SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LEVI STRAUSS & CO.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 2325 94-0905160
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification No.)
Incorporation or Classification Code
Organization) Number)
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1155 Battery Street, San Francisco, California 94111 (415) 501-6000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)
Albert F. Moreno, Esq. Copies to:
Senior Vice President,
General Patricia A. Vlahakis, Jay A. Mitchell, Esq.
Counsel And Assistant Esq. Chief Counsel-Corporate
Secretary Wachtell, Lipton, Rosen Levi Strauss & Co.
Levi Strauss & Co. & Katz 1155 Battery Street
1155 Battery Street 51 West 52nd Street San Francisco,
San Francisco, New York, New York 10019 California 94111
California 94111 (212) 403-1000 (415) 501-1372
(415) 501-6284
(Name, Address,
Including Zip Code, and
Telephone Number,
Including Area Code, of
Agent for Service)
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Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.
If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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--------------------------------------------------------------------------------
Proposed
Maximum
Title of Each Class of Proposed Aggregate Amount of
Securities to be Amount to Offering Price Offering Registration
Registered be Registered Per Note Price(1) Fee(2)
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6.80% Notes due 2003.... $350,000,000 100% $350,000,000 $ 92,400
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7.00% Notes due 2006.... $450,000,000 100% $450,000,000 $118,800
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities or accept any offer to buy these securities until +
+the registration statement filed with the Securities and Exchange Commission +
+is effective. This prospectus is not an offer to sell these securities and is +
+not soliciting an offer to buy these securities in any state where the offer +
+or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED MAY 4, 2000
PROSPECTUS
Levi Strauss & Co.
Offer to Exchange
all outstanding 6.80% Notes due 2003 ($350,000,000 principal amount)
for
6.80% Notes due 2003 ($350,000,000 principal amount) which have been registered under the Securities Act of 1933
and
all outstanding 7.00% Notes due 2006 ($450,000,000 principal amount)
for
7.00% Notes due 2006 ($450,000,000 principal amount) which have been registered under the Securities Act of 1933
The exchange offer will expire at 5:00 p.m., New York City time, on , 2000, unless extended.
We do not intend to list the exchange notes on any national securities exchange, and no established trading market for the exchange notes is anticipated.
See "Risk Factors" beginning on page 11 for a discussion of factors that you should consider before tendering your old notes.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2000.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration statement on Form S-4 under the Securities Act of 1933 relating to the exchange offer that incorporates important business and financial information about us that is not included in or delivered with this prospectus. This prospectus does not contain all of the information included in the registration statement. This information is available from us without charge to holders of the notes as specified below. If we have made references in this prospectus to any contracts, agreements or other documents and also filed any of those contracts, agreements or documents as exhibits to the registration statement, you should read the relevant exhibit for a more complete understanding of the document or matter involved.
Following the exchange offer, we will be required to file periodic reports and other information with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Information that we file with the Securities and Exchange Commission after the date of this prospectus will automatically supersede the information in this prospectus and any earlier filed incorporated information. We are also incorporating any future filings made with the Securities and Exchange Commission under sections 13(a), 13(e), 14, or 15(d) of the Securities Exchange Act of 1934 until the termination of the exchange offer.
You may read and copy the registration statement, including the attached exhibits, and any report, statements or other information that we file at the Securities and Exchange Commission's public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the public reference room. Our Securities and Exchange Commission filings will also be available to the public from commercial document retrieval services and at the Securities and Exchange Commission's Internet site at http://www.sec.gov.
You may request a copy of any of our filings with the Securities and Exchange Commission, or any of the agreements or other documents that constitute exhibits to those filings, at no cost, by writing or telephoning us at the following address or phone number:
Levi Strauss & Co.
1155 Battery Street
San Francisco, California 94111
Attention: Treasurer
Telephone: (415) 501-3869 or (415) 501-6000
To obtain timely delivery of any of our filings, agreements or other documents, you must make your request to us no later than five business days before the expiration date of the exchange offer. The exchange offer will expire at 5:00 p.m., New York City time on , 2000, which is 30 days following the commencement of the exchange offer. The exchange offer can be extended by us in our sole discretion. See the caption "The Exchange Offer" for more detailed information.
You should rely only on the information provided in this prospectus. No person has been authorized to provide you with different information. The information in this prospectus is accurate as of the date on the front cover. You should not assume that the information contained in this prospectus is accurate as of any other date.
TABLE OF CONTENTS
Page
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Where You Can Find More Information...................................... i
Summary.................................................................. 1
Risk Factors............................................................. 11
Forward-Looking Statements............................................... 19
The Exchange Offer....................................................... 20
Use of Proceeds.......................................................... 29
Capitalization........................................................... 29
Selected Historical Consolidated Financial Data.......................... 30
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 32
Business................................................................. 46
Management............................................................... 59
Principal Stockholders................................................... 67
Material Relationships and Related Party Transactions.................... 71
Description of Other Indebtedness........................................ 72
Description of the Exchange Notes........................................ 76
Book-Entry, Delivery and Form............................................ 82
Federal Income Tax Considerations........................................ 85
Plan of Distribution..................................................... 89
Experts.................................................................. 89
Legal Matters............................................................ 89
Index to Financial Statements............................................ F-1
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Until , 2000, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.
SUMMARY
The following summary highlights selected information contained elsewhere in this prospectus. This summary may not contain all of the information that you should consider before exchanging your old notes for exchange notes, and you are encouraged to read this prospectus in its entirety. Our fiscal year ends in November. Unless otherwise stated in this prospectus, any reference to periods shall refer to fiscal periods. This prospectus includes the specific terms of the exchange notes we are offering, as well as a discussion of risk factors and the financial statements that we have included.
Our Company
We are one of the world's leading branded apparel companies with operations in more than 40 countries. We design and market jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories for men, women and children under our Levi's(R), Dockers(R) and Slates(R) brands. Our products are primarily distributed in the United States through chain retailers and department stores and abroad through department stores and specialty retailers. We also maintain a network of approximately 750 franchised or independently owned stores dedicated to our products outside the United States and operate a small number of company-owned stores.
We believe there is no other apparel company with a comparable global presence in either the jeans or casual pants segment of the apparel market. Since our founder, Levi Strauss, invented the blue jean in 1873, Levi's(R) jeans have become one of the most successful and widely recognized brands in the history of the apparel industry. According to a 1999 study performed on our behalf by an international market research firm, the Levi's(R) brand is the most recognized casual clothing brand in all 17 of the markets in which the study was conducted, including the United States, Canada, Germany, Italy, France, the United Kingdom, Japan and Australia. Our Dockers(R) brand of casual pants, introduced in 1986, is also widely recognized in the United States and a growing number of markets abroad. According to industry research, approximately 71% of U.S. male consumers ages 18 to 45 own Dockers(R) brand casual pants. Jeans and casual and dress pants represented approximately 85% of our total units sold in 1999. Basic jeans are our key generator of sales and gross profits.
Levi's(R) Brand Dockers(R) Brand Slates(R) Brand
--------------- ---------------- ---------------
Products: Men's, women's and Men's, women's and Men's and in Fall
kids' -jeans, jeans boys' -casual pants, 2000 women's - dress
related products, shorts, skirts, knit pants, skirts, tops,
knits and woven tops, and woven tops, jackets, outerwear
outerwear and outerwear and and accessories
accessories accessories
Geographic Men's and women's - Men's and women's - Men's and women's -
Markets: global global U.S. only
Kids' - primarily Boys' - U.S. only
U.S.
Percentage
of 1999
Net
Sales: 76% 22% 2%
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Our business is currently organized into three geographic divisions: the Americas, consisting of the United States, Canada and Latin America; Europe, including the Middle East and Africa; and Asia Pacific. In 1999, we had net sales of $5.1 billion, of which the Americas, Europe and Asia Pacific accounted for 66.5%, 26.5% and 7.0%, respectively. In 1999, we had EBITDA of $295.1 million and adjusted EBITDA of $448.9 million. For the three months ended February 27, 2000, we had net sales of $1.1 billion and EBITDA and adjusted EBITDA of $148.5 million.
Our operating performance has deteriorated in recent years. Our net sales fell from $7.1 billion in 1996 to $5.1 billion in 1999, and our brand equity and market position have declined in all three of our operating regions. This deterioration is attributable to both industry-wide and company-specific factors. Industry-wide
factors include consumer market trends towards more fashion denim and non-denim products and intense competition from designer and private label products. Company-specific factors include brand equity erosion, insufficient product innovation, poor presentation of our products at retail, operational problems in our supply chain and weakness in our key distribution channels. In response to these developments, we have, among other things, taken the following restructuring actions:
. reduced overhead expenses and eliminated excess manufacturing capacity through extensive restructuring initiatives executed during the past three years, including reducing the number of our employees by approximately 18,500 since 1997 and closing 29 of our owned and operated production and finishing facilities in North America and Europe;
. shifted from manufacturing two-thirds of our U.S. jeans internally in 1997 to manufacturing one-third internally in 1999;
. reduced corporate infrastructure at our San Francisco and regional headquarters and consolidated and streamlined merchandising, marketing and sales functions in all three of our operating regions; and
. hired a new senior management team, including a chief executive officer, a chief financial officer, senior vice presidents responsible for worldwide supply chain and worldwide human resources and heads for each of our three operating regions.
We intend our restructuring efforts to help us achieve our strategic goals of reversing the recent deterioration in our performance and repositioning our business to support future growth. We do not anticipate taking any material restructuring actions relating to additional capacity reductions or reorganization efforts in 2000 or 2001.
Our Business Strategy
Going forward, our primary strategic goals are to leverage the worldwide recognition of our brand names and our history of product innovation and high product quality to reverse the recent deterioration in our performance and to reposition our business to support future growth. To achieve these goals, we have three key business strategies:
Reinvigorate our brands through better product innovation and increased consumer and channel relevance.
We believe that an integrated presentation of new and innovative products and marketing programs targeted to specific consumer and retail segments is crucial to generating consumer demand for our products. We intend to:
. focus on continually updating our core products and creating new products;
. design and market sub-brands and products that are relevant to our various consumer segments;
. leverage our global brand recognition and marketing capabilities;
. target our sub-brands and product offerings to specific distribution channels; and
. develop product-focused marketing programs using both traditional and non-traditional advertising vehicles.
Upgrade the presentation of our product at retail and improve our relationships with our customers.
We distribute our products in a wide variety of retail formats around the world including through chain and department stores in the United States, Europe and Asia, franchise stores dedicated to our brands and specialty retailers. We intend to:
. engage in more collaborative planning and performance monitoring processes with our retail customers;
. improve the presentation of our product at retail through new retailing formats and sales area upgrade programs; and
. increase the number of franchised or other retail formats dedicated to our Dockers(R) brand products outside the United States.
Improve our supply chain execution and continue to focus on cost reduction.
We made extensive restructuring changes during the last three years to shift our sourcing base and reduce manufacturing costs and overhead expenses. We must continue improving our supply chain in order to capture the benefits of these changes and become a more effective competitor. We intend to:
. focus on improving the coordination of our design, merchandising, forecasting, sourcing and logistics processes;
. improve the linkage of product supply to consumer demand; and
. leverage our restructuring initiatives to further reduce cost of goods sold, operating expenses and inventory costs.
Failure to Exchange Your Old Notes
The old notes which you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities. Therefore, you may only transfer or resell them in a transaction registered under or exempt from the Securities Act of 1933 and applicable state securities laws. We will issue the exchange notes in exchange for the old notes under the exchange offer only following the satisfaction of the procedures and conditions described in the caption "The Exchange Offer."
Because we anticipate that most holders of the old notes will elect to exchange their old notes, we expect that the liquidity of the markets, if any, for any old notes remaining after the completion of the exchange offer will be substantially limited. Any old notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount outstanding of the old notes.
The Exchange Offer
On November 6, 1996, we completed the private offering of the unregistered 6.80% notes due 2003 and 7.00% notes due 2006, which we refer to in this prospectus as the old notes. In this exchange offer, we are offering to exchange, for your old notes, exchange notes which are identical in all material respects to the old notes except that the exchange notes have been registered under the Securities Act.
The Exchange Offer...... We are offering to exchange:
. up to $350.0 million aggregate principal amount of
6.80% old notes due 2003 for up to $350.0 million
aggregate principal amount of 6.80% exchange notes
due 2003; and
. up to $450.0 million aggregate principal amount of
7.00% old notes due 2006 for up to $450.0 million
aggregate principal amount of 7.00% exchange notes
due 2006.
You may exchange old notes only in integral multiples
of $1,000 principal amount.
Purpose and Effect...... The purpose of the exchange offer is to give you the
opportunity to exchange your old notes for exchange
notes that have been registered under the Securities
Act. As a consequence of the registration of the
exchange notes, we will become subject to the
informational requirements of the Exchange Act and
will file reports and other information with the SEC
to which each holder of old notes, if any are
outstanding after the exchange offer, and exchange
notes will have access.
Resale.................. We believe that the exchange notes issued pursuant to
the exchange offer in exchange for old notes may be
offered for resale, resold and otherwise transferred
by you (unless you are an "affiliate" of us within
the meaning of Rule 405 under the Securities Act)
without compliance with the registration and
prospectus delivery provisions of the Securities Act,
so long as you are acquiring the exchange notes in
the ordinary course of your business and that you
have not engaged in, do not intend to engage in, and
have no arrangement or understanding with any person
to participate in, a distribution of the exchange
notes.
Each participating broker-dealer that receives
exchange notes for its own account under the exchange
offer in exchange for old notes that were acquired as
a result of market-making or other trading activity
must acknowledge that it will deliver a prospectus in
connection with any resale of the exchange notes. See
the caption "Plan of Distribution."
Any holder of old notes who:
. is our affiliate;
. does not acquire exchange notes in the ordinary
course of its business; or
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. exchanges old notes in the exchange offer with the
intention to participate, or for the purpose of
participating, in a distribution of exchange
notes;
must, in the absence of an exemption, comply with the
registration and prospectus delivery requirements of
the Securities Act in connection with the resale of
the exchange notes.
Expiration of the
Exchange Offer; The exchange offer will expire at 5:00 p.m., New York
Withdrawal of Tender... City time, on , 2000, or a later date and time to
which we may extend it. We do not currently intend to
extend the expiration of the exchange offer. You may
withdraw your tender of old notes pursuant to the
exchange offer at any time before expiration of the
exchange offer. Any old notes not accepted for
exchange for any reason will be returned without
expense to you promptly after the expiration or
termination of the exchange offer.
Conditions to the
Exchange Offer......... The exchange offer is subject to customary
conditions, which we may waive. Please read the
caption "The Exchange Offer--Conditions" for more
information regarding the conditions to the exchange
offer.
Procedures for
Tendering Old Notes.... If you wish to participate in the exchange offer, you
must:
. complete, sign and date the accompanying letter of
transmittal, or a facsimile of the letter of
transmittal, according to the instructions
contained in this prospectus and the letter of
transmittal; and
. mail or otherwise deliver the letter of
transmittal, or a facsimile of the letter of
transmittal, together with your old notes and any
other required documents, to the exchange agent at
the address set forth on the cover page of the
letter of transmittal.
If you hold old notes through The Depository Trust
Company, or DTC, and wish to participate in the
exchange offer, you must comply with DTC's Automated
Tender Offer Program procedures, by which you will
agree to be bound by the letter of transmittal. By
signing, or agreeing to be bound by, the letter of
transmittal, you will represent to us that, among
other things:
. you acquired your old notes in the ordinary course
of your business;
. you have no arrangement or understanding with any
person or entity to participate in a distribution
of the exchange notes;
. if you are a broker-dealer that will receive
exchange notes for your own account in exchange
for old notes that were acquired as a result of
market-making activities, that you will deliver a
prospectus, as required by law, in connection with
any resale of those exchange notes; and
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. you are not an "affiliate," as defined in Rule 405
of the Securities Act, of us or, if you are an
affiliate, that you will comply with any
applicable registration and prospectus delivery
requirements of the Securities Act.
Special Procedures for
Beneficial Owners...... If you are a beneficial owner of old notes that are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, and
you want to tender old notes in the exchange offer,
you should contact the registered holder promptly and
instruct the registered holder to tender on your
behalf. If you wish to tender on your own behalf, you
must, before completing and executing the letter of
transmittal and delivering your old notes, either
make appropriate arrangements to register ownership
of the old notes in your name or obtain a properly
completed bond power from the registered holder. The
transfer of registered ownership may take
considerable time and may not be able to be completed
before expiration of the exchange offer.
Guaranteed Delivery
Procedures.............. If you wish to tender your old notes and your old
notes are not immediately available or you cannot
deliver your old notes, the letter of transmittal or
any other documents required by the letter of
transmittal or cannot comply with the applicable
procedures under DTC's Automated Tender Offer Program
before expiration of the exchange offer, you must
tender your old notes according to the guaranteed
delivery procedures set forth under the caption "The
Exchange Offer--Guaranteed Delivery Procedures."
Effect on Holders of
Old Notes............... If you are a holder of old notes and you do not
tender your old notes in the exchange offer, you will
continue to hold your old notes and will be entitled
to all the rights and subject to all the limitations
applicable to the old notes in the indenture.
The trading market for old notes could be adversely
affected if some but not all of the old notes are
tendered and accepted in the exchange offer.
Consequences of Failure
to Exchange............ All untendered old notes will remain subject to the
restrictions on transfer provided for in the old
notes and in the indenture. In general, absent
registration under or exemption from the Securities
Act, if you are, were or acquired old notes from an
affiliate of us, your transfer of old notes will be
restricted by the resale limitations of Rule 144 and
applicable state securities laws. Non-affiliates will
be able to transfer their old notes freely without
limitation under Rule 144 and in compliance with
applicable state securities laws. Other than in
connection with the exchange offer, we do not
currently anticipate that we will register the old
notes under the Securities Act.
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Federal Income Tax
Considerations......... The exchange of old notes for exchange notes in the
exchange offer will not be a taxable event for U.S.
federal income tax purposes. See the caption "Federal
Income Tax Considerations" for a more detailed
description of the tax consequences of the exchange.
Use of Proceeds......... We will not receive any cash proceeds from the
issuance of exchange notes pursuant to the exchange
offer.
Exchange Agent.......... Citibank, N.A. is the exchange agent for the exchange
offer. The address and telephone number of the
exchange agent are set forth under the caption "The
Exchange Offer--Exchange Agent."
The Exchange Notes
Issuer.................. Levi Strauss & Co.
Securities Offered...... . $350.0 million aggregate principal amount of 6.80%
exchange notes due 2003.
. $450.0 million aggregate principal amount of 7.00%
exchange notes due 2006.
Maturity................ . November 1, 2003 for the 6.80% exchange notes.
. November 1, 2006 for the 7.00% exchange notes.
Interest Payment
Dates................... May 1 and November 1 of each year.
Redemption.............. The exchange notes cannot be redeemed prior to
maturity.
Ranking................. The exchange notes will be unsecured and will rank
equally with all of our other existing and future
unsecured and unsubordinated debt. As of April 30,
2000, we had $1.2 billion of debt that was secured by
most of our assets, including our trademarks, and the
assets of our material U.S. subsidiaries. That
secured debt will have priority over the exchange
notes with respect to those assets. See the caption
"Description of Other Indebtedness--Bank Credit
Facilities."
Restrictive Covenants... We will issue the exchange notes under the same
indenture with Citibank, N.A., as the trustee, under
which we issued the old notes. The indenture, among
other things, restricts our ability and the ability
of our subsidiaries and future subsidiaries, to:
. incur liens;
. engage in sale and leaseback transactions; and
. engage in mergers and sales of assets.
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See the caption "Description of the Exchange Notes-- Restrictive Covenants."
Absence of Established
Market for the
Exchange Notes......... The exchange notes are a new issue of securities, and
there is no established trading market for the
exchange notes. We do not intend to apply for the
exchange notes to be listed on any securities
exchange or to arrange for quotation on any automated
dealer quotation system. The initial purchasers of
the old notes may discontinue any market making in
the exchange notes at any time in their sole
discretion. We cannot assure you that a liquid market
will develop for the exchange notes.
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We are located at Levi Strauss & Co., 1155 Battery Street, San Francisco, California 94111. Our telephone number is (415) 501-6000. We maintain a website at www.levistrauss.com. Information contained on this website, or on any other website referred to therein, does not constitute part of this prospectus and is not incorporated by reference in this prospectus.
Summary Historical Consolidated Financial Data
The following table sets forth summary historical consolidated financial data for Levi Strauss & Co. The following selected statements of income data and cash flow data for fiscal years 1995, 1996, 1997, 1998 and 1999 and the consolidated statement of balance sheet data of such periods are derived from our financial statements that have been audited by Arthur Andersen LLP, independent public accountants. The data for the three months ended February 28, 1999 and February 27, 2000 have been derived from our unaudited consolidated financial statements which, in our opinion, contain all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for these periods. The results of operations for the three months ended February 27, 2000 may not be indicative of the results to be expected for the year ending November 26, 2000.
The financial data set forth below should be read in conjunction with, and is qualified by reference to, "Management's Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial statements and the related notes to those financial statements, included elsewhere in this prospectus.
Year Ended Three Months Ended
-------------------------------------------------------------- ------------------------
Nov. 26, Nov. 24, Nov. 30, Nov. 29, Nov. 28, Feb. 28, Feb. 27,
1995 1996 1997 1998 1999 1999 2000
---------- ----------- ----------- ----------- ----------- ----------- -----------
(Unaudited)
(Dollars in Thousands)
Statement of Income
Data:
Net sales............... $6,707,631 $ 7,136,304 $ 6,861,482 $ 5,958,635 $ 5,139,458 $ 1,278,322 $ 1,082,437
Cost of goods sold...... 3,930,132 4,159,371 3,962,719 3,433,081 3,180,845 814,673 632,442
---------- ----------- ----------- ----------- ----------- ----------- -----------
Gross profit............ 2,777,499 2,976,933 2,898,763 2,525,554 1,958,613 463,649 449,995
Marketing, general and
administrative
expenses............... 1,809,633 2,029,138 2,045,938 1,834,058 1,629,845 419,085 322,111
Excess
capacity/restructuring
charges(1)............. -- -- 386,792 250,658 497,683 394,105 --
Global Success Sharing
Plan(2)................ -- 138,963 114,833 90,564 (343,873) -- --
Special compensation
charge(3).............. -- 76,983 -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ----------- -----------
Operating income
(loss)................. 967,866 731,849 351,200 350,274 174,958 (349,541) 127,884
Interest expense........ 15,659 145,234 212,358 178,035 182,978 43,157 56,782
Other (income) expense,
net.................... (82,630) (33,291) (45,439) 9,539 (16,519) (16,127) (29,141)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before
taxes.................. 1,034,837 619,906 184,281 162,700 8,499 (376,571) 100,243
Income tax expense
(benefit).............. 300,101 154,977 46,070 60,198 3,144 (139,331) 35,084
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)....... $ 734,736 $ 464,929 $ 138,211 $ 102,502 $ 5,355 $ (237,240) $ 65,159
========== =========== =========== =========== =========== =========== ===========
Other Financial Data:
EBITDA(4)............... $1,083,248 $ 861,386 $ 490,094 $ 479,047 $ 295,060 $ (315,894) $ 148,504
Adjusted EBITDA(5)...... 1,083,248 1,077,332 991,719 820,269 448,870 78,211 148,504
Capital expenditures.... 333,949 210,466 121,595 116,531 61,062 18,779 4,252
Ratio of adjusted EBITDA
to interest expense.... 69.2x 7.4x 4.7x 4.6x 2.5x 1.8x 2.6x
Ratio of earnings to
fixed charges(6)....... 23.2x 3.8x 1.6x 1.6x 1.0x -- 1.7x
Statement of Cash Flow
Data:
Cash flows from
operating activities... $ 749,319 $ 494,138 $ 573,890 $ 223,769 $ (173,772) $ 43,627 $ 60,302
Cash flows from
investing activities... (363,841) (242,781) (76,895) (82,707) 62,357 (9,801) 104,953
Cash flows from
financing activities... (105,305) (1,136,300) (530,302) (194,489) 224,219 (17,828) (251,176)
Balance Sheet Data:
Cash and cash
equivalents............ $1,088,032 $ 195,852 $ 144,484 $ 84,565 $ 192,816 $ 97,654 $ 105,959
Working capital......... 1,722,074 1,059,940 706,522 645,900 799,627 521,998 666,010
Total assets............ 4,709,157 4,192,696 4,032,327 3,884,658 3,665,517 3,819,131 3,303,383
Total debt.............. 38,057 3,225,512 2,631,696 2,415,330 2,664,609 2,393,028 2,403,477
Stockholders' equity
(deficit)(3)........... 2,115,293 (1,481,577) (1,370,262) (1,313,747) (1,288,562) (1,519,481) (1,219,572)
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(1) We reduced overhead expenses and eliminated excess manufacturing capacity through extensive restructuring initiatives executed during the past three years, including reducing the number of our employees by 18,500 and closing 29 of our owned and operated production and finishing facilities in North America and Europe.
(2) Our Global Success Sharing Plan, adopted in 1996, provides for cash payments to our employees in 2002 if we achieve pre-established financial targets. We recognized and accrued expenses in 1998, 1997 and 1996 for our Global Success Sharing Plan. During 1999, we concluded that, based on our financial performance, the targets under the plan would not be achieved and that the probability of a payment in 2002 is highly unlikely. As a result, in 1999 we reversed into income $343.9 million of accrued expenses, less miscellaneous expenses, previously recorded in connection with the Global Success Sharing Plan.
(3) The special compensation charge and stockholders' equity (deficit) resulted from a 1996 transaction in which our stockholders created new long-term governance arrangements for us, including the voting trust and stockholders agreement. In the 1996 transaction, a group of stockholders of our former parent, Levi Strauss Associates Inc., established a new company, LSAI Holding Corp, to which they contributed approximately 70% of the outstanding shares of Levi Strauss Associates Inc. Levi Strauss Associates Inc. was then merged with a subsidiary of LSAI Holding Corp. In the merger, shares of Levi Strauss Associates Inc. not contributed to LSAI Holding Corp., including shares held under several employee benefit and compensation plans, were converted into the right to receive cash, thereby making Levi Strauss Associates Inc. a wholly-owned subsidiary of LSAI Holding Corp. Funding for the cash payments in the merger was provided in part by cash on hand and in part from proceeds of approximately $3.3 billion of borrowings under bank credit facilities. The special compensation charge resulted from the impact of the transaction on various employee plans. In October 1996, Levi Strauss Associates Inc. and LSAI Holding Corp. were merged into Levi Strauss & Co. These transactions were accounted for as a reorganization of entities under common control.
(4) EBITDA equals operating income (loss) plus depreciation and amortization expense. EBITDA is not intended to represent cash flow or any other measure of performance in accordance with generally accepted accounting principles. EBITDA is included herein because we believe that you may find it to be a useful analytical tool. Other companies may calculate EBITDA differently, and we cannot assure you that our figures are comparable with similarly-titled figures for other companies.
(5) The calculation for adjusted EBITDA is shown below:
Year Ended Three Months Ended
------------------------------------------------- -------------------
Nov. 26, Nov. 24, Nov. 30, Nov. 29, Nov. 28, Feb. 28, Feb. 27,
1995 1996 1997 1998 1999 1999 2000
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(Dollars in Thousands)
EBITDA.................. $1,083,248 $ 861,386 $490,094 $479,047 $ 295,060 $(315,894) $148,504
Excess capacity
reduction/restructuring
charge................. -- -- 386,792 250,658 497,683 394,105 --
Global Success Sharing
Plan................... -- 138,963 114,833 90,564 (343,873) -- --
Special compensation
charges................ -- 76,983 -- -- -- -- --
---------- ---------- -------- -------- --------- --------- --------
Adjusted EBITDA......... $1,083,248 $1,077,332 $991,719 $820,269 $ 448,870 $ 78,211 $148,504
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(6) For the purpose of computing the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes, plus fixed charges and less capitalized interest. Fixed charges are defined as the sum of interest, including capitalized interest, on all indebtedness, amortization of debt issuance cost and that portion of rental expense which we believe to be representative of an interest factor. For the three months ended February 28, 1999, earnings were insufficient by $412.1 million to cover total fixed charges.
RISK FACTORS
You should carefully consider the following factors and the other information in this prospectus before deciding to exchange your old notes for exchange notes.
Risks relating to our substantial debt
We have substantial debt and interest payment requirements that may restrict our future operations and impair our ability to meet our obligations under the exchange notes.
As of February 27, 2000, our total debt was $2.4 billion, and we had $365.5 million of additional borrowing capacity under our bank credit facilities. Our substantial debt may have important consequences to you. For instance, it could:
. make it more difficult for us to satisfy our financial obligations, including those relating to the exchange notes;
. require us to dedicate a substantial portion of any cash flow from operations to the payment of interest and principal due under our debt, including the exchange notes, which will reduce funds available for other business purposes;
. increase our vulnerability to general adverse economic and industry conditions;
. limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate;
. place us at a competitive disadvantage compared to some of our competitors that have less financial leverage; and
. limit our ability to obtain additional financing required to fund working capital and capital expenditures and for other general corporate purposes.
All borrowings under our bank credit facilities are, and will continue to be, at variable rates of interest. As a result, increases in market interest rates may require a greater portion of our cash flow to be used to pay interest. In addition, if by February 1, 2001, we have not completed one or more private or public capital-raising transactions yielding net proceeds to us of at least $300.0 million, which have been used to reduce commitments under our bank credit facilities, we will be required to pay our lenders an additional borrowing spread of 1.00% on outstanding borrowings under our bank credit facilities, plus a one-time additional fee of 2.00% of total commitments as of January 31, 2001. Our borrowing spread will increase by 0.25% quarterly until those capital-raising transactions are completed. For a detailed schedule of our required payments under our bank credit facilities, see the caption "Description of Other Indebtedness--Bank Credit Facilities-- Amortization; Interest."
Our ability to satisfy our obligations and to reduce our total debt depends on our future operating performance and on economic, financial, competitive and other factors, many of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow or that future financings will be available to provide sufficient proceeds to meet these obligations or to successfully execute our business strategy.
The restrictive covenants in our bank credit facilities may limit our activities.
Our bank credit facilities contain customary restrictive covenants, including covenants limiting our ability to:
. incur additional debt;
. grant liens;
. make investments;
. consolidate, merge or acquire other businesses and sell assets;
. pay dividends and other distributions;
. make capital expenditures; and
. enter into transactions with affiliates.
We also are required to meet specified financial ratios. These covenants may make it difficult for us to successfully execute our business strategy or to compete in the worldwide apparel industry with companies not similarly restricted.
Our bank credit facilities mature in January 2002, at which time we will be required to refinance our borrowings under those facilities. We cannot assure you that we will be able to obtain replacement financing at that time or that any available replacement financing will be on terms acceptable to us. If we are unable to obtain acceptable replacement financing on or before January 2002, we will not be able to satisfy our obligations under our bank credit facilities and may be required to take other actions to avoid defaulting on those facilities, including selling assets or surrendering assets to our lenders, which would not otherwise be in our long-term economic interest.
Failure to comply with the terms of our bank credit facilities or our inability to pay our lenders at maturity would entitle those lenders immediately to foreclose on most of our assets, including our trademarks and the capital stock of all of our U.S. and most of our foreign subsidiaries, and the assets of our material U.S. subsidiaries, which serve as collateral. In this event, those secured lenders would be entitled to be repaid in full from the proceeds of the liquidation of those assets before those assets would be available for distribution to other creditors, including you, and, lastly, to the holders of our capital stock.
Since the exchange notes are effectively subordinated to all of our secured debt and the liabilities of our subsidiaries, we may not have sufficient assets to pay amounts owed on the exchange notes if a default occurs.
The exchange notes are general senior unsecured obligations that rank equal in right of payment with all of our existing and future unsecured and unsubordinated debt. The exchange notes are effectively subordinated to all of our secured debt to the extent of the value of the assets securing that debt. The exchange notes are also structurally subordinated to all obligations of our subsidiaries. As of February 27, 2000, we had $1.3 billion of debt under our bank credit facilities that was secured by liens on most of our assets and the assets of our material U.S. subsidiaries, including our trademarks, and by the capital stock of some of our subsidiaries to which the exchange notes would have been effectively subordinated in right of payment.
The ability of our creditors, including you, to participate in any distribution of assets of any of our subsidiaries upon liquidation or bankruptcy will be subject to the prior claims of that subsidiary's creditors, including trade creditors, and any prior or equal claim of any equity holder of that subsidiary. In addition, the ability of our creditors, including you, to participate in distributions of assets of our subsidiaries will be limited to the extent that the outstanding shares of capital stock of any of our subsidiaries are either pledged to secure other creditors, such as under our bank credit facilities, or are not owned by us. As a result, you may receive less, proportionately, than our secured creditors and the creditors of our subsidiaries.
If our foreign subsidiaries are unable to distribute cash to us when needed, we may be unable to satisfy our obligations under the exchange notes.
We conduct our foreign operations through foreign subsidiaries, which in fiscal year 1999 accounted for approximately 38% of our net sales. As a result, we depend in part upon dividends or other intercompany transfers of funds from our foreign subsidiaries for the funds necessary to meet our debt service obligations,
including payments on the exchange notes. We only receive the cash that remains after our foreign subsidiaries satisfy their obligations. If those subsidiaries are unable to pass on the amount of cash that we need, we will be unable to make payments to you. Any agreements our foreign subsidiaries enter into with other parties, as well as applicable laws and regulations limiting the right and ability of non-U.S. subsidiaries and affiliates to pay dividends and remit earnings to affiliated companies absent special conditions, may restrict the ability of our foreign subsidiaries to pay dividends or make other distributions to us.
Risks relating to the industry in which we compete
We face intense competition in the worldwide apparel industry.
We face a variety of competitive challenges from other domestic and foreign jeanswear marketers, fashion-oriented apparel marketers, specialty retailers and retailers of private label jeanswear and casual apparel products, some of which have greater financial and marketing resources than we do. We compete with these companies primarily on the basis of:
. anticipating and responding to changing consumer demands in a timely manner;
. maintaining favorable brand recognition;
. developing innovative, high-quality products in sizes, colors and styles that appeal to consumers;
. pricing products;
. providing strong and effective marketing support;
. creating an acceptable value proposition for retail customers;
. ensuring product availability and optimizing supply chain efficiencies with retailers; and
. obtaining sufficient retail floor space.
We also face increasing competition from companies selling apparel products through the Internet, where we lack a direct, company-operated selling presence. Increased competition in the worldwide apparel industry, including from Internet-based competitors, could reduce our sales and prices and adversely affect our results of operations. Because of our high debt level, we may also be less able to respond effectively to these developments than our competitors who have less financial leverage.
The success of our business is subject to constantly changing fashion trends.
Our success depends in large part on our ability to anticipate, identify and respond to rapidly changing consumer demands and fashion trends in a timely manner. Any failure on our part to anticipate, identify and respond effectively to changing consumer demands and fashion trends could adversely affect retail and consumer acceptance of our products and leave us with a substantial amount of unsold inventory. If that occurs, we may be forced to rely on markdowns or promotional sales to dispose of excess, slow-moving inventory, which may harm our business. The exposure of our business to fashion trends and changes in consumer preferences is heightened by our recent decision to outsource a substantially larger proportion of our pants production to offshore manufacturers, as offshore outsourcing may increase lead times between production decisions and customer delivery.
The worldwide apparel industry is heavily influenced by general economic cycles.
Apparel is a cyclical industry that is heavily dependent upon the overall level of consumer spending. Purchases of apparel and related goods tend to be highly correlated with cycles in the disposable income of our retail consumers. As a result, any substantial deterioration in general economic conditions or increases in interest rates in any of the regions in which we compete could adversely affect the sales of our products.
Increases in the price of raw materials or their reduced availability could increase our cost of sales and decrease our profitability.
The principal fabrics used in our business are cotton, synthetics, wools and blends. The prices we pay for these fabrics are dependent on the market price for raw materials used to produce them, primarily cotton. The price and availability of cotton may fluctuate significantly, depending on a variety of factors, including crop yields. Any raw material price increases could increase our cost of sales and decrease our profitability unless we are able to pass higher prices on to our customers. Moreover, any decrease in the availability of cotton could impair our ability to meet our production requirements in a timely manner.
Our business is subject to risks associated with importing products.
We import raw materials and finished garments into all of our operating regions. Substantially all of our import operations are subject to:
. quotas imposed by bilateral textile agreements between the countries where our facilities are located and foreign countries;
. customs duties imposed on imported products by the governments where our facilities are located; and
. penalties imposed for, or adverse publicity relating to, violations by foreign contractors of labor and wage standards.
In addition, the countries in which our products are manufactured or imported may from time to time impose additional new quotas, duties, tariffs or other restrictions on our imports or adversely modify existing restrictions. Adverse changes in these import costs and restrictions could harm our business.
Risks relating to our business
We may be unable to reverse or recover from recent declines in sales and earnings which have impaired our competitive and financial positions.
Our business has been in decline for the past three years. Specifically:
. net sales declined from $6.9 billion in 1997 to $5.1 billion in 1999, a decrease of 25%; and
. net income, excluding one-time charges, declined from $411.5 million in 1997 to $102.3 million in 1999, a decrease of 75%.
Consistent with these declining financial results, our market research indicates that during this period we experienced significant brand equity and market position erosion in all of the regions in which we operate, including a substantial deterioration in the perception of the Levi's(R) brand by younger consumers. In addition, our ability to reverse or recover from declines in sales depends in part on improving our supply chain, including our ability to ship complete and timely orders to our retail customers and to reduce product lead times through better execution and coordination across business functions from product design to customer delivery. Our declining business, and the actions we took in response to that decline, prevented us from repaying the substantial debt we incurred in the 1996 transaction as quickly as we then intended. As a result, our financial condition remains highly leveraged, reducing our operating flexibility and impairing our ability to respond to developments in the worldwide apparel industry as effectively as competitors that do not have equivalent financial leverage.
In response to these trends, we have made substantial strategic, operational and management changes in the past three years. We do not know whether those changes will have the desired effect.
We may be unable to maintain or increase our sales through our current distribution channels.
In the United States, chain stores and department stores are currently the primary distribution channels for our products. We may be unable to increase sales of our apparel products through these distribution channels, since other channels, including vertically integrated specialty stores and mass merchants, now account for most of the growth in jeanswear and casual wear sales in the United States. Our lack of a substantial presence in the vertically integrated specialty store market, where companies such as Gap Inc. and Abercrombie & Fitch Co. compete, weakens our ability to market to younger consumers. Moreover, we do not sell products to mass merchants in the United States, such as Wal-Mart Stores, Inc., Target Corporation and Kmart Corporation, a distribution channel that continues to increase its share of overall retail spending, as well as its share of jeanswear and casual wear sales.
In Europe we depend heavily on independent jeanswear retailers, which account for approximately half of our sales in that region. Independent retailers in Europe have experienced increasing difficulty competing against large department stores and increasingly prevalent vertically integrated specialty stores, evidenced, according to our internal research, by decreases in the last five years in the percentage of total jeanswear sales made by independent stores. Further declines in the independent retailer channel may adversely affect the sales of our products in Europe.
We also lack company-owned stores and Internet distribution channels possessed by some of our competitors, including Gap Inc. and other vertically integrated specialty stores. Although we own a small number of stores located in selected major urban areas, we operate those stores primarily as "flagships" for marketing and branding purposes and do not expect them to produce substantial unit volume or sales. As a result, we have less control than industry competitors over the distribution and presentation at retail of our apparel products, which we believe has adversely affected our performance and could make it more difficult for us to implement our strategy.
A group of key U.S. customers accounts for a significant portion of our sales.
Net sales to our 10 largest customers, all of which are located in the United States, totaled approximately 46% and 43% of net worldwide sales during fiscal years 1999 and 1998. One customer, J.C. Penney Company, Inc., accounted for 11% of our fiscal year 1999 net sales and 12% of our fiscal year 1998 net sales. Moreover, we believe that consolidation in the retail industry has centralized purchasing decisions and given customers greater leverage over suppliers like us, and we expect that trend to continue, including in Europe, Canada and Mexico.
While we have long-standing customer relationships, we do not have long-term contracts with any of them. As a result, purchases generally occur on an order- by-order basis, and the relationship, as well as particular orders, can be terminated by either party at any time. In addition, during the past several years, various retailers, including some of our customers, have experienced significant changes and difficulties, including consolidation of ownership, increased centralization of buying decisions, restructurings, bankruptcies and liquidations. These and other financial problems of some of our retailers increase the risk of extending credit to these retailers. A significant adverse change in a customer relationship or in a customer's financial position could cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to that customer's receivables or limit our ability to collect amounts related to previous purchases by that customer, all of which could harm our business and financial condition.
Our operations may be harmed if our recent decision to outsource most of our U.S. jeans production to independent manufacturers proves unsuccessful.
From 1997 through 1999, we closed 29 of our manufacturing and finishing facilities in North America and Europe. As a result, we now outsource approximately two-thirds of our U.S. jeans production from independent contractors, compared with approximately one-third in 1997. We depend upon our contract manufacturers to secure a sufficient supply of raw materials and maintain sufficient manufacturing and shipping capacity. This
dependence could subject us to difficulty in obtaining timely delivery of products of acceptable quality. In addition, a contractor's failure to ship products to us in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers. The failure to make timely deliveries may cause our customers to cancel orders, refuse to accept deliveries, impose non-compliance charges, demand reduced prices or reduce future orders, any of which could harm our sales, reputation and overall profitability.
We require contractors to meet our standards in terms of working conditions, environmental protection and other matters before we are willing to place business with them. As such, we may not be able to obtain the lowest-cost production. In addition, any failure by our independent manufacturers to adhere to labor or other laws, or any divergence of any independent manufacturer's labor practices from those generally considered ethical in the United States, and the potential negative publicity relating to any of these events, could harm our business and reputation.
We do not have long-term contracts with any of our independent manufacturers, and any of these manufacturers may unilaterally terminate their relationship with us at any time. In addition, the recent trend in the apparel industry towards outsourcing has intensified competition for quality contractors, some of which have long-standing relationships with our competitors. To the extent we are not able to secure or maintain relationships with manufacturers that are able to fulfill our requirements, our operations would be harmed.
We rely on key suppliers for a large portion of our fabric purchases.
Three vendors, Cone Mills Corporation, Burlington Industries, Inc. and Galey & Lord, Inc., including its Swift Denim subsidiary, supplied approximately 55% of our total volume of fabric purchases worldwide in 1999. Cone Mills, our largest supplier, supplies various fabrics to us and is the sole supplier of the denim used for our 501(R) jeans. Purchases from Cone Mills accounted for 22% of our total fabric purchases in 1999. Our supply agreement with Cone Mills provides for a rolling five-year term unless either Cone Mills or we elect not to extend the agreement, upon which the agreement will terminate at the end of the then-current term. Cone Mills and we may also terminate the agreement in the event of bankruptcy or insolvency of the other party or a material breach by the other that is not cured within a specified time period. We may also terminate the agreement at any time upon 30 days notice to Cone Mills. We do not have long-term supply agreements with any other principal suppliers, and we compete with other apparel companies for supply capacity. We cannot assure you that we will be able to obtain adequate supply if there occurs a significant disruption in any of our supplier relationships, including any disruption caused by a change of control, bankruptcy or other financial or operating difficulty of any of our suppliers, or in the markets for the fabrics we purchase, including disruptions arising from mill closures or consolidation resulting from excess industry capacity or otherwise. Any of those disruptions could impair our ability to deliver products to customers in a timely manner and harm our business.
We have recently made significant changes in our senior management team, and our current senior management team has limited apparel industry experience.
We have replaced four members of our senior management team with external hires during the past eight months and created one new position. With one exception, none of the recent additions to our management team has prior experience in the apparel industry. This includes our president and chief executive officer, Philip Marineau, and the newly hired head of our worldwide supply chain, Karen Duvall. In addition, we have recently made several key internal appointments, including president of the U.S. Levi's(R) brand, president of the U.S. Dockers(R) and Slates(R) brands and president of our European business. We cannot assure you that our new management team will be able to successfully execute our strategy, and our business and financial condition may suffer if they fail to do so.
The success of our business depends on our ability to attract and retain key personnel.
We compete for the services of qualified personnel. Our inability to retain and attract qualified personnel or the loss of any of our current key executives or key members of our design, merchandising or marketing
staff could harm our business. Our ability to retain and attract qualified employees has been adversely affected by the San Francisco location of our corporate and Americas headquarters, including the high cost of living and competitive labor market in the San Francisco and Silicon Valley area. Other factors that have affected our ability to retain and attract employees include the disruption associated with our restructuring initiatives, our deteriorating financial position and our lack of stock option or other equity-based compensation programs and resulting reliance on cash incentive programs tied to our financial performance.
Our success depends on the continued protection of our trademarks and other proprietary intellectual property rights.
Our trademarks and other intellectual property rights are important to our success and competitive position, and the loss or inability to enforce trademarks and other proprietary intellectual property rights could harm our business. We devote substantial resources to the establishment and protection of our trademarks and other proprietary intellectual property rights on a worldwide basis. We cannot assure you that our efforts to establish and protect our trademarks and other proprietary intellectual property rights will be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products. Moreover, we cannot assure you that others will not assert rights in, or ownership of, our trademarks and other proprietary intellectual property or that we will be able successfully to resolve those claims. In addition, the laws of some foreign countries may not allow us to protect our proprietary rights to the same extent as we do in the United States and other countries. Because our brand recognition is such an important part of our strategy, we are especially dependent upon the protection of our trademarks.
Our international operations expose us to political and economic risks.
In fiscal year 1999, approximately 38% of our net sales were generated outside the United States, and a substantial amount of our products came from sources outside of the country of distribution. As a result, we are subject to the risks of doing business abroad, including:
. political and economic instability;
. exchange controls;
. language and other cultural barriers;
. foreign tax treaties and policies; and
. restrictions on the transfer of funds to or from foreign countries.
Our financial performance on a U.S. dollar denominated basis is also subject to fluctuations in currency exchange rates. Approximately $30 million of the decrease in total net sales for the three months ended February 27, 2000, as compared to the same period in 1999, was due to the effects of translating non- U.S. currency reported sales results into U.S. dollars. From time to time we enter into agreements seeking to reduce our foreign currency exposure, but we cannot assure you that our efforts will be successful.
Our approach to corporate governance may lead us to take actions that conflict with your interests as holders of exchange notes.
All of our common stock is owned by a voting trust described under the caption "Principal Stockholders." Four voting trustees have the exclusive ability to elect and remove directors, amend our by-laws and take other actions which would normally be within the power of stockholders of a Delaware corporation. Although the voting trust agreement gives the holders of two- thirds of the outstanding voting trust certificates the power to remove trustees and terminate the voting trust, three of the trustees, as a group based on their ownership of voting trust certificates, have the ability to block all efforts by the two-thirds of the holders of the voting trust certificates to remove a trustee or terminate the voting trust. In addition, the concentration of voting trust certificate ownership in a small group of holders, including these three trustees, gives this group the voting
power to block stockholder action on matters for which the holders of the voting trust certificates are entitled to vote and direct the trustees under the voting trust agreement.
Our principal stockholders created the voting trust in part to ensure that we would continue to operate in a socially responsible manner while seeking the greatest long-term benefit for our stockholders, employees and other stakeholders and constituencies. We measure our success not only by growth in economic value, but also by our reputation, the quality of our constituency relationships and our commitment to social responsibility. As a result, we cannot assure you that the voting trustees will cause us to be operated and managed in a manner that benefits you as a holder of exchange notes or that the interests of the voting trustees or our principal equity holders will not diverge from yours.
Risks relating to the offering
There is no established trading market for the exchange notes, and any market for the exchange notes may be illiquid.
The exchange notes are a new issue of securities with no established trading market. We cannot assure you that a liquid market will develop for the exchange notes, that you will be able to sell your exchange notes at a particular time or that the prices that you receive when you sell will be favorable. Moreover, we do not intend to apply for the exchange notes to be listed on any securities exchange or to arrange for quotation on any automated dealer quotation system, and the initial purchasers of the old notes are not obligated to make a market in the exchange notes. This offer to exchange the exchange notes for the old notes does not depend upon any minimum amount of old notes being tendered for exchange.
If you do not exchange your old notes, they may be difficult to resell.
It may be difficult for you to sell old notes that are not exchanged in the exchange offer, since any old notes not exchanged may remain subject to the restrictions on transfer provided for in Rule 144 under the Securities Act. These restrictions on transfer of your old notes exist because we issued the old notes pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. In general, absent registration under or exemption from the Securities Act, if you are, were or acquired old notes from an affiliate of ours, your transfer of old notes will continue to be restricted by the resale limitations of Rule 144 and applicable state securities laws. If you are a non-affiliate, any transfer of your old notes must still comply with applicable state securities laws. We do not intend to register the old notes under the Securities Act.
Unless you are an affiliate of us within the meaning of Rule 405 under the Securities Act, you may offer for resale, resell or otherwise transfer exchange notes without compliance with the registration and prospectus delivery provisions of the Securities Act, so long as you acquired the exchange notes in the ordinary course of business and have no arrangement or understanding with respect to the distribution of the exchange notes to be acquired in the exchange offer. If you tender your old notes for the purpose of participating in a distribution of the exchange notes, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.
To the extent any old notes are tendered and accepted in the exchange offer, the trading market, if any, for the old notes that remain outstanding after the exchange offer would be adversely affected due to a reduction in market liquidity.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements, including, in particular, statements about our plans, strategies and prospects under the captions "Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." We have based these forward-looking statements on our current assumptions, expectations and projections about future events. When used in this prospectus, the words "believe," "anticipate," "intend," "estimate," "expect," "project" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements speak only as of the date of this prospectus, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to be correct or that savings or other benefits anticipated in the forward-looking statements will be achieved. Important factors, some of which may be beyond our control, that could cause actual results to differ materially from management's expectations are disclosed in this prospectus, including under the caption "Risk Factors." Prospective purchasers are cautioned not to place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements and the risk factors contained throughout this prospectus.
THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The exchange offer will give holders of old notes the opportunity to exchange the old notes, which were issued on November 6, 1996, for exchange notes that have been registered under the Securities Act. The exchange notes will be identical in all material respects to the old notes. As a consequence of the registration of the exchange notes, we will become subject to the informational requirements of the Exchange Act. To satisfy those requirements, we will file reports and other information with the SEC that will be made available to the holders of the old notes, if any are outstanding after the exchange offer, and the exchange notes and the general public. We are not obligated by any agreement to effect the exchange offer.
The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of old notes in any jurisdiction in which the exchange offer or the acceptance of it would not be in compliance with the securities or blue sky laws of the jurisdiction.
Resale of Exchange Notes
We believe that exchange notes issued under the exchange offer in exchange for old notes may be offered for resale, resold and otherwise transferred by any exchange note holder without further registration under the Securities Act and without delivery of a prospectus that satisfies the requirements of Section 10 of the Securities Act if:
. the holder is not our "affiliate" within the meaning of Rule 405 under the Securities Act;
. the exchange notes are acquired in the ordinary course of the holder's business; and
. the holder does not intend to participate in a distribution of the exchange notes.
Any holder who exchanges old notes in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.
This prospectus may be used for an offer to resell, resale or other retransfer of exchange notes. With regard to broker-dealers, only broker- dealers that acquired the old notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker- dealer that receives exchange notes for its own account in exchange for old notes, where the old notes were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Please read the caption "Plan of Distribution" for more details regarding the transfer of exchange notes.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn before expiration of the exchange offer. The date of acceptance for exchange of the old notes and completion of the exchange offer, is the exchange date, which will be the first business day following the expiration date unless we extend the date as described in this document. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of old notes surrendered under the exchange offer. Old notes may be tendered only in integral multiples of $1,000. The exchange notes will be delivered on the earliest practicable date following the exchange date.
The form and terms of the exchange notes will be substantially identical to the form and terms of the old notes, except the exchange notes:
. will be registered under the Securities Act; and
. will not bear legends restricting their transfer.
The exchange notes will evidence the same debt as the old notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the old notes. Consequently, both the old notes and the exchange notes will be treated as a single series of debt securities under that indenture. For a description of the indenture, see the caption "Description of the Exchange Notes."
The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange.
As of the date of this prospectus, $800.0 million aggregate principal amount of the old notes are outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Act, the Exchange Act, and the rules and regulations of the SEC. Old notes that are not exchanged in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits their holders have under the indenture relating to the old notes and the exchange notes.
We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the holders of old notes who surrender them in the exchange offer for the purposes of receiving the exchange notes from us and delivering the exchange notes to their holders. The exchange agent will make the exchange promptly on the date of acceptance for exchange of the old notes. This exchange date will be the first business day following the expiration date unless it is extended as described in this document. We expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption "-- Conditions."
Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than applicable taxes described below, in connection with the exchange offer. It is important that you read the caption "--Fees and Expenses" for more details regarding fees and expenses incurred in the exchange offer.
Expiration of the Exchange Offer; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on , 2000 which is 30 days following the commencement of the exchange offer. The exchange offer can be extended by us in our sole discretion, in which case the term "expiration date" shall mean the latest date and time to which the exchange offer is extended.
In order to extend the exchange offer, we will notify the exchange agent orally, confirmed in writing, or in writing of any extension. We will notify the registered holders of old notes by public announcement of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration of the exchange offer.
Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.
Conditions
Despite any other term of the exchange offer, we will not be required to accept for exchange any old notes and we may terminate or amend the exchange offer as provided in this prospectus before accepting any old notes for exchange if in our reasonable judgment:
. the exchange notes to be received will not be tradeable by the holder, without restriction under the Securities Act, the Exchange Act and without material restrictions under the blue sky or securities laws of substantially all of the states of the United States;
. the exchange offer, or the making of any exchange by a holder of old notes, would violate applicable law or any applicable interpretation of the staff of the SEC; or
. any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that would reasonably be expected to impair our ability to proceed with the exchange offer.
We will not be obligated to accept for exchange the old notes of any holder that has not made to us:
. the representations described under the captions "--Purpose and Effect of the Exchange Offer," "--Procedures for Tendering" and "Plan of Distribution"; and
. any other representations that may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the exchange notes under the Securities Act.
We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any old notes by giving oral or written notice of an extension to their holders. During an extension, all old notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We will return any old notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. By public announcement we will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the old notes as promptly as practicable. If we amend the exchange offer in a manner that we consider material, we will disclose the amendment by means of a prospectus supplement.
These conditions are solely for our benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any time or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of that right. Each of these rights will be deemed an ongoing right that we may assert at any time or at various times.
We will not accept for exchange any old notes tendered, and will not issue exchange notes in exchange for any old notes, if at that time a stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939.
Procedures for Tendering
Only a holder of record of old notes may tender old notes in the exchange offer. To tender in the exchange offer, a holder must:
. complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires; and deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or
. comply with DTC's Automated Tender Offer Program procedures described below.
In addition, either:
. the exchange agent must receive old notes along with the letter of transmittal;
. the exchange agent must receive, before expiration of the exchange offer, a properly transmitted agent's message or a timely confirmation of book-entry transfer of old notes into the exchange agent's account at DTC according to the procedure for book-entry transfer described below; or
. the holder must comply with the guaranteed delivery procedures described below.
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under the caption "--Exchange Agent" before expiration of the exchange offer. To receive confirmation of valid tender of old notes, a holder should contact the exchange agent at the telephone number listed under the caption "--Exchange Agent."
The tender by a holder that is not withdrawn before expiration of the exchange offer will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. If a holder tenders less than all of the old notes held by this holder, this tendering holder should fill in the applicable box of the letter transmittal. The amount of old notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated.
The method of delivery of old notes, the letter of transmittal and all other required documents to the exchange agent is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before expiration of the exchange offer. Holders should not send the letter of transmittal or old notes to us. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.
Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner's behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its old notes, either:
. make appropriate arrangements to register ownership of the old notes in the owner's name; or
. obtain a properly completed bond power from the registered holder of old notes.
The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.
If the applicable letter of transmittal is signed by the record holder(s) of the old notes tendered, the signature must correspond with the name(s) written on the face of the old note without alteration, enlargement or any change whatsoever. If the applicable letter of transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the old notes.
A signature on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible guarantor institution. Rule 17Ad-15 under the Exchange Act describes eligible guarantor institutions as banks, brokers, dealers, municipal securities dealers, municipal securities brokers, government securities dealers, government securities brokers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. The signature need not be guaranteed by an eligible guarantor institution if the old notes are tendered:
. by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal; or
. for the account of an eligible institution.
If the letter of transmittal is signed by a person other than the registered holder of any old notes, the old notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the old notes and an eligible institution must guarantee the signature on the bond power.
If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless we waive this requirement, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal.
The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC's system may use DTC's Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the old notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, to the effect that:
. DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering old notes that are the subject of the book-entry confirmation;
. the participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agent's message relating to guaranteed delivery, that the participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and
. the agreement may be enforced against the participant.
We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within the time that we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give notification. Tenders of old notes will not be deemed made until those defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.
In all cases, we will issue exchange notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:
. old notes or a timely book-entry confirmation that old notes have been transferred into the exchange agent's account at DTC; and
. a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.
Holders should receive copies of the applicable letter of transmittal with the prospectus. A holder may obtain additional copies of the applicable letter of transmittal for the old notes from the exchange agent at its
offices listed under the caption "--Exchange Agent." By signing the letter of transmittal, each tendering holder of old notes will represent to us that, among other things:
. any exchange notes that the holder receives will be acquired in the ordinary course of its business;
. the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;
. if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes;
. if the holder is a broker-dealer that will receive exchange notes for its own account in exchange for old notes that were acquired as a result of market-making activities or other trading activities, that it will deliver a prospectus, as required by law, in connection with any resale of those exchange notes (see the caption "Plan of Distribution"); and
. the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of us or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.
Book-entry Transfer
The exchange agent will make a request to establish an account with respect to the old notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC's system may make book-entry delivery of old notes by causing DTC to transfer old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. Holders of old notes who are unable to deliver confirmation of the book-entry transfer of their old notes into the exchange agent's account at DTC or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their old notes according to the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
Holders wishing to tender their old notes but whose old notes are not immediately available or who cannot deliver their old notes, the letter of transmittal or any other required documents to the exchange agent or cannot comply with the applicable procedures under DTC's Automated Tender Offer Program before expiration of the exchange offer may tender if:
. the tender is made through an eligible guarantor institution;
. before expiration of the exchange offer, the exchange agent receives from the eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent's message and notice of guaranteed delivery:
-- setting forth the name and address of the holder and the registered number(s) and the principal amount of old notes tendered;
-- stating that the tender is being made by guaranteed delivery; and
-- guaranteeing that, within three New York Stock Exchange trading days after expiration of the exchange offer, the letter of transmittal, or facsimile thereof, together with the old notes or a book-entry confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and
. the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered old notes in proper form for transfer or a book-entry confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after expiration of the exchange offer.
Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their old notes according to the guaranteed delivery procedures set forth above.
Withdrawal of Tenders
Except as otherwise provided in this prospectus, holders of old notes may withdraw their tenders at any time before expiration of the exchange offer.
For a withdrawal to be effective:
. the exchange agent must receive a written notice of withdrawal, which may be by telegram, telex, facsimile transmission or letter, at one of the addresses set forth below under the caption "--Exchange Agent"; or
. holders must comply with the appropriate procedures of DTC's Automated Tender Offer Program system.
Any notice of withdrawal must:
. specify the name of the person who tendered the old notes to be withdrawn;
. identify the old notes to be withdrawn, including the principal amount of the old notes to be withdrawn; and
. where certificates for old notes have been transmitted, specify the name in which the old notes were registered, if different from that of the withdrawing holder.
If certificates for old notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of those certificates, the withdrawing holder must also submit:
. the serial numbers of the particular certificates to be withdrawn; and
. a signed notice of withdrawal with signatures guaranteed by an eligible institution, unless the withdrawing holder is an eligible institution.
If old notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and otherwise comply with the procedures of the facility.
We will determine all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal, and our determination shall be final and binding on all parties. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer. We will return any old notes that have been tendered for exchange but that are not exchanged for any reason to their holder without cost to the holder. In the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC according to the procedures described above, those old notes will be credited to an account maintained with DTC for old notes, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn old notes by following one of the procedures described under the caption "-- Procedures for Tendering" above at any time on or before expiration of the exchange offer.
A holder may obtain a form of the notice of withdrawal from the exchange agent at its offices listed under the caption "--Exchange Agent."
Exchange Agent
Citibank, N.A. has been appointed as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery or the notice of withdrawal to the exchange agent addressed as follows:
By Registered or Certified Mail:
Citibank, N.A.
111 Wall Street
5th Floor
New York, New York 10043
Attention: Sebastien Andrieszyn
By Hand or Overnight Delivery:
Citibank, N.A.
111 Wall Street
5th Floor
New York, New York 10005
Attention: Sebastien Andrieszyn
By Facsimile Transmission (for Eligible Institutions Only):
(212) 825-3483
To Confirm by Telephone or for Information Call:
(800) 422-2066
Delivery of the letter of transmittal to an address other than as shown above or transmission via facsimile other than as set forth above does not constitute a valid delivery of the letter of transmittal.
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitations by telegraph, telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.
We will pay the cash expenses to be incurred in connection with the exchange offer. The expenses are estimated in the aggregate to be approximately $ , including the following:
. SEC registration fees;
. fees and expenses of the exchange agent and trustee;
. accounting and legal fees; and
. printing and mailing costs.
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:
. certificates representing old notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of old notes tendered;
. exchange notes are to be delivered to, or issued in the name of, any person other than the registered holder of the old notes;
. tendered old notes are registered in the name of any person other than the person signing the letter of transmittal; or
. a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer.
If satisfactory evidence of payment of transfer taxes is not submitted with the letter of transmittal, the amount of any transfer taxes will be billed to the tendering holder.
Accounting Treatment
We will record the exchange notes in our accounting records at the same carrying value as the old notes, which is the aggregate principal amount, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. We will record the expenses of the exchange offer as incurred.
Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. We urge you to consult your financial and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. However, we have no present plans to acquire any old notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered old notes.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange notes under the exchange offer. In consideration for issuing the exchange notes as contemplated by this prospectus, we will receive the old notes in like principal amount, the terms of which are identical in all material respects to the exchange notes. The old notes surrendered in exchange for the exchange notes will be retired and canceled and cannot be reissued. Accordingly, the issuance of the exchange notes will not result in any increase in our indebtedness or capital stock.
CAPITALIZATION
The following table sets forth our capitalization as of February 27, 2000. This table should be read in conjunction with our historical financial statements and the related notes included in this prospectus.
February 27, 2000
----------------------
(Dollars in Thousands)
Cash and cash equivalents................................ $ 105,959
===========
Total debt (including current portion):
Credit facilities...................................... $ 1,292,552
Short-term foreign bank lines.......................... 29,943
6.80% Notes due 2003................................... 348,189
7.00% Notes due 2006................................... 446,853
4.25% Yen-denominated eurobond due 2016................ 180,180
Customer service center equipment financing............ 89,500
Industrial development revenue refunding bond.......... 10,000
Notes payable, at various rates, due through 2006...... 6,260
-----------
Total debt............................................... 2,403,477
Total stockholders' deficit.............................. (1,219,572)
-----------
Total capitalization................................... $ 1,183,905
===========
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial data for Levi Strauss & Co. The following selected statements of income data and cash flow data for fiscal years 1995, 1996, 1997, 1998 and 1999 and the consolidated statement of balance sheet data of such periods are derived from our financial statements that have been audited by Arthur Andersen LLP, independent public accountants. The data for the three months ended February 28, 1999 and February 27, 2000 have been derived from our unaudited consolidated financial statements which, in our opinion, contain all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for these periods. The results of operations for the three months ended February 27, 2000 may not be indicative of the results to be expected for the year ending November 26, 2000.
The financial data set forth below should be read in conjunction with, and is qualified by reference to, "Management's Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial statements and the related notes to those financial statements, included elsewhere in this prospectus.
Year Ended Three Months Ended
-------------------------------------------------------------- ------------------------
Nov. 26, Nov. 24, Nov. 30, Nov. 29, Nov. 28, Feb. 28, Feb. 27,
1995 1996 1997 1998 1999 1999 2000
---------- ----------- ----------- ----------- ----------- ----------- -----------
(Unaudited)
(Dollars in Thousands)
Statement of Income
Data:
Net sales............... $6,707,631 $ 7,136,304 $ 6,861,482 $ 5,958,635 $ 5,139,458 $ 1,278,322 $ 1,082,437
Cost of goods sold...... 3,930,132 4,159,371 3,962,719 3,433,081 3,180,845 814,673 632,442
---------- ----------- ----------- ----------- ----------- ----------- -----------
Gross profit............ 2,777,499 2,976,933 2,898,763 2,525,554 1,958,613 463,649 449,995
Marketing, general and
administrative
expenses............... 1,809,633 2,029,138 2,045,938 1,834,058 1,629,845 419,085 322,111
Excess
capacity/restructuring
charges(1)............. -- -- 386,792 250,658 497,683 394,105 --
Global Success Sharing
Plan(2)................ -- 138,963 114,833 90,564 (343,873) -- --
Special compensation
charge(3).............. -- 76,983 -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ----------- -----------
Operating income
(loss)................. 967,866 731,849 351,200 350,274 174,958 (349,541) 127,884
Interest expense........ 15,659 145,234 212,358 178,035 182,978 43,157 56,782
Other (income) expense,
net.................... (82,630) (33,291) (45,439) 9,539 (16,519) (16,127) (29,141)
---------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) before
taxes.................. 1,034,837 619,906 184,281 162,700 8,499 (376,571) 100,243
Income tax expense
(benefit).............. 300,101 154,977 46,070 60,198 3,144 (139,331) 35,084
---------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)....... $ 734,736 $ 464,929 $ 138,211 $ 102,502 $ 5,355 $ (237,240) $ 65,159
========== =========== =========== =========== =========== =========== ===========
Other Financial Data:
EBITDA(4)............... $1,083,248 $ 861,386 $ 490,094 $ 479,047 $ 295,060 $ (315,894) $ 148,504
Adjusted EBITDA(5)...... 1,083,248 1,077,332 991,719 820,269 448,870 78,211 148,504
Capital expenditures.... 333,949 210,466 121,595 116,531 61,062 18,779 4,252
Ratio of adjusted EBITDA
to interest expense.... 69.2x 7.4x 4.7x 4.6x 2.5x 1.8x 2.6x
Ratio of earnings to
fixed charges(6)....... 23.2x 3.8x 1.6x 1.6x 1.0x -- 1.7x
Statement of Cash Flow
Data:
Cash flows from
operating activities... $ 749,319 $ 494,138 $ 573,890 $ 223,769 $ (173,772) $ 43,627 $ 60,302
Cash flows from
investing activities... (363,841) (242,781) (76,895) (82,707) 62,357 (9,801) 104,953
Cash flows from
financing activities... (105,305) (1,136,300) (530,302) (194,489) 224,219 (17,828) (251,176)
Balance Sheet Data:
Cash and cash
equivalents............ $1,088,032 $ 195,852 $ 144,484 $ 84,565 $ 192,816 $ 97,654 $ 105,959
Working capital......... 1,722,074 1,059,940 706,522 645,900 799,627 521,998 666,010
Total assets............ 4,709,157 4,192,696 4,032,327 3,884,658 3,665,517 3,819,131 3,303,383
Total debt.............. 38,057 3,225,512 2,631,696 2,415,330 2,664,609 2,393,028 2,403,477
Stockholders' equity
(deficit)(3)........... 2,115,293 (1,481,577) (1,370,262) (1,313,747) (1,288,562) (1,519,481) (1,219,572)
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(1) We reduced overhead expenses and eliminated excess manufacturing capacity through extensive restructuring initiatives executed during the past three years, including reducing the number of our employees by 18,500 and closing 29 of our owned and operated production and finishing facilities in North America and Europe.
(2) Our Global Success Sharing Plan, adopted in 1996, provides for cash payments to our employees in 2002 if we achieve pre-established financial targets. We recognized and accrued expenses in 1998, 1997 and 1996 for our Global Success Sharing Plan. During 1999, we concluded that, based on our financial performance, the targets under the plan would not be achieved and that the probability of a payment in 2002 is highly unlikely. As a result, in 1999 we reversed into income $343.9 million of accrued expenses, less miscellaneous expenses, previously recorded in connection with the Global Success Sharing Plan.
(3) The special compensation charge and stockholders' equity (deficit) resulted from a 1996 transaction in which our stockholders created new long-term governance arrangements for us, including the voting trust and stockholders agreement. In the 1996 transaction, a group of stockholders of our former parent, Levi Strauss Associates Inc., established a new company, LSAI Holding Corp, to which they contributed approximately 70% of the outstanding shares of Levi Strauss Associates Inc. Levi Strauss Associates Inc. was then merged with a subsidiary of LSAI Holding Corp. In the merger, shares of Levi Strauss Associates Inc. not contributed to LSAI Holding Corp., including shares held under several employee benefit and compensation plans, were converted into the right to receive cash, thereby making Levi Strauss Associates Inc. a wholly-owned subsidiary of LSAI Holding Corp. Funding for the cash payments in the merger was provided in part by cash on hand and in part from proceeds of approximately $3.3 billion of borrowings under bank credit facilities. The special compensation charge resulted from the impact of the transaction on various employee plans. In October 1996, Levi Strauss Associates Inc. and LSAI Holding Corp. were merged into Levi Strauss & Co. These transactions were accounted for as a reorganization of entities under common control.
(4) EBITDA equals operating income (loss) plus depreciation and amortization expense. EBITDA is not intended to represent cash flow or any other measure of performance in accordance with generally accepted accounting principles. EBITDA is included herein because we believe that you may find it to be a useful analytical tool. Other companies may calculate EBITDA differently, and we cannot assure you that our figures are comparable with similarly- titled figures for other companies.
(5) The calculation for adjusted EBITDA is shown below:
Year Ended Three Months Ended
------------------------------------------------- -------------------
Nov. 26, Nov. 24, Nov. 30, Nov. 29, Nov. 28, Feb. 28, Feb. 27,
1995 1996 1997 1998 1999 1999 2000
---------- ---------- -------- -------- --------- --------- --------
(Dollars in Thousands)
EBITDA.................. $1,083,248 $ 861,386 $490,094 $479,047 $ 295,060 $(315,894) $148,504
Excess capacity
reduction/restructuring
charge................. -- -- 386,792 250,658 497,683 394,105 --
Global Success Sharing
Plan................... -- 138,963 114,833 90,564 (343,873) -- --
Special Compensation
Charges................ -- 76,983 -- -- -- -- --
---------- ---------- -------- -------- --------- --------- --------
Adjusted EBITDA......... $1,083,248 $1,077,332 $991,719 $820,269 $ 448,870 $ 78,211 $148,504
========== ========== ======== ======== ========= ========= ========
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(6) For the purpose of computing the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes, plus fixed charges and less capitalized interest. Fixed charges are defined as the sum of interest, including capitalized interest, on all indebtedness, amortization of debt issuance cost and that portion of rental expense which we believe to be representative of an interest factor. For the three months ended February 28, 1999, earnings were insufficient by $412.1 million to cover total fixed charges.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Business Overview
We are one of the world's leading branded apparel companies with operations in more than 40 countries. We design and market jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories for men, women and children under the Levi's(R), Dockers(R) and Slates(R) brands. Our products are primarily distributed in the United States through chain retailers and department stores and abroad through department stores and specialty retailers. We also maintain a network of approximately 750 franchised or independently owned stores dedicated to our products outside the United States and operate a small number of company-owned stores.
We believe there is no other apparel company with a comparable global presence in either the jeans or casual pants segment of the apparel market. According to a 1999 study performed on our behalf by an international market research firm, the Levi's(R) brand is the most recognized casual clothing brand in all 17 of the markets in which the study was conducted, including the United States, Canada, Germany, Italy, France, the United Kingdom, Japan and Australia.
Despite our brand recognition, our operating and financial performance has declined over the last three years. Our total net sales fell from $7.1 billion in 1996 to $5.1 billion in 1999, and we expect our sales to continue to decline in 2000 as compared to 1999. For the three months ended February 27, 2000, our total net sales were $1.1 billion, compared with $1.3 billion in the same period in 1999. Our brand equity and market position have also declined in all three of the regions where we operate. This deterioration is attributable to both industry-wide and company-specific factors. Industry-wide factors include consumer market trends towards more fashion denim and non-denim products and intense competition from designer and private label products. Company-specific factors include brand equity erosion, insufficient product innovation, poor presentation of our product at retail, operational problems in our supply chain and weakness in our key distribution channels.
In late 1997, we began restructuring our business to address our deteriorating operating and financial performance. We have reduced overhead expenses and eliminated excess manufacturing capacity through extensive restructuring initiatives executed during the last three years. We have shifted to increased outsourcing of production to contract manufacturers. We put in place a new senior management team, including a new chief executive officer, a new chief financial officer, new senior vice presidents responsible for worldwide supply chain and worldwide human resources and new operating heads for each of our three operating regions. Going forward, our primary strategic goals are to reverse the recent deterioration in our performance and to reposition our business to support future growth. We plan to achieve these goals through our restructuring efforts and by leveraging the worldwide recognition of our brand names, our global presence and our history of product innovation and high product quality.
Restructuring Overview
Over the last three years, we closed 29 of our owned and operated production and finishing facilities in North America and Europe in order to reduce costs, eliminate excess capacity and align our sourcing strategy with changes in the industry and in consumer demand, leaving us with 22 operated facilities worldwide as of February 27, 2000. As a result, we currently produce only approximately one-third of our U.S. jeans ourselves, down from approximately two-thirds in 1997. During this period, we executed initiatives to reduce operating expenses and consolidate operations in conjunction with the closure of these facilities. We also reduced the number of our employees from approximately 36,000 at the end of 1997 to approximately 17,500 as of February 27, 2000.
We have recorded charges totaling approximately $1.1 billion arising from plant closures and restructuring initiatives, including costs related to severance plans and other employee assistance programs, write-offs of property and plants to be disposed of, and other restructuring charges such as costs to cover contractor obligations and various administrative functions. This $1.1 billion is comprised of charges of $497.7 million,
$250.7 million and $386.8 million recorded in 1999, 1998 and 1997, respectively. As of February 27, 2000, we have expended $814.2 million in cash and incurred $90.0 million in non-cash asset write-offs related to these recorded charges. We anticipate completing the remaining spending by the end of 2000, except for the spending relating to the North American plant closures, which we expect to complete in 2001. The $230.9 million reserve remaining at February 27, 2000 is composed of $135.2 million for severance and other employee assistance programs, $56.5 million for asset write-offs and $39.2 million for other restructuring costs. These changes are described in further detail in the caption "--Restructuring and Excess Capacity Reduction." We do not anticipate taking any material restructuring charges for additional capacity reductions or reorganization efforts in 2000 or 2001.
Global Success Sharing Plan
Our Global Success Sharing Plan, adopted in 1996, provides for cash payments to our employees in 2002 if we achieve pre-established financial targets. We recognized and accrued expenses of $90.6 million, $114.8 million and $139.0 million in 1998, 1997 and 1996, respectively, for our Global Success Sharing Plan. During 1999, we concluded that, based on our financial performance, the targets under the plan would not be achieved and that the probability of a payment in 2002 is highly unlikely. As a result, in 1999 we reversed into income $344.0 million of accrued expenses, less miscellaneous expenses, previously recorded in connection with the Global Success Sharing Plan.
Results of Operations
The following table sets forth, for the periods indicated, selected items in our consolidated statements of operations, expressed as a percentage of net sales (amounts may not foot due to rounding).
Year Ended Three Months Ended
--------------------------- -----------------------
Nov. 30, Nov. 29, Nov. 28, Feb. 28, Feb. 27,
1997 1998 1999 1999 2000
-------- -------- -------- --------- ---------
Margin Data:
Net sales............... 100.0 % 100.0% 100.0 % 100.0 % 100.0 %
Cost of goods sold...... 57.8 57.6 61.9 63.7 58.4
----- ----- ----- --------- ---------
Gross profit............ 42.2 42.4 38.1 36.3 41.6
Marketing, general and
administrative
expenses............... 29.8 30.8 31.7 32.8 29.8
Excess
capacity/restructuring
charges................ 5.6 4.2 9.7 30.8 --
Global Success Sharing
Plan................... 1.7 1.5 (6.7) -- --
----- ----- ----- --------- ---------
Operating income
(loss)................. 5.1 5.9 3.4 (27.3) 11.8
Interest expense........ 3.1 3.0 3.6 3.4 5.2
Other (income) expense,
net.................... (0.7) 0.2 (0.3) (1.3) (2.7)
----- ----- ----- --------- ---------
Income (loss) before
taxes.................. 2.7 2.7 0.2 (29.5) 9.3
Income tax expense
(benefit).............. 0.7 1.0 0.1 (10.9) 3.2
----- ----- ----- --------- ---------
Net income (loss)....... 2.0 % 1.7% 0.1 % (18.6)% 6.0 %
===== ===== ===== ========= =========
Net Sales Segment Data:
Geographic
Americas.............. 66.5 % 66.1% 66.5 % 64.1 % 63.8 %
Europe................ 26.7 27.7 26.5 29.5 28.0
Asia Pacific.......... 6.8 6.2 7.0 6.4 8.2
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Three Months Ended February 27, 2000 as Compared to Three Months Ended February 28, 1999
Net sales. Total net sales for the three months ended February 27, 2000 decreased 15.3% to $1.1 billion, as compared to $1.3 billion in the same period in 1999. The decrease was primarily due to volume declines in Levi's(R) brand products in the United States and Europe as a result of the continued erosion of younger
consumers' perception of our Levi's(R) brand and intense competition from designer and private label products. Also contributing to the decrease were lower average unit selling prices worldwide caused by a higher proportion of closeout sales in line with our intensive efforts to clear inventories of slow- moving or obsolete fashion products. In the Americas, net sales decreased 15.8% to $690.5 million, as compared to $819.8 million in the same period in 1999. In Europe, net sales decreased 19.6% to $303.0 million, as compared to $377.0 million in the same period in 1999. Approximately half of the decline in Europe was due to a stronger U.S. dollar to European currencies exchange rate. In the Asia Pacific region, net sales increased 9.1% to $88.9 million, as compared to $81.5 million in the same period in 1999, partially attributable to the weaker U.S. dollar to yen exchange rate. Approximately $30.0 million of the decrease in total net sales for the three months ended February 27, 2000, as compared to the same period in 1999, was due to the effects of translating non- U.S. currency reported sales results into U.S. dollars.
Gross profit. Gross profit as a percentage of net sales, or gross margin, for the three months ended February 27, 2000 increased to 41.6%, as compared to 36.3% in the same period in 1999. Higher proportions of higher margin basic denim products sold in all regions contributed to the increase. In addition, during the three months ended February 27, 2000, we realized the benefit of cost reductions associated with plant closures due to the reduction of plant downtime.
Marketing, general and administrative expenses. Marketing, general and administrative expenses for the three months ended February 27, 2000 decreased 23.1% to $322.1 million, as compared to $419.1 million in the same period in 1999. Consequently, marketing, general and administrative expenses as a percentage of net sales decreased to 29.8%, as compared to 32.8% in the same period in 1999. These decreases were primarily due to lower total salary and wages resulting from headcount reductions and lower sales volume-related, information technology and advertising expenses. Sales volume-related marketing, general and administrative expenses such as selling, distribution and freight decreased in line with the reduction in sales volume. The lower salary and wages and information technology expenses were due primarily to our focus on cost containment and overhead reduction. We also incurred minimal information technology expenses associated with our year 2000 compliance effort. Advertising expense for the three months ended February 27, 2000 decreased 27.7% to $81.8 million, as compared to $113.2 million in the same period in 1999. Our advertising expenses decreased because we lowered our media advertising costs by focusing on key youth segments in relevant media, slightly offset by the costs associated with an increased emphasis on retail presentation and the launch of our new Levi's(R) Engineered Jeans(TM) line.
Excess capacity/restructuring expenses. For the three months ended February 27, 2000, we recorded no charges, as compared to charges of $394.1 million in the same period in 1999 from the closure of 11 manufacturing facilities in North America.
Interest expense. Interest expense for the three months ended February 27, 2000 increased 31.6% to $56.8 million, as compared to $43.2 million in the same period in 1999. This increase was due to a higher average cost of borrowing resulting from higher interest rates associated with the new credit facility agreements and an equipment financing agreement, higher average debt outstanding and higher market interest rates.
Other (income) expense, net. Other (income) expense, net includes items such as interest income, hyper-inflationary transaction gains and losses in foreign countries, foreign exchange gains and losses on our hedging program, licensee income and gains and losses on sale of property, plant and equipment. Other (income) expense, net for the three months ended February 27, 2000 increased 80.7% to $29.1 million, as compared to $16.1 million in the same period in 1999. This increase was primarily attributable to a $26.1 million gain on the sale of two office buildings in San Francisco located next to our corporate headquarters, offset by lower net gains on foreign currency contracts. Net currency gains are primarily due to the fluctuations of various currencies in relation to foreign currency hedging positions.
Income tax expense (benefit). Income tax expense for the three months ended February 27, 2000 was $35.1 million, as compared to an income tax benefit of $139.3 million in the same period in 1999. The income
tax benefit for the three months ended February 28, 1999 was generated primarily from the excess capacity restructuring charge of $394.1 million that created a pre-tax loss. Our effective tax rate for the three months ended February 27, 2000 was 35.0%, as compared to 37.0% for the same period in 1999. The lower tax rate for the three months ended February 27, 2000 was due to a reassessment of potential tax settlements.
Net income (loss). Net income for the three months ended February 27, 2000 increased to $65.2 million, as compared to a net loss of $237.2 million in the same period in 1999. Net income for the three months ended February 27, 2000 included a $26.1 million pre-tax gain related to the sale of two office buildings. Net loss for the three months ended February 28, 1999 included a pre-tax excess capacity reduction charge of $394.1 million. Excluding the impacts of these one-time charges, net income for the three months ended February 27, 2000 would have increased by $37.2 million to $48.2 million, as compared to $11.0 million for the same period in 1999. Lower marketing, general and administrative expenses and increases in gross profit as a percentage of sales contributed to the increase in net income for the three months ended February 27, 2000, partially offset by lower net sales and higher interest expense.
Year Ended November 28, 1999 as Compared to Year Ended November 29, 1998
Net sales. Total net sales in fiscal year 1999 decreased 13.7% to $5.1 billion, as compared to $6.0 billion in fiscal year 1998. Net sales declined worldwide in Levi's(R) brand basic denim products as the consumer market trended towards more fashion denim, designer and private label products, as well as non-denim products. Factors contributing to our fiscal year 1999 net sales decline were difficulties in matching production with demand and a higher percentage of closeout sales needed to reduce the buildup of inventories. In the Americas, net sales decreased 13.2% to $3.4 billion, as compared to $3.9 billion in fiscal year 1998. In Europe, net sales decreased 17.6% to $1.4 billion, as compared to $1.7 billion in fiscal year 1998. In the Asia Pacific region, net sales decreased 3.0% to $358.4 million, as compared to $369.4 million in fiscal year 1998. Changes in foreign exchange rates had a minimal impact on total net sales. In fiscal years 1999 and 1998, we had one customer that represented approximately 11% and 12%, respectively, of total net sales. No other customer accounted for more than 10% of total net sales.
Gross profit. Gross profit as a percentage of net sales, or gross margin, decreased to 38.1% in fiscal year 1999, as compared to 42.4% in fiscal year 1998. The decrease was primarily attributable to unfavorable product mix and increased production downtime. Idle capacity associated with production downtime occurred in 1999 as factory production was curtailed prior to fully closing some North American and European plants. In fiscal year 1999 we determined that the sell-off of obsolete goods would continue in fiscal year 2000 and thus inventories were marked down accordingly resulting in higher costs of goods sold.
Marketing, general and administrative expenses. Marketing, general and administrative expenses for fiscal year 1999 decreased 11.1% to $1.6 billion, as compared to $1.8 billion in fiscal year 1998. Marketing, general and administrative expenses as a percentage of net sales in fiscal year 1999 increased to 31.7%, as compared to 30.8% in fiscal year 1998. The dollar decrease resulted primarily from reduced selling and distribution costs associated with lower unit volume shipments, decreases in performance-related incentives and reductions in administrative and overhead expenses associated with cost reduction efforts. Advertising expenses in fiscal year 1999 increased 5.0% to $490.2 million, as compared to $466.7 million in fiscal year 1998 primarily due to various initiatives we implemented to revitalize our brand. Advertising initiatives in fiscal year 1999 included worldwide music sponsorship programs, a new Pan-European marketing campaign and a renewed focus on U.S. Dockers(R) brand promotions.
Excess capacity reduction/restructuring expenses. For fiscal year 1999, we incurred charges of $497.7 million, as compared to $250.7 million in fiscal year 1998. These charges were associated with the plant closures in North America and Europe and with our corporate overhead restructuring initiatives.
Global Success Sharing Plan. In fiscal year 1999, we reversed into income $343.9 million of previously recorded expenses associated with the Global Success Sharing Plan, as compared to an expense of
$90.6 million recognized in fiscal year 1998. This reversal of the Global Success Sharing Plan liability was based on our lower estimate of financial performance through the year 2001.
Interest expense. Interest expense in fiscal year 1999 increased 2.8% to $183.0 million, as compared to $178.0 million in fiscal year 1998. This increase was due to higher average debt outstanding throughout most of fiscal year 1999. The increase in outstanding debt was primarily due to the cash outflows associated with plant closures and restructuring initiatives.
Other (income) expense, net. Other (income) expense, net in fiscal year 1999 increased to $16.5 million, as compared to a $9.5 million net expense in fiscal year 1998. This change was primarily attributable to net gains on foreign currency contracts in fiscal year 1999, as compared to net losses in fiscal year 1998. Net currency gains and losses are primarily due to currency fluctuations in relation to our foreign currency hedging positions.
Income tax expense (benefit). Income tax expense for fiscal year 1999 decreased 94.8% to $3.1 million, as compared to $60.2 million in fiscal year 1998. The decrease in income tax expense is consistent with the decrease in income before taxes as the effective tax rate was 37.0% for both fiscal years.
Net income (loss). Net income for fiscal year 1999 decreased 94.8% to $5.4 million, as compared to $102.5 million in fiscal year 1998. Net income for fiscal years 1999 and 1998 was adversely impacted by the pre-tax North American and European plant closures and restructuring initiatives totaling $497.7 million in fiscal year 1999 and $250.7 million in fiscal year 1998. Offsetting this decrease in fiscal year 1999 was the pre-tax reversal of the Global Success Sharing Plan liability totaling $343.9 million, as compared to a pre- tax charge of $90.6 million in fiscal year 1998. Excluding the charges for the plant closures and restructuring initiatives and the reversal and charge for Global Success Sharing Plan in fiscal years 1999 and 1998, net income for fiscal year 1999 would have decreased by $215.2 million to $102.3 million, as compared to $317.5 million in fiscal year 1998. The principal causes of this decrease were lower net sales and lower gross margin, which were partially offset by lower marketing, general and administrative expenses.
Year Ended November 29, 1998 as Compared to Year Ended November 30, 1997
Net sales. Total net sales in fiscal year 1998 decreased 13.2% to $6.0 billion, as compared to $6.9 billion in fiscal year 1997. The decrease from fiscal year 1997 was a result of lower sales volumes, primarily due to worldwide decline in consumer demand for our Levi's(R) basic denim products. This was a result of a consumer market trend towards more fashion denim and non-denim products, intense competition from designer and private label products and a poor economy in the Asia Pacific region. Net sales also declined as a result of insufficient product innovation, poor presentation of product at retail and challenges in accurately matching production with forecasted demand. In addition, net sales in fiscal year 1998 decreased from fiscal year 1997 by approximately 2.0% due to the effects of translating non-U.S. currency sales to the U.S. dollar. In the Americas, net sales in fiscal year 1998 decreased 13.7% to $3.9 billion, as compared to $4.6 billion in fiscal year 1997. In Europe, net sales in fiscal year 1998 decreased 9.7% to $1.7 billion, as compared to $1.8 billion in fiscal year 1997. In the Asia Pacific region, net sales in fiscal year 1998 decreased by 21.1% to $369.4 million, as compared to $468.0 million in fiscal year 1997. In fiscal years 1998 and 1997, we had one customer that represented approximately 12% and 11%, respectively, of total net sales. No other customer accounted for more than 10% of total net sales.
Gross profit. Gross profit as a percentage of net sales, or gross margin, in fiscal year 1998 remained relatively flat at 42.4%, as compared to 42.2% in fiscal year 1997. Gross margin increased slightly due to improved product mix, offset by a stronger U.S. dollar and higher product sourcing costs.
Marketing, general and administrative expenses. Marketing, general and administrative expenses in fiscal year 1998 decreased 10.4% to $1.8 billion, as compared to $2.0 billion in fiscal year 1997. Marketing, general and administrative expenses as a percentage of net sales increased to 30.8%, as compared to 29.8% in fiscal year 1997. Sales volume-related expenses such as distribution, freight and sourcing costs declined in line with
net sales reductions. Administrative expenses declined as a result of lower performance-related incentive pay costs and declines in other overhead costs associated with cost reduction efforts. Advertising expenses as a percentage of net sales in fiscal year 1998 increased to 7.8%, as compared to 6.9% million in fiscal year 1997 and reflected various initiatives to revitalize sales volume.
Excess capacity reduction/restructuring expenses. In fiscal year 1998, we incurred charges of $250.7 million, as compared to $386.8 million in fiscal year 1997. These charges were associated with the plant closures in North America and Europe and with our corporate overhead restructuring initiatives.
Global Success Sharing Plan. Global Success Sharing Plan expenses in fiscal year 1998 decreased 21.1% to $90.6 million, as compared to $114.8 million in fiscal year 1997. This decrease resulted from the adoption of a lower Global Success Sharing Plan accrual rate, based on revised estimates of financial performance through the year 2001.
Interest expense (benefit). Interest expense in fiscal year 1998 decreased 16.2% to $178.0 million, as compared to $212.4 million in fiscal year 1997. This decrease was due to lower average debt outstanding that resulted from the repayment of borrowings using cash generated from operations.
Other (income) expense, net. In fiscal year 1998 there was a net expense of $9.5 million compared to other income, net of $45.4 million in fiscal year 1997. This net expense was primarily attributable to losses on foreign currency hedging contracts in fiscal year 1998, as compared to gains in fiscal year 1997. Net currency gains and losses are primarily due to currency fluctuations in relation to our foreign currency hedging positions.
Income tax expense (loss). Income tax expense in fiscal year 1998 increased 30.7% to $60.2 million, as compared to $46.1 million in fiscal year 1997. This increase was primarily due to a non-recurring tax benefit in fiscal year 1997 of $40.0 million associated with the restructuring of non-U.S. affiliates under a U.S. tax regulation allowing deductions for previously non-deductible losses. As a result, the effective tax rate for fiscal year 1998 was 37.0%, as compared to 25.0% for fiscal year 1997.
Net income. Net income in fiscal year 1998 decreased 25.8% to $102.5 million, as compared to $138.2 million in fiscal year 1997. Net income for fiscal years 1998 and 1997 were adversely impacted by charges associated with the restructuring initiatives and the Global Success Sharing Plan. In addition, fiscal year 1997 included a $40.0 million one-time tax benefit. These pre-tax one-time items totaled $341.2 million in fiscal year 1998 and $461.6 million in fiscal year 1997. Excluding the effects of the restructuring initiatives and the Global Success Sharing Plan in fiscal years 1998 and 1997, net income for fiscal year 1998 would have decreased by $94.0 million to $317.5 million, as compared to $411.5 million in fiscal year 1997. The principal cause of this decrease was lower net sales, partially offset by lower marketing, general and administrative expenses.
Restructuring and Excess Capacity Reduction
The following is a summary of the actions taken and related charges associated with our excess capacity reductions and other restructuring activities:
. During September 1999, we announced plans to close one manufacturing facility and further reduce overhead costs by consolidating operations in Europe, with an estimated displacement of 960 employees. We recorded an initial charge to set up a reserve of $54.7 million. As of February 27, 2000, the balance of this reserve was $19.9 million, and approximately 810 employees had been displaced. The manufacturing facility was closed in December 1999.
. In February 1999, we announced the closure of 11 manufacturing facilities in North America. We recorded an initial charge to set up a reserve of $394.1 million. As of February 27, 2000, the balance in this reserve was $145.9 million, and approximately 5,880 employees had been displaced. The 11 manufacturing facilities were closed during 1999.
. In fiscal year 1999, we recorded an initial charge to set up a reserve of $48.9 million for corporate overhead reorganization initiatives with an estimated displacement of 930 employees upon completion of the reorganization. As of February 27, 2000, the balance of this reserve was $21.5 million, and approximately 360 employees had been displaced.
. In fiscal year 1998, we recorded an initial charge to set up a reserve of $61.1 million for corporate overhead reorganization initiatives and $82.1 million for the closure of two North American finishing facilities. Approximately 770 and 990 employees were displaced in connection with the reorganization and facility closures, respectively. As of February 27, 2000, the balances of these reserves were $10.6 million and $9.4 million, respectively. The two North America finishing facilities were closed during 1999.
. In fiscal year 1998, we recorded an initial restructuring charge to set up a reserve of $107.5 million for reorganization initiatives and the closure of two manufacturing and two finishing facilities in Europe with an estimated displacement of 1,650 employees. As of February 27, 2000, the balance of this reserve was $8.1 million and approximately 1,630 employees had been displaced. The two manufacturing and two finishing facilities were closed in 1999.
. In November 1997, we announced the closure of one finishing and 10 manufacturing facilities in North America. Those facilities were closed by the end of 1998, resulting in the displacement of approximately 6,400 employees. We recorded an initial charge to set up a reserve of $386.8 million. As of February 27, 2000, the balance of this reserve was $15.5 million.
The following table summarizes the plant closures and restructuring charges and the resulting cash and non-cash reductions:
Balance as of
Initial Cash Non-cash February 27,
Provision Reductions Reductions 2000
---------- ---------- ---------- -------------
(Dollars in Thousands)
1997 North American Plant
Closures...................... $ 386,792 $332,421 $38,847 $ 15,524
1998 North American Plant
Closures...................... 82,073 53,347 19,293 9,433
1999 North American Plant
Closures...................... 394,105 225,714 22,472 145,919
1998 Corporate Restructuring
Initiatives................... 61,062 49,500 983 10,579
1999 Corporate Restructuring
Initiatives................... 48,889 27,418 -- 21,471
1998 European Restructuring and
Plant Closures................ 107,523 91,077 8,336 8,110
1999 European Restructuring and
Plant Closures................ 54,689 34,734 55 19,900
---------- -------- ------- --------
Total as of February 27,
2000........................ $1,135,133 $814,211 $89,986 $230,936
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The balance of the above reserves as of February 27, 2000 was $230.9 million, of which $56.5 million was included as a reduction to property, plant and equipment on the balance sheet and was a non-cash item, while the remaining balance of $174.4 million was included in restructuring reserves on the balance sheet and will be paid in cash. Approximately $145.0 million of this balance is expected to be paid by the end of fiscal year 2000, with the remaining balance expected to be paid in 2001.
Liquidity and Capital Resources
Our principal capital requirements have been to fund working capital, to pay down debt and for capital expenditures. We have historically relied on internally generated funds and bank borrowings to finance our operations. As of February 27, 2000, total cash and cash equivalents were $106.0 million, an $8.3 million increase over the $97.7 million cash balance reported as of February 28, 1999 and a decrease of $86.8 million from the $192.8 million reported as of November 28, 1999.
Our capital spending in fiscal year 1999 was $61.1 million, as compared to $116.5 million in fiscal year 1998 and $121.6 million in fiscal year 1997. Our capital expenditure plan for fiscal year 2000 contemplates
$50.0 million in expenditures, primarily for maintenance and purchase of equipment at our remaining manufacturing facilities and distribution centers, and for computer systems. As a result of our plant closures in 1998 and 1999, we expect to have reduced capital spending for manufacturing activities than in the past.
Cash provided by/used in operations. Cash provided by operating activities for the three months ended February 27, 2000 increased 38.2% to $60.3 million, as compared to $43.6 million in the same period in 1999. Inventory decreased due to our inventory initiatives, which included tighter inventory control, lead-time reduction and an aggressive program to dispose of obsolete inventory. Net deferred tax assets decreased during the three months ended February 27, 2000 primarily due to the spending related to the excess capacity reduction and restructuring initiatives. Restructuring reserves decreased due to spending associated with restructuring initiatives and plant closures. Accrued salaries, wages and employee benefits, and long-term employee benefits decreased during the three months ended February 27, 2000 as a result of the reduced number of employees and timing differences.
Cash used by operating activities in fiscal year 1999 was $173.8 million, as compared to cash provided by operating activities of $223.8 million in fiscal year 1998. This change was primarily due to increased spending associated with plant closures and restructuring initiatives and lower sales in fiscal year 1999. The decrease in long-term employee related benefits during fiscal year 1999 primarily reflected the reversal of the prior year's accruals for Global Success Sharing Plan and reductions in deferred compensation. Inventory decreased during fiscal year 1999 primarily due to reduced production levels. The increase in income tax receivable for fiscal year 1999 reflected an expected income tax refund based upon a carryback of a net operating loss to be reported on our income tax return.
Cash provided by operating activities in fiscal year 1998 decreased 61.0% to $223.8 million, as compared to $573.9 million in fiscal year 1997 primarily due to lower sales and spending associated with the plant closures announced in fiscal year 1997. The increase in long-term employee related benefits during fiscal year 1998 reflected increased cumulative accruals for Global Success Sharing Plan and deferred compensation.
Cash provided by/used for investing activities. Cash provided by investing activities during the three months ended February 27, 2000 was $105.0 million, as compared to net cash used for investing activities of $9.8 million during the same period in 1999. This increase in cash provided by investing activities resulted primarily from proceeds received on increased sales of property, plant and equipment, higher realized gains on net investment hedges and lower purchases of property, plant and equipment. The higher proceeds received on the sale of property during the three months ended February 27, 2000 was primarily attributable to a sale in February 2000 of two office buildings in San Francisco located adjacent to our corporate headquarters.
Cash provided by investing activities in fiscal year 1999 was $62.4 million, as compared to net cash used by investing activities of $82.7 million in fiscal year 1998. This change was primarily due to an increase in proceeds from the sale of property, plant and equipment mainly associated with the plant closures, and lower purchases of property, plant and equipment in fiscal year 1999. In addition, in fiscal year 1999 we had net realized gains on hedging of our net investments, as compared to net losses in fiscal year 1998.
Cash used for investing activities in fiscal year 1998 increased 7.6% to $82.7 million, as compared to $76.9 million in fiscal year 1997. This increase was primarily due to net realized losses on hedging of our net investments in fiscal year 1998, as compared to net gains in fiscal year 1997, partially offset by an increase in proceeds from the sale of property, plant and equipment in fiscal year 1998 mainly associated with the plant closures.
Cash provided by/used for financing activities. Cash used for financing activities for the three months ended February 27, 2000 increased to $251.2 million, as compared to $17.8 million in the same period in 1999 as a result of amendments to our credit facility agreements and continued debt repayments on existing debt. These increases were partially offset by proceeds from the new credit facility and equipment financing agreements.
Cash provided by financing activities in fiscal year 1999 was $224.2 million, as compared to net cash used for financing activities of $194.5 million in fiscal year 1998. This change was primarily due to an increase in debt financing in fiscal year 1999.
Cash used for financing activities in fiscal year 1998 decreased 63.3% to $194.5 million, as compared to $530.3 million in fiscal year 1997 primarily due to the repayment of debt with cash generated from operations.
In early March 2000, we received income tax refunds in cash in the amount of $66.3 million associated with a carryback of a net operating loss reported on our income tax return.
Credit Agreements. On January 31, 2000, we amended each of our three existing credit agreements, and we entered into one new $450.0 million bridge credit agreement. The new credit facilities include the following terms:
. The maturity date for all four credit facilities is January 31, 2002. Borrowings under the credit facilities bear interest at the London Interbank Offered Rate, or the agent bank's base rate, plus an incremental borrowing spread ranging from 3.00% to 3.25% over the London Interbank Offered Rate, or 1.75% to 2.00% over the base rate, a substantial increase from the prior spread. Additional fees will be incurred and increases in the borrowing spread will occur on February 1, 2001 if we have not completed a private or public capital-raising transaction of at least $300.0 million by that date and used those proceeds to reduce commitments under the bank credit facilities.
. The credit agreements provide for a total of $200.0 million in minimum commitment reductions in 2000 and 2001 and mandatory prepayments from specified transactions we may effect during the term of the facilities, including equipment and real estate financings, asset dispositions and foreign subsidiary receivables securitizations. We are also obligated to prepay borrowings ratably under the credit facilities with up to 60% of our excess cash flow (after voluntary prepayments) as defined in the credit agreements.
At February 27, 2000, we had borrowings of approximately $1.3 billion outstanding under these bank credit facilities. These facilities also support letters of credit and interest rate and foreign exchange risk management activities. At the time we amended our existing credit agreements and entered into the new bridge agreement, we terminated a domestic receivables securitization facility.
In addition, in December 1999, we entered into a five-year $89.5 million credit facility secured by most of the equipment located at our distribution centers in Nevada, Mississippi and Kentucky. At February 27, 2000, there was $89.5 million principal amount outstanding under this facility. In February 2000, several of the Company's European subsidiaries entered into receivables securitization financing agreements with several lenders under which those subsidiaries may borrow up to $125.0 million, subject to specified operational conditions. No borrowings have been made under the facilities. See the caption "Description of Other Indebtedness" for more information about these credit arrangements.
The following table sets forth the required total long and short-term debt principal payments and commitment reductions as of February 27, 2000 for the next five years and thereafter:
Year Payments/Reductions
---- ----------------------
(Dollars in Thousands)
2000.................. $ 234,627
2001.................. 11,297
2002.................. 1,099,689
2003.................. 365,988
2004.................. 8,520
Thereafter............ 683,356
----------
Total............... $2,403,477
==========
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Seasonality and Backlog
Our sales do not vary substantially by quarter in any of our three regions, as the apparel industry has become less seasonal due to more frequent selling seasons and offerings of both basic and fashion oriented merchandise throughout the year. In addition, all of our orders are subject to cancellation. Therefore, our order backlog may not be indicative of future shipments.
Foreign Currency Fluctuations
The functional currency for most of our foreign operations is the applicable local currency. For those operations, assets and liabilities are translated into U.S. dollars using period-end exchange rates and income and expense accounts are translated at average monthly exchange rates. The U.S. dollar is the functional currency for foreign operations in countries with highly inflationary economies and certain other subsidiaries. The translation adjustments for these entities are included in other (income) expense, net.
Year 2000
We experienced no material disruption in customer or supplier relationships, revenue patterns or customer buying patterns as a result of the year 2000 problem. There have been no losses of revenue and we do not believe that any future contingencies related to year 2000 would have a material impact on our business.
Effects of Inflation
We believe that the relatively moderate rates of inflation which have been experienced in the regions where most of our sales occur have not had a significant effect on our net sales or profitability.
Euro Conversion
We have a multi-functional Euro project team responsible for ensuring our ability to operate effectively during the Euro transition phase and through final Euro conversion. Our total program costs are not expected to be material. We have developed marketing and pricing strategies for implementation throughout the more open European market.
We are currently able to make and receive payments in Euros and will convert financial and information technology systems to be able to use Euros as the base currency in relevant markets prior to January 1, 2002. Based on the analysis and actions taken to date, we do not expect the Euro conversion to materially affect our consolidated financial position, results of operations or cash flow.
Market Risk Disclosure
Derivative Financial Instruments
We are exposed to market risk primarily related to foreign exchange, interest rates and the price of cotton. We actively manage foreign currency and interest rate risk with the objective of reducing fluctuations in actual and anticipated cash flows by entering into a variety of derivative instruments including spot, forward, options and swaps. We currently do not hedge our exposure to the price of cotton with derivative instruments.
Foreign Exchange Risk
Foreign exchange market risk exposures are primarily related to cash management activities, raw material and finished goods purchases and anticipated dividend and royalty flows from affiliates.
The following table presents notional amounts, average exchange rates and fair values for forward and swap contracts by currency. All amounts are stated in U.S. dollar equivalents. The notional amount represents the total net position outstanding as of the stated date. A positive amount represents a long position in U.S. dollars, while a negative amount represents a short position in U.S. dollars, versus the relevant currency. The net position is the sum of all buy transactions minus the sum of all sell transactions. The unrealized gain (loss) is the fair value of the outstanding position. The average forward rate is the forward rate weighted by the total of the transacted amounts. All transactions will mature during fiscal year 2000.
Outstanding Forward and Swap Transactions
(Dollars in Thousands Except Average Rates)
Currency Data As of Nov. 28, 1999 As of Feb. 27, 2000
-------- ---- ------------------- -------------------
Australian Dollar......... Notional amount $ (16,528) $(11,059)
Unrealized gain 230 676
Average forward rate 0.65 0.65
Canadian Dollar........... Notional amount $ (50,360) $(27,446)
Unrealized gain 64 133
Average forward rate 1.46 1.45
Euro...................... Notional amount $(137,416) $(79,399)
Unrealized gain 18,672 15,884
Average forward rate 1.06 1.02
British Pound............. Notional amount $ (81,591) $(76,871)
Unrealized gain 675 1,529
Average forward rate 1.62 1.63
Japanese Yen.............. Notional amount $(115,369) $(85,646)
Unrealized gain (loss) (3,175) 4,956
Average forward rate 106.47 106.91
Mexican Peso.............. Notional amount $ (7,339) --
Unrealized gain (loss) (110) --
Average forward rate 9.47 --
Swedish Krona............. Notional amount $ (94,675) $(59,582)
Unrealized gain 655 940
Average forward rate 8.32 8.54
Other Currencies.......... Notional amount $ (10,406) $ 6,365
Unrealized gain (loss) (79) 3
Average forward rate N/A N/A
--------- --------
Total Unrealized Gain..... $ 16,932 $ 24,121
========= ========
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The following table presents notional amounts, average strike rates, book values and fair values of outstanding foreign currency options. All amounts are stated in U.S. dollar equivalents. The notional amount represents the total net position outstanding as of the stated date should the option be exercised. A positive amount represents a long position in U.S. dollars, while a negative amount represents a short position in U.S. dollars, versus the relevant currency. The carrying value is the amount reported in our financial statements. It equals the sum of the non-amortized portion of the option premium and the intrinsic value of the option. The market value represents the fair value reported by our counterparts. The average strike rate is weighted by the total of the notional amounts. All transactions will expire during fiscal year 2000.
Outstanding Options Transactions
(Dollars in Thousands Except Average Rates)
Currency Data As of Nov. 28, 1999 As of Feb. 27, 2000
-------- ---- ------------------- -------------------
Australian Dollar......... Notional amount $ 3,585 --
Carrying value 30 --
Market value (250) --
Average strike rate 0.65 --
Canadian Dollar........... Notional amount $ 30,000 $ 10,000
Carrying value 6 10
Market value 25 (48)
Average strike rate 1.48 1.45
Euro...................... Notional amount $365,006 $316,079
Carrying value 9,374 8,277
Market value 6,181 6,916
Average strike rate 1.06 1.03
British Pound............. Notional amount -- $(29,400)
Carrying value (2) --
Market value 53 482
Average strike rate 1.61 1.58
Hong Kong Dollar.......... Notional amount $ 3,000 $ 3,000
Carrying value -- --
Market value (2) 0
Average strike rate 7.93 7.93
Japanese Yen.............. Notional amount $ 55,000 $ 75,000
Carrying value (1,602) 1,189
Market value (3,749) 1,600
Average strike rate 111.83 112.55
Swedish Krona............. Notional amount $ 30,902 $ 39,200
Carrying value -- --
Market value 30 (144)
Average strike rate 8.40 8.82
-------- --------
Total Carrying Value...... $ 7,806 $ 9,476
======== ========
Total Market Value........ $ 2,288 $ 8,806
======== ========
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Interest Rate Risk
We have an interest rate risk management policy designed to manage the interest rate risk on our borrowings by entering into a variety of interest rate derivatives.
The following table provides information about our derivative financial instruments and other financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and interest rates by contractual maturity dates. The applicable floating rate index is included for variable rate instruments. Notional amounts are the amounts outstanding at the end of the stated period. All amounts are stated in U.S. dollar equivalents.
Interest Rate Sensitivity as of February 27, 2000
(Dollars in Thousands Unless Otherwise Stated)
Year Ended
-------------------------------------------------------------------
Fair Value
Q1 2000 2000 2001 2002 2003 2004 2005 Q1 2000
---------- ---------- ---------- -------- -------- -------- -------- ----------
Debt Instruments
Fixed Rate (US$)......... $ 859,500 $ 855,833 $ 850,548 $844,774 $488,465 $481,571 $450,000 $ 569,729
Average Interest Rate... 7.05% 7.05% 7.02% 7.02% 7.15% 7.13% 7.00% --
Fixed Rate (Yen 20
billion)................ $ 180,180 $ 180,180 $ 180,180 $180,180 $180,180 $180,180 $180,180 $ 72,072
Average Interest Rate... 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% --
Variable Rate (US$)...... $1,333,000 $1,332,180 $1,331,138 $ 36,995 $ 25,741 $ 24,365 -- $1,338,687
Average Interest Rate*.. 7.87% 7.87% 7.87% 9.39% 9.39% 9.39% -- --
Interest Rate Derivative
Financial Instruments
Related to Debt
Interest Rate Swaps
Payer swaps (Pay
fix/Receive variable).. $ 425,000 -- -- -- -- -- -- $ (1,002)
Average rate received =
US$ 3 month LIBOR...... 6.11% -- -- -- -- -- -- --
Average rate paid....... 6.72% -- -- -- -- -- -- --
Receiver swaps (Receive
fix/Pay variable)...... $ 325,000 $ 325,000 $ 325,000 $325,000 $200,000 $200,000 $200,000 $ (7,590)
Average rate received... 6.84% 6.84% 6.84% 6.84% 6.80% 6.80% 6.80% --
Average rate paid = US$
3 month LIBOR.......... +6.22bp +6.15bp +6.15bp +6.15bp +10.00bp +10.00bp +10.00bp --
Receiver swaps (Receive
fix/Pay variable) with
periodic "Knock-Out'
option................. $ 50,000 $ 50,000 $ 50,000 $ 50,000 -- -- -- $ (1,726)
Average rate received... 6.58% 6.58% 6.58% 6.58% -- -- -- --
Average rate paid = US$
6 month LIBOR.......... 6.13% -- -- -- -- -- -- --
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Interest Rate Sensitivity as of November 28, 1999
(Dollars in Thousands Unless Otherwise Stated)
Year Ended
---------------------------------------------------------------
Fair
Value
Q4 1999 2000 2001 2002 2003 2004 2005 Q4 1999
---------- -------- -------- -------- -------- -------- -------- ----------
Debt Instruments
Fixed Rate (US$)......... $ 800,000 $800,000 $800,000 $800,000 $450,000 $450,000 $450,000 $ 626,307
Average Interest Rate... 6.91% 6.91% 6.91% 6.91% 7.00% 7.00% 7.00% --
Fixed Rate (Yen 20
billion)................ $ 188,679 $188,679 $188,679 $188,679 $188,679 $188,679 $188,679 $ 148,113
Average Interest Rate... 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% --
Variable Rate (US$)...... $1,642,836 $631,800 $631,800 -- -- -- -- $1,650,315
Average Interest Rate*.. 6.12% 6.16% 6.16% -- -- -- -- --
Interest Rate Derivative
Financial Instruments
Related to Debt
Interest Rate Swaps
Payer swaps (Pay
fix/Receive variable).. $ 425,000 -- -- -- -- -- -- $ (2,119)
Average rate received =
US$ 3 month LIBOR...... 5.49% -- -- -- -- -- -- --
Average rate paid....... 6.72% -- -- -- -- -- -- --
Receiver swaps (Receive
fix/Pay variable)...... $ 325,000 $325,000 $325,000 $325,000 $200,000 $200,000 $200,000 $ (1,596)
Average rate received... 6.91% 6.84% 6.84% 6.84% 6.80% 6.80% 6.80% --
Average rate paid = US$
3 month LIBOR.......... +5.69bp +6.15bp +6.15bp +6.15bp +10.00bp +10.00bp +10.00bp --
Receiver swaps (Receive
fix/Pay variable) with
periodic "Knock-Out'
option................. $ 50,000 $ 50,000 $ 50,000 $ 50,000 -- -- -- $ (1,124)
Average rate received... 6.58% 6.58% 6.58% 6.58% -- -- -- --
Average rate paid = US$
6 month LIBOR.......... 6.13% -- -- -- -- -- -- --
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New Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). In June 1999, the FASB delayed the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. We will adopt SFAS 133 the first day of fiscal year 2001. SFAS 133 establishes accounting and reporting standards for derivative instruments including certain derivative instruments embedded in other contracts, and for hedging activities. In summary, SFAS 133 requires all derivatives to be recognized as assets or liabilities at fair value. Fair value adjustments are made either through earnings or equity, depending upon the exposure being hedged and the effectiveness of the hedge. We have not yet quantified all effects of adopting SFAS 133 on its financial statements. However, the adoption of SFAS 133 could increase volatility in earnings and other comprehensive income or result in certain changes in our business practices. We currently have an implementation team in place that is determining the method of implementation and evaluating all effects of adopting SFAS 133.
BUSINESS
Overview
We are one of the world's leading branded apparel companies with operations in more than 40 countries. We design and market jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories for men, women and children under our Levi's(R), Dockers(R) and Slates(R) brands. Our products are primarily distributed in the United States through chain retailers and department stores and abroad through department stores and specialty retailers. We also maintain a network of approximately 750 franchised or independently owned stores dedicated to our products outside the United States and operate a small number of company-owned stores.
We believe there is no other apparel company with a comparable global presence in either the jeans or casual pants segment of the apparel market. Since our founder Levi Strauss invented the blue jean in 1873, Levi's(R) jeans have become one of the most successful and widely recognized brands in the history of the apparel industry. According to a 1999 study performed on our behalf by an international market research firm, the Levi's(R) brand is the most recognized casual clothing brand in all 17 of the markets in which the study was conducted, including the United States, Canada, Germany, Italy, France, the United Kingdom, Japan and Australia. More 15 to 39 year old consumers in these markets name the Levi's(R) brand first as a casual clothing brand than any other competitor. Our Dockers(R) brand of casual pants, introduced in 1986, is also widely recognized in the United States and a growing number of markets abroad. According to industry research, approximately 71% of U.S. male consumers ages 18 to 45 own Dockers(R) brand casual pants. According to NPD Group's point of sale tracking, in the United States our Slates(R) brand of dress pants sold the most units of any single dress pant brand within traditional department stores in 1999. Jeans and casual and dress pants represented approximately 85% of our total units sold in 1999. Basic jeans are our key generator of sales and gross profits.
Levi's(R) Brand Dockers(R) Brand Slates(R) Brand
--------------- ---------------- ---------------
Products: Men's, women's and Men's, women's and Men's and in Fall
kids' -jeans, jeans boys' -casual pants, 2000 women's - dress
related products, shorts, skirts, knit pants, skirts, tops,
knits and woven tops, and woven tops, jackets, outerwear
outerwear and outerwear and and accessories
accessories accessories
Geographic Men's and women's - Men's and women's - Men's and women's -
Markets: global global U.S. only
Kids' - primarily Boys' - U.S. only
U.S.
Percentage
of 1999
Net
Sales: 76% 22% 2%
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Our business is currently organized into three geographic divisions: the Americas, consisting of the United States, Canada and Latin America; Europe, including the Middle East and Africa; and Asia Pacific. Our operations in the United States are conducted primarily through Levi Strauss & Co., while our operations outside the United States are conducted primarily through foreign subsidiaries owned directly or indirectly by Levi Strauss & Co. In 1999 we had net sales of $5.1 billion, of which the Americas, Europe and Asia Pacific accounted for 66.5%, 26.5% and 7.0%, respectively. In 1999, we had EBITDA of $295.1 million and adjusted EBITDA of $448.9 million. For the three months ended February 27, 2000, we had net sales of $1.1 billion and EBITDA and adjusted EBITDA of $148.5 million.
Our operating performance has deteriorated in recent years. Our net sales fell from $7.1 billion in 1996 to $5.1 billion in 1999, and our brand equity and market position have declined in all three of our operating regions. This deterioration is attributable to both industry-wide and company-specific factors. Industry-wide factors include consumer market trends towards more fashion denim and non-denim products and intense competition from designer and private label products. Company-specific factors include brand equity erosion, insufficient product innovation, poor presentation of our products at retail, operational problems in our supply
chain and weakness in our key distribution channels. In response to these developments, we have, among other things, taken the following restructuring actions:
. reduced overhead expenses and eliminated excess manufacturing capacity through extensive restructuring initiatives executed during the past three years, including reducing the number of our employees by approximately 18,500 since 1997 and closing 29 of our owned and operated production and finishing facilities in North America and Europe;
. shifted from manufacturing two-thirds of our U.S. jeans internally in 1997 to manufacturing one-third internally in 1999;
. reduced corporate infrastructure at our San Francisco and regional headquarters and consolidated and streamlined merchandising, marketing and sales functions in all three of our operating regions; and
. hired a new senior management team, including a chief executive officer, a chief financial officer, senior vice presidents responsible for worldwide supply chain and worldwide human resources and heads for each of our three operating regions.
We intend our restructuring efforts to help us achieve our strategic goals of reversing the recent deterioration in our performance and repositioning our business to support future growth. We do not anticipate taking any material restructuring actions relating to additional capacity reductions or reorganization efforts in 2000 or 2001.
Our Business Strategy
Going forward, our primary strategic goals are to leverage the worldwide recognition of our brand names and our history of product innovation and high product quality to reverse the recent deterioration in our performance and to reposition our business to support future growth. To achieve these goals, we have three key business strategies:
Reinvigorate our brands through better product innovation and increased consumer and channel relevance.
We believe that an integrated presentation of new and innovative products and marketing programs targeted to specific consumer and retail segments is crucial to generating consumer demand for our products. We intend to:
. focus on continually updating our core products and creating new products, such as our Levi's(R) Engineered Jeans(TM), that incorporate design innovations, new fabrics and new finishes and that draw on our long heritage of originality in product design and fabrication;
. design and market sub-brands and products that are relevant to our various consumer segments ranging from teenagers and trend initiators who demand fashion-forward styles, to urban professionals who desire sophisticated casual wear, as well as to the broad group of consumers who want mainstream, quality branded jeanswear and khaki pants for everyday and business wear;
. leverage our global brand recognition and marketing capabilities by adopting products and design concepts developed in one region and introducing them to other geographic markets in which we operate;
. target our sub-brands and product offerings to specific distribution channels in order to reach discrete consumer segments, create differentiation for our retail customers and between our brands, strengthen our position in our existing channels and address shifts in retail distribution channels in both the United States and Europe; and
. develop product-focused marketing programs using both traditional advertising vehicles such as television, print and point-of-sale materials and non-traditional vehicles such as concert sponsorships, product placement and Internet sites.
Upgrade the presentation of our product at retail and improve our relationships with our customers.
We distribute our products in a wide variety of retail formats around the world including through chain and department stores in the United States, Europe and Asia, franchise stores dedicated to our brands and specialty retailers. We intend to:
. engage in more collaborative planning and performance monitoring processes with our retail customers to achieve better product presentation, assortment and inventory management;
. improve the presentation of our product at retail through new retailing formats, better fixturing and visual merchandising, on-floor merchandising services and other sales area upgrade programs; and
. increase the number of franchised or other retail formats dedicated to our Dockers(R) brand products outside the United States in order to present the brand in a focused, image-enhancing environment.
Improve our supply chain execution and continue to focus on cost reduction.
We made extensive restructuring changes during the last three years to shift our sourcing base and reduce manufacturing costs and overhead expenses. We must continue improving our supply chain in order to capture the benefits of these changes and become a more effective competitor. We intend to:
. focus on improving the coordination of our design, merchandising, forecasting, sourcing and logistics processes to reduce product lead times and ensure product availability;
. improve the linkage of product supply to consumer demand and our ability to ship complete and timely orders to our customers by increasing the efficiency and effectiveness of our business processes; and
. leverage our restructuring initiatives to further reduce cost of goods sold, operating expenses and inventory costs.
Our Brands and Products
We market a broad line of branded jeanswear, casual wear and dress pants that appeal to diverse demographic groups in markets around the world. Through a number of sub-brands and product lines under the Levi's(R), Dockers(R) and Slates(R) brands, we target specific consumer segments and provide product differentiation for our retail customers in our selected distribution channels. We focus on creating new, innovative products relevant to our target consumers, as well as ensuring that our core, traditional products are updated with new finishes, fabrications and colors. We strive to leverage our global brand recognition, product design and marketing capabilities to take products and design concepts developed in one region and introduce them in other geographic markets.
Levi's(R) Brand
We market jeans and jeans-related products under the Levi's(R) brand around the world. Since their invention in 1873 by our founder, Levi Strauss, Levi's(R) jeans have become one of the most successful and widely recognized brands in the history of the apparel industry. In fiscal year 1999, sales of our Levi's(R) brand products represented approximately 76% of our net sales, and accounted for 69% of net sales in the Americas, 91% of net sales in Europe and 96% of net sales in Asia Pacific.
According to a 1999 study performed on our behalf by an international market research firm, the Levi's(R) brand was the first brand mentioned 29% of the time by consumers ages 15 to 29 when asked to name a brand of jeans in the United States, 40% in Germany and 53% in Japan, compared with 8%, 14% and 25% for the next brand named in each of those countries. According to consumer purchase tracking studies performed by the market research firms NPD, GfK, AC Nielsen, CAMM and Taylor-Nelson, consumers purchased approximately 800 million pairs of jeans in the United States, Europe and Asia during the 12 months ended
September 1999. The same data indicates that we sold 15% of the jeans sold in the United States, 10% of the jeans sold in key European markets and 21% of the jeans sold in key Asian markets. In each region we believe we sold more jeans than any other single brand of jeans.
Our Levi's(R) brand offerings include:
. Red Tab(TM) Products. Our Red Tab(TM) product line, identified by our Tab device trademark on the back pocket, encompasses a variety of basic jeans with different silhouettes, fits and finishes intended to appeal to a wide range of consumers. Our core line is anchored by the classic 501(R) button-fly jean, named by Time Magazine as the "Best Fashion of the Century" in its December 31, 1999 edition. We distribute Red Tab(TM) products worldwide through many of our distribution channels.
. Silvertab(R) Brand. Our Silvertab(R) brand targets 15 to 19 year olds and offers a more fashion-forward product range featuring technologically advanced fabrics, such as microfiber, nylon ripstop and "oily" canvas and innovative finishes for denim jeans. We distribute Silvertab(R) products primarily through department stores and Original Levi's Store(R) retail shops in the Americas.
. L2(R) Brand. Our L2(R) brand targets 15 to 24 year old suburban youth who want fashionable products at value pricing. We distribute the L2(R) brand through chain stores in the United States and in Asia.
. Levi's(R) Engineered Jeans(TM). In December 1999, we introduced Levi's(R) Engineered Jeans(TM) in the first international jeanswear launch in our history. Developed in Europe, the product represents our reinvention of the blue jean. They are ergonomically engineered to fit the body's contours and have a three-dimensional shape that we believe provides innovative design, unique style, superior comfort and ease of movement. We target Levi's(R) Engineered Jeans(TM) to 15 to 24 year olds and are introducing them throughout Asia, Europe and the United States through independent retailers, specialty stores, department stores and Original Levi's Store(R) retail shops.
. Other. Our other Levi's(R) brand product lines include Lot 53(TM) premium denim jeans, targeted to teenagers and distributed through department stores in the United States; Levi's(R) Vintage Clothing for jean "aficionados," a premium line available through high-end specialty stores and independent retailers in Europe, Asia and the United States; the Levi's(R) Red(TM) collection, a European-developed product designed to reflect both our heritage and modern design concepts; the Sta- Prest(R) product line, originally developed in the 1960s in the United States and later adopted and updated in Europe, featuring a distinctive permanent crease and sharp, clean look; and the All-Duty(TM) product line sold in Europe, which features non-denim functional, military and workwear style products.
Dockers(R) Brand
We market casual clothing, primarily pants and tops, under the Dockers(R) brand, in more than 40 countries. We launched the brand in 1986 to address an emerging consumer interest in khaki pants. We believe that the Dockers(R) brand, through its product offering and marketing, played a major role in the resurgence of khaki pants and the movement toward casual attire in the workplace by helping create a standard for casual clothing. Today, according to Cotton, Inc., approximately 70% of U.S. workplaces allow casual business wear at least one day a week. In fiscal year 1999, sales of Dockers(R) brand products represented approximately 22% of our net sales, accounting for 29% of net sales in the Americas, 9% of net sales in Europe and 4% of net sales in Asia Pacific.
The Dockers(R) brand has been a leader in the U.S. khaki category since its launch. According to Market Facts, Inc., an independent market research firm, 71% of U.S. male consumers ages 18 to 45 own Dockers(R) casual pants. A 1999 tracking study conducted by Russell Research, Inc. reported that 22% of U.S. female consumers ages 25 to 49 own Dockers(R) khakis.
Our Dockers(R) brand offerings are primarily targeted to men and women ages 25 to 39 and include:
. Dockers(R) brand. Dockers(R) brand products are the core line of the brand. They include a broad range of casual khaki pants and are complemented by a variety of tops and seasonal pant products in
a range of fits, fabrics and styles. We distribute these products through a variety of channels in all three of our operating regions, including department stores and chain stores.
. Dockers(R) Premium. The Dockers(R) Premium pant line provides a range of cotton pants constructed from premium fabrics with sophisticated details in a range of finishes, fits, styles and colors. We distribute these products through department stores in the United States.
. Dockers(R) Recode(TM). In Spring 2000, we launched the sub-brand Dockers(R) Recode(TM) exclusively in U.S. department stores in order to appeal to more fashion-involved consumers who want modern casual clothes. A slightly more fashion-forward line of pants and tops, the sub-brand consists of cotton-blended fabrications in a sophisticated color spectrum. Beginning in Fall 2000, the collection will be expanded with an offering of sweaters, outerwear, shoes and belts marketed by our licensees.
. Dockers(R) K-1 Khakis. The brand's first global product launch, Dockers(R) K-1 Khakis is a premium khaki pant inspired by the authentic army khaki and made from the original Cramerton(R) army cloth. In Fall 2000, we will introduce a complete collection with new colors and fabrics in shirts, sweaters, belts, outerwear and a variety of pants, all inspired by military and antique workwear themes. We distribute Dockers(R) K-1 Khakis through specialty and department stores in the Americas, Europe and Asia.
. Other. Our other Dockers(R) product lines include Exact(TM) clothing, a Dockers(R) brand, a collection of more refined casual dress styling available through chain stores; Equipment for Legs(TM), performance wear primarily available in Europe; and D(TM) Line products, a new boys' line distributed in the United States targeted towards boys ages 7 to 14.
We work with established licensees to develop and market complementary products under the Dockers(R) brand, including outerwear and leather goods, men's and women's footwear, men's sweaters, hosiery and golf apparel.
Slates(R) Brand
We market dress pants and other products under the Slates(R) brand in the United States. Launched in Fall 1996, the Slates(R) brand became the leading dress pant brand at department stores by the end of 1997. According to the NPD Group's point of sale tracking data, in 1999 the Slates(R) brand sold the most dress pant units of any single brand in traditional department stores, accounting for 21% of units sold. Sales of Slates(R) brand products represented approximately 2% of our net sales in 1999.
Our Slates(R) brand offerings include:
. Men's Slates(R). The men's Slates(R) brand collection of pants, shirts, sweaters and outerwear, combines contemporary styles with modern fabrics and colors. We position the brand between casual pants and tailored clothing and design and market it to meet the 25 to 34 year old consumer's desire for a younger and more sophisticated casual look. This brand is distributed to department stores and specialty stores.
. Women's Slates(R). In Fall 2000, we will add a new line of women's dress-casual clothing to the Slates(R) brand. The line, named "Slates(R) Janet Howard(R)" and designed by Janet Howard, will target women ages 24 to 35 with a designer-inspired line of dress pants, skirts, tops, sweaters and dress jackets. We plan to distribute this line of products to higher-end department stores to fill a gap between the classic and contemporary women's apparel categories.
For men's products, we produce the pants in the Slates(R) line and work with established licensees to develop and market complementary products under the Slates(R) brand, including a broad assortment of knit and woven tops, sweaters, hosiery and outerwear and, planned for Spring 2001, sportcoats and suits.
Sales, Distribution and Customers
We distribute our products on a worldwide basis through selected retail channels, including chain stores, department stores, specialty stores, dedicated franchised stores, outlets, Internet sites and mail-order catalogs. Our distribution strategy focuses on:
. improving the presentation of our products at retail through introducing new retailing formats, executing new fixturing, visual merchandising and other sales area upgrade programs and providing on-floor merchandising services; and
. strengthening our relationships with our retail customers through more collaborative planning and performance monitoring processes, providing sub-brands and products to specific distribution channels in order to create points of differentiation for our customers and providing them with products targeted for their core consumers.
Americas
In the Americas, we distribute our products through national and regional chains, department stores, specialty stores and Original Levi's Store(R) and Dockers(R) Store retail shops. We have approximately 3,000 retail customers operating more than 16,800 locations in the United States and Canada. Sales of Levi's(R), Dockers(R) and Slates(R) products to our top five and top 10 customers in the United States accounted for approximately 34% and 46% of our total net sales in fiscal year 1999, and 51% and 69% of our Americas net sales in fiscal year 1999, as compared to 32% and 43% of our total net sales in fiscal year 1998, and 48% and 65% of our Americas net sales in fiscal year 1998. Our top 10 customers in 1999, on both an Americas and total company basis, were American Retail, Designs, Inc., Dillards, Inc., Federated Department Stores, Inc., Goody's Family Clothing, Inc., J.C. Penney, Kohl's Corporation, The May Department Stores Company, the Mervyn's unit of Target and Sears, Roebuck & Co. J.C. Penney is the only customer that represented more than 10% of our total net sales, accounting for 11%, 12% and 11% of our total net sales in fiscal years 1999, 1998 and 1997. We also target limited distribution premium products like Levi's(R) Vintage Clothing to independent, image-conscious specialty stores in major metropolitan areas who cater to more fashion-forward, trend-influential consumers.
Europe
Our European customers include large department stores, such as Corte Ingles in Spain, Galeries Lafayette in France and Karstadt Quelle AG in Germany; dedicated, single-brand Original Levi's Store(R) and Dockers(R) Store retail shops; mail order accounts; and a substantial number of independent retailers operating either a single or small group of jeans-focused stores or general clothing stores. We depend for nearly half our European sales on these independent retailers, who are under increasing pressure from both vertically integrated specialty stores and department stores. The more varied and fragmented nature of European retailing means that we are less dependent on major customers than we are in the United States. In 1999, our top 10 European customers accounted for only 11% of our total European net sales.
Asia Pacific
In Asia Pacific, we generate nearly half of our sales through the specialty store channel, which includes multi-brand as well as independently owned Original Levi's Store(R) retail shops. Over 35% of our products are sold through national jean stores, such as Right On Co. LTD and Jeans Mate Corp. in Japan, with the balance distributed through department stores and general merchandise stores. As in Europe, the varied and fragmented nature of Asian retailing means we are less dependent on individual customers in the region. Our Asia Pacific business is heavily weighted toward Japan, which represented approximately 61% of our 1999 net sales in the region.
Dedicated Stores
We have a network of approximately 750 franchised or other independently owned stores selling Levi's(R) brand or Dockers(R) brand products exclusively under the "Original Levi's Store(R)," "Levi's(R) Store" and "Dockers(R) Store" names in Europe, Asia, Canada and Latin America. These dedicated-format stores are strategically important as vehicles for demonstrating the breadth of our product line, enhancing brand image and generating sales. These stores also are an important distribution channel in newer and smaller markets in Eastern Europe, Asia Pacific and Latin America. We own and operate a small number of stores dedicated to the Levi's(R) brand, including stores in the United States located in New York, Chicago, Orange County, San Francisco, San Diego, Boston and Seattle and abroad in London, Milan, Paris and Berlin.
We also own in the United States and Japan, and license third parties in the United States and abroad to operate, outlet stores for the disposition of closeout, irregular and return goods. Sales in fiscal year 1999 through our outlet channels in the United States represented 7% of our Americas net sales and 4% of our total net sales. Our strategy is to use the outlet store channel to support our brands by moving closeout and irregular goods as quickly as possible through the stores and by reducing the flow of goods to channels that are not consistent with brand image and distribution strategies. In order to better meet consumer needs, we supplement the product offering to the outlet stores in the United States by producing selected basic products, including jeans, khaki pants and denim shirts, specifically for those stores.
Internet
We operate websites devoted to each of the Levi's(R), Dockers(R) and Slates(R) brands as marketing vehicles to enhance consumer understanding of our brands. We currently do not sell products directly to consumers through the Internet. In the United States, our products are currently sold online through www.macys.com, operated by Federated, and www.jcpenney.com, operated by J.C. Penney, each of which is linked to our brand sites. In Europe, authorized dealers and mail order accounts who meet our standards relating to customer service, return policy, site content, trademark use and other matters may sell our products to consumers through Internet sites.
Advertising and Promotion
We make substantial investments in advertising, retail and promotion activities in support of our brands to increase consumer relevance and to drive consumer demand. We spent approximately $490.2 million, or approximately 10% of total net sales, on these activities in fiscal year 1999. We advertise through a broad mix of media, including television, national publications, billboards and other outdoor vehicles. We execute both global and region-specific marketing programs to achieve consistent brand positioning while allowing flexibility to optimize program execution in local markets. Recent examples of our global marketing initiatives include our sponsorships of World AIDS Day and the MTV Awards, and advertising campaigns associated with the global launch of Levi's(R) Engineered Jeans(TM).
Our marketing strategy focuses on:
. developing clear consumer value propositions that drive product development and messaging in order to differentiate our brands and products;
. developing integrated marketing programs that effectively coordinate product launches and promotions with specific traditional and non- traditional advertising and retail point of sales activities;
. creating superior quality advertising and continuing our tradition of award-winning commercials; and
. enhancing presentation of product at retail through innovative retail initiatives.
We are increasing our use of less traditional marketing vehicles, including event and music sponsorships, product placement in television shows, music videos and films and alternative marketing techniques, including
street-level and nightclub events and similar targeted, small-scale activities. For example, we promote our L2(R) sub-brand through both traditional media and less traditional programs including sponsorship of the Aggressive Skating Association pro in-line skating tour involving a high school exhibition tour and retail partnerships; a tie-in with the teen movie "Whatever it Takes," including wardrobing the stars, personal appearances and in store promotions with a key retailer; and creating a website, www.L2.com, featuring interactive programs for teens.
Competition
The worldwide apparel industry is highly competitive and fragmented. We compete in all of our markets with numerous designers, manufacturers, private labels and specialty store retailers, both domestic and foreign. The success of our business depends on our ability to shape and stimulate consumer tastes and demands by producing innovative, attractive, and competitively priced fashion products. In fashion sensitive markets such as the jeans and casual wear markets, barriers to entry are sufficiently low so that talented designers and others can become meaningful competitors soon after establishing a new label. We believe that the primary factors upon which we compete are:
. anticipating and responding to changing consumer demands in a timely manner;
. maintaining favorable brand recognition;
. developing innovative, high-quality products in sizes, colors and styles that appeal to consumers;
. pricing products;
. providing strong and effective marketing support;
. creating an acceptable value proposition for retail customers;
. ensuring product availability and optimizing supply chain efficiencies with retailers; and
. obtaining sufficient retail floor space.
We believe our competitive strengths include:
. strong worldwide brand recognition;
. competitive product quality and value;
. long-standing relationships with leading department stores and other chain stores worldwide;
. our network of franchised and other Original Levi's Store(R) and Dockers(R) Store retail shops in Europe, Asia, Canada and Latin America; and
. our commitment to ethical conduct and social responsibility.
We believe that the total unit sales of Levi's(R) brand jeans in the United States is second only to the combined total unit sales of VF Corporation's principal jeans brands, Wrangler, Lee and Rustler. We believe that the total unit sales of Levi's(R) brand jeans on a pan-European basis and on a pan-Asia Pacific basis is greater than the total unit sales of jeans of any single brand in those regions and that there is no single competitor offering multiple brands with greater total sales of jeans in either of those regions.
Americas
We face intense competition across all of our brands from designer labels, vertically integrated specialty stores, mass merchandisers, private labels and fashion labels. Because we sell both basic and fashion-oriented products under the Levi's(R), Dockers(R) and Slates(R) brands to retailers in diverse channels across a wide range of retail price points, we face a wide range of competitors, including:
. other jeanswear manufacturers, including VF Corporation, marketer of the Lee, Wrangler and Rustler brands;
. fashion-oriented designer apparel marketers, including Polo Ralph Lauren Corporation, Calvin Klein, Nautica Enterprises, Guess?, Inc. and Tommy Hilfiger Corp.;
. vertically integrated specialty stores, including Gap Inc., Abercrombie & Fitch, American Eagle Outfitters Inc., J. Crew and Eddie Bauer, Inc.;
. lower-volume but high visibility fashion-forward jeanswear brands that appeal to the teenage market, including the FUBU, JNCO, Lucky, MUDD and Diesel brands;
. casual wear manufacturers, including Haggar Corp., Liz Claiborne, Inc. and Savane International Corp.;
. retailer private labels, including J.C. Penney's Arizona brand and Sears' Canyon River Blues and Canyon River Khakis brands; and
. mass merchandisers, including Wal-Mart Stores, Inc., Target and Kmart.
Europe
While there is no one particular brand with a strong pan-European presence, strong local brands and retailers exist in certain markets, including Diesel in Italy and Scandinavia, Pepe in Spain and Lee Cooper in France. Zara, Hennes & Mauritz AB, Energie and other vertically integrated specialty retailers, and athletic wear firms such as adidas-Salomon, also offer competitive products and are an increasing competitive force in the market. Our principal U.S. competitors, including Gap Inc. and VF Corporation, are expanding their collective presence in Europe. While these U.S. competitors generally lack the presence in Europe they enjoy in the United States, we believe they view Europe as a significant growth opportunity, and we anticipate increased competition from them going forward.
Asia Pacific
Competitors in the jeanswear market consist of both regional brands, such as Edwin, our principal competitor in Japan, and U.S. brands, including Guess, Lee and Wrangler, which offer basic products available in local markets. Competitors in both jeanswear and casual apparel also include vertically integrated specialty stores, such as UNIQLO, Gap Inc., Esprit and Eddie Bauer in Japan, and Giordano, a more value-focused retailer that operates throughout the region.
Sourcing, Manufacturing and Raw Materials
We obtain our products from a combination of company-owned facilities and independent manufacturers. Over the last three years, we shifted our sourcing base substantially toward outsourcing by closing 29 company-owned production and finishing facilities in North America and Europe. In 1999, we purchased approximately two-thirds of our U.S. jeans units from independent manufacturers, as compared to approximately one-third in 1997. We believe that outsourcing allows us to maintain production flexibility while avoiding the substantial capital expenditures and costs related to maintaining a large internal production capability.
Each of our operating regions operates a supply chain network that provides product management, demand-forecasting, quality assurance, manufacturing and logistics support to our brands. Within each of our brands, merchandisers and designers create seasonal product plans that are intended to reflect consumer preferences, market trends and retail customer requirements. During the development phase, the merchandisers and designers work closely with the product managers to ensure completion of manufacturing specifications and costing for each product in the seasonal plan. They also consult with forecast specialists and sales representatives to determine the potential unit volume for the fashion and replenishment products in the plan. Once the brand's seasonal plan is finalized, product managers focus on sourcing the products in the plan.
We purchase the fabric and raw materials used in our business, particularly denim and twill, from several suppliers, including Cone Mills, Burlington Industries, Galey & Lord, including its Swift Denim subsidiary and
American Cotton Growers. In addition, we purchase thread, trim, buttons, zippers, snaps and various other product components from numerous suppliers. We do not have long-term raw materials or production contracts with any of our principal suppliers, except for Cone Mills, which is the sole worldwide supplier of the denim used for our 501(R) jeans, and which supplied approximately 22%, 24% and 27% in 1999, 1998 and 1997 of the total volume of fabrics we purchased worldwide. Our contract with Cone Mills provides for a rolling five-year term unless either Cone Mills or we elect not to extend the agreement, upon which the agreement will terminate at the end of the then- current term. The contract also ensures our supply for three years following a change of control of Cone Mills. We may terminate the Cone Mills contract at any time upon 30 days notice. We have not experienced any material difficulty in obtaining fabric and other raw materials to meet production needs in the past.
Our purchased fabrics are shipped directly from fabric manufacturers to our owned manufacturing plants, to cutting facilities for cutting and shipment on to third party contractors or directly to third party contractors for garment construction. In most cases where we use contractors, we retain ownership of the fabric throughout the manufacturing process. We use numerous independent manufacturers, principally in Latin America and Asia, for the production of our garments. We also use contractors who both produce or purchase fabric and sew the garments. These package contractors represent a small but growing percentage of our production and they enable us to reduce working capital relating to work-in-process inventories. We typically conduct business with our contractors on an order-by-order basis. We inspect fabrics and finished goods as part of our quality control program.
We require all third party contractors who manufacture or finish products on our behalf to abide by a stringent code of conduct that sets guidelines for employment practices such as wages and benefits, working hours, health and safety, working age and disciplinary practices, and for environmental, ethical and legal matters. We assess working conditions and contractors' compliance with our standards on a regular basis and implement continuous improvement plans as needed.
We operate 22 dedicated distribution centers in 19 countries. Distribution center activities include receiving finished goods from our plants and contractors, inspecting those products and shipping them to our customers. In some instances, we outsource distribution activities to third party logistics providers.
Trademarks
We regard our trademarks as our most valuable assets and believe they have substantial value in the marketing of our products. Our core trademarks include Levi's(R), Silvertab(R), L2(R), 501(R), Dockers(R), Slates(R), the Arcuate trademark, the Tab device and the Two Horse Brand trademark. We protect these trademarks by registering them with the U.S. Patent and Trademark Office and with governmental agencies in other countries where our products are manufactured and sold. We work vigorously to enforce and protect our trademark rights by engaging in regular market reviews, helping local law enforcement authorities detect and prosecute counterfeiters, issuing cease-and-desist letters against third parties infringing or denigrating our trademarks and initiating litigation as necessary. We also work with trade groups and industry participants seeking to strengthen laws relating to the protection of intellectual property rights in markets around the world. We grant licenses to other parties to manufacture and sell products with our trademarks in product categories and in geographic areas in which we do not operate.
Social Responsibility
We have a long-standing corporate culture characterized by ethical conduct and social responsibility. Our culture and values are reflected in policies and initiatives that we believe distinguish us from others in the apparel industry. We were a pioneer in many social and cultural areas:
. We were the first multinational company to develop a comprehensive code of conduct intended to ensure that workers making our products anywhere in the world would do so in safe and healthy working conditions and be treated with dignity and respect.
. Our commitment to social justice is highlighted by a unique initiative that addresses racial prejudice and seeks to improve race relations by supporting community organizations working together to eliminate racism.
. We were among the first companies to offer employee benefits such as flexible time-off policies and domestic partner benefits.
. We have been a leader in promoting AIDS awareness and education since 1982.
We are active in the communities where we have a presence. We and the Levi Strauss Foundation jointly contributed $20.3 million during fiscal year 1999 to community agencies in over 40 countries to support employee volunteerism and programs in AIDS prevention and care, economic empowerment, youth empowerment and social justice. In addition, we support more than 100 community involvement teams worldwide that facilitate employee volunteerism and raise funds for community projects.
Employees
As of February 27, 2000, we employed approximately 17,500 people, approximately 8,900 of whom were located in the United States. Most of our production and distribution employees in the United States are covered by various collective bargaining agreements. Outside the United States, most of our production and distribution employees are covered by either industry- sponsored and/or state-sponsored collective bargaining mechanisms. We consider our relations with our employees to be good and have not recently experienced any material job actions or labor shortages.
Properties
We conduct manufacturing, distribution and administrative activities in owned and leased facilities. We have renewal rights in most of our property leases. We anticipate that we will be able to extend these leases on terms satisfactory to us or, if necessary, locate substitute facilities on acceptable terms. We believe our facilities and equipment are in good condition and are suitable for our needs. Information about manufacturing, finishing and distribution facilities and other key operating properties in use as of April 28, 2000 is summarized in the following table:
Location Primary Use Leased/Owned -------- ----------- ------------ United States Little Rock, AR......... Distribution Owned Hebron, KY.............. Distribution Owned Canton, MS.............. Distribution Owned Henderson, NV........... Distribution Owned San Antonio, TX......... Finishing Owned San Antonio, TX......... Manufacturing Owned San Francisco, CA....... Manufacturing Owned Blue Ridge, GA.......... Manufacturing Owned Powell, TN.............. Manufacturing Owned Brownsville, TX......... Manufacturing Owned El Paso (Kastrin), TX... Manufacturing Owned San Benito, TX.......... Manufacturing Owned Westlake, TX............ Data Center Leased Other Americas Buenos Aires, Argentina.............. Distribution Leased Cotia, Brazil........... Distribution Leased Rexdale, Canada......... Distribution Owned Stoney Creek, Canada.... Manufacturing Owned Brantford, Canada....... Finishing Leased Edmonton, Canada........ Manufacturing Leased Naucalpan, Mexico....... Distribution Leased Europe Schoten, Belgium........ Distribution Leased Les Ulis, France........ Distribution Leased Heustenstamm, Germany... Distribution Owned Kiskunhalas, Hungary.... Manufacturing, Finishing and Distribution Owned Milan, Italy............ Distribution Leased Amsterdam, Netherlands.. Distribution Leased Plock, Poland........... Manufacturing and Finishing Leased Warsaw, Poland.......... Distribution Leased Dundee, Scotland........ Manufacturing Owned Bellshill, Scotland..... Finishing Owned Northhampton, U.K....... Distribution Owned Cape Town, South Africa................. Manufacturing, Finishing and Distribution Leased Sabedell, Spain......... Distribution Leased Bonmati, Spain.......... Manufacturing Owned Olvega, Spain........... Manufacturing Owned Helsingborg, Sweden..... Distribution Owned Corlu, Turkey........... Manufacturing, Finishing and Distribution Owned Asia Pacific Auckland, New Zealand... Distribution Leased Adelaide, Australia..... Manufacturing and Distribution Owned Bangalore, India........ Distribution Leased Jawa Barat, Indonesia... Distribution Leased Jawa Barat, Indonesia... Finishing Leased Hiratsuka Kanagawa, Japan.................. Distribution Owned Makati, Philippines..... Distribution Leased Makati, Philippines..... Manufacturing Leased |
Our global headquarters and the headquarters of our Americas business are both located in leased premises in San Francisco, California. Our Europe and Asia Pacific headquarters are located in leased premises in Brussels, Belgium and Singapore. We also lease or own over 110 administrative and sales offices in 44 countries, as well as lease a number of small warehouses in nine countries. In addition, we have 52 company- operated retail and outlet stores in eight countries in owned and leased premises, of which 10 stores are outlet stores in the United States, and 15 stores are located in Poland. We also own or lease several facilities we formerly operated and have closed.
Legal Proceedings
We are subject to claims against us, and we make claim against others, in the ordinary course of our business, including claims arising from the use of our trademarks. We do not believe that the resolution of any pending claims will materially adversely affect our business.
MANAGEMENT
Set forth below is information concerning our directors and executive officers as of April 28, 2000.
Name Age Office and Position
---- --- -------------------
Peter E. Haas, Sr. ...... 81 Director, Chairman of the Executive Committee
Robert D. Haas........... 58 Director, Chairman of the Board of Directors
Philip A. Marineau....... 53 Director, President and Chief Executive Officer
Angela Glover Blackwell.. 54 Director
Robert E. Friedman....... 50 Director
Tully M. Friedman........ 58 Director
James C. Gaither......... 62 Director
Peter A. Georgescu....... 61 Director
Peter E. Haas, Jr. ...... 52 Director
Walter J. Haas........... 50 Director
F. Warren Hellman........ 65 Director
Patricia Salas Pineda.... 48 Director
T. Gary Rogers........... 57 Director
G. Craig Sullivan........ 60 Director
R. John Anderson......... 49 Senior Vice President and President, Levi Strauss
Asia Pacific
William B. Chiasson...... 47 Senior Vice President and Chief Financial Officer
Karen Duvall............. 37 Senior Vice President, Worldwide Supply Chain
Linda S. Glick........... 52 Senior Vice President and Chief Information Officer
James Lewis.............. 49 Senior Vice President and President, Levi Strauss
Americas
Joseph Middleton......... 44 Senior Vice President and President, Levi Strauss
Europe, Middle East, Africa
Albert F. Moreno......... 56 Senior Vice President, General Counsel and Assistant
Secretary
Fred Paulenich........... 35 Senior Vice President, Worldwide Human Resources
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All members of the Haas family are descendants of our founder, Levi Strauss. Peter E. Haas, Sr. is the father of Peter E. Haas, Jr. and the uncle of Robert D. Haas and Walter J. Haas. Robert E. Friedman is a descendant of Daniel E. Koshland, who joined his brother-in-law, Walter A. Haas, Sr., in our management in 1922.
Peter E. Haas, Sr. became Chairman of the Executive Committee of our Board of Directors in 1989 after serving as Chairman of our Board since 1981. He has been a member of our Board since 1948. He joined us in 1945, became President in 1970 and Chief Executive Officer in 1976. Mr. Haas is a former Director of American Telephone and Telegraph Co., Crocker National Corporation and Crocker National Bank.
Robert D. Haas is the Chairman of our Board. He was named Chairman in 1989 and served as Chief Executive Officer from 1984 until 1999. Mr. Haas joined us in 1973 and served in a variety of marketing, planning and operating positions before becoming Chief Executive Officer.
Philip A. Marineau, a director since 1999, is our President and Chief Executive Officer. Prior to joining us, Mr. Marineau was the President and Chief Executive Officer of Pepsi-Cola North America from 1997 to 1999. From 1996 to 1997, Mr. Marineau was President and Chief Operating Officer of Dean Foods Company. From 1972 to 1996, Mr. Marineau held a series of positions at Quaker Oats Company including President and Chief Operating Officer from 1993 to 1996.
Angela Glover Blackwell, a director since 1994, is founder and president of PolicyLink, a nonprofit research, advocacy and communications organization devoted to eliminating poverty and strengthening communities. From 1995 to 1998, Ms. Blackwell was Senior Vice President of the Rockefeller Foundation where she oversaw the foundation's domestic and cultural divisions. Ms. Blackwell was the founder of Oakland, California's Urban Strategies Council, a nonprofit organization focused on reducing persistent urban poverty.
Robert E. Friedman, a director since 1998, is founder and Chairman of the Board of the Corporation for Enterprise Development, a Washington, D.C.-based not-for-profit economic development research, technical assistance and demonstration organization which he founded in 1979. The Corporation for Enterprise Development works with public and private policymakers in governments, international organizations, corporations, private foundations, labor unions and community groups to design and implement economic development strategies.
Tully M. Friedman, a director since 1985, is Chairman and Chief Executive Officer of Friedman Fleischer & Lowe LLC, a private equity investment firm he founded in 1997. Formerly, Mr. Friedman was a founding partner of Hellman & Friedman, a private investment firm formed in 1984. Prior to forming Hellman & Friedman in 1984, he was a managing director and general partner of Salomon Brothers Inc. Mr. Friedman currently serves on the board of directors of The Clorox Company, Mattel, Inc., McKesson Corporation, Archimedes Technology Group and Brand Farm, Inc.
James C. Gaither, a director since 1988, is a partner of the law firm of Cooley Godward LLP in San Francisco, California. Prior to joining Cooley Godward in 1969, he served as law clerk to the Honorable Earl Warren, Chief Justice of the United States, special assistant to the Assistant Attorney General in the U.S. Department of Justice and staff assistant to the President of the United States, Lyndon B. Johnson. Mr. Gaither is currently a director of Amylin Pharmaceuticals, Inc., Basic American, Inc., Blue Martini Software, Nvidia and Siebel Systems, Inc.
Peter A. Georgescu, a director since February 2000, is Chairman Emeritus of Young & Rubicam Inc., a global advertising agency. Prior to his retirement in January 2000, Mr. Georgescu served as Chairman and Chief Executive Officer of Young & Rubicam since 1993 and, prior to that, as President of Y&R Inc. from 1990 to 1993, Y&R Advertising from 1986 to 1990 and President of its Young & Rubicam international division from 1982 to 1986. Mr. Georgescu is currently a director of IFF Corporation and Briggs & Stratton, Inc.
Peter E. Haas, Jr., a director since 1985, is a director or trustee of each of the Levi Strauss Foundation, Red Tab Foundation, San Francisco Foundation, The Stern Grove Festival Foundation, Walter and Elise Haas Fund and the Novato Youth Center Honorary Board. Mr. Haas was one of our managers from 1972 to 1989. He was Director of Product Integrity of The Jeans Company, one of former operating units, from 1984 to 1989. He served as Director of Materials Management for Levi Strauss USA in 1982 and Vice President and General Manager in the Menswear Division in 1980.
Walter J. Haas, a director since 1995, served as Chairman and Chief Executive Officer of the Oakland A's Baseball Company from 1993 to 1995, President and Chief Executive Officer from 1991 to 1993 and in other management positions with the club from 1980 to 1991.
F. Warren Hellman, a director since 1985, served as chairman and general partner of Hellman & Friedman LLC, a private investment firm, since its inception in 1984. Previously, he was a general partner of Hellman Ferri (now Matrix Partners) and managing director of Lehman Brothers Kuhn Loeb, Inc. Mr. Hellman is currently a director of Franklin Resources, Inc., Il Fornaio (America) Corp., DN&E Walter & Co., Young and Rubicam, Inc. and Sugar Bowl Corporation.
Patricia Salas Pineda, a director since 1991, is currently Vice President of Legal, Human Resources, Government Relations and Environmental Affairs and Corporate Secretary of New United Motor Manufacturing, Inc. She has held this position since 1996. Prior to assuming that position, she served as General Counsel from 1990 to 1996. Ms. Pineda is currently a trustee of the RAND Corporation and a director of the James Irvine Foundation.
T. Gary Rogers, a director since 1998, is Chairman of the Board and Chief Executive Officer of Dreyer's Grand Ice Cream, Inc., a manufacturer and marketer of premium ice cream products. He has held this position since 1977. He serves as a director of Shorenstein Company, L.P., Stanislaus Food Products and Gardonjim Farms.
G. Craig Sullivan, a director since 1998, is Chairman of the Board and Chief Executive Officer of The Clorox Company, a major consumer products firm. Prior to his election as Vice Chairman and Chief Executive Officer of Clorox in 1992, Mr. Sullivan was group vice president with overall responsibility for manufacturing and marketing, the company's laundry and cleaning products in the United States, the international business, the manufacturing and marketing of products for the food service industry and the corporate purchasing and distribution functions.
R. John Anderson, President of our Asia Pacific Division since 1998, joined us in 1979. Mr. Anderson served as General Manager of Levi Strauss Canada and as President of Levi Strauss Canada and Latin America from 1996 to 1998. He has held a series of merchandising positions with us in Europe and the United States, including Vice President, Merchandising and Product Development for the Levi's(R) brand in 1995.
William B. Chiasson, our Senior Vice President and Chief Financial Officer, joined us in 1998. From 1988 to 1998, Mr. Chiasson held various positions with Kraft Foods Inc., a subsidiary of Philip Morris Companies, including Senior Vice President of Finance and Information Systems. Prior to joining Kraft Foods, he was Vice President and Controller for Baxter Healthcare Corporation, Hospital Group.
Karen Duvall, our Senior Vice President of Worldwide Supply Chain, joined us in 2000. Ms. Duvall was Executive Vice President of Global Operations for Warner Lambert Company, a major pharmaceutical firm, from 1997 to 2000. At Warner Lambert, Ms. Duvall also served as Director of Global Sourcing for Marketing Services from 1996 to 1997. From 1994 to 1996, Ms. Duvall was a management consultant at Booz Allen & Hamilton.
Linda S. Glick, our Senior Vice President and Chief Information Officer since 1996, joined the Company in 1976. She has held a number of positions including Vice President of Information Resources for Levi Strauss International from 1993 to 1996, Director of Information Resources and Business Systems from 1989 to 1993 and Director of Information Resources for The Jeans Company from 1987 to 1989. Ms. Glick has announced her retirement, effective upon appointment of her successor.
James Lewis, our Senior Vice President and President, Levi Strauss Americas, joined us in 2000. From 1995 to 2000, Mr. Lewis held various positions with Liz Claiborne, Inc., including Group President (responsible for all of Liz Claiborne's operating units), Group President for the Liz Claiborne women's casual apparel division and Division President for LizWear. Before joining Liz Claiborne, Mr. Lewis was for 10 years Senior Vice President, Merchandise, Design and Production Planning for Haggar Clothing Company.
Joseph Middleton, our Senior Vice President and President of Levi Strauss Europe, Middle East and Africa since 1999, joined us in 1981. He held the position of General Manager of the Dockers(R) brand in Europe from 1993 to 1999, General Manager of Levi Strauss New Zealand from 1990 to 1993 and a variety of other positions from 1981 to 1990.
Albert F. Moreno, our Senior Vice President and General Counsel since 1996, joined us in 1978. He held the position of Chief Counsel for Levi Strauss North America from 1994 to 1996 and Deputy General Counsel from 1985 to 1994. He is a member of the Board of Directors of New Century Energies, Inc.
Fred Paulenich, our Senior Vice President of Worldwide Human Resources, joined us in 2000. Prior to joining us, Mr. Paulenich was Vice President and Chief Personnel Officer of Pepsi-Cola North America from 1999 to 2000. At Pepsi-Cola, he has held a series of management positions including Vice President of Headquarters Human Resources from 1996 to 1998, Vice President of Personnel from 1995 to 1996, Director of Compensation from 1993 to 1994 and Senior Manager of Organizational Capability from 1992 to 1993.
Our Board of Directors
Our board of directors has 14 members. Directors are elected annually by the trustees of the voting trust and serve for one-year terms. Directors may be removed, with or without cause, by the trustees of the voting trust.
Committees. Our board of directors currently has three committees.
. Audit. Our audit committee reviews, with management and with independent and internal auditors, our accounting and reporting policies and internal controls, the scope, cost and outcome of the independent audit and the selection of an auditor.
-- Members: Blackwell, T. Friedman, Georgescu, P.E. Haas, Jr., W. J.
Haas, Hellman, Pineda and Sullivan.
. Personnel. Our personnel committee reviews our employee compensation and benefit programs, approves and monitors incentive programs, establishes the compensation of and approves the perquisites and reimbursed expenses for members of senior management and administers a number of our executive and employee compensation plans.
-- Members: R. Friedman, Gaither, Georgescu, Hellman, Pineda, Rogers and Sullivan.
. Corporate Ethics and Social Responsibility. Our corporate ethics and social responsibility committee reviews our efforts to meet our social responsibilities and to maintain policies, programs and practices that conform with moral, legal and social standards. In addition, the corporate ethics and social responsibility committee also reviews our employment practices, our equal employment opportunity compliance and compliance with our code of worldwide business ethics and recommends contributions to outside beneficiaries and the Levi Strauss Foundation.
-- Members: Blackwell, R. Friedman, T. Friedman, Gaither, Georgescu, P.E. Haas, Jr., P.E. Haas, Sr., R.D. Haas, W.J. Haas, Marineau and Rogers.
Compensation. Directors who are also stockholders or employees do not receive compensation for their services as directors. Directors who are not stockholders or employees, Mr. Gaither, Ms. Blackwell, Ms. Pineda, Mr. Rogers, Mr. Sullivan and Mr. Georgescu, receive annual compensation of approximately $62,000. This amount includes an annual retainer fee of $6,000, meeting fees of $1,000 per meeting day attended and long-term variable pay in the form of 1,800 Leadership Shares units, for a target value of $45,000 per year. The actual amount for each payment varies depending on the years of service, the number of meetings attended and the actual value of the granted units upon vesting.
Mr. Gaither, Ms. Blackwell and Ms. Pineda each received 1,800 Leadership Shares units in 1999. Mr. Gaither, Ms. Blackwell and Ms. Pineda each received payments under the Long-Term Incentive Plan and the Long-Term Performance Plan of approximately $59,000 in 1999. If the Global Success Sharing Plan were to pay out at target levels in 2002, the outside directors' effective target compensation would be approximately $82,000. During 1999 we concluded that, based on our financial performance, the targets under the plan would not be achieved and that the probability of a payment in 2002 is highly unlikely. Directors who are not employees or stockholders are eligible to participate in a deferred compensation plan.
Personnel Committee Interlocks and Insider Participation
The members of our personnel committee in 1999 were Mr. Friedman, Mr. Gaither, Mr. Hellman, Ms. Pineda, Mr. Rogers and Mr. Sullivan. Mr. Georgescu joined the Personnel Committee when he joined our board of directors in February 2000.
Mr. Hellman is a general partner of Hellman & Friedman, a private investment firm that has provided financial advisory services to us in the past. We did not pay any fees to Hellman & Friedman during fiscal year 1999. Mr. Gaither is a partner of the law firm Cooley Godward LLP. Cooley Godward provided legal services to us in 1999 and received approximately $78,000 in fees.
Executive Compensation
This table provides compensation information for our chief executive officer and other executive officers who were our most highly compensated officers in 1999.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------- ------------
LTIP All Other
Name/Principal Position Year Salary Bonus(1) Awards(2) Compensation(3)
----------------------- ---- ---------- -------- ------------ ---------------
Robert D. Haas............. 1999 $1,248,462 -- $187,000 $ 90,000
Chairman and Chief
Executive Officer
Philip A. Marineau......... 1999 153,846 -- -- 3,172,234
President and Chief
Executive Officer(4)
Gordon D. Shank............ 1999 412,712 -- 14,201 65,079
Senior Vice President and
Chief Marketing Officer(5)
William B. Chiasson........ 1999 450,449 -- -- --
Senior Vice President and
Chief Financial Officer
John L. Ermatinger......... 1999 356,462 -- 16,522 123,057
Senior Vice President and
President Levi Strauss
Americas(5)
Donna J. Goya.............. 1999 348,404 -- 26,851 26,130
Senior Vice President,
Human Resources(5)
Peter A. Jacobi............ 1999 402,908 -- 55,000 4,202,481
President and Chief
Operating Officer(5)
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(4) Mr. Marineau joined us on September 27, 1999.
(5) Mr. Shank and Mr. Ermatinger left us at the beginning of the 2000 fiscal
year. Mr. Jacobi left us on July 1, 1999. Ms. Goya retired in March 2000.
Mr. Shank has a supplemental retirement agreement with us that is
integrated with his regular retirement plan benefits and provides a total
benefit of approximately $13,700 per month.
Long-Term Incentive Plans--Awards in Last Fiscal Year (1999)
Number of Estimated Future
Leadership Payouts(1)
Shares Performance ------------------
Name/Principal Position Awarded Period(2) Minimum Target
----------------------- ---------- ----------- ------- ----------
Robert D. Haas....................... 100,000 5 years -- $2,500,000
Chairman and Chief Executive Officer
Philip A. Marineau................... -- N/A N/A N/A
President and Chief Executive
Officer(3)
Gordon D. Shank...................... 20,000 5 years -- 500,000
Senior Vice President and
Chief Marketing Officer(4)
William B. Chiasson.................. 45,000 5 years -- 1,125,000
Senior Vice President and Chief
Financial Officer
John L. Ermatinger................... 45,000 5 years -- 1,125,000
Senior Vice President and President
Levi Strauss Americas(4)
Donna J. Goya........................ 17,500 5 years -- 437,500
Senior Vice President, Human
Resources(4)
Peter A. Jacobi...................... -- N/A N/A N/A
President and Chief Operating Officer
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Pension Plan Table
The following table shows the estimated annual benefits payable upon retirement under our Home Office Pension Plan, benefit restoration plans and deferred compensation plan to persons in various compensation and years-of- service classifications prior to mandatory offset of Social Security benefits:
Years of Service
Covered -------------------------------------------------------
Compensation 5 10 15 20 25 30 35
------------ ------- ------- ------- ------- ------- ------- -------
150,000 15,000 30,000 45,000 60,000 75,000 76,875 78,750
225,000 22,500 45,000 67,500 90,000 112,500 115,313 118,125
300,000 30,000 60,000 90,000 120,000 150,000 153,750 157,500
375,000 37,500 75,000 112,500 150,000 187,500 192,188 196,875
450,000 45,000 90,000 135,000 180,000 225,000 230,625 236,250
525,000 52,500 105,000 157,500 210,000 262,500 269,063 275,625
600,000 60,000 120,000 180,000 240,000 300,000 307,500 315,000
675,000 67,500 135,000 202,500 270,000 337,500 345,938 354,375
750,000 75,000 150,000 225,000 300,000 375,000 384,375 393,750
825,000 82,500 165,000 247,500 330,000 412,500 422,813 433,125
900,000 90,000 180,000 270,000 360,000 450,000 481,250 472,500
975,000 97,500 195,000 292,500 390,000 487,500 499,688 511,875
1,050,000 105,000 210,000 315,000 420,000 525,000 538,125 551,250
1,125,000 112,500 225,000 337,500 450,000 562,500 576,563 590,625
1,200,000 120,000 240,000 360,000 480,000 600,000 615,000 630,000
1,275,000 127,500 255,000 382,500 510,000 637,500 653,438 669,375
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The table assumes retirement at the age of 65, with payment to the employee in the form of a single-life annuity. As of year-end 1999, the credited years of service for Mr. Haas, Mr. Marineau, Mr. Shank, Mr. Chiasson, Mr. Ermatinger, Ms. Goya, and Mr. Jacobi were 26, 0, 3, 1, 23, 29 and 29 respectively. The 1999 compensation covered by the pension plan, benefit restoration plans and deferred compensation plan for Mr. Haas, Mr. Marineau, Mr. Shank, Mr. Chiasson, Mr. Ermatinger, Ms. Goya, and Mr. Jacobi were $1,248,462, $153,846, $457,836, $450,449, $466,368, $348,404 and $551,524 respectively. The 1999 compensation covered by the pension plan alone for these individuals was the same, except for Mr. Shank's which was $445,043.
Employment Agreements
Philip Marineau. We have an employment agreement with Philip Marineau, our President and Chief Executive Officer. The agreement provides for a minimum base salary of $1.0 million in accordance with our executive salary policy and a target annual cash bonus of 90% of base salary, with a maximum bonus of 180% of base salary. In addition, Mr. Marineau is eligible to participate in all other executive compensation and benefit programs, including the Leadership Shares Plan. Under the employment agreement, we made a one-time grant of 810,000 Leadership Shares units to compensate him for the potential value of stock options he forfeited upon leaving his previous employer to join us. We also provide under the agreement a supplemental pension benefit to Mr. Marineau.
The agreement terminates in September 2002 but extends automatically after this date until terminated by either Mr. Marineau or us. We may terminate the agreement upon Mr. Marineau's death or disability, for cause (as defined in the agreement), and without cause upon 30 days notice. Mr. Marineau may terminate the agreement for good reason (as defined in the agreement) or other than for good reason upon 30 days notice to us. The consequences of termination depend on the basis for the termination:
. If we terminate without cause or if Mr. Marineau terminates for good reason, Mr. Marineau will be entitled to: (i) severance payments equal to three times the sum of his base salary as of the termination date plus his most recent target or, if greater, annual bonus, (ii) amounts accrued or earned under our compensation and benefit plans and (iii) an amount in respect of the Leadership Shares units granted in the one-time grant described above.
. If we terminate for cause or if Mr. Marineau terminates for other than good reason, then the agreement will terminate without our having further obligations to Mr. Marineau other than for amounts accrued or earned under our compensation and benefit programs (which does not include unvested Leadership Shares units or target bonus amounts not payable as of the date of termination).
. If we terminate for any reason other than cause or if Mr. Marineau
terminates for good reason within 12 months after a change in control
(as defined in the agreement), Mr. Marineau will be entitled to:
(i) severance payments equal to three times the sum of his base salary
as of the termination date plus his most recent target or, if greater,
annual bonus, (ii) amounts accrued or earned under our compensation and
benefit plans, (iii) an amount in respect of the Leadership Shares units
granted in the one-time grant described above, (iv) full and immediate
vesting in all outstanding Leadership Shares grants; (v) full and
immediate vesting in his supplemental pension benefit; and (vi) if any
amounts paid are treated as parachute payments (as defined in Section
280G(b)(2) of the Internal Revenue Code), an amount equal to the
applicable excise tax and any taxes on this reimbursement payment.
James Lewis. We have an employment agreement with James Lewis, our Senior Vice President, and President, Levi Strauss Americas. The agreement provides for a minimum base salary of $750,000 per year with a bonus target equal to 55% of base salary, and a maximum bonus equal to 110% of base salary. For fiscal year 2000, which is the first year of Mr. Lewis' employment, he is guaranteed under the agreement to earn at least his target bonus amount; later years' bonus payouts are not guaranteed. Under the agreement, Mr. Lewis received a one-time lump sum of $300,000 net of taxes to assist with relocation expenses.
Mr. Lewis is eligible to participate in all of our executive compensation and benefit programs, including the Leadership Shares Plan. Under his employment agreement, Mr. Lewis received 108,000 Leadership Shares units for his 2000 grant. This award reflects three elements: a signing bonus, a normal grant for the year and a replacement for options forfeited upon leaving his previous employer to join us. In addition, we will compensate Mr. Lewis for other incentive amounts he forfeited upon leaving his previous employer. Under the terms of the agreement, Mr. Lewis will be eligible for a supplemental pension benefit. If Mr. Marineau leaves us during the first five years of Mr. Lewis' employment and Mr. Lewis remains with us through that five-year period, Mr. Lewis will receive an additional five years of credited service under the supplemental pension benefit.
The agreement has a five-year term ending in April 2005. We may terminate Mr. Lewis' employment agreement upon death or disability, for cause, as defined in the agreement, or without cause upon 60 days' notice. Mr. Lewis may terminate the agreement for good reason, as defined in the agreement, or other than for good reason upon 60 days' notice to us. The consequences of termination depend on the basis for the termination:
. If we terminate without cause or if Mr. Lewis terminates for good reason, Mr. Lewis will be entitled to: (i) severance payments equal to two times the sum of his base salary as of the termination date plus his most recent target bonus; (ii) payment in respect of the vested portions of his Leadership Shares units; (iii) in the case of termination by Mr. Lewis for good reason, full and immediate vesting in all outstanding Leadership Shares units and immediate vesting in his supplemental retirement benefit unless at the time of termination Mr. Marineau is no longer the chief executive officer; and (iv) amounts accrued or earned under our compensation and benefit plans.
. If we terminate for cause or if Mr. Lewis terminates for other than good reason, then the agreement will terminate without our having further obligations to Mr. Lewis other than payment of base salary and accrued vacation pay through the date of termination and vested amounts under our compensation and benefit plans.
. If within 12 months following a change in control, as defined in the agreement, we terminate for any reason other than for cause or if Mr. Lewis terminates due to good reason, Mr. Lewis will be entitled to: (i) two times the sum of his base salary as of the termination date plus his most recent target bonus; (ii) accelerated vesting of his unvested Leadership Shares units; (iii) full vesting in his supplemental pension benefit; and (iv) amounts accrued or earned under our compensation and benefit plans. Mr. Lewis in his sole discretion shall be able to accept these benefits or choose to have these benefits capped at the Internal Revenue Service limit in order to avoid excise taxes.
PRINCIPAL STOCKHOLDERS
All shares of our common stock are deposited in a voting trust, a legal device that transfers the voting power of the shares to a trustee or group of trustees. The four voting trustees are Peter E. Haas, Sr., Peter E. Haas, Jr., Robert D. Haas and F. Warren Hellman. The voting trustees have the exclusive ability to elect and remove directors, amend our by-laws and take certain other actions which would normally be within the power of stockholders of a Delaware corporation. Our equity holders who, as a result of the voting trust, legally hold "voting trust certificates," not stock, retain the right to direct the trustees on specified mergers and business combinations, liquidations, sales of substantially all of our assets and specified amendments to our certificate of incorporation.
The voting trust will last until April 2011, unless the trustees unanimously decide, or holders of at least two-thirds of the outstanding voting trust certificates decide, to terminate it earlier. If Robert D. Haas ceases to be a trustee for any reason, then the question of whether to continue the voting trust will be decided by the holders. If Peter E. Haas, Sr. ceases to be a trustee, his successor will be his spouse, Miriam L. Haas. The existing trustees will select the successors to the other trustees. The agreement among the stockholders and the trustees creating the voting trust contemplates that, in selecting successor trustees, the trustees will attempt to select individuals who share a common vision with the sponsors of the 1996 transaction that gave rise to the voting trust, represent and reflect the financial and other interests of the equity holders and bring a balance of perspectives to the trustee group as a whole. A trustee may be removed if the other three trustees unanimously vote for removal or if holders of at least two-thirds of the outstanding voting trust certificates vote for removal.
This table contains information about the beneficial ownership of our voting trust certificates as of May 1, 2000, by:
. Each of our directors and each of our five most highly compensated officers;
. Each person known by us to own beneficially more than 5% of our voting trust certificates; and
. All of our directors and officers as a group.
You should keep in mind as you read the following table that, under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of the security, or "investment power," which includes the power to dispose of or to direct the disposition of the security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which that person has no economic interest. Except as described in the footnotes to the table below, the individuals named in the table have sole voting and investment power with respect to all voting trust certificates beneficially owned by them, subject to community property laws where applicable.
Percentage of
Number of Voting Voting Trust
Trust Certificates Certificates
Name Beneficially Owned Outstanding
---- ------------------ -------------
Peter E. Haas, Sr. .......................... 10,439,593(1) 28.00%
Peter E. Haas, Jr. .......................... 4,642,472(2) 12.45%
Josephine B. Haas............................ 4,103,750(3) 11.01%
Robert D. Haas............................... 3,723,679(4) 9.99%
Evelyn D. Haas............................... 3,515,116(5) 9.43%
Miriam L. Haas............................... 2,980,200(6) 7.99%
Margaret E. Haas............................. 2,643,110(7) 7.09%
F. Warren Hellman............................ 527,342(8) 1.41%
Walter J. Haas............................... 258,348(9) *
Tully M. Friedman............................ 246,196(10) *
Robert E. Friedman........................... 114,300(11) *
James C. Gaither............................. -- --
Peter A. Georgescu(12)....................... -- --
Angela Glover Blackwell...................... -- --
Philip A. Marineau........................... -- --
Patricia Salas Pineda........................ -- --
T. Gary Rogers............................... -- --
G. Craig Sullivan............................ -- --
William B. Chiasson.......................... -- --
Directors and executive officers as a group
(22 persons)(13)............................ 19,951,930 53.52%
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The percentage of beneficial ownership shown in the table is based on 37,278,238 shares of common stock and related voting trust certificates outstanding as of December 31, 1999. The business address of all persons listed, including the trustees under the voting trust, is 1155 Battery Street, San Francisco, California 94111.
Stockholders' Agreement
Our common stock and the voting trust certificates are not publicly held or traded. All shares and the voting trust certificates are subject to a stockholders' agreement. The agreement, which expires in April 2016, limits the transfer of shares and certificates to other holders, family members, specified charities and foundations and to us. The agreement does not provide for registration rights or other contractual devices for forcing a public sale of shares, certificates or other access to liquidity. The scheduled expiration date of the stockholders' agreement is five years later than that of the voting trust agreement in order to permit an orderly transition from effective control by the voting trust trustees to direct control by the stockholders.
Estate Tax Repurchase Policy
We have a policy under which we will repurchase a portion of the shares offered by the estate of a deceased stockholder in order to generate funds for payment of estate taxes. The purchase price will be based on a valuation received from an investment banking or appraisal firm. Estate repurchase transactions are subject to applicable laws governing stock repurchases, board approval and restrictions under our credit agreements. Our current bank credit facilities prohibit repurchases without the consent of the lenders. The policy does not create a contractual obligation on our part. We may amend or terminate this policy at any time.
Valuation Policy
We have a policy under which we obtain, and make available to our stockholders, an annual valuation of our voting trust certificates. The policy provides that we will make reasonable efforts to defend valuations we obtain which are challenged in any tax or regulatory proceeding involving a stockholder (including an estate) that used the valuation and that was challenged on that use. The policy provides that we will not indemnify any stockholder against any judgment or settlement amounts or expenses specific to any individual stockholder arising from the use of a valuation. We may amend or terminate this policy at any time.
Voting Trustee Compensation
The voting trust agreement provides that trustees who are also beneficial owners of 1% or more of our stock are not entitled to compensation for their services as trustees. Trustees who are not beneficial owners of more than 1% of our outstanding stock may receive such compensation, upon approval of our Board. All trustees are entitled to reimbursement for reasonable expenses and charges, which may be incurred in carrying out their duties as trustees. Of the current trustees, Mr. Hellman beneficially owns less than 1% of our outstanding stock. He is not currently receiving compensation from us for his service as a trustee. All of the other trustees each beneficially owns more than 1% of our outstanding stock.
Voting Trustee Indemnification
Under the voting trust agreement, the trustees are not liable to us or to the holders of voting trust certificates for any actions undertaken in their capacity as trustees, except in cases of willful misconduct. The voting trust will indemnify the trustees in respect of actions taken by them under the voting trust agreement in their capacity as trustees, except in cases of willful misconduct.
We have agreed to reimburse the voting trust for any amounts paid by the trust as a result of its indemnity obligation on behalf of the trustees.
Limitation of Liability and Indemnification Matters
As permitted by Delaware law, we have included in our certificate of incorporation a provision to eliminate generally the personal liability of directors for monetary damages for breach or alleged breach of their fiduciary duties as directors. In addition, our by-laws provide that we are required to indemnify our officers and directors under a number of circumstances, including circumstances in which indemnification would otherwise be discretionary, and we are required to advance expenses to our officers and directors as incurred in connection with proceedings against them for which they may be indemnified. In addition, our board adopted resolutions making clear that officers and directors of our foreign subsidiaries are covered by these indemnification provisions. We are not aware of any pending or threatened litigation or proceeding involving a director, officer, employee or agent of ours in which indemnification would be required or permitted. We believe that these indemnification provisions are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities under the Securities Act of 1933 may be granted to directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable.
MATERIAL RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
F. Warren Hellman, one of our directors, is a general partner of Hellman & Friedman, a private investment firm that has provided financial advisory services to us in the past. We did not pay any fees to Hellman & Friedman during 1999 and 1998.
James C. Gaither, one of our directors, is a partner of the law firm Cooley Godward LLP. Cooley Godward provided legal services to us in 1999 and 1998, for which we paid fees of approximately $78,000 and $74,000 in those years.
DESCRIPTION OF OTHER INDEBTEDNESS
Bank Credit Facilities
In January 2000, we amended each of our three existing credit agreements with Bank of America, N.A., as administrative agent and collateral agent, and other lenders and entered into one new $450 million credit agreement with five of those lenders. The following is a summary description of the material terms of the bank credit facilities and is subject to, and qualified in its entirety by, reference to the credit agreements themselves, which have been filed as exhibits to the registration statement of which this prospectus is a part and which are incorporated by reference in this prospectus.
Structure. Our credit facilities consist of the following:
. a new $450 million revolving bridge facility;
. an amended $300 million revolving credit facility;
. an amended $545 million credit facility; and
. an amended $584 million credit facility.
The January 2000 amendments increased our financial and operating flexibility in exchange for securing the loans, as described below. We used the proceeds of the new bridge facility in part to replace a domestic receivables securitization facility that we terminated at the time we entered into these agreements, to refinance several foreign bank lines, to support letters of credit, interest-rate and foreign exchange risk-management activities and for working capital and other general corporate purposes.
Security; Guarantees. Our bank credit facilities are guaranteed by our material domestic subsidiaries. All four facilities and the guarantees are secured by substantially all of our assets and the assets of those subsidiaries, including:
. U.S. receivables;
. U.S. inventories;
. U.S. equipment, other than the principal equipment at our customer service centers;
. U.S. real property, other than our customer service centers and one plant in Texas;
. U.S. and foreign trademarks and other intellectual property;
. 100% of the capital stock of our U.S. subsidiaries; and
. 65% of the capital stock of most of our foreign subsidiaries, other than our affiliates in Germany and United Kingdom.
Excluded from the assets securing the bank credit facilities are all of our most valuable real property interests and all of the capital stock and debt of our restricted subsidiaries. See the caption "Description of the Exchange Notes--Restrictive Covenants--Limitations on Liens" for a more detailed discussion of our ability to grant liens on our property.
Amortization; Interest. All of our bank credit facilities mature on January 31, 2002. Prior to that date, the commitments under our bank credit facilities will be reduced by the following amounts:
. $50 million at May 25, 2000;
. $50 million at August 24, 2000;
. $100 million at November 22, 2000;
. $50 million at February 22, 2001;
. $50 million at May 24, 2001; and
. $100 million at August 23, 2001.
These reductions will first be applied ratably to our three amended bank credit facilities and will then be applied to the new bridge facility once the commitments outstanding under our other three bank credit facilities have been reduced to zero.
Borrowings under the bank credit facilities bear interest at the London Interbank Offered Rate or the agent bank's base rate plus an incremental borrowing spread. For the bridge facility, the spread is 3.00% over the London Interbank Offered Rate or 1.75% over the base rate. For each of the three amended facilities, the spread is 3.25% over the London Interbank Offered Rate or 2.00% over the base rate.
In addition, if by February 1, 2001 we have not completed one or more private or public capital-raising transactions yielding net proceeds to us of at least $300 million which have been used to reduce commitments under our bank credit facilities, we will be required to pay our lenders an additional borrowing spread of 1.00% on outstanding borrowings under our bank credit facilities, plus a one-time additional fee of 2.00% of total commitments as of January 31, 2001. Our borrowing spread will be increased by 0.25% quarterly until those capital-raising transactions are completed.
Prepayments. We are obligated to prepay borrowings under our bank credit facilities with proceeds from specified transactions we may effect during the term of the facilities, including equipment and real estate financings, asset dispositions and foreign subsidiary receivables securitizations. We are also required to prepay borrowings ratably under our bank credit facilities with up to 60% of our excess cash flow (after voluntary prepayments) as defined in the credit agreements. In addition, in limited circumstances we are obligated to prepay our borrowings with the proceeds of insurance on collateral securing those borrowings.
Covenants. The credit agreements contain customary covenants restricting our activities as well as those of our subsidiaries, including limitations on our and their ability to sell assets; engage in mergers; enter into operating leases or capital leases; enter into transactions involving related parties, derivatives or letters of credit; enter into intercompany transactions; incur indebtedness or grant liens or negative pledges on our assets; make loans or other investments; pay dividends or repurchase stock or other securities; guaranty third party obligations; make capital expenditures; and make changes in our corporate structure. The credit agreements also contain financial covenants that we must satisfy on an ongoing basis, including a maximum leverage ratio, a minimum coverage ratio and minimum consolidated EBITDA.
Events of Default. The credit agreements contain customary events of default, including payment failures; failures to satisfy other obligations under the credit agreements; material judgments; pension plan terminations or specified underfunding; substantial voting trust certificate or stock ownership changes; specified changes in the composition of our Board; and invalidity of the guaranty or security agreements. If an event of default occurs, our lenders could terminate their commitments, declare immediately payable all borrowings under the credit facilities and foreclose on the collateral, including our trademarks.
Yen-denominated Eurobond Placement
In November 1996, we issued a (Yen)20 billion principal amount eurobond (equivalent to approximately $180.0 million at the time of issuance) due November 22, 2016, with interest payable at 4.25% per annum. The bond is redeemable at our option at a make-whole redemption price, based on market rates at the time of redemption, commencing in November 2006 and on any subsequent semi-annual interest payment date. We treat the bond as a hedge of our net investment in our Japanese subsidiary.
The bond includes covenants limiting our activities similar to the covenants governing the exchange notes and customary events of default described in the caption "Description of the Exchange Notes--Restrictive Covenants."
European Receivables Financing
In February 2000, several of our European subsidiaries, including Levi Strauss Germany GmbH, Levi Strauss (U.K.) Limited, Levi Strauss Continental S.A., Levi Strauss Italia s.r.l., and Levi Strauss De Espana, S.A., each entered into a receivables-backed securitization financing agreement with ABN AMRO BV and other lenders. The maximum amount of permitted outstanding loans under the program would vary based upon the amount of eligible receivables as defined under each agreement. The program currently provides for the subsidiaries to borrow in aggregate up to $125.0 million on a committed basis for 364 days. Proceeds from any net borrowings under the securitization agreements must be used to reduce commitments under our bank credit facilities. All borrowings under the securitization agreements bear interest at a variable rate based on market commercial paper rates. As of April 28, 2000, the subsidiaries were working with lenders to operationalize certain reporting and other systems functions. As a result, they have not yet borrowed under the securitization agreements.
The securitization agreements contain covenants governing the activities of the subsidiaries and the quality of the receivables that may be used to support the borrowings, including, among other things, a requirement that our subsidiaries service the receivables securing their borrowings.
We would provide a limited guaranty to support borrowings under the agreements. We would guaranty performance by the subsidiaries of their servicing obligations. We would also guaranty the collectibility of the receivables in an amount not to exceed 10% of the outstanding amount as of the termination date under the securitization agreements.
The securitization agreements contain customary termination events for these arrangements, including the subsidiaries' failure to make payments or otherwise comply with their obligations under the securitization agreements, bankruptcy events, material adverse changes in financial position or receivables collection procedures, cross default to other indebtedness, failure of the portfolio to meet certain performance standards or a change in control.
We expect that some of our other European subsidiaries will enter into the program during the next 12 months. We and our Japanese subsidiary, Levi Strauss Japan K.K., are currently negotiating a similar receivables-backed securitization financing agreement which we expect to complete by July 2000.
Customer Service Center Equipment Financing
In December 1999, we borrowed $89.5 million from a group of lenders under a five-year credit facility secured by most of the equipment located at our customer service centers in Nevada, Mississippi and Kentucky. These customer service centers are our principal product distribution facilities in the United States. The equipment in the customer service centers securing this facility is not part of the collateral securing our bank credit facilities. As of May 1, there was approximately $88.0 million principal amount outstanding under this facility. Approximately $25.0 million in excess collateral equipment value remains available to secure additional third party funding. Borrowings of $59.5 million under the first tranche bear interest at a fixed rate equal to the yield on four-year U.S. Treasury notes at the time of funding plus an incremental borrowing spread. Borrowings of $30.0 million under the second tranche bear interest at a floating quarterly rate equal to the 90-day London Interbank Offered Rate plus an incremental borrowing spread based on our leverage ratio at the time of the interest payment. The borrowings amortize over five years, with 50% and 80% of the principal amount of the first tranche and second tranche, respectively, due at maturity. We are also permitted to prepay the debt in whole at any time and to prepay in part in $5 million or greater increments.
The credit facility is structured as a lease intended as security. This means that we retain ownership of the equipment, the lenders have a security interest in the equipment and the transaction is considered a secured financing, and not a lease, for tax, accounting, bankruptcy, financial reporting and commercial law purposes.
The transaction documents include customary covenants governing our activities, including, among other things, limitations on our ability to sell, lease, relocate or grant liens in the equipment held in these customer service centers.
In some circumstances, we are permitted to sell or, with the lenders' approval, obtain a release of the lenders' security interest in, the equipment in the customer service centers upon repayment of a portion of the debt attributable to that equipment. We can also enter into agreements with third party "outsource" providers to operate one or more of the customer service centers.
The transaction documents include customary events of default. If we default, the lenders could accelerate the maturity date of our loans, enter these customer service centers and take possession of our equipment held there.
DESCRIPTION OF THE EXCHANGE NOTES
We will issue the exchange notes under the indenture, dated as of November 6, 1996, as supplemented, between us and Citibank, N.A., as trustee, under which we issued the old notes. We will provide you with a copy of the indenture, as supplemented, upon request. The indenture contains provisions that define your rights under the exchange notes. In addition, the indenture governs our obligations under the exchange notes. The terms of the exchange notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended.
The following description is meant to be only a summary of the indenture. It does not restate the terms of the indenture in their entirety. We urge you to read the indenture carefully, as it, and not this description, governs your rights as holders.
General
The exchange notes will be unsecured obligations, will not be subject to redemption before maturity and will not be subject to any sinking fund.
We will issue up to $350.0 million aggregate principal amount of 6.80% exchange notes. We will receive no proceeds from this issuance. The 6.80% exchange notes will mature on November 1, 2003. Each 6.80% exchange note we issue will accrue interest at an annual rate of 6.80%.
We will issue up to $450.0 million aggregate principal amount of 7.00% exchange notes. We will receive no proceeds from this issuance. The 7.00% exchange notes will mature on November 1, 2006. Each 7.00% exchange note we issue will accrue interest at an annual rate of 7.00%.
We will pay accrued interest semiannually to holders of record of exchange notes at the close of business on the May 1 or November 1 immediately preceding the relevant interest payment date. We will issue the exchange notes in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000.
Payment
We will pay the principal of, premium, if any, and interest on the exchange notes at any office of ours or any agency designated by us which is located in the Borough of Manhattan, the City of New York. We may pay the principal or interest on the exchange notes by wire transfer to a U.S. dollar account maintained by any holder of an aggregate principal amount in excess of U.S.$1,000,000 with a bank in the City of New York. We will not make any transfer to a dollar account unless the trustee has received written wire instructions at least 10 days prior to the relevant payment date. We reserve the right to pay interest by check mailed directly to holders at their registered addresses. We may make any payment on the exchange notes that is due on any day which is not a business day on the following business day without penalty or additional interest as if that payment had been made on the date due.
Restrictive Covenants
Limitations on Liens. The indenture provides that we will not, and will not permit any restricted subsidiary to, create, incur, issue, assume or guarantee any indebtedness secured by a lien upon any Principal Property, or upon shares of capital stock or indebtedness issued by any restricted subsidiary and owned by us or any restricted subsidiary, without providing concurrently that the exchange notes are secured equally and ratably with or, at our option, prior to such indebtedness so long as such indebtedness shall be so secured.
The indenture provides that this restriction shall not apply to, and there shall be excluded from indebtedness in any computation under this restriction, indebtedness secured by:
(1) liens on any property existing at the time of its acquisition;
(2) liens on property of a corporation existing at the time such corporation is merged into or consolidated with us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all the properties of such corporation (or a division thereof) to us or a restricted subsidiary, provided that any such lien does not extend to any property owned by us or any restricted subsidiary immediately prior to such merger, consolidation, sale, lease or disposition;
(3) liens on property of a corporation existing at the time such corporation becomes a restricted subsidiary;
(4) liens in favor of us or a restricted subsidiary;
(5) liens to secure all or part of the cost of acquisition, construction, development or improvement of the underlying property, or to secure indebtedness incurred to provide funds for any such purpose, provided that the commitment of the creditor to extend the credit secured by any such lien shall have been obtained not later than 180 days after the later of:
. the completion of the acquisition, construction, development or improvement of such property or
. the placing in operation of such property or of such property as so constructed, developed or improved;
(6) liens in favor of the United States of America or any State thereof, or any department, agency or instrumentality or political subdivision thereof, to secure partial, progress, advance or other payments;
(7) liens securing industrial revenue or pollution control bonds; and
(8) liens existing on the date of the indenture or any extension, renewal
or replacement or refunding of any Indebtedness secured by a lien
existing on the date of the indenture or referred to in clause (1),
(2), (3) or (5);
provided, however, that the principal amount of indebtedness secured thereby and not otherwise authorized by clauses (1) through (7) shall not exceed the principal amount of indebtedness, plus any premium or fee payable in connection with any such extension, renewal, replacement, or refunding, so secured at the time of such extension, renewal, replacement or refunding.
Notwithstanding the restrictions described above, the indenture provides
that we and our restricted subsidiaries may create, incur, issue, assume or
guarantee indebtedness secured by liens without equally and ratably securing
the exchange notes of each series then outstanding if, at the time of such
creation, incurrence, issuance, assumption or guarantee, after giving effect
thereto and to the retirement of any indebtedness which is concurrently being
retired, the aggregate amount of all outstanding indebtedness secured by liens
which would otherwise be subject to such restrictions (other than any
indebtedness secured by liens permitted as described in clauses (1) through (8)
of the immediately preceding paragraph) plus indebtedness in respect of sale
and leaseback transactions with respect to Principal Properties (with the
exception of such transactions which are permitted under clauses (1) through
(5) of the first sentence of the first paragraph under the caption "--
Limitation on Sale and Leaseback Transactions") does not exceed 10% of our
consolidated net tangible assets.
Limitation on Sale and Leaseback Transactions. The indenture provides that we will not, and will not permit any restricted subsidiary to, enter into any sale and leaseback transaction with respect to any Principal Property unless:
(1) the sale and leaseback transaction is solely with us or another restricted subsidiary;
(2) the lease is for a period not in excess of three years, including renewal rights;
(3) the lease secures or relates to industrial revenue or pollution control bonds;
(4) we or the restricted subsidiary would (at the time of entering into such arrangement) be entitled as described in clauses (1) through (8) of the second preceding paragraph, without equally and ratably securing the exchange notes of each series then outstanding, to create, incur, issue, assume or
guarantee indebtedness secured by a lien on such Principal Property in the amount of the indebtedness arising from such sale and leaseback transaction;
(5) we or the restricted subsidiary, within 180 days after the sale of such Principal Property in connection with such sale and leaseback transaction is completed, applies an amount equal to the greater of:
. the net proceeds of the sale of the Principal Property leased or
. the fair market value of the Principal Property leased to:
-- the retirement of exchange notes, other Funded Indebtedness of ours ranking on a parity with the exchange notes or Funded Indebtedness of a restricted subsidiary or
-- the purchase of other property which will constitute a Principal Property having a value at least equal to the value of the Principal Property leased; or
(6) the indebtedness of us and our restricted subsidiaries in respect of such sale and leaseback transaction and all other sale and leaseback transactions entered into after the date of the indenture (other than any such sale and leaseback transactions as would be permitted as described in clauses (1) through (5) of this sentence), plus the aggregate principal amount of indebtedness secured by liens on Principal Properties then outstanding (not including any such indebtedness secured by liens described in clauses (1) through (8) of the second preceding paragraph) which do not equally and ratably secure such outstanding exchange notes (or secure such outstanding exchange notes on a basis that is prior to other indebtedness secured thereby), would not exceed 10% of our consolidated net tangible assets.
Mergers and Sales of Assets by the Company. The indenture provides that we may not consolidate with or merge into, or convey, transfer, sell or lease all or substantially all of its properties and assets to, any person, and may not permit any person to merge into, or convey, transfer or lease all or substantially all of its properties and assets to, us, unless, among other things:
(1) the successor person (if any) is a corporation, partnership, trust or other entity organized and validly existing under the laws of any U.S. domestic jurisdiction and expressly assumes our obligations on the exchange notes and under the indenture;
(2) immediately after giving effect to the transaction, no event of default, and no event which, after notice or lapse of time, or both, would become an event of default, shall have occurred and be continuing under the indenture; and
(3) if, as a result of the transaction, property of ours would become subject to a lien that would not be permitted under the limitation on liens described under the caption "--Limitations on Liens", we take such steps as shall be necessary to secure the exchange notes equally and ratably with (or prior to) the indebtedness secured by such lien.
Definitions
"Funded Indebtedness" means:
(1) all indebtedness having a maturity of more than 12 months from the date as of which the determination is made or having a maturity of 12 months or less but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower; and
(2) rental obligations payable more than 12 months from such date under leases which are capitalized in accordance with generally accepted accounting principles (such rental obligations to be included as Funded Indebtedness at the amount so capitalized as of such date of determination).
"Principal Property" means any contiguous or proximate parcel of real property owned by, or leased to, us or any of our restricted subsidiaries, and any equipment located at or comprising a part of any such property, having a gross book value (without deduction of any depreciation reserves), as of the date of determination, in excess of 1.0% of our consolidated net tangible assets.
Events of Default
The following are events of default with respect to the exchange notes under the indenture:
(1) failure to pay principal of any exchange note when due;
(2) failure to pay any interest on any exchange note when due, continuing for 30 days;
(3) failure to perform any of our other covenants or warranties in the indenture, continuing for 60 days after written notice to us by the trustee as provided in the indenture;
(4) any indebtedness for money borrowed by us in an outstanding principal amount in excess of $25,000,000 is not paid at final maturity or upon acceleration thereof and such default in payment or acceleration is not cured or rescinded within 30 days after written notice as provided in the indenture; and
(5) certain events of bankruptcy, insolvency or reorganization.
Subject to the provisions of the indenture relating to the duties of the trustee in case an event of default occurs, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders, unless the holders have offered the trustee reasonable indemnity. Subject to the provisions for the indemnification of the trustee, the holders of a majority in aggregate principal amount of the outstanding exchange notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee with respect to such series or exercising any trust or power conferred on the trustee with respect to such exchange notes.
If an event of default with respect to either series of exchange notes (other than an event of default specified in subsection (5) above) occurs, the trustee shall, at the written request of the holders of not less than 25% in aggregate principal amount of the outstanding exchange notes of that series, by notice in writing to us, declare the principal of all the exchange notes of that series to be due and payable immediately, and upon any such declaration such principal and any accrued interest will become immediately due and payable. If an event of default specified in subsection (5) occurs, the principal and any accrued interest on all of the exchange notes then outstanding shall become due and payable immediately without any declaration or other act on the part of the trustee or any holder.
At any time after a declaration of acceleration with respect to exchange notes of either series has been made but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of outstanding exchange notes of that series may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in the indenture.
No holder of any exchange note of any series has any right to institute any proceeding with respect to the indenture or for any remedy thereunder, unless the holder shall have previously given to the trustee written notice of a continuing event of default and unless also the holders of at least 25% in aggregate principal amount of the outstanding exchange notes of that series shall have made written request, and offered reasonable indemnity, to the trustee to institute such proceeding as trustee, and the trustee shall not have received from the holders of a majority in aggregate principal amount of the outstanding exchange notes of that series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days. However, these limitations do not apply to a suit instituted by a holder of an exchange note for the enforcement of payment of the principal of or interest on such exchange note on or after the respective due dates expressed in such exchange note.
We are required to furnish to the trustee annually a statement as to the performance by us of our obligations under the indenture and as to any default in such performance.
Meetings, Modification and Waiver
The indenture contains provisions for convening meetings of the holders of exchange notes to consider matters affecting their interests.
Modifications and amendments of the indenture may be made, and certain past defaults by us may be waived, either:
(1) with the written consent of the holders of not less than a majority in aggregate principal amount of the outstanding exchange notes of each series affected; or
(2) by the adoption of a resolution, at a meeting of holders of the exchange notes at which a quorum is present, by the holders of at least 66 2/3% in aggregate principal amount of the outstanding exchange notes of each series affected represented at such meeting.
However, no modification or amendment may, without the consent of the holder of each outstanding exchange note affected thereby:
(1) change the stated maturity of the principal of, or any installment of interest on, any exchange note;
(2) reduce the principal amount of or rate of interest on, any exchange note;
(3) change the coin or currency of payment of principal of or interest on, any exchange note;
(4) impair the right to institute suit for the enforcement of any payment on or with respect to any exchange note;
(5) reduce the above-stated percentage of outstanding exchange notes necessary to modify or amend the indenture;
(6) reduce the percentage of aggregate principal amount of outstanding exchange notes necessary for waiver of compliance with certain provisions of the indenture or for waiver of certain defaults;
(7) reduce the percentage in aggregate principal amount of exchange notes outstanding required for the adoption of a resolution or the quorum required at any meeting of holders of exchange notes at which a resolution is adopted; or
(8) modify our obligation to deliver information required under Rule 144A to permit resales of exchange notes in the event we are not subject to certain reporting requirements under the U.S. securities laws. The quorum at any meeting called to adopt a resolution will be persons holding or representing a majority in aggregate principal amount of the exchange notes at the time outstanding of the series as to which a meeting has been called and, at any reconvened meeting adjourned for lack of a quorum, 25% of such aggregate principal amount.
The holders of a majority in aggregate principal amount of the outstanding exchange notes of either series may waive compliance by us with certain restrictive provisions of the indenture with respect to such series. The holders of a majority in aggregate principal amount of the outstanding exchange notes may waive any past default under the indenture with respect to such series, except a default in the payment of principal or interest.
Purchase and Cancellation
We or any subsidiary may at any time and from time to time purchase exchange notes at any price in the open market or otherwise.
All exchange notes surrendered for payment or registration of transfer or exchange shall, if surrendered to any person other than the trustee, be delivered to the trustee. All exchange notes so delivered to the trustee shall be cancelled promptly by the trustee. No exchange notes shall be authenticated in lieu of or in exchange for any exchange notes cancelled as provided in the indenture. Unless otherwise requested by us and confirmed
in writing, the trustee shall, from time to time but not less than once annually, destroy all cancelled exchange notes and deliver to us a certificate of destruction, which certificate shall specify the number, principal amount and, in the case of exchange notes, the form of each cancelled exchange note so destroyed.
Title
We and the trustee may treat the registered owner of any exchange note as the absolute owner thereof, whether or not such exchange note shall be overdue, for the purpose of making payment and for all other purposes.
Notices
Notice to holders of the exchange notes will be given by mail to the registered addresses of such holders. Such notices will be deemed to have been given on the date of the first such publication or on the date of such mailing, as the case may be.
Replacement of Exchange Notes
Exchange notes that become mutilated, destroyed, stolen or lost will be replaced by us at the expense of the holder upon delivery to the trustee or to a transfer agent of the mutilated exchange notes or evidence of their loss, theft or destruction satisfactory to us and the trustee. In the case of a lost, stolen or destroyed exchange note, indemnity satisfactory to the trustee and us may be required at the expense of the holder of the exchange note before a replacement exchange note will be issued.
Payment of Stamp and Other Taxes
We will pay all stamp and other duties, if any, which may be imposed by the United States or the United Kingdom or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of the exchange notes. We will not be required to make any payment with respect to any other tax, assessment or governmental charge imposed by any government or any political subdivision thereof or taxing authority therein.
Governing Law
The indenture, the exchange notes and the coupons will be governed by and construed in accordance with the laws of the State of New York.
The Trustee
In case an event of default shall occur, and shall not be cured, the trustee will be required to use the degree of care of a prudent person in the conduct of his own affairs in the exercise of its powers. Subject to these provisions, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders of exchange notes, unless they shall have offered to the trustee reasonable security or indemnity.
BOOK-ENTRY, DELIVERY AND FORM
The exchange notes will initially be represented by one or more permanent global notes in definitive, fully registered book-entry form, without interest coupons, that will be deposited with, or on behalf of, DTC and registered in the name of Cede and Co., as nominee of DTC, on behalf of the acquirors of exchange notes for credit to the accounts of the acquirors or to other accounts as they may direct at DTC, or Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System, or Cedel Bank, societe anonyme.
The global notes may be transferred in whole and not in part, solely to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for exchange notes in physical, certificated form except in the limited circumstances described below.
All interests in the global notes, including those held through Euroclear or Cedel, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Cedel may also be subject to the procedures and requirements of those systems.
Book-Entry Procedures for the Global Notes
The descriptions of the operations and procedures of DTC, Euroclear and Cedel set forth below are provided as a matter of convenience. These operations and procedures are solely within the control of the settlement systems and are subject to change by them from time to time. We take no responsibility for these operations or procedures, and you are urged to contact the relevant system or its participants directly to discuss these matters.
DTC has advised us that it is:
. a limited purpose trust company organized under the laws of the State of New York;
. a "banking organization" within the meaning of the New York Banking Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the Uniform Commercial Code, as amended; and
. a "clearing agency" registered pursuant to Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants, eliminating the need for physical transfer and delivery of certificates. DTC's participants include securities brokers and dealers, including the initial purchasers in the private offering of the old notes, banks and trust companies, clearing corporations and similar organizations. Indirect access to DTC's system is also available to indirect participants, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Investors who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants.
We expect that pursuant to procedures established by DTC ownership of the exchange notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to the interests of participants, and the records of participants and the indirect participants, with respect to the interests of persons other than participants.
The laws of some jurisdictions may require that purchasers of securities take physical delivery of purchased securities in definitive form. Accordingly, the ability to transfer interests in the exchange notes represented by a global note to those persons may be limited. In addition, because DTC can act only on behalf
of its participants, who in turn act on behalf of persons who hold interests through participants, the ability of a person having an interest in exchange notes represented by a global note to pledge or transfer that interest to persons or entities that do not participate in DTC's system, or to otherwise take actions in respect of that interest, may be affected by the lack of a physical definitive security in respect of that interest.
So long as DTC or its nominee is the registered owner of a global note, DTC or its nominee will be considered the sole owner or holder of the exchange notes represented by the global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note will not be entitled to have exchange notes represented by that global note registered in their names, will not receive or be entitled to receive physical delivery of certificated exchange notes and will not be considered the owners or holders thereof under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee. Accordingly, each holder owning a beneficial interest in a global note must rely on the procedures of DTC and, if the holder is not a participant or an indirect participant, on the procedures of the participant through which the holder owns its interest, to exercise any rights of a holder of exchange notes under the indenture or the global note. We understand that, under existing industry practice, in the event that we request any action of holders of exchange notes, or a holder that is an owner of a beneficial interest in a global note desires to take any action that DTC, as the holder of that global note, is entitled to take, DTC would authorize the participants to take that action and the participants would authorize holders owning through the participants to take that action or would otherwise act upon the instruction of the holders. Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of exchange notes by DTC, or for maintaining, supervising or reviewing any records of DTC relating to exchange notes.
Payments with respect to the principal of, and premium, if any, liquidated damages, if any, and interest on, any exchange notes represented by a global note registered in the name of DTC or its nominee on the applicable record date will be payable by the trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the global note representing the exchange notes under the indenture. Under the terms of the indenture, we and the trustee may treat the persons in whose names the exchange notes, including the global notes, are registered as the owners for the purpose of receiving payment thereon and for any and all other purposes whatsoever. Accordingly, neither we nor the trustee has or will have any responsibility or liability for the payment of these amounts to owners of beneficial interests in a global note, including principal, premium, if any, liquidated damages, if any, and interest. Payments by the participants and the indirect participants to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice and will be the responsibility of the participants or the indirect participants and DTC.
Transfers between participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear or Cedel will be effected in the ordinary way in accordance with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the exchange notes, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Cedel participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf of Euroclear or Cedel, as the case may be, by its respective depositary. However, these cross- market transactions will require delivery of instructions to Euroclear or Cedel by the counterparty in the appropriate system in accordance with the rules and procedures and within the established deadlines, Brussels time, of the appropriate system. Euroclear or Cedel will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global notes in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Cedel participants may not deliver instructions directly to the depositories for Euroclear or Cedel.
Because of time zone differences, the securities account of a Euroclear or Cedel participant purchasing an interest in a global note from a participant in DTC will be credited, and that crediting will be reported to the
relevant Euroclear or Cedel participant, during the securities settlement processing day, which must be a business day for Euroclear and Cedel, immediately following the settlement date of DTC. Cash received in Euroclear or Cedel as a result of sales of interest in a global note by or through a Euroclear or Cedel Participant to a participant in DTC will be received with value on the settlement date of DTC, but will be available in the relevant Euroclear or Cedel cash account only as of the business day for Euroclear or Cedel following DTC's settlement date.
Although DTC, Euroclear and Cedel have agreed to the foregoing procedures to facilitate transfers of interests in the global notes among participants in DTC, Euroclear and Cedel, they are under no obligation to perform or to continue to perform these procedures, and these procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by DTC, Euroclear or Cedel or their participants or indirect participants of their obligations under the rules and procedures governing their operations.
Certificated Exchange Notes
If:
. we notify the Trustee in writing that DTC is no longer willing or able to act as a depositary or DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days of that notice or cessation;
. we, at our option, notify the trustee in writing that we elect to cause the issuance of exchange notes in definitive form under the indenture; or
. upon the occurrence of other events as provided in the indenture,
then, upon surrender by DTC of the global notes, certificated exchange notes will be issued to each person that DTC identifies as the beneficial owner of the exchange notes represented by the global notes. Upon that issuance, the trustee is required to register the certificated exchange notes in the name of that person, or the nominee of any thereof, and cause the same to be delivered to that person.
Neither we nor the trustee shall be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related exchange notes, and each beneficial owner of exchange notes may conclusively rely on, and shall be protected in relying on, instructions from DTC for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the exchange notes to be issued.
FEDERAL INCOME TAX CONSIDERATIONS
Scope of Discussion
This general discussion of certain U.S. federal income and estate tax consequences applies to you if you acquired old notes at original issue for cash in the amount of the issue price, exchange your old notes for exchange notes pursuant to the terms set forth in this prospectus and hold the exchange notes as a "capital asset," generally, for investment, under Section 1221 of the U.S. Internal Revenue Code. This summary, however, does not consider state, local or foreign tax laws. In addition, it does not include all of the rules which may affect the U.S. tax treatment of your investment in the exchange notes. For example, special rules not discussed here may apply to you if you are:
. a broker-dealer, a dealer in securities, a trader in securities who elects to apply a mark-to-market method of accounting or a financial institution;
. an S corporation;
. an insurance company;
. a tax-exempt organization;
. subject to the alternative minimum tax provisions of the Code;
. holding the exchange notes as part of a hedge, straddle, conversion transaction or other risk reduction or constructive sale transaction;
. a nonresident alien or foreign corporation subject to net-basis U.S. federal income tax on income or gain derived from an exchange note because such income or gain is effectively connected with the conduct of a U.S. trade or business; or
. an expatriate of the United States.
This discussion only represents our best attempt to describe certain federal income tax consequences that may apply to you based on current U.S. federal tax law. This discussion may in the end inaccurately describe the federal income tax consequences which are applicable to you because the law may change, possibly retroactively, and because the U.S. Internal Revenue Service or any court may disagree with this discussion.
This summary may not cover your particular circumstances because it does not consider foreign, state or local tax rules, disregards certain special federal tax rules, and does not describe future changes in federal tax rules. Please consult your tax advisor rather than relying on this general description.
The Exchange Offer
The issuance of the exchange notes to holders of the old notes pursuant to the terms set forth in this prospectus will not constitute an exchange for federal income tax purposes. Consequently, no gain or loss will be recognized by holders of the old notes upon receipt of the exchange notes, and ownership of the exchange notes will be considered a continuation of ownership of the old notes. For purposes of determining gain or loss upon the subsequent sale or exchange of the exchange notes, a holder's basis in the exchange notes should be the same as the holder's basis in the old notes exchanged. A holder's holding period for the exchange notes should include the holder's holding period for the old notes exchanged. The issue price and other tax characteristics of the exchange notes should be identical to the issue price and other tax characteristics of the old notes exchanged.
U.S. Holders
If you are a U.S. holder, as defined below, this section applies to you. Otherwise, the caption "--Non-U.S. Holders" applies to you.
Definition of U.S. Holder. You are a U.S. holder if you hold the exchange notes and you are:
. a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the "substantial presence" test under Section 7701(b) of the Code;
. a corporation or partnership created or organized in the United States or under the laws of the United States or of any political subdivision of the United States;
. an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
. a trust, if a U.S. court can exercise primary supervision over the administration of the trust and one or more U.S. persons can control all substantial decisions of the trust, or if the trust was in existence on August 20, 1996 and has elected to continue to be treated as a U.S. person.
Payments of Interest. Interest paid on an exchange note will generally be taxable to a U.S. holder as ordinary interest income at the time it accrues or is received in accordance with the U.S. holder's method of accounting for federal income tax purposes.
Sale or Other Taxable Disposition of the Exchange Notes. You must recognize taxable gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of an exchange note. The amount of your gain or loss equals the difference between the fair market value of the cash or other property you receive for the exchange note, minus the amount attributable to accrued interest on the exchange note, minus your adjusted tax basis in the exchange note. Your initial tax basis should equal the price you paid for the old note. Your adjusted tax basis in an exchange note will equal the initial tax basis, reduced by any payments on the exchange note or the old note exchanged therefor.
Your gain or loss will generally be a long-term capital gain or loss if your holding period for the exchange note is more than one year. Otherwise, it will be a short-term capital gain or loss. Payments attributable to accrued interest which you have not yet included in income will be taxed as ordinary interest income.
Backup Withholding. You may be subject to a 31% backup withholding tax when you receive interest payments on an exchange note or proceeds upon the sale or other disposition of an exchange note. Certain holders (including, among others, corporations and certain tax-exempt organizations) are generally not subject to backup withholding. In addition, the 31% backup withholding tax will not apply to you if you provide your taxpayer identification number in the prescribed manner unless:
. the IRS notifies us or our agent that the taxpayer identification number you provided is incorrect;
. you fail to report interest and dividend payments that you receive on your tax return and the IRS notifies us or our agent that withholding is required; or
. you fail to certify under penalties of perjury that you are not subject to back up withholding.
If the 31% backup withholding tax does apply to you, you may use the amounts withheld as a refund or credit against your U.S. federal income tax liability as long as you provide certain information to the IRS.
Non-U.S. Holders
Definition of Non-United States Holder. A "non-U.S. holder" is any person who holds exchange notes other than a U.S. holder. Please note that if you are subject to U.S. federal income tax on a net basis on income or gain with respect to an exchange note because such income or gain is effectively connected with the conduct of a U.S. trade or business, this disclosure does not cover the U.S. federal tax rules that apply to you.
Interest
Portfolio Interest Exemption. You will generally not have to pay U.S. federal income tax on interest paid on the exchange notes because of the "portfolio interest exemption" if either:
. you represent that you are not a U.S. person for U.S. federal income tax purposes and you provide your name and address to us or our paying agent on a properly executed IRS Form W-8 (or a suitable substitute form) signed under penalties of perjury; or
. a securities clearing organization, bank, or other financial institution that holds customers' securities in the ordinary course of its business holds the exchange note on your behalf, certifies to us or our agent under penalties of perjury that it has received IRS Form W-8 (or a suitable substitute form) from you or from another qualifying financial institution intermediary, and provides a copy to us or our agent.
You will not, however, qualify for the portfolio interest exemption described above if:
. you own, actually or constructively, 10% or more of the total combined voting power of all classes of our capital stock;
. you are a controlled foreign corporation with respect to which we are a "related person" within the meaning of Section 864(d)(4) of the Code; or
. you are a bank receiving interest described in Section 881(c)(3)(A) of the Code.
Withholding Tax if the Interest Is Not Portfolio Interest. If you do not claim, or do not qualify for, the benefit of the portfolio interest exemption, you may be subject to a 30% withholding tax on interest payments made on the exchange notes. However, you may be able to claim the benefit of a reduced withholding tax rate under an applicable income tax treaty. The required information for claiming treaty benefits is generally submitted, under current regulations, on Form 1001. Successor forms will require additional information, as discussed below under the caption "--Backup Withholding and Information Reporting--New Withholding Regulations."
Reporting. We may report annually to the IRS and to you the amount of interest paid to, and the tax withheld, if any, with respect to you.
Sale or Other Disposition of Exchange Notes. You will generally not be subject to U.S. federal income tax or withholding tax on gain recognized on a sale, exchange, redemption, retirement, or other disposition of an exchange note. You may, however, be subject to tax on such gain if you are an individual who was present in the United States for 183 days or more in the taxable year of the disposition, in which case you may have to pay a U.S. federal income tax of 30% (or a reduced treaty rate) on such gain.
U.S. Federal Estate Taxes. If you qualify for the portfolio interest exemption under the rules described above when you die, the exchange notes will not be included in your estate for U.S. federal estate tax purposes.
Backup Withholding and Information Reporting
Payments From U.S. Office. If you receive payments of interest or principal directly from us or through a U.S. office of a custodian, nominee, agent or broker, there is a possibility that you will be subject to both backup withholding at a rate of 31% and information reporting.
With respect to interest payments made on the exchange notes, however, backup withholding will not apply if you certify, generally on a Form W-8 or a substitute form, that you are not a U.S. person in the manner described above under the caption "--Interest."
Moreover, with respect to proceeds received on the sale, exchange, redemption, or other disposition of an exchange note, backup withholding or information reporting generally will not apply if you properly provide,
generally on Form W-8 or a substitute form, a statement that you are an "exempt foreign person" for purposes of the broker reporting rules, and other required information. If you are not subject to U.S. federal income or withholding tax on the sale or other disposition of an exchange note, as described above under the heading "--Interest--Sale or Other Disposition of Exchange Notes," you will generally qualify as an "exempt foreign person" for purposes of the broker reporting rules.
Payments From Foreign Office. If payments of principal and interest are made to you outside the United States by or through a foreign office of your foreign custodian, nominee or other agent, or if you receive the proceeds of the sale of an exchange note through a foreign office of a "broker," as defined in the pertinent U.S. Treasury regulations, you will generally not be subject to backup withholding or information reporting. You will, however, be subject to backup withholding and information reporting if the foreign custodian, nominee, agent or broker has actual knowledge or, after December 31, 2000, reason to know, that the payee is a U.S. person. You will also be subject to information reporting, but not backup withholding, if the payment is made by a foreign office of a custodian, nominee, agent or broker that is a U.S. person or a controlled foreign corporation for U.S. federal income tax purposes, or that derives 50% or more of its gross income from the conduct of a U.S. trade or business for a specified three year period, unless the broker has in its records documentary evidence that you are a non-U.S. holder and certain other conditions are met.
Refunds. Any amounts withheld under the backup withholding rules may be refunded or credited against the non-U.S. holder's U.S. federal income tax liability, provided that the required information is furnished to the IRS.
New Withholding Regulations. New regulations relating to withholding tax on income paid to foreign persons will generally be effective for payments made after December 31, 2000, subject to certain transition rules. The new withholding regulations modify and, in general, unify the way in which you establish your status as a non-U.S. "beneficial owner" eligible for withholding exemptions including the portfolio interest exemption, a reduced treaty rate or an exemption from backup withholding. For example, the new withholding regulations will require new forms, which you will generally have to provide earlier than you would have had to provide replacements for expiring existing forms.
The new withholding regulations clarify withholding agents' reliance standards. They also require additional certifications for claiming treaty benefits. The new withholding regulations also provide somewhat different procedures for foreign intermediaries and flow-through entities (such as foreign partnerships) to claim the benefit of applicable exemptions on behalf of non-U.S. beneficial owners for which or for whom they receive payments. For example, the new withholding regulations would require, in the case of exchange notes held by a foreign partnership, that the certification be provided by the partners rather than by the foreign partnership and that the partnership provide certain information, including a U.S. taxpayer identification number. A look-through rule would apply in the case of tiered partnerships.
When you purchased the old notes, you were required to submit certification that complies with the currently effective temporary Treasury regulations in order to obtain an available exemption from or reduction in withholding tax. The new withholding regulations provide that certifications satisfying the requirements of the new withholding regulations will be deemed to satisfy the requirements of the temporary Treasury regulations now in effect. If you are a non-U.S. holder claiming benefit under an income tax treaty (and not relying on the portfolio interest exemption), you should be aware that you may be required to obtain a taxpayer identification number and to certify your eligibility under the applicable treaty's limitations on benefits article in order to comply with the new withholding regulations' certification requirements.
The new withholding regulations are complex and this summary does not completely describe them. Please consult your tax advisor to determine how the new withholding regulations will affect your particular circumstances.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where the old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for at least 90 days after the exchange offer is completed, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale of exchange notes.
We will not receive any proceeds from any sales of the exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of methods of resale, at market prices prevailing at the time of resale, at prices related to those prevailing market prices or at negotiated prices. Any resale may be made directly to the purchaser or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the broker-dealer and/or the purchasers of the exchange notes. Any broker-dealer that resells the exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by any of those persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.
We have agreed to pay the expenses incident to the exchange offer, other than commission or concessions of any brokers or dealers and the fees of any counsel or other advisors or experts retained by the holders of old notes, and will indemnify the holders of the exchange notes (including any broker-dealers) against related liabilities, including liabilities under the Securities Act.
EXPERTS
The audited financial statements and schedules included in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and is included herein in reliance upon the authority of said firm as experts (or, as experts in accounting and auditing) in giving said reports.
LEGAL MATTERS
The validity of the exchange notes will be passed upon for us by Wachtell, Lipton, Rosen & Katz, New York, New York.
INDEX TO FINANCIAL STATEMENTS
Levi Strauss & Co. and Subsidiaries Independent Auditors' Report............................................ F-2 Consolidated Balance Sheets--November 28, 1999 and November 29, 1998.... F-3 Consolidated Statements of Income--Years Ended November 28, 1999, November 29, 1998 and November 30, 1997................................ F-4 Consolidated Statements of Stockholders' Deficit--Years Ended November 28, 1999, November 29, 1998, November 30, 1997 and November 24, 1996... F-5 Consolidated Statements of Cash Flows--Years Ended November 28, 1999, November 29, 1998 and November 30, 1997................................ F-6 Notes to Consolidated Financial Statements--Years Ended November 28, 1999, November 29, 1998 and November 30, 1997.......................... F-7 Consolidated Balance Sheets--February 27, 2000 (Unaudited) and November 28, 1999 .............................................................. F-34 Consolidated Statements of Income (Loss)--Three Months Ended February 27, 2000 and February 28, 1999 (Unaudited)............................. F-35 Consolidated Statements of Cash Flows--Three Months Ended February 27, 2000 and February 28, 1999 (Unaudited)................................. F-36 Notes to Consolidated Financial Statements--Three Months Ended February 27, 2000 and February 28, 1999 (Unaudited)............................. F-37 |
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of Levi Strauss & Co.:
We have audited the accompanying consolidated balance sheets of Levi Strauss & Co. (a Delaware corporation) and subsidiaries as of November 28, 1999 and November 29, 1998, and the related consolidated statements of income, stockholders' deficit and cash flows for each of the three fiscal years in the period ended November 28, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Levi Strauss & Co. and subsidiaries as of November 28, 1999 and November 29, 1998, and the results of their operations and their cash flows for each of the three fiscal years in the period ended November 28, 1999 in conformity with accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule II listed in the index of financial statements (not presented herein) is presented for purposes of complying with the Securities and Exchange Commission rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
San Francisco, California
January 31, 2000
LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share Data)
November 28, November 29,
1999 1998
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents........................ $ 192,816 $ 84,565
Trade receivables, net of allowance for doubtful
accounts of $30,017 in 1999 and $39,987 in
1998............................................ 759,273 856,637
Income taxes receivable.......................... 70,000 --
Inventories:
Raw materials.................................. 137,082 163,100
Work-in-process................................ 100,523 108,836
Finished goods................................. 433,882 546,096
----------- -----------
Total inventories............................ 671,487 818,032
Deferred tax assets.............................. 300,972 248,604
Other current assets............................. 172,195 127,552
----------- -----------
Total current assets......................... 2,166,743 2,135,390
Property, plant and equipment, net of accumulated
depreciation of $548,437 in 1999 and $728,137 in
1998.............................................. 685,026 828,251
Goodwill and other intangibles, net of accumulated
amortization of $158,052 in 1999 and $148,857 in
1998.............................................. 275,318 299,505
Non-current deferred tax assets.................... 478,235 555,046
Other assets....................................... 60,195 66,466
----------- -----------
Total Assets................................. $ 3,665,517 $ 3,884,658
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current maturities of long-term debt and short-
term borrowings................................. $ 233,992 $ 238,701
Accounts payable................................. 262,389 296,248
Restructuring reserves........................... 258,784 236,552
Accrued liabilities.............................. 415,273 451,479
Accrued salaries, wages and employee benefits.... 194,130 244,517
Accrued taxes.................................... 2,548 21,993
----------- -----------
Total current liabilities.................... 1,367,116 1,489,490
Long-term debt, less current maturities............ 2,430,617 2,176,629
Long-term employee related benefits................ 325,518 721,330
Postretirement medical benefits.................... 541,815 518,667
Long-term tax liabilities.......................... 241,542 247,843
Other long-term liabilities........................ 20,696 14,685
Minority interest.................................. 26,775 29,761
----------- -----------
Total liabilities............................ 4,954,079 5,198,405
----------- -----------
Stockholders' Deficit:
Common stock--$.01 par value; 270,000,000 shares
authorized; 37,278,238 shares issued and
outstanding..................................... 373 373
Additional paid-in capital....................... 88,812 88,812
Accumulated deficit.............................. (1,395,256) (1,400,611)
Accumulated other comprehensive income........... 17,509 (2,321)
----------- -----------
Stockholders' deficit........................ (1,288,562) (1,313,747)
----------- -----------
Total Liabilities and Stockholders' Deficit.. $ 3,665,517 $ 3,884,658
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Data)
Year Ended Year Ended Year Ended
November 28, November 29, November 30,
1999 1998 1997
------------ ------------ ------------
Net sales................................ $5,139,458 $5,958,635 $6,861,482
Cost of goods sold....................... 3,180,845 3,433,081 3,962,719
---------- ---------- ----------
Gross profit........................... 1,958,613 2,525,554 2,898,763
Marketing, general and administrative
expenses................................ 1,629,845 1,834,058 2,045,938
Excess capacity reduction/restructuring.. 497,683 250,658 386,792
Global Success Sharing Plan.............. (343,873) 90,564 114,833
---------- ---------- ----------
Operating income....................... 174,958 350,274 351,200
Interest expense......................... 182,978 178,035 212,358
Other (income) expense, net.............. (16,519) 9,539 (45,439)
---------- ---------- ----------
Income before taxes.................... 8,499 162,700 184,281
Provision for taxes...................... 3,144 60,198 46,070
---------- ---------- ----------
Net income............................. $ 5,355 $ 102,502 $ 138,211
========== ========== ==========
Earnings per share--basic and diluted.... $ 0.14 $ 2.75 $ 3.71
========== ========== ==========
Weighted-average common shares
outstanding............................. 37,278,238 37,278,238 37,278,238
========== ========== ==========
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(Dollars in Thousands)
Accumulated
Additional Other
Common Paid-In Accumulated Comprehensive Stockholders'
Stock Capital Deficit Income Deficit
------ ---------- ----------- ------------- -------------
Balance at November 24,
1996................... $373 $88,812 $(1,641,324) $ 70,562 $(1,481,577)
---- ------- ----------- -------- -----------
Net income.............. -- -- 138,211 -- 138,211
Translation adjustment
(net of tax of
$13,896)............... -- -- -- (26,896) (26,896)
---- ------- ----------- -------- -----------
Total comprehensive
income................. -- -- 138,211 (26,896) 111,315
---- ------- ----------- -------- -----------
Balance at November 30,
1997................... 373 88,812 (1,503,113) 43,666 (1,370,262)
---- ------- ----------- -------- -----------
Net income.............. -- -- 102,502 -- 102,502
Translation adjustment
(net of tax of
$3,811)................ -- -- -- (45,987) (45,987)
---- ------- ----------- -------- -----------
Total comprehensive
income................. -- -- 102,502 (45,987) 56,515
---- ------- ----------- -------- -----------
Balance at November 29,
1998................... 373 88,812 (1,400,611) (2,321) (1,313,747)
---- ------- ----------- -------- -----------
Net income.............. -- -- 5,355 -- 5,355
Minimum pension
liability (net of tax
of $457)............... -- -- -- (778) (778)
Translation adjustment
(net of tax of
$8,686)................ -- -- -- 20,608 20,608
---- ------- ----------- -------- -----------
Total comprehensive
income................. -- -- 5,355 19,830 25,185
---- ------- ----------- -------- -----------
Balance at November 28,
1999................... $373 $88,812 $(1,395,256) $ 17,509 $(1,288,562)
==== ======= =========== ======== ===========
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Year Ended Year Ended Year Ended
November 28, November 29, November 30,
1999 1998 1997
------------ ------------ ------------
Cash Flows from Operating Activities:
Net income............................ $ 5,355 $ 102,502 $ 138,211
Adjustments to reconcile net cash
(used for) provided by operating
activities:
Depreciation and amortization....... 120,102 128,773 138,894
Unrealized foreign exchange (gains)
losses............................. (10,130) 27,219 (23,220)
Decrease in trade receivables....... 57,643 31,806 90,593
Increase in income taxes
receivable......................... (70,000) -- --
Decrease in inventories............. 106,979 45,754 45,440
(Increase) decrease in other current
assets............................. (47,284) (29,410) 34,550
Decrease (increase) in net deferred
tax assets......................... 29,340 (43,761) (278,492)
Increase (decrease) in accounts
payable and accrued liabilities.... 11,362 31,595 (120,511)
Increase (decrease) in restructuring
reserves........................... 20,176 (79,339) 386,792
Decrease in accrued salaries, wages
and employee benefits.............. (22,974) (23,404) (32,212)
Decrease in accrued taxes........... (32,640) (22,520) (35,328)
(Decrease) increase in long-term
employee related benefits.......... (376,204) 127,823 195,859
(Decrease) increase in long-term tax
liabilities........................ (6,300) (16,113) 16,496
Other, net.......................... 40,803 (57,156) 16,818
----------- ----------- -----------
Net cash (used for) provided by
operating activities............. (173,772) 223,769 573,890
----------- ----------- -----------
Cash Flows from Investing Activities:
Purchases of property, plant and
equipment............................ (61,062) (116,531) (121,595)
Proceeds from sale of property, plant
and equipment........................ 69,455 31,185 12,907
Decrease (increase) in net investment
hedges............................... 53,736 (2,532) 27,284
Other, net............................ 228 5,171 4,509
----------- ----------- -----------
Net cash provided by (used for)
investing activities............. 62,357 (82,707) (76,895)
----------- ----------- -----------
Cash Flows from Financing Activities:
Proceeds from issuance of long-term
debt................................. 1,462,052 1,959,611 1,633,921
Repayments of long-term debt.......... (1,230,145) (2,037,627) (2,260,445)
Net (decrease) increase in short-term
borrowings........................... (7,688) (116,437) 96,219
Other, net............................ -- (36) 3
----------- ----------- -----------
Net cash provided by (used for)
financing activities............. 224,219 (194,489) (530,302)
----------- ----------- -----------
Effect of exchange rate changes on
cash................................. (4,553) (6,492) (18,061)
----------- ----------- -----------
Net Increase (Decrease) in Cash and
Cash Equivalents..................... 108,251 (59,919) (51,368)
Beginning cash and cash equivalents... 84,565 144,484 195,852
----------- ----------- -----------
Ending Cash and Cash Equivalents...... $ 192,816 $ 84,565 $ 144,484
=========== =========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the year for:
Interest............................ $ 172,688 $ 167,907 $ 209,211
Income taxes........................ 82,675 146,717 337,984
Restructuring initiatives........... 416,123 313,700 --
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The consolidated financial statements of Levi Strauss & Co. and its wholly- owned foreign and domestic subsidiaries ("LS&CO." or "Company") are prepared in conformity with generally accepted accounting principles. All significant intercompany balances and transactions have been eliminated. LS&CO. is privately held primarily by descendants and relatives of its founder, Levi Strauss.
The Company's fiscal year consists of 52 or 53 weeks, ending on the last Sunday of November in each year. The 1999 and 1998 fiscal years consisted of 52 weeks and ended November 28, 1999 and November 29, 1998, respectively, and fiscal year 1997 consisted of 53 weeks and ended November 30, 1997. All references to years relate to fiscal years rather than calendar years. Certain prior year amounts have been reclassified to conform to the 1999 presentation.
Nature of Operations
The Company is one of the world's leading branded apparel companies with operations in more than 40 countries. The Company designs and markets jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories, for men, women and children, under the Levi's(R), Dockers(R) and Slates(R) brands. The Company markets its Levi's(R) and Dockers(R) brand products in three geographic regions: the Americas, Europe and Asia Pacific. The Slates(R) brand products are marketed in the United States. As of November 28, 1999, the Company employed approximately 18,000 people.
The Company relies on a number of suppliers for its manufacturing processes, particularly Cone Mills Corporation, which has been and remains the sole supplier of the denim used for 501(R) jeans through the Company's only long- term supply contract. In 1999, 1998 and 1997, Cone Mills Corporation supplied approximately 22%, 24% and 27%, respectively, of the total volume of fabrics purchased worldwide by the Company. The loss of Cone Mills Corporation or other principal suppliers could have an adverse effect on the Company's results of operations.
Minority Interest
Minority interest is included in other (income) expense, net, and includes a 16.4% minority interest of Levi Strauss Japan K.K. and a 49.0% minority interest of Levi Strauss Istanbul Konfeksigon.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the related notes to the financial statements. Changes in such estimates, based on more accurate future information, may affect amounts reported in future periods.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates fair market value.
Inventory Valuation
Inventories are valued at the lower of average cost or market value and include materials, labor and manufacturing overhead. Market value is calculated on the basis of anticipated selling price less allowances to maintain a targeted gross margin for each product.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Income Taxes
Deferred income tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.
Property, Plant and Equipment
Property, plant and equipment are carried at cost, less accumulated depreciation. The cost is depreciated on a straight-line basis over the estimated useful lives of the related assets. Buildings are depreciated over 40 years, and machinery and equipment is depreciated over an average of ten years. Leasehold improvements are depreciated over the lesser of the life of the improvement or the initial lease term.
Goodwill and Other Intangible Assets
Goodwill and other intangibles are carried at cost, less accumulated amortization. Goodwill resulted primarily from a 1985 acquisition of LS&CO. by Levi Strauss Associates Inc., a former parent company that was subsequently merged into the Company in 1996. This merger was accounted for as a reorganization of entities under common control. Goodwill is being amortized on a straight-line basis over 40 years through the year 2025. Other intangibles consist primarily of tradenames, which were valued as a result of the 1985 acquisition. Tradenames and other intangibles are being amortized over the estimated useful lives of the related assets, which range from six to 40 years.
Long-Lived Assets
In accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121"), the Company reviews long-lived assets, including goodwill and other intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of an asset exceeds the expected future undiscounted cash flows, the Company measures and records an impairment loss for the excess of the carrying value of the asset over its fair value.
Self-Insurance
The Company is partially self-insured for workers' compensation and certain employee health benefits. Accruals for losses are made based on the Company's claims experience and actuarial assumptions followed in the insurance industry. Actual losses could differ from accrued amounts.
Translation Adjustment
The functional currency for most of the Company's foreign operations is the applicable local currency. For those operations, assets and liabilities are translated into United States ("U.S.") dollars using period-end exchange rates and income and expense accounts are translated at average monthly exchange rates. Net changes resulting from such translations are recorded as a separate component of accumulated other comprehensive income in the consolidated financial statements.
The U.S. dollar is the functional currency for foreign operations in countries with highly inflationary economies and certain other subsidiaries. The translation adjustments for these entities are included in other (income) expense, net.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Interest Rate Swaps
The Company enters into interest rate swap transactions to manage interest rate exposures on its debt. Net interest receivable or payable on the swap transactions is included in interest expense. Gains or losses that result from the early termination of swap agreements are deferred and amortized over the remaining term of the associated debt as a component of interest expense.
Foreign Exchange Contracts
The Company enters into foreign exchange contracts to hedge against known foreign currency denominated exposures, particularly dividends and intercompany royalties, loans, sourcing and other transactions with its foreign affiliates and licensees. The accounting treatment of these hedges is dependent on the item being hedged. Forward and swap transactions hedging our cash management and sourcing exposures are reported at market value, with gains and losses included in current earnings in other (income) expense, net. Option premium on these hedges is amortized straight-line over the life of the option and is also included in other (income) expense, net. The intrinsic value is used to mark the option value to market through current earnings.
Forward and swap transactions hedging unremitted earnings and royalties are also reported at market value but the market gain or loss is included in translation equity adjustment, a component of comprehensive income, which is included in stockholders' equity on the balance sheet. Similarly, option premiums on hedges of unremitted earnings and royalties are amortized to the translation equity account. The intrinsic value of the options is used to mark the instruments to market at each financial statement date with the change in value recorded in translation equity adjustment. At November 28, 1999 and November 29, 1998, the net effect of exchange rate changes related to net investment hedge transactions was a $48.7 million decrease and a $18.8 million decrease respectively, to the translation adjustment.
Advertising Costs
In accordance with Statement of Position ("SOP") 93-7, "Reporting on Advertising Costs," the Company expenses advertising costs as incurred. For fiscal years 1999, 1998 and 1997 total advertising expense was $490.2 million, $466.7 million and $473.0 million, respectively.
Research and Development Costs
Research and development costs, which are not material to the consolidated statements of income, are expensed as incurred.
Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing net income by the weighted-average number of common shares outstanding for the period and excludes the dilutive effect of common shares that could potentially be issued. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding plus all potential dilutive common shares. The Company does not have any potentially dilutive securities, and therefore, basic and diluted EPS are the same. The weighted-average number of common shares outstanding is 37,278,238 for all periods presented.
Computer Software Costs
The costs of computer software purchased or developed for internal use are expensed as incurred due to the indeterminate life resulting from rapid technological changes, except when the software is included with
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
capitalized hardware and the cost cannot be separately identified. The Company will adopt SOP 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," in the first quarter of fiscal year 2000. SOP 98-1 requires certain costs related to internal-use computer software to be capitalized. The adoption of SOP 98-1 is not expected to have a material effect on the Company's financial position or results of operations.
Revenue Recognition
Revenue from the sale of product is recognized upon shipment of products to customers. Allowances for estimated returns and discounts are recognized when sales are recorded.
New Accounting Standards
In 1999, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This statement establishes standards for the reporting of comprehensive income and its components. Comprehensive income consists of net income, foreign currency translation adjustments and minimum pension liability adjustments and is presented in the consolidated statements of stockholders' deficit. The adoption of SFAS 130 had no impact on total stockholders' deficit. Prior year financial statements have been reclassified to conform to this statement.
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). In June 1999, the FASB delayed the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. The Company will adopt SFAS 133 the first day of fiscal year 2001. SFAS 133 establishes accounting and reporting standards for derivative instruments including certain derivative instruments embedded in other contracts, and for hedging activities. In summary, SFAS 133 requires all derivatives to be recognized as assets or liabilities at fair value. Fair value adjustments are made either through earnings or equity, depending upon the exposure being hedged and the effectiveness of the hedge. The Company has not yet quantified all effects of adopting SFAS 133 on its financial statements. However, the adoption of SFAS 133 could increase volatility in earnings and other comprehensive income or involve certain changes in the Company's business practices. The Company currently has an implementation team in place that is determining the method of implementation and evaluating all effects of adopting SFAS 133.
Note 2: Excess Capacity Reductions/Restructuring Reserves
North America Plant Closures
Over the last three years, the Company has closed 29 of its owned and operated production and finishing facilities in North America and Europe in order to reduce costs, eliminate excess capacity and align its sourcing strategy with changes in the industry and in consumer demand. Plant closures were announced in November 1997, in which ten manufacturing facilities as well as a finishing center in the U.S. were closed by the end of 1998 and displaced approximately 6,400 employees. The Company recorded an initial charge of $386.8 million in 1997 that consisted of $47.7 million for asset write-offs, $323.8 million for severance and employee benefits and $15.3 million for other restructuring costs. The ending liability balances for this initial charge is displayed in the table below.
In line with the above plans, the Company announced in November 1998 the closure of two more finishing centers in the U.S. that were closed by the end of 1999, displacing approximately 990 employees. The Company recorded an initial charge of $82.1 million in 1998 that consisted of $25.5 million for asset write-
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
offs, $55.1 million for severance and employee benefits and $1.5 million for other restructuring costs. The ending liability balances for this initial charge is displayed in the table below.
Also in conjunction with such plans, the Company announced in February 1999 the closure of 11 additional manufacturing facilities in North America and the displacement of approximately 5,900 employees. As of November 28, 1999, all of these manufacturing facilities have been closed and approximately 5,860 employees have been displaced. The Company recorded an initial charge of $394.1 million in 1999 that consisted of $54.8 million for asset write-offs, $292.9 million for severance and employee benefits and $46.4 million for other restructuring costs. The ending liability balances for this initial charge is displayed in the table below.
1997 North America Plant Closures
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- ------- ---------- -------- -------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $323,796 $ -- $(297,176) $26,620 $ -- $ (17,830) $ 8,790
Asset write-offs........ 47,676 -- (12,454) 35,222 -- (24,567) 10,655
Other restructuring
costs.................. 15,320 -- (4,482) 10,838 -- (8,925) 1,913
-------- ------- --------- ------- -------- --------- --------
Total................. $386,792 $ -- $(314,112) $72,680 $ -- $ (51,322) $ 21,358
======== ======= ========= ======= ======== ========= ========
1998 North America Plant Closures
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- ------- ---------- -------- -------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $55,060 $ (1,970) $53,090 $ -- $ (50,407) $ 2,683
Asset write-offs........ -- 25,469 (3,331) 22,138 -- (12,425) 9,713
Other restructuring
costs.................. -- 1,544 (250) 1,294 -- (101) 1,193
-------- ------- --------- ------- -------- --------- --------
Total................. $ -- $82,073 $ (5,551) $76,522 $ -- $ (62,933) $ 13,589
======== ======= ========= ======= ======== ========= ========
1999 North America Plant Closures
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- ------- ---------- -------- -------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $ -- $ -- $ -- $292,886 $(183,131) $109,755
Asset write-offs........ -- -- -- -- 54,828 (17,265) 37,563
Other restructuring
costs.................. -- -- -- -- 46,391 (17,865) 28,526
-------- ------- --------- ------- -------- --------- --------
Total................. $ -- $ -- $ -- $ -- $394,105 $(218,261) $175,844
======== ======= ========= ======= ======== ========= ========
|
Corporate Reorganization Initiatives
In 1998, the Company instituted various corporate reorganization initiatives and the displacement of approximately 770 employees. The goal of these initiatives was to reduce overhead costs and consolidate
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
operations. The Company recorded initial charges of $61.1 million in 1998 that consisted of $4.0 million for asset write-offs, $49.1 million for severance and employee benefits and $7.9 million for other restructuring costs. As of November 28, 1999, approximately 720 employees were displaced. The ending liability balances for these initial charges are displayed in the table below.
In line with such overhead reorganization initiatives, the Company recorded additional charges of $48.9 million in 1999 that consisted of $45.0 million for severance and employee benefits and $3.9 million for other restructuring costs. A total of approximately 930 employees are expected to be displaced of which approximately 40 employees have been displaced as of the end of 1999. The ending liability balances for these initial charges are displayed in the table below.
1998 Corporate Reorganization Initiatives
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- ------- ---------- -------- ------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $49,097 $ -- $49,097 $ -- $(45,893) $ 3,204
Asset write-offs........ -- 4,027 (360) 3,667 -- (623) 3,044
Other restructuring
costs.................. -- 7,938 (740) 7,198 -- (786) 6,412
----- ------- ------- ------- ------- -------- -------
Total................. $ -- $61,062 $(1,100) $59,962 $ -- $(47,302) $12,660
===== ======= ======= ======= ======= ======== =======
1999 Corporate Reorganization Initiatives
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- ------- ---------- -------- ------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $ -- $ -- $ -- $44,952 $ (1,402) $43,550
Other restructuring
costs.................. -- -- -- -- 3,937 (2,257) 1,680
----- ------- ------- ------- ------- -------- -------
Total................. $ -- $ -- $ -- $ -- $48,889 $ (3,659) $45,230
===== ======= ======= ======= ======= ======== =======
|
Europe Reorganization and Plant Closures
In September 1998 the Company announced plans to close two manufacturing and two finishing facilities, and reorganize operations throughout Europe, displacing approximately 1,650 employees. These plans were prompted by decreased demand for denim jeans products and a resulting over-capacity in the Company's European owned and operated plants. The production facilities were closed by the end of 1999 and approximately 1,630 employees were displaced. The Company recorded an initial charge of $107.5 million in 1998 that consisted of $10.0 million for asset write-offs and $97.5 million for severance and employee benefits. The ending liability balances for this initial charge is displayed in the table below.
In conjunction with such plans in Europe, the Company announced in September 1999 plans to close a production facility and reduce capacity at a finishing facility in the United Kingdom, to further reduce overhead costs and consolidate operations, and to displace approximately 960 employees. The production facility closed in December 1999 and as of November 28, 1999, approximately 50 employees have been displaced. The Company recorded an initial charge of $54.7 million in 1999 that consisted of $4.5 million for asset write- offs, $48.2 million for severance and employee benefits and $2.0 million for other restructuring costs. The ending liability balances for this initial charge is displayed in the table below.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
1998 Europe Reorganization and Plant Closures
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- -------- ---------- -------- ------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $ 97,497 $(9,082) $88,415 $ -- $(77,762) $10,653
Asset write-offs........ -- 10,026 (152) 9,874 -- (6,478) 3,396
----- -------- ------- ------- ------- -------- -------
Total................. $ -- $107,523 $(9,234) $98,289 $ -- $(84,240) $14,049
===== ======== ======= ======= ======= ======== =======
1999 Europe Reorganization and Plant Closures
Balance Balance Balance
At At At
11/30/97 Charges Reductions 11/29/98 Charges Reductions 11/28/99
-------- -------- ---------- -------- ------- ---------- --------
(Dollars in Thousands)
Severance and employee
benefits............... $ -- $ -- $ -- $ -- $48,160 $ (9,747) $38,413
Asset write-offs........ -- -- -- -- 4,500 (26) 4,474
Other restructuring
costs.................. -- -- -- -- 2,029 (17) 2,012
----- -------- ------- ------- ------- -------- -------
Total................. $ -- $ -- $ -- $ -- $54,689 $ (9,790) $44,899
===== ======== ======= ======= ======= ======== =======
|
Severance and employee benefits relate to severance packages, out-placement and career counseling for employees affected by the plant closures, and reorganization initiatives. Reductions consists of payments for severance and employee benefits, and other restructuring costs, as well as actual losses on disposal of assets. The asset write-offs relate primarily to machinery and equipment, and buildings that have been adjusted to net realizable value which was determined by estimating the proceeds realizable on sale or lease of these assets (see Note 4 to the Consolidated Financial Statements). The balance of severance and employee benefits and other restructuring costs are included under restructuring reserves on the balance sheet. The balance of asset write- offs is included as a reduction to property, plant and equipment on the balance sheet and is non-cash. All of the initiatives are expected to be completed by the end of 2000 with the exception of the North America plant closures announced in 1999 which are expected to be completed by mid-2001.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Note 3: Income Taxes
The U.S. and non-U.S. components of income before taxes are as follows:
1999 1998 1997
-------- -------- ---------
(Dollars in Thousands)
U.S........................................... $ 6,025 $ 61,197 $(199,855)
Non-U.S....................................... 2,474 101,503 384,136
-------- -------- ---------
Total....................................... $ 8,499 $162,700 $ 184,281
======== ======== =========
The provision for taxes consists of the following:
1999 1998 1997
-------- -------- ---------
(Dollars in Thousands)
Federal-U.S.
Current..................................... $(53,441) $(36,879) $ 118,579
Deferred.................................... 20,589 1,812 (265,287)
-------- -------- ---------
$(32,852) $(35,067) $(146,708)
======== ======== =========
State-U.S.
Current..................................... $ (521) $ 458 $ 19,960
Deferred.................................... 776 4,423 (14,324)
-------- -------- ---------
$ 255 $ 4,881 $ 5,636
======== ======== =========
Non-U.S.
Current..................................... $ 32,663 $132,089 $ 186,179
Deferred.................................... 3,078 (41,705) 963
-------- -------- ---------
$ 35,741 $ 90,384 $ 187,142
======== ======== =========
Total
Current..................................... $(21,299) $ 95,668 $ 324,718
Deferred.................................... 24,443 (35,470) (278,648)
-------- -------- ---------
$ 3,144 $ 60,198 $ 46,070
======== ======== =========
|
At November 28, 1999, cumulative non-U.S. operating losses of $162.6 million generated by the Company were available to reduce future taxable income primarily between the years 2002 and 2009.
Income tax expense due to translation adjustment was $8.7 million, $3.8 million and $13.9 million for 1999, 1998 and 1997, respectively.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Temporary differences which give rise to deferred tax assets and liabilities at November 28, 1999 and November 29, 1998 were as follows:
1999 Deferred 1998 Deferred
Tax Assets Tax Assets
(Liabilities) (Liabilities)
------------- -------------
(Dollars in Thousands)
Postretirement benefits.......................... $215,361 $205,225
Employee compensation and benefit plans.......... 146,261 273,238
Inventory........................................ 86,311 27,972
Depreciation and amortization.................... 4,713 (3,853)
Foreign exchange gains/losses.................... (36,834) (45,113)
Restructuring and special charges................ 102,501 105,271
Tax on unremitted non-U.S. earnings.............. 209,296 196,858
State income tax................................. (21,352) (22,491)
Other............................................ 72,950 66,543
-------- --------
$779,207 $803,650
======== ========
|
The Company's effective income tax rate for fiscal years 1999, 1998 and 1997 differs from the statutory federal income tax rate as follows:
1999 1998 1997
----- ----- -----
Statutory rate........................................ 35.0% 35.0% 35.0%
Changes resulting from:
State income taxes, net of federal income tax
benefit............................................ 2.0 2.0 2.0
Foreign losses, no recorded tax benefit............. 15.2 8.1 3.1
Acquisition-related book and tax bases differences.. 43.6 2.3 2.0
Reversal of prior years' accruals................... (55.0) (11.3) --
Tax benefit, prior years' foreign losses............ -- -- (21.7)
Other, net.......................................... (3.8) 0.9 4.6
----- ----- -----
Effective rate........................................ 37.0% 37.0% 25.0%
===== ===== =====
|
The consolidated U.S. income tax returns of the Company for 1986 through 1995 are under examination by the Internal Revenue Service. The Company believes it has made adequate provision for income taxes and interest for all periods under review.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Note 4: Property, Plant and Equipment
The components of property, plant and equipment ("PP&E") are as follows:
1999 1998
---------- ----------
(Dollars in
Thousands)
Land................................................. $ 48,483 $ 52,928
Buildings and leasehold improvements................. 566,046 497,596
Machinery and equipment.............................. 613,966 787,802
Construction in progress............................. 4,968 218,062
---------- ----------
Total PP&E......................................... 1,233,463 1,556,388
Accumulated depreciation............................. (548,437) (728,137)
---------- ----------
PP&E, net............................................ $ 685,026 $ 828,251
========== ==========
|
As a result of the excess capacity reduction and reorganization initiatives charges (see Note 2 to the Consolidated Financial Statements), the Company recognized impairment losses in 1999, 1998 and 1997 of $59.3 million, $39.5 million and $47.7 million, respectively, related to certain plant assets. The adjustment to net realizable value was determined by estimating the proceeds realizable on sale or lease of these assets.
As of November 28, 1999, the Company had $58.8 million of PP&E, net, available for sale (see Note 18 to the Consolidated Financial Statements).
Depreciation expense for 1999, 1998 and 1997 was $108.7 million, $114.3 million and $123.1 million, respectively.
Construction in progress at November 28, 1999 related to various projects with expected costs of approximately $2.0 million to complete these projects in 2000. Construction in progress at November 29, 1998 related primarily to the Company's distribution centers that were completed in 1999. In addition at November 29, 1998, construction in progress included a flagship retail store in San Francisco that was completed in 1999.
Note 5: Goodwill and Other Intangible Assets
The components of goodwill and other intangible assets are as follows:
1999 1998
--------- ---------
(Dollars in
Thousands)
Goodwill............................................... $ 351,474 $ 364,748
Tradenames............................................. 77,534 77,403
Other intangibles...................................... 4,362 6,211
--------- ---------
Total intangible assets.............................. 433,370 448,362
Accumulated amortization related to goodwill........... (125,208) (117,543)
Other accumulated amortization......................... (32,844) (31,314)
--------- ---------
Intangible assets, net............................... $ 275,318 $ 299,505
========= =========
|
Primarily as a result of a liquidation of a small subsidiary, the Company recognized an impairment loss in 1999 of $13.6 million related to obsolete technology that is recorded in other (income) expense, net. In 1998 and 1997, intangibles were adjusted by $16.4 million and $52.3 million, respectively, for fully amortized assets.
Amortization expense for 1999, 1998 and 1997 was $11.4 million, $14.4 million and $15.8 million, respectively.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Note 6: Debt and Lines of Credit
Debt and lines of credit are summarized below:
1999 1998
---------- ----------
(Dollars in
Thousands)
Long-Term Debt:
Unsecured:
Credit facilities................................ $1,417,000 $ 750,000
Uncommitted lines of credit...................... -- 69,000
Commercial paper program......................... -- 581,036
Notes:
6.80%, due 2003................................ 348,065 347,429
7.00%, due 2006................................ 446,735 446,405
Yen-denominated eurobond:
4.25%, due 2016................................ 188,679 166,666
---------- ----------
2,400,479 2,360,536
Secured:
Receivables-backed securitization financing
agreement....................................... 214,000 --
Industrial development revenue refunding bond.... 10,000 10,000
Notes payable, at various rates, due in
installments through 2006....................... 6,331 6,273
---------- ----------
2,630,810 2,376,809
Current maturities................................. (200,193) (200,180)
---------- ----------
Total........................................ $2,430,617 $2,176,629
========== ==========
Unused Lines of Credit:
Long-term........................................ $ -- $1,000,000
Short-term....................................... 201,689 587,017
---------- ----------
Total........................................ $ 201,689 $1,587,017
========== ==========
|
Credit Facilities
In February 1999, the Company restructured a 1998 credit facility agreement which consisted of three syndicated bank credit facilities totaling $1.75 billion. Since this restructuring, the Company reduced its credit facilities by $248.0 million to approximately $1.5 billion as of November 28, 1999, consisting of: (1) a $621.8 million five-year unsecured credit facility, (2) a $580.2 million 364-day credit facility convertible into a two year loan at maturity at the option of the Company, and (3) a $300.0 million 180-day revolving credit facility (together, the "Credit Facilities"). In August 1999, the Company renewed its 180-day credit facility. The maturity date for the five-year credit facility is January 31, 2002, while the maturity date for the 364-day credit facility and the 180-day revolving facility is February 4, 2000. Borrowings under the Credit Facilities bear interest at either LIBOR or the agent bank's base rate plus an incremental percentage based on the Company's credit ratings.
On November 12, 1999, the banks granted the Company a waiver of the financial covenants required by the Credit Facilities. This waiver was requested due to the Company's business conditions during the fourth quarter of 1999, primarily lower sales, and to ensure ample time to renegotiate its credit facilities in light of the pending February 4, 2000 expiration date. This waiver included new financial covenants consisting of a maximum leverage ratio and a minimum interest-coverage ratio, which expire on February 3, 2000. As of
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
November 28, 1999, the Company was in compliance with the new financial covenants. The Company amended its Credit Facilities in January 2000 (see Note 18 to the Consolidated Financial Statements).
The 1998 credit facilities amended a 1997 credit facility resulting in lower margin borrowing rates and a reduced commitment of $1.75 billion from $2.5 billion. The commitments were designated as a $1.0 billion 364-day credit facility (with an option to request a 364-day extension and an option to term out outstanding borrowings for two years) and a $750.0 million five-year unsecured credit facility.
Commercial Paper Program
A decline in the Company's credit ratings below investment grade caused the commercial paper market to be unavailable to the Company. During 1999 the Company eliminated its commercial paper borrowings. During 1998, the Company reduced the size of its commercial paper program to $1.75 billion from $2.5 billion. Interest rates on the outstanding commercial paper borrowings as of November 29, 1998, ranged from 5.2% to 6.4% with an effective weighted average rate of 5.8%. Commercial paper outstanding in 1998 was classified as long-term since the Company at the time intended to refinance these borrowings on a long- term basis through continued commercial paper borrowings or other borrowing vehicles.
Notes Offering
In 1996, the Company issued two series of notes payable totaling $800.0 million to qualified institutional investors in reliance on Rule 144A under the U.S. Securities and Exchange Act of 1933 (the "Notes Offering"). The notes are unsecured obligations of the Company and are not subject to redemption before maturity. The issuance was divided into two series: $350.0 million seven-year notes maturing in November 2003 and $450.0 million ten-year notes maturing in November 2006. The seven- and ten-year notes bear interest at 6.8% and 7.0% per annum, respectively, payable semi-annually in May and November of each year. Discounts of $8.2 million on the original issue are being amortized over the term of the notes using an approximate effective-interest rate method. Net proceeds from the Notes Offering were used to repay a portion of the indebtedness outstanding under a 1996 credit facility agreement. In September and December 1999, and January 2000, the credit rating agencies lowered the Company's debt ratings.
Yen-denominated Eurobond Placement
In 1996, the Company issued a (Yen)20 billion principal amount eurobond (equivalent to approximately $180.0 million at the time of issuance) due in November 2016, with interest payable at 4.25% per annum. The bond is redeemable at the option of the Company at a make-whole redemption price commencing in 2006. Net proceeds from the placement were used to repay a portion of the indebtedness outstanding under a 1996 credit facility agreement.
Industrial Development Revenue Refunding Bond
In 1995, the City of Canton, Mississippi issued an industrial development revenue refunding bond with a principal amount of $10.0 million, and the proceeds were loaned to the Company to help finance the cost of acquiring a customer service center in Canton. Interest payments are due monthly at a variable rate based upon the J.J. Kenny Index, reset weekly at a maximum rate of 13.0%, and the principal amount is due June 1, 2003. The bond is secured by a letter of credit that expires on June 15, 2000, which the Company has the opportunity to extend or renew.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Receivables-Backed Securitization Financing Agreement
During April 1999, the Company, through a wholly owned special purpose entity, Levi Strauss Funding Corp. ("LSFC"), entered into a U.S. receivables- backed securitization financing agreement. LSFC's sole business consists of purchasing receivables from the Company and its affiliates as part of this financing transaction. LSFC is a separate corporation with its own separate creditors who, in any liquidation of the Company or its affiliates, will be entitled to be satisfied out of LSFC's assets prior to any value in LSFC being available to the equity holders of LSFC. Under the terms of the agreement as of November 28, 1999, borrowings up to $214.0 million are collateralized by a security interest in LSFC's receivables. The maximum amount outstanding varies based upon the level of eligible receivables as defined under the agreement. The Company intends to extend the commitment period beyond one year as of November 28, 1999, and therefore borrowings under this agreement are classified as long-term debt. Net new borrowings from this facility reduced the commitment levels of the Credit Facilities (see note above). The fees under this agreement are variable based on outstanding receivables and the Company's debt ratings. Interest rates ranged from 4.90% to 5.54% with an effective weighted average interest rate of 5.69% during 1999. The Company terminated this agreement in January 2000 (see Note 18 to the Consolidated Financial Statements).
Principal Debt Payments
As of November 28, 1999, the required aggregate debt principal payments and commitment reductions for the next five years and thereafter are as follows:
Principal
Year Payments
---- ----------
(Dollars
in
Thousands)
2000*............................................................. $1,012,880
2001.............................................................. 1,359
2002.............................................................. 622,220
2003.............................................................. 358,300
2004.............................................................. 250
Thereafter........................................................ 635,801
----------
Total........................................................... $2,630,810
==========
|
Short-Term Credit Lines and Stand-By Letters of Credit
At November 28, 1999, the Company had unsecured and uncommitted short-term credit lines available totaling $201.7 million at various rates. These credit arrangements may be canceled by the bank lenders upon notice and generally have no compensating balance requirements or commitment fees. The majority of these short-term credit lines were refinanced with the new bank credit facilities (see Note 18 to the Consolidated Financial Statements).
At November 28, 1999 and November 29, 1998, the Company had $89.4 million and $96.3 million, respectively, of standby letters of credit with various international banks, of which $70.6 million and $79.0 million, respectively, serves as guarantees by the creditor banks to cover U.S. workers' compensation claims. The Company pays fees on the standby letters of credit. Borrowings against the letters of credit are subject to interest at various rates.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Interest Rate Swaps
At November 28, 1999, the Company had interest rate swap transactions outstanding with a total notional principal amount of $425.0 million, to convert floating rate liabilities to fixed rates and $375.0 million to convert fixed rate liabilities to floating rates. These swap transactions effectively change the Company's interest rates on part of its debt to fixed rates that range from 6.25% to 7.0% and floating rates that range from 4.87% to 6.5%, depending on their maturities, the latest of which is in 2006.
The Company is exposed to credit loss in the event of nonperformance by the counterparties to the interest swap transactions; however, the Company believes these counterparties are creditworthy financial institutions and does not anticipate nonperformance.
In addition, the Company is exposed to interest rate risk. It is the Company's policy and practice to use derivative instruments, primarily interest rate swaps, to manage and reduce interest rate exposures.
Interest Rates on Borrowings
The Company's weighted average interest rate on borrowings outstanding during 1999 and 1998, including the impact of interest rate swap transactions, was 7.3% and 7.2%, respectively.
Note 7: Commitments and Contingencies
Foreign Exchange Contracts
At November 28, 1999, the Company has U.S. dollar forward currency contracts to sell the aggregate equivalent of $929.6 million and to buy the aggregate equivalent of $377.9 million of various foreign currencies. The Company also had Euro forward currency contracts to sell the aggregate equivalent of $128.4 million and to buy the aggregate equivalent of $33.0 million of various foreign currencies. Additionally at November 28, 1999, the Company had U.S. dollar option contracts to sell the aggregate equivalent of $1.3 billion and to buy the aggregate equivalent of $826.9 million of various foreign currencies. The Company also had Euro option contracts to sell the foreign currency aggregate equivalent of $105.0 million and buy the aggregate equivalent of $75.0 million. These contracts are at various exchange rates and expire at various dates through 2000.
The foreign exchange gains and losses included in other (income) expense, net, are the realized results for the current financial year together with the market revaluation of all outstanding foreign exchange contracts related to both current and future years. The foreign exchange gains and losses included in other comprehensive income, a component of stockholders' deficit in the balance sheet, are the unrealized results for the current financial year together with the market revaluation of all outstanding foreign exchange contracts related to both current and future years.
The Company's market risk is generally related to fluctuations in the currency exchange rates. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the foreign exchange contracts; however the Company believes these counterparties are creditworthy financial institutions and does not anticipate nonperformance.
Other Contingencies
The Company does not believe there are any pending legal proceedings that will have a material impact on the Company's operations. In the ordinary course of its business, the Company has pending various cases
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
involving contractual matters, employee-related matters, distribution questions, product liability claims, trademark infringement and other matters. The Company believes that these cases are not material in aggregate considering the strength of its legal positions in such matters.
Compliance with United States Federal, state and local laws enacted for the protection of the environment has no material effect upon the Company's capital expenditures, earnings, or competitive position to date. Although the Company does not anticipate any material adverse effects in the future based on the nature of its operations and the effect of such laws, no assurance can be given that such laws, or any future laws enacted for the protection of the environment, will not have a material adverse effect on the Company. The Company evaluates environmental liabilities on an ongoing basis and, based on current available information, does not consider any environmental exposure to be material to the Company's financial position or results of operations.
Note 8: Fair Value of Financial Instruments
The estimated fair value of certain financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
The carrying amount and estimated fair value (in each case including accrued interest) of the Company's financial instrument assets and (liabilities) at November 28, 1999 and November 29, 1998 are as follows:
November 28, 1999 November 29, 1998
------------------------ --------------------
Estimated
Carrying Estimated Carrying Fair
Value Fair Value Value Value
----------- ----------- --------- ---------
(Dollars in Thousands)
Debt instruments:
Credit facilities............ $(1,424,449) $(1,424,449) $(753,766) $(753,766)
Yen-denominated eurobond
placement................... (189,274) (148,113) (169,028) (183,750)
Notes offering............... (798,640) (626,307) (812,275) (742,143)
Commercial paper............. -- -- (586,128) (586,128)
Receivables-backed
securitization.............. (215,836) (215,836) -- --
Industrial development
revenue refunding bond...... (10,030) (10,030) (10,025) (10,025)
Currency and interest rate
hedges:
Foreign exchange forward
contracts................... $ 16,972 $ 16,932 $ (3,335) $ (3,668)
Foreign exchange option
contracts................... 7,806 2,288 (1,160) (3,161)
Interest rate swap
contracts................... (2,224) (4,839) (2,978) 1,437
|
Quoted market prices or dealer quotes are used to determine the estimated fair value of foreign exchange contracts, option contracts and interest rate swap contracts. Dealer quotes and other valuation methods, such as the discounted value of future cash flows, replacement cost, and termination cost have been used to determine the estimated fair value for long-term debt and the remaining financial instruments. The carrying values of cash and cash equivalents, trade receivables, current assets, current and non-current maturities of long-term debt, short-term borrowings and taxes approximate fair value.
The fair value estimates presented herein are based on information available to the Company as of November 28, 1999 and November 29, 1998. Although the Company is not aware of any factors that would substantially affect the estimated fair value amounts, such amounts have not been updated since those dates and, therefore, the current estimates of fair value at dates subsequent to November 28, 1999 and November 29,
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
1998 may differ substantially from these amounts. Additionally, the aggregation of the fair value calculations presented herein do not represent and should not be construed to represent the underlying value of the Company.
Note 9: Leases
The Company is obligated under operating leases for facilities, office space and equipment. At November 28, 1999, obligations under long-term leases are as follows:
Minimum
Lease
Payments
----------
(Dollars
in
Thousands)
2000............................................................ $ 67,985
2001............................................................ 60,623
2002............................................................ 53,440
2003............................................................ 48,341
2004............................................................ 46,164
Remaining years................................................. 241,469
--------
Total minimum lease payments.................................. $518,022
========
|
The total minimum lease payments on operating leases have not been reduced by estimated future income of $19.0 million from non-cancelable subleases.
In general, leases relating to real estate include renewal options of up to 20 years, except for the San Francisco headquarters office lease, which contains multiple renewal options of up to 79 years. Some leases contain escalation clauses relating to increases in operating costs. Certain operating leases provide the Company with an option to purchase the property after the initial lease term at the then prevailing market value. Rental expense for 1999, 1998 and 1997 was $86.1 million, $80.2 million and $97.8 million, respectively.
Note 10: Pension and Postretirement Benefit Plans
The Company has numerous non-contributory defined benefit retirement plans covering substantially all employees. It is the Company's policy to fund its retirement plans based on actuarial recommendations, consistent with applicable laws and income tax regulations. Plan assets, which may be denominated in foreign currencies and issued by foreign issuers, are invested in a diversified portfolio of securities including stocks, bonds, real estate investment funds and cash equivalents. Benefits payable under the plans are based on either years of service or final average compensation. The Company also sponsors other retirement plans for certain domestic and foreign employees. Expense for these plans in 1999, 1998 and 1997 totaled $12.0 million, $7.5 million and $6.9 million, respectively.
The Company maintains two plans that provide postretirement benefits, principally health care, to substantially all domestic retirees and their qualified dependents. These plans have been established with the intention that they will continue indefinitely. However, the Company retains the right to amend, curtail or discontinue any aspect of the plans at any time. Under the Company's current policies, employees become eligible for these benefits when they reach age 55 with 15 years of credited service. The plans are contributory and contain certain cost-sharing features, such as deductibles and coinsurance. The Company's policy is to fund postretirement benefits as claims and premiums are paid.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
The Company instituted early retirement programs offered to those affected by the Company's excess capacity reduction initiatives and various reorganization initiatives (see Note 2 to the Consolidated Financial Statements). A reduced benefit is payable under the programs based on reduced years of age and service than under the defined benefit retirement plans. These programs resulted in the recognition of net curtailment gains and losses and early retirement incentives.
Pension Benefits Postretirement Benefits
------------------------- -------------------------
November 28, November 29, November 28, November 29,
1999 1998 1999 1998
------------ ------------ ------------ ------------
(Dollars in Thousands)
Change in benefit
obligation:
Benefit obligation at
beginning of year........ $631,788 $ 565,966 $ 483,708 $ 488,739
Service cost.............. 23,743 31,553 7,480 10,565
Interest cost............. 43,154 41,073 33,485 35,098
Plan participants'
contributions............ 337 372 1,140 933
Actuarial (gain) loss..... (23,140) 20,649 9,698 (34,928)
Early retirement
incentives............... 12,702 2,030 37,345 964
Net curtailment (gain)
loss..................... 9,271 -- (23,571) --
Settlement loss........... 540 -- -- --
Benefits paid*............ (28,955) (29,855) (24,220) (17,663)
-------- --------- --------- ---------
Benefit obligation at end
of year.................. 669,440 631,788 525,065 483,708
-------- --------- --------- ---------
Change in plan assets:
Fair value of plan assets
at beginning of year..... 500,789 491,211 -- --
Actual return on plan
assets................... 94,976 20,866 -- --
Employer contribution..... 5,429 18,195 23,080 16,730
Plan participants'
contributions............ 337 372 1,140 933
Benefits paid*............ (28,955) (29,855) (24,220) (17,663)
-------- --------- --------- ---------
Fair value of plan assets
at end of year........... 572,576 500,789 -- --
-------- --------- --------- ---------
Funded status............. (96,864) (130,999) (525,065) (483,708)
Unrecognized actuarial
(gain) loss.............. (9,247) 50,131 (41,724) (56,359)
Unrecognized prior service
cost..................... 6,737 22,403 -- --
-------- --------- --------- ---------
Net amount recognized..... $(99,374) $ (58,465) $(566,789) $(540,067)
======== ========= ========= =========
|
Postretirement
Pension Benefits Benefits
------------------- --------------------
1999 1998 1999 1998
--------- -------- --------- ---------
(Dollars in Thousands)
Amounts recognized in the
consolidated balance sheets
consist of:
Prepaid benefit cost............. $ 1,882 $ 12,200 $ -- $ --
Accrued benefit cost (including
short-term)..................... (107,352) (70,682) (566,789) (540,067)
Intangible asset................. 4,861 17 -- --
Accumulated other comprehensive
income.......................... 1,235 -- -- --
--------- -------- --------- ---------
Net amount recognized.............. $ (99,374) $(58,465) $(566,789) $(540,067)
========= ======== ========= =========
Weighted-average assumptions:
Discount rate...................... 7.0% 7.0% 7.0% 7.0%
Expected return on plan assets..... 9.0% 9.0% -- --
Rate of compensation increase...... 6.0% 6.0% -- --
|
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
For postretirement benefits measurement purposes, an 8.0% and 4.0% annual rate of increase in the per capita cost of covered health care and Medicare Part B benefits, respectively, were assumed for 1999, declining gradually to 4.5% and 2.25% by the year 2009 and remaining at those rates thereafter.
Pension Benefits
----------------------------
1999 1998 1997
-------- -------- --------
(Dollars in Thousands)
Components of net periodic benefit cost:
Service cost................................... $ 23,743 $ 31,553 $ 33,091
Interest cost.................................. 43,154 41,073 37,072
Expected return on plan assets................. (44,871) (42,698) (34,223)
Amortization of prior service cost............. 2,309 2,947 3,823
Recognized actuarial (gain) loss............... (487) 10 1,642
Early retirement incentives.................... 12,702 2,030 23,133
Net curtailment loss........................... 9,271 -- 5,595
Settlement loss................................ 540 -- --
-------- -------- --------
Net periodic benefit cost...................... $ 46,361 $ 34,915 $ 70,133
======== ======== ========
Postretirement Benefits
----------------------------
1999 1998 1997
-------- -------- --------
(Dollars in Thousands)
Components of net periodic benefit cost:
Service cost................................... $ 7,480 $ 10,565 $ 18,028
Interest cost.................................. 33,485 35,098 30,449
Expected return on plan assets................. -- -- --
Amortization of prior service cost............. -- -- --
Recognized actuarial gain...................... (345) -- (1,595)
Early retirement incentives.................... 37,345 964 5,170
Net curtailment gain........................... (23,571) -- (18,885)
-------- -------- --------
Net periodic benefit cost...................... $ 54,394 $ 46,627 $ 33,167
======== ======== ========
|
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan with accumulated benefit obligations in excess of plan assets were $235.0 million, $223.8 million, and $163.8 million, respectively, as of November 28, 1999, and $213.3 million, $199.8 million, and $144.4 million, respectively, as of November 29, 1998.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
1-Percentage-Point 1-Percentage-Point
Increase Decrease
------------------ ------------------
(Dollars in Thousands)
Effect on total of service and
interest cost components........... $ 5,934 $ (4,894)
Effect on the postretirement benefit
obligation......................... 61,380 (51,503)
|
Note 11: Employee Investment Plans
The Company maintains three employee investment plans. The Employee Investment Plan of Levi Strauss & Co. ("EIP") and the Levi Strauss & Co. Employee Long-Term Investment and Savings Plan ("ELTIS") are
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
two qualified plans that cover non-highly compensated Home Office employees and U.S. field employees. The Capital Accumulation Plan of Levi Strauss & Co. ("CAP") is a non-qualified, self-directed investment program for highly compensated employees (as defined by the Internal Revenue Code).
EIP/ELTIS
Under EIP and ELTIS, eligible employees may contribute and direct up to 10% of their annual compensation to various investments among a series of mutual funds. The Company may match 50% of the contributions made by employees to all funds maintained under the qualified plans. Employees are always 100% vested in the Company match. The ELTIS also includes a company profit sharing provision with payments made at the sole discretion of the Board of Directors. The EIP and the ELTIS allow employees a choice of either pre-tax or after-tax contributions.
CAP
The CAP allows eligible employees to contribute on an after-tax basis up to 10% of their annual compensation to an individual retail brokerage account. The Company generally matches 75% of these contributions made by employees in cash to each employee's account. Employees are always 100% vested in the Company match. All investment decisions, related commissions and charges, investment results and tax reporting requirements are the responsibility of the employee, not the Company.
Cost of Investment Plans
The aggregate cost of employee savings plans in 1999, 1998 and 1997 was $14.4 million, $19.7 million and $20.5 million, respectively.
Note 12: Employee Compensation Plans
Partners in Performance Plan
The Partners in Performance Plan ("PIP") is a program for all salaried worldwide employees and is intended to align the objectives of employees with the strategic objectives of the Company and interests of the Company stockholders.
Annual Incentive Plan
The Annual Incentive Plan ("AIP"), the short-term portion of PIP, is intended to reward individual and team contributions to the Company's objectives during the year. The amount of incentive earned depends upon the performance and salary grade level of the individual and also depends on corporate, group, division and affiliate financial results against pre- established targets. In 1999, the Company did not meet pre-established targets for AIP and, therefore, reversed $3.2 million of a prior year accrual and did not record an expense for 1999. The cost of the AIP for fiscal years 1998 and 1997 was $24.9 million and $43.9 million, respectively.
Long-Term Incentive Plans
Leadership Shares ("LS") is a feature of PIP, introduced in early 1999. LS replaced the executive Long-Term Incentive Plan ("LTIP") with 1999 LS grants partially based on executive performance during fiscal 1998. It places greater emphasis on an individual's ability to contribute and affect long-term strategic objectives with all grants based on individual performance. LS is a performance unit plan, which grants units or "shares"
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
at an initial value of $0 each. These "shares" are not stock and do not represent equity interests in the Company.
A competitive level of five-year Company financial performance is determined by examining expected value growth at other companies. This growth is then tied to competitive external long-term incentive pay so that the Company will pay its executives at competitive levels when they achieve competitive growth. At the end of each fiscal year, a share value will be determined and communicated to employees. The shares vest in one-third increments at the end of the third, fourth and fifth fiscal years of the performance period.
LTIP, which previously represented the portion of PIP related to long-term incentives, ended for all employees during fiscal year 1999 and was replaced by LS for employees at management levels. These incentives were awarded as performance units with each grant's unit value measured based on the Company's three-year cumulative earnings performance and return on investment against pre-established targets. Awards were based on an individual's grade level, salary and performance and are paid in one-third annual increments beginning in the year following the three-year performance cycle of the grant. Existing LTIP units that were previously granted will be paid out according to the plan schedule.
The Special Long-Term Incentive Plan ("SLTIP") is intended to provide incentive and reward performance over time for certain key senior employees above and beyond PIP awards. Awards under this plan have the same grant unit value, vesting period and pay-out cycle as grants made under LTIP. A Long-Term Performance Plan ("LTPP"), which awarded grants in 1994 and 1995, will finish paying out in 2000.
In 1999, the Company did not meet some of the pre-established targets for these long-term incentive plans and therefore reversed a portion of prior year accruals totaling $32.5 million. Total amounts charged to expense for these long-term incentive plans in 1998 and 1997 were $14.9 million and $17.5 million, respectively.
Other Compensation Plans
Global Success Sharing Plan
The Global Success Sharing Plan ("GSSP") was adopted in 1996 and is designed to allow all eligible employees to share in the Company's future success by providing a cash payment based on the achievement of pre-established financial targets. The plan calls for an aggregate cash payment, ranging from 3% to 10% of the achieved cumulative cash flow (defined as earnings before interest, taxes, depreciation, amortization and certain other items) to be paid by the Company to all eligible employees, assuming a minimum cumulative cash flow is reached. If the Company were to meet its planned target, at the time of adoption, an estimated payment of $758.0 million could be due in 2002 (exclusive of all employer-related taxes). However, in 1999, the Company lowered its estimate of financial performance through the year 2001 and determined that payment in 2002 is highly unlikely. In 1999, the Company reversed prior years' GSSP accruals totaling $343.9 million, less miscellaneous plan expenses. The Company recognized GSSP expenses of $90.6 million and $114.8 million for 1998 and 1997, respectively.
Cash Performance Sharing Plan
The Cash Performance Sharing Plan awards a cash payment to production employees worldwide based on a percentage of annual salary and certain earnings criteria. The largest individual plan is the U.S. Field Profit Sharing Plan that covers approximately 11,900 U.S. employees. The Company did not meet certain earnings criteria established by the plan and therefore no expense was recognized for the 1999 plan. Total amounts charged to expense for this plan in 1998 and 1997 were $6.9 million and $14.7 million, respectively.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Key Employee Recognition and Commitment Plan
The Key Employee Recognition and Commitment Plan ("KEP") was adopted in 1996 and is designed to recognize and reward key employees for making significant contributions to the Company's future success. Units awarded to employees under the plan are subject to a four-year vesting period, which commenced in fiscal 1997. Units are exercisable in one-third increments at the end of fiscal years 2001 through 2003 upon reaching a certain minimum cumulative earnings criteria threshold at each fiscal year-end. Employees may elect to defer the exercise of each one-third increment, until final payment in 2004. Payments may occur earlier under certain circumstances. Unit values will be directly related to the excess over the threshold of the cumulative cash flow (defined as earnings before interest, taxes, depreciation, amortization, GSSP and certain other items) generated by the Company at the end of the fiscal years 2001 through 2003. In 1999, the Company lowered its estimate of financial performance through the year 2003 and, consequently, decreased the KEP accrual rate to 0% and reversed prior years KEP accruals totaling $13.6 million. The amounts charged to expense for this plan in 1998 and 1997 were $5.9 million and $7.7 million, respectively.
Note 13: Special Deferral Plan
The Special Deferral Plan ("SDP") was adopted during 1996 and was designed to replace the Company's Stock Appreciation Rights Plan ("SARs"). Existing SARs were transferred in the SDP at a value of $265 per share. The SDP had grants in 1992 and 1994, both of which were fully vested as of November 28, 1999. The SDP bases the appreciation/depreciation of units on certain tracked mutual funds or the prime rate, at the election of the employee.
There were no additional grants under the SDP in 1999 and 1998. During 1999 and 1998, SDP grants exercised resulted in cash disbursements of $10.6 million and $4.2 million, respectively.
The amounts charged (net of forfeitures) to expense for the plans in 1999, 1998 and 1997 were $(2.3) million, $8.0 million and $6.9 million, respectively.
Note 14: Long-Term Employee Related Benefits
Long-term employee related benefits are as follows:
1999 1998
-------- --------
(Dollars in
Thousands)
Workers' compensation..................................... $ 64,004 $ 76,510
Long-term performance programs............................ 8,511 64,692
Global Success Sharing Plan*.............................. -- 344,057
Deferred compensation..................................... 101,263 114,694
Pension and profit sharing................................ 147,978 115,196
Other deferred employee benefits.......................... 3,762 6,181
-------- --------
Total................................................... $325,518 $721,330
======== ========
|
Included in the liability for workers' compensation are accrued expenses related to the Company's program that provides for early identification and treatment of employee injuries. Changes in the Company's safety programs, medical and disability management and the long-term effects of statutory changes have decreased workers' compensation costs substantially from prior years. Accruals for workers' compensation of $29.7 million and $36.7 million were recorded during fiscal years 1999 and 1998, respectively. However, these
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
amounts were reduced in 1999 and 1998 by $21.0 million and $20.0 million, respectively, related to reversals of previously estimated costs. Included in long-term performance programs are accrued liabilities for LTIP, SLTIP, KEP and LTPP (see Note 12 to the Consolidated Financial Statements).
Note 15: Common Stock
The Company has a capital structure consisting of 270,000,000 authorized shares of common stock, par value $.01 per share, of which 37,278,238 shares are issued and outstanding.
Note 16: Related Parties
Compensation of Directors
Directors of the Company who are also stockholders or employees of the Company do not receive compensation for their services as directors. Directors who are not stockholders or employees (James C. Gaither, Angela G. Blackwell, Patricia S. Pineda, T. Gary Rogers and Craig Sullivan) receive annual compensation of approximately $62,000. This amount includes an annual retainer fee of $6,000, meeting fees of $1,000 per meeting day attended and long-term variable pay in the form of 1,800 LS units, for a target value of $45,000 per year (see Note 12 to the Consolidated Financial Statements ). The actual amount for each of the above payments varies depending on the years of service, the number of meetings attended and the actual value of the granted units upon vesting. Directors who are not employees or stockholders also receive travel accident insurance while on Company business and are eligible to participate in a deferred compensation plan.
Mr. Gaither, Ms. Blackwell and Ms. Pineda each received 1,800 LS units in 1999 and 450 performance units under LTIP in 1998. In 1999, Mr. Gaither, Ms. Blackwell and Ms. Pineda each received payments under LTIP and LTPP of approximately $59,000. In 1998, Mr. Gaither and Ms. Pineda each received payments under LTPP of approximately $85,000. Ms. Blackwell received a payment under LTPP of approximately $48,000 in 1998.
If the GSSP were to pay out at target levels in 2002, the outside directors' effective target compensation would be approximately $82,000 (see Note 12 to the Consolidated Financial Statements). However in 1999, the Company lowered its estimate of financial performance through the year 2001 and, consequently, decreased the GSSP accrual rate to 0% and does not expect to make future payments under this plan.
Other Transactions
F. Warren Hellman, a director of the Company is a general partner of Hellman & Friedman, an investment banking firm, and has provided financial advisory services to the Company in the past. However, the Company did not pay any fees to Hellman & Friedman during fiscal years 1999 and 1998. At November 28, 1999 and November 29, 1998, Mr. Hellman and his family, other partners, and former partners of Hellman & Friedman beneficially owned an aggregate of less than 5% of the outstanding common stock of the Company.
James C. Gaither, a director of the Company, is a partner of the law firm Cooley Godward LLP. The firm provided legal services to the Company in 1999, 1998 and 1997 and received in fees approximately $78,000, $74,000 and $123,000, respectively.
Estate Tax Repurchase Policy
The Company has a policy under which it will, subject to certain conditions, repurchase a portion of the shares offered by the estate of a deceased stockholder in order to generate funds for payment of estate taxes.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
The purchase price will be based on a valuation received from an investment banking or appraisal firm. Estate repurchase transactions will be subject to, among other things, compliance with applicable laws governing stock repurchases, board approval, and restrictions under the Company's credit facilities (see Note 18 to the Consolidated Financial Statements). The policy does not create a contractual obligation on the Company.
Note 17: Business Segment Information
The Company manages its only segment, the apparel business, based on geographic regions consisting of: the Americas, which includes the United States, Canada and Latin America; Europe, the Middle East and Africa; and Asia Pacific. All Other consists of functions that are directed by the corporate office and are not allocated to a specific geographic region. Under Geographic Information for all periods presented, no other single country other than the United States had net sales exceeding 10% of consolidated net sales.
The Company designs and markets jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories, for men, women and children, under our Levi's(R), Dockers(R) and Slates(R) brands. Its products are distributed in the United States primarily through chain retailers and department stores and abroad through department stores, specialty retailers and franchised stores. The Company also maintains a network of approximately 750 franchised or independently owned stores dedicated to our products outside the United States and operates a small number of company-owned stores in eight countries. The Company obtains its products from a combination of company-owned facilities and independent manufacturers.
The Company evaluates performance and allocates resources based on regional profits or losses. The accounting policies of the regions are the same as those described in Note 1, "Summary of Significant Accounting Policies." Regional profits exclude net interest expense, special compensation program expenses, excess capacity reduction/restructuring charges, and expenses that are controlled at the corporate level. Management financial information for the Company is as follows:
Asia
Americas Europe Pacific All Other Consolidated
---------- ---------- -------- --------- ------------
(Dollars in Thousands)
1999:
Net sales from external
customers................ $3,420,326 $1,360,782 $358,350 $ -- $5,139,458
Intercompany sales........ 82,219 1,045,119 38,923 -- 1,166,261
Depreciation and amortiza-
tion expense............. 86,078 27,474 6,550 -- 120,102
Earnings contribution..... 279,900 242,700 28,500 -- 551,100
Interest expense.......... -- -- -- 182,978 182,978
Excess capacity
reduction/restructuring.. -- -- -- 497,683 497,683
Global Success Sharing
Plan..................... -- -- -- (343,873) (343,873)
Corporate and other ex-
penses................... -- -- -- 205,813 205,813
Income before income
taxes.................. -- -- -- -- 8,499
Total regional assets..... 5,154,019 1,625,396 576,533 -- 7,355,948
Elimination of
intercompany assets...... -- -- -- -- 3,690,431
Total assets............ -- -- -- -- 3,665,517
Expenditures for long-
lived assets............. 36,578 20,518 3,966 -- 61,062
|
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
United Foreign
States Countries Consolidated
1999 (cont'd): ---------- ---------- ------------
Geographic Information:
Net sales.................................... $3,201,809 $1,937,649 $5,139,458
Long-lived assets............................ 577,618 1,089,215 1,666,833
|
Asia All
Americas Europe Pacific Other Consolidated
---------- ---------- -------- -------- ------------
(Dollars in Thousands)
1998:
Net sales from external
customers................. $3,938,786 $1,650,479 $369,370 $ -- $5,958,635
Intercompany sales......... 130,234 1,124,962 45,322 -- 1,300,518
Depreciation and amortiza-
tion expense.............. 93,588 29,607 5,578 -- 128,773
Earnings contribution...... 420,700 361,700 53,100 -- 835,500
Interest expense........... -- -- -- 178,035 178,035
Excess capacity
reduction/restructuring... -- -- -- 250,658 250,658
Global Success Sharing
Plan...................... -- -- -- 90,564 90,564
Corporate and other ex-
penses.................... -- -- -- 153,543 153,543
Income before income tax-
es...................... -- -- -- -- 162,700
Total regional assets...... 4,846,314 1,895,210 312,358 -- 7,053,882
Elimination of intercompany
assets.................... -- -- -- -- 3,169,224
Total assets............. -- -- -- -- 3,884,658
Expenditures for long-lived
assets.................... 57,417 54,439 4,675 -- 116,531
|
United Foreign
States Countries Consolidated
---------- ---------- ------------
Geographic Information:
Net sales.................................... $3,672,295 $2,286,340 $5,958,635
Long-lived assets............................ 884,412 1,120,338 2,004,750
|
Asia All
Americas Europe Pacific Other Consolidated
---------- ---------- -------- -------- ------------
(Dollars in Thousands)
1997:
Net sales from external
customers................. $4,564,898 $1,828,613 $467,971 $ -- $6,861,482
Intercompany sales......... 166,522 1,178,107 57,736 -- 1,402,365
Depreciation and amortiza-
tion expense.............. 94,915 29,637 14,342 -- 138,894
Earnings contribution...... 528,900 509,800 70,700 -- 1,109,400
Interest expense........... -- -- -- 212,358 212,358
Excess capacity
reduction/restructuring... -- -- -- 386,792 386,792
Global Success Sharing
Plan...................... -- -- -- 114,833 114,833
Corporate and other ex-
penses.................... -- -- -- 211,136 211,136
Income before income tax-
es...................... -- -- -- -- 184,281
Total regional assets...... 4,847,930 1,746,017 360,119 -- 6,954,066
Elimination of intercompany
assets.................... -- -- -- -- 2,921,739
Total assets............. -- -- -- -- 4,032,327
Expenditures for long-lived
assets.................... 67,014 44,029 10,552 -- 121,595
|
United Foreign
States Countries Consolidated
---------- ---------- ------------
Geographic Information:
Net sales.................................... $4,240,543 $2,620,939 $6,861,482
Long-lived assets............................ 962,117 1,051,572 2,013,689
|
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
For 1999, 1998 and 1997, the Company had one customer that represented approximately 11%, 12% and 11%, respectively, of net sales. No other customer accounted for more than 10% of net sales.
Note 18: Subsequent Events
Customer Service Center Equipment Financing
In December 1999 the Company entered into a secured financing transaction consisting of a five-year credit facility secured by owned equipment at Customer Service Centers located in Nevada, Mississippi and Kentucky. The amount financed in December 1999 is $89.5 million, comprised of a $59.5 million tranche ("Tranche 1") and a $30.0 million tranche ("Tranche 2"). Borrowings under Tranche 1 have a fixed interest rate equal to the yield of a four-year Treasury note plus an incremental borrowing spread. Borrowings under Tranche 2 have a floating quarterly interest rate equal to the 90 day LIBOR plus an incremental borrowing spread based on the Company's leverage ratio at that time. Proceeds from the borrowings were used to reduce the commitment amounts of the credit facilities.
Credit Facility Amendment
In January 2000 the Company amended three of its credit facility agreements and entered into one new agreement. These agreements effectively replace existing credit facilities consisting of three syndicated bank credit facilities of $1.5 billion and a domestic receivables-backed securitization financing of approximately $214.0 million, and support the majority of the Company's unsecured and uncommitted short-term credit lines, letters of credit and interest rate and foreign-exchange risk management activities. The new financing package consists of four separate agreements: (1) a new $450.0 million bridge loan to fund working capital and support foreign exchange contracts and derivatives, (2) an amended $300.0 million revolving credit facility, extending the existing bridge facility, (3) an amended $545.0 million 364-day credit facility, and (4) an amended $584.0 million 5-year credit facility. Simultaneously with entering into these agreements, the Company terminated the domestic receivables-backed securitization financing.
All four facilities are secured by domestic receivables, domestic inventories, certain domestic equipment, trademarks, other intellectual property, 100% of the stock in domestic subsidiaries, 65% of the stock of certain foreign subsidiaries and other assets. The maturity date for all credit facilities is January 31, 2002. Borrowings under the bank credit facilities bear interest at LIBOR or the agent bank's base rate plus an incremental borrowing spread. For the bridge facility, the spread is 3.00% over LIBOR or 1.75% over the base rate. For each of the three amended facilities, the spread is 3.25% over LIBOR or 2.00% over the base rate.
In addition, if by February 1, 2001 we have not completed one or more private or public capital-raising transactions yielding net proceeds to us of at least $300.0 million which have been used to reduce commitments under our bank credit facilities, we will be required to pay our lenders an additional borrowing spread of 1.00% on outstanding borrowings under our bank credit facilities, plus a one-time additional fee of 2.00% of total commitments as of January 31, 2001. Our borrowing spread will be increased by 0.25% quarterly until those capital-raising transactions are completed.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
The following is a pro forma table of the required aggregate debt principal payments and commitment reductions for the next five years and thereafter that includes the customer service center equipment financing and the credit facility replacement.
Principal
Payments
----------
(Dollars
in
Thousands)
2000................................... $ 200,000
2001................................... 201,359
2002................................... 1,145,600
2003................................... 358,300
2004................................... 89,750
Thereafter............................. 635,801
----------
Total.............................. $2,630,810
==========
|
Sale of Office Buildings
In December 1999 the Company entered into an agreement to sell two office buildings in downtown San Francisco located adjacent to its corporate headquarters. The transaction is expected to close in February 2000. Proceeds from the sale will be approximately $80 million and will be used to reduce the commitment amounts under the amended credit facilities. As a result of the sale, the Company is expected to recognize a gain of approximately $26.1 million in its fiscal first quarter ending February 27, 2000.
LEVI STRAUSS & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Note 19: Quarterly Financial Data (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
---------- ---------- ---------- ----------
(Dollars in Thousands, Except Per Share
Data)
1999
Net sales..................... $1,278,322 $1,227,910 $1,226,413 $1,406,813
Cost of goods sold............ 814,673 737,303 747,766 881,103
---------- ---------- ---------- ----------
Gross profit.................. 463,649 490,607 478,647 525,710
Marketing, general and admin-
istrative.................... 419,085 407,677 338,223 464,860
Excess
capacity/restructuring....... 394,105 11,780 -- 91,798
Global Success Sharing Plan... -- -- -- (343,873)
---------- ---------- ---------- ----------
Operating income (loss)....... (349,541) 71,150 140,424 312,925
Interest expense.............. 43,157 43,819 45,742 50,260
Other (income) expense, net... (16,127) (20,931) 7,139 13,400
---------- ---------- ---------- ----------
Income (loss) before taxes.... (376,571) 48,262 87,543 249,265
Income tax expense (benefit).. (139,331) 17,857 32,391 92,227
---------- ---------- ---------- ----------
Net income (loss)............. $ (237,240) $ 30,405 $ 55,152 $ 157,038
========== ========== ========== ==========
Earnings (loss) per share-ba-
sic and diluted.............. $ (6.36) $ 0.82 $ 1.48 $ 4.21
========== ========== ========== ==========
1998
Net sales..................... $1,435,362 $1,356,318 $1,537,666 $1,629,289
Cost of goods sold............ 823,144 787,292 894,271 928,374
---------- ---------- ---------- ----------
Gross profit.................. 612,218 569,026 643,395 700,915
Marketing, general and admin-
istrative.................... 457,330 471,350 466,675 438,703
Excess
capacity/restructuring....... -- -- -- 250,658
Global Success Sharing Plan... 22,655 22,657 22,658 22,594
---------- ---------- ---------- ----------
Operating income (loss)....... 132,233 75,019 154,062 (11,040)
Interest expense.............. 44,499 43,673 45,338 44,525
Other (income) expense, net... (16,712) (3,977) (11,877) 42,105
---------- ---------- ---------- ----------
Income (loss) before taxes.... 104,446 35,323 120,601 (97,670)
Income tax expense (benefit).. 41,778 9,936 44,622 (36,138)
---------- ---------- ---------- ----------
Net income (loss)............. $ 62,668 $ 25,387 $ 75,979 $ (61,532)
========== ========== ========== ==========
Earnings (loss) per share-ba-
sic and diluted.............. $ 1.68 $ 0.68 $ 2.04 $ (1.65)
========== ========== ========== ==========
|
LEVI STRAUSS & CO.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
February November
27, 2000 28, 1999
----------- -----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents...................... $ 105,959 $ 192,816
Trade receivables, net of allowance for
doubtful accounts of $29,264 in 2000 and
$30,017 in 1999............................... 633,531 759,273
Income taxes receivable........................ 76,371 70,000
Inventories:
Raw materials................................ 123,082 137,082
Work-in-process.............................. 88,997 100,523
Finished goods............................... 417,415 433,882
----------- -----------
Total inventories................................ 629,494 671,487
Deferred tax assets............................ 284,415 300,972
Other current assets........................... 145,400 172,195
----------- -----------
Total current assets....................... 1,875,170 2,166,743
Property, plant and equipment, net of accumulated
depreciation of $521,866 in 2000 and $548,437 in
1999............................................ 613,372 685,026
Goodwill and other intangibles, net of
accumulated amortization of $155,832 in 2000 and
$158,052 in 1999................................ 272,625 275,318
Non-current deferred tax assets.................. 464,687 478,235
Other assets..................................... 77,529 60,195
----------- -----------
Total Assets............................... $ 3,303,383 $ 3,665,517
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Current maturities of borrowings and capital
lease obligations............................. $ 230,140 $ 233,992
Accounts payable............................... 185,918 262,389
Restructuring reserves......................... 174,396 258,784
Accrued liabilities............................ 435,057 415,273
Accrued salaries, wages and employee benefits.. 183,649 194,130
Accrued taxes.................................. -- 2,548
----------- -----------
Total current liabilities.................. 1,209,160 1,367,116
Long-term debt and capital lease obligations,
less current maturities......................... 2,173,337 2,430,617
Long-term employee related benefits.............. 312,027 325,518
Postretirement medical benefits.................. 545,270 541,815
Long-term tax liability.......................... 241,542 241,542
Other long-term liabilities...................... 18,938 20,696
Minority interest................................ 22,681 26,775
----------- -----------
Total liabilities.......................... 4,522,955 4,954,079
----------- -----------
Stockholders' Deficit:
Common stock--$.01 par value; authorized
270,000,000 shares; issued and outstanding:
37,278,238 shares............................. 373 373
Additional paid-in capital..................... 88,812 88,812
Accumulated deficit............................ (1,330,097) (1,395,256)
Accumulated other comprehensive income......... 21,340 17,509
----------- -----------
Total stockholders' deficit................ (1,219,572) (1,288,562)
----------- -----------
Total Liabilities and Stockholders'
Deficit................................... $ 3,303,383 $ 3,665,517
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
------------------------
February February
27, 2000 28, 1999
----------- -----------
Net sales............................................ $ 1,082,437 $ 1,278,322
Cost of goods sold................................... 632,442 814,673
----------- -----------
Gross profit....................................... 449,995 463,649
Marketing, general and administrative expenses....... 322,111 419,085
Excess capacity/restructuring charge................. -- 394,105
----------- -----------
Operating income (loss)............................ 127,884 (349,541)
Interest expense..................................... 56,782 43,157
Other income, net.................................... (29,141) (16,127)
----------- -----------
Income (loss) before taxes......................... 100,243 (376,571)
Income tax expense (benefit)......................... 35,084 (139,331)
----------- -----------
Net income (loss).................................. $ 65,159 $ (237,240)
=========== ===========
Earnings per share--basic and diluted................ $ 1.75 $ (6.36)
=========== ===========
Weighted-average common shares outstanding........... 37,278,238 37,278,238
=========== ===========
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
-------------------------
February 27, February 28,
2000 1999
------------ ------------
Cash Flows from Operating Activities:
Net income (loss).................................. $ 65,159 $(237,240)
Adjustments to reconcile net cash provided by
operating activities:
Depreciation and amortization.................... 20,620 33,647
Unrealized foreign exchange gains................ (5,444) (18,157)
Decrease in trade receivables.................... 116,579 147,934
Increase in income taxes receivables............. (6,371) --
(Increase) decrease in inventories............... 31,996 (18,067)
Decrease in other current assets................. 26,858 11,398
Decrease (increase) in net deferred tax assets... 27,864 (149,444)
Decrease in accounts payable and accrued
liabilities..................................... (52,534) (81,600)
(Decrease) increase in restructuring reserves.... (96,693) 331,163
Decrease in accrued salaries, wages and employee
benefits........................................ (9,078) (33,160)
Decrease in accrued taxes........................ (1,551) (17,738)
(Decrease) increase in long-term employee
benefits........................................ (10,161) 84,482
Other, net....................................... (46,942) (9,591)
--------- ---------
Net cash provided by operating activities...... 60,302 43,627
--------- ---------
Cash Flows from Investing Activities:
Purchases of property, plant and equipment......... (4,252) (18,779)
Proceeds from sale of property, plant and
equipment......................................... 90,271 7,031
Decrease in net investment hedges.................. 18,878 1,575
Other, net......................................... 56 372
--------- ---------
Net cash provided by (used for) investing
activities.................................... 104,953 (9,801)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt........... 290,742 353
Repayments of long-term debt....................... (539,498) (58,505)
Net increase (decrease) in short-term borrowings... (2,420) 40,360
Other, net......................................... -- (36)
--------- ---------
Net cash used for financing activities......... (251,176) (17,828)
--------- ---------
Effect of exchange rate changes on cash.............. (936) (2,909)
--------- ---------
Net increase (decrease) in cash and cash
equivalents......................................... (86,857) 13,089
Beginning cash and cash equivalents.................. 192,816 84,565
--------- ---------
Ending cash and cash equivalents..................... $ 105,959 $ 97,654
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest......................................... $ 40,702 $ 34,599
Income taxes..................................... 13,898 31,707
Restructuring initiatives........................ 84,388 60,472
|
The accompanying notes are an integral part of these financial statements.
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Preparation of Financial Statements
The unaudited consolidated financial statements of Levi Strauss & Co. and subsidiaries ("LS&CO." or "Company") are prepared in conformity with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments necessary for a fair presentation of the financial position and operating results for the periods presented have been included. All such adjustments are of a normal recurring nature. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the annual financial report of LS&CO. for the year ended November 28, 1999.
The consolidated financial statements include the accounts of LS&CO. and its subsidiaries. All inter-company transactions have been eliminated. Management believes that, along with the following information, the disclosures are adequate to make the information presented herein not misleading. Certain prior year amounts have been reclassified to conform to the current presentation. The results of operations for the three months ended February 27, 2000 may not be indicative of the results to be expected for the year ending November 26, 2000.
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). In June 1999, the FASB delayed the effective date of SFAS 133 to fiscal years beginning after June 15, 2000. The Company will adopt SFAS 133 the first day of fiscal year 2001. SFAS 133 establishes accounting and reporting standards for derivative instruments including certain derivative instruments embedded in other contracts, and for hedging activities. In summary, SFAS 133 requires all derivatives to be recognized as assets or liabilities at fair value. Fair value adjustments are made either through earnings or equity, depending upon the exposure being hedged and the effectiveness of the hedge. The Company has not yet quantified all effects of adopting SFAS 133 on its financial statements. However, the adoption of SFAS 133 could increase volatility in earnings and other comprehensive income or result in certain changes in the Company's business practices. The Company currently has an implementation team in place that is determining the method of implementation and evaluating all effects of adopting SFAS 133.
Note 2: Comprehensive Income
The following is a summary of the components of total comprehensive income
(loss), net of related income taxes:
Three Months Ended
-------------------------
February 27, February 28,
2000 1999
------------ ------------
(Dollars in Thousands)
Net income (loss).................................. $65,159 $(237,240)
Other comprehensive income:
Foreign currency translation adjustments........... 3,831 31,501
------- ---------
Total comprehensive income (loss)................ $68,990 $(205,739)
======= =========
|
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
Note 3: Excess Capacity/Restructuring Reserves
North America Plant Closures
In view of declining sales, the need to bring manufacturing capacity in line with sales projections and the need to reduce costs, the Company decided to close some of its owned and operated production facilities in North America starting in 1997. The Company announced in 1997 the closure of ten manufacturing facilities and a finishing center in the U.S. which were closed during 1998 and displaced approximately 6,400 employees. The table below displays the activity and liability balances of this reserve.
In 1998, the Company announced the closure of two more finishing centers in the U.S. that were closed during 1999 and displaced approximately 990 employees. The table below displays the activity and liability balances of this reserve.
The Company announced in February 1999 plans to close 11 manufacturing facilities in North America and the displacement of approximately 5,900 employees that resulted in an initial charge of $394.1 million. The 11 manufacturing facilities were closed during 1999 and as of February 27, 2000, approximately 5,880 employees have been displaced. The table below displays the activity and liability balances of this reserve.
1997 North America Plant Closures
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- --------
(Dollars in Thousands)
Severance and employee benefits................... $ 8,790 $ (3,903) $ 4,887
Asset write-offs.................................. 10,655 (1,826) 8,829
Other restructuring costs......................... 1,913 (105) 1,808
-------- -------- --------
Total........................................... $ 21,358 $ (5,834) $ 15,524
======== ======== ========
1998 North America Plant Closures
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- --------
(Dollars in Thousands)
Severance and employee benefits................... $ 2,683 $ (564) $ 2,119
Asset write-offs.................................. 9,713 (3,537) 6,176
Other restructuring costs......................... 1,193 (55) 1,138
-------- -------- --------
Total........................................... $ 13,589 $ (4,156) $ 9,433
======== ======== ========
1999 North America Plant Closures
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- --------
(Dollars in Thousands)
Severance and employee benefits................... $109,755 $(23,878) $ 85,877
Asset write-offs.................................. 37,563 (5,207) 32,356
Other restructuring costs......................... 28,526 (840) 27,686
-------- -------- --------
Total........................................... $175,844 $(29,925) $145,919
======== ======== ========
|
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
Corporate Reorganization Initiatives
Starting in 1998, the Company instituted various overhead reorganization initiatives to reduce overhead costs and consolidate operations. The reorganization initiative instituted in 1998 displaced approximately 770 employees as of February 27, 2000. The table below displays the activity and liability balances of this reserve.
During the fourth quarter of 1999, the Company instituted an overhead reorganization initiative that was estimated to displace approximately 930 employees. As of February 27, 2000, approximately 360 employees were displaced. The table below displays the activity and liability balances of this reserve.
1998 Corporate Reorganization Initiatives
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- -------
(Dollars in Thousands)
Severance and employee benefits.................... $ 3,204 $ (1,908) $ 1,296
Asset write-offs................................... 3,044 -- 3,044
Other restructuring costs.......................... 6,412 (173) 6,239
------- -------- -------
Total............................................ $12,660 $ (2,081) $10,579
======= ======== =======
1999 Corporate Reorganization Initiatives
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- -------
(Dollars in Thousands)
Severance and employee benefits.................... $43,550 $(23,505) $20,045
Other restructuring costs.......................... 1,680 (254) 1,426
------- -------- -------
Total............................................ $45,230 $(23,759) $21,471
======= ======== =======
|
Europe Reorganization and Plant Closures
In 1998, the Company announced plans to close two manufacturing and two finishing facilities, and reorganize operations throughout Europe, displacing approximately 1,650 employees. These plans were prompted by decreased demand for denim jeans products and a resulting over-capacity in the Company's European owned and operated plants. The production facilities were closed by the end of 1999 and as of February 27, 2000, approximately 1,630 employees were displaced. The table below displays the activity and liability balances of this reserve.
In conjunction with the above plans in Europe, the Company announced in September 1999 plans to close a production facility, and reduce capacity at a finishing facility in the United Kingdom with an estimated displacement of 960 employees. The production facility closed in December 1999 and as of February 27, 2000, approximately 810 employees have been displaced. The table below displays the activity and liability balances of this reserve.
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
1998 Europe Reorganization and Plant Closures
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- -------
(Dollars in Thousands)
Severance and employee benefits.................... $10,653 $ (4,233) $ 6,420
Asset write-offs................................... 3,396 (1,706) 1,690
------- -------- -------
Total............................................ $14,049 $ (5,939) $ 8,110
======= ======== =======
1999 Europe Reorganization and Plant Closures
Balance Balance
11/28/99 Reductions 2/27/00
-------- ---------- -------
(Dollars in Thousands)
Severance and employee benefits.................... $38,413 $(23,818) $14,595
Asset write-offs................................... 4,474 (29) 4,445
Other restructuring costs.......................... 2,012 (1,152) 860
------- -------- -------
Total............................................ $44,899 $(24,999) $19,900
======= ======== =======
|
Note 4: Credit Facility Agreements, Equipment Financing, Receivables Securitization Financing and Interest Rate Swaps
2000 Credit Facility Agreements
On January 31, 2000 the Company amended three of its credit facility agreements and entered into one new agreement. The Company amended its credit facility agreements and entered into one new agreement to reflect its current financial position and extend maturity dates. The new financing package consists of four separate agreements: (1) a new $450.0 million bridge loan to fund working capital and support letters of credit, foreign exchange contracts and derivatives, (2) an amended $300.0 million revolving credit facility, extending the existing bridge facility, (3) an amended $545.0 million 364-day credit facility, and (4) an amended $584.0 million 5-year credit facility. Simultaneously with entering into these agreements, the Company terminated a domestic receivables-backed securitization financing.
All four facilities are secured by domestic receivables, domestic inventories, certain domestic equipment, trademarks, other intellectual property, 100% of the stock in domestic subsidiaries, 65% of the stock of certain foreign subsidiaries and other assets. The maturity date for all credit facilities is January 31, 2002. Borrowings under the bank credit facilities bear interest at LIBOR or the agent bank's base rate plus an incremental borrowing spread. For the bridge facility, the spread is 3.00% over LIBOR or 1.75% over the base rate. For each of the three amended facilities, the spread is 3.25% over LIBOR or 2.00% over the base rate.
In addition, if by February 1, 2001 we have not completed one or more private or public capital-raising transactions yielding net proceeds to us of at least $300.0 million which have been used to reduce commitments under our bank credit facilities, we will be required to pay our lenders an additional borrowing spread of 1.00% on outstanding borrowings under our bank credit facilities, plus a one-time additional fee of 2.00% of total commitments as of January 31, 2001. Our borrowing spread will be increased by 0.25% quarterly until those capital-raising transactions are completed.
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
The credit agreements contain customary covenants restricting the Company's activities as well as those of its subsidiaries, including limitations on the Company's and its subsidiaries' ability to sell assets; engage in mergers; enter into operating leases or capital leases; enter into transactions involving related parties, derivatives or letters of credit; enter into intercompany transactions; incur indebtedness or grant liens or negative pledges on the Company's assets; make loans or other investments; pay dividends or repurchase stock or other securities; guaranty third party obligations; make capital expenditures; and make changes in the Company's corporate structure. The credit agreements also contain financial covenants that we must satisfy on an ongoing basis, including a maximum leverage ratio, a minimum coverage ratio and minimum consolidated EBITDA. The Company was in compliance with financial covenants required by the credit facility agreements as of February 27, 2000.
Customer Service Center Equipment Financing
In December 1999 the Company entered into a secured financing transaction consisting of a five-year credit facility secured by owned equipment at Customer Service Centers located in Nevada, Mississippi and Kentucky. The amount financed in December 1999 is $89.5 million, comprised of a $59.5 million tranche ("Tranche 1") and a $30.0 million tranche ("Tranche 2"). Borrowings under Tranche 1 have a fixed interest rate equal to the yield of a four-year Treasury note plus an incremental borrowing spread. Borrowings under Tranche 2 have a floating quarterly interest rate equal to the 90 day LIBOR plus an incremental borrowing spread based on the Company's leverage ratio at that time. Proceeds from the borrowings were used to reduce the commitment amounts of the credit facilities.
Receivables Securitization Agreements
In February 2000, several of the Company's European subsidiaries entered into receivable securitization financing agreements with several lenders. As of May 1, 2000, the subsidiaries were working with the lenders to operationalize certain reporting and other systems functions and, as such, have not made any borrowings under the facilities. Under these agreements, if operational matters are resolved and the facilities utilized, those subsidiaries may borrow up to $125.0 million. Borrowings would be collateralized by a security interest in the receivables of these subsidiaries. The maximum amount of permitted outstanding loans under the program would vary based upon the amount of eligible receivables as defined under the agreement. The Company would provide a limited guaranty to support borrowings under the agreements, consisting of a guaranty of performance by the subsidiaries of their servicing obligations and a guaranty of the collectibility of the receivables in an amount not to exceed 10% of the outstanding amount as of the termination date under the securitization agreements. Net borrowings under this securitization facility, if any, must be used to reduce the commitment levels under the Company's bank credit facilities. We expect that other of the Company's European subsidiaries may enter into the program during the next 12 months. The Company and its Japanese subsidiary are currently negotiating a similar receivables-backed securitization financing agreement which the Company expects to complete by July 2000.
Interest Rate Swaps
At February 27, 2000, the Company had interest rate swap transactions outstanding with a total notional principal amount of $425.0 million, to convert floating rate liabilities to fixed rates and $375.0 million to convert fixed rate liabilities to floating rates. These swap transactions effectively change the Company's interest rates on part of its debt to fixed rates that range from 6.25% to 7.0% and floating rates that range from 6.05% to 6.5%, depending on their maturities, the latest of which is in 2006.
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
The Company is exposed to credit loss in the event of nonperformance by the counterparties to the interest swap transactions; however, the Company believes these counterparties are creditworthy financial institutions and does not anticipate nonperformance.
In addition, the Company is exposed to interest rate risk. It is the Company's policy and practice to use derivative instruments, primarily interest rate swaps, to manage and reduce interest rate exposures.
Note 5: Commitments and Contingencies
Foreign Exchange Contracts
At February 27, 2000, the Company had U.S. dollar forward currency contracts to sell the aggregate equivalent of $753.5 million and to buy the aggregate equivalent of $419.9 million of various foreign currencies. The Company also had an Euro forward currency contract to buy the equivalent of $3.9 million British Pounds. Additionally at February 27, 2000, the Company had option contracts to sell the aggregate equivalent of $955.6 million and to buy the aggregate equivalent of $590.5 million of various foreign currencies. These contracts are at various exchange rates and expire at various dates through August 2000.
The Company's market risk is generally related to fluctuations in the currency exchange rates. The Company is exposed to credit loss in the event of nonperformance by the counterparties to the foreign exchange contracts; however the Company believes these counterparties are creditworthy financial institutions and does not anticipate nonperformance.
Note 6: Fair Value of Financial Instruments
The estimated fair value of certain financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
The carrying amount and estimated fair value (in each case including accrued interest) of the Company's financial instrument assets and (liabilities) at February 27, 2000 and November 28, 1999 are as follows:
February 27, 2000 November 28, 1999
------------------------ ------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
----------- ----------- ----------- -----------
(Dollars in Thousands)
Debt instruments:
Credit facilities........ $(1,298,119) $(1,298,119) $(1,424,449) $(1,424,449)
Yen-denominated eurobond
placement............... (182,663) (72,072) (189,274) (148,113)
Notes offering........... (812,707) (509,000) (798,640) (626,307)
Receivables-backed
securitization.......... -- -- (215,836) (215,836)
Industrial development
revenue refunding bond.. (10,028) (10,028) (10,030) (10,030)
Customer service center
equipment financing..... (91,269) (91,269) -- --
Currency and interest rate
hedges:
Foreign exchange forward
contracts............... $ 23,622 $ 24,121 $ 16,972 $ 16,932
Foreign exchange option
contracts............... 9,476 8,806 7,806 2,288
Interest rate swap
contracts............... (990) (10,318) (2,224) (4,839)
|
LEVI STRAUSS & CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
(Unaudited)
Quoted market prices or dealer quotes are used to determine the estimated fair value of foreign exchange contracts, option contracts and interest rate swap contracts. Dealer quotes and other valuation methods, such as the discounted value of future cash flows, replacement cost, and termination cost have been used to determine the estimated fair value for long-term debt and the remaining financial instruments. The carrying values of cash and cash equivalents, trade receivables, current assets, current and non-current maturities of long-term debt, short-term borrowings and taxes approximate fair value.
The fair value estimates presented herein are based on information available to the Company as of February 27, 2000 and November 28, 1999. Although the Company is not aware of any factors that would substantially affect the estimated fair value amounts, such amounts have not been updated since those dates and, therefore, the current estimates of fair value at dates subsequent to February 27, 2000 and November 28, 1999 may differ substantially from these amounts. Additionally, the aggregation of the fair value calculations presented herein do not represent and should not be construed to represent the underlying value of the Company.
Note 7: Business Segment Information
Asia All
Americas Europe Pacific Other Consolidated
-------- -------- ------- ------- ------------
(Dollars in Thousands)
Three Months Ended February 27,
2000:
Net sales..................... $690,528 $303,004 $88,905 $ -- $1,082,437
Earnings contribution......... 76,980 81,009 13,410 -- 171,399
Interest expense.............. -- -- -- 56,782 56,782
Corporate and other (income)
expense, net................. -- -- -- 14,374 14,374
Income before income taxes.... -- -- -- -- 100,243
Three Months Ended February 28,
1999:
Net sales..................... $819,823 $376,975 $81,524 $ -- $1,278,322
Earnings contribution......... 65,941 96,084 9,956 -- 171,981
Excess capacity/restructuring
charge....................... -- -- -- 394,105 394,105
Interest expense.............. -- -- -- 43,157 43,157
Corporate and other (income)
expense, net................. -- -- -- 111,290 111,290
Loss before income taxes...... -- -- -- -- (376,571)
|
Levi Strauss & Co.
$350,000,000
aggregate principal amount of
6.80% Notes due 2003
and
$450,000,000
aggregate principal amount of
7.00% Notes due 2006
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") provides that a corporation has the power to indemnify its officers, directors, employees and agents (or persons serving in such positions in another entity at the request of the corporation) against expenses, including attorneys' fees, judgments, fines or settlement amounts actually and reasonably incurred by them in connection with the defense of any action by reason of being or having been directors or officers, if such person shall have acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation (and, with respect to any criminal action, had no reasonable cause to believe the person's conduct was unlawful), except that if such action shall be by or in the right of the corporation, no such indemnification shall be provided as to any claim, issue or matter as to which such person shall have been judged to have been liable to the corporation unless and to the extent that the Court of Chancery of the State of Delaware, or another court in which the suit was brought, shall determine upon application that, in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity. The Registrant's Certificate of Incorporation provides that the Registrant will indemnify its officers and directors to the fullest extent permitted by Delaware law.
As permitted by Section 102 of the DGCL, the Registrant's Certificate of
Incorporation provides that no director shall be liable to the Registrant or
its stockholders for monetary damages for any breach of fiduciary duty as a
director other than (i) for breaches of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits.
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 Bylaws of the Registrant.
4.1 Indenture, dated of November 6, 1996 between the Registrant and
Citibank, N.A., relating to the 6.80% Notes due 2003 and the 7.0%
Notes due 2006.
4.2 Fiscal Agency Agreement, dated as of November 21, 1996, between the
Registrant and Citibank, N.A., relating to (Yen)20 billion 4.25%
bonds due 2016.
4.3 Lease Intended as Security, dated as of December 3, 1996, among the
Registrant, First Security Bank, National Association as Agent and
named lessors.
9 Voting Trust Agreement, dated as of April 15, 1996, among LSAI
Holding Corp. (predecessor of the Registrant), Robert D. Haas, Peter
E. Haas, Sr., Peter E. Haas, Jr., F. Warren Hellman, as voting
trustees, and the stockholders.
10.1 Stockholders Agreement, dated as of April 15, 1996, among LSAI
Holding Corp. (predecessor of the Registrant) and the stockholders.
10.2 Bridge Credit Agreement, dated as of January 31, 2000, among the
Registrant, the Financial Institutions party thereto and Bank of
America, N.A.
10.3 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.4 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
|
II-1
10.5 Limited Waiver, dated as of February 29, 2000, between the
Registrant and Bank of America, N.A.
10.6 Amended and Restated 1997 364-Day Credit Agreement among the
Registrant, the Lenders party thereto and Bank of America, N.A.
10.7 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.8 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.9 Amended and Restated 1999 180-Day Credit Agreement among the
Registrant, the Lenders parties thereto and Bank of America, N.A.
10.10 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.11 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.12 Limited Waiver, dated as of February 29, 2000, between the
Registrant and Bank of America, N.A.
10.13 1997 Second Amended and Restated Credit Agreement, dated as of
January 31, 2000, among the Registrant, the Lenders parties thereto
and Bank of America, N.A.
10.14 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.15 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.16 Form of European Receivables Agreement, dated February 2000, between
the Registrant and Tulip Asset Purchase Company B.V.
10.17 Form of European Servicing Agreement, dated January 2000, between
Registrant and Tulip Asset Purchase Company B.V.
10.18 Supply Agreement, dated as of March 30, 1992, and First Amendment to
Supply Agreement, between the Registrant and Cone Mills
Corporation.
10.19 Home Office Pension Plan.
10.20 Employee Investment Plan.
10.21 Capital Accumulation Plan.
10.22 Special Deferral Plan.
10.23 Key Employee Recognition and Commitment Plan.
10.24 Global Success Sharing Plan.
10.25 Deferred Compensation Plan for Executives.
10.26 Deferred Compensation Plan for Outside Directors.
10.27 Excess Benefit Restoration Plan.
10.28 Supplemental Benefit Restoration Plan.
10.29 Leadership Shares Plan.
|
II-2
10.30 Annual Incentive Plan.
10.31 Long-Term Incentive Plan.
10.32 Long-Term Performance Plan.
10.33 Employment Agreement, dated as of September 30, 1999, between the
Registrant and Philip Marineau.
10.34 Supplemental Executive Retirement Agreement, dated as of January 1,
1998, between the Registrant and Gordon Shank.
10.35 Form of Indemnification Agreement, dated as of November 30, 1995,
for members of the Special Committee of Board of Directors created
by the Board of Directors on November 30, 1995.
12 Statements re: Computation of Ratios.
21 Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen LLP.
24 Power of Attorney (contained in the signature pages).
27.1 Financial Data Schedule.
27.2 Financial Data Schedule.
|
(b) Financial Statement Schedules.
Schedule II Reserves
All other schedules have been omitted because they are inapplicable, not required or the information is included in the financial statements or notes thereto.
Item 22. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change in such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof.
II-3
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in the documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(d) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on April 25, 2000.
Levi Strauss & Co.
/s/ William B. Chiasson
By: _________________________________
William B. Chiasson
Senior Vice President and Chief
Financial Officer
|
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William B. Chiasson, Joseph M. Maurer and Jay A. Mitchell, and each of them, his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this Registration Statement relates, or other instruments he deems necessary or appropriate, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities on April 25, 2000.
Signature Title
--------- -----
/s/ Robert D. Haas Chairman
______________________________________
Robert D. Haas
/s/ Philip A. Marineau Director, President and Chief Executive Officer
______________________________________
Philip A. Marineau
/s/ Peter E. Haas, Sr. Director
______________________________________
Peter E. Haas, Sr.
/s/ Angela Glover Blackwell Director
______________________________________
Angela Glover Blackwell
/s/ Robert E. Friedman Director
______________________________________
Robert E. Friedman
/s/ Tully M. Friedman Director
______________________________________
Tully M. Friedman
/s/ Gary W. Grellman Vice President and Controller (Principal Accounting Officer)
______________________________________
Gary W. Grellman
|
II-5
Signature Title
--------- -----
/s/ William B. Chiasson Senior Vice President and Chief Financial Officer
______________________________________
William B. Chiasson
/s/ Peter A. Georgescu Director
______________________________________
Peter A. Georgescu
/s/ Peter E. Haas, Jr. Director
______________________________________
Peter E. Haas, Jr.
/s/ Walter J. Haas Director
______________________________________
Walter J. Haas
/s/ F. Warren Hellman Director
______________________________________
F. Warren Hellman
Director
______________________________________
Patricia Salas Pineda
/s/ T. Gary Rogers Director
______________________________________
T. Gary Rogers
/s/ G. Craig Sullivan Director
______________________________________
G. Craig Sullivan
/s/ James C. Gaither Director
______________________________________
James C. Gaither
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II-6
SCHEDULE II
LEVI STRAUSS & CO. AND SUBSIDIARIES
RESERVES
(Dollars in Thousands)
Balance at Additions
Allowance for Beginning Charged to Deductions Balance at
Doubtful Accounts of Period Expenses to Reserves End of Period
----------------- ---------- ---------- ----------- -------------
November 28, 1999 $39,987 $5,396 $15,366 $30,017
======= ====== ======= =======
November 29, 1998 31,620 9,762 1,395 39,987
======= ====== ======= =======
November 30, 1997 32,761 9,428 10,569 31,620
======= ====== ======= =======
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EXHIBIT INDEX
Exhibits
--------
3.1 Restated Certificate of Incorporation of the Registrant.
3.2 Bylaws of the Registrant.
4.1 Indenture, dated of November 6, 1996 between the Registrant and
Citibank, N.A., relating to the 6.80% Notes due 2003 and the 7.0%
Notes due 2006.
4.2 Fiscal Agency Agreement, dated as of November 21, 1996, between the
Registrant and Citibank, N.A., relating to (Yen)20 billion 4.25%
bonds due 2016.
4.3 Lease Intended as Security, dated as of December 3, 1996, among the
Registrant, First Security Bank, National Association as Agent and
named lessors.
9 Voting Trust Agreement, dated as of April 15, 1996, among LSAI
Holding Corp. (predecessor of the Registrant), Robert D. Haas, Peter
E. Haas, Sr., Peter E. Haas, Jr., F. Warren Hellman, as voting
trustees, and the stockholders.
10.1 Stockholders Agreement, dated as of April 15, 1996, among LSAI
Holding Corp. (predecessor of the Registrant) and the stockholders.
10.2 Bridge Credit Agreement, dated as of January 31, 2000, among the
Registrant, the Financial Institutions party thereto and Bank of
America, N.A.
10.3 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.4 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.5 Limited waiver, dated as of February 29, 2000, between the Registrant
and Bank of America, N.A.
10.6 Amended and Restated 1997 364-Day Credit Agreement among the
Registrant, the Lenders party thereto and Bank of America, N.A.
10.7 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.8 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.9 Amended and Restated 1999 180-Day Credit Agreement among the
Registrant, the Lenders parties thereto and Bank of America, N.A.
10.10 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.11 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
10.12 Limited Waiver, dated as of February 29, 2000, between the Registrant
and Bank of America, N.A.
10.13 1997 Second Amended and Restated Credit Agreement, dated as of
January 31, 2000, among the Registrant, the Lenders parties thereto
and Bank of America, N.A.
10.14 Pledge and Security Agreement, dated as of January 31, 2000, between
the Registrant and Bank of America, N.A.
10.15 Guaranty, dated as of January 31, 2000, between certain subsidiaries
of the Registrant and Bank of America, N.A.
|
Exhibits
--------
10.16 Form of European Receivables Agreement, dated February 2000, between
the Registrant and Tulip Asset Purchase Company B.V.
10.17 Form of European Servicing Agreement, dated January 2000, between the
Registrant and Tulip Asset Purchase Company B.V.
10.18 Supply Agreement, dated as of March 30, 1992, and First Amendment to
Supply Agreement, between the Registrant and Cone Mills Corporation.
10.19 Home Office Pension Plan.
10.20 Employee Investment Plan.
10.21 Capital Accumulation Plan.
10.22 Special Deferral Plan.
10.23 Key Employee Recognition and Commitment Plan.
10.24 Global Success Sharing Plan.
10.25 Deferred Compensation Plan for Executives.
10.26 Deferred Compensation Plan for Outside Directors.
10.27 Excess Benefit Restoration Plan.
10.28 Supplemental Benefit Restoration Plan.
10.29 Leadership Shares Plan.
10.30 Annual Incentive Plan.
10.31 Long-Term Incentive Plan.
10.32 Long-Term Performance Plan.
10.33 Employment Agreement, dated as of September 30, 1999 between the
Registrant and Philip Marineau.
10.34 Supplemental Executive Retirement Agreement, dated as of January 1,
1998 between the Registrant and Gordon Shank.
10.35 Form of Indemnification Agreement, dated as of November 30, 1995, for
members of the Special Committee of Board of Directors created by
the Board of Directors on November 30, 1995.
12 Statements re: Computation of Ratios.
21 Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen LLP.
24 Power of Attorney (contained in the signature pages).
27.1 Financial Data Schedule.
27.2 Financial Data Schedule.
|
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
LEVI STRAUSS & CO.
FIRST. The name of the Corporation is Levi Strauss & Co. (the "Corporation").
SECOND. The address of the Corporation's registered office in the State of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle. Its registered agent at that address is The Prentice-Hall Corporation System, Inc.
THIRD. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
FOURTH.
The Corporation shall be authorized to issue 280,000,000 shares of capital stock, of which 270,000,000 shares shall be shares of common stock, par value $0.01 per share ("Common Stock") and 10,000,000 shares shall be shares of preferred stock, par value $1.00 per share ("Preferred Stock").
Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the "Board") is authorized, subject to any limitation prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and, by filing a Certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitation or restrictions thereof, including, without limitation, the dividend, conversion and voting rights, the redemption rights and terms, and the liquidation preferences, if any, and to increase or decrease the number of shares of Preferred Stock of any such series (but not below the number of shares of Preferred Stock thereof then outstanding).
Subject to the preferences of any shares of Preferred Stock issued
pursuant to Section B of this Article Fourth, the holders of shares of Common
Stock shall be entitled: (i) to receive such dividends as may be declared by the
Board; (ii) to receive, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, all of the remaining
assets of the Corporation available for distribution to the stockholders,
ratably in proportion to the number of shares of Common Stock held by them; and
(iii) to vote on all matters at all meetings of the stockholders of record of
the Corporation and shall be entitled to one vote for each share of Common Stock
held of record by such stockholder. Shares of Common Stock may be issued by the
Board for such consideration, having a value of not less than the par value
thereof, as is determined by the Board.
From the time of execution of the Stockholders' Agreement dated as of April 15, 1996 by and among LSAI Holding Corp. and its stockholders, (as such agreement may be amended from time to time, the "Stockholders' Agreement"), and for so long as such agreement remains in effect, any sale, assignment, gift, pledge or encumbrance or other transfer (each, a "Transfer") of capital stock of the Corporation made in violation of the Stockholders' Agreement shall be null and void. The Corporation shall not register, recognize or give effect to any such Transfer but rather shall continue to recognize the transferor on the books and records of the Corporation as the holder of record of any such shares.
FIFTH. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Any amendment or repeal of this Article Fifth shall not adversely affect any right or protection of a director of the Corporation existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.
SIXTH. Each person who is or was or had agreed to become a director or officer of the Corporation, or each such person who is or was serving or who had agreed to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of the Corporation or as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, in accordance with the Bylaws of the Corporation, to the fullest extent permitted from time to time by the General Corporation Law of the State of Delaware as
the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws as presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than that provided in this Article Sixth. Any amendment or repeal of this Article Sixth shall not adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.
SEVENTH. In exercising the powers granted to it by law, this Certificate of Incorporation, and the Bylaws, the members of the Board of Directors may consider, and act upon their beliefs concerning, the Corporation's long-term financial and other interests, and may take into account, among other factors, the social, economic and legal effects of the Corporation's actions upon all constituencies having a relationship with the Corporation, including without limitation, its stockholders, employees, customers, suppliers, consumers and the community at large, so long as all actions and decisions reflecting such considerations are reasonably calculated to be in the interests of the stockholders of the Corporation.
EIGHTH. The Board is expressly authorized to make, alter, or repeal the Bylaws of the Corporation, except for any Bylaw which specifically prohibits such alteration or repeal without the approval of the stockholders of the Corporation.
NINTH. The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute. All rights conferred upon the Corporation's stockholders are granted subject to this reservation.
* * *
Filed with the Secretary of State of Delaware: October 1, 1996
EXHIBIT 3.2
The registered office of the Corporation shall be in the City of Dover, State of Delaware.
The Corporation may also have offices at such other places, both within or without the State of Delaware, as the Board of Directors of the Corporation (the "Board") may from time to time determine or the business of the Corporation may require.
An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board shall fix by resolution.
Special meetings of the stockholders, may be called by the Board, the Chairman of the Board or the President and shall be called by the President or Secretary at the request in writing of the holders of a Majority of the shares of capital stock of the Corporation then entitled to vote generally in an election for directors and shall be held at such place, on such date, and at such time as they or he or she shall fix. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.
Written notice of the place, date, and time of all meetings of the stockholders shall be given, not less than ten nor more than sixty days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the General Corporation Law of the State of Delaware or the Certificate of Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might
have been transacted at the original meeting. Notice of time, place and purpose of any meeting of stockholders may be waived in writing either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person or by proxy. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
At any meeting of the stockholders, the holders of a majority of all of the shares of the stock issued and outstanding and entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law.
If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.
If a notice of any adjournment of a special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that the meeting will be held with those present constituting a quorum, then except as otherwise required by law, those present at such subsequent meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting.
Such person as the Board may have designated or, in the absence of such a person, the chief executive officer of the Corporation or, in the designee's or the chief executive officer's absence, such person as may be chosen by the holders of a majority of the shares issued and outstanding and entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints.
The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order.
At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting.
Each stockholder shall have one vote for every share of stock entitled to vote which is registered in his or her name on the record date for the meeting, except as otherwise provided herein or required by law.
All voting, including on the election of directors but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefore by a
stockholder entitled to vote or his or her proxy, a stock vote shall be taken, and provided, further, that the chairman of the meeting may require that ballots be cast for such vote. Every stock vote shall be taken by ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast.
A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held.
The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Notice of the taking of corporate action by written consent shall be given to those stockholders who have not consented in writing in accordance with applicable law.
The number of directors who shall constitute the Board shall be 12, or such other number as may be designated by the Board from time to time in accordance with these By-laws. Each director shall be elected for a term of one year in accordance with these Bylaws and shall serve until his or her successor is elected and qualified, except as otherwise provided herein or required by law. Any person who is elected a director of the Corporation hall be deemed to have resigned automatically as a director, and shall no longer be a director, effective upon such person's seventy-second (72nd) birthday. Notwithstanding the foregoing, the Board may, in its discretion, waive this requirement and expressly authorize a director to remain a director beyond such person's seventy-second (72nd) birthday.
Vacancies created by such resignations shall be filled in the manner provided in
Section 2 of this Article III for the filling of vacancies caused by other
manner prove reasons.
Whenever the authorized number of directors is increased between annual meetings of the stockholders, a majority of the directors then in office shall have the power to elect such new directors for the balance of a term and until their successors are elected and qualified. Any decrease in the authorized number of directors shall not become effective until the expiration of the term of the directors then in office unless, at the time of such decrease, there shall be vacancies on the board which are being eliminated by the decrease.
Notwithstanding the foregoing, whenever the holders of any series of preferred stock issued by the Corporation shall have the right, voting separately as a class, to elect directors at an annual or a special meeting of stockholders, the then authorized number of directors shall be increased by the number of the additional directors so to be elected, and at such meeting the holders of such preferred stock shall be entitled to elect such additional directors. Any director so elected shall hold office until his or her right to hold such office terminates pursuant to the provisions of such preferred stock.
If the office of any director becomes vacant by reason of death, resignation, disqualification, removal or other cause, a majority of the directors remaining in office, although less than a quorum, may elect a successor for the unexpired term and until his or her successor is elected and qualified.
Subject to the rights of the holders of any series of Preferred Stock with respect to such series of Preferred Stock, any director, or the entire Board, may be removed from office at any time with or without cause, by the affirmative vote of the holders of a majority of the shares of capital stock of the Corporation then entitled to vote in an election for directors.
Regular meetings of the Board shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board and publicized among all directors. A notice of each regular meeting shall not be required.
Special meetings of the Board may be called by one-third of the directors then in office (rounded up to the nearest whole number) or by the chief executive officer and shall be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each such special meeting shall be given each director by whom it is not waived by mailing written notice not less than three days before the meeting or by telegraphing the same not less than twenty-four hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.
The business and affairs of the Corporation shall be managed under the direction of the Board. In addition to the powers and authorities expressly conferred upon them by these By-laws, the Board may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws required to be exercised or done by the stockholders. Directors may participate in task forces and other activities with stockholders, employees and other stakeholders.
Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone, video conference or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.
At any meeting of the Board, a majority of the total number of the entire Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof
At any meeting of the Board, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present at any meeting at which a quorum is present, except as otherwise provided herein or required by law. Stockholders, members of management or other employees or other persons may attend all or any part of a meeting, at the Board's invitation and discretion. The following actions shall not be taken by the Corporation or the Board without the approval of at least two-thirds of those directors present at a meeting at which a quorum is present:
(a) the declaration of dividends or distributions with respect to capital stock of the Corporation;
(b) the purchase of the Corporation's Common Stock (other than as may be provided in any policy of the type contemplated by Section 9(c) of this Article 111);
(c) the adoption, termination or material modification of any estate tax repurchase policy of the Corporation, as such may be in place from time to time, which policy may contemplate, among other things, the repurchase by the Corporation of its securities from the estates of deceased stockholders to provide funds for payment of estate or similar taxes;
(d) the acquisition or disposition of assets with a fair market value in excess of One Hundred Fifty Million Dollars ($150,000,000.00) in one transaction or a series of related transactions;
(e) the employment or termination of the chief executive officer of the Corporation;
(f) the execution of a registration statement under the Securities Act of 1933 (or comparable law of any other jurisdiction) for a public offering of securities of the Corporation or any subsidiary;
(g) the dissolution or liquidation of the Corporation;
(h) the execution or performance of any merger agreement pursuant to which securities of the Corporation are issued, extinguished, or modified;
(i) the adoption of a resolution by the Board changing the size of the Board;
(j) the changing of the independent accountants of the Corporation;
(k) the calling by the Board of a special meeting of the stockholders of the Corporation;
(l) the waiver of any rights of the Corporation as successor to LSAI Holding Corp. under the Stockholders' Agreement dated as of April 15, 1996 by and among LSAI Holding Corp. and its stockholders (as such agreement may be amended from time to time, the "Stockholders' Agreement") or the approval of certain transfers of shares of common stock pursuant to the Stockholders' Agreement;
(m) the amendment or repeal of this Section 9 of Article III or of Article XI, or the addition to these By-laws of any provision inconsistent with this Section 9 of Article III or with Article XI.
Action may be taken by the Board without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board.
Directors, as such, may receive, pursuant to resolution of the Board, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board.
The Board, by a vote of a majority of the whole Board, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by
unanimous vote appoint another member of the Board to act at the meeting in the place of the absent or disqualified member.
Each committee may determine the procedural rules for meeting and conducting its business, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one- third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.
The officers of the Corporation shall be chosen by the Board and shall include a President, a Secretary, and a Treasurer. The Board may also appoint one or more Vice Presidents, Assistant Secretaries or Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem necessary. Any Vice President may be given such specific designation as may be determined from time to time by the Board. Any number of offices may be held by the same person, unless the Certificate of Incorporation or these By-laws otherwise provide.
The officers shall be elected annually by the Board at its organizational meeting following the annual meeting of the stockholders, and each officer shall hold office until the next annual election of officers and until his or her successor is elected and qualified, or until his or her death, resignation, or removal. Any officer may be removed at any time, with or without cause, by a vote of the majority of the whole Board, and any officer shall be deemed removed upon termination of such officer's employment with the Corporation or by any subsidiary for any reason. Any vacancy occurring in any office may be filled by the Board.
The Board from time to time shall fix the salaries of the following officers: the Chairman of the Board, the President, all Executive Vice Presidents and all Senior Vice Presidents.
The Chairman of the Board shall be the chief executive officer of the Corporation unless the President is designated the chief executive officer. The Chairman of the Board shall supervise generally the affairs of the Corporation, and shall exercise such other powers and perform such other duties as may be assigned to him or her by these Bylaws or by the Board. The Chairman of the Board shall preside at meetings of the stockholders and the Board. He or she shall be an ex-officio member of all standing committees of the Board.
The President shall be the chief operating officer of the Corporation unless otherwise designated by the Board. The President shall exercise such other powers and duties as may be assigned to him or her by these By-laws or by the Board.
Except where the signature of the President is required by law, each of the Vice Presidents shall have the same power as the President to sign certificates, contracts and other instruments of the Corporation. Any Vice President shall perform such other duties and may exercise such other powers as may from time to time be assigned to him or her by these By-laws, the Board or the President.
The Secretary shall: record, or cause to be recorded, in books provided for the purpose, minutes of the meetings of the stockholders, the Board, and all committees of the Board; see that all notices are duly given in accordance with the provisions of these Bylaws as required by law; be custodian of all corporate records (other than financial) and of the seal of the Corporation, and have authority to affix the seal to all documents requiring it and attest to the same; give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board; and, in general, shall perform all duties incident to the office of Secretary and such other duties as may, from time to time, be assigned to him or her by the Board or by the President. At the request of the Secretary, or in his or her absence or disability, any Assistant Secretary shall perform any of the duties of the Secretary and, when so acting, shall have all the powers and be subject to all the restrictions upon, the Secretary.
The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Treasurer shall cause the funds of the Corporation to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositories in the manner provided by resolution of the Board. He or she shall have such further powers and duties and shall be subject to such directions as may be granted or imposed upon him or her from time to time by the Board, the Chair-man of the Board or the President. At the request of the Treasurer, or in his or her absence or disability, the Assistant Treasurer may perform any of the duties of the Treasurer and, when so acting shall have all the powers of, and be subject to all the restrictions upon, the Treasurer. Except where the signature of the Treasurer is required by law, each of the Assistant Treasurers shall possess the same power as the Treasurer to sign all certificates, contracts, obligations, and other instruments of the Corporation.
The Board may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute any corporate instrument or document, or to sign the corporate name without limitation, except where otherwise provided by law, and such execution or signature shall be binding upon the Corporation. Unless otherwise specifically determined by the Board:
(a) formal contracts of the Corporation, promissory notes, indentures, deeds of trust, mortgages, real property leases and purchase and sale agreements, powers of attorney relating to trademark and any other matters, and other evidences of indebtedness of the Corporation, and corporate instruments or documents requiring the corporate seal (except for share certificates issued by the Corporation), and share certificates owned by the Corporation, shall be executed, signed, or endorsed by any of the Chairman of the Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer;
(b) checks drawn on banks or other depositories on funds to the credit of the Corporation, or in special accounts of the Corporation, shall be signed in such manner (which may be a facsimile signature) and by such person or persons as shall be authorized by the Board; and
(c) share certificates issued by the Corporation shall be signed (which may be a facsimile signature) jointly by (i) the chief executive officer and (ii) the Secretary or an Assistant Secretary.
The Board may, in its discretion, submit any contract or act for approval or ratification by the stockholders at any annual meeting of stockholders or at any special meeting of stockholders called for that purpose. Any contract or act which shall be approved or ratified by the holders of a majority of the voting power of the Corporation represented at such meeting shall be as valid and binding upon the Corporation as though approved or ratified by each and every stockholder of the Corporation, unless a greater vote is required by law for such purpose.
All stock of other corporations owned or held by the Corporation for itself or for other par ties in any capacity shall be voted, and all proxies with respect thereto shall be executed, by the person authorized to do so by resolution of the Board or, in the absence of such authorization, by the President, any of the Vice Presidents, the Secretary or any Assistant Secretary.
The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe. The shares of the stock of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by his or her attorney, upon surrender for cancellation of certificates for at least the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require.
The certificates of stock shall be signed, countersigned and registered in such manner as the Board may by resolution prescribe, which resolution may permit all or any of the signatures on such certificates to be in facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.
No certificate for shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed or stolen, except on production of such evidence of such loss, destruction or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board or the Secretary may in its or such officer's discretion require.
For as long as that voting trust agreement among Robert D. Haas, Peter E. Haas, Sr., Peter E. Haas, Jr., and F. Warren Hellman (the "Trustees") and certain holders of capital stock of the Corporation (the "Voting Trust Agreement") is in effect, shares of the Corporation's capital stock subject thereto and the voting trust certificates so representing (the "Voting Trust Certificates") are necessarily linked and cannot be transferred separately. Any transfer of Voting Trust Certificates shall be deemed to effect a transfer of the underlying shares of capital stock represented thereby, and any transfer of shares of capital stock with respect to which Voting Trust Certificates have been issued shall be deemed to effect a transfer of such Voting Trust Certificates.
The Board may fix a record date, which shall not be more than sixty nor less than ten days before the date of any meeting of stockholders, nor more than sixty days prior to the time for the other action hereinafter described, as of which there shall be determined the stockholders who are entitled: to notice of or to vote at any meeting of stockholders or any adjournment thereof; to express consent to corporate action in writing without a meeting; to receive payment of any dividend or other distribution or allotment of any rights; or to exercise any rights with respect to any change, conversion or exchange of stock of with respect to any other lawful action.
The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Delaware.
In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations and practices as the Corporation may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.
The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Corporation may establish.
Except as otherwise specifically provided herein or required by law, all notices required to be given under these By-laws to any stockholder, director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, by sending such notice by prepaid telegram or mailgram, or by telecopier (provided that receipt is confirmed by telephone). Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails or by telegram or mailgram, shall be the time of the giving of the notice.
A written waiver of any notice, signed by a stockholder, director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.
Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation (including, without limitation, any subsidiary) or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment),
To obtain indemnification under this Article, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pursuant to the first sentence of this Section 2, a determination, if required by applicable law, with respect to the claimant's entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (1) by the Board by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the claimant, or (iii) if such Directors so direct, by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the Board unless there shall have occurred within two years prior to the date of the commencement of the proceeding for which indemnification is claimed a change in control of the Corporation, in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the Board. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 10 days after such determination.
If a claim under Section I of this Article is not paid in full by the Corporation within thirty days after a written claim pursuant to Section 2 of this Article has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its Board, Independent Counsel- or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.
If a determination shall have been made pursuant to Section 2 of this
Article that the claimant is entitled to indemnification, the Corporation shall
be bound by such determination in any Judicial proceeding commenced pursuant to
Section 3 of this Article.
The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to Section 3 of this Article that the procedures and presumptions of this Article are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this Article.
The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-laws, agreement, vote of stockholders or Disinterested Directors or otherwise. No repeal or modification of this Article shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification.
The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware. To the extent that the Corporation maintains any policy or policies providing such insurance, each such director or officer, and each such agent or employee to which rights to indemnification have been granted as provided in Section 8 of this Article, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent.
The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.
If any provision or provisions of this Article shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this Article (including, without limitation, each portion of any paragraph of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Article (including, without limitation, each such portion of any paragraph of this Article containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
For purposes of this Article, "Independent Counsel" means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant's rights under this Article.
Any notice, request or other communication required or permitted to be given to the Corporation under this Article shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.
In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these By-laws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof.
The Board may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. Duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.
Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation, including reports made to the Corporation by any of its officers, by an independent certified public accountant, by an appraiser or by any other professional person or expert selected with reasonable care.
Each fiscal year of the Corporation shall end on the last Sunday of November, and the subsequent fiscal year shall begin on the Monday thereafter, unless the Board, the Chairman of the Board or the President of the Corporation shall designate a different period.
In applying any provision of these By-laws which require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
These By-laws may be amended or repealed, or new By-laws may be adopted, by the holders of a majority of the shares of capital stock then entitled to vote in an election for directors or by the Board at any regular or special meeting of the stockholders or the Board, or by written consent in lieu thereof.
* * * *
This is to certify that the foregoing is a true and correct copy of the By-laws of Levi Strauss & Co. as of October 1, 1996.
EXHIBIT 4.1
LEVI STRAUSS & CO.
ISSUER
AND
CITIBANK, N.A.
TRUSTEE
INDENTURE
Dated as of November 6, 1996
U.S. $350,000,000
6.80% NOTES
DUE NOVEMBER 1, 2003
and
U.S. $450,000,000
7.00% NOTES
DUE NOVEMBER 1, 2006
TABLE OF CONTENTS
Page
Number
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
Section 1.1 Definitions.......................................................................... 1
Section 1.2 Compliance Certificates and Opinions; Form of Documents Delivered to Trustee......... 9
Section 1.3 Acts of Holders of Securities........................................................ 10
Section 1.4 Notices, Etc......................................................................... 12
Section 1.5 Notice to Holders of Securities; Waiver.............................................. 13
Section 1.6 Effect of Headings and Table of Contents............................................. 13
Section 1.7 Successors and Assigns............................................................... 13
Section 1.8 Separability Clause.................................................................. 13
Section 1.9 Benefits of Indenture................................................................ 13
Section 1.10 Governing Law........................................................................ 14
Section 1.11 Legal Holidays....................................................................... 14
Section 1.12 Conflict with Trust Indenture Act.................................................... 14
ARTICLE II
SECURITY FORMS
Section 2.1 Forms of Securities Generally........................................................ 14
Section 2.2 Form of Face of 6.80% Notes.......................................................... 16
Section 2.3 Form of Reverse of 6.80% Notes....................................................... 20
Section 2.4 Form of Trustee's Certificate of Authentication of 6.80% Notes....................... 22
Section 2.5 Form of Face of 7.00% Notes.......................................................... 22
Section 2.6 Form of Reverse of 7.00% Notes....................................................... 26
Section 2.7 Form of Trustee's Certificate of Authentication of 7.00% Notes....................... 28
ARTICLE III
THE SECURITIES
Section 3.1 Title and Terms...................................................................... 29
Section 3.2 Denominations........................................................................ 30
Section 3.3 Execution, Authentication, Delivery and Dating....................................... 30
Section 3.4 Temporary Securities................................................................. 31
Section 3.5 Registration, Registration of Transfer and Exchange: Restrictions on Transfer........ 31
Section 3.6 Mutilated, Destroyed, Lost or Stolen Securities...................................... 37
Section 3.7 Payment of Principal and Interest, Interest Rights Preserved......................... 38
Section 3.8 Persons Deemed Owners................................................................ 39
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Section 3.9 Cancellation......................................................................... 39
Section 3.10 Computation of Interest.............................................................. 40
Section 3.11 CUSIP Numbers........................................................................ 40
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.............................................. 40
Section 4.2 Application of Trust Money........................................................... 41
ARTICLE V
REMEDIES
Section 5.1 Events of Default.................................................................... 41
Section 5.2 Acceleration of Maturity, Rescission and Annulment................................... 43
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee...................... 44
Section 5.4 Trustee May File Proofs of Claim..................................................... 44
Section 5.5 Trustee May Enforce Claims Without Possession of Securities.......................... 45
Section 5.6 Application of Money Collected....................................................... 45
Section 5.7 Limitation on Suits.................................................................. 46
Section 5.8 Unconditional Right of Holders to Receive Principal and Interest..................... 46
Section 5.9 Restoration of Rights and Remedies................................................... 47
Section 5.10 Rights and Remedies Cumulative....................................................... 47
Section 5.11 Delay or Omission Not Waiver......................................................... 47
Section 5.12 Control by Holders of Securities..................................................... 47
Section 5.13 Waiver of Past Defaults.............................................................. 48
Section 5.14 Undertaking for Costs................................................................ 48
Section 5.15 Waiver of Stay or Extension Laws..................................................... 48
ARTICLE VI
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities.................................................. 49
Section 6.2 Notice of Defaults................................................................... 50
Section 6.3 Certain Rights of Trustee............................................................ 50
Section 6.4 Not Responsible for Recitals or Issuance of Securities............................... 51
Section 6.5 May Hold Securities, Act as Trustee Under Other Indentures........................... 51
Section 6.6 Money Held in Trust.................................................................. 51
Section 6.7 Compensation and Indemnification of Trustee and Its Prior Claims..................... 51
Section 6.8 Corporate Trustee Required; Eligibility.............................................. 52
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Section 6.9 Resignation and Removal; Appointment of Successor.................................... 53
Section 6.10 Acceptance of Appointment by Successor............................................... 54
Section 6.11 Appointment of Co-Trustee or Separate Trustee........................................ 54
Section 6.12 Merger, Conversion, Consolidation or Succession to Business.......................... 55
Section 6.13 Authenticating Agent................................................................. 56
Section 6.14 Disqualification; Conflicting Interests.............................................. 57
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of Holders............................ 57
Section 7.2 Preservation of Information; Communications to Holders............................... 57
Section 7.3 Reports by the Company............................................................... 58
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1 Company May Consolidate, Etc., Only on Certain Terms................................. 58
Section 8.2 Successor Substituted................................................................ 59
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without Consent of Holders of Securities..................... 59
Section 9.2 Supplemental Indentures With Consent of Holders of Securities........................ 60
Section 9.3 Trustee Protected.................................................................... 61
Section 9.4 Execution of Supplemental Indentures................................................. 61
Section 9.5 Effect of Supplemental Indentures.................................................... 61
Section 9.6 Reference in Securities to Supplemental Indentures................................... 61
Section 9.7 Notice of Supplemental Indentures.................................................... 62
ARTICLE X
MEETINGS OF HOLDERS OF SECURITIES
Section 10.1 Purposes for Which Meetings May Be Called............................................ 62
Section 10.2 Call, Notice and Place of Meetings................................................... 62
Section 10.3 Persons Entitled to Vote at Meetings................................................. 63
Section 10.4 Quorum; Action....................................................................... 63
Section 10.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.................. 63
Section 10.6 Counting Votes and Recording Action of Meetings...................................... 64
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ARTICLE XI
COVENANTS
Section 11.1 Payment of Principal and Interest.................................................... 65
Section 11.2 Maintenance of Offices or Agencies................................................... 65
Section 11.3 Money for Security Payments To Be Held in Trust...................................... 65
Section 11.4 Corporate Existence.................................................................. 67
Section 11.5 Maintenance of Properties............................................................ 67
Section 11.6 Maintenance of Insurance............................................................. 67
Section 11.7 Compliance with Laws................................................................. 67
Section 11.8 Payment of Taxes and Claims.......................................................... 67
Section 11.9 Delivery of Certain Information...................................................... 68
Section 11.10 Limitation on Liens.................................................................. 68
Section 11.11 Limitation on Sale and Leaseback Transactions........................................ 69
Section 11.12 Statement by Officers as to Default.................................................. 70
Section 11.13 Resale of Certain Securities......................................................... 70
Section 11.14 Waiver of Certain Covenants.......................................................... 71
Section 11.15 Book-Entry System.................................................................... 71
ANNEX A-1 FORM OF TRANSFER CERTIFICATE -- RESTRICTED GLOBAL SECURITY TO TEMPORARY REGULATION S
GLOBAL SECURITY...................................................................... A-1-1
ANNEX A-2 FORM OF TRANSFER CERTIFICATE -- RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY............................................................................. A-2-1
ANNEX B FORM OF TRANSFER CERTIFICATE -- TEMPORARY REGULATION S GLOBAL SECURITY OR REGULATION S
GLOBAL SECURITY RESTRICTED GLOBAL SECURITY........................................... B-1
ANNEX C-1 FORM OF CERTIFICATION TO BE GIVEN BY HOLDERS OF BENEFICIAL INTEREST IN A TEMPORARY
REGULATION S GLOBAL SECURITY TO EUROCLEAR OR CEDEL................................... C-1-1
ANNEX C-2 FORM OF CERTIFICATION TO BE GIVEN BY THE EUROCLEAR OPERATOR OR CEDEL BANK, SOCIETE
ANONYME.............................................................................. C-2-1
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ANNEX C-3 FORM OF CERTIFICATION TO BE GIVEN BY TRANSFEREE OF BENEFICIAL INTEREST IN A TEMPORARY
REGULATION S GLOBAL SECURITY AFTER THE RESTRICTED PERIOD............................. C-3-1
ANNEX D-1 FORM OF TRANSFER CERTIFICATE -- NON-GLOBAL RESTRICTED SECURITY TO RESTRICTED GLOBAL
SECURITY............................................................................. D-1-1
ANNEX D-2 FORM OF CERTIFICATE -- NON-GLOBAL RESTRICTED SECURITY TO REGULATION S GLOBAL SECURITY
OR TEMPORARY REGULATION S GLOBAL SECURITY............................................. D-2-1
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INDENTURE, dated as of November 6, 1996, between LEVI STRAUSS & CO., a Delaware corporation (herein called the "Company"), and CITIBANK, N.A., a national banking association, as Trustee hereunder (herein called the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of its 6.80% Notes due November 1, 2003 (herein called the "6.80% Notes") and an issue of its 7.00% Notes due November 1, 2006 (herein called the "7.00% Notes" and, together with the 6.80% Notes, the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) Unless the context otherwise requires, any reference to an
"Article" or a "Section," or to an "Annex," refers to an Article or
Section of, or an Annex attached to, this Indenture, as the case may
be;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States prevailing at the time of any relevant computation hereunder; and
particular form of Security, form of notice or form of certificate, as the case may be, in which such words are contained.
"Act," when used with respect to any Holder of a Security, has the meaning specified in Section 1.3.
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Members" has the meaning specified in Section 3.5.
"Applicable Procedures" has the meaning specified in Section 3.5.
"Attributable Indebtedness," in respect of any sale and leaseback transaction, means, as of the time of determination, the total obligation (discounted to present value at the rate per annum equal to the discount rate which would be applicable to a capital lease obligation with like term in accordance with generally accepted accounting principles) of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, water rates and other items which do not constitute payments for property rights) during the remaining portion of the initial term of the lease included in such sale and leaseback transaction.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 6.13 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in an official language of the country of publication or in the English language, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.
"Board of Directors," when used with reference to the Company, means the board of directors of the Company, or any committee of the board of directors of the Company, empowered to act for the Company, as the case may be, with respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of Directors, a copy of which, certified by the Secretary or an Assistant Secretary of the Company, as the case may be, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, shall have been delivered to the Trustee.
"Business Day" means, with respect to any particular place of payment or any other place, as the case may be, each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any such day on which banking institutions in The City of New York, New York or in such particular place are authorized or obligated by law or executive order to close. If any day on which any delivery, request, surrender, payment or other action is required or permitted hereunder to be taken by or on behalf of a Holder is not a Business Day in any place where such action is permitted hereunder to be taken, then such actions may be taken at such or any other permitted place on the next succeeding Business Day at such place with the same force and effect as if taken at the same time on such day that is not a business day at such place.
"CEDEL" means Cedel Bank Societe Anonyme.
"Code" has the meaning specified in Section 2.1.
"Commission" means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under applicable law, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order signed in the name of the Company by any one of its Chairman of the Board, its Chief Executive Officer, its President, or any Vice President, and by any one of its Chief Financial Officer, Treasurer, any Assistant Treasurer, its Secretary or any Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the most recent consolidated balance sheet of the Company but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower) and (ii) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the most recent consolidated balance sheet of the Company and computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered (which at the date of this Indenture is located at 120 Wall Street, 13th Floor, New York, New York 10043), Attention: Corporate Trust Administration.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depository" means, with respect to the Securities issued in whole or in part in the form of one or more Global Securities, the clearing agency registered under the Exchange Act, specified for that purpose as contemplated by Section 2.1 or any successor clearing agency registered under the Exchange Act as contemplated by Section 2.1.
"Depository Securities Certification" has the meaning specified in Section 2.1.
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, including any successor or amendatory statutes.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the U.S. Securities Exchange Act of 1934 (including any successor act thereto), as it may be amended from time to time, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.3(g).
"Funded Indebtedness" means (i) all Indebtedness having a
maturity of more than 12 months from the date as of which the determination is
made or having a maturity of 12 months or less but by its terms being renewable
or extendible beyond 12 months from such date at the option of the borrower and
(ii) rental obligations payable more than 12 months from such date under leases
which are capitalized in accordance with generally accepted accounting
principles (such rental obligations to be included as Funded Indebtedness at the
amount so capitalized as of such date of determination).
"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such other entity as may be in general use by significant segments of the U.S. accounting profession, which are applicable to the circumstances as of the date of determination.
"Global Security" means any of the Restricted Global Security of either series, the Temporary Regulation S Global Security of either series and the Regulation S Global Security of either series.
"Governmental Authority" means any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
"Holder" means, with respect to any Security, a Person in whose name such Security is registered in the Security Register.
"Indebtedness" means obligations (other than nonrecourse obligations) of, or guaranteed or assumed by, the Company for borrowed money, including obligations evidenced by bonds, debentures, notes or other similar instruments and reimbursement and cash collateralization of letters of credit, bankers' acceptances, interest rate hedge and currency hedge agreements.
"Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof including, for all purposes of this instrument and any such supplemental indenture, the Annexes attached to this instrument.
"Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities.
"Institutional Accredited Investor" means an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
"Material Adverse Effect" means (i) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole; (ii) a material impairment of the ability of the Company to perform under any Loan Document and to avoid any Event of Default, or (iii) a material adverse effect upon the legality, validity, binding effect or enforceability against the Company of any Loan Document.
"Maturity," when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration or otherwise.
"6.80% Notes" has the meaning ascribed to it in the first paragraph under the caption "Recitals."
"7.00% Notes" has the meaning ascribed to it in the first paragraph under the caption "Recitals."
"Lien" means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, security interest, lien, encumbrance, or other security arrangement of any kind or nature whatsoever on or with respect to such property or assets (including any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).
"Loan Documents" means any of this Indenture or the Securities.
"Officer," when used with reference to the Company, means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer, the
Controller, an Assistant Treasurer, an Assistant Controller, the Secretary, an Assistant Secretary or any Vice President of the Company.
"Opinion of Counsel" means a written opinion of counsel selected by the Company, which counsel shall be reasonably acceptable to the Trustee.
(i) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(ii) Securities for the payment of which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; and
(iii) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
"Owner Securities Certification" has the meaning specified in Section 2.1.
"Paying Agent" means any Person authorized by the Company to pay the principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, company, partnership, joint venture, association, joint-stock company, trust, estate, unincorporated organization or other legal entity or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any contiguous or proximate parcel of real property owned by, or leased to, the Company or any of its Restricted Subsidiaries, and any equipment located at or comprising a part of any such property, having a gross book value (without deduction of any depreciation reserves), as of the date of determination, in excess of 1.0% of Consolidated Net Tangible Assets.
"Qualified Institutional Buyer" has the meaning specified in Rule 144A.
"Record Date" means any Regular Record Date or Special Record Date.
"Regular Record Date" for interest payable in respect of any Security on any Interest Payment Date means the April 15 or October 15 (whether or not a Business Day) next preceding the relevant Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (including any successor regulation thereto), as it may be amended from time to time.
"Regulation S Global Security" has the meaning specified in Section 2.1.
"Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
"Responsible Officer," when used with respect to the Trustee, shall mean any officer of the Trustee within the Corporate Trust Office including any Vice President, Managing Director, Assistant Vice President, Secretary, Assistant Secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge and familiarity with the particular subject.
"Restricted Global Security" has the meaning specified in Section 2.1.
"Restricted Period" has the meaning specified in Section 2.1.
"Restricted Securities" has the meaning specified in Section 2.1.
"Restricted Subsidiary" means any Subsidiary of the Company which owns or leases a Principal Property.
"Rule 144" means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 11.9.
"Securities" has the meaning ascribed to it in the first paragraph under the caption "Recitals."
"Securities Act" means the Securities Act of 1933 (including any successor act thereto), as it may be amended from time to time, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder.
"Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5.
"series" has the meaning specified in Section 3.1.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the outstanding stock having by the terms thereof ordinary voting power for the election of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned by the Company, or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Temporary Regulation S Global Security" has the meaning specified in
Section 2.1.
"Transferee Securities Certification" has the meaning specified in
Section 3.5.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the United States Trust Indenture Act of 1939 (including any successor act thereto), as it may be amended from time to time, and (unless the context otherwise requires) includes the rules and regulations of the Commission thereunder.
"U.S. Depository" means DTC until a successor U.S. Depository shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "U.S. Depository" shall mean such successor U.S. Depository.
"Unrestricted Securities" has the meaning specified in Section 2.1.
"Vice President," when used with respect to the Company, means any Vice President, whether or not designated by a number or a word or words added before or after the title "Vice President."
(a) Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
(b) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer or Officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Securities of either series may be embodied in and evidenced by (1) one or more instruments of substantially similar tenor signed by such Holders in person or by agent or proxy duly appointed in writing, (2) the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly called and held in accordance with the provisions of Article X or (3) a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders of Securities signing such instrument or instruments and so voting at such meeting. Proof of execution of any such instrument or of a writing appointing any such agent or proxy, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 10.6.
(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgements of deeds, certifies that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.
(c) The principal amount, serial number and ownership of Securities shall be proven by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the applicable series in the manner set forth in Section 1.5.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.
Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of Holders of Securities or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder of Securities or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee and received at its Corporate Trust Office, Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder of Securities shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing, mailed, first-class postage prepaid, or
telexed or telecopied and confirmed by mail, first-class postage prepaid,
or delivered by hand or overnight courier, addressed to the Company at
Levi's Plaza, 1155 Battery Street, IH1/5, San Francisco, California 94111,
telephone no.: (415) 544-6955; telecopy no.: (415) 544-1342, Attention:
Treasurer, or at any other address previously furnished in writing to the
Trustee by the Company.
Except for a notice to the Trustee, which is deemed given only when received, if a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
Any request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his registered address as recorded in the Security Register. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Holder entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
All covenants and agreements in this Indenture by the Company shall bind its respective successors and assigns, whether so expressed or not.
In case any provision in this Indenture or the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns hereunder and the Holders of Securities, any benefit or legal or equitable right, remedy or claim under this Indenture.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture (or would be required to be a part of and govern this Indenture if this Indenture were required to be qualified under the Trust Indenture Act), the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
ARTICLE II
SECURITY FORMS
The Securities shall be in substantially the forms set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depository thereof, the Internal Revenue Code of 1986, as amended (the "Code"), and regulations thereunder, or as may, consistently herewith, be determined by the Officers executing such Securities, as evidenced by their execution thereof. The Company shall approve the form of the Securities and any notation, legend or endorsement on the Securities.
The definitive Securities shall be printed, lithographed or engraved or produced by any combination of these methods on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the Officers executing such Securities as evidenced by their execution thereof.
In certain cases described elsewhere herein, the legends set forth in the first four paragraphs of Section 2.2 may be omitted from Securities issued hereunder.
Securities offered and sold in their initial distribution in reliance on Regulation S shall be initially issued in the form of temporary Global Securities, one or more for each series, in fully registered form without interest coupons, substantially in the form of Security set forth in Sections 2.2 and 2.3 or Sections 2.5 and 2.6, as the case may be, with such applicable legends as are provided for in Section 2.2 or Section 2.5, as the case may be. Such Global Securities shall be registered in the name of the U.S. Depository or its nominee and deposited with the Trustee, at its New York office, as custodian for the U.S. Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided, for credit to the respective accounts at the U.S. Depository of the depositories for Morgan Guaranty Trust Company of New York, Brussels office, as operator of Euroclear, or CEDEL. Until such time as the Restricted Period (as defined below) shall have terminated, such temporary Global Securities shall be referred to herein as "Temporary Regulation S Global Securities." Until such time as the Restricted Period shall have terminated, investors may hold beneficial interests in such Global Securities only through Euroclear and CEDEL, unless delivery of such beneficial interest shall be made through a Restricted Global Security in accordance with the certification requirements discussed below in Section 3.5(b)(5). After such time as the Restricted Period shall have terminated, such certification requirements shall no longer be required for such transfers. After such time as the Restricted Period shall have terminated and the certifications referred to below in the next succeeding paragraph shall have been provided, such temporary Global Securities shall be exchanged for interests in like Global Securities, referred to herein collectively as the "Regulation S Global Securities," substantially in the form of Security set forth in Section 2.2 and 2.3 or Sections 2.5 and 2.6, as the case may be, with such applicable legends as are provided for in Section 2.2 or Section 2.5, as the case may be. As used herein, the term "Restricted Period" means the period up to (but not including) the 40th day following the later of (i) the day that Goldman, Sachs & Co., as representative of the several initial purchasers of the Securities, advises the Company and the Trustee of the day on which the Securities are first offered to persons other than distributors (as defined in Regulation S) in reliance on Regulation S and (ii) November 6, 1996. The Temporary Regulation S Global Securities, Regulation S Global Securities following the Restricted Period and all other Securities that are not Restricted Securities shall collectively be referred to herein as the "Unrestricted Securities."
Interests in a Temporary Regulation S Global Security may be exchanged for interests in a Regulation S Global Security of the same series only on or after the termination of the Restricted Period after delivery by a beneficial owner of an interest therein to Euroclear or CEDEL of a written certification (an "Owner Securities Certification") substantially in the form of Annex C-1 hereto, and upon delivery by Euroclear or CEDEL to the Trustee of a written certification (a "Depository Securities Certification") substantially in the form attached hereto as Annex C-2. Upon receipt of such certification, the Trustee will exchange the portion of the Temporary Regulation S Global Security covered by such certification for interests in a Regulation S Global Security of the same series.
Securities offered and sold in their initial distribution in reliance on Rule 144A shall be issued in the form of Global Securities, one or more for each series (collectively, as to each series, the "Restricted Global Security"), in fully registered form without interest coupons,
substantially in the form of Security set forth in Sections 2.2 and 2.3 or Sections 2.5 and 2.6, as the case may be, with such applicable legends as are provided for in Section 2.2 or Section 2.5, as the case may be, except as otherwise permitted herein. Such Global Securities shall be registered in the name of the U.S. Depository or its nominee and deposited with the Trustee, at its New York office, as custodian for the U.S. Depository, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of a Restricted Global Security may be increased or decreased from time to time by adjustments made on the records of the Trustee, as custodian for the U.S. Depository, in connection with a corresponding decrease or increase in the aggregate principal amount of the Temporary Regulation S Global Security or Regulation S Global Security each of the same series, as the case may be, as hereinafter provided. The Restricted Global Securities and all other Securities evidencing the debt, or any portion of the debt, initially evidenced by such Global Securities, other than Securities transferred or exchanged upon certification as provided in Section 3.5(b)(3), (4) or (7), shall collectively be referred to herein as the "Restricted Securities."
The Securities will be issued only in registered form. The
Securities will be issued in minimum denominations of $1,000, as provided in
Section 3.2, except that Securities offered other than in reliance on Regulation
S or to Qualified Institutional Buyers will be issued only in definitive
certificated form and will be issued initially in minimum denominations of
$100,000 and integral multiples of $1,000 in excess thereof. Such Securities
(i.e., Securities sold to Institutional Accredited Investors) will also be
considered to be Restricted Securities hereunder.
[INCLUDE IF SECURITY IS A TEMPORARY REGULATION S GLOBAL
SECURITY - THIS SECURITY IS A TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 3.5(b) OF THE INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN THE RESTRICTED GLOBAL SECURITY. NO EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN THE REGULATION S GLOBAL SECURITY EXCEPT ON OR AFTER THE TERMINATION OF THE RESTRICTED PERIOD AND UPON DELIVERY OF THE OWNER SECURITIES CERTIFICATION AND THE DEPOSITORY SECURITIES CERTIFICATION RELATING TO SUCH INTEREST IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.]
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY - THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY - THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS THE U.S. DEPOSITORY - UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
LEVI STRAUSS & CO.
6.80% NOTES
DUE NOVEMBER 1, 2003
No. U.S.$ CUSIP No.:
Payment of the principal of and interest on this Security will be made in immediately available funds, and in the case of payment of principal against presentation and surrender of this Security by the Holder thereof, and in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which the Company has initially designated as the office of the Trustee, 111 Wall Street, 5th Floor, New York, New York 10043, or, at the option of the Holder and subject to any fiscal or other laws and regulations, at any other office or agency maintained by
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by the manual signature of one of its authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly executed under its corporate seal.
LEVI STRAUSS & CO.
[Corporate Seal] By_______________________________ Title:
By_______________________________ Title:
Attest:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: CITIBANK, N.A., as Trustee
By:___________________________
Authorized Signatory
Section 2.3 Form of Reverse of 6.80% Notes.
------------------------------
This Security is one of a duly authorized issue of securities of
|
the Company designated as its "6.80% Notes due November 1, 2003" (herein called the "6.80% Notes"), limited in aggregate principal amount to U.S.$350,000,000, issued and to be issued under an Indenture, dated as of November 6, 1996 (herein called the "Indenture") between the Company and Citibank, N.A., as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which the Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the 6.80% Notes and of the terms upon which the 6.80% Notes are, and are to be, authenticated and delivered.
No sinking fund is provided for in the 6.80% Notes. The 6.80% Notes may not be redeemed at the option of the Company.
In any case where the due date for the payment of the principal of, or interest on, any 6.80% Note shall be, at any place of payment, a day on which banking institutions at such place of payment are authorized or obligated by law or executive order to close, then payment of principal or interest need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or at the Stated Maturity, and no interest shall accrue for the period after such date.
Subject to certain limitations in the Indenture, at any time when the Company is not subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted Security, the Company will promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such Holder of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder or holder, as the case may be, to the extent required to permit compliance by any such holder with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
If an Event of Default shall occur and be continuing, the principal of all the 6.80% Notes may be declared due and payable to the extent, in the manner and with the effect provided in the Indenture. Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest, all of the Company's obligations in respect of the payment of the principal of and interest on the 6.80% Notes shall terminate.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the 6.80% Notes under the Indenture at any time by the Company and the Trustee with either (a) the written consent of the Holders of a majority in principal amount of the 6.80% Notes at the time Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding 6.80% Notes at which a quorum is present, by the Holders of 66- 2/3% in aggregate principal amount of the Outstanding 6.80% Notes represented at such meeting. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the 6.80% Notes at the time Outstanding, on behalf of the Holders of all the 6.80% Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this 6.80% Note shall be conclusive and binding upon such Holder and upon all future Holders of this 6.80% Note and of any 6.80% Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this 6.80% Note or such other 6.80% Note.
As provided in and subject to the provisions of the Indenture, the Holder of this 6.80% Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in aggregate principal amount of the Outstanding 6.80% Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default and offered the Trustee indemnity satisfactory to it and the Trustee shall not have received from the Holders of a majority in principal amount of the 6.80% Notes Outstanding a direction inconsistent with such request and shall have failed to institute any such proceedings for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this 6.80% Note for the enforcement of any payment of principal hereof or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this 6.80% Note or of the Indenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the principal of and interest on this 6.80% Note at the times, places and rate, and in the coin or currency, herein prescribed.
The 6.80% Notes are issuable only in fully registered form, without exception, and, except as provided in Section 2.1 of the Indenture, in denominations of $1,000 and any integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations and satisfaction of certain requirements therein set forth, 6.80% Notes are exchangeable for a like aggregate principal amount of securities of the same or a different authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations and satisfaction of certain requirements therein set forth, the transfer of this 6.80% Note is registrable on the Security Register upon surrender of this 6.80% Note for registration of transfer at the office or
agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new 6.80% Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this 6.80% Note for registration of transfer the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such 6.80% Note is registered, as the owner thereof for all purposes, whether or not such 6.80% Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THE 6.80% NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA.
All terms used in this 6.80% Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Section 2.4 Form of Trustee's Certificate of Authentication of 6.80% Notes.
--------------------------------------------------------------
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: CITIBANK, N.A., as Trustee
By:______________________________
Authorized Signatory
Section 2.5 Form of Face of 7.00% Notes.
---------------------------
[INCLUDE IF SECURITY IS A TEMPORARY REGULATION S GLOBAL
|
SECURITY - THIS SECURITY IS A TEMPORARY REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 3.5(b) OF THE INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN THE RESTRICTED GLOBAL SECURITY. NO EXCHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL SECURITY MAY BE MADE FOR AN INTEREST IN THE REGULATION S GLOBAL SECURITY EXCEPT ON OR AFTER THE TERMINATION OF THE RESTRICTED PERIOD AND UPON DELIVERY OF THE OWNER SECURITIES CERTIFICATION AND THE DEPOSITORY SECURITIES CERTIFICATION RELATING TO SUCH INTEREST IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY - THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTOR (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
[INCLUDE IF SECURITY IS A GLOBAL SECURITY - THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST
COMEPANY IS THE U.S. DEPOSITORY - UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
LEVI STRAUSS & CO.
7.00% NOTES
DUE NOVEMBER 1, 2006
No. U.S.$ CUSIP No.:
Payment of the principal of and interest on this Security will be made in immediately available funds, and in the case of payment of principal against presentation and surrender of this Security by the Holder thereof, and in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which the Company has initially designated as the office of the Trustee, 111 Wall Street, 5th Floor, New York, New York 10043, or, at the option of the Holder and subject to any fiscal or other laws and regulations, at any other office or agency maintained by
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by the manual signature of one of its authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly executed under its corporate seal.
LEVI STRAUSS & CO.
[Corporate Seal] By___________________________ Title:
By___________________________ Title:
Attest:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: CITIBANK, N.A., as Trustee
By:____________________________
Authorized Signatory
Section 2.6 Form of Reverse of 7.00% Notes.
------------------------------
This Security is one of a duly authorized issue of securities of
|
the Company designated as its "7.00% Notes due November 1, 2006" (herein called the "7.00% Notes"), limited in aggregate principal amount to U.S.$450,000,000, issued and to be issued under an Indenture, dated as of November 6, 1996 (herein called the "Indenture") between the Company and Citibank, N.A., as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which the Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the 7.00% Notes and of the terms upon which the 7.00% Notes are, and are to be, authenticated and delivered.
No sinking fund is provided for in the 7.00% Notes. The 7.00% Notes may not be redeemed at the option of the Company.
In any case where the due date for the payment of the principal of, or interest on, any 7.00% Note shall be, at any place of payment, a day on which banking institutions at such place of payment are authorized or obligated by law or executive order to close, then payment of principal or interest need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or at the Stated Maturity, and no interest shall accrue for the period after such date.
Subject to certain limitations in the Indenture, at any time when the Company is not subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted Security, the Company will promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such Holder of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder or holder, as the case may be, to the extent required to permit compliance by any such holder with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
If an Event of Default shall occur and be continuing, the principal of all the 7.00% Notes may be declared due and payable to the extent, in the manner and with the effect provided in the Indenture. Upon payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest, all of the Company's obligations in respect of the payment of the principal of and interest on the 7.00% Notes shall terminate.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the 7.00% Notes under the Indenture at any time by the Company and the Trustee with either (a) the written consent of the Holders of a majority in principal amount of the 7.00% Notes at the time Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding 7.00% Notes at which a quorum is present, by the Holders of 66-2/3% in aggregate principal amount of the Outstanding 7.00% Notes represented at such meeting. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the 7.00% Notes at the time Outstanding, on behalf of the Holders of all the 7.00% Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this 7.00% Note shall be conclusive and binding upon such Holder and upon all future Holders of this 7.00% Note and of any 7.00% Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this 7.00% Note or such other 7.00% Note.
As provided in and subject to the provisions of the Indenture, the Holder of this 7.00% Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in aggregate principal amount of the Outstanding 7.00% Notes shall have made written request to the Trustee to institute proceedings in respect of such Event of Default and offered the Trustee indemnity satisfactory to it and the Trustee shall not have received from the Holders of a majority in principal amount of the 7.00% Notes Outstanding a direction inconsistent with such request and shall have failed to institute any such proceedings for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this 7.00% Note for the enforcement of any payment of principal hereof or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this 7.00% Note or of the Indenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the principal of and interest on this 7.00% Note at the times, places and rate, and in the coin or currency, herein prescribed.
The 7.00% Notes are issuable only in fully registered form, without exception, and, except as provided in Section 2.1 of the Indenture, in denominations of $1,000 and any integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations and satisfaction of certain requirements therein set forth, 7.00% Notes are exchangeable for a like aggregate principal amount of securities of the same or a different authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations and satisfaction of certain requirements therein set forth, the transfer of this 7.00% Note is registrable on the Security Register upon surrender of this 7.00% Note for registration of transfer at the office or
agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new 7.00% Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this 7.00% Note for registration of transfer the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such 7.00% Note is registered, as the owner thereof for all purposes, whether or not such 7.00% Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THE 7.00% NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA.
All terms used in this 7.00% Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
This is one of the Securities referred to in the within-mentioned Indenture.
Dated: CITIBANK, N.A., as Trustee
By:_______________________________
Authorized Signatory
|
ARTICLE III
THE SECURITIES
The Securities shall be issued in two series and shall be known and designated as the "6.80% Notes due November 1, 2003" and the "7.00% Notes due November 1, 2006" of the Company. The aggregate principal amount of 6.80% Notes which may be authenticated and delivered under this Indenture is limited to U.S.$350,000,000 and the aggregate principal amount of 7.00% Notes which may be authenticated and delivered under the Indenture is limited to U.S.$450,000,000, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Sections 3.4, 3.5, 3.6 or 9.6. Each of the two series (each, a "series") of the Securities issued hereunder shall be treated separately for purposes of the acts of Holders permitted or required hereunder, the giving of waivers or consents by Holders, Events of Default and accelerations of the respective series, registrations of transfer and exchange of Securities, replacement of Securities, and all other events and actions hereunder as to which the interests of the Holders of the separate series of the Securities may differ or it is otherwise appropriate to treat such series separately, whether or not express mention is made of such separate treatment in a particular context.
The Securities shall be issuable only in registered form without coupons and, except as provided in Section 2.1, only in denominations of $1,000 and any integral multiple of $1,000 in excess thereof.
The Securities shall be executed on behalf of the Company by any two of the following persons: its Chairman of the Board, its Chief Executive Officer, its President, or any of its Vice Presidents, under a facsimile of its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals who were at any time the proper Officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate and make available for delivery such Securities as in this Indenture provided and not otherwise. In connection with any Company Order for authentication, a compliance certificate and Opinion of Counsel pursuant to Section 1.2 shall not be required.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee or the Authenticating Agent by manual signature of an authorized signatory, and such certificate upon such Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.
Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 11.2, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of the same series of those surrendered of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.
(a) The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 11.2 being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 11.2 for such purpose, and subject to the other provisions of this Section 3.5, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more new Securities of the same series of those surrendered of any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, and subject to the other provisions of this Section 3.5, Securities may be exchanged for other Securities of the same series of those surrendered of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, and subject to the other provisions of this Section 3.5, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and subject to the other
provisions of this Section 3.5, entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4.
(b) Notwithstanding any other provisions of this Indenture or the
Securities (but subject to Section 2.1), transfers of a Global Security, in
whole or in part, transfers and exchanges of interests therein of the kinds
described in clauses (3), (4), (5), (6), (7) and (8) below and exchanges of
interests in Global Securities shall be made only in accordance with this
Section 3.5(b). Transfers and exchanges subject to this Section 3.5 shall also
be subject to the other provisions of this Indenture that are not inconsistent
with this Section 3.5.
Regulation S Global Security from the beneficial owner providing the Owner Securities Certification to the Person providing the Transferee Securities Certification.
Security, and to increase the principal amount of the Regulation S Global Security of the same series, by the principal amount of the beneficial interest in the Restricted Global Security to be so transferred, and to credit or cause to be credited to the account of the Person specified in such instructions (which during the Restricted Period shall be the Agent Member for Euroclear or CEDEL or both, as the case may be) a beneficial interest in the Regulation S Global Security of the same series having a principal amount equal to the amount by which the principal amount of the Restricted Global Security was reduced upon such transfer.
Restricted Global Security, the Temporary Regulation S Global Security or the Regulation S Global Security, as the case may be, in a specified principal amount equal to the principal amount of the Restricted Security (or portion thereof) of the same series to be so transferred, and (B) an appropriately completed certificate substantially in the form set forth in Annex D-1 hereto, if the specified account is to be credited with a beneficial interest in a Restricted Global Security, or Annex D-2 hereto, if the specified account is to be credited with a beneficial interest in the Temporary Regulation S Global Security or the Regulation S Global Security, given by the holder of such beneficial interest, the Trustee, as Security Registrar, shall cancel such Restricted Security (and issue a new Security in respect of any untransferred portion thereof) as provided in Section 3.5(a) and increase the principal amount of the Restricted Global Security, Temporary Regulation S Global Security or Regulation S Global Security, as the case may be, in each case of the same series, by the specified principal amount as provided in Section 3.5(d)(3).
(c) Each Restricted Security and Global Security issued
hereunder shall, upon issuance, bear the legends required by Section 2.2 or
Section 2.5, as the case may be, to be applied to such a Security and such
required legends shall not be removed from such Security except as provided in
the next sentence or paragraph (d) of this Section 3.5. The legend required for
a Restricted Security may be removed from a Security if there is delivered to
the Company such satisfactory evidence, which may include an opinion of
independent counsel licensed to practice law in the State of New York, as may be
reasonably required by the Company that neither such legend nor the restrictions
on transfer set forth therein are required to ensure that
transfers of such Security will not violate the registration requirements of the Securities Act. Upon provision of such satisfactory evidence, the Trustee, at the written direction of the Company, shall authenticate and deliver in exchange for such Security another Security or Securities of the same series having an equal aggregate principal amount that does not bear such legend. If such a legend required for a Restricted Security has been removed from a Security as provided above, no other Security issued in exchange for all or any part of such Security shall bear such legend, unless the Company has reasonable cause to believe that such other Security is a "restricted security" within the meaning of Rule 144 and instructs the Trustee in writing to cause a legend to appear thereon.
(d) The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name of the U.S. Depository or a nominee thereof and delivered to such U.S. Depository or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.
(3) Securities issued in exchange for a Global Security or any portion thereof pursuant to clause (2) above shall be of the same series as the Global Security to be exchanged, shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the U.S. Depository shall designate and shall bear any legends required hereunder. Any Global Security to be exchanged in whole shall be surrendered by the
U.S. Depository to the Trustee, as Security Registrar. With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as custodian for the U.S. Depository or its nominee with respect to such Global Security, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee. Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Security issuable on such exchange to or upon the written order of the U.S. Depository or an authorized representative thereof.
(4) In the event of the occurrence of any of the events specified in clause (2) above, the Company will promptly make available to the Trustee a reasonable supply of certificated Securities in definitive, fully registered form, without interest coupons.
(5) No Agent Members nor any other Persons on whose behalf Agent Members may act (including Euroclear and CEDEL and account holders and participants therein) shall have any rights under this Indenture with respect to any Global Security, or under any Global Security, and the U.S. Depository or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Conmpany, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the U.S. Depository or such nominee, as the case may be, or impair, as between the U.S. Depository, its Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Security.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of the same series of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series as the Security destroyed, lost or stolen, of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
A Holder shall bear the cost to the Company of replacing a mutilated, destroyed, stolen or lost Security. Upon the issuance of any new Security under this Section, the Company also may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies. with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Payment of the principal of the Securities will be made in immediately available funds, against presentation and surrender of the Securities by the Holders thereof, and in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which the Company has initially designated as the office of the Trustee, 111 Wall Street, 5th Floor, New York, New York 10043, or, at the option of the Holder and subject to any fiscal or other laws and regulations, at any other office or agency maintained by the Company for such purpose.
Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities at such Holder's address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Sections 3.5 and 3.7) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
All Securities surrendered for payment or registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. All Securities so delivered shall be canceled promptly by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 3.9 except as expressly permitted by this Indenture. All canceled Securities and any certificates in connection
Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.
The Company in issuing the Securities may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in notices of exchange as a convenience to the Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of exchange and that reliance may be placed only on the other identification numbers printed on the Securities.
ARTICLE IV
SATISFACTION AND DISCHARGE
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of replacement of Securities herein expressly provided for and any right to receive the payment of principal of, or interest on, such Securities), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 11.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation (other than Securities referred to in clauses (i) and
(ii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their Stated Maturity within one year,
and the Company, in the case of clause (i) or (ii) above, has deposited or caused to be deposited with the Trustee as trust funds (immediately available to the Holders in the case of clause (i)) in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7 and, if money
shall have been deposited with the Trustee pursuant to clause (1)(B) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 11.3 shall survive.
Subject to the provisions of the last paragraph of Section 11.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Trustee.
ARTICLE V
REMEDIES
"Event of Default," whenever used herein with respect to Securities of either series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes due and payable and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of any Security of that series at its Maturity; or
(3) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under the Bankruptcy Code or any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding under the Bankruptcy Code or any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other singular official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due.
At any time after such declaration of acceleration with respect to Securities of either series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article V provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest thereon on all Securities of that series,
(B) the principal of any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate borne by the Securities of that series,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at a rate of 6.80% per annum on the 6.80% Notes and 7.00% on the 7.00% Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the nonpayment of the principal of, and any interest on, Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.
No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and interest and, to the extent the payment of such interest shall be legally enforceable, interest on any overdue principal and on any overdue interest, at a rate of 6.80% per annum on the 6.80% Notes and at a rate of 7.00% per annum on the 7.00% Notes, and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or either of their creditors, the Trustee (irrespective of whether the principal of, and any interest on, the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee and each predecessor Trustee, its agents and counsel) and of the Holders of Securities allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or deliverable on any such claim and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities by his acceptance thereof to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, and each predecessor Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.7.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, and each predecessor Trustee, its agents and counsel, and other amounts due to the Trustee or such predecessor, agent or counsel under Section 6.7, be for the ratable benefit of the Holders of the Securities in respect of which judgment has been recovered.
Any money collected by the Trustee pursuant to this Article V shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for principal of and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.
In the event the Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of the Holders, each representing less than a majority in aggregate principal amount of the Outstanding Securities of either series, the Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture, and shall have no liability to any person for such action or inaction.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 3.7) interest on such Security on the respective Stated Maturities
expressed in such Security and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
If the Trustee or any Holder of a Security has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holders shall continue as though no such proceeding had been instituted.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Holders of Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Securities, as the case my be.
The Holders of a majority in principal amount of the Outstanding Securities of either series shall, subject to Section 6.3(e), have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and
(2) the Trustee shall not be obligated to follow any direction which may involve it in personal liability or which may be unduly prejudicial to Holders not joining therein, and
(3) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction or this Indenture.
The Holders, either (a) through the written consent of not less than a majority in principal amount of the Outstanding Securities of either series, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities of either series at which a quorum is present, by the Holders of at least 66-2/3% in aggregate principal amount of the Outstanding Securities of such series represented at such meeting, may on behalf of the Holders of all the Securities of such series waive any past default hereunder and its consequences with respect to such series, except a default (1) in the payment of the principal of or interest on any Security, or (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holders of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture with respect to such series; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.14 shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Outstanding Securities of either series, or to any suit instituted by any Holder of any Security for the enforcement of the payment of the principal of or interest on any Security on or after the respective Stated Maturity or Maturities expressed in such Security.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own wilful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of either series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, with respect to such series under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
Subject to the provisions of Section 6. 1:
(a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate, other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel (at the expense of the Company) and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee appointed with due care by it hereunder;
(h) the Trustee shall not be deemed to have notice of any Event of Default under Section 5.1 unless a Responsible Officer of the Trustee shall have actual knowledge thereof, and
(i) in the event that the Trustee is also acting as authenticating agent, payment agent or securities registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article VI shall also be afforded to the Trustee in such capacities.
The recitals contained herein and in the Securities (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.
The Trustee, any Authenticating Agent, any Paying Agent or any other agent of the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent or such other agent.
The Trustee may become and act as trustee under other indentures under which other securities, or certificates of interest or participation in other Securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company in writing.
The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable condensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust) and the Company covenants and agrees to pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other Persons not regularly in its employ), except to the extent that any such expense, disbursement or advance is due to its negligence or bad faith. The Company also covenants to indemnify the Trustee and its directors, officers, employees and agents for, and to hold the Trustee and its directors, officers, employees and agents harmless against, any loss, liability or expense incurred by the Trustee or its directors, officers, employees and agents, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder or the performance of the Trustee's duties hereunder, including the costs and expenses of defending the Trustee or its directors, officers, employees and agents against or investigating any claim or liability in the premises, except to the extent that any such loss, liability or expense was due to the Trustee's negligence or bad faith. The obligations of the Company under this Section 6.7 to compensate and indemnify the Trustee and its directors, officers, employees and agents and to pay or reimburse the Trustee and its directors, officers, employees and agents for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture or the earlier resignation and removal of the Trustee. The Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee including, without limitation, all money or property held or collected by the Trustee in trust to pay the principal of, or interest on, or any other amounts on any Securities, and such lien shall survive the satisfaction and discharge of the Indenture and any other termination of the Indenture including any termination under any bankruptcy law. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Sections 5.1(5) or (6), the Holders by their acceptance of the Securities hereby agree that such expenses and the compensation for such services are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or similar law. "Trustee" for purposes of this Section 6.7 shall include any predecessor Trustee, but the negligence or bad faith of any Trustee shall not affect the indemnification of any other Trustee.
There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof, or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$100,000,000, subject to supervision or examination by Federal or State authority, in good standing and having an established place of business in The City of New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by this Section 6.9 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and the Company.
(d) If at any time:
1. the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Company or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months, or
2. the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee and shall comply with the applicable requirements of this Section 6.9. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of this Section 6.9, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required by this Section 6.9, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders of Securities in the manner provided in Section 1.5. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.
Notwithstanding the replacement of the Trustee pursuant to this
Section 6.9, the Company's obligations under Section 6.7 shall continue for the
benefit of the retiring Trustee.
The retiring Trustee shall not be liable for the acts or omissions of any successor Trustee hereunder.
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the Successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be eligible under this Article.
Upon the acceptance of appointment by any successor Trustee, all fees, charges and expenses of the retiring Trustee shall become immediately due and payable upon the rendering of a statement thereof.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the trust may at the time be located, the Trustee shall
have the power and may execute and deliver all instruments to appoint one or
more Persons reasonably acceptable to the Company to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, and to vest in such Person
or Persons, in such capacity and for the benefit of the Security Holders, such
title to the Securities, or any part hereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.9 and no notice to Security Holders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.9 hereof. All fees, charges and expenses of any co-trustee or separate
trustee appointed pursuant to this Section 6.11 shall be paid by the Company.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations, (including the holding of title to the trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trust or co-trustee, but solely at the direction of the Trustee;
(ii) the Trustee shall not be personally liable by reason of any act or omission of any separate trustee or co-trustee (subject to the provisions of Section 6.1 hereof);
(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the separate trustees and co- trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee.
The Trustee may appoint an Authenticating Agent or Agents
acceptable to the Company with respect to the Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon exchange or substitution pursuant to this Indenture. Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder, and every reference in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State thereof and
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than U.S.$100,000,000 or its equivalent in
another currency or composite currencies and subject to supervision or
examination by government authority. If such Authenticating Agent publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section 6.13, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.13, such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 6.13.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.13, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.13.
If an Authenticating Agent is appointed with respect to the Securities pursuant to this Section 6.13, the Securities may have endorsed thereon, in addition to or in lieu of the Trustee's certification of authentication, an alternative certificate of authentication in the following form:
This is one of the Securities (as the case may be) referred to in the within-mentioned Indenture.
Dated: Citibank, N.A., as Trustee
By [Authenticating Agent or authorized
representative], as Authenticating Agent
|
By:_____________________________________ Authorized Signatory
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after the Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request in writing, within 30 days after the receipt by the Company of any such request, a list of singular form and content as of a date not more than 15 days prior to the time such list is furnished;
except that for so long as the Trustee is the Security Registrar, the Company
shall not be required to furnish to the Trustee the information required by this
Section 7. 1.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it pursuant to Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties
of the Trustee, shall be as provided by the Trust Indenture Act for holders of securities issued under an indenture qualified pursuant to the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act or the Code.
(a) The Company shall file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of any annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. In the event the Company is not subject to Section 13 or 15(d) of the Exchange Act, it shall file with the Trustee upon request the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(b) The Company shall file with the Trustee such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be reasonably requested from time to time by the Trustee.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of the Company's properties and assets to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of the Company's properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the Company's properties and assets shall be a corporation, partnership, trust or other entity, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company would become subject to a Lien which would not be permitted by this Indenture, the Company or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer, sale or lease of all
or substantially all the properties and assets of the Company in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter the predecessor
Person shall be relieved of all obligations and covenants under this Indenture
and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Without the consent of any Holders of Securities, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants and obligations of the Company herein and in the Securities as permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of the Holders of Securities, or to surrender any right or power herein conferred upon the Company; or
(3) to secure the Securities; or
(4) to modify the restrictions on, and procedures for, resale and other transfers of the Securities to the extent required by any change in applicable law or regulation (or the interpretation thereof) or in practice relating to the resale or transfer of restricted securities generally; or
(5) to accommodate the issuance, if any, of Securities in book- entry or definitive form and matters related thereto which do not adversely affect the interest of the Holders of Securities; or
(6) to comply with any requirements of the Commission in order to effect and maintain, to the extent required, the qualification of this Indenture under the Trust Indenture Act; or
Upon Company Request, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and subject to and upon receipt by the Trustee of the documents described in Section 9.4 hereof, the Trustee shall join with the Company in the execution of any supplemental indenture authorized or permitted by the term of this Indenture and any further appropriate agreements and stipulations which may be therein contained.
(1) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount thereof or the rate of interest payable thereon, or change the coin or currency in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof, or
(2) reduce the requirements of Section 10.4 for quorum or voting, or reduce the percentage in aggregate principal amount of the Outstanding Securities of either series the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver provided for in this Indenture, or
(3) modify the obligation of the Company to maintain an office or agency in The City of New York pursuant to Section 11.2, or
(4) modify any of the provisions of this Section, Section 5.13 or Section 11.14, except to increase any percentage contained herein or therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, or
(5) modify any of the provisions of Section 11.9 or 11.13.
It shall not be necessary for any Act of Holders of Securities under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
If, in the opinion of the Trustee hereunder, any document required to be executed pursuant to the term of Section 9.2 hereof adversely affects any right, duty, immunity or indemnity with respect to it under this Indenture, the Trustee in its discretion may decline to execute such document.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and an Officers' Certificate to the effect that all conditions precedent have been satisfied. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.
Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 9.2, the Company shall give notice to all Holders of Securities, in the manner provided in Section 1.5, of such fact, setting forth in general terms the substance of such supplemental indenture. Any failure of the Company to give such notice, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture.
ARTICLE X
MEETINGS OF HOLDERS OF SECURITIES
A meeting of Holders of Securities of either or both series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series.
(a) The Trustee may at any time call a meeting of Holders of Securities of either series for any purpose specified in Section 10.1, to be held at such time and at such place in The City of New York as the Trustee shall determine. Notice of every meeting of Holders of Securities, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.5, not less than 21 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of either series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 10.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities of such series in the amount specified, as the case may be, may determine the time and the place in The City of New York for such meeting and may call such meeting for such purposes by giving notice thereof as provided in paragraph (a) of this Section.
To be entitled to vote at any meeting of Holders of Securities of either series, a Person shall be (a) a Holder of one or more Outstanding Securities of the applicable series, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of the applicable series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.
The Persons entitled to vote a majority in principal amount of the Outstanding Securities of the series as to which a meeting has been called shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting (subject to repeated applications of this sentence). Notice of the reconvening of any adjourned meeting shall be given as provided in Section 10.2(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage of the principal amount of the Outstanding Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for a lack of a quorum, the persons entitled to vote 25% in aggregate principal amount of the Outstanding Securities of the applicable series (or of both series, as the case may be) at the time shall constitute a quorum for the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid, any resolution and all matters (except as limited by the proviso to Section 9.2) shall be effectively passed and decided if passed or decided by the Persons entitled to vote not less than 66 2/3% in aggregate principal amount of Outstanding Securities of the applicable series represented and voting at such meeting.
Any resolution passed or decisions taken at any meeting of Holders of Securities of either series duly held in accordance with this Section shall be binding on all the Holders of Securities of the applicable series, whether or not present or represented at the meeting.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 1.3 and the appointment of any proxy shall be proved in the manner specified in Section 1.3. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 10.3 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 10.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities of the applicable series represented at the
meeting.
(d) Any meeting of Holders of Securities duly called pursuant to Section 10.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of the applicable series represented at the meeting, and the meeting may be held as so adjourned without further notice.
The vote upon any resolution submitted to any meeting of Holders of Securities shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 10.2 and, if applicable, Section 10.4. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE XI
COVENANTS
The Company will duly and punctually pay the principal of and interest on the Securities in accordance with the term of the Securities and this Indenture.
The Company hereby appoints the Corporate Trust Office of the Trustee as its agent in The City of New York where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.
The Company hereby appoints the principal corporate trust office of the Trustee as Paying Agent for the payment of principal of and interest on the Securities, and appoints the office of the Trustee as transfer agent where Securities may be surrendered for registration of transfer or exchange.
If at any time the Company shall fail to maintain any such required office or agency, or shall fail to furnish the Trustee with the address thereof, presentations and surrenders may be made and notices and demands may be served on the Corporate Trust Office of the Trustee, and the Company hereby appoints the same as its agent to receive such respective presentations, notices and demands.
If the Company at any time shall act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and the Company will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior to or on each due date of the principal of or interest on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the Trustee or affiliate of the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of or interest on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such persons or otherwise disposed of as herein provided;
(2) give the Trustee written notice of any default by the Company (or any other obligor upon the securities) in the making of any payment of principal or interest; and
(3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
the Trustee or any Paying Agent of their obligation to pay any amounts to the Company in the manner provided in this Section 11.3.
The Company shall maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of the Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect.
The Company shall maintain or cause to be maintained, through self-insurance or with financially sound and reputable insurers, insurance with respect to their properties and business and the properties and business of their Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all such failures in the aggregate) have a Material Adverse Effect.
The Company shall comply with the requirements of each applicable Requirement of Law, except where the failure to do so would not in the aggregate have a Material Adverse Effect.
The Company shall pay, and cause each of its Subsidiaries to pay, all taxes, assessments and other charges (other than taxes, assessments and other governmental charges not exceeding $5,000,000 in the aggregate) imposed upon them or any of their properties or assets or in respect of any of their franchises, business, income or property before any penalty or interest accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums (other than claims not exceeding $5,000,000 in the aggregate) which have become due and payable and which by law have or may become a Lien upon any of their properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided that no such governmental charge or claim need be paid if it is being contested
in good faith by appropriate proceedings and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.
At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and therefore is not a reporting company pursuant thereto, the Company will make available to each Holder of any Security (in reasonable quantities for redistribution to beneficial owners), annual audited consolidated financial statements of the Company, with the notes thereto and with a report thereon by independent accountants of established national reputation (to be available within 90 days after the end of each fiscal year), and unaudited quarterly consolidated financial statements of the Company, without notes or with abbreviated notes and without any such report thereon (to be available within 60 days after the end of each of the first three quarters of each fiscal year). Such financial statements shall be prepared in accordance with generally accepted accounting principles (except for such omitted or abbreviated notes in the case of the quarterly financial statements). Such financial statements shall be mailed or otherwise distributed to Holders by such method as the Company may reasonably determine.
The Company will not, and will not permit any Restricted Subsidiary to, create, incur, issue, assume or guarantee any Indebtedness secured by a Lien upon any Principal Property, or upon shares of capital stock or Indebtedness issued by any Restricted Subsidiary and owned by the Company or any Restricted Subsidiary, now or hereafter acquired, without effectively providing concurrently that the Securities of each series then outstanding are secured equally and ratably with or, at the option of the Company, prior to such Indebtedness so long as such Indebtedness shall be so secured.
Notwithstanding the restrictions described above, the Company and its Restricted Subsidiaries may create, incur, issue, assume or guarantee Indebtedness secured by Liens without equally and ratably securing the Securities of each series then outstanding if, at the time of such creation, incurrence, issuance, assumption or guarantee, after giving effect thereto and to the retirement of any Indebtedness which is concurrently being retired, the aggregate amount of all outstanding Indebtedness secured by Liens which would otherwise be subject to such restrictions (other than any Indebtedness secured by Liens permitted as described in clauses (i) through (viii) of the immediately preceding paragraph) plus all Attributable Indebtedness in respect of sale and leaseback transactions with respect to Principal Properties (with the exception of such transactions which are permitted under clauses (i) through (v) of the first sentence of the first paragraph of Section l1.11) does not exceed 10% of Consolidated Net Tangible Assets.
The Company will not, and will not permit any Restricted Subsidiary to, enter into any sale and leaseback transaction with respect to any Principal Property unless: (i) the sale and leaseback transaction is solely with the Company or another Restricted Subsidiary; (ii) the lease is for a period not in excess of three years, including renewal rights; (iii) the lease secures or relates to industrial revenue or pollution control bonds; (iv) the Company or such Restricted Subsidiary would (at the time of entering into such arrangement) be entitled as described in
clauses (i) through (viii) of the second paragraph of Section 11.10, without equally and ratably securing the Securities of each series then outstanding, to create, incur, issue, assume or guarantee Indebtedness secured by a Lien on such Principal Property in the amount of the Attributable Indebtedness arising from such sale and leaseback transaction; (v) the Company or such Restricted Subsidiary, within 180 days after the sale of such Principal Property in connection with such sale and leaseback transaction is completed, applies an amount equal to the greater of (A) the net proceeds of the sale of the Principal Property leased and (B) the fair market value of the Principal Property leased to (1) the retirement of Securities, other Funded Indebtedness of the Company ranking on a parity with the Securities, or Funded Indebtedness of a Restricted Subsidiary or (2) the purchase of other property which will constitute a Principal Property having a value at least equal to the value of the Principal Property leased; or (vi) the Attributable Indebtedness of the Company and its Restricted Subsidiaries in respect of such sale and leaseback transaction and all other sale and leaseback transactions entered into after the date of this Indenture (other than any such sale and leaseback transactions as would be permitted as described in clauses (i) through (v) of this sentence), plus the aggregate principal amount of Indebtedness secured by Liens on Principal Properties then outstanding (not including any such Indebtedness secured by Liens described in clauses (i) through (viii) of the second paragraph of Section 11.10) which do not equally and ratably secure such outstanding Securities (or secure such outstanding Securities on a basis that is prior to other Indebtedness secured thereby), would not exceed 10% of Consolidated Net Tangible Assets.
The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the Officers signing such certificate, with a view to determining whether any default exists in the performance and observance of any of the terms, provisions and conditions of this Indenture and whether the Company has observed, performed and fulfilled its obligations under this Indenture. If the Officers signing the Certificate know of such a default, the Officers' Certificate shall describe such default and its status with particularity. The Company shall also promptly notify the Trustee if the Company's fiscal year is changed so that the end thereof is on any date other than the then current fiscal year end date.
The Company will also deliver to the Trustee, forthwith upon any Officer becoming aware of any Event of Default, an Officers' Certificate specifying with particularity such default or Event of Default and further stating what action the Company has taken, is taking or proposes to take with respect thereto.
During the period beginning on November 6, 1996 and ending on November 6, 1999, the Company will not, and will not permit any of its "affiliates" (as defined under Rule 144 under the Securities Act or any successor provision thereto) to, resell any Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them. The Trustee shall have no responsibility in respect of the Company's performance of its agreement in the preceding sentence.
The Company may, with respect to the Securities of either series, omit in any particular instance to comply with any covenant or condition set forth in any covenant provided pursuant to Sections 11.5 to 11.11, inclusive, for the benefit of Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series (or such lesser amount as shall have acted at a meeting pursuant to the provisions of this Indenture) shall either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect.
If the Securities cease to trade in the U.S. Depository's book- entry settlement system, the Company covenants and agrees that it shall use reasonable efforts to make such other book-entry arrangements that it determines are reasonable for the Securities.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
LEVI STRAUSS & CO.
By /s/ Joseph M. Maurer
------------------------------------------
Name: Joseph M. Maurer
Title: Vice President & Treasurer
By /s/ Maeve L.J. Richard
------------------------------------------
Name: Maeve L.J. Richard
Title: Assistant Treasurer
[SEAL]
Attest:
/s/ Nenita T. Sobejana
------------------------------
Name: Nenita T. Sobejana
Title: Secretary
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CITIBANK, N.A., not in its individual capacity but solely as Trustee
By___________________________________________ Name:
Title:
[SEAL]
Attest:
State of California
----------------------------
County of San Francisco
---------------------------
On November 5, 1996 before me, ANITA L. DRENNAN, NOTARY PUBLIC,
--------------------------------- -------------------------------
DATE NAME, TITLE OF OFFICER - E.G., "JANE DOE,
NOTARY PUBLIC"
personally appeared JOSEPH M. MAURER, VICE-PRESIDENT & TREASURER,
------------------------------------------------------------
NAME(S) OF SIGNER(S)
[X] personally known to me - OR - [_] proved to me on the basis of satisfactory
evidence to be the person(s) whose
name(s) is/are subscribed to the within
instrument and acknowledged to me that
[SEAL] he/she/they executed the same in
his/her/their authorized capacity(ies),
and that by his/her/their signature(s)
on the instrument the person(s), or the
entity upon behalf of which the
person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Anita L. Drennan
--------------------------------------
SIGNATURE OF NOTARY
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================================== OPTIONAL ====================================
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[_] INDIVIDUAL
[X] CORPORATE OFFICER
___________________________________
TITLE OR TYPE OF DOCUMENT
__________________________________
TITLE(S)
[_] PARTNER(S) [_] LIMITED
[_] GENERAL ___________________________________
[_] ATTORNEY-IN-FACT NUMBER OF PAGES
[_] TRUSTEE(S)
[_] GUARDIAN/CONSERVATOR
[_] OTHER:________________________ ___________________________________
______________________________ DATE OF DOCUMENT
______________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES) ___________________________________
__________________________________ SIGNER(S) OTHER THAN NAMED ABOVE
__________________________________
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State of California
----------------------------
County of San Francisco
---------------------------
On November 5, 1996 before me, ANITA L. DRENNAN, NOTARY PUBLIC,
--------------------------------- -------------------------------
DATE NAME, TITLE OF OFFICER - E.G., "JANE DOE,
NOTARY PUBLIC"
personally appeared MAEVE L. J. RICHARD, ASSISTANT TREASURER,
-----------------------------------------------------------
NAME(S) OF SIGNER(S)
[X] personally known to me - OR - [_] proved to me on the basis of satisfactory
evidence to be the person(s) whose
name(s) is/are subscribed to the
within instrument and acknowledged to
[SEAL] me that he/she/they executed the same
in his/her/their authorized
capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s), or the
entity upon behalf of which the
person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Anita L. Drennan
------------------------------------
SIGNATURE OF NOTARY
|
================================== OPTIONAL ====================================
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[_] INDIVIDUAL
[X] CORPORATE OFFICER
_________________________________
_____________________________________ TITLE OR TYPE OF DOCUMENT
TITLE(S)
[_] PARTNER(S) [_] LIMITED
[_] GENERAL _________________________________
[_] ATTORNEY-IN-FACT NUMBER OF PAGES
[_] TRUSTEE(S)
[_] GUARDIAN/CONSERVATOR _________________________________
[_] OTHER:___________________________ DATE OF DOCUMENT
_________________________________
_________________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES) _________________________________
_____________________________________ SIGNER(S) OTHER THAN NAMED ABOVE
_____________________________________
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____________________
|
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
LEVI STRAUSS & CO.
By________________________
Name:
Title:
By________________________
Name:
Title:
[SEAL]
Attest:
CITIBANK, N.A., not in its individual capacity but solely as Trustee
By /s/ Robert T. Kirchner
------------------------
Name: Robert T. Kirchner
Title: Vice President
[SEAL]
Attest:
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Name: /s/ Wafaa Orfy
-----------------------------
Title: Senior Trust Officer
----------------------------
_________________
|
STATE OF CALIFORNIA )
:ss.:
COUNTY OF SAN FRANCISCO )
|
On the 6th day of November 1996, before me personally came_______________ , to me known, who, being by me duly sworn, did depose and say that he is ______________ of Levi Strauss & Co., one of the corporations described in and which executed the foregoing installment; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he/she signed his name thereto by like authority.
_______________________________
Notary Public
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
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On the 6th day of November 1996, before me personally came Robert Kirchner, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Citibank, N.A., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority.
/s/ Jeffry Borgen
-------------------------------
Notary Public
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ANNEX A-1
FORM OF TRANSFER CERTIFICATE--
RESTRICTED GLOBAL SECURITY TO
TEMPORARY REGULATION S GLOBAL SECURITY
REGULATION S GLOBAL NOTE CERTIFICATE
(for transfers pursuant to Section 3.5(b)(3)
of the Indenture)
Citibank, N.A., as Trustee
111 Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to U.S.$____ aggregate principal amount of Notes which are evidenced by the Restricted Global Security (CUSIP No.____) and held with the U.S. Depository in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Notes to a Person who will take delivery thereof in the form of an equal aggregate principal amount of Securities evidenced by the Temporary Regulation S Global Security (CUSIP No.____), which amount, immediately after such transfer, is to be held with the U.S. Depository through Euroclear or CEDEL or both.
In connection with such request and in respect of such Securities, the Transferor does hereby certify that such transfer has been effected pursuant to and in accordance with Rule 903 or Rule 904 under the United States Securities Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor does hereby further certify that:
(1) the offer of the Securities was not made to a person in the United States;
(2) either:
(A) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or
(B) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States;
A-1-1
(3) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being transferred as described above was held with the U.S. Depository through Euroclear or CEDEL or both.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceeding. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as initial purchasers of the Notes. Term used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act.
Dated: [Insert Name of Transferor]
By:________________________________
Name:
Title:
(If the registered owner is a
corporation, partnership or
fiduciary, the title of the
Person signing on behalf of such
registered owner must be
stated.)
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A-1-2
ANNEX A-2
FORM OF TRANSFER CERTIFICATE--
RESTRICTED GLOBAL SECURITY TO
REGULATION S GLOBAL SECURITY
REGULATION S GLOBAL NOTE CERTIFICATE
(for transfers pursuant to Section 3.5(b)(4)
of the Indenture)
Citibank, N.A., as Trustee
111 Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to U.S.$____ aggregate principal amount of Notes which are evidenced by the Restricted Global Security (CUSIP No.____) and held with the U.S. Depository in the name of [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such beneficial interest in the Notes to a Person who will take delivery thereof in the form of an equal aggregate principal amount of Notes evidenced by the Regulation S Global Security (CUSIP No.____).
In connection with such request and in respect of such Notes, the Transferor does hereby certify that:
(1) with respect to transfers made in reliance on Regulation S under the Securities Act of 1933, as amended (the "Securities Act"):
(A) the offer of the Notes was not made to a person in the United States;
(B) either:
(i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or
(ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that
A-2-1
the transaction was prearranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable; and
(D) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; or
(2) with respect to transfers made in reliance on Rule 144 under the Securities Act, the Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceeding. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as initial purchasers of the Notes. Terms used in this certificate and not otherwise defined in the Indenture have the meanings set forth in Regulation S under the Securities Act.
Dated: [Insert Name of Transferor]
By:_______________________________
Name:
Title:
(If the registered owner is a
corporation, partnership or
fiduciary, the title of the
Person signing on behalf of
such registered owner must be
stated.)
A-2-2
|
ANNEX B
|
FORM OF TRANSFER CERTIFICATE--
TEMPORARY REGULATION S GLOBAL SECURITY OR
REGULATION S GLOBAL SECURITY RESTRICTED
GLOBAL SECURITY
RESTRICTED GLOBAL NOTE CERTIFICATE
(for transfers pursuant to Section 3.5(b)(5)
of the Indenture)
Citibank, N.A., as Trustee
111 Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to U.S.$ _____________ aggregate
principal amount of Notes which are evidenced by the Temporary Regulation S
Global Security or the Regulation S Global Security (CUSIP No._______) and held
with the U.S. Depository through Euroclear or CEDEL or both in the name of
[insert name of transferor] (the "Transferor") during the Restricted Period. The
Transferor has requested a transfer of such beneficial interest in the Notes to
a Person that will take delivery thereof in the form of an equal principal
amount of Notes evidenced by the Restricted Global Security (CUSIP
No.___________).
In connection with such request and in respect of such Notes, the Transferor does hereby certify that such transfer has been effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended, and accordingly the Transferor does hereby further certify that the Notes are being transferred to a person that the Transferor reasonably believes is purchasing the Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A and the Notes have been transferred in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceeding. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as initial purchasers of the Notes.
Dated: [Insert Name of Transferor]
By:___________________________
Name:
Title:
(If the registered owner is
a corporation, partnership
or fiduciary, the title of
the Person signing on
behalf of such registered
owner must be stated.)
B-2
|
ANNEX C-1
|
FORM OF CERTIFICATION TO BE GIVEN BY HOLDERS OF
BENEFICIAL INTEREST IN A TEMPORARY REGULATION S
GLOBAL SECURITY TO EUROCLEAR OR CEDEL
OWNER SECURITIES CERTIFICATION
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE,
as Operator of the Euroclear
Clearance System] [or] [CEDEL BANK,
SOCIETE ANONYME]
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to U.S.$______ aggregate principal amount of Notes which are evidenced by the Temporary Regulation S Global Security (CUSIP No.___) and held with the U.S. Depository through Euroclear or CEDEL or both in the name of [insert name of holder] (the "Holder").
In respect of such Notes, the Holder does hereby certify that as of the date hereof, the above-captioned Notes are beneficially owned by non-U.S. Persons and are not held for purposes of resale directly or indirectly to a U.S. Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia. As used herein, U.S. Person has the meaning assigned to it in Rule 902 under the Securities Act of 1933, as amended.
We undertake to advise you immediately by tested telex on or prior to the date on which you intend to submit your certification relating to the Notes held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
We understand that this certification is required in connection with certain securities laws in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings.
C-1-1
This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as the initial purchasers of the Notes.
Date: __________________, 199_*
C-1-2
ANNEX C-2
FORM OF CERTIFICATION TO BE GIVEN
BY THE EUROCLEAR OPERATOR OR CEDEL BANK,
SOCIETE ANONYME
DEPOSITORY SECURITIES CERTIFICATION
Citibank, N.A., as Trustee
111 Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Indenture, as of the date hereof, $__________ aggregate principal amount of the above-captioned Notes is beneficially owned by non-U.S. Persons and are not held for purposes of resale directly or indirectly to a U.S. Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia. As used herein, U.S. Person has the meaning assigned to it in Rule 902 under the Securities Act of 1933, as amended.
We further certify (i) that we are not making available herewith for exchange any portion of the Temporary Regulation S Global Security excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain securities laws of the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as the initial purchasers of the Notes.
C-2-1
Date: _____________, 199_
By:___________________________________
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, as
Operator of the Euroclear Clearance
System] [or] [CEDEL BANK, SOCIETE
ANONYME]
C-2-2
ANNEX C-3
FORM OF CERTIFICATION TO BE GIVEN BY
TRANSFEREE OF BENEFICIAL INTEREST IN A
TEMPORARY REGULATION S GLOBAL SECURITY
AFTER THE RESTRICTED PERIOD
TRANSFEREE SECURITIES CERTIFICATION
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE,
as Operator of the Euroclear
Clearance system] [or] [CEDEL BANK,
SOCIETE ANONYME]
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
For purposes of acquiring a beneficial interest in the Temporary Regulation S Global Security, the undersigned certifies that it is not a U.S. Person as defined by Regulation S under the Securities Act of 1933, as amended.
We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Notes held by you in which we intend to acquire a beneficial interest in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceeding. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as initial purchasers of the Notes.
Dated: __________, ____
By:_______________________________ As, or as agent for, the beneficial acquiror of the Notes to which this certificate relates.
C-3-1
ANNEX D-1
FORM OF TRANSFER CERTIFICATE--
NON-GLOBAL RESTRICTED SECURITY TO
RESTRICTED GLOBAL SECURITY
RESTRICTED GLOBAL NOTE CERTIFICATE
(for transfers pursuant to Section 3.5(b)(6)
of the Indenture)
Citibank, N.A., as Trustee
111 Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to $__________ aggregate principal amount of Notes held in definitive form (CUSIP No._____) by [insert name of transferor] (the "Transferor"). The Transferor has requested a transfer of such Notes to a Person that will take delivery in the form of an equal principal amount of Notes evidenced by the Restricted Global Security (CUSIP No. _______).
In connection with such request and in respect of such Notes, the Transferor does hereby certify that such transfer has been effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended, and accordingly the Transferor does hereby further certify that the Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A and the Notes have been transferred in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceedings. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as the initial purchasers of the Notes.
D-1-1
Dated: [Insert Name of Transferor]
By:_______________________________
Name:
Title:
D-2-2
|
ANNEX D-2
|
FORM OF CERTIFICATE -- NON-GLOBAL
RESTRICTED SECURITY TO REGULATION S GLOBAL
SECURITY OR TEMPORARY REGULATION S
GLOBAL SECURITY
REGULATION S GLOBAL NOTE CERTIFICATE
(for transfers pursuant to Section 3.5(b)(6)
of the Indenture)
Citibank, N.A., as Trustee
III Wall Street, 5th Floor
New York, New York 10043
Reference is hereby made to the Indenture, dated as of November 6, 1996 (the "Indenture"), between Levi Strauss & Co., as Issuer, and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.
This certificate relates to $_______ aggregate principal amount of Notes held in definitive form (CUSIP No.____) by [insert name of transferor] (the "Transferor"). The Transferor has requested an exchange or transfer of such Notes to a Person that will take delivery in the form of an equal principal amount of Notes evidenced by the Regulation S Global Security or the Temporary Regulation S Global Security (CUSIP No.____).
In connection with such request and in respect of such Notes, the Transferor does hereby certify that such transfer has been effected pursuant to and in accordance with (a) Rule 903 or Rule 904 under the Securities Act of 1933, as amended (the "Act"), or (b) Rule 144 under the Act, and accordingly the Transferor does hereby further certify that:
(1) if the transfer has been effected pursuant to Rule 903 or Rule 904:
(A) the offer of the Notes was not made to a person in the United States;
(B) either:
(i) at the time the buy order was originated, the transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the transferee was outside the United States, or
(ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the Transferor nor any person acting on its behalf knows that
D-2-1
the transaction was pre-arranged with a buyer in the United States;
(C) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(D) the transaction is not part of a plan or scheme to evade the registration requirements of the Act; and
(E) if such transfer is to occur during the Restricted
Period, upon completion of the transaction, the
beneficial interest being transferred as described
above was held with the Depository through
[Euroclear] [CEDEL]; or
(2) if the transfer has been effected pursuant to Rule 144:
(A) more than two years has elapsed since the date of the closing of the initial placement of the Notes pursuant to the Purchase Agreement, dated October 31, 1996, between the Issuer and the representatives of the several purchasers named therein; and
(B) the Notes have been transferred in a transaction permitted by Rule 144 and made in accordance with any applicable securities laws of any state of the United States.
We understand that this certificate is required in connection with certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certificate to any interested party in such proceedings This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman, Sachs & Co., Lehman Brothers Inc., J.P. Morgan Securities Inc., Morgan, Stanley & Co. Incorporated, BA Securities, Inc. and Dillon, Read & Co. Inc. as initial purchasers of the Notes.
Dated: __________, ____ [Insert Name of Transferor]
By:___________________________
Name:
Title:
D-2-2
|
EXHIBIT 4.2
FISCAL AGENCY AGREEMENT
Between
LEVI STRAUSS & CO.
Issuer
and
CITIBANK, N.A.
Fiscal Agent
Dated as of November 22, 1996
(Y)20,000,000,000 4.25 per cent. Bonds due November 22, 2016
Page
----
Parties........................................................................................................1
1. Securities............................................................................................3
2. Fiscal Agent; Other Agents............................................................................4
3. Authorization and Authentication......................................................................4
4. Payment and Cancellation..............................................................................6
(a) Payment..................................................................................6
(b) Certification............................................................................7
(c) Withholding..............................................................................8
(d) Cancellation.............................................................................8
5. Exchange of Securities................................................................................8
6. Redemption............................................................................................9
7. Delivery of Certain Information.......................................................................9
8. Conditions of Fiscal Agent's Obligations.............................................................10
(a) Compensation and Indemnity..............................................................11
(b) Agency..................................................................................11
(c) Advice of Counsel.......................................................................11
(d) Reliance................................................................................11
(e) Interest in Securities, etc.............................................................11
(f) Non-Liability for Interest..............................................................12
(g) Certifications..........................................................................12
(h) No Implied Obligations..................................................................12
9. Resignation and Appointment of Successor.............................................................12
(a) Fiscal Agent and Paying Agent...........................................................12
(b) Resignation.............................................................................12
(c) Successors..............................................................................13
(d) Acknowledgement.........................................................................13
(e) Merger, Consolidation, etc..............................................................14
10. Payment of Taxes.....................................................................................14
11. Meetings and Amendments..............................................................................14
(a) Calling of Meeting, Notice and Quorum...................................................14
(b) Approval................................................................................15
(c) Binding Nature of Amendments, Notices, Notations, etc...................................16
|
(d) "Outstanding" Defined...................................................................16
12. Governing Law........................................................................................17
13. Notices..............................................................................................17
14. Consent to Service; Jurisdiction.....................................................................17
15. Headings.............................................................................................18
16. Currency Rate Indemnity..............................................................................18
17. Terms and Conditions.................................................................................18
18. Counterparts.........................................................................................18
|
EXHIBIT A Form of Temporary Global Security
EXHIBIT B Form of Permanent Global Security
EXHIBIT C Form of Definitive Security
EXHIBIT D Terms and Conditions
EXHIBIT E Form of Certificate to be Given by Euroclear or Cedel
EXHIBIT F Form of Certificate to be Given by Beneficial Owners
-ii-
|
FISCAL AGENCY AGREEMENT, dated as of November 22, 1996, between LEVI
|
STRAUSS & CO., a corporation duly organized under the laws of Delaware (the "Issuer"), and CITIBANK, N.A. (London Branch), as Fiscal Agent.
The Issuer has, by a Purchase Agreement, dated November 21, 1996, between the Issuer and Goldman Sachs International (the "Purchase Agreement"), agreed to issue (Yen)20,000,000,000 aggregate principal amount of its 4.25 per cent. Bonds due November 22, 2016 (the "Securities").
The Securities offered shall be initially represented by a single temporary global security (the "Temporary Global Security") issued in fully registered form without interest coupons, substantially in the form set forth in Exhibit A hereto. The Temporary Global Security shall be executed by the Issuer and delivered to the Fiscal Agent, and the Fiscal Agent shall, upon order of the Issuer, authenticate such Temporary Global Security. Such Temporary Global Security shall be registered in the name of National City Nominees Limited or its nominee and deposited with Citibank, N.A. (London Branch), as common depositary (the "Common Depositary") on behalf of Morgan Guaranty Trust Company of New York (Brussels office) as operator of the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel") for credit to the respective accounts of Euroclear or Cedel. The beneficial interests in the Temporary Global Note will be exchangeable for beneficial interests in a permanent global Security (the "Permanent Global Security"), in denominations of (Yen)l,000,000,000 and integral multiples thereof, substantially in the form set forth in Exhibit B hereto, on or after the Exchange Date upon and to the extent that the certification requirements set forth below have been complied with. As used herein, the term "Exchange Date" means the date that is 40 days after the later of (i) the day that Goldman Sachs International, as initial purchaser of the Securities, advises the Issuer and the Fiscal Agent is the day on which the Securities are first offered to persons other than distributors (as defined in Regulation S under the Securities Act of 1933, as amended (the "Securities Act")) in reliance on Regulation S and (ii) the closing of the offering of the Securities under the Purchase Agreement, as notified to the Fiscal Agent and the Issuer in writing by Goldman Sachs International. The Permanent Global Security shall be executed by the Issuer and delivered to the Fiscal Agent, and the Fiscal Agent shall, upon order of the Issuer, authenticate such Permanent Global Security. The Permanent Global Security shall be registered in the name of National City Nominees Limited and shall be deposited with the Common Depositary for the benefit of the operator of Euroclear and Cedel to be held for the account of the Issuer until the Temporary Global Security shall be exchanged for the Permanent Global Security in the manner set forth below. The Permanent Global Security will be exchangeable, in whole but not in part, but only as provided in Section 3(g) below, for definitive Securities in minimum denominations of (Yen)1,000,000,000 (the "Definitive Securities") issuable in registered form, without coupons, in such name or names as Euroclear or Cedel shall direct, all substantially in the form set forth in Exhibit C hereto. The term "Securities" as used herein includes the Temporary Global Security, the Permanent Global Security and the Definitive Securities.
The Issuer hereby appoints Citibank, N.A. (London Branch) having a corporate trust office ("Principal Office") at 336 Strand, London WC2R IHB, in England, as fiscal agent and principal paying agent of the Issuer in respect of the Securities upon the terms and subject to the conditions herein set forth, and Citibank, N.A. (London Branch) hereby accepts such appointment. Citibank, N.A. (London Branch), and any successor or successors as such fiscal agent qualified and appointed in accordance with Section 9 hereof, are herein called the "Fiscal Agent". The Fiscal Agent shall have the powers and authority granted to and conferred upon it in the Securities and hereby and such further powers and authority to act on behalf of the Issuer as may be mutually agreed upon by the Issuer and the Fiscal Agent. All of the terms and provisions with respect to such powers and authority contained in the Securities are subject to and governed by the terms and provisions hereof.
The Issuer may, at its discretion, appoint one or more other or additional agents (each of the principal paying agent, each paying agent appointed herein and each such other or additional paying agent, (a "Paying Agent" or "Paying Agents") for the payment (subject to applicable laws and regulations) of the principal of (and premium, if any) and any interest on the Securities, and in addition to the appointment contemplated by Section 3(i), one or more agents (each transfer agent appointed herein and each such other or additional transfer agent, a "Transfer Agent" or "Transfer Agents") for the exchange of Securities, at such place or places as the Issuer may determine. The Issuer shall promptly notify the Fiscal Agent of the name and address of each Paying Agent and Transfer Agent appointed by it and of the country or countries in which a Paying Agent or Transfer Agent may act in that capacity, and will notify the Fiscal Agent of the resignation or termination of any Paying Agent or Transfer Agent. Subject to the provisions of Section 9(c) hereof, the Issuer may vary or terminate the appointment of any such Paying Agent or Transfer Agent at any time and from time to time upon giving not less than ninety days' notice to such Paying Agent or Transfer Agent, as the case may be, and to the Fiscal Agent.
The Issuer shall cause notice of any resignation, termination or appointment of any Paying Agent or Transfer Agent or of the Fiscal Agent and of any change in the office through which any such Agent will act to be given to the holders at their addresses as they appear in the Security Register.
(a) The Securities shall be executed on behalf of the Issuer by any two of the following persons: its Chairman of the Board, its Chief Executive Officer, its President or any of its Vice Presidents, its Treasurer or an Assistant Treasurer (the "Authorized Officers"), under a facsimile of its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. Any such signature may be manual or facsimile. Securities bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such officers, or any one of them, shall have ceased, for any reason, to hold such offices prior to the authentication and delivery of the Securities or did not hold such offices at the date of the Securities.
(b) The Issuer shall execute and deliver, on or prior to November 22,
1996 (the "Closing Date") the Temporary Global Security and the Permanent Global
Security to the Fiscal Agent, and the Fiscal Agent shall, upon the order of the
Issuer signed by an executive officer of the Issuer, authenticate the Temporary
Global Security and the Permanent Global Security. The Temporary Global
Security and the Permanent Global Security will be deposited with the Common
Depositary, to be held for credit to the respective accounts of Euroclear or
Cedel (or to such accounts as they may direct), except as otherwise provided in
Section 1 hereof in the case of the Permanent Global Security being held for the
account of the Issuer until the exchange of the Temporary Global Security.
(c) On or after the Exchange Date pursuant to instructions delivered by the Issuer to the Common Depositary on the date hereof, the Temporary Global Security may be exchanged as a whole or in part for the Permanent Global Security without charge, but only upon presentation to the Common Depositary of a certificate or certificates in substantially the form set forth in Exhibit E hereto in writing, by tested telex or electronic transmission, from Euroclear or Cedel and upon presentation to Euroclear or Cedel of a certificate or certificates in substantially the form set forth in Exhibit F hereto in writing, by tested telex or electronic transmission, from the beneficial owners of the Temporary Global Security or portions thereof being exchanged.
(d) [Reserved]
(e) Upon any such exchange of a portion of the Temporary Global Security for the Permanent Global Security, the Temporary Global Security shall be endorsed by the Fiscal Agent to reflect the reduction of the principal amount evidenced thereby, whereupon its remaining principal amount shall be reduced for all purposes by the amount so exchanged, and the Permanent Global Security shall be endorsed to reflect the increase of the principal amount evidenced thereby, whereupon its principal amount shall be increased for all purposes by the amount so exchanged. Until so exchanged in full, the Temporary Global Security shall in all respects be entitled to the same benefits under this Agreement as the Permanent Global Security authenticated and delivered hereunder.
(f) Promptly after the Temporary Global Security has been fully exchanged, it shall be surrendered by the Common Depositary to the Fiscal Agent, as the Issuer's agent, for cancellation.
(g) The Permanent Global Security is exchangeable, in whole but not in part, for a Definitive Security or Securities without charge if the Permanent Global Security is held on behalf of Euroclear or Cedel or an alternative clearing system and Euroclear or Cedel or such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so. Thereupon the holder of a beneficial interest in the Permanent Global Security may give notice to the Fiscal Agent of its intention to exchange the Permanent Global Security for Definitive Securities on a day falling not less than 60 days after the day on which the notice requiring an exchange is given and on which banks are open for business in the city of London.
(h) Upon the exchange of a Permanent Global Security for Definitive Securities as contemplated by clause (g) of this Section 3, the Permanent Global Security shall be surrendered promptly by the Common Depositary to the Fiscal Agent for cancellation. Any exchange of an interest in a Permanent Global Security for Definitive Securities pursuant to this Section 3 shall be made free of charge to the beneficial owners of the Permanent Global Security.
(i) The Issuer shall cause to be kept at the Principal Office of the Fiscal Agent a register (the register maintained in such office and in any other office or agency for such purpose being herein sometimes referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration and transfer of Securities. The Fiscal Agent is hereby appointed "Security Registrar" for the purpose of registering and transferring Securities as herein provided. Any reference herein to the Transfer Agent or Agents shall include the Security Registrar.
(j) The Fiscal Agent may, with the consent of the Issuer, appoint by an instrument or instruments in writing one or more agents (which may include itself) for the authentication of the Securities and, with such consent, vary or terminate any such appointment upon written notice and approve any change in the office through which any authentication agent acts. The Issuer (by written notice to the Fiscal Agent and the authentication agent whose appointment is to be terminated) may also terminate any such appointment at any time. The Fiscal Agent hereby agrees to solicit written acceptances from the entities concerned (in form and substance satisfactory to the Issuer) of any such appointments. In its acceptance of such appointment, each such authentication agent shall agree to act as an authentication agent pursuant to the terms and conditions of this Agreement.
Agent. The Issuer irrevocably confirms that funds will be deposited with an account specified by the Fiscal Agent in such a manner so that the Fiscal Agent will be able to make timely payments in accordance with the provisions of this Agreement. If the Fiscal Agent or any Paying Agent has not for any reason received on the relevant payment date sufficient amounts to satisfy all claims in respect of payments then due on the Securities, the Fiscal Agent and any Paying Agent shall not be required to make payment of any amount due on any Security until the Fiscal Agent or such Paying Agent has received or has had made available to it the full amount of the monies then due and payable in respect of such Securities. Nevertheless, subject to the foregoing, if the Fiscal Agent or any Paying Agent is satisfied that it will receive such full amount later, it shall be entitled to pay principal of or interest on the Securities due in accordance with their terms.
The principal of (and premium, if any) and interest on the Securities shall be payable in Japanese Yen. Payment of principal shall be made to the registered owner against surrender of Securities, subject to any applicable laws and regulations, at the office of any Paying Agent. Payment of any installment of interest on a Security shall be made to the person in whose name such Security is registered at the close of business on April 15 and October 15 (whether or not such days are business days) in the year of the relevant interest payment date (the "Record Date"), in accordance with such information furnished to the Fiscal Agent by the Registrar promptly after each Record Date. Payments of principal (and premium, if any) and interest will be made, subject to any applicable laws and regulations, by transfer to a Japanese Yen account maintained by the payee with a bank in Tokyo. Each registered owner shall give notice of such Japanese Yen account, in the case of principal payments, to the relevant Paying Agent not less than 15 days prior to the date of the payment to be received, or, in the case of interest payments, to the Registrar not later than the Record Date relating to the payment to be received, provided that if such notice has been given to the Registrar and the applicable Paying Agent, such registered owner shall give further notice to the Registrar and Paying Agent only upon a change of any details as to such account. If a registered owner fails to give such notice prior to the time limit specified above, payments of principal (and premium, if any) and interest will be made, subject to any applicable laws and regulations, by a Japanese Yen check drawn on a bank in Tokyo unless the relevant Paying Agent or (as the case may be) the Registrar at its discretion accepts such notice given after the time limit specified above. Payments to non-residents of Japan shall be made to a non-resident Japanese Yen account maintained by the payee with an authorized foreign exchange bank in Tokyo or (as the case may be) by a Japanese Yen check drawn on an authorized foreign exchange bank in Tokyo, subject to each case to any applicable laws and regulations.
regulations, the Issuer shall be entitled to determine its duties and liabilities with respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such certificate, or, if no certificate shall be presented, on the basis of any presumption created by any such law or regulation, and shall be entitled to act in accordance with such determination.
The Fiscal Agent and each such withholding agent shall retain each certificate received by it and relating to the Securities for so long as any of the Securities are outstanding and in no event for less than four calendar years after its receipt, and for such additional period thereafter as such certificate may become material in the administration of applicable tax laws.
The Fiscal Agent, or its agent duly authorized by the Fiscal Agent, is hereby authorized from time to time in accordance with the provisions of the Securities and of this Section to authenticate and deliver:
(i) Securities in exchange for or in lieu of Securities of like tenor and of like form which become mutilated, destroyed, stolen or lost; and
(ii) Upon partial redemption, Securities of authorized denominations of a like tenor and form as the Securities so surrendered in exchange for the unredeemed portion of any Securities repaid in part only.
Securities shall be dated the date from which interest on the Securities first begins to accrue. Each Security authenticated and delivered upon any exchange for or in lieu of the whole or any part of any Security shall carry all the rights, if any, to interest accrued and unpaid and to accrue which were carried by the whole or such part of such Security.
All notices of redemption of the Securities shall be made in the name and at the expense of the Issuer and shall be given in accordance with the provisions applicable thereto set forth in the text of the Securities.
Whenever less than all the Securities at any time Outstanding are to be redeemed at the option of the Issuer, the particular Securities to be redeemed shall be selected not more than 60 days prior to the redemption date by the Fiscal Agent from the Outstanding Securities not previously called for redemption, by prorating, as nearly as may be practicable, the principal amount of Securities to be redeemed. In any proration pursuant to this Section, the Fiscal Agent shall make such adjustments, reallocations and eliminations as it shall deem proper to the end that the principal amount of Securities so prorated shall be (Yen)1,000,000,000 or a multiple thereof, by increasing or decreasing or eliminating the amount which would be allocable to any holder on the basis of exact proportion by an amount not exceeding (Yen)1,000,000,000. The Fiscal Agent in its discretion may determine the particular Securities (if there are more than one) registered in the name of any holder which are to be redeemed, in whole or in part. Upon any partial redemption of a Security, the Issuer will issue and the Fiscal Agent shall authenticate and deliver in exchange therefor one or more Securities, of any authorized denomination as requested by the holder, in aggregate principal amount equal to the unredeemed portion of the principal of such Security.
(a) The Issuer shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP (as defined in Condition 7 of the Terms and Conditions of the Securities). So long as any Securities are Outstanding (as defined in Section 11(d) hereof) and subject to the second sentence of subsection (b) below, the Issuer will furnish or cause to be furnished to the Fiscal Agent and, upon request of a holder of Securities, the Fiscal Agent shall furnish to such holder, as soon as available, a copy (in English):
(i) as soon as practicable and in any event within 60 days after the end of each of the first three fiscal quarters of the fiscal year of the Issuer, a copy of the consolidated balance sheet of the Issuer and its Subsidiaries (as defined in Condition 7 of the Terms and Conditions of the Securities), as at the end of the period, and the related consolidated statements of income and cash flows of the Issuer and its
Subsidiaries for such fiscal quarter and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of the Issuer as fairly presenting the financial condition of the Issuer and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event within 90 days after the end of each fiscal year of the Issuer, commencing with fiscal year 1996, a copy of the consolidated balance sheet of the Issuer and its Subsidiaries as at the end of such year and the related consolidated statement of income, stockholders' equity and cash flows of the Issuer and its Subsidiaries for such fiscal year, accompanied by a report thereon of and a letter from Arthur Andersen LLP or other independent public accountants of recognized international standing; which report shall be unqualified as to going concern and scope of audit and shall state that such consolidated financial statements present fairly in all material respects the financial position of the Issuer and its Subsidiaries as at the dates indicated and the results of operations and cash flows for the periods indicated in conformity with GAAP (except as otherwise stated therein) and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepting auditing standards;
(b) As soon as practicable after the same are available to the Issuer, the Issuer will deliver to the Fiscal Agent and, upon request of a holder of Securities, the Fiscal Agent shall furnish to such holder as soon as available, a copy (in English), of all material financial statements, reports, notices and proxy statements, if any, sent or made available by the Issuer to its bondholders generally, of all material regular and periodic reports and other filings, if any, made by the Issuer with any securities exchange or the Securities and Exchange Commission, and of all press releases and other statements made available generally by the Issuer to the public concerning material developments in the business of the Issuer and its Subsidiaries taken as a whole. Notwithstanding the foregoing, the Issuer shall have no obligation under this subsection to deliver to the Fiscal Agent copies of (i) court filings and related documents, (ii) state securities or "blue sky" filings, (iii) filings relating to routine business matters such as permits, etc. and (iv) filings pursuant to the consent decree between the Issuer and the U.S. Federal Trade Commission dates July 12, 1978. As to any information contained in materials furnished pursuant to this subsection, the Issuer shall not be separately required to furnish such information under subsection (a) above, but the foregoing shall not derogate the obligation of the Issuer to furnish the information and material described in subsection (a) above at the times specified therein.
The Fiscal Agent accepts it obligations herein set forth upon the terms and conditions hereof, including the following, to all of which the Issuer agrees and to all of which the rights of holders from time to time of Securities are subject:
other Paying Agent or Transfer Agent or such person, and may engage or be interested in any financial or other transaction with the Issuer, and may act on, or as depository, trustee or agent for, any committee or body of holders of Securities or other obligations of the Issuer, as freely as if they were not the Fiscal Agent, such other Paying Agent or Transfer Agent or such person.
successor Fiscal Agent (which, to qualify as such, shall be a bank or trust company in good standing and having and acting through an established place of business in London, authorized under such laws to exercise corporate trust powers and having a combined capital and surplus in excess of U.S. $50,000,000) and the acceptance of such appointment by such successor Fiscal Agent. Upon its resignation or removal, the Fiscal Agent shall be entitled to payment by the Issuer pursuant to Section 8 hereof of compensation for services rendered and to reimbursement of out-of-pocket expenses incurred hereunder. If, by the day which is 10 days before the expiration of any notice under this Section 9(b), the Issuer has not appointed a successor Fiscal Agent, the Fiscal Agent shall be entitled, on behalf of the Issuer, to appoint a Fiscal Agent in its place meeting the requirements set out above (which successor Fiscal Agent must be approved by the Issuer, provided that such approval shall not be unreasonably withheld or delayed).
further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named as Fiscal Agent hereunder, and such predecessor, upon payment of its compensation and reimbursement of its disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Fiscal Agent shall be entitled to receive, all monies, securities, books, records or other property on deposit with or held by such predecessor as Fiscal Agent hereunder.
The Issuer will pay all stamp and other duties, if any, which may be imposed by the State of Delaware, the United States of America or any political subdivision thereof or taxing authority of or in the foregoing with respect to this Agreement or the issuance of the Securities.
To be entitled to vote at any meeting of holders of Securities, a person shall be a holder of Outstanding Securities. The persons entitled to vote a majority in principal amount of the Outstanding Securities shall constitute a quorum. At the reconvening of any meeting adjourned for a lack of a quorum, the persons entitled to vote 25% in principal amount the Outstanding Securities shall constitute a quorum for the taking of an action set forth in the
notice of the original meeting. The Fiscal Agent may make such reasonable and customary regulations as it shall deem advisable for any meeting of holders of Securities with respect to the proof of the holdings of Securities, the adjournment and chairmanship of such meeting, the appointment and duties of inspectors of votes, the submission and examination of certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate.
It shall not be necessary for the vote or consent of the holders of Securities to approve the particular form of any proposed modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or other action, but it shall be sufficient if such vote or consent shall approve the substance thereof.
Securities authenticated and delivered after the effectiveness of any such modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or other action may bear a notation in the form approved by the Fiscal Agent and the Issuer as to any matter provided for in such modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or other action. New Securities modified to conform, in the opinion of the Fiscal Agent and the Issuer, to any such modification, amendment, supplement, request, demand, authorization, direction, notice, consent, waiver or other action may be prepared by the Issuer, authenticated by the Fiscal Agent (or any authentication agent appointed pursuant to Section 3 hereof) and delivered in exchange for Outstanding Securities.
(i) Securities theretofore canceled by the Fiscal Agent or delivered to the Fiscal Agent for cancellation or held by the Fiscal Agent for reissuance but not reissued by the Fiscal Agent;
(ii) Securities which have been called for redemption in accordance with their terms or which have become due and payable at maturity or otherwise and with respect to which monies sufficient to pay the principal thereof (and premium, if any) and any interest thereon shall have been made available to the Fiscal Agent; or
(iii) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to this Agreement;
have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment, modification or supplement hereunder, (i) the principal amount of a Security which by its terms provides for an amount less than the principal amount to be due and payable upon a declaration of acceleration of the maturity thereof that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the maturity thereof, and (ii) Securities owned directly or indirectly by the Issuer shall be disregarded and deemed not to be Outstanding.
Except as otherwise provided by applicable mandatory provisions of law, this Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York, United States of America.
All notices or communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to the Fiscal Agent shall be delivered, transmitted by facsimile, telexed or telegraphed to it at 336 Strand, London WC2R 1HB, Attention: Bond Agency Department, facsimile transmission no. 44171-500-0483 or if sent to the Issuer shall be delivered or transmitted by facsimile to it at Levi Strauss & Co., Levi's Plaza, 1155 Battery Street, IH1/5, San Francisco, California 94111, facsimile transmission no. (415) 501-1342, Attention: Treasurer. The foregoing addresses for notices or communications may be changed by written notice given by the addressee to each party hereto, and the addressee's address shall be deemed changed for all purposes from and after the giving of such notice.
If the Fiscal Agent shall receive any notice or demand addressed to the Issuer by the holder of a Security, the Fiscal Agent shall promptly forward such notice or demand to the Issuer.
The Issuer hereby appoints Citibank, N.A., 120 Wall Street in the Borough of Manhattan, The City of New York (attention: Corporate Trust Administration) and its successors as its authorized agent (the "Authorized Agent") upon which process may be served in any action arising out of or based on the Securities or this Agreement which may be instituted in any State or Federal court in the City of New York by the holder of any Security and expressly accepts the jurisdiction of any such court in respect of such action. Such appointment, which the Fiscal Agent hereby accepts, shall be irrevocable until all amounts in respect of the principal of (and premium, if any) and any interest due and to become due on or in respect of all the Securities have been either paid or discharged in full, unless and until a successor Fiscal Agent shall have been appointed as such Authorized Agent and shall have accepted such appointment. The Issuer shall take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the Authorized
Agent at the address indicated above, as such address may be changed within the Borough of Manhattan, The City of New York by notice given by the Authorized Agent to the holders of the Securities, shall be deemed, in every respect, effective service of process upon the Issuer. Notwithstanding the foregoing, any action arising out of or based on the Securities may be instituted by the holder of any Security in any other court of competent jurisdiction.
The section headings herein are for convenience only and shall not affect the construction hereof.
If a judgment or order is given by a court or tribunal of any particular jurisdiction for the payment of any amounts owing under any of the Securities to the holders thereof, such judgment or order is expressed in a currency other than Yen, and the amount which is received (or could have been received) by converting such other currency to Yen promptly following receipt at the prevailing rate of exchange in a foreign exchange market reasonably selected by such holder of Securities is less than the amount owed by the Issuer in Yen, then the Issuer shall indemnify and hold each affected holder of Securities harmless against the deficiency and any direct loss sustained as a result thereof. The Issuer shall also pay the reasonable cost of the conversion but shall not be obligated to pay any special or consequential damages.
The Terms and Conditions of the Securities attached hereto as Exhibit D shall be part of the terms of all the Securities and applicable thereto for all purposes. However, the Issuer may prepare the Securities in a form that includes Terms and Conditions numbered 1 through 6, inclusive, and 12 through 15, inclusive, only. The omission of such other Terms and Conditions from the forms of Securities is for convenience only and shall not affect the Terms and Conditions applicable to the Securities that shall include all of the Terms and Conditions.
This Agreement may be executed in one or more counterparts, and by each party separately on a separate counterpart, and each such counterpart when executed and delivered shall be deemed to be an original. Such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Fiscal Agency Agreement as of the date first above written.
LEVI STRAUSS & CO.
By ________________________
Title:
By ________________________
Title:
Attest:
CITIBANK, N.A. (LONDON BRANCH),
as Fiscal Agent
By ________________________
Title:
Attest:
EXHIBIT A
FORM OF TEMPORARY GLOBAL SECURITY
THIS SECURITY IS A TEMPORARY GLOBAL SECURITY WITHIN THE MEANING
OF THE FISCAL AGENCY AGREEMENT REFERRED TO HEREINAFTER. NO EX-
CHANGE OF AN INTEREST IN THIS TEMPORARY GLOBAL SECURITY MAY
BE MADE FOR AN INTEREST IN THE PERMANENT GLOBAL SECURITY
EXCEPT ON OR AFTER THE EXCHANGE DATE AND UPON DELIVERY
OF CERTIFICATIONS RELATING TO SUCH INTEREST IN THE
FORMS REQUIRED BY THE FISCAL AGENCY AGREEMENT.
THIS OBLIGATION HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD IN CONTRAVENTION OF THAT ACT.
LEVI STRAUSS & CO.
(Yen)20,000,000,000
4.25 per cent. Bonds due November 22, 2016
No. TG-1 ISIN: XS0071465586
TEMPORARY GLOBAL SECURITY
LEVI STRAUSS & CO., a corporation duly organized and existing under the laws of the State of Delaware (the "Issuer"), for value received, hereby promises to pay to National City Nominees Limited, or registered assigns, the principal sum of Twenty Billion Japanese Yen ((Yen)20,000,000,000) on November 22, 2016 (or on such earlier date as such principal may become payable in accordance with the Terms and Conditions (the "Conditions") of the Securities designated above (the "Securities") which are attached hereto) and to pay interest thereon from November 22, 1996 or from the most recent Interest Payment Date (as defined in the Conditions) to which interest has been paid or duly provided for, semi-annually in arrears on May 1 and November 1 in each year, commencing May 1, 1997 (each an "Interest Payment Date"), and on the date of maturity, at the rate of 4.25 per cent. per annum (calculated on the basis of a year of twelve 30-day months), until the principal hereof is paid or made available for payment, and, to the fullest extent permitted by applicable law, at the rate of 4.25 per cent. per annum on any overdue principal and premium and on any overdue instalment of interest.
This Temporary Global Security is one of a duly authorized issue of Securities of the Issuer designated as specified in the title hereof, issued and to be issued under the Fiscal Agency Agreement, dated as of November 22, 1996 ("Fiscal Agency Agreement"), between the Issuer and Citibank, N.A. (London Branch), as Fiscal Agent ("Fiscal Agent"). On or after January 4, 1997 (the "Exchange Date"), this temporary security is exchangeable in whole or from time to time in part without charge upon request of the Holder hereof for a beneficial interest in a duly executed and authenticated Permanent Global Security in registered form, without coupons, of authorized denominations as promptly as practicable following presentation of certification, in the form required by the Fiscal Agency Agreement for such purpose, from Euroclear or Cedel Bank, and upon presentation of certification to Euroclear or Cedel, substantially in the form of certificate attached as Exhibit F to the Fiscal Agency Agreement, from the beneficial owners of the Temporary Global Security or portions thereof being exchanged. Upon any exchange of a part of this Temporary Global Security for a beneficial interest in the Permanent Global Security, the portion of the principal amount hereof so exchanged shall be endorsed by or on behalf of the Fiscal Agent on the Schedule hereto, and the principal amount hereof shall be reduced for all purposes by the amount so exchanged in order that the Permanent Global Security represents an aggregate principal amount of securities equal to the aggregate principal amount of beneficial interests in this Temporary Global Security submitted for exchange.
Until exchanged in full for the Permanent Global Security, this Temporary Global Security shall in all respects be entitled to the same benefits and subject to the same terms and conditions of, and the Issuer shall be subject to the same restrictions as those to be endorsed on, the Permanent Global Security and those contained in the Fiscal Agency Agreement.
This Temporary Global Security shall be governed by and construed in accordance with the laws of the State of New York.
Reference is hereby made to the provisions of the Conditions of this Temporary Global Security attached hereto, which further provisions shall for all purposes have the same effect as if set forth at this place.
All terms used in this Temporary Global Security which are defined in the Fiscal Agency Agreement or the definitive Securities shall have the meanings assigned to them therein.
Unless the certificate of authentication hereon has been executed by or on behalf of the Fiscal Agent by the manual signature of one of its duly authorized officers, this Temporary Global Security shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Temporary Global Security to be duly executed and its corporate seal to be hereunto affixed and attested.
Dated: November 22, 1996
LEVI STRAUSS & CO.
By _________________________
Title:
By _________________________
Title:
[Corporate Seal]
Attest:
This is the Temporary Global Security referred to in the within- mentioned Fiscal Agency Agreement and is authenticated by or on behalf of the Fiscal Agent.
CITIBANK, N.A. (LONDON BRANCH),
as Fiscal Agent
By _________________________
Authorized Officer
SCHEDULE OF
PRINCIPAL AMOUNT OF THE TEMPORARY GLOBAL SECURITY
The following subtractions of parts of the principal amount of this Temporary Global Security have been made:
Portion of the aggregate
principal amount of this
Temporary Global Security Remaining principal
exchanged for interests in amount of this Notation made on
Date of exchange or the Permanent Global Temporary Global behalf of the Fiscal
cancellation Security Security Agent
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EXHIBIT B
FORM OF PERMANENT GLOBAL SECURITY
THIS OBLIGATION HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED OR SOLD IN CONTRAVENTION OF THAT ACT.
LEVI STRAUSS & CO.
(Yen)0
4.25 per cent. Bonds due November 22, 2016
No. PG-1 ISIN: XS0071465586
PERMANENT GLOBAL SECURITY
LEVI STRAUSS & CO., a corporation duly organized under the laws of Delaware (herein called the "Issuer"), for value received, hereby promises to pay to National City Nominees Limited, or registered assigns, the principal sum of Zero Japanese Yen ((Yen)0) (or such other amount as is shown in column four on the Schedule attached hereto, but in no event to exceed (Yen)20,000,000,000) on November 22, 2016 (or on such earlier date as such principal amount may become payable in accordance with the Terms and Conditions (the "Conditions") of the Securities designated above (the "Securities") which are attached hereto) and to pay interest thereon from November 22, 1996 or from the most recent Interest Payment Date (as defined in the Conditions) to which interest has been paid or duly provided for, semi-annually in arrears on May 1 and November 1 in each year, commencing May 1, 1997 (each an "Interest Payment Date"), and on the date of maturity, at the rate of 4.25 per cent. per annum (calculated on the basis of a year of twelve 30-day months), until the principal hereof is paid or made available for payment, and, to the fullest extent permitted by applicable law, at the rate of 4.25 per cent. per annum on any overdue principal and premium and on any overdue instalment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Permanent Global Security is registered at the close of business on the April 15 or October 15 next preceding such Interest Payment Date ("Record Date"). Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the person in whose name this Permanent Global Security is registered on such Record Date and may be paid to the person in whose name this Permanent Global Security is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Issuer or be paid at any time in any other lawful manner not inconsistent with the requirement of any securities exchange on which this Permanent Global Security may be listed. Such payments (including premium, if any) shall be
made by Japanese Yen check drawn on, or transfer to a Japanese Yen account maintained by the payee with, a bank in the City of Tokyo. Payment of interest on this Permanent Global Security will be made by Japanese Yen check drawn on a bank in The City of Tokyo mailed to the address of the person entitled thereto as such address shall appear in the Security Register (as defined in Condition 3 of the Conditions hereof) or, upon application by the Holder to the Fiscal Agent not later than the Record Date in respect of such payment, by transfer to a Japanese Yen account maintained by the Holder with a bank in the City of Tokyo.
Upon any exchange of a part of the Temporary Global Security for a beneficial interest in this Permanent Global Security, the portion of the principal amount hereof so exchanged shall be endorsed by or on behalf of the Fiscal Agent on the Schedule hereto, and the principal amount hereof shall be increased for all purposes by the amount so exchanged.
This Permanent Global Security is one of a duly authorized issue of Securities of the Issuer designated as specified in the title hereof, issued and to be issued under the Fiscal Agency Agreement, dated as of November 22, 1996 ("Fiscal Agency Agreement"), between the Issuer and Citibank, N.A. (London Branch), as Fiscal Agent ("Fiscal Agent"). This Permanent Global Security is exchangeable, in whole but not in part, for a Definitive Security or Securities without charge if (i) there occurs and is continuing any Event of Default under Condition 6 or (ii) this Permanent Global Security is held on behalf of Euroclear or Cedel or an alternative clearing system and Euroclear or Cedel or such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so. Thereupon the holder of a beneficial interest in this Permanent Global Security may give notice to the Fiscal Agent of its intention to exchange the Permanent Global Security for Definitive Securities on a day falling not less than 60 days after the day on which the notice requiring an exchange is given and on which banks are open for business in the city of London.
Reference is hereby made to the provisions of the Conditions of this Permanent Global Security attached hereto, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on behalf of the Fiscal Agent by the manual signature of one of its duly authorized officers, this Permanent Global Security shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed and its corporate seal to be affixed hereto and attested.
Dated: November 22, 1996
LEVI STRAUSS & CO.
By ________________________
Title:
By ________________________
Title:
[Corporate Seal]
Attest:
This is the Permanent Global Security referred to in the within- mentioned Fiscal Agency Agreement and is authenticated by or on behalf of the Fiscal Agent.
CITIBANK, N.A. (LONDON BRANCH),
as Fiscal Agent
By ________________________
Authorized Officer
SCHEDULE OF
PRINCIPAL AMOUNT OF THE PERMANENT GLOBAL SECURITY
The following increases to and subtractions from the principal amount of this Permanent Global Security have been made:
Reason for change in Increase to or
principal amount of subtraction from Aggregate principal Notation made on
this Permanent aggregate amount following such behalf of the
Date Global Security/*/ principal amount increase or subtraction Fiscal Agent
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EXHIBIT C
FORM OF DEFINITIVE SECURITY
THIS OBLIGATION HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED OR SOLD IN
CONTRAVENTION OF THAT ACT.
LEVI STRAUSS & CO.
(Yen)________
4.25 per cent. Bonds due November 22, 2016
No. D-______________ ISIN: XS0071465586
LEVI STRAUSS & CO., a corporation duly organized under the laws of Delaware (herein called the "Issuer"), for value received, hereby promises to pay to __________, or registered assigns, the principal sum of _______________ Japanese Yen ((Yen)__________) on November 22, 2016 (or on such earlier date as such principal amount may become payable in accordance with the Terms and Conditions (the "Conditions") of the Securities designated above (the "Securities") which are attached hereto) and to pay interest thereon from November 22, 1996 or from the most recent Interest Payment Date (as defined in the Conditions) to which interest has been paid or duly provided for, semi- annually in arrears on May 1 and November 1 in each year, commencing May 1, 1997 (each an "Interest Payment Date"), and on the date of maturity, at the rate of 4.25 per cent. per annum (calculated on the basis of a year of twelve 30-day months), until the principal hereof is paid or made available for payment, and, to the fullest extent permitted by applicable law, at the rate of 4.25 per cent. per annum on any overdue principal and premium and on any overdue instalment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Security is registered at the close of business on the April 15 or October 15 next preceding such Interest Payment Date ("Record Date"). Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the person in whose name this Security is registered on such Record Date and may be paid to the person in whose name this Security is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Issuer or be paid at any time in any other lawful manner not inconsistent with the requirement of any securities exchange on which this Security may be listed. Such payments (including premium, if any) shall be made by Japanese Yen check drawn on, or transfer to a Japanese Yen account maintained by the payee with, a bank in the City of Tokyo. Payment of interest on this Security will be made by Japanese Yen check drawn on a bank in The City of Tokyo mailed to the address of the person
entitled thereto as such address shall appear in the Security Register (as defined in Condition 3 of the Terms and Conditions hereof) or, upon application by the Holder to the Fiscal Agent not later than the Record Date in respect of such payment, by transfer to a Japanese Yen account maintained by the Holder with a bank in the City of Tokyo. The Issuer covenants that until this Security has been delivered to the Fiscal Agent for cancellation, or monies sufficient to pay the principal of and premium, if any, and interest on this Security has been made available for payment and either paid or returned to the Issuer, it will at all times maintain an office or agency outside the United States for the payment of the principal of and premium, if any, and interest on the Securities as herein provided.
This Security is one of a duly authorized issue of Securities of the Issuer designated as specified in the title hereof, issued and to be issued under the Fiscal Agency Agreement, dated as of November 22, 1996 ("Fiscal Agency Agreement"), between the Issuer and Citibank, N.A. (London Branch), as Fiscal Agent ("Fiscal Agent"). Reference is hereby made to the provisions of the Conditions of this Security attached hereto, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on behalf of the Fiscal Agent by the manual signature of one of its duly authorized officers, this Security shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed and its corporate seal to be affixed hereto and attested.
Dated: November 22, 1996
LEVI STRAUSS & CO.
By __________________________
Title:
By __________________________
Title:
[Corporate Seal]
Attest:
This is one of the Securities referred to in the within-mentioned Fiscal Agency Agreement and is authenticated by or on behalf of the Fiscal Agent.
CITIBANK, N.A. (LONDON BRANCH),
as Fiscal Agent
By _______________________
Authorized Officer
EXHIBIT D
TERMS AND CONDITIONS OF THE SECURITIES
1. This Security is one of a duly authorized issue of securities of the Issuer in the aggregate principal amount of 20,000,000,000 Japanese Yen ((Yen)20,000,000,000), designated as its 4.25 per cent. Bonds due November 22, 2016 (herein called the "Securities"). The Issuer, for the benefit of the Holders (as defined in Condition 2 herein) from time to time of the Securities, has entered into a Fiscal Agency Agreement, dated as of November 22, 1996 (herein called the "Fiscal Agency Agreement"), between the Issuer and Citibank, N.A. (London Branch), as Fiscal Agent (herein called the "Fiscal Agent", which term includes any successor fiscal agent under the Fiscal Agency Agreement), copies of which Fiscal Agency Agreement are on file and available for inspection at the corporate trust office of the Fiscal Agent in London. Upon the written request of any Holder, the Fiscal Agent will provide a copy of the Fiscal Agency Agreement to such Holder.
2. The Securities are issuable as registered Securities. The Securities are issuable in authorized denominations of ((Yen)1,000,000,000 and integral multiples thereof. As used herein, the term "Holder", when used with respect to any Security, means the person in whose name such Security is registered in the Security Register.
3. The Issuer shall maintain in London an office or agency where Securities may be surrendered for registration of transfer or exchange. The Issuer has initially appointed the corporate trust office (the "Principal Office") of the Fiscal Agent as its agent in London for such purpose and has agreed to cause to be kept at such office a register (the register maintained in such office and in any other office or agency for such purpose being herein collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer will provide for the registration and transfers of Securities. The Issuer reserves the right to vary or terminate the appointment of the Fiscal Agent as security registrar or any transfer agent or to appoint additional or other registrars or transfer agents or to approve any change in the office through which any security registrar or transfer agent acts, provided that there will at all times be a security registrar in London.
The transfer of a Security is registrable on the Security Register upon surrender of such Security at the Principal Office of the Fiscal Agent duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Fiscal Agent duly executed by, the Holder thereof or his attorney duly authorized in writing. Upon such surrender of this Security for registration of transfer, the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more
new Securities, dated the date of authentication thereof, of any authorized denominations and of a like aggregate principal amount.
At the option of the Holder upon request confirmed in writing, Securities may be exchanged for Securities of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at the office of any transfer agent or at the Principal Office of the Fiscal Agent. Any registration of transfer or exchange will be effected upon the transfer agent or the Fiscal Agent, as the case may be, being satisfied with the documents of title and identity of the person making the request and subject to such reasonable regulations as the Issuer may from time to time agree with the transfer agents and the Fiscal Agent. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
In the event of a redemption in part, the Issuer shall not be required
(i) to register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the date notice is given
identifying the Securities to be redeemed or (ii) to register the transfer of or
exchange any registered Security, or portion thereof, called for redemption.
All Securities issued upon any registration of transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits, as the Securities surrendered upon such registration of transfer or exchange. No service charge shall be made for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith, other than an exchange in connection with a partial redemption of a Security not involving any registration of a transfer.
The Issuer and the Fiscal Agent and any other paying agency of the Issuer may deem and treat the person in whose name a Security is registered the owner thereof for all purposes whether or not such Security be overdue, and neither the Issuer, the Fiscal Agent nor any such agent shall be affected by notice to the contrary.
4. (a) Subject to the following provisions, the Issuer shall provide to the Fiscal Agent at its head office in the City of Tokyo, on or prior to the applicable due date for the payment of Securities, funds required to make payment of the principal of and interest on the Securities, at the times, in the amounts, in such coin or currency and for the purposes set forth herein and in the text of the Securities; and the Issuer hereby authorizes and directs the Fiscal Agent from funds so paid to it to make or cause to be made payment of the principal of (and premium, if any) and interest on the Securities as set forth herein and in the text of the Securities. The Fiscal Agent will arrange directly with the Paying Agents (if applicable) for the payment, and the Fiscal Agent will make payment, in the manner provided herein and in the Securities, from funds furnished by the Issuer, of the principal of (and premium, if any) and interest on the Securities.
The principal of (and premium, if any) and interest on the Securities shall be payable in Japanese Yen. Payment of principal shall be made to the registered owner against
surrender of Securities, subject to any applicable laws and regulations, at the office of any Paying Agent. Payment of any installment of interest on a Security shall be made to the person in whose name such Security is registered at the close of business on April 15 and October 15 (whether or not such days are business days) in the year of the relevant interest payment date (the "Record Date"), in accordance with such information furnished to the Fiscal Agent by the Registrar promptly after each Record Date. Payments of principal (and premium, if any) and interest will be made, subject to any applicable laws and regulations, by transfer to a Japanese Yen account maintained by the payee with a bank in Tokyo. Each registered owner shall give notice of such Japanese Yen account, in the case of principal payments, to the relevant Paying Agent not less than 15 days prior to the date of the payment to be received, or, in the case of interest payments, to the Registrar not later than the Record Date relating to the payment to be received. If a registered owner fails to give such notice prior to the time limit specified above, payments of principal (and premium, if any) and interest will be made, subject to any applicable laws and regulations, by a Japanese Yen check drawn on a bank in Tokyo unless the relevant Paying Agent or (as the case may be) the Registrar at its discretion accepts such notice given after the time limit specified above. Payments to non- residents of Japan shall be made to a non-resident Japanese Yen account maintained by the payee with an authorized foreign exchange bank in Tokyo or (as the case may be) by a Japanese Yen check drawn on an authorized foreign exchange bank in Tokyo, subject to each case to any applicable laws and regulations. Any monies paid by the Issuer to the Fiscal Agent for the payment of the principal of or premium, if any, or interest on any Securities and remaining unclaimed at the end of two years after such principal, premium or interest shall have become due and payable (whether at maturity, upon call for redemption or otherwise) and monies sufficient therefor shall have been duly made available for payment shall then be repaid to the Issuer upon its written request, and upon such repayment all liability of the Fiscal Agent and the Paying Agents with respect thereto shall cease, without, however, limiting in any way any obligation the Issuer may have to pay the principal of or premium, if any, and interest on this Security as the same shall become due.
(b) In any case where the due date for the payment of the principal of and premium, if any, or interest on any Security or the date fixed for redemption of any Security shall be at any place of payment a day on which banking institutions in such place or in Tokyo or London are authorized or obligated by law to close, then payment of principal, premium or interest need not be made on such date at such place but may be made on the next succeeding day at such place which is not a day on which banking institutions in such place or in Tokyo or London are authorized or obligated by law to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption, and no interest shall accrue for the period after such date.
5. (a) On November 1, 2006 and on any Interest Payment Date thereafter, the Securities are subject to redemption, at the option of the Issuer in whole or in part, upon not less than 30 nor more than 60 days' prior written notice given as hereinafter provided, at a redemption price equal to the Make Whole Redemption Amount.
(b) In the case of any partial redemption of Securities, the Securities to be redeemed shall be selected by the Fiscal Agent not more than 60 days prior to the redemption date, from the Outstanding Securities not previously called for redemption, by prorating, as
nearly as may be practicable, the principal amount of Securities to be redeemed. In any proration pursuant to this Condition 5, the Fiscal Agent shall make such adjustments, reallocations and eliminations as it shall deem proper to the end that the principal amount of Securities so prorated shall be (Yen)l,000,000,000 or a multiple thereof, by increasing or decreasing or eliminating the amount which would be allocable to any Holder on the basis of exact proportion by an amount not to exceed (Yen)1,000,000,000.
(c) Notices to redeem Securities shall be given in writing mailed, first-class postage prepaid, to each Holder of Securities, or portions thereof, so to be redeemed, at his address as it appears in the Security Register. Neither the failure to give notice nor any defect in any notice given to any particular Holder of a Security shall affect the sufficiency of any notice with respect to other Securities. Notices to redeem Securities shall specify the date fixed for redemption, the redemption price, the place or places of payment, that payment will be made upon presentation and surrender of the Securities to be redeemed (or portion thereof in the case of a partial redemption of a Security), that interest accrued to the date fixed for redemption (unless the redemption date is an Interest Payment Date) will be paid as specified in said notice, and that on and after said date interest thereon will cease to accrue.
(d) If notice of redemption has been given in the manner set forth in clause (c) of this Condition 5 the Securities so to be redeemed shall become due and payable on the redemption date specified in such notice and upon presentation and surrender of the Securities at the place or places specified in such notice the Securities shall be paid and redeemed by the Issuer at the places and in the manner herein specified and at the redemption price herein specified together with accrued interest (unless the redemption date is an Interest Payment Date) to the redemption date. From and after the redemption date, if monies for the redemption of Securities called for redemption shall have been made available at the corporate trust office of the Fiscal Agent for redemption on the redemption date, the Securities called for redemption shall cease to bear interest and the only right of the holders of such Securities shall be to receive payment of the redemption price together with accrued interest (unless the redemption date is an Interest Payment Date) to the redemption date as aforesaid. If monies for the redemption of the Securities are not made available for payment until after the redemption date, the Securities called for redemption shall not cease to bear interest until such monies have been so made available.
(e) Any Security which is to be redeemed only in part shall be surrendered with, if the Issuer or the Fiscal Agent so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Fiscal Agent duly executed by, the Holder thereof or his attorney duly authorized in writing, and the Issuer shall execute, and the Fiscal Agent shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
(f) Securities redeemed or otherwise acquired by the Issuer or their subsidiaries will forthwith be delivered to the Fiscal Agent for cancellation and may not be reissued or resold.
The following terms used in this Condition 5 shall have the following meanings:
"Adjusted JGB Rate" means a rate of interest per annum calculated by the Calculation Agent corresponding to the calculated yield per annum of a Japanese Government Bond ("JGB") bearing a maturity equal to the Remaining Term, such yield to be interpolated between the yields on (i) the JGB with a constant maturity closest to and greater than the Remaining Term and (ii) the JGB with a constant maturity closest to and less than the Remaining Term, plus the Credit Spread.
"Calculation Agent" means Goldman Sachs International or, if it is unavailable or unwilling to serve, any other banking or investment banking firm of recognized international standing appointed from time to time by the Issuer to act as Calculation Agent hereunder.
"Credit Spread" means .45 per cent. from November 1, 2006 to and including November 1, 2011, and .25 per cent. thereafter.
"Remaining Term" means the remaining term of the Securities from the redemption date.
6. In the event of the occurrence of any of the following events (each, an "Event of Default")
(a) default in the payment of the principal of or premium, if any, of any Security when due (whether at maturity, upon redemption or otherwise); or
(b) default in the payment of any interest on any Security for a period of more than 30 days after the date when due; or
(c) default in the performance or breach of any other covenant, warranty or agreement contained in the Securities or, if applicable to the Securities, in the Fiscal Agency Agreement for a period of 60 days after the date on which written notice of such default requiring the Issuer to remedy the same and stating that such notice is a "Notice of Default" shall first have been given to the Issuer by the Fiscal Agent or to the Issuer and the Fiscal Agent by the holders of at least 25% in aggregate principal amount of the Outstanding Securities; or
(d) default under any bond, debenture, note or other evidence of indebtedness for money borrowed of the Issuer or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed of the Issuer with a principal amount then outstanding, individually or in the aggregate, in excess of $25,000,000, whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay any portion of the principal of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto or shall have resulted in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged or such failure to pay or such acceleration having been rescinded or annulled, within a period of 30 days after the date on which written notice of such failure to pay or such acceleration, requiring the Issuer to remedy the same and stating that such notice is a "Notice of Default", shall first have been given to the Issuer by the Fiscal Agent or to the Issuer and the Fiscal Agent by the holders of at least 25% in aggregate principal amount of the Outstanding Securities; or
(e) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Issuer a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer under any applicable law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or of any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer, and any such decree or order for relief or any such other decree or order shall continue unstayed and in effect for a period of 60 consecutive days; or
(f) commencement by the Issuer of a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Issuer to the entry of a decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Issuer, or the filing by the Issuer of a petition or answer or consent seeking reorganization or relief under any such applicable law, or the consent by the Issuer to the filing of such petition or to the appointment of or the taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or of any substantial part of its property, or the making by the Issuer of an assignment for the benefit of creditors, or the taking of action by the Issuer in furtherance of any such action;
due and payable. If any other Event of Default shall have occurred and be continuing, the Fiscal Agent shall, at the request of the holders of not less than 25% in principal amount of the Outstanding Securities, by written notice to the Issuer, declare the principal of all the Securities to be due and payable immediately, and upon such declaration the principal of and any accrued interest on shall become immediately due and payable. The right of the Fiscal Agent to give any such notice shall terminate if the Event of Default giving rise to such right shall have been cured before such right is exercised.
At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained, the holders of a majority in principal amount of the Outstanding Securities, by written notice to the Issuer and the Fiscal Agent, may rescind and annul such declaration and its consequences if
(1) the Issuer has paid or deposited with the Fiscal Agent, a sum sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have become due otherwise than by such declaration of acceleration and, to the extent that payment of such interest is lawful, interest thereon at the rate provided herein, and
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate provided herein,
and
(2) all Events of Default, other than the nonpayment of the principal of Securities which have become due solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
As provided in Section 17 of the Fiscal Agency Agreement, Terms and Conditions 7 through 11, inclusive, may be omitted from the "Terms and Conditions" of the Securities, but shall remain applicable to the Securities.
7. For so long as any of the Securities remain Outstanding or any amount remains unpaid on any of the Securities, the Issuer will comply with the terms of the covenants set forth below:
(a) The Issuer shall at all times preserve and keep in full force and effect its corporate existence and rights and franchises material to its business and its goodwill and the business and the goodwill of each of its Subsidiaries, except where the failure to do so would not in the aggregate have a Material Adverse Effect (as defined below).
(b) The Issuer shall comply with the requirements of each applicable Requirement of Law (as defined below), except where the failure to do so would not in the aggregate have a Material Adverse Effect.
(c) The Issuer shall pay, and cause each of its Subsidiaries (as defined below) to pay, all taxes, assessments and other governmental charges (other than taxes, assessments and other governmental charges not exceeding $5,000,000 in the aggregate) imposed upon them or any of their properties or assets or in respect of any of their franchises, business, income or property before any penalty or interest accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums (other than claims not exceeding $5,000,000 in the aggregate) which have become due and payable and which by law have or may become a Lien (as defined below) upon any of their properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided that no such governmental charge or claim need be paid if it is being contested in good faith by appropriate proceedings and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.
(d) The Issuer shall maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of the Issuer and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect. The Issuer shall maintain or cause to be maintained, through self-insurance or with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all such failures in the aggregate) have a Material Adverse Effect.
(e) The following terms used in this Condition 7 and/or, as applicable, in Conditions 8 or 9, shall have the following meanings:
"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Attributable Indebtedness," in respect of any sale and leaseback transaction, means, as of the time of determination, the total obligation (discounted to present value at the rate per annum equal to the discount rate which would be applicable to a capital lease obligation with like term in accordance with generally accepted accounting principles) of the lessee for rental payments (other than amounts required to be paid on account of property taxes, maintenance, repairs, insurance, water rates and other items which do not constitute payments
for property rights) during the remaining portion of the initial term of the lease included in such sale and leaseback transaction.
"Consolidated Net Tangible Assets" means the aggregate amount of assets (less applicable reserves and other properly deductible items) after deducting therefrom (i) all current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the most recent consolidated balance sheet of the Issuer but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower) and (ii) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the most recent consolidated balance sheet of the Issuer and computed in accordance with generally accepted accounting principles.
"Funded Indebtedness" means (i) all Indebtedness having a maturity of
more than 12 months from the date as of which the determination is made or
having a maturity of 12 months or less but by its terms being renewable or
extendible beyond 12 months from such date at the option of the borrower and
(ii) rental obligations payable more than 12 months from such date under leases
which are capitalized in accordance with generally accepted accounting
principles (such rental obligations to be included as Funded Indebtedness at the
amount so capitalized as of such date of determination).
"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such other entity as may be in general use by significant segments of the U.S. accounting profession, which are applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
"Indebtedness" means obligations (other than nonrecourse obligations) of, or guaranteed or assumed by, the Issuer for borrowed money, including obligations evidenced by bonds, debentures, notes or other similar instruments and reimbursement and cash collateralization of letters of credit, bankers' acceptances, interest rate hedge and currency hedge agreements.
"Lien" means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, security interest, lien, encumbrance, or other security arrangement of any kind or nature whatsoever on or with respect to such property or assets (including any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) of the Issuer and its Subsidiaries taken as a whole;
(b) a material impairment of the ability of the Issuer to perform under the
Fiscal Agency Agreement or the Securities, and to avoid any Event of Default; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against the Issuer of the Fiscal Agency Agreement or the
Securities.
"Officers' Certificate," when used with reference to the Issuer, means a written certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer or any Vice President of the Issuer and by any one of the Treasurer, the Controller, an Assistant Treasurer, an Assistant Controller, the Secretary or an Assistant Secretary of the Issuer, and delivered to the Fiscal Agent.
"Opinion of Counsel" means a written opinion of counsel selected by the Issuer, which counsel shall be reasonably acceptable to the Fiscal Agent.
"Person" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.
"Principal Property" means any contiguous or proximate parcel of real property owned by, or leased to, the Issuer or any of its Restricted Subsidiaries, and any equipment located at or comprising a part of any such property, having a gross book value (without deduction of any depreciation reserves), as of the date of determination, in excess of 1.0% of Consolidated Net Tangible Assets.
"Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.
"Restricted Subsidiary" means any Subsidiary of the Issuer which owns or leases a Principal Property.
"Subsidiary" of the Issuer means any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Issuer, or one or more of the Subsidiaries of the Issuer, or a combination thereof.
8. (a) The Issuer will not, and will not permit any Restricted Subsidiary to, enter into any sale and leaseback transaction with respect to any Principal Property unless: (i) the sale and leaseback transaction is solely with the Issuer or another Restricted Subsidiary; (ii) the lease is for a period not in excess of three years, including renewal rights; (iii) the lease secures or relates to industrial revenue or pollution control bonds; (iv) the Issuer or such Restricted Subsidiary would (at the time of entering into such arrangement) be entitled as
described in clauses (i) through (viii) of the second paragraph of subparagraph
(b), without equally and ratably securing this Security, to create, incur,
issue, assume or guarantee Indebtedness secured by a Lien on such Principal
Property in the amount of the Attributable Indebtedness arising from such sale
and leaseback transaction; (v) the Issuer or such Restricted Subsidiary, within
180 days after the sale of such Principal Property in connection with such sale
and leaseback transaction is completed, applies an amount equal to the greater
of (A) the net proceeds of the sale of the Principal Property leased or (B) the
fair market value of the Principal Property leased to (1) the retirement of
Securities, other Funded Indebtedness of the Issuer ranking on a parity with the
Securities, or Funded Indebtedness of a Restricted Subsidiary or (2) the
purchase of other property which will constitute a Principal Property having a
value at least equal to the value of the Principal Property leased; or (vi) the
Attributable Indebtedness of the Issuer and its Restricted Subsidiaries in
respect of such sale and leaseback transaction and all other sale and leaseback
transactions entered into after the date of the Fiscal Agency Agreement (other
than any such sale and leaseback transactions as would be permitted as described
in clauses (i) through (v) of this sentence), plus the aggregate principal
amount of Indebtedness secured by Liens on Principal Properties then outstanding
(not including any such Indebtedness secured by Liens described in clauses (i)
through (viii) of the second paragraph of subparagraph (b) below) which do not
equally and ratably secure such outstanding Securities (or secure such
outstanding Securities on a basis that is prior to other Indebtedness secured
thereby), would not exceed 10% of Consolidated Net Tangible Assets.
(b) The Issuer will not, and will not permit any Restricted Subsidiary to, create, incur, issue, assume or guarantee any Indebtedness secured by a Lien upon any Principal Property, or upon shares of capital stock or Indebtedness issued by any Restricted Subsidiary and owned by the Issuer or any Restricted Subsidiary, now or hereafter acquired, without effectively providing concurrently that this Security is secured equally and ratably with or, at the option of the Issuer, prior to such Indebtedness so long as such Indebtedness shall be so secured.
Notwithstanding the restrictions described above, the Issuer and its Restricted Subsidiaries may create, incur, issue, assume or guarantee Indebtedness secured by Liens without equally and ratably securing this Security if, at the time of such creation, incurrence, issuance, assumption or guarantee, after giving effect thereto and to the retirement of any Indebtedness which is concurrently being retired, the aggregate amount of all outstanding Indebtedness secured by Liens which would otherwise be subject to such restrictions (other than any Indebtedness secured by Liens permitted as described in clauses (i) through (viii) of the immediately preceding paragraph) plus all Attributable Indebtedness in respect of sale and leaseback transactions with respect to Principal Properties (with the exception of such transactions which are permitted under clauses (i) through (v) of the first sentence of the first paragraph of subparagraph (a) above) does not exceed 10% of Consolidated Net Tangible Assets.
9. (a) The Issuer shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of the Issuer's properties and assets to any Person, and the Issuer shall not permit any Person to consolidate with or merge into the Issuer or convey, transfer or lease its properties and assets substantially as an entirety to the Issuer, unless:
(i) in case the Issuer shall consolidate with or merge into another Person or convey, transfer or lease all or substantially all of the Issuer's properties and assets to any Person, the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the Issuer's properties and assets shall be a corporation, partnership, trust or other entity, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an amendment to the Fiscal Agency Agreement, executed and delivered to the Fiscal Agent, in form satisfactory to the Fiscal Agent, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of the Fiscal Agency Agreement on the part of the Issuer to be performed or observed;
(ii) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Issuer or any Subsidiary as a result of such transaction as having been incurred by the Issuer or such Subsidiary at the time of
such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;
(iii) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Issuer would become subject to a Lien which would not be permitted by the Fiscal Agency Agreement, the Issuer or such successor Person, as the case may be, shall take such steps as shall be necessary effectively to secure this Security equally and ratably with (or prior to) all indebtedness secured thereby; and
(iv) the Issuer has delivered to the Fiscal Agent an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if an amendment to the Fiscal Agency Agreement is required in connection with such transaction, such amendment comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
(b) Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer, sale or lease of all or substantially all the properties and assets of the Issuer in accordance with subparagraph (a) above, the successor Person formed by such consolidation or into which the Issuer is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Fiscal Agency Agreement with the same effect as if such successor Person had been named as the Issuer herein, and thereafter the predecessor Person shall be relieved of all obligations and covenants under the Fiscal Agency Agreement and this Security.
11. If any mutilated Security is surrendered to the Fiscal Agent or a Paying Agent, the Issuer shall execute, and the Fiscal Agent or such Paying Agent, as the case may be, shall authenticate and deliver in exchange therefor, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.
If there shall be delivered to (x) the Issuer and (y) the Fiscal Agent or a Paying Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of each of them harmless, then, in the absence of notice to the Issuer or the Fiscal Agent or any such Paying Agent that such Security has been acquired by a bona fide purchaser, the Issuer shall execute, and upon their request the Fiscal Agent or such Paying Agent shall authenticate and deliver in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.
Upon the issuance of any new Security under this Condition, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and the expenses of the Fiscal Agent or such Paying Agent) connected therewith.
Every new Security issued pursuant to this Condition in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone.
Any new Security delivered pursuant to this Condition shall be so dated that neither gain nor loss in interest shall result from such exchange.
The provisions of this Condition 11 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
13. No reference herein to the Fiscal Agency Agreement and no provision of this Security or of the Fiscal Agency Agreement shall alter or impair the obligation of the Issuer, which is absolute and unconditional to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
14. If a judgment or order is given by a court or tribunal of any particular jurisdiction for the payment of any amounts owing under any of the Securities to the holders thereof, such judgment or order is expressed in a currency other than Yen, and the amount which is received (or could have been received) by converting such other currency to Yen promptly following receipt at the prevailing rate of exchange in a foreign exchange market reasonably selected by such holder of Securities is less than the amount owed by the Issuer in Yen, then the Issuer shall indemnify and hold each affected holder of Securities harmless against the deficiency and any direct loss sustained as a result thereof. The Issuer shall also pay the reasonable cost of the conversion but shall not be obligated to pay any special or consequential damages.
15. (a) This Security shall be governed by and construed in accordance with the laws of the State of New York.
(b) The Issuer has appointed Citibank, N.A., 120 Wall Street in the Borough of Manhattan, The City of New York (attention: Corporate Trust Administration) and its successors as its Authorized Agent upon which process may be served in any action arising out of or based on the Securities or this Agreement which may be instituted in any State or Federal court in the City of New York by the holder of any Security and expressly accepts the jurisdiction of any such court in respect of such action. Such appointment, which the Fiscal Agent hereby accepts, shall be irrevocable until all amounts in respect of the principal of (and premium, if any) and any interest due and to become due on or in respect of all the Securities have been either paid or discharged in full, unless and until a successor Fiscal Agent shall have been appointed as such Authorized Agent and shall have accepted such appointment. The Issuer shall take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment or appointments in full force and effect as aforesaid. Service of process upon the Authorized Agent at the address indicated above, as such address may be changed within the Borough of Manhattan, The City of New York by notice given by the Authorized Agent to the holders hereof, shall be deemed, in every respect, effective service of process upon the Issuer.
(c) Notwithstanding the foregoing, any action arising out of or based on the Securities may be instituted by the holder of any Security in any other court of competent jurisdiction.
EXHIBIT E
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
CERTIFICATE
LEVI STRAUSS & CO.
(Yen)20,000,000,000 4.25 percent. Bonds due November 22, 2016
Reference is hereby made to the Fiscal Agency Agreement, dated as of November 22, 1996 (the "Fiscal Agency Agreement"), between Levi Strauss & Co., as Issuer, and Citibank, N.A. (London Branch), as Fiscal Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Fiscal Agency Agreement.
This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Fiscal Agency Agreement, as of the date hereof, (Yen)_______ aggregate principal amount of the above-captioned Securities are beneficially owned by non-U.S. Persons and are not held for purposes of resale directly or indirectly to a U.S. Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia. As used herein, U.S. Person has the meaning assigned to it in Rule 902 under the Securities Act of 1933, as amended.
We further certify that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with certain securities laws of the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman Sachs International as the initial purchasers of the Securities.
Dated: ____________, 199_
By:_________________________
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, BRUSSELS
OFFICE, as
Operator of the Euroclear Clearance
System][or]
[CEDEL BANK, SOCIETE ANONYME]
EXHIBIT F
FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
CERTIFICATE
LEVI STRAUSS & CO.
(Yen)20,000,000,000 4.25 percent. Bonds due November 22, 2016
Reference is hereby made to the Fiscal Agency Agreement, dated as of November 22, 1996 (the "Fiscal Agency Agreement"), between Levi Strauss & Co., as Issuer, and Citibank, N.A. (London Branch), as Fiscal Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Fiscal Agency Agreement.
This certificate relates to (Yen)_______________ aggregate principal amount of Securities which are evidenced by the Temporary Global Security and held with the Common Depositary through Euroclear or CEDEL or both in the name of _______________ [insert name of holder] (the "Holder").
In respect of such Securities, the Holder does hereby certify that as of the date hereof, the above-captioned Securities are beneficially owned by non-U.S. Persons and are not held for purposes of resale directly or indirectly to a U.S. Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia. As used herein, U.S. Person has the meaning assigned to it in Rule 902 under the Securities Act of 1933, as amended.
We undertake to advise you immediately by tested telex on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.
We understand that this certification is required in connection with certain securities laws in the United States. If administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification or a copy thereof to any interested party in such proceedings. This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer and Goldman Sachs International as the initial purchaser of the Securities.
Dated: ____________, 199_*
EXHIBIT 4.3
COUNTERPART NO. __ OF __ SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
LEASE INTENDED AS SECURITY
Dated as of December 3, 1999
among
LEVI STRAUSS & CO.
as Lessee
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Agent
and
THE PERSONS LISTED ON SCHEDULE I HERETO
as Lessors
PAGE
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ARTICLE I DEFINITIONS.............................................................................. 2
ARTICLE II GRANT OF SECURITY INTEREST AND LEASE; GENERAL PROVISIONS................................. 14
Section 2.1 Funding; Payment of Funded Amount................................................. 14
Section 2.2 Application of Funds; Lease of Collateral......................................... 14
Section 2.3 Time and Place of Funding Date.................................................... 15
Section 2.4 Nature of Transaction............................................................. 15
Section 2.5 Intentionally Omitted............................................................. 15
Section 2.6 NO WARRANTY....................................................................... 15
Section 2.7 Legal and Tax Representation...................................................... 16
Section 2.8 Computations...................................................................... 16
Section 2.9 Capital Rent...................................................................... 16
Section 2.10 Conditions for Subsequent Tranche Fundings........................................ 16
ARTICLE III CONDITIONS TO FUNDING DATE............................................................... 17
Section 3.1 Conditions to the Tranche I Funding .............................................. 17
Section 3.2 Conditions to Each Subsequent Tranche Funding..................................... 19
Section 3.3 Other Documents................................................................... 22
ARTICLE IV TERM, RENT AND PAYMENT................................................................... 22
Section 4.1 Term.............................................................................. 22
Section 4.2 Rent Payments..................................................................... 22
Section 4.3 Place and Manner of Payment....................................................... 22
Section 4.4 Net Lease......................................................................... 23
Section 4.5 Overdue Amounts................................................................... 23
Section 4.6 No Termination or Abatement....................................................... 23
ARTICLE V POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF COLLATERAL................................ 24
Section 5.1 Possession and Use of Collateral; Compliance with Laws............................ 24
Section 5.2 Subleases and Assignments......................................................... 24
Section 5.3 Maintenance....................................................................... 26
Section 5.4 Alterations, Modifications, etc................................................... 26
Section 5.5 Liens............................................................................. 27
Section 5.6 Identifying Numbers; Legend; Changes; Inspection.................................. 28
ARTICLE VI RISK OF LOSS; INSURANCE.................................................................. 28
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Section 6.1 Casualty and Replacement.......................................................... 28
Section 6.2 Insurance Coverages............................................................... 31
Section 6.3 Insurance Certificates............................................................ 32
ARTICLE VII INDEMNIFICATION......................................................................... 32
Section 7.1 General Indemnification........................................................... 32
Section 7.2 General Tax Indemnity............................................................. 33
Section 7.3 After-Tax Basis................................................................... 35
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES............................................................. 36
Section 8.1 Events of Default................................................................. 36
Section 8.2 Remedies.......................................................................... 38
Section 8.3 Sale of Collateral................................................................ 39
Section 8.4 Application of Proceeds........................................................... 39
Section 8.5 Right to Perform Obligations...................................................... 39
Section 8.6 Power of Attorney................................................................. 40
Section 8.7 Remedies Cumulative; Consents..................................................... 40
ARTICLE IX AGENT................................................................................... 40
Section 9.1 Appointment of Agent; Powers and Authorization to Take Certain Actions............ 40
Section 9.2 Reliance.......................................................................... 41
Section 9.3 Action Upon Instructions Generally................................................ 42
Section 9.4 Indemnification................................................................... 42
Section 9.5 Independent Credit Investigation.................................................. 43
Section 9.6 Refusal to Act.................................................................... 43
Section 9.7 Resignation or Removal of Agent; Appointment of Successor......................... 44
Section 9.8 Separate Agent.................................................................... 44
Section 9.9 Termination of Agency............................................................. 44
Section 9.10 Compensation of Agency............................................................ 45
Section 9.11 Limitations....................................................................... 45
ARTICLE X DISTRIBUTIONS TO LESSORS................................................................ 45
Section 10.1 Prorata Distribution.............................................................. 45
Section 10.2 Timing of Distribution............................................................ 46
ARTICLE XI LEASE TERMINATION....................................................................... 46
Section 11.1 Release of Collateral............................................................. 46
Section 11.2 Early Termination Right for All of the Collateral................................. 46
Section 11.3 Early Payment and Termination Rights for Less Than All of the Collateral.......... 46
Section 11.4 Right to Sell A Unit.............................................................. 47
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ARTICLE XII REPRESENTATIONS AND WARRANTIES.......................................................... 47
Section 12.1 Representations and Warranties of Lessee.......................................... 47
Section 12.2 Representations and Warranties of Lessors......................................... 53
Section 12.3 Representations and Warranties of Agent........................................... 53
ARTICLE XIII COVENANTS............................................................................... 54
Section 13.1 Covenants of Lessee............................................................... 54
Section 13.2 Covenants of Agent................................................................ 57
Section 13.3 Covenants of Lessors.............................................................. 58
ARTICLE XIV REGISTRATION, TRANSFER, EXCHANGE,REPLACEMENT AND ASSIGNMENT OF CERTIFICATES............. 58
Section 14.1 Certificates Represent Lessor Interests........................................... 58
Section 14.2 Lost, Stolen or Damaged Certificates.............................................. 59
Section 14.3 Lessor Assignments................................................................ 59
ARTICLE XV OWNERSHIP AND GRANT OF SECURITY INTEREST................................................ 60
Section 15.1 Grant of Security Interest........................................................ 60
Section 15.2 Retention of Proceeds............................................................. 60
ARTICLE XVI MISCELLANEOUS........................................................................... 61
Section 16.1 Payment of Transaction Costs and Other Costs...................................... 61
Section 16.2 Effect of Waiver.................................................................. 61
Section 16.3 Survival of Covenants............................................................. 61
Section 16.4 Applicable Law.................................................................... 62
Section 16.5 Effect and Modification........................................................... 62
Section 16.6 Notices........................................................................... 62
Section 16.7 Consideration for Consents to Waivers and Amendments.............................. 62
Section 16.8 Counterparts...................................................................... 63
Section 16.9 Severability...................................................................... 63
Section 16.10 Successors and Assigns............................................................ 63
Section 16.11 No Third-Party Beneficiaries...................................................... 63
Section 16.12 Brokers........................................................................... 63
Section 16.13 Captions; Table of Contents....................................................... 63
Section 16.14 Schedules and Exhibits............................................................ 63
Section 16.15 Submission to Jurisdiction........................................................ 63
Section 16.16 Jury Trial........................................................................ 64
Section 16.17 Confidentiality................................................................... 64
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PAGE
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Schedule I List of Agent and Lessors; Addresses for Notices and Payments
Schedule II Description of Equipment
Schedule III Payment Schedules
Schedule 2.10 Pro Forma Amortization Schedule
Schedule 12.1(b) Recordings, Filings and Governmental Permits
Schedule 12.1 (k) List of Patents, Patent Rights, Trademarks, Service Marks, Trade Names,
Copyrights, Licenses and other Intellectual Property Rights
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Exhibit A Form of Funding Date Certificate Exhibit B Form of Opinion of Counsel to Lessee Exhibit C Form of Certificate Exhibit D Form of Officer's Certificate of Lessee Exhibit E Form of Secretary's Certificate Of Lessee |
WHEREAS, the parties intend that this transaction constitutes a lease from Lessors to Lessee while preserving ownership in the Collateral to Lessee, and the transaction shall be characterized as a secured financial transaction for Federal and state tax, bankruptcy, commercial law and UCC purposes; and
NOW THEREFORE, in consideration of the mutual terms and conditions herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
In this Lease and each other Operative Document, unless the context otherwise requires:
(a) any term defined below by reference to another instrument or document shall continue to have the meaning ascribed thereto whether or not such other instrument or document remains in effect;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender include any gender;
(d) a reference to a part, clause, section, article, exhibit or schedule is a reference to a part, clause, section and article of, and exhibit and schedule to, such Operative Document;
(e) a reference to any statute, regulation, proclamation, ordinance or law includes all statutes, regulations, proclamations, ordinances or laws amending, supplementing, supplanting, varying, consolidating or replacing them, and a reference to a statute includes all regulations, proclamations and ordinances issued or otherwise applicable under that statute;
(f) a reference to a document includes any amendment or supplement to, or replacement or novation of, that document;
(g) a reference to a party to a document includes that party's successors and permitted assigns; and
Further, each of the parties to the Operative Documents and their counsel have reviewed and revised the Operative Documents, or requested revisions thereto, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in construing and interpreting the Operative Documents.
(a) the Equipment (including all Parts thereof, accessions thereto and replacements and substitutions therefor);
(b) all contracts necessary to operate and maintain the Equipment;
(c) any rights to a rebate, offset or other assignment, warranty or service under a purchase order, invoice or purchase agreement with any manufacturer of any of the Equipment;
(d) all books, manuals, logs, records, writings, data bases, information and other property relating to, used or useful in connection with, evidencing, embodying, incorporating or referring to, any of the foregoing;
product of the Unit Value Fraction of the released Unit and the Depreciated Collateral Value as of the date of determination.
I Funding Date, and as to any Subsequent Tranche Lessor, such Subsequent Tranche Lessor's Funded Amount on the applicable Subsequent Tranche Funding Date divided by the Depreciated Collateral Value as of the applicable Subsequent Tranche Funding Date, in each case stated as a percentage, rounded to the nearest 0.001%.
"Lessee" shall have the meaning provided in the introductory paragraph of
------
this Lease.
"Lessor" shall have the meaning provided in the introductory paragraph of
------
this Lease.
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(i) the actual fees and expenses of (a) Mayer, Brown & Platt and (b) any local or special counsel incurred by Agent in connection with the negotiation, preparation, execution and delivery of the term sheet, the commitment letters, the Operative Documents,
(ii) the fees and expenses of the Appraiser;
(iii) the reasonable fees, costs and expenses of Agent; and
(iv) all costs of searching and perfecting a first priority security interest in the Collateral.
ARTICLE II
GRANT OF SECURITY INTEREST AND LEASE; GENERAL PROVISIONS
(a) On each Funding Date hereunder, subject to the terms and conditions hereinafter set forth, and in reliance on the representations and warranties contained herein or made pursuant hereto, upon receipt of the Funding Date Certificate with respect to such Funding Date, each Lessor making a Funding on such Funding Date shall transfer to Agent on such Funding Date an amount equal to such Lessor's Commitment as set forth on Schedule III to this Lease with respect to such Funding Date, as supplemented from time to time in accordance with the provisions of this Lease.
specified by Agent to each Lessor not less than three Business Days prior to the date of the Funding) and must be received by Agent by 2:00 p.m., New York time, on the Funding Date:
Bank: First Security Bank, National Association
Corporate Trust Services
79 South Main Street
Salt Lake City, Utah 84111
ABA Routing #: 124-0000-12
Account #: 051-0922115
Re: Levi Strauss Acct. #36088
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(i) the Tranche I Funding and Tranche I Funding Date shall occur on a Business Day on or after the date hereof and not later than December 7, 1999 unless mutually extended by the Tranche I Lessors and Lessee;
(ii) Subsequent Tranche Fundings and Subsequent Tranche Funding Dates shall each occur on a Business Day as agreed by the Subsequent Tranche Lessors funding on such Subsequent Tranche Funding Date and Lessee; and
(iii) in no event shall the aggregate amount advanced by the Lessors exceed the Maximum Commitment Amount, nor shall the aggregate amount advanced by any Lessor exceed such Lessor's Commitment, nor shall any Lessor be obligated to advance any portion of its Lease Balance which has been repaid by Lessee.
ARTICLE III
CONDITIONS TO FUNDING DATE
of the Collateral at the end of the Term is reasonably expected to be at least equal to fifty percent (50%) of the Fair Market Value of the Collateral as of the Tranche I Funding Date.
(i) certificates of existence and good standing with respect to Lessee from the Secretary of State of the State of its incorporation, dated no earlier than the 15th day prior to the Tranche I Funding Date;
(i) certificates of existence and good standing with respect to Lessee from the Secretary of State of the State of its incorporation, dated no earlier than the 15th day prior to such Subsequent Tranche Funding Date;
ARTICLE IV
TERM, RENT AND PAYMENT
provisions of this Lease or any amendment hereto. To the extent permitted by Applicable Law, Lessee hereby waives any and all rights which it may now have or which may at any time be conferred upon it, by statute or otherwise, to terminate, cancel, quit or surrender this Lease, in whole or in part, except strictly in accordance with the express terms hereof. Each rental, indemnity or other payment made by Lessee hereunder shall be final, and Lessee shall not seek to recover (except as expressly provided in this Lease) all or any part of such payment from Agent or any Lessor for any reason whatsoever. Without affecting Lessee's obligation to pay Rent, payable hereunder, Lessee may seek damages for a breach by Agent or any Lessor of its obligations under this Lease.
ARTICLE V
POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF COLLATERAL
(a) such Sublease shall (i) automatically expire upon the termination of this Lease, (ii) be expressly subordinate and subject to this Lease and the Liens created hereunder, and (iii) expressly require the Collateral subject thereto to be returned as directed by the Agent or the Required Lessors upon notice to the Sublessee that an Event of Default shall have occurred and be continuing;
(b) such Sublease shall be in writing and shall expressly prohibit any further assignment, sublease or transfer;
(c) such Sublease shall not contain a bargain purchase option in favor of the Sublessee or any other provision pursuant to which the Sublessee may obtain record or beneficial title to any Unit or any Part leased thereunder from Lessee;
(d) such Sublease shall prohibit the Sublessee from making any alterations or modifications to any Unit that would violate this Lease;
(f) all of Lessee's rights, title and interest in, to and under such Sublease shall be pledged by Lessee to Agent, for the benefit of Lessors, as collateral for Lessee's obligations under the Operative Documents, and such pledge shall be perfected by delivery of an executed original counterpart upon the execution and delivery thereof, marked as the sole original execution counterpart for UCC purposes, to the Agent, and Lessee shall, at its own cost and expense, do any further act and execute, acknowledge, deliver, file, register and record any further documents which the Lessors may reasonably request in order to create, perfect, preserve and protect Agent's Lien, for the benefit of the Lessors, in such Sublease;
(g) Lessee shall not, without Agent's prior written consent, permit or consent to any renewal or extension of a Sublease at any time when Lessee has knowledge that an Incipient Default or Event of Default has occurred and is continuing;
(i) Lessee shall notify Agent in writing not less than 30 days prior to entering into any Sublease, which notice shall include a description of the Unit or Collateral to be leased thereunder.
The liability of Lessee with respect to this Lease and each of the other Operative Documents shall not be altered or affected in any way by the existence of any Sublease.
In no event shall Lessee discriminate as to the use or maintenance of any Unit (including the periodicity of maintenance or record keeping in respect of such Unit) as compared to the highest standards of Lessee (or any of its Affiliates) with respect to equipment of a similar nature which Lessee (or any Affiliates) owns or leases. Lessee shall prepare and deliver to Agent within a reasonable time prior to the required date of filing (and, to the extent permissible, file on behalf of Agent and Lessors) any and all reports to be filed by Agent or any Lessor with any Authority by reason of the transaction described herein. Agent and each Lessor shall inform Lessee of any request for such reports received by it. Lessee shall maintain or cause to be maintained, and shall permit the Agent and Lessors to inspect, all records, logs and other materials required by any Authority having jurisdiction over the Collateral or Lessee, to be maintained in respect of each Unit. Lessee hereby waives any right now or hereafter conferred by law to make repairs on the Collateral at the expense of Agent or any Lessor.
ARTICLE VI
RISK OF LOSS; INSURANCE
such full repayment to be made no later than the Casualty Settlement Date, and upon the indefeasible payment of such full repayment, this Lease and the Security Interest shall be terminated and released. Lessee shall continue to make all payments of Rent due under this Lease until and including the Casualty Settlement Date. Upon payment on such Casualty Settlement Date of the Casualty Amount in respect of any Unit suffering a Casualty, the remaining scheduled payments of Basic Rent, if any, as well as the amount of the Lease Balance remaining following the payment of the final installment of Basic Rent at the end of the Term shall each be reduced, for each Lessor, by an amount equal to the product of the scheduled amount of such Basic Rent payment or such remaining Lease Balance, for each Lessor, as the case may be (determined in each case prior to the receipt of such Casualty Amount), multiplied by the Unit Value Fraction of the Unit suffering such Casualty.
HOWEVER CAUSED OR OCCASIONED, SUCH RISK TO BE BORNE BY LESSEE WITH RESPECT TO EACH UNIT DURING THE TERM. LESSEE AGREES THAT NO OCCURRENCE SPECIFIED IN THE PRECEDING SENTENCE SHALL IMPAIR, IN WHOLE OR IN PART, ANY OBLIGATION OF LESSEE UNDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO PAY RENT .
ARTICLE VII
INDEMNIFICATION
(x) waives and releases any Claims now or hereafter existing against any Indemnitee on account of, and
(a) any of the Operative Documents or any of the transactions contemplated thereby or any investigation, litigation or proceeding in connection therewith, and any amendment, modification or waiver in respect thereof;
(b) the Collateral, any Unit or any Part thereof or interest therein;
(c) the acquisition, mortgaging, design, manufacture, re-manufacture, construction, preparation, installation, inspection, delivery, non- delivery, acceptance, rejection, purchase, ownership, possession, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition or substitution, storage, titling or retitling, transfer of title, registration or re-registration, redelivery, use, operation, condition, financing, refinancing, sale or other disposition of the Collateral or any Unit or Part thereof or the imposition of any Lien (or incurring of any liability to refund or pay over any amount as a result of any Lien) on any of the Collateral, including, without limitation, (i) Claims or penalties arising from any violation of Applicable Laws or in tort (strict liability or otherwise), (ii) loss of or damage to the environment (including, without limitation, investigation costs, cleanup costs, response costs, remediation and removal costs, costs of corrective action, costs of financial assurance, and all other damages, costs, fees and expenses, fines and penalties, including natural resource damages), or death or injury to any Person, and any mitigative action required by or under Environmental Laws, (iii) latent or other defects, whether or not discoverable, and (iv) any Claim for patent, trademark or copyright infringement;
(d) the sale or other disposition of any of the Collateral, including, without limitation, any disposition as a result of the exercise of remedies;
(e) the offer, issuance, sale or delivery of the Certificates;
(f) the breach or alleged breach by Lessee of any representation or warranty made by it or deemed made by it in any Operative Document;
(g) the transactions contemplated hereby or by any other Operative Document in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction described in Section 4975(c) of the Code;
(h) any Claims related to the Release from any Unit of any substance into the environment, including (without limitation) Claims arising out of the use of any Unit for the transportation or storage of any Hazardous Material;
(i) any failure on the part of Lessee to perform or comply with any of the terms of any Operative Document; or
(j) any other agreement entered into or assumed by Lessee in connection with any Unit.
(B) as to an Indemnitee, Lessor Liens which such Indemnitee is responsible for discharging under the Operative Documents.
(i) the acquisition, mortgaging, design, manufacture, re-manufacture, construction, preparation, installation, inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership, possession, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition or substitution, storage, titling or retitling, transfer of title, registration or re-registration, redelivery, use, operation, condition, financing, refinancing, sale, return or other application or disposition of the Collateral or any Unit or Part thereof or the imposition of any Lien (or incurrence of any liability to refund or pay over any amount as a result of any Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or earnings arising from or received with respect to the Collateral or any Unit or any Part thereof, or any interest therein or any applications or dispositions thereof,
(iii) any other amount paid or payable pursuant to this Lease, the Certificates or any other Operative Documents,
(iv) the Collateral or any Unit or any Part thereof or any interest therein,
(v) all or any of the Operative Documents, any other documents contemplated thereby and any amendments and supplements thereto, and
(vi) otherwise with respect to or in connection with the transactions contemplated by the Operative Documents;
(c) (i) At least five (5) Business Days prior to the first date on which any payment is due under this Lease for the account of any Lessor not incorporated under the laws of the United States or a state thereof, such Lessor agrees that it will have delivered to each of Lessee and Agent two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, certifying in either case that such Lessor is entitled to receive payments under the Operative Documents (x) without deduction or withholding of any United States Federal income Taxes, or (y) at a reduced rate, if applicable. (ii) Each Lessor which so delivers a Form 1001 or 4224 further undertakes to deliver to each of Lessee and Agent two additional copies of such form (or a successor form) on or before the date that such form expires (currently, three successive calendar years for Form 1001 and one calendar year for Form 4224) or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by Lessee or Agent, in each case certifying that such Lessor is entitled to receive payments under the Operative Documents without deduction or withholding of any United States Federal income Taxes, unless an event (including any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lessor from duly completing and delivering any such form with respect to it and such Lessor advises Lessee
and Agent that it is not capable of receiving payments without any withholding of United States Federal income Tax.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
(b) Any representation or warranty of Lessee contained herein or in any document furnished to any Lessor or Agent in connection herewith is incorrect, incomplete or misleading in any material respect when made, deemed made or reaffirmed, as the case may be;
(e) Lessee shall generally fail to pay, or admit in writing its inability to pay, its debts as they become due, or shall voluntarily commence any case or proceeding or file any petition under any bankruptcy, insolvency or similar law or seeking dissolution, liquidation or reorganization or the appointment of a receiver, agent, custodian, liquidator or similar Person for itself or a substantial portion of its property, assets or business or to effect a plan or other arrangement with its creditors, or shall file any answer admitting the jurisdiction of the court and the material allegations of any involuntary petition filed against it in any bankruptcy, insolvency or similar case or proceeding, or shall be adjudicated bankrupt, or shall make a general assignment for the benefit of creditors, or shall consent to, or acquiesce in the appointment of, a receiver, agent, custodian, liquidator or similar Person for itself or a substantial portion of its property, assets or business, or action shall be taken by Lessee for the purpose of effectuating, authorizing or furthering any of the foregoing;
(f) involuntary proceedings or an involuntary petition shall be commenced or filed against Lessee under any bankruptcy, insolvency or similar law or seeking the dissolution, liquidation or reorganization of Lessee or the appointment of a receiver, agent, custodian, liquidator or similar Person for Lessee or of a substantial part of the property, assets or business of Lessee, or any writ, judgment, warrant of attachment, execution or similar process shall be issued or levied against a substantial part of the property, assets or business of Lessee, and such proceedings or petition shall not be dismissed or stayed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded, within 60 days after commencement, filing or levy, as the case may be; or
(g) there shall have occurred any event of default in any payment obligation with respect to any amount or amounts of indebtedness owing by or guaranteed by Lessee which is not cured within 10 days after notice from Agent and as a result of which the creditor accelerates the maturity of indebtedness having a principal amount in excess of $25,000,000 (individually or in the aggregate) prior to its expressed or stated maturity or the beneficiary of any such guarantee of indebtedness having a principal amount in excess of $25,000,000 (individually or in the aggregate) makes demand for payment thereunder;
(h) any Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Pension Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lessors, likely to result in the termination of the Pension Plan for purposes of Title IV of ERISA; or the Pension Benefit Guaranty Corporation shall institute proceedings to terminate any Pension Plan or to appoint a trustee to administer any Pension Plan; or a trustee shall be appointed by an appropriate United States district court to administer any Pension Plan; or Lessee or any ERISA Affiliate shall fail to pay to any Pension Plan any contribution which it is obligated to pay under the terms of such Plan or any agreement or which is required to meet statutory
minimum funding standards and which Lessee or any ERISA Affiliate does not have sufficient unencumbered assets to pay in full such liability or deficiency by the payment due date thereof;
(i) any Operative Document or the Security Interest granted under this Lease shall (except in accordance with its terms), in whole or in material part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of Lessee, or Lessee or any of its Affiliates shall, directly or indirectly, contest in any manner in any court the effectiveness, validity, binding nature or enforceability thereof; or the Lien securing Lessee's obligations under the Operative Documents shall, in whole or in part, cease to be a perfected first priority security interest; and
Notwithstanding the foregoing,
Upon the indefeasible payment of all sums due from Lessee hereunder, including the then outstanding Lease Balance due and payable, all Accrual Rent, any Applicable Administrative Charge, and any other amounts due and payable under the Operative Documents including all costs and expenses incurred by Agent or Lessors in enforcing their rights hereunder and any loss or damage arising by reason of Lessee's breach hereof or default hereunder, Agent, on behalf of the Lessors, shall execute and deliver to Lessee such documents as may be reasonably required to release the Collateral from the terms and scope of this Lease (without representations or warranties, except that the Collateral is free and clear of Lessor Liens), at Lessee's sole cost and expense.
If there is a deficiency in any amounts due hereunder after Agent has exercised remedies in accordance with this Lease, Lessee will promptly pay the same to Agent.
ARTICLE IX
AGENT
or otherwise incur any financial liability in the performance of any of its duties and obligations under the Operative Documents, or in the exercise of any of its rights or powers thereunder. It is understood and agreed that the duties of Agent are ministerial in nature.
(d) Agent may accept deposits from, lend money to and otherwise deal with Lessee or any of its Affiliates with the same rights as it would have if it were not the named Agent hereunder.
performance or observance by Lessee of any other document referred to (directly or indirectly) or provided for herein or to inspect the properties or books of Lessee. Except for notices or statements which Agent is expressly required to give under this Lease and for notices, reports and other documents and information expressly required to be furnished to Agent alone (and not also to each Lessor, it being understood that Agent shall forward copies of same to each Lessor) hereunder or under any other Operative Document, Agent shall not have any duty or responsibility to provide any Lessor with copies of notices or with any credit or other information concerning the affairs, financial condition or business of Lessee (or any of its Affiliates) that may come into the possession of Agent or any of its Affiliates.
corporations, in such capacity, such title to such Collateral or any part thereof, and such rights or duties, as Agent may consider necessary or desirable. Agent shall not be required to qualify to do business in any jurisdiction where it is not now so qualified. Agent shall execute, acknowledge and deliver all such instruments as may be required by any such co-agent or separate agent more fully confirming such title, rights or duties to such co- agent or separate agent. Upon the acceptance in writing of such appointment by any such co-agent or separate agent, it, she or he shall be vested with such interest in the Collateral or any part thereof, and with such rights and duties, not inconsistent with the provisions of the Operative Documents, as shall be specified in the instrument of appointment, jointly with Agent (except insofar as local law makes it necessary for any such co-agent or separate agent to act alone), subject to all terms of the Operative Documents. Any co-agent or separate agent, to the fullest extent permitted by legal requirements of the relevant jurisdiction, at any time, by an instrument in writing, shall constitute Agent its attorney-in-fact and agent, with full power and authority to do all acts and things and to exercise all discretion on its behalf and in its name. If any co-agent or separate agent shall die, become incapable of acting, resign or be removed, the interest in the Collateral and all rights and duties of such co-agent or separate agent shall, so far as permitted by law, vest in and be exercised by Agent, without the appointment of a successor to such co-agent or separate agent.
ARTICLE X
DISTRIBUTIONS TO LESSORS
All amounts of money received or realized by Agent pursuant to this Lease which are to be distributed to any Lessor (as distinguished from Lessee or any other Person) shall be distributed as follows:
ARTICLE XI
LEASE TERMINATION
on such date, and upon satisfaction by Lessee of the Payment Obligation, Agent shall release the Collateral then subject to this Lease from the lien hereof.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
(i) Neither Lessee, nor any ERISA Affiliate, presently maintains, participates in, or contributes to, an Employee Benefit Plan (A) that has incurred any current liability or any "accumulated funding deficiency", whether or not waived, as defined in Section 412 of the Code or Section 302 of ERISA, that remains unpaid as of the Funding Date for which Lessee or any ERISA Affiliate does not have sufficient unencumbered assets to pay in full such liability or deficiency by the payment due date thereof, (B) with respect to which, as of the Funding Date, a Reportable Event has occurred which could reasonably be expected to result in the termination of such Employee Benefit Plan, (C) which is a Multiemployer Plan for
which Lessee or any ERISA Affiliate has received notice that the plan is in reorganization or insolvent, (D) for which penalties or taxes have been imposed under Sections 502(i) and 502(l) of ERISA or Section 4975 of the Code, (E) for which there has been, in the immediately preceding six-year period, a complete or partial withdrawal from any Multiemployer Plan, or (F) which is a Welfare Plan that does not reserve to Lessee the right to modify or terminate such Welfare Plan at any time.
Documents which would involve violation of Regulation T, U or X, or any other regulation of the Board of Governors of the Federal Reserve System.
(i) The consolidated balance sheet of Lessee and its Subsidiaries as of November 29, 1998, and the related consolidated statements of operations, cash flows and common shareholders' equity for the fiscal year then ended, reported on by Arthur Andersen, LLP, a copy of which has been delivered to Agent, fairly present, in conformity with GAAP, the consolidated financial position of Lessee and its Subsidiaries as of such date and their consolidated results of operations and changes in financial position for such fiscal year.
(ii) The consolidated balance sheet of Lessee and its Subsidiaries as of August 29, 1999, and the related consolidated statements of operations and cash flows for the portion of Lessee's fiscal year ended at the end of such quarter, a copy of which has been delivered to Agent, fairly present, in conformity with GAAP, the consolidated financial position of Lessee and its Subsidiaries as of such date and their consolidated results of operations and changes in financial position for such fiscal quarter, subject to normal year-end auditing adjustments.
(iii) Since August 29, 1999, there has been no Material Adverse Effect.
liabilities, including contingent liabilities, as they become due; and the property remaining in the hands of Lessee was not and will not be an unreasonably small amount of capital.
ARTICLE XIII
COVENANTS
related consolidated statements of income and cash flows of Lessee and its Subsidiaries for such fiscal quarter for the period from the beginning of the current fiscal year to the end of such fiscal quarter, and a consolidated balance sheet of Lessee and its Subsidiaries, as at the end of such fiscal quarter, setting forth in each case in comparative form corresponding consolidated figures from the corresponding fiscal quarter in the immediately preceding fiscal year, all in reasonable detail and certified by an authorized financial officer of Lessee, subject to changes resulting from year-end adjustments, together with an officer's certificate that no Incipient Default or Event of Default has occurred and is continuing hereunder; (ii) as soon as practicable and in any event within 120 days after the end of each fiscal year, audited consolidated statements of cash flows, income and shareholders' equity of Lessee and its Subsidiaries for such year and a consolidated balance sheet of Lessee and its Subsidiaries as at the end of such year, setting forth in each case in comparative form corresponding consolidated figures from the preceding annual audit, all in reasonable detail and certified to Agent and each Lessor by independent certified public accountants of recognized standing selected by Lessee; (iii) as soon as practicable, copies of all such financial statements, proxy statements, notices and reports as Lessee shall send to its public stockholders, if any, and copies of any registration statements (without exhibits) and any regular or periodic reports which it files with the SEC (or any Authority succeeding to the function of the SEC); and (iv) with reasonable promptness, such other data and information with respect to the business, affairs and conditions of Lessee or its Subsidiaries as from time to time Agent may request, at the reasonable request of the Required Lessors.
(b) Agent shall apply funds held by it in its capacity as agent hereunder as required by this Lease and shall otherwise perform all of its duties and obligations under this Lease and the Operative Documents to which it is a party.
(a) provided that no Incipient Default or Event of Default exists, it will not, through its own actions, interfere with Lessee's (or any permitted sublessee's or assignee's) rights hereunder with respect to any Unit during the Term;
(c) it will not, alone or in conjunction with one or more other Lessors, deal directly with Lessee, it being acknowledged that Agent is the only party representing Lessors which is authorized to deal with Lessee for any purpose in connection with this Lease, the Collateral or the exercise of any remedies hereunder.
ARTICLE XIV
REGISTRATION, TRANSFER, EXCHANGE,
REPLACEMENT AND ASSIGNMENT OF CERTIFICATES
(a) that it is an accredited investor that is a financial institution, with sufficient knowledge and experience in financial and business matters to enable it to evaluate the merits and risks of acquiring a Certificate, and has the requisite power and authority to enter into such assignment or transfer;
(b) that the assignment or transfer is exempt from registration requirements under any and all applicable federal and state statutes, laws, rules, regulations and orders;
(e) that, and also covenants to such Persons that, it will not transfer the Certificate unless the proposed transferee makes the foregoing representations and covenants;
(f) that, and also covenants that, it will not take any action that would by itself subject the transfer of the Certificate to the provisions of Section 5 of the Securities Act; and
ARTICLE XV
OWNERSHIP AND GRANT OF SECURITY INTEREST
ARTICLE XVI
MISCELLANEOUS
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written.
LEVI STRAUSS & CO. FIRST SECURITY BANK
as Lessee as Agent (and in its individual
capacity where specifically indicated):
By:_________________________________
Name:_______________________________ By:__________________________________
Title:______________________________ Name:________________________________
Title:_______________________________
Address:
1155 Battery Street Address:
San Francisco, California 94111 _____________________________________
Attention:___________________________ _____________________________________
Attention:___________________________
_____________________________________
_____________________________________
Facsimile:___-___-____
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[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURE PAGE FOR LESSORS]
ORIX USA CORPORATION, HELLER FINANCIAL LEASING, INC.
a_________________________________, a________________________________,
as Lessor as Lessor
By:_______________________________ By:______________________________
Name:_____________________________ Name:____________________________
Title:____________________________ Title:__________________________
DIME COMMERCIAL CORP., GENERAL ELECTRIC CAPITAL
a_________________________________, BUSINESS ASSET FUNDING
as Lessor CORPORATION,
a________________________________,
By:_______________________________ as Lessor
Name:_____________________________
Title:____________________________ By:______________________________
Name:____________________________
Title:__________________________
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SCHEDULE I TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
FIRST SECURITY BANK, NATIONAL ASSOCIATION
Address for all communications (except wire transfers):
FIRST SECURITY BANK, NATIONAL ASSOCIATION
Attention: Corporate Trust Services
79 South Main Street
Salt Lake City, Utah 84111
Facsimile: 801/246-5053
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Address for wire transfers:
Account
Information:
ABA
Routing #: 124-0000-12
Account #: 051-092215
Levi Strauss Acct. #: 36088
ORIX USA CORPORATION
Address for all communications (except wire transfers):
Orix USA Corporation
550 South Hope Street, Suite 1600
Los Angeles, CA 90071
Attn: Leroy Onishi
Facsimile: 213/955-6530
Address for wire transfers:
Bank: The Sanwa Bank of California
Los Angeles, California
ABA
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Routing #: 122003516
Account #: 5106-0278
Reference: Levi Strauss & Co.
DIME COMMERCIAL CORP.
Address for all communications (except wire transfers):
Dime Commercial Corp.
1180 Avenue of the Americas, 5th Floor
New York, New York 10036
Attn: Michael E. Evans
Facsimile: 212/382-8349
Address for wire transfers:
Bank: Federal Reserve Bank of New York
New York, New York
ABA
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Routing #: 226070296
Account #: 2062160000 977
Reference: Levi Strauss & Co.
HELLER FINANCIAL LEASING, INC.
Address for all communications (except wire transfers):
Heller Financial Leasing, Inc.
71 Stevenson Street, Suite 2000
San Francisco, California 94105
Attn: Kevin Donovan
Facsimile: 415/356-1335
Address for wire transfers:
Bank: Bank of America
Chicago, Illinois
ABA
Routing #: 071-000-039
Account #: 8188801273
Reference: Levi Strauss & Co.
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GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION
Address for all communications (except wire transfers):
General Electric Capital Business Asset Funding Corporation
10900 N.E. 4th Street, Suite 500
P.O. Box C-97550
Seattle, Washington 98004
Attn: Anne Bonn
Facsimile: 425/450-3584
Address for wire transfers:
Bank: Bankers Trust Company
New York, New York
ABA
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Routing #: 21001033
Account #: 50-261-508
Reference: Levi Strauss & Co.
SCHEDULE II TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
[legal descriptions to be attached]
SCHEDULE III TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
SCHEDULE 2.10 TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
SCHEDULE 12.1(b) TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
1. Kentucky
a. Boone County Clerk
i. financing statement
ii. fixture filing
b. Franklin County Clerk - financing statement
c. Secretary of State - financing statement
2. Mississippi
a. Madison County Clerk - fixture filing
b. Secretary of State - financing statement
3. Nevada
a. Clark County Recorder - fixture filing
b. Secretary of State - financing statement
4. California - Secretary of State
SCHEDULE 12.1(k) TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
None
EXHIBIT A TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
___________ __, 199_
TO: Agent and the Lessors, pursuant to that certain Lease Intended as
Security (the "Lease"), dated December 3, 1999 among: LEVI
-----
STRAUSS & CO., a Delaware corporation ("Lessee"); the
------
Persons identified on Schedule I thereto as the "Lessors";
-------
and FIRST SECURITY BANK, a national banking association, as
agent ("Agent"; all capitalized terms used herein without
-----
definition shall have the meaning assigned to such terms in
the Lease).
FROM: Lessee
REGARDING: Funding Date and Condition of Collateral
|
1. The Funding Date was ____________ __, 199_ at [THE OFFICES OF MAYER, BROWN & PLATT, _________________________________________] at 9:00 a.m.
2. The Equipment in which the Security Interest was granted is identified on
4. The Collateral is leased by the Lessee for all purposes of the Lease in its "as is," present condition as set forth in Section 2.6 of the Lease.
5. All of the Collateral is subject to and shall be governed by all of the provisions of the Lease.
6. The Collateral is in good operating order, repair, condition and appearance and Lessee has no knowledge of any material defect therein with respect to design, manufacture, condition (reasonable wear and tear excepted) or in any other respect.
LEVI STRAUSS & CO.
By:_______________________________________ Name Printed:_____________________________ Title:____________________________________
SCHEDULE I TO EXHIBIT A
TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
[legal descriptions to be attached]
SCHEDULE II TO EXHIBIT A
TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
Citibank, N.A.
New York, NY
ABA Routing:0210-0008-9
Account: 0010-9292
Payee: Levi Strauss & Co.
EXHIBIT B TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
FORM OF OPINION OF LESSEE'S COUNSEL
December 3, 1999
Re: Levi Strauss & Co. Lease Intended As Security
Gentlemen:
In rendering this opinion [I / we] have assumed: (a) the genuineness of the signatures on all documents and instruments (other than the signatures of officers of Lessee on the Operative Documents to which Lessee is a party), the authenticity of all documents submitted as originals, and the conformity to originals of all documents submitted as photostatic or certified copies; and (b) that the Operative Documents constitute the legal, valid and binding obligations of the respective parties thereto, if any, other than Lessee.
Based upon and subject to the foregoing, [I am / we are] of the opinion that:
1. Lessee is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to conduct its business as presently conducted, to own, grant or hold under lease its properties, to enter into and perform its obligations under the Operative Documents to which it is a party, and is duly qualified as a foreign corporation authorized to do business and is in good standing in every other jurisdiction in which its failure to be so qualified would have a Material Adverse Effect or prevent the enforcement of contracts to which Lessee is a party.
2. Lessee has all requisite corporate power and authority to execute, deliver, and perform its obligations under each Operative Document to which it is a party.
3. The execution and delivery by Lessee of, the consummation by Lessee of the transactions provided for in, and the compliance by Lessee with all of the provisions of, each Operative Document to which it is a party have been duly authorized by all necessary corporate action on its part; and neither the execution and delivery thereof, nor the consummation of the transactions contemplated thereby (including, without limitation, the granting of the Security Interest to Agent and the operation of the Equipment), nor compliance by Lessee with any of the terms and provisions thereof (i) requires any approval of the stockholders of Lessee, or approval or consent of any trustee or holder of any of Lessee's indebtedness or obligations; (ii) contravenes or will contravene any Applicable Laws currently in effect applicable to or binding upon Lessee or the Collateral; (iii) conflicts with, results in any breach of or constitutes any default under, or results in the creation of any Lien (other than the respective rights and interest of Lessee, Lessors or Agent as provided in the Operative Documents) upon any of Lessee's property under, (A) any indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales contract, loan or credit arrangement or other material agreement or instrument by which Lessee or any of its respective properties may be bound or by which the Collateral may be materially adversely affected, (B) Lessee's corporate charter or (C) Lessee's by-laws; or (iv) requires or will require any Governmental Action to perfect the right of Lessors and Agent intended to be created by the Operative Documents.
4. Each Operative Document to which Lessee is a party has been duly executed and delivered by Lessee and constitutes its legal, valid and binding obligation, enforceable against Lessee in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and by general equitable principles.
5. There is no action, proceeding or investigation pending or, to the best of [our / my] knowledge, threatened which questions the validity of the Operative Documents to which Lessee is a party or any action taken or to be taken pursuant thereto; nor is any action, proceeding or investigation pending or, to the best of [my / our] knowledge, threatened which is reasonably likely to result, either in any case or in the aggregate, in a Material Adverse Effect.
6. No authorizations, consent, approval, license or formal exemption from, nor any filing, declaration or registration with, any Authority (other than approval of the Board of Directors of Lessee which has been obtained prior to the date hereof) is or will be required in connection with the execution and delivery by Lessee of the Operative Documents, or the performance by Lessee of its obligations under such Operative Documents or the ownership, operation and maintenance of the Collateral as contemplated by the Operative Documents.
7. Lessee is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The proceeds of the sale of the Collateral and the issuance of the Certificates, if used in accordance with the terms of the Operative Documents, will not result in a violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System.
8. Lessee is not subject to regulation as a "holding company," an "affiliate" of a "holding company," or a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended.
9. The registration of the Certificates or the interests of the Lessors under the Securities Act of 1933, as amended, is not required under the circumstances contemplated by the Lease, and no qualification of an indenture in respect of such Certificates or interests under the Trust Indenture Act of 1939, as amended, is required in connection therewith.
10. The Lease and other Operative Documents create valid security interests under the UCC in favor of the Agent for the benefit of the Lessors, as security for payment of each Lessee's obligations under the Lease, in all of Lessee's right, title and interest in and to the Collateral.
11. Neither Agent nor any Lessor will become (i) solely by reason of entering into the Lease or the consummation of the transactions contemplated thereby (other than upon the exercise of remedies under the Lease or upon the expiration thereof) subject to ongoing regulation of its operations by any Authority; or (ii) except for regulation the applicability of which depends upon the existence of facts in addition to the ownership of, or the holding of any interest in, the Collateral or any interest therein upon the exercise of remedies under the Lease or upon the expiration thereof, subject to ongoing regulation of its operations by any Authority.
13. Each UCC financing statement is in proper form for filing, and upon the filing of such financing statements with the offices listed on Schedule A hereto, the security interest of Agent, on behalf of the Lessors, in all the Collateral will be perfected to the extent that a security interest
in such Collateral may be perfected by so filing, and the description of such Collateral therein is adequate. No other filing, recordation or registration is necessary in order to perfect Agent's security interest in such Collateral.
14. Except for statutory filing and recording fees payable in connection with the registration of the Collateral or the filing of any lien on the Collateral, no state or local recording tax, transfer tax, stamp tax or other fee, tax or governmental charge, including, without limitation, sales tax, is required to be paid by Lessee, Agent, or Lessors to any taxing Authority in connection with the execution, delivery, filing or recording of any of the Operative Documents or the transactions contemplated by the Operative Documents, nor will Lessee, Agent or any Lessor be required to collect or withhold any such fee, tax or governmental charge.
15. The payment by Lessee and the receipt by Agent, for the benefit of the Lessors, of the Basic Rent, Supplemental Rent and all other amounts, fees or interest due and payable under the Lease and the other Operative Documents and any transactions described therein, and any interest rate cap fee paid or payable to the Lessors or their Affiliates, are not usurious under or otherwise in violation of the laws of the State of ___________.
16. No state or local recording tax, transfer tax, stamp tax or other similar fee, tax or governmental charge, including, without limitation, sales tax, is required to be paid to the State of ______________ or any political subdivision thereof in connection with the execution, delivery, filing or recording of the Operative Documents, other than statutory filing and recording fees that are to be paid upon the filing and recording, as applicable, of the UCC-1 Financing Statement and Fixture Filing filed in connection with the transactions contemplated by the Operative Documents and transfer taxes that are to be paid by Lessee upon the transfer of the Collateral on any Funding Date.
17. The express choice of law of the State of New York to govern the Lease is enforceable and will be recognized by __________ courts.
This opinion is solely for your and your counsel's benefit and may not be relied upon by, and copies may not be delivered to, any other person without our prior approval.
Very truly yours,
EXHIBIT C TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES OR "BLUE SKY" LAW,
AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED
FOR SALE EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION. THIS CERTIFICATE MAY NOT BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE SOLD OR
CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE LEASE REFERRED TO BELOW.
Commitment: $___________________
Investment Percentage __%
R- ______ Date: ____________ __, 199_
status, including the benefit of the representations, warranties and covenants of Lessee under the Lease and with all obligations attendant to such status.
The Lessor holding this Certificate shall be entitled to receive a portion of each payment of Rent, Lease Balance, Administrative Charge, and interest payable by Lessee pursuant to the Lease as set forth in such Lessor's Payment Schedule.
This Certificate is one of the Certificates referred to in, and evidences obligations of the Lessee under, the Lease, to which reference is made for a statement of the terms and conditions hereof. Capitalized terms used herein without definition shall have the meanings provided in the Lease.
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS OF SUCH STATE.
LEVI STRAUSS & CO.
By:___________________________________________
Title:________________________________________
Rental Rental Rental Payment Payment Payment Lease Number Date Amount Balance ------ ---- ------- ------- |
EXHIBIT D TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
Pursuant to the Lease Intended as Security, dated as of December 3, 1999 (the "Lease"), among LEVI STRAUSS & CO., a Delaware corporation ("Lessee"), FIRST SECURITY BANK, a national banking association, as Agent, and the several Lessors listed on Schedule I thereto, I, _______________________, ______________________ of Lessee, do hereby certify as follows (capitalized terms used herein without definition shall have the meanings ascribed thereto in the Lease):
The representations and warranties of Lessee contained in the Lease are true on and as of the date hereof with the same effect as if such representations and warranties had been made on and as of the date hereof; Lessee has performed all agreements on its part required to be performed under the Lease and the other Operative Documents on or prior to the date hereof; and there exists on the date hereof no Incipient Default or Event of Default.
IN WITNESS WHEREOF, I have signed my name this ___ day of December, 1999.
LEVI STRAUSS & CO.
By:____________________________________________ Name:__________________________________________ Title:_________________________________________
EXHIBIT E TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(LEVI STRAUSS & CO.)
THE UNDERSIGNED ________________________________, [Assistant] Secretary of Levi Strauss & Co., a Delaware corporation ("Lessee"), pursuant to that certain Lease Intended as Security, dated as of December 3, 1999 (the "Lease"), among Lessee, FIRST SECURITY BANK, a national banking association, as Agent, and the Persons listed on Schedule I thereto, does hereby certify as follows (capitalized terms used herein shall have the meanings ascribed thereto in the Lease):
1. Attached hereto as Exhibit A is a true and complete copy of Lessee's Certificate of Incorporation as amended and in effect on the date hereof, certified by the Secretary of State of the State of Delaware.
2. No proceeding for merger, consolidation, liquidation, reorganization or dissolution of Lessee or the sale of all or substantially all of its assets is pending or contemplated.
3. The copy of the By-laws of Lessee, attached hereto as Exhibit B, is true and complete and such By-laws have been in full force and effect since __________________ without modification or amendment.
4. Attached hereto as Exhibit C are true and correct copies of all resolutions adopted by the Board of Directors and stockholders of Lessee relating to the Lease and the other Operative Documents, which resolutions have not been amended or rescinded and are in full force and effect on the date hereof.
5. The form of Lease (together with all Exhibits thereto), attached hereto as Exhibit D, is substantially in the form approved by or pursuant to authorization by the Board of Directors of Lessee.
6. The following persons are on the date hereof duly qualified and acting officers of Lessee, duly elected or appointed to the offices set forth beside their respective names and signatures, and each such person who, as an officer of Lessee, signed the Lease, the Certificates representing interests in the Lease, any of the other Operative Documents or any other document delivered prior hereto or on the date hereof in connection with such agreements and documents and the transactions contemplated therein was, at the respective times of such signing and delivery and is now duly
elected or appointed, qualified and acting as such officer, and the signatures of such persons appearing on such documents are their genuine signatures:
NAME OFFICE SIGNATURE ---- ------ --------- ------------- --------------- ---------------- ------------- --------------- ---------------- ------------- --------------- ---------------- |
IN WITNESS WHEREOF, I have signed my name this ___ day of December, 1999.
LEVI STRAUSS & CO.
I, ___________________________, _________________________ of Lessee, hereby certify that _____________________________ is on the date hereof the duly elected, qualified and acting [Assistant] Secretary of Lessee, and that the signature set forth above is such person's true and correct signature.
Dated: December __, 1999.
LEVI STRAUSS & CO.
By:_______________________________________________ Name Printed:_____________________________________ Title:____________________________________________
EXHIBIT 9
VOTING TRUST AGREEMENT
This VOTING TRUST AGREEMENT ("Agreement") is entered into as of April 15, 1996, by and among ROBERT D. HAAS, PETER E. HAAS, SR., PETER E. HAAS, JR. AND F. WARREN HELLMAN, as the voting trustees (each of whom, in such capacity and with his successor(s) being hereinafter referred to as a "Voting Trustee"), and the stockholders of LSAI HOLDING CORP., a Delaware corporation (the "Company") who are parties hereto (hereinafter referred to individually as a "Stockholder" and collectively as the "Stockholders"), as identified and listed on a certificate attested to by the Secretary of the Company and maintained with the permanent records of the Company on behalf of the Voting Trustees (the "Certificate").
RECITALS
WHEREAS, upon the consummation (the "Closing") of the transactions contemplated by the Stock Subscription Agreement dated as of January 25, 1996 between each of the Stockholders and the Company (each, a "Stock Subscription Agreement" and collectively, the "Stock Subscription Agreements") the Stockholders will be the record and beneficial owners of shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"), with the number of shares of Common Stock held by each Stockholder being set forth on the Certificate;
WHEREAS, LSAI Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company ("Acquisition"), the Company, and Levi Strauss Associates Inc., a Delaware corporation ("LSAI"), have entered into an Agreement and Plan of Merger, dated as of February 8, 1996 (the "Merger Agreement"), providing, among other things, for the merger (the "Merger") of Acquisition with and into LSAI; and
WHEREAS, the Voting Trustees and the Stockholders believe it advisable, in order to provide for the long-term, stable and consistent ownership and governance of the Company, to deposit the shares of Common Stock to be issued to the Stockholders under the Stock Subscription Agreements with the Voting Trustees, creating a Voting Trust (the "Trust") on the terms and conditions hereinafter set forth, and for the initial and successor Voting Trustees to share a common vision of the Company, to represent and reflect the financial and other interests of the Stockholders and to bring a balance of perspectives to the Voting Trustees as a whole (the term "Shares", as used in this Agreement, shall include, in addition to the shares of Common Stock originally deposited with the Voting Trustees pursuant to Article II hereof, all additional shares of Common Stock and other securities of the Company or any successor or successors of the Company deposited with the Voting Trustees pursuant to Section 3.3 or Article VIII hereof or retained by the Voting Trustees pursuant to Article X hereof).
NOW THEREFORE, in consideration of the premises and of the representations, warranties and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
FILING; INSPECTION
1.1. Filing of Agreement with the Company; Availability for Inspection by Stockholders. Copies of counterparts of this Agreement, signed by each of the Stockholders, and of every
agreement supplemental to this Agreement or amending this Agreement, shall be filed in the principal office of the Company, which immediately following the effective time of the Merger shall be located at Levi's Plaza, 1155 Battery Street, San Francisco, California 94111 and in the registered office of the Company in the State of Delaware, and shall be open to reasonable inspection by any Stockholder. The "Voting Trust Certificates" (as defined in Section 3.1) issued as provided in this Agreement shall be issued, received and held subject to all of the terms of this Agreement, the respective Stock Subscription Agreements executed by the Stockholders pursuant to which such Stockholders acquired their Shares and a Stockholders' Agreement dated of even date herewith executed by the Company and the Stockholders (the "Stockholders' Agreement").
ARTICLE II
TRANSFER OF SHARES TO VOTING TRUST
2. 1. Transfer of Shares. Effective as of the Closing, each of the Stockholders hereby directs Thomas J. Bauch and Nenita Sobejana, as their agents, to deposit with the Voting Trustees (or with a national bank or other bank with capital of at least $100,000,000 designated by the Voting Trustees from time to time (the "Custodian")) such Stockholder's Shares, by causing the Company to deliver to the Voting Trustees (or Custodian, if any) a certificate (or certificates) representing the Shares purchased by, and issued in the name of, such Stockholder under the applicable Stock Subscription Agreement, together with appropriate stock powers transferring such certificate(s) to the Voting Trustees, with any requisite stock transfer stamps annexed thereto. The Stockholders and the Voting Trustees (or Custodian, if any) shall take (or shall cause the Company to take) such action as is necessary to effect the transfer of the Shares to, and in the name of, the Voting Trustees on the books of the Company, including the immediate filing of this Agreement with the Secretary of the Company. The certificate(s) for Shares so transferred and delivered to the Voting Trustees pursuant to this Agreement shall be surrendered by the Voting Trustees to the Company's Secretary or transfer agent, if any, and cancelled, and a new certificate (or certificates) therefor shall be issued to and held by the Voting Trustees in the names of "Robert D. Haas, Peter E. Haas, Sr., Peter E. Haas, Jr. and F. Warren Hellman, as Voting Trustees". Upon receipt by the Voting Trustees of the certificate(s) for Shares and upon the transfer of the Shares into the name of the Voting Trustees, the Voting Trustees shall hold the Shares, as stockholders of record, subject to the terms and conditions of this Agreement.
2.2. Custodian May Administrate. The Voting Trustees may designate a Custodian to assist the Voting Trustees in connection with the administration of transfer and voting procedures for Shares and Voting Trust Certificates under this Agreement. If a Custodian is designated by the Voting Trustees, such person shall have no power to make voting or investment decisions with respect to the Shares, but shall only be empowered, at the direction of the Voting Trustees, to make necessary arrangements for the voting or transfer of Shares and Voting Trust Certificates in a manner consistent with this Agreement.
ARTICLE III
ISSUANCE AND TRANSFER OF
VOTING TRUST CERTIFICATES
3.1. Issuance of Certificates. Promptly after the Closing, the Voting Trustees shall issue (or cause to be issued by the Custodian, if any) to each Stockholder, in exchange for the Shares delivered by such Stockholder or such Stockholder's agent on his or her behalf pursuant to this Agreement, a Voting Trust Certificate(s) substantially in the form annexed as Exhibit A hereto (the "Voting Trust Certificate(s)"), representing in the aggregate the number of Shares purchased by the respective Stockholder pursuant to the applicable Stock Subscription Agreement. Except as otherwise specifically provided in this Agreement (including, without limitation, Articles IV, VIII and X), all options, rights of purchase, and other powers, privileges and limitations thereof affecting the Shares represented by the Voting Trust Certificates (including, without limitation, those provided for in the Stockholders' Agreement relating to, among other things, restrictions upon transfers of Shares) shall attach to the Voting Trust Certificates.
3.2. Shares and Voting Trust Certificates Transferred as a Unit. Shares and Voting Trust Certificates are necessarily linked and cannot be transferred separately. Any transfer of Voting Trust Certificates shall be deemed to effect a transfer of the underlying Shares, and any transfer of Shares with respect to which Voting Trust Certificates have been issued shall be deemed to effect a transfer of such Voting Trust Certificates.
3.3. Transfer Restrictions. No sale, assignment, gift, pledge or other
encumbrance, or other transfer or similar transaction (collectively "Transfer")
of Voting Trust Certificates or the related Shares, will be effective,
recognized by the Company or the Voting Trustees or recorded on the books and
records of the Company and on the Certificate unless (a) the intended transferee
in such Transfer first becomes a party to this Agreement and (b) the provisions
of the Stockholders' Agreement relating to Transfers are duly complied with. All
Stockholders agree to be bound by this Agreement with respect to any Voting
Trust Certificates or the related Shares acquired after the date hereof, and all
Stockholders further agree to transfer any shares of Common Stock acquired after
the date hereof to the Voting Trustees in exchange for Voting Trust Certificates
and to be bound by this Agreement with respect thereto. In the case of (i)
Transfers of Voting Trust Certificates or the related Shares by Stockholders or
(ii) issuances of shares of Common Stock by the Company, in each case to persons
who are not Stockholders (and hence at such time are not parties to this
Agreement), such Transfers or issuances will be recognized and recorded on the
books and records of the Company and on the Certificate only after appropriate
documentation in a form satisfactory to the Voting Trustees has been executed
and the transferee has thereby agreed to become bound by this Agreement (it
being understood that without such documentation the Company and the Voting
Trustees shall recognize only the original transferor as the beneficial owner
and/or record holder, as the case may be, of any Voting Trust Certificates and
related Shares affected by such purported Transfer). It is intention of the
Voting Trustees that the Company will issue no shares of Common Stock subsequent
to the Closing unless such shares are subject to this Agreement or this
Agreement is amended pursuant to Section 14.4 hereof by the vote of holders of
Voting Trust Certificates representing at least two-thirds of the then
outstanding Shares to accommodate the existence of shares of Common Stock
outside the Voting Trust Agreement.
ARTICLE IV
AUTHORITY OF VOTING TRUSTEES TO VOTE
THE SHARES; POWERS RESERVED FOR STOCKHOLDERS
4.1. General. The Voting Trustees shall hold the Shares transferred to them pursuant to Articles II, III, VIII and X and Section 14.1 of this Agreement under the terms and conditions set forth in this Agreement. Except as expressly provided by this Agreement (including Sections 4.2 and 4.3 hereof), for as long as any of the Shares are subject to this Agreement, and until the actual delivery by the Voting Trustees (or Custodian, if any), to the Stockholders owning such Shares, of stock certificates in exchange for Voting Trust Certificates pursuant to Section 13.3 of this Agreement, the Voting Trustees shall have full power and authority, and are hereby fully and exclusively empowered and authorized, to vote in person or by proxy the Shares deposited pursuant to this Agreement and transferred to them (including any changed or additional Shares, as provided in Article III, VIII or X hereof) at all meetings of the stockholders of the Company or to give written consents in lieu of voting such Shares in respect of any and all matters on which Shares are entitled to vote.
4.2. Certain Powers Reserved for Holders of Voting Trust Certificates. (a) Notwithstanding the provisions of Section 4.1 hereof, the holders of Voting Trust Certificates, and not the Voting Trustees, shall have the exclusive right to direct the Voting Trustees with respect to the voting of, and the exercise of appraisal rights (if the Voting Trustees would, under applicable law, be entitled as record holders to such appraisal rights in the event they were to vote against the proposed matter) or rights to consent with respect to, the Shares underlying such Voting Trust Certificates, on the following matters ("Pass-Through Voting Matters") and the Voting Trustees shall be absolutely required to vote or not vote, such Shares in accordance with such instructions on all such Pass-Through Voting Matters:
(i) any merger transaction in connection with which, in the absence of this Agreement, the holders of shares of Common Stock, as the Company's stockholders, would be entitled to vote under the Delaware General Corporation Law as then in effect (it being understood that this provision shall not require the Company or the Voting Trustees to structure any such transaction in such a way that stockholders would be entitled to vote);
(ii) any sale by the Company of all or substantially all of its assets in connection with which in the absence of this Agreement, the holders of shares of Common Stock, as the Company's stockholders, would be entitled to vote under the Delaware General Corporation Law as then in effect (it being understood that this provision shall not require the Company or the Voting Trustees to structure any such transaction in such a way that stockholders would be entitled to vote);
(iii) any liquidation, dissolution or winding-up of the affairs of the Company in connection with which in the absence of this Agreement, the holders of shares of Common Stock, as the Company's stockholders, would be entitled to vote under the Delaware General Corporation Law as then in effect (it being understood that this provision shall not require the Company or the Voting Trustees to structure any such transaction in such a way that stockholders would be entitled to vote); and
(iv) any amendment to the Company's Certificate of Incorporation which alters or changes the powers, preferences or rights of the shares of Common Stock so as to affect the holders thereof adversely (it being understood that the "holders" for this purpose shall include the holders of Voting Trust Certificates).
(b) In addition, notwithstanding the provisions of Section 4.1 hereof, the holders of Voting Trust Certificates, and not the Voting Trustees, shall have the exclusive right, in their capacity as such, to approve or disapprove the following matters (the "Holder Approval Matters-): the matters specified in Sections 6.1, 7.3, 13.1(c), 13.1(d), 13.2 and 14.4 hereof as matters requiring the approval by the holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares.
(c) The Stockholders, and not the Voting Trustees, shall, subject to the provisions of the Stockholders' Agreement, the Company's Certificate of Incorporation and Bylaws and any other applicable law, regulation or agreement, have the sole power to Transfer their Shares, including, without limitation, to the Company under the Company's estate tax policies or otherwise.
4.3. Procedures for Voting Directions, and Voting, by Holders of Voting Trust Certificates.
(a) (i) The rights of holders of Voting Trust Certificates to direct the Voting Trustees with respect to the voting of, and the exercise of appraisal rights with respect to, the Shares underlying their Voting Trust Certificates in connection with Pass-Through Voting Matters, shall be exercised at a meeting of holders of Voting Trust Certificates called for such purpose or by written consent in lieu of such a meeting. Such meeting of, or action by written consent of, holders of Voting Trust Certificates, shall also constitute a meeting of, or action by written consent of, stockholders of the Company, as provided in this Section 4.3. At each meeting at which a Pass-Through Voting Matter is to be acted upon, the presence in person or by proxy of the holders of record of Voting Trust Certificates shall be deemed to be the presence in person or by proxy of the Voting Trustees with respect to the number of Shares represented by such Voting Trust Certificates for purposes of holding a meeting of, and conducting a vote of, stockholders of the Company. The quorum, meeting conduct and voting requirements for action at a meeting of stockholders on a Pass-Through Voting Matter shall be as specified in the Company's Certificate of Incorporation and Bylaws, and as required by law for meetings of stockholders generally, except as provided in Section 4.3(a)(iii) hereof. In the event such a vote occurs by written consent in lieu of a meeting, consents of the Voting Trustees executed at the direction of holders of Voting Trust Certificates representing the percentage of the then outstanding shares of Common Stock necessary for the taking of such action under applicable law and the Company's Certificate of Incorporation and Bylaws shall be required.
(ii) The rights of holders of Voting Trust Certificates to approve or disapprove the Holder Approval Matters shall be exercised at a meeting of holders of Voting Trust Certificates called for such purpose or by written consent in lieu of a meeting. In connection with any such meeting or action by written consent, the presence in person or by proxy, or the written consent of, holders of record of Voting Trust Certificates representing two-thirds of the Shares then outstanding shall be necessary for approval of such Holder Approval Matters.
(iii) Notwithstanding the foregoing, nothing in this Section 4.3 or otherwise in this Agreement shall mean that there will be annual or other periodic meetings of holders of Voting Trust Certificates. Any such meetings shall be called (A) only when there is a Pass-Through Voting Matter or a Holder Approval Matter which will not be acted upon by written consent in lieu of a meeting and (B) only by the Voting Trustees unless, in
accordance with Section 4.3(c) or 4.3(e) of this Agreement, the Voting Trustees have failed to call a meeting and the holders of Voting Trust Certificates have been specifically granted the right to request such a meeting. The business to be conducted at any such meeting shall be limited to one or more Pass-Through Voting Matters or Holder Approval Matters and no holder of a Voting Trust Certificate shall have a right to raise other business or submit other proposals for action by stockholders or by holders of Voting Trust Certificates.
(b) For the taking of any action as provided in this Section 4.3 by the holders of Voting Trust Certificates, whether with respect to Pass-Through Voting Matters or Holder Approval Matters, each such holder shall have one vote for each share of Common Stock represented by a Voting Trust Certificate standing in his or her name in the Certificate as of any record date fixed by the Board of Directors of the Company for such purpose or, if no such date be fixed, at the close of business on the business day next preceding the day on which notice of a meeting is given, or if notice is waived or no meeting is held, at the close of business on the business day next preceding the day on which the meeting is held or the consents are to become effective.
(c) In conjunction with any action to be taken by holders of Voting Trust
Certificates as provided in this Section 4.3, whether with respect to Pass-
Through Voting Matters or Holder Approval Matters (other than pursuant to
Section 13.1(d) which is covered by Section 4.3(e) hereof), the Voting Trustees
shall, as promptly as practicable, call a meeting or arrange for action by
written consent of the holders of Voting Trust Certificates. If no notice of
such meeting has been given, or no such arrangements are made, within 30 days of
the date of the event or circumstance giving rise to such action, any holder of
a Voting Trust Certificate may request, by written notice to the Voting
Trustees, that a meeting be called or arrangements be made for action by written
consent without a meeting. Upon receipt of such request, the Voting Trustees
shall promptly call a meeting or make such arrangements.
(d) (i) In conjunction with any action to be taken by holders of Voting Trust Certificates as provided in this Section 4.3 with respect to Pass- Through Voting Matters, the Voting Trustees shall use reasonable efforts to cause the Company to deliver to each holder such notices and information as would be furnished to such holders if they were the record holders of Shares in respect of the exercise of voting rights, together with forms by which the holder of record of a Voting Trust Certificate may instruct the Voting Trustees, or revoke such instruction, with respect to the voting of and, if applicable, the exercise of appraisal rights relating to, the Shares represented by such Voting Trust Certificate. Upon timely receipt of directions, the Voting Trustees shall (A) vote on each matter the number of Shares as directed by the holder of the related Voting Trust Certificate or not vote if so directed by a holder of a Voting Trust Certificate and (B) exercise any applicable appraisal rights as directed by a holder of a Voting Trust Certificate. The Voting Trustees shall vote, or not vote, all Shares as to which no instructions have been received from the holder of the related Voting Trust Certificate in the same proportion as those Shares for which the Voting Trustees have received proper direction on such matter.
(ii) In conjunction with any action to be taken by holders of Voting Trust Certificates as provided in this Section 4.3 with respect to Holder Approval Matters, the Voting Trustees shall use reasonable efforts to cause the Company to deliver to each
holder appropriate information relating to such matter, together with forms by which the holder may indicate approval or disapproval of such matter.
(e) In the event there shall be no Voting Trustees in office as contemplated by Section 13.1(d), any holder of a Voting Trust Certificate may request, by written notice to the Company, that a meeting be called for purposes of determining whether the holders of Voting Trust Certificates wish to continue this Agreement and, if so, to designate one or more successor Voting Trustees. The Company shall use reasonable efforts, within 30 days of receipt of such written notice, to give written notice ("Company Notice") to all holders of Voting Trust Certificates of a meeting to be held no later than 30 days after such Company Notice for such purpose. Any holder or group of holders of record of Voting Trust Certificates representing at least five percent of the then outstanding Shares shall, by written notice to the Company within 10 days of the Company Notice, be entitled to nominate one or more successor Voting Trustees. If more than four potential successor Voting Trustees are nominated, each holder of record of a Voting Trust Certificate shall be entitled to vote for up to four successor Voting Trustees, but no more. Election of any given successor Voting Trustee shall require the vote of holders of Voting Trust Certificates representing at least two-thirds of the then outstanding Shares. In the event that more than four potential successor Voting Trustees each receive the affirmative vote of holders of Voting Trust Certificates representing at least two-thirds of the then outstanding Shares, the four nominees who receive the highest total number of votes shall be deemed elected. There shall be no cumulative voting or similar practice in connection with any such vote. This Agreement shall be continued only if (A) holders of Voting Trust Certificates representing at least two-thirds of the then outstanding Shares vote in favor of such continuance and (13) one or more successor Voting Trustees nominated in accordance with the foregoing requirements are approved by the required vote. In the event this Agreement is so continued, the Voting Trustee(s) so elected shall have, as contemplated by Section 7.4, all of the rights, powers, and obligations provided hereunder to Voting Trustees, including the right to elect additional Voting Trustees, subject to the terms of this Agreement.
4.4. Trustees' Powers Irrevocable. Subject to Sections 4.2 and 4.3 hereof, the Voting Trustees' power to vote the Shares held by them and give consents in respect thereof pursuant to this Agreement shall be irrevocable for the term of this Agreement. Subject to Sections 4.2 and 4.3 hereof, the Voting Trustees shall have the right to waive notice of any meeting of stockholders of the Company in respect of such Shares. The Voting Trustees may exercise any power or perform any act pursuant to this Agreement by an agent or attorney duly authorized and appointed by them.
ARTICLE V
ELIGIBILITY OF TRUSTEES
5.1. Stock Ownership or Familial Relationship Not Required. Voting Trustees need not be holders of the Company's capital stock or members of the families descended from Levi Strauss or Daniel E. Koshland, Sr.
5.2. Permitted Activities. No Voting Trustee or successor Voting Trustee shall be disqualified from serving as such if the Voting Trustee does any of the following, nor shall anyone serving in such trustee capacity be incapacitated from doing any of the following: (a) dealing or contracting with the Company or any of its affiliates, either as a vendor, purchaser, advisor, or otherwise, nor shall any transaction or contract be affected or invalidated by reason of the fact that a Voting Trustee or any firm or corporation affiliated with a Voting Trustee is in any way interested in such transaction or contract; nor shall a Voting Trustee be liable to account to the Company or to any stockholder thereof for any profits realized by, from or through any transaction or contract by reason of the fact that a Voting Trustee or any firm or corporation affiliated with a Voting Trustee is interested in such transaction or contract, or (b) serving the Company or any of its affiliates as an officer or director, or employee or in any other capacity, and receiving compensation therefor.
ARTICLE VI
NUMBER OF TRUSTEES; ACTION BY TRUSTEES
6.1. Increase or Decrease in Number of Trustees. The number of Voting Trustees shall initially be set at four. Any increase or decrease in the number of Voting Trustees specified under this Agreement shall require the approval of the holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares.
6.2. Quorum for Action Regarding Voting of Shares; Notice of Trustee Meetings.
(a) Action by the Voting Trustees regarding the voting of Shares (or regarding action by written consent with respect thereto) shall require (i) a quorum of three Voting Trustees if there are four Voting Trustees then in office, (ii) a quorum of two Voting Trustees if there are three Voting Trustees then in office, (iii) a quorum of two Voting Trustees if there are two Voting Trustees then in office and (iv) a quorum of one Voting Trustee if there is one Voting Trustee then in office. On any such matter, each Voting Trustee shall have one vote, regardless of the number of Shares legally or beneficially owned by such Voting Trustee or by members of his or her family.
(b) Any Voting Trustee may call a meeting of the Voting Trustees by giving written notice to the other Voting Trustees then in office. Any such notice must be delivered at least five days before the date of any such meeting, and the Voting Trustee calling such meeting shall make reasonable arrangements to ensure that such meeting shall take place at a time and in a location where any Voting Trustee desiring to participate in such meeting in person or by telephone may do so. Voting Trustees shall have the right to waive notice of any meeting.
6.3. Required Vote for Action Regarding Voting of Shares. Except as expressly provided by this Agreement, all actions by the Voting Trustees regarding the voting of Shares (or regarding action by written consent with respect thereto) shall require the affirmative vote of a majority of a quorum of the Voting Trustees.
6.4. Instructions From Stockholders. Voting Trustees shall have the right (but shall not be required, except as expressly provided by this Agreement) to seek and follow instructions from the holders of Voting Trust Certificates on matters requiring a vote of the Voting Trustees which are not specifically reserved for action by the holders of Voting Trust Certificates. The decision to seek and/or follow such instructions shall require the affirmative vote of a majority of a quorum of the Voting Trustees.
6.5. Deadlock on Actions Relating to the Voting of Shares.
(a) In the event that a majority of a quorum of the Voting Trustees are unable to agree upon the voting of Shares (or action by written consent with respect thereto) to elect or remove one or more members of the Company's Board of Directors within 30 days of the date the Voting Trustees first hold a vote to determine such matter, all votes of the Voting Trustees shall be deemed automatically to have been cast in favor of voting the Shares for the incumbent slate of directors, or against removal of directors, as the case may be.
(b) In the event that a majority of a quorum of the Voting Trustees are unable to agree upon the voting of Shares (or action by written consent with respect thereto) with respect to any matter subject to a vote of the stockholders (other than the election or removal of directors) within 30 days of the date the Voting Trustees first hold a vote to determine such matter, all votes of the Voting Trustees will be deemed to have been cast to vote the Shares against the matter.
6.6. Actions Requiring a Unanimous Vote. The unanimous vote of all Voting Trustees then serving shall be required for trustee action not relating to the voting of Shares (or action by written consent with respect thereto), as follows: (a) the election of any successor Voting Trustee shall require a unanimous vote of the Voting Trustees then in office, (b) the removal of any Voting Trustee from his or her position as such shall require a unanimous vote of three Voting Trustees other than the Voting Trustee to be removed (so that if there are fewer than four Voting Trustees, any vacancy must be filled before removal can occur) and (c) termination of the trust created by this Agreement and of this Agreement shall require a unanimous vote of the Voting Trustees then in office (it being understood that the holders of Voting Trust Certificates may terminate the Voting Trust pursuant to Section 13.1(c) hereof without action by the Voting Trustees).
ARTICLE VII
TERM OF TRUSTEES; VACANCIES;
REMOVAL; SUCCESSOR TRUSTEES
7.1. Term of Trustees. Voting Trustees shall serve until their death, resignation or removal as Voting Trustees.
7.2. Vacancies. Except for vacancies created by the departure of Robert D. Haas or Peter E. Haas, Sr. as Voting Trustees, the remaining Voting Trustee or Trustees shall fill all vacancies by a unanimous vote of the Voting Trustees then in office. If Robert D. Haas ceases to be a Voting Trustee for any reason, then, prior to the filling of the resulting vacancy by the remaining Voting Trustees, the question of whether to continue the Voting Trust shall be put to a vote of the holders of Voting Trust Certificates as set forth in Section 13.2 of this Agreement. If Peter E. Haas, Sr. ceases to be a Voting Trustee for any reason, and at such time is married to Miriam L. Haas, then his successor shall be his wife, Miriam L. Haas. If Miriam L. Haas subsequently ceases to be a Voting Trustee, or predeceases Peter E. Haas, Sr.'s departure from trusteeship, then the successor to Peter E. Haas, Sr. shall be chosen in the manner described above. In the event there are no Voting Trustees in office, the Voting Trust will terminate in accordance with Section 13.1(d) hereof unless the holders of Voting Trust Certificates representing at least two-thirds of the Shares vote to continue the Voting Trust and designate new Trustees pursuant to Section 4.3(c) hereof.
7.3. Removal. A Voting Trustee may be removed, with or without cause, under either of the following circumstances: (a) if the other three Voting Trustees unanimously vote for his or her removal (so that if there is a vacancy at the time of the vote, it must be filled before removal can occur), or (b) if holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares (including all Shares beneficially owned by the subject Voting Trustee and other Voting Trustees) vote for his or her removal. Voting Trustees shall not be removable under any other circumstances.
7.4. Successor Trustees. All successors chosen to fill vacant Voting Trustee positions shall be chosen in accordance with Section 7.2 or, as the case may be, Section 4.3(e). The rights, powers, privileges and obligations of the Voting Trustees acting as such pursuant to this Agreement shall be possessed by any successor Voting Trustees with the same effect as though such successor had originally been a party to this Agreement. The words "Voting Trustees" as used in this Agreement mean the Voting Trustees or any successor Voting Trustees acting under this Agreement.
ARTICLE VIII
EXTRAORDINARY TRANSACTIONS;
RECEIPT OF ADDITIONAL SECURITIES
8.1. Receipt of Additional Securities. If the Voting Trustees shall receive any securities of the Company or any successor or successors of the Company issued by way of dividend, split-up, recapitalization, reorganization, merger, consolidation, or any other change or adjustment in respect of the Shares held by them pursuant to this Agreement, the Voting Trustees (or Custodian, if any) shall hold the certificates representing such additional or changed securities, to the extent that such securities have voting rights (including voting rights contingent upon the occurrence of specified events), subject to the terms of this Agreement and shall issue, or cause to be issued by the Custodian, if any, Voting Trust Certificates representing such changed or additional securities to the respective holders of the then outstanding Voting Trust Certificates entitled thereto. Any securities of the Company or any successor or successors of the Company issued to the Voting Trustees with respect to the then outstanding Shares which do not have any such voting rights shall be delivered to the respective registered
holders of the then outstanding Voting Trust Certificates in proportion to the number of Shares represented by the Voting Trust Certificates.
ARTICLE IX
DIVIDENDS AND DISTRIBUTIONS
9.1. Distributions to be Paid to Beneficial Holders. Except as otherwise provided in Article VIII, if the Company shall pay dividends or any distribution on or in respect of the Shares, the Voting Trustees shall be deemed to have directed the Company to distribute, and the Company shall promptly distribute, or cause the distribution to be made by the Custodian (if any) of, the same, proportionately among the holders of record of the then outstanding Voting Trust Certificates in relation to the number of underlying Shares in respect of which the dividends are paid, or distribution is made.
ARTICLE X
SUBSCRIPTION FOR SECURITIES OF THE COMPANY
10.1. Procedures for Subscription. In case any shares or other securities of the Company are offered for subscription to the holders of the Shares, the Voting Trustees (or Custodian, if any), promptly upon receipt of notice of such offer. shall mail a copy thereof to each holder of Voting Trust Certificates. Upon actual receipt (any deemed receipt in accordance with Section 14.2 notwithstanding) by the Voting Trustees, prior to the last day fixed by the Company for subscription and payment, of a request so to subscribe from such holder accompanied by the requisite sum of money or other consideration and appropriate documentation required to subscribe for such shares or securities, the Voting Trustees shall make, or cause to be made, such subscription and payment. If the shares or other securities so subscribed for are voting securities of the Company, the certificates therefor shall be issued and held by the Voting Trustees (or Custodian, if any), as stockholder of record, subject to the terms and conditions of this Agreement and the Voting Trustees shall issue or cause to be issued by the Custodian, if any, to the subscribing holder a Voting Trust Certificate in respect thereof. If the shares or other securities so subscribed for are non-voting securities of the Company, the certificates therefor shall be issued to the subscribing holder and the Voting Trustees shall mail or deliver such certificates or, cause them to be mailed and delivered by the Custodian, if any, to such holder.
ARTICLE XI
COMPENSATION; EXPENSES
11.1. Payment of Compensation and Reimbursement for Expenses. Voting Trustees who are also beneficial owners of one percent or more of the outstanding shares of Common Stock shall serve without compensation. Voting Trustees who are beneficial owners of less than one percent of the outstanding shares of Common Stock of the Company may receive compensation from the Trust, upon approval of a majority of the other Voting Trustees then in office, for performance of their duties as Voting Trustees. All Voting Trustees shall be entitled to reimbursement from the Trust as set forth in this Agreement for reasonable expenses and charges which may be incurred as Voting Trustees, including, without limitation, the employment of the Custodian, if any, and such agents, attorneys and counsel as the Voting Trustees may
deem necessary and proper for the carrying out of this Agreement (it being understood that each Voting Trustee shall be entitled to retain and be reimbursed for the reasonable expenses and charges of separate counsel if such Voting Trustee believes such separate representation to be advisable), and all taxes or other governmental charges paid or incurred as a result of the transfer or issuance of any Shares or Voting Trust Certificates or in respect of the ownership of the Shares held as trustee or in respect of any dividends, distributions or other rights in respect of such stock. Any such charges or expenses incurred shall be promptly reimbursed to the Voting Trustees by the Trust.
ARTICLE XII
INDEMNIFICATION
12.1. Exculpation; Indemnification of Voting Trustees. No Voting Trustee
shall be liable to the Company, to any holder of a Voting Trust Certificate or
to any other person, under this Agreement or applicable law, by reason of any
matter arising out of or in relation to this Agreement (including, without
limitation, any action taken, or omitted to be taken by him or her in reliance
upon and in conformity with, the advice of counsel, or by reason of any error of
judgment or mistake of law or other mistake, or any act or omission of any agent
or attorney, or any misconstruction of this Agreement, or any action of any sort
taken or omitted thereunder or believed by such Voting Trustee to be in
accordance with the provisions and intents hereof or otherwise), except, in each
case, for such loss or damage as the holders of Voting Trust Certificates may
suffer by reason of such Voting Trustee's willful misconduct. Each holder of
Voting Trust Certificates, by entering into this Agreement, hereby waives any
right to bring or pursue any action, directly or derivatively, on his or her own
behalf or on behalf of the Company, against the Voting Trustees, except with
respect to loss or damage caused by any such willful misconduct. Each Voting
Trustee shall be indemnified and held harmless by the Trust from and against any
and all of such Voting Trustee's actions pursuant to this Agreement, including
any expenses incurred by a Voting Trustee in defending any proceeding or action
brought against such Voting Trustee for actions taken in his or her capacity as
a Voting Trustee, except for such Voting Trustee's willful misconduct. No Voting
Trustee shall be required to give a bond or other security for the faithful
performance of his or her duties as such. Each Voting Trustee shall be entitled
to receive prompt payments in respect of the indemnification provided by this
Agreement in advance of the final adjudication of any disputes relating thereto.
The rights to indemnification and reimbursement of expenses set forth in this
Section 12.1 shall not be deemed exclusive and shall be in addition to any such
rights a Voting Trustee may have, including but not limited to rights of such
Voting Trustee, in his or her capacity as an officer, director, employee or
agent of the Company.
ARTICLE XIII
TERMINATION
13.1. Termination Events. The Voting Trust created by this Agreement and this Agreement shall be effective and remain in force until the occurrence of the earliest of the following events:
(a) the fifteenth anniversary of the date of this Agreement;
(b) the unanimous vote by all of the Voting Trustees then in office to terminate this Agreement, effected by written notice given to the holders of Voting Trust Certificates, at any time after the date of this Agreement;
(c) the election by the holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares to terminate this Agreement, at any time after the date of this Agreement; or
(d) if there shall be no Voting Trustees in office, the failure of the holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares to vote to continue the Trust and to designate one or more successor Voting Trustees within 90 days of the death, resignation or removal of the last remaining Voting Trustee, as contemplated by Section 4.3(e) hereof.
13.2. Termination Upon Failure of Robert D. Haas to Continue Serving as Voting Trustee. If Robert D. Haas ceases to be a Voting Trustee for any reason, then the remaining Voting Trustees shall seek instructions from the holders of Voting Trust Certificates with respect to the issue of continuing the Trust. The vote shall be conducted in accordance with the procedures set forth in Sections 4.3(a)-(d) hereof. Unless holders of Voting Trust Certificates representing at least two-thirds of the outstanding Shares vote against continuation of the Voting Trust, the Voting Trust shall continue, and the vacancy shall be filled by the Voting Trustees as described in Article VII hereof.
13.3. Surrender of Certificates. Upon the termination of the Voting Trust, the Voting Trustees, or the Custodian, if any, shall in exchange for, and upon the surrender of, the Voting Trust Certificates representing such Shares, deliver or cause to be delivered stock certificates to the holders of such Voting Trust Certificates representing the number of Shares set forth on the Certificate. No person or entity purporting to be a holder of Voting Trust Certificates shall receive any stock certificates pursuant to this provision unless such holder is listed on the Certificate and, if not the original holder thereof, receives Voting Trust Certificates in a Transfer made in accordance with the provisions of Article III of this Agreement.
13.4. Consequences of Bankruptcy, Etc. If, in the event of the bankruptcy, receivership, dissolution or total or partial liquidation of the Company, whether voluntary or involuntary (each a "Bankruptcy Event"), the Voting Trustees shall receive any monies, securities or property to which the respective registered holders of the then outstanding Voting Trust Certificates shall be entitled, the Voting Trustees shall distribute or cause the distribution to be made by the Custodian, if any, of such monies, securities or property to the respective registered holders of the then outstanding Voting Trust Certificates, in proportion to the number of Shares respectively represented by their Voting Trust Certificates. Such a Bankruptcy Event shall not cause termination of or otherwise affect this Agreement.
13.5. No Termination Upon Death, Etc. The death, disability or incompetency of any Voting Trustee or any holder of a Voting Trust Certificate during the term of this Agreement shall in no way affect the validity or enforceability of this Agreement or the Voting Trust Certificates issued pursuant to this Agreement, which shall remain in full force and effect in accordance with its terms.
13.6. Certificates Held by Company. If the Company shall acquire any Voting Trust Certificates, the Company may thereupon, at its option, deliver such Voting Trust Certificates to the Voting Trustees (or Custodian, if any) and shall receive in exchange the Shares or other securities represented by such Voting Trust Certificates. Upon such exchange, the Voting Trust Certificates so delivered shall be cancelled. Any Voting Trust Certificates held by the Company shall not be deemed to be outstanding.
13.7. Exclusive Means of Termination. The circumstances set forth in this Article XIII represent the only circumstances under which the Voting Trust created by this Agreement may be terminated. It is the intention of the parties hereto that no statute or regulation, no governmental, judicial or administrative authority, no other provision of this Agreement or any other agreement, and no event or other development affecting the Company, shall operate or be effective to terminate the Voting Trust created hereby.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1. Additional Parties. If any person who is not, as of the date of this Agreement, a Stockholder, shall acquire Shares or Voting Trust Certificates (or other voting securities of the Company which by the terms of their issuance are governed by this Agreement) from a Stockholder, or who otherwise is required as a condition to the acquisition of shares of Common Stock to enter into and become a party to this Agreement, such person, upon execution of a counterpart to this Agreement, shall become a party to this Agreement and be deemed to be a Stockholder for all purposes of this Agreement as if such person had originally executed this Agreement, and the Voting Trust herein created shall continue to remain in effect.
14.2. Notices. All notices given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if sent by registered or certified mail, return receipt requested, by messenger or by a nationally recognized overnight delivery company, to the party or parties to be given such notice at the address set forth below. Notices to the holders of Voting Trust Certificates shall be sent to the respective addresses specified by such parties in the Certificate, or in such other manner as such holders may have communicated in writing to the Company or the Voting Trustees. Notices to the Voting Trustees shall be addressed to:
Robert D. Haas, as Voting Trustee c/o Levi Strauss & Co.
Levi's Plaza
1155 Battery Street
San Francisco, California 94111
or to such other address as the Voting Trustees may have communicated in writing to the parties to this Agreement. If a Custodian has been appointed and is serving, and the holders of Voting Trust Certificates have been so notified, then a copy is to be sent to the Custodian at the address provided in such notice. Notices to be sent to a successor Voting Trustees shall be sent to the person and at the address designated by notice served in the manner herein provided.
14.3. Maintenance of Certificate. The Voting Trustees shall, or shall make arrangements with the Company to, make such amendments from time to time to the Certificate as shall be necessary by reason of share transfers, stock splits or otherwise.
14.4. Amendment. This Agreement (including, without limitation, an amendment extending the duration of the Voting Trust) may be amended at any time upon the vote of the holders of Voting Trust Certificates representing two- thirds of the outstanding Shares; no approval by the Voting Trustees shall be required in order to effect such amendments. Notwithstanding the foregoing, this Agreement may be amended solely for the purpose of effecting ministerial changes hereto, without the vote of holders of Voting Trust Certificates, upon the affirmative vote of a majority of a quorum of Voting Trustees as contemplated by Article IV and Article VII. All amendments to this Agreement must be in writing, and any such writing must recite that it is an amendment to this Agreement.
14.5. Voting: "Outstanding" Shares. On any matter requiring a vote of holders of Voting Trust Certificates representing a specified number or proportion of the "outstanding" Shares, the Voting Trust Certificates held by Voting Trustees shall be included for the purposes of determining the result of such vote.
14.6. Entire Agreement. This Agreement contains all of the terms and conditions agreed upon by the parties relating to its subject matter, represents the final, complete and exclusive statement of the parties, and supersedes any and all prior agreements, negotiations, correspondence, understandings and communications of the parties, whether oral or written, including the 1991 Class L Stockholders' Agreement by and among LSAI and certain of its stockholders which is terminated pursuant to the Stockholders' Agreement; provided that this Agreement does not supersede, and should be enforced in conjunction with, the Stockholders' Agreement, the Stock Subscription Agreements, the Merger Agreement and the Voting Trust Support Agreement of even date herewith between the Voting Trustees and the Company. No modification, amendment or waiver of any provision of this Agreement shall be valid unless in writing and approved in the manner set forth in Section 14.4.
14.7. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators and permitted successors and assigns. This Agreement shall apply to, and all of the foregoing parties, heirs, executors, administrators and permitted successors and assigns shall be bound by this Agreement with respect to, any securities issued in respect of (or in exchange for) Shares or Voting Trust Certificates in connection with any transaction to the extent set forth in Article VIII. Without limiting the foregoing, the parties intend for the rights and obligations under this Agreement to survive the death of any party or other person, including any Voting Trustee or any holder of a Voting Trust Certificate and the related Shares, and to be specifically enforceable against any deceased party's heirs, executors, administrators, representatives, successors or assigns to the fullest extent permitted by law (including, without limitation, California Probate Code Section 9680).
14.8. Governing Law; Jurisdiction. This Agreement creates a voting trust under Section 218 of the General Corporation Law of the State of Delaware applicable to the shares of a Delaware corporation. Regardless of the place of execution of this Agreement, the domicile or residence of any Stockholder or Voting Trustee, the location of the principal executive office of the Company, or any other fact or circumstance, this Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (without regard to conflicts of laws principles). EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE IN ANY ACTION, SUIT OR PROCEEDING ARISING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURTS (AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS PARAGRAPH AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SUCH COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING. Service of process on a Stockholder or Stockholders in any action arising out of or relating to this Agreement shall be effective if delivered to such Stockholder or Stockholders in accordance with Section 14.2. These provisions reflect the overall objective of this Agreement to provide for the long-term, stable and consistent ownership and governance of the Company.
14.9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any Voting Trustee may execute this Agreement, any Voting Trust Certificate, and any amendment, waiver or consent relating thereto by use of an appropriate facsimile signature, provided that such Voting Trustee provides adequate assurances to the Company that such facsimile signature is an accurate representation of such Voting Trustee's actual signature.
14.10. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
VOTING TRUSTEES:
STOCKHOLDERS:
EXHIBIT A
Voting Trust Certificate
FOR SHARES OF COMMON STOCK,
PAR VALUE $0.01 PER SHARE,
OF
LSAI HOLDING CORP.,
a Delaware corporation
No. of Shares Certificate No.
THIS IS TO CERTIFY THAT, on 2011, or
upon the prior termination of a certain Voting Trust Agreement, dated April 15,
1996 (the "Voting Trust Agreement"), by and among Robert D. Haas, Peter E. Haas,
Sr., Peter E. Haas, Jr. and F. Warren Hellman, as Voting Trustees and certain
stockholders of LSAI Holding Corp. (the "Company"), pursuant to which agreement
this Certificate has been issued,
will be entitled to receive certificates for the number of fully-paid and non-
assessable shares hereinabove specified (the "Shares") and for the duration of
such Voting Trust Agreement, to receive distributions equal to the cash or
property or nonvoting security distributions, if any, collected by the Voting
Trustees (or Custodian, if any) upon a like number of the Shares standing in the
name of the Voting Trustees. Prior to the actual delivery of such certificates,
the Voting Trustees (or Custodian, if any), with respect to any and all of the
Shares shall possess and be entitled to exercise, in the manner and to the
extent provided in the aforesaid Voting Trust Agreement, all of the rights of
every kind of the holder of this Certificate, including the right to vote and
take part in, or to consent to any corporate or stockholders' action, it being
expressly stipulated that except as specifically provided in the Voting Trust
Agreement, no right to vote, or take part in, or to consent to any corporate or
stockholders' action, shall pass by, or under, this Certificate.
THE SALE, ASSIGNMENT, GIFT, PLEDGE OR OTHER ENCUMBRANCE, OR OTHER TRANSFER ("TRANSFER") OF THIS VOTING TRUST CERTIFICATE OR THE SHARES (OR ANY INTEREST THEREIN) REPRESENTED HEREBY IS SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH IN THE COMPANY'S CERTIFICATE OF INCORPORATION AND IN THE VOTING TRUST AGREEMENT DESCRIBED IN THIS CERTIFICATE AND PURSUANT TO WHICH THIS CERTIFICATE IS ISSUED, TO A STOCK SUBSCRIPTION AGREEMENT DATED AS OF JANUARY 25, 1996, AND TO A STOCKHOLDERS' AGREEMENT AMONG THE COMPANY AND ITS STOCKHOLDERS DATED AS OF APRIL 15, 1996. COPIES OF SUCH STOCKHOLDERS' AGREEMENT AND VOTING TRUST AGREEMENT ARE ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY. NO TRANSFER OF THIS CERTIFICATE, OR THE SHARES REPRESENTED BY THIS CERTIFICATE, MAY BE EFFECTED, EXCEPT PURSUANT TO THE TERMS OF SUCH CERTIFICATE OF INCORPORATION, VOTING TRUST AGREEMENT AND STOCKHOLDERS' AGREEMENT. NO SUCH TRANSFER SHALL BE VALID UNLESS MADE TOGETHER WITH THE UNDERLYING SHARES.
IN ADDITION, THIS CERTIFICATE AND/OR THE SHARES REPRESENTED BY THIS CERTIFICATE, AS THE CASE MAY BE, MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT (FOR THE INTEREST IN THE VOTING TRUST REPRESENTED BY THIS CERTIFICATE AND SUCH SHARES REPRESENTED HEREBY, AS THE CASE MAY BE) UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. IN CONNECTION WITH ANY PROPOSED SALE OR TRANSFER OF THIS CERTIFICATE, OR THE SHARES REPRESENTED HEREBY, AS THE CASE MAY BE, PURSUANT TO AN EXEMPTION FROM REGISTRATION, THE HOLDER OF THIS CERTIFICATE, OR SHARES REPRESENTED BY THIS CERTIFICATE, AS THE CASE MAY BE, MAY BE REQUIRED TO DELIVER TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, OR THE COMPANY MAY REQUIRE THAT IT SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL, THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED. IN ADDITION, THE RIGHT TO VOTE THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN THE MANNER PROVIDED IN THE VOTING TRUST AGREEMENT.
This Certificate is not valid unless signed by the Voting Trustees or the appointed Custodian. The holder hereof, by accepting this Certificate, manifests his or her consent that the undersigned Voting
Trustees may treat the registered holder hereof as the true owner for all purposes, except the delivery of certificates for Shares which delivery shall not be made without the surrender hereof.
IN WITNESS WHEREOF, the undersigned, the Voting Trustees, have caused this Certificate to be signed as of the day of , .
VOTING TRUSTEES:
ASSIGNMENT
FOR VALUE RECEIVED, does hereby sell, assign and transfer unto all of the undersigned's right, title and interest in and to this Voting Trust Certificate, and does hereby irrevocably constitute and appoint to be the undersigned's attorney to transfer this Voting Trust Certificate on the books of the within named Voting Trustees, with full power of substitution in the premises.
Dated:
IN PRESENCE OF__________________________________________________________________
Witness' signature
Print name of witness:
FORM OF
VOTING TRUST SUPPORT AGREEMENT
THIS VOTING TRUST SUPPORT AGREEMENT (this "Agreement") dated as of , 1996, is among LSAI HOLDING CORP., a Delaware corporation (the "Company"), and the voting trust (the "Voting Trust) created pursuant to the Voting Trust Agreement, (the "Voting Trust Agreement") by and among Robert D. haas, Peter E. Haas, Sr., Peter E. Haas, Jr., and F. Warren Hellman, as voting trustees (the "Voting Trustees), and the stockholders of the Company who are parties thereto (the "Stockholders"). Capitalized terms used herein without definition shall have the meanings assigned thereto in the Voting Trust Agreement.
RECITALS
WHEREAS, the Voting Trustees and the Stockholders have entered into the Voting Trust Agreement; and
WHEREAS, the Company recognizes that the efficient administration of the Voting Trust is beneficial to the long-term, stable and consistent ownership and governance of the Company; and
WHEREAS, the Company and the Voting Trustees believe it to be in the best interests of the Company and the Voting Trust to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and of the representations, warranties and agreements contained herein, and as contemplated by the Voting Trust Agreement, the parties hereto agree as follows:
1. Maintenance of Certificate. The Company shall maintain the Certificate in its permanent records. The Company shall initially create the Certificate, and thereafter shall revise the Certificate from time to time, in each case upon instruction from, and in the manner requested by, any one or more of the Voting Trustees, as contemplated by the Voting Trust Agreement. The Company shall make no changes to the Certificate other than as directed by the Voting Trustees.
2. Transfer Restrictions. The Company shall recognize, and shall record on the Certificate and/or the books and records of the Company, only those Transfers made in accordance with Section 3.3 of the Voting Trust Agreement.
3. Calling of Meetings. In the event that the Company receives written notice, pursuant to Section 4.3(e) of the Voting Trust Agreement, requesting that a meeting be called for purposes of determining whether the holders of Voting Trust Certificates wish to continue the Voting Trust Agreement and to designate one or more successor Voting Trustees, the Company shall abide by the provisions of such Section 4.3(e) as though it were a party to the Voting Trust Agreement and bound thereby.
4. Reimbursement of Voting Trust. In the event that the Voting Trust is required to pay any sums of money to any Voting Trustee pursuant to Sections 11.1 or 12.1 of the Voting Trust Agreement, the Company shall, upon receipt of written notice from the Voting Trustees, promptly reimburse the Voting Trust for the amounts so paid.
5. Amendment. All amendments to this Agreement must be in writing and be signed by the Company and by each Voting Trustee then in office, and any such writing must recite that it is an amendment to this Agreement.
6. Third Party Beneficiaries. It is the express intention of the parties hereto that each Voting Trustee shall be a third party beneficiary of the agreements contained in Section 4 hereof, and that any Voting Trustee may enforce the provisions of such Section 4 as though such Voting Trustee were a party hereto.
7. Governing Law; Jurisdiction. Regardless of the place of execution of this Agreement, the domicile or residence of any Stockholder or Voting Trustee, the location of the principal executive office of the Company, or any other fact or circumstance, this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without regard to conflicts of laws principles). EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL COURTS LOCATED IN THE STATE OF DELAWARE IN ANY ACTION, SUIT OR PROCEEDING ARISING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURTS (AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS PARAGRAPH AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SUCH COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH ACTION, SUIT OR PROCEEDING. These provisions reflect the overall objective of this Agreement to provide for the long-term, stable and consistent ownership and governance of the Company.
8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any Voting Trustee may execute this Agreement, any Voting Trust Certificate, and any amendment, waiver or consent relating thereto by use of an appropriate facsimile signature, provided that such Voting Trustee provides adequate assurances to the Company that such facsimile signature is an accurate representation of such Voting Trustee's actual signature.
9. Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
10. Further Assurance. Each of the parties hereto shall execute such documents and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and of the other documents to be executed by such person pursuant to the terms hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
LSAI HOLDING CORP:
By:________________________________
Robert D. Haas
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Voting Trustees:
F. Warren Hellman
EXHIBIT 10.1
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") dated as of April 15,1996 is among LSAI HOLDING CORP., a Delaware corporation (the "Company"), and those parties listed as signatories hereto (together with such additional signatories as may be deemed added from time to time pursuant to Section 2.4 hereof, the "Stockholders").
RECITALS
WHEREAS, the Stockholders are all currently holders of shares of Class L common stock, par value $0.10 (the "Class L Shares"), of Levi Strauss Associates Inc., a Delaware corporation ("LSAI") and are parties to an agreement restricting transfers of those Class L Shares;
WHEREAS, each Stockholder is a party to a Stock Subscription Agreement (a "Stock Subscription Agreement"), in which such Stockholder has committed at the closing of the transactions contemplated thereby (the "Closing") to purchase (the "Purchase") shares of common stock, par value $0.01 per share, of the Company (the "Common Stock") in an amount specified in the Stock Subscription Agreement and at a per share price of one Class L Share (all of the shares of such Common Stock issued and outstanding immediately following the Closing, together with any other shares of Common Stock or other capital stock entitling the record owner thereof to vote in elections of directors generally which are issued by the Company during the life of this Agreement to any holder who is, by the terms of this Agreement or otherwise required to subject such shares to this Agreement, the "Shares");
WHEREAS, each Stockholder is, concurrently with the delivery of this Agreement, executing and delivering a voting trust agreement (the "Voting Trust Agreement") to which all the shares of Common Stock outstanding immediately following the Closing will be subject, and pursuant to which all such shares together with certain additional shares of Common Stock and other securities specified in the Voting Trust Agreement will be represented by Voting Trust Certificates ("Voting Trust Certificates") for as long as the Voting Trust Agreement is in effect;
WHEREAS, LSAI Acquisition Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company ("Acquisition"), the Company, and LSAI, have entered into an Agreement and Plan of Merger, dated as of February 8, 1996, providing, among other things, for the merger (the "Merger") of Acquisition with and into LSAI;
WHEREAS, it is a condition precedent to the Purchase that all Stockholders participating therein enter into this Agreement and the Voting Trust Agreement, with the end result being that immediately following the Purchase all the outstanding shares of Common Stock shall be subject to this Agreement and the Voting Trust Agreement;
WHEREAS, the Stockholders and the Company believe that, in addition to the rights, restrictions and obligations created by the Voting Trust Agreement with respect to the voting of shares of Common Stock and the governance of the Company, additional rights, restrictions and obligations regarding the Shares, and the related Voting Trust Certificates, are reasonable and appropriate to provide for the long-term, stable and consistent ownership and governance of the Company, and are in the best interests of the Company and the Stockholders;
NOW, THEREFORE, in consideration of the premises and of the representations, warranties and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
THE VOTING TRUST AGREEMENT
1.1. Shares; Voting Trust Certificates. (a) So long as the Voting Trust Agreement is in effect: (i) the trustees (the "Trustees") of the voting trust (the "Voting Trust") shall be the owners of record of all the Shares; (ii) a Stockholder's beneficial ownership of Shares shall be evidenced, not by certificates of common stock, but by a Voting Trust Certificate; (iii) the Voting Trust Certificates shall represent both the beneficial ownership of the number of Shares specified thereon and the participation of such Shares in the Voting Trust; and (iv) any transfer of Voting Trust
Certificates shall be deemed to effect a transfer of the Shares represented thereby, and any transfer of Shares shall be deemed to effect a transfer of any Voting Trust Certificates so representing.
(b) It is understood that immediately following the Closing, all Shares
then outstanding will be subject to the Voting Trust Agreement (as well as this
Agreement). The Company shall have the right to issue shares of Common Stock,
whether treasury shares or newly issued shares, in any way and to any transferee
that the Board approves, subject to the Company's Certificate of Incorporation,
By-Laws, and to applicable law (a "Company Transfer"). Any transferee who is
already a Stockholder shall be bound by this Agreement with respect to the
shares received in such Company Transfer. All other transferees who receive
shares in such a Company Transfer shall sign a Confirming Document pursuant to
Section 2.4 hereof and thereby become Stockholders. Following the Closing, in
the event the Voting Trust Agreement is no longer in effect but this Agreement
remains in effect, it is possible that shares of Common Stock will be issued or
outstanding which are "Shares" for purposes of this Agreement but are not
subject to the Voting Trust Agreement and hence not represented by Voting Trust
Certificates.
ARTICLE II
RESTRICTIONS ON TRANSFER
2.1. No Transfers. Except as explicitly permitted by this Agreement, no Stockholder shall, directly or indirectly, sell, assign, give, pledge or encumber or otherwise transfer (each a "Transfer"), to any person or entity, any Shares (or any related Voting Trust Certificates), during the term of this Agreement.
2.2. Permitted Transfers; Permitted Transferees. (a) So long as a Stockholder complies with the terms of this Agreement in its entirety, such Stockholder may:
(i) Transfer Shares (together with any related Voting Trust Certificates) to (A) the spouse (or ex-spouse if the Transfer is pursuant to a marital dissolution order), any lineal ancestor, any lineal descendant or any adopted child (or a spouse of any of the foregoing) of such Stockholder (each a "Related Party"), or (B) if such Stockholder is a trust, to a Related Party of such trust's grantor;
(ii) Transfer Shares (together with any related Voting Trust Certificates) to (A) any lineal descendant or adopted child of, or (B) any lineal descendent or adopted child of such lineal descendent or adopted child of, any of such Stockholder's Related Parties (for example, a stepchild of a Stockholder) (collectively, "Other Related Parties");
(iii) Transfer Shares (together with any related Voting Trust Certificates) to a trust of which there are no beneficiaries other than (A) such Stockholder (the grantor), (B) Related Parties of such Stockholder or(C) Other Related Parties of such Stockholder, provided that the Stockholder or the beneficiaries or the trustees of such a trust have the power to act with respect to the trust's assets without obtaining court approval;
(iv) Transfer Shares (together with any related Voting Trust Certificates) to any charitable organization which qualifies under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), including any transfer in trust for the benefit of such organization, provided that such charitable organization (A) is controlled by either such Stockholder, a Related Party of such Stockholder or an Other Related Party of such Stockholder ("control" here meaning majority representation by such persons on the board of directors, trustees or comparable governing body of such organization) or (B) has been approved by a majority of the members of the board of directors of the Company (the "Board") present at a meeting of the Board at which a quorum is present;
(v) Transfer Shares (together with any related Voting Trust Certificates) to (or in trust for the benefit of) The San Francisco Foundation, The Marin Foundation, the Jewish Community Federation of San Francisco, the Peninsula, Marin and Sonoma Counties, the University of California at Berkeley, Stanford University and such other public charitable organizations which (A) qualify under Section 501(c)(3) of the Code and (B) have been approved as transferees prior to the time of Transfer by a majority of the members of the Board present at a meeting at which a quorum is present;
(vi) Transfer Shares (together with any related Voting Trust Certificates) to such Stockholder's legal representative in the event such Stockholder becomes incompetent;
(vii) Transfer Shares (together with any related Voting Trust Certificates) to another Stockholder;
(viii) Transfer Shares (together with any related Voting Trust Certificates) to a partnership in which the only persons or entities who are permitted to be partners would otherwise be capable of receiving such Shares directly in accordance with this Section 2.2(a);
(ix) Transfer Shares (together with any related Voting Trust Certificates) to the Company or an entity owned or controlled by the Company; and
(x) Transfer Shares (together with any related Voting Trust Certificates) if such Transfer or transferee is approved prior to such Transfer by two-thirds of the members of the Board present at a meeting at which a quorum is present.
Any transfer made pursuant to this Section 2.2(a) is a "Permitted Transfer". Any
persons or entities who are capable of receiving Shares in accordance with this
Section 2.2(a) are referred to as "Permitted Transferees".
(b) Testamentary Transfers of Shares (together with any related -Voting Trust Certificates) from a Stockholder's estate, and Transfers of Shares (together with any related Voting Trust Certificates) made by the legal representative of a deceased Stockholder, shall be Permitted Transfers only if such Transfers would have been Permitted Transfers had they been made by such Stockholder prior to his or her death.
(c) Notwithstanding Sections 2.2(a) and (b) hereof, a Transfer of Shares (together with any related Voting Trust Certificates) shall only be a Permitted Transfer if made in compliance with the terms of this Agreement in its entirety and with all state and federal securities laws. Any Transfer of Shares (or any related Voting Trust Certificates) made in violation of such laws shall also constitute a violation of this Agreement.
2.3. Prior Notification. Any Transfer of Shares and any related Voting Trust Certificates made pursuant to this Agreement, other than a Transfer made pursuant to Section 2.8 hereof, shall require, at least five days prior to the desired effective date of the Transfer, the delivery to the Company of evidence reasonably satisfactory to the Company that the Transfer is a Permitted Transfer and a Confirming Document (as hereinafter defined) executed by the proposed transferee.
2.4. Transferee Bound. No Transfer of Shares or of any related Voting Trust Certificates other than Transfers to the Company or to a Stockholder shall be effective unless the person or entity receiving such Shares together with any related Voting Trust Certificates) (the "Transferee"), executes an appropriate document (a "Confirming Document"), substantially in the form attached to this Agreement as Exhibit A, confirming that the Transferee takes those Shares and any related Voting Trust Certificates subject to all the terms and conditions of this Agreement (and, if related Voting Trust Certificates are transferred, the Voting Trust Agreement), without limitation. The Confirming Document must be delivered to and approved by the Company prior to the Transfer of Shares (and any related Voting Trust Certificates) to that Transferee. So long as the Transfer is otherwise made in accordance with the terms of this Agreement, the Company shall not unreasonably withhold its approval of a proposed Confirming Document. Upon approval of the Confirming Document (except for Confirming Documents executed pursuant to Section 2.6 hereof) and assuming completion of the underlying Transfer, the Transferee's signature on the Confirming Document shall constitute an execution of a counterpart of this Agreement, and such Transferee shall become a Stockholder signatory of this Agreement. Additionally, if the Voting Trust Agreement is still in effect and Voting Trust Certificates were so transferred, the Company shall, within ten days of such notification to the Company, deliver to the Trustees a copy of the Confirming Document attesting to the fact that the Transferee has become the Stockholder with respect to such transferred Shares (and the related Voting Trust Certificates) and is so bound by the Voting Trust Agreement.
2.5. Non-Conforming Transfers. The Company's Certificate of Incorporation provides that any purported Transfer of Shares to a Transferee who is not or who does not become a Stockholder pursuant to Section 2.4 hereof (a
"Non-Conforming Transferee," and such transfer, a "Non-Conforming Transfer"), shall be null and void. The Company shall not register, recognize or give effect to any such Non-Conforming Transfer, and the Company shall continue to recognize on its books and records the transferor of such Shares as the holder thereof.
2.6. Pledges of Stock. A Stockholder may pledge his or her Shares (together with any related Voting Trust Certificates) to a commercial bank, savings and loan institution, brokerage firm or any other lender as security for any indebtedness of that Stockholder to that lender; provided, however, that prior to the pledge becoming effective, the lender must first execute and deliver to the Company an appropriate Confirming Document, pursuant to Section 2.4 hereof, which Confirming Document shall be subject to the Company's approval as provided in Section 2.4 hereof.
2.7. Stock Certificate Legends. Each outstanding certificate representing Shares (the "Stock Certificates") shall bear legends reading substantially as follows:
The shares represented by this certificate were acquired for investment only and not for resale. They have not been registered for resale under the Securities Act of 1933 or any state securities laws. These shares may not be sold, transferred, pledged, or hypothecated unless first registered under such laws, or unless the Corporation has received evidence satisfactory to it that registration under such laws is not required.
The shares represented by this certificate are subject to restrictions on transfer and certain rights of the Corporation to purchase the shares on the terms set forth in a Stockholders' Agreement initially entered into as of April 15, 1996 among the Corporation and its stockholders, a copy of which may be obtained from the Corporation or from the holder of this certificate. No transfer of such shares will be made on the books of the Corporation unless accompanied by evidence of compliance with the terms of such Stockholders' Agreement.
The Stock Certificates shall bear any additional legend which may be appropriate for compliance with state securities or blue sky laws. However, to the extent such Shares are subject to the Voting Trust Agreement, only the Trustees shall hold such certificates. Stockholders shall hold Voting Trust Certificates substantially in the form attached as Exhibit A to the Voting Trust Agreement with respect to Shares which are subject to the Voting Trust Agreement. Upon termination of the Voting Trust Agreement, the Trustees shall cause all Stock Certificates held by them to be cancelled and the Stockholders shall exchange with the Company any Voting Trust Certificates then held for Stock Certificates representing that number of Shares formerly represented by the Voting Trust Certificates held thereby and, as provided in the Voting Trust Agreement, will deliver them to the appropriate holders.
2.8. Certain Involuntary Transfers. (a) If a Stockholder involuntarily transfers, directly or indirectly, any Shares (or any related Voting Trust Certificates) for any reason (other than to a former spouse pursuant to a court order with respect to the dissolution of the marriage) and the transfer is not to a Permitted Transferee, that transferor Stockholder (the "Transferor Stockholder") shall give written notice within 30 days after the involuntary transfer (a "Transferor's Notice") to the Company, with a copy to the Transferee, stating the fact that the involuntary transfer occurred, the reason therefor, the date of the transfer, the name and address of the Transferee, the terms of the transfer and the number of Shares (and any related Voting Trust Certificates) acquired by the Transferee (the "Offered Securities"). An "involuntary transfer" includes a foreclosure upon or other seizure of Shares (together with any related Voting Trust Certificates) by a creditor of a Stockholder, but does not include action under a pledge arrangement permitted under Section 2.6 of this Agreement.
(b) For a period of 60 days after the date of receipt of the Transferor's Notice or, failing receipt of such notice, 60 days after the date the Company sends written notice to the Transferee that the transfer is an "involuntary Transfer" subject to repurchase under this Section 2.8, the Company shall have the irrevocable and exclusive option to buy up to all of the Offered Securities at the price provided for in subsection (d) of this Section 2.8; provided, however, that the Company may not purchase any of the Offered Securities unless either:(i) the Company purchases all of the Offered Securities; or (ii) the Transferor Stockholder consents to the purchase of less than all of the Offered Securities. The Company's option is exercisable by delivery of a written notice to the Transferor Stockholder within 15 days after the date of the Transferor's Notice. The Company's rights are assignable, in whole or in part, by action of the Board.
(c) If the Transferor's Notice is properly given, and if the Company does not exercise its option to purchase the Offered Securities or does not purchase all of the Offered Securities, then the involuntary transfer shall stand and the Offered Securities shall not be subject to any further right of repurchase by the Company, provided that the Transferee executes a Confirming Document which is subsequently approved by the Company.
(d) The purchase price for the Offered Securities purchased under this
Section 2.8 shall be the appraised value of the Shares (with no separate value
being attributable to any Voting Trust Certificates relating to such Shares) as
of the most recent appraisal obtained by the Company if such appraisal is as of
a date not more than eighteen months prior to the involuntary transfer, and if
such an appraisal has not been obtained, the purchase price for the Offered
Securities shall be equal to the lower of the price which the involuntary
Transferee offered to pay for the Offered Securities (such price represented
either by consideration tendered or indebtedness repaid or cancelled) or the
book value of the Shares (with no separate value being attributable to any
Voting Trust Certificates relating to such Shares and with book value never to
be deemed less than the par value of the Shares, even if the Company has a
negative net worth) at the end of the preceding fiscal year of the Company, as
determined by the Chief Financial Officer of the Company.
2.9. Tag-Along Rights in Significant Transactions. For a five-year period beginning on the Termination Date (as defined in Section 4.1), no Stockholder may Transfer Shares (or any related Voting Trust Certificates) representing more than 10% of the then outstanding Shares (such transferor Stockholder, the "Selling Stockholder") to a third party other than a Permitted Transferee (a "Third Party"), unless the Selling Stockholder shall give written notice to each other Stockholder at least 20 days prior to such transaction and shall make all such arrangements as are necessary such that each other Stockholder shall have the right to participate (a "Tag-Along Right") in such sale by selling the same percentage of such Stockholder's Shares to the Third Party as the percentage of the aggregate number of Shares then owned by the Selling Stockholder to be sold by the Selling Stockholder for the same consideration per Share (with no separate consideration or value being attributable to any related Voting Trust Certificate), and otherwise on the same terms as the Selling Stockholder sells its Shares (with no separate consideration or value being attributable to any related Voting Trust Certificates). Such arrangements shall include the time and place of closing, closing deliveries and similar matters.
ARTICLE III
REGISTRATION; PURCHASE; REPRESENTATION
3.1. No Entitlements. Nothing in this Agreement (a) entitles any Stockholder to obtain registration or qualification of any Shares (or any related Voting Trust Certificates) under the Securities Act of 1933 (the "Securities Act") or any state securities laws; (b) provides any Stockholder with any right to have such Stockholder's Shares (or any related Voting Trust Certificates) or any portion thereof purchased or redeemed by the Company or by any other party, it being understood that any estate tax policy of the Company, which may be in place from time to time, contemplating, among other things, repurchase by the Company of Shares from estates of deceased Stockholders to provide funds for payment of estate or similar taxes, will be a policy and will not create a binding obligation on the part of the Company; or (c) entitles any Stockholder or family group to a position on, or a representative on, the Company's Board of Directors, or to be represented as or by a Trustee.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1. Term. The term of this Agreement shall commence at the moment the Purchase is consummated (the "Effective Date") and shall terminate upon the earlier of. (a) the execution and delivery of a written agreement to that effect by the holders of record of at least two-thirds of the Shares then outstanding (who shall, for this purpose, be deemed to be the holders of record of Shares to the extent such Shares are not subject to the Voting Trust Agreement and shall be the holders of record of Voting Trust Certificates relating to any Shares which are then subject to the Voting Trust Agreement) or (b) unless extended by agreement of the parties as contemplated by Section 4.5 hereof, the twentieth anniversary of the Effective Date (the first occurrence of either (a) or (b) being the "Termination Date"),
provided that in either case Section 2.9 of this Agreement shall not terminate until the fifth anniversary of the Termination Date.
4.2. Injunctive Relief. The parties acknowledge that it will be impossible to measure in money the damages that would be suffered if the parties fail to comply with any of the obligations imposed on them by this Agreement and that, in the event of any such failure, an aggrieved person will be irreparably damaged and will not have an adequate remedy at law. Any such person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce those obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties shall raise the defense that there exists an adequate remedy at law.
4.3. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators and permitted successors and assigns. This Agreement shall apply to, and all of the foregoing parties, heirs, executors, administrators and permitted successors and assigns shall be bound by this Agreement with respect to, any securities issued in respect of (or in exchange for) Shares or any related Voting Trust Certificates in connection with any transaction to the extent such securities are of the type that would be deposited with or retained by the Voting Trustees under Article VIII or Article X of the Voting Trust Agreement as in effect on the date hereof (regardless of whether the Voting Trust Agreement is terminated or amended). Without limiting the foregoing, the parties intend for the obligations under this Agreement to survive the death of any party or other person, including any Stockholder, Trustee or other person, and to be specifically enforceable against any deceased party's heirs, executors, administrators, representatives, successors or assigns to the fullest extent permitted by law (including, without limitation, California Probate Code Section 9680).
4.4. Governing Law. Regardless of the place of execution of this Agreement,
the domicile or residence of any Stockholder, the location of the principal
executive office of the Company, or any other fact or circumstance, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware (without regard to conflicts of laws principles). EACH PARTY
TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE COURTS OF THE STATE OF DELAWARE AND THE FEDERAL COURTS LOCATED IN THE
STATE OF DELAWARE IN ANY ACTION, SUIT OR PROCEEDING ARISING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
BROUGHT ONLY IN SUCH COURTS (AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN); PROVIDED, HOWEVER, THAT
SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
PARAGRAPH AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION
OF SUCH COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY
SUCH ACTION, SUIT OR PROCEEDING. Service of process on a Stockholder or
Stockholders in any action arising out of or relating to this Agreement shall be
effective if delivered to such Stockholder or Stockholders in accordance with
Section 4.8. These provisions reflect the overall objective of this Agreement to
provide for the long-term, stable and consistent ownership and governance of the
Company.
4.5. Amendment. This Agreement may be amended (including, without limitation, an amendment extending its term generally or the duration of any of its particular provisions) only by an instrument in writing reciting that it is an amendment to this Agreement, and signed by the Company as approved by a majority of the Board at a meeting at which a quorum is present and by the holders of record of two-thirds of the outstanding Shares at the time of the amendment (who shall, for this purpose, be deemed to be the holders of record of Shares to the extent the Voting Trust Agreement is no longer in effect and shall be the holders of record of Voting Trust Certificates to the extent the Voting Trust Agreement is then in effect).
4.6. Filing; Inspection. The Company shall cause a copy of this Agreement to be filed with the Secretary of the Company and kept with the records of the Company. So long as this Agreement is in effect, the Company shall make this Agreement available for inspection by any Stockholder at the principal offices of the Company.
4.7. No Third Party Beneficiaries. This Agreement is for the benefit of its parties and their transferees who become bound by this Agreement, and is not intended for the benefit of any other person. This Agreement may be amended pursuant to Section 4.5 hereof in any manner without the consent of any other person who is not a party.
4.8. Notices. All notices given pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if sent by registered or certified mail, return receipt requested, by messenger, or by a nationally recognized overnight delivery company, to the party or parties to be given such notice at the address set forth below. Notices to Stockholders shall be sent to the respective addresses specified by such parties on the signature pages to this Agreement, or in such other manner as such holders may have communicated in writing to the Company. Notices to the Company shall be addressed to:
LSAI Holding Corp.
Levi's Plaza
1155 Battery Street
San Francisco, California 94111
Attn: Corporate Secretary
or to such other address as the Company may have communicated in writing to the parties to this Agreement.
4.9. Entire Agreement. This Agreement contains all of the terms and conditions agreed upon by the parties relating to its subject matter, represents the final, complete and exclusive statement of the parties, and supersedes any and all prior agreements, negotiations, correspondence, understandings and communications of the parties, whether oral or written, including the 1991 Class L Stockholders' Agreement by and among LSAI and certain of its stockholders (which is hereby deemed amended by consent of the holders of Class L Shares as evidenced by the execution of this Agreement so as to terminate upon the effectiveness of this Agreement); provided that this Agreement does not supersede, and should be enforced in conjunction with, the Voting Trust Agreement and related Voting Trust Support Agreement, the Stock Subscription Agreements, and the Merger Agreement.
4.10. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. Additionally, the execution of a Confirming Document (other than those Confirming Documents executed pursuant to Section 2.6 hereof which shall not be deemed to constitute execution of a counterpart to this Agreement until such time as the pledge becomes effective), when approved, shall constitute the execution of a counterpart to this Agreement, and the signatory thereof shall be benefited and obligated to the same extent as an original signatory hereto. Notwithstanding the foregoing, Robert D. Haas or any other duly authorized officer of the Company may execute this Agreement by providing an appropriate facsimile signature, and any counterpart or amendment hereto containing such facsimile signature shall for all purposes be deemed an original instrument duly executed by the Company. In the event that such a facsimile signature is used, Robert D. Haas or such other duly authorized officer shall execute, in original, a certificate attesting to the entry into this Agreement or any amendment hereto, which certificate shall list the names of all of the parties to this Agreement or amendment and shall be filed with the permanent records of the Company.
4.11. Validity of Provisions; Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
LSAI HOLDING CORP.
By__________________________________________
ROBERT D. HAAS
Chairman of the Board and Chief Executive
Officer
STOCKHOLDERS:
EXHIBIT A
CONFIRMING DOCUMENT
The undersigned acknowledges and confirms that he, she or it agrees to be a
party to and to be bound by, and hereby does become a party to and is bound by,
(I) the Stockholders' Agreement, dated as of April 15, 1996, among LSAI Holding
Corp. (the "Company") and stockholders of the Company and (ii) the Voting Trust
Agreement, dated as of April 15, 1996, among Robert D. Haas, Peter E. Haas, Sr.,
Peter E. Haas, Jr., and F. Warren Hellman, as voting trustees, and stockholders
of the Company, as each of those agreements may be amended from time to time.
The undersigned further acknowledges and confirms that any and all Shares which
he, she or it may hold at this time or acquire in the future shall be subject to
all of the terms and conditions of the Stockholders' Agreement and the Voting
Trust Agreement, including, without limitation, the transfer restrictions and
legend requirements contained in the Stockholders' Agreement and the Share
deposit and voting limitations contained in the Voting Trust Agreement. This
document is intended to be a "Confirming Document" within the meaning of Section
2.4 of the Stockholders' Agreement. Capitalized terms used without definition
have the meanings given to them in the Stockholders' Agreement.
ACKNOWLEDGMENT BY THE COMPANY
The Company hereby acknowledges that this document satisfies all of the requirements for a "Confirming Document" under the Stockholders' Agreement and approves of this "Confirming Document" pursuant to Section 2.4 of the Stockholders' Agreement.
LSAI HOLDING CORP.
By:_____________________________________
[date]
EXHIBIT 10.2
EXECUTION COPY
BRIDGE CREDIT AGREEMENT
among
LEVI STRAUSS & CO.
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Syndication Agents
THE FINANCIAL INSTITUTION PARTY HERETO
as Documentation Agent
and
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
and
BANK OF AMERICA, N.A.,
as Administrative Agent for Banks
and
BANK OF AMERICA, N.A.,
as Collateral Agent for Banks
dated as of January 31, 2000
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Defined Terms.......................................................................................... 1
1.2 Other Interpretive Provisions..........................................................................26
1.3 Accounting Principles..................................................................................27
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; the Credit...........................................................27
2.2 Notes; Loan Accounts...................................................................................28
2.3 Procedure for Borrowing................................................................................28
2.4 Conversion and Continuation Elections..................................................................29
2.5 Lender Bridge Letters of Credit........................................................................30
2.6 Derivative/FX Contracts................................................................................36
2.7 Voluntary Termination or Reduction of Aggregate Bridge Commitment; Voluntary Prepayments...............37
2.8 Mandatory Prepayments and Reductions of Aggregate Bridge Commitment....................................38
2.9 Repayment; Scheduled Reductions of Aggregate Bridge Commitment.........................................40
2.10 Interest...............................................................................................40
2.11 Fees...................................................................................................41
2.12 Computation of Fees and Interest.......................................................................42
2.13 Payments by Company....................................................................................43
2.14 Payments by the Banks to Administrative Agent..........................................................44
2.15 Sharing of Payments, etc...............................................................................44
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes..................................................................................................45
3.2 Illegality.............................................................................................46
3.3 Increased Costs and Reduction of Return................................................................47
3.4 Funding Losses.........................................................................................48
3.5 Inability to Determine Rates...........................................................................48
3.6 Reserves on Offshore Rate Loans........................................................................48
3.7 Certificates of Banks..................................................................................49
3.8 Substitution of Banks..................................................................................49
3.9 Survival...............................................................................................49
|
TABLE OF CONTENTS
(continued)
Page
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Condition to Closing...................................................................................49
4.2 Conditions to Each Borrowing, Issuance of Lender Bridge Letter of Credit and execution of Lender
Derivative/FX Contract.................................................................................53
4.3 Conditions Subsequent..................................................................................53
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization, Powers, Good Standing, Business, Ownership of Subsidiaries and Capitalization............54
5.2 Authorization of Borrowing, etc........................................................................54
5.3 Financial Condition....................................................................................55
5.4 Title to Properties; Liens.............................................................................56
5.5 Litigation; Adverse Facts..............................................................................56
5.6 Payment of Taxes.......................................................................................56
5.7 Materially Adverse Agreements; Performance.............................................................56
5.8 Governmental Regulation................................................................................57
5.9 ERISA Compliance.......................................................................................57
5.10 Environmental Matters..................................................................................57
5.11 Compliance With Laws...................................................................................58
5.12 Regulation U...........................................................................................58
5.13 Disclosure.............................................................................................58
5.14 Matters Relating to Collateral.........................................................................58
5.15 Intangible Assets......................................................................................59
5.16 Insurance..............................................................................................59
5.17 Year 2000..............................................................................................59
5.18 Solvency...............................................................................................60
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements and Other Reports.................................................................60
6.2 Corporate Existence, etc...............................................................................63
6.3 Compliance With Laws, etc..............................................................................64
6.4 Compliance with Agreements.............................................................................64
6.5 Payment of Taxes and Claims............................................................................64
6.6 Maintenance of Properties; Insurance...................................................................64
6.7 Inspection.............................................................................................65
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Page
6.8 Use of Proceeds........................................................................................65
6.9 Execution of Guaranty and Collateral Documents by Additional Subsidiaries..............................66
6.10 Compliance with ERISA..................................................................................67
6.11 Post Closing Actions...................................................................................67
6.12 Transfer of Receivables................................................................................69
ARTICLE VII
NEGATIVE COVENANTS
7.1 Indebtedness; Derivative/FX Contracts..................................................................69
7.2 Limitation on Liens and Negative Pledges...............................................................72
7.3 Dispositions...........................................................................................74
7.4 Fundamental Changes....................................................................................75
7.5 Use of Proceeds........................................................................................75
7.6 Leverage Ratio.........................................................................................76
7.7 Interest Coverage Ratio................................................................................77
7.8 Minimum Consolidated EBITDA............................................................................78
7.9 Change in Business.....................................................................................78
7.10 ERISA..................................................................................................78
7.11 Investments............................................................................................79
7.12 Restricted Payments....................................................................................80
7.13 Operating Lease Obligations............................................................................80
7.14 Transactions with Affiliates...........................................................................80
7.15 Amendments of Documents Relating to Indebtedness and Receivables.......................................80
7.16 Consolidated Capital Expenditures......................................................................81
7.17 Materially Adverse Agreements..........................................................................81
7.18 Limitations on Upstreaming.............................................................................81
7.19 Change in Auditors.....................................................................................82
7.20 Restricted Subsidiaries................................................................................82
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default.......................................................................................82
8.2 Remedies...............................................................................................85
8.3 Rights Not Exclusive...................................................................................85
ARTICLE IX
ADMINISTRATIVE AGENT; COLLATERAL AGENT
9.1 Appointment and Authorization..........................................................................86
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9.2 Delegation of Duties...................................................................................86
9.3 Liability of Administrative Agent or Collateral Agent..................................................86
9.4 Reliance by Administrative Agent and Collateral Agent..................................................87
9.5 Notice of Default......................................................................................87
9.6 Credit Decision; Disclosure of Information by Administrative Agent and Collateral Agent................88
9.7 Indemnification of Administrative Agent and Collateral Agent...........................................88
9.8 Administrative Agent in Individual Capacity............................................................89
9.9 Successor Administrative Agent.........................................................................89
9.10 Successor Collateral Agent.............................................................................90
9.11 Withholding Tax........................................................................................90
9.12 Co-Syndication Agents; Documentation Agent.............................................................92
9.13 Collateral Documents, Guaranties and Intercreditor Agreement...........................................92
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers.................................................................................93
10.2 Notices................................................................................................94
10.3 No Waiver; Cumulative Remedies.........................................................................94
10.4 Costs and Expenses.....................................................................................95
10.5 Company's Indemnification..............................................................................95
10.6 Payments Set Aside.....................................................................................96
10.7 Successors and Assigns.................................................................................96
10.8 Assignments, Participations, etc.......................................................................96
10.9 Confidentiality........................................................................................98
10.10 Set-off................................................................................................99
10.11 Notification of Addresses, Lending Offices, etc........................................................99
10.12 Counterparts...........................................................................................99
10.13 Severability...........................................................................................99
10.14 No Third Parties Benefited.............................................................................99
10.15 Change in Accounting Principles.......................................................................100
10.16 Governing Law and Jurisdiction........................................................................100
10.17 Interpretation........................................................................................100
10.18 Representation of Banks...............................................................................101
10.19 Waiver of Jury Trial..................................................................................101
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ARTICLE XI
GENERAL RELEASE
EXHIBIT LIST
Exhibit I.......................................................[FORM OF] NOTICE OF BORROWING Exhibit II.....................[FORM OF] NOTICE OF EXECUTION OF LENDER DERIVATIVE/FX CONTRACT Exhibit III.......................................[FORM OF] NOTICE OF CONVERSION/CONTINUATION Exhibit IV.....................................................................[FORM OF] NOTE Exhibit V....................................................[FORM OF] COMPLIANCE CERTIFICATE Exhibit VI......................................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY Exhibit VII...........................................[FORM OF] PLEDGE AND SECURITY AGREEMENT Exhibit VIII...............................................................[FORM OF] GUARANTY Exhibit IX................................................[FORM OF] ASSIGNMENT AND ACCEPTANCE Exhibit X......................................................................PRIVITY LETTER |
WHEREAS, Banks have agreed to extend certain credit facilities to Company, the proceeds of which will be used to (a) refinance Company's receivable purchase program, refinance certain uncommitted foreign and domestic lines of credit provided to Company and its Foreign Subsidiaries, and (b) provide financing for working capital and other general corporate purposes of Company and its Subsidiaries, letters of credit and back up credit for certain foreign lines of credit and foreign exchange and other derivative contracts; and
WHEREAS, Company has agreed to secure its Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of its personal property and certain of its real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital Stock of certain of its Foreign Subsidiaries (other than Restricted Subsidiaries); and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of their respective personal property and certain of their respective real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of their respective Domestic Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign Subsidiaries (other than Restricted Subsidiaries);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
Bank of America, as administrative agent, Bank of America, as collateral agent, and the other lenders parties thereto.
current liabilities, excluding changes in short-term Indebtedness or current maturities of long-term Indebtedness, changes in short-term tax liabilities and changes in short-term interest liabilities.
functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than obligations under a long term supply contract), which purchase price is (i) due more than 90 days from the date of incurrence of the obligation in respect thereof, or (ii) evidenced by a note or similar written instrument, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(d) without duplication, lease payment obligations under Capital Leases or Synthetic Lease Obligations; and
(e) without duplication, all Guaranty Obligations of such Person in respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to Majority Banks.
(a) if any Interest Period pertaining to an Offshore Rate Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Maturity Date; and
(d) unless Administrative Agent otherwise consents, there may not be more than 24 Interest Periods for Offshore Rate Loans in effect at any time under this Agreement, the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement.
Office", as the case may be, below its name on the signature pages hereto, or such other office or offices of such Bank as it may from time to time specify to Company and Administrative Agent.
1.00 - Eurodollar Reserve Percentage
Where,
(a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(b) in the event that the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(c) in the event that the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest at which Dollar deposits (for delivery on the first day
of such Interest Period) in same day funds in the approximate amount of the applicable Offshore Rate Loan and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.
The determination of the Eurodollar Reserve Percentage and the Offshore Base Rate by Administrative Agent shall be conclusive in the absence of manifest error.
connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time.
foregoing, any debts represented thereby and all rights of action against any Person in connection therewith.
(a) the declaration or payment of any dividend or other distribution by Company or any of its Subsidiaries, directly or indirectly, either in cash or property, on any shares of the Capital Stock of any class of Company or any of its Subsidiaries (except dividends or other distributions payable solely in shares of Capital Stock of Company or any of its Subsidiaries or payable by any Subsidiary to Company or to a wholly-owned Subsidiary of Company);
(b) the purchase, redemption or retirement by Company or any of its Subsidiaries of any shares of its Capital Stock of any class or any warrants, rights or options to purchase or acquire any shares of its Capital Stock, whether directly or indirectly (except the purchase, redemption or retirement of Capital Stock (or any such warrants, rights or options) held by Company or any wholly-owned Subsidiary of Company); and
(c) the prepayment, repayment, redemption, defeasance or other acquisition or retirement for value prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness not otherwise permitted under any Loan Document to be so paid.
as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person's capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and (b) such Person is "solvent" within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
(i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means "including without limitation."
(a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, consistently applied; except that, subject to Section 10.15, all financial computations required under this Agreement shall be made in accordance with GAAP as in effect on the Closing Date.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of Company. The fiscal quarters of Company end on the last Sunday in February, May, August, and November of each year. Each fiscal year of Company ends on the last Sunday in November of such year.
(c) References herein to "consolidated" and "consolidated basis" with reference to Company are to Company and its Subsidiaries on a consolidated basis.
ARTICLE II
Total Commitments at any time and (ii) the Total Utilization of Bridge Commitments shall not exceed the Aggregate Bridge Commitment at any time.
(b) Within the limits of each Bank's Commitment and the Aggregate Bridge Commitment, and subject to the other terms and conditions hereof, Company may borrow under this subsection, prepay under Section 2.7 or 2.8, and reborrow under this Section.
(c) Loans shall be denominated in Dollars.
(a) The Loans made by each Bank shall be evidenced by one or more loan accounts or records maintained by such Bank in the ordinary course of business. The loan accounts or records maintained by Administrative Agent and each Bank shall be conclusive evidence, absent manifest error, of the amount of the Loans made by Banks to Company and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of Company hereunder to pay any amount owing with respect to the Loans.
(a) Each Borrowing shall be made upon the irrevocable written notice (including notice via facsimile transmission or telephone call confirmed immediately by telephone call or facsimile transmission, respectively) of Company in the form of a Notice of Borrowing, which notice must be received by Administrative Agent not later than 9:00 a.m. San Francisco, California time:
(i) three Business Days prior to the requested Borrowing Date for Offshore Rate Loans; and
(ii) on the requested Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum principal amount of $10,000,000 or any integral multiple of $5,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) whether the Borrowing is to be comprised of Offshore Rate Loans or Base Rate Loans; and
(D) the duration of the Interest Period applicable to the Loans included in such notice which are Offshore Rate Loans. If the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Borrowing comprised of Offshore Rate Loans, such Interest Period shall be one month.
(b) Upon receipt of the Notice of Borrowing (or notice by telephone or facsimile transmission followed by prompt confirmation by facsimile transmission or telephone, respectively) Administrative Agent will promptly notify each Bank thereof and of the amount of such Bank's Commitment Percentage of the Borrowing.
(i) Each Bank will make the amount of its Commitment Percentage of the Borrowing available to Administrative Agent, in immediately available funds for the account of Company at Administrative Agent's Payment Office by 10:00 a.m. San Francisco, California time on the Borrowing Date requested by Company.
(ii) The proceeds of all such Loans will then be made available to Company by Administrative Agent at Administrative Agent's Payment Office by crediting Company's concentration account #12335-02255 on the books of Bank of America (or such other account with Bank of America as Company may hereafter designate in a written notice to Administrative Agent) with the aggregate of the amounts made available to Administrative Agent by Banks not later than 11:00 a.m. San Francisco, California time on such Borrowing Date; or will then be remitted by Administrative Agent to such other financial institution or institutions for the account or accounts of such designees as Company shall designate from time to time in accordance with written instructions from Company delivered to Administrative Agent. To the extent that Loans made by Banks mature on any Borrowing Date, each Bank shall apply the proceeds of any Loans made on such Borrowing Date, to the extent thereof, to the repayment of such maturing Loans, such Loans and repayments intended to be a contemporaneous exchange.
(a) Company may upon irrevocable notice to Administrative Agent in accordance with Section 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Offshore Rate Loans; or
(ii) elect to convert on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less
than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Base Rate Loans; or
(iii) elect to renew on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof);
(b) Company shall deliver in writing (or by facsimile transmission confirmed immediately by a telephone call or by a telephone call confirmed immediately by a facsimile transmission), an irrevocable Notice of Conversion/Continuation to be received by Administrative Agent not later than 9:00 a.m. San Francisco, California time, at least three Business Days in advance of the Conversion/Continuation Date, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) with respect to Offshore Rate Loans, the duration of the requested Interest Period.
(c) (i) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, Company has failed to select a new Interest Period to be applicable to such Offshore Rate Loans, and if no Event of Default shall then exist, Company shall be deemed to have elected to continue such Offshore Rate Loans as Offshore Rate Loans with an Interest Period of one month.
(ii) If an Event of Default exists at the time any Interest Period applicable to Offshore Rate Loans expires, Company shall be deemed to have elected to convert Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation (or telephonic notice in lieu thereof), Administrative Agent will promptly notify each Bank thereof, or, if no timely notice is provided, Administrative Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans with respect to which the notice was given or which are subject to automatic conversion held by each Bank.
participation shall be payable by Company upon demand of Administrative Agent, and shall bear interest at a rate per annum equal to the Default Rate.
(i) any lack of validity or enforceability of such Lender Bridge Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from such Lender Bridge Letter of Credit, this Agreement, or any other agreement or instrument relating hereto or thereto;
(iii) the existence of any claim, setoff, defense, or other rights which Company may have at any time against such Issuing Bridge Lender, Administrative Agent, Collateral Agent or any Bank, any beneficiary of such Lender Bridge Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with such Lender Bridge Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document presented under such Lender Bridge Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the Lender Bridge Letter of Credit;
(v) payment by such Issuing Bridge Lender in good faith under such Lender Bridge Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of such Lender Bridge Letter of Credit; or any payment made by such Issuing Bridge Lender under such Lender Bridge Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Lender Bridge Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any property purported to be represented by documents presented in connection with such Lender Bridge Letter of Credit or for any difference between any such property and the character, quality, quantity, condition, or value of such property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of property as described in documents presented in connection with such Lender Bridge Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with such Lender Bridge Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any property;
(x) any error in the transmission of any message relating to such Lender Bridge Letter of Credit not caused by such Issuing Bridge Lender, or any delay or interruption in any such message;
(xi) any error, neglect or default of any correspondent of such Issuing Bridge Lender in connection with such Lender Bridge Letter of Credit;
(xii) any consequence arising from acts of God, wars, insurrections, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of such Issuing Bridge Lender;
(xiii) so long as such Issuing Bridge Lender in good faith determines that the document appears to comply with the terms of the Lender Bridge Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to such Issuing Bridge Lender in connection with such Lender Bridge Letter of Credit;
(xv) any other circumstances whatsoever where such Issuing Bridge Lender has acted in good faith.
In addition, Company will promptly examine a copy of each Lender Bridge Letter of Credit and amendments thereto delivered to them and, in the event of any claim of noncompliance with Company's instructions or other irregularity, Company will immediately notify the applicable Issuing Bridge Lender in writing. Company shall be conclusively deemed to have waived any such claim against such Issuing Bridge Lender and its correspondents unless such notice is given as aforesaid.
required pursuant to subsection (c) above, such Derivative/FX Lender shall notify Administrative Agent of such fact and the amount of such payment. If the conditions precedent set forth in Section 4.2 can be satisfied on any date Company is obligated to, but fails to, pay any Derivative/FX Lender, Company shall be deemed to have requested a Borrowing of Base Rate Loans on such payment date and Administrative Agent shall promptly notify each Bank of its Commitment Percentage of such deemed requested Loans. Each Bank shall make funds in an amount equal to its Commitment Percentage of such amount available to Administrative Agent at Administrative Agent's Payment Office not later than 1:00 p.m. San Francisco, California time, on the Business Day specified by Administrative Agent. Administrative Agent shall remit the funds so received to such Derivative/FX Lender. If the conditions precedent set forth in Section 4.2 cannot be satisfied on the date Company is obligated to, but fails to, pay such Derivative/FX Lender, no Borrowing shall occur and no Bank shall have any obligation to reimburse such Derivative/FX Lender.
(b) Subject to Section 3.4, Company may (from time to time) ratably prepay Loans in whole or in part in the minimum amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, upon notice to Administrative Agent given not later than 9:00 a.m. San Francisco, California time:
(i) at least three Business Days' prior to the proposed date of prepayment for Offshore Rate Loans; and
(ii) on the Business Day prior to the proposed date of prepayment for Base Rate Loans.
Each such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination thereof. In the event that Company fails to so specify, any voluntary prepayments of the Loans pursuant to this Section 2.7 shall be applied first to Base Rate Loans to the full
amount thereof before application to Offshore Rate Loans. Such notice shall not thereafter be revocable by Company and Administrative Agent will promptly notify each Bank thereof and the amount of such Bank's Commitment Percentage of such prepayment. If such notice is given by Company, Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and the amounts required pursuant to Section 3.4.
Notice to Administrative Agent under this Section shall be in writing, signed by Company or may be by telephone notice promptly confirmed by notice sent by facsimile transmission.
Date Scheduled Reduction
---- -------------------
May 25, 2000 $ 50,000,000
August 24, 2000 $ 50,000,000
November 22, 2000 $100,000,000
February 22, 2001 $ 50,000,000
May 24, 2001 $ 50,000,000
August 23, 2001 $100,000,000
2.10 Interest.
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(a) Subject to Section 2.10(c), each Loan shall bear interest on the outstanding principal amount thereof (before and after default, before and after maturity, before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief
(b) Interest on each Loan shall be payable in arrears on each Interest Payment Date. Interest shall also be payable on the date of any prepayment of Loans pursuant to Section 2.7, 2.8 or 2.9 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during any period when principal of the Loans is due and payable, interest shall be payable on request for such payment by the holders of the Loans.
(c) While any Event of Default exists, Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law and including post-petition interest in any proceeding under any Debtor Relief Law) on the principal amount of all Loans, at a rate per annum equal to the Default Rate. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be payable upon demand.
(d) Anything herein to the contrary notwithstanding, the obligations of Company to any Bank hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Bank, and in such event Company shall pay such Bank interest at the lower of (i) the highest rate permitted by applicable law and (ii) the rates required by this Agreement.
Commitment exceeds the Outstanding Obligations of all Banks. The commitment fee shall accrue at all times from the Closing Date until the Maturity Date, shall be computed on a daily basis, and shall be payable in arrears (i) on the fifth Business Day after the last day of each fiscal quarter, commencing on the first such day after the Closing Date and (ii) on the Maturity Date. The commitment fee shall accrue at all times, including at any time during which one or more conditions in Article IV are not met.
(a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.
(b) Administrative Agent will notify Company and Banks of each determination of an Offshore Rate. Any failure by Administrative Agent to give such notice and any failure by Company and any Bank to receive such notice shall not relieve Company of any obligation to pay interest or provide the basis for any claim against Administrative Agent. Administrative Agent shall, upon request made by Company or any Bank from time to time, advise such Person(s) of the relevant applicable Offshore Rate(s).
(c) Each determination of an interest rate by Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on Company and Banks in the absence of manifest error.
(a) All payments (including prepayments) to be made by Company on account of principal, interest, fees and other amounts required hereunder shall be made without set-off or counterclaim and shall be made in Dollars to Administrative Agent for the ratable account of Banks at Administrative Agent's Payment Office. Such payments shall be made in immediately available funds and no later than 11:00 a.m. San Francisco, California time, on the date specified herein. Administrative Agent will promptly distribute to each Bank the amount of its Commitment Percentage (or other applicable share as expressly provided herein) of such principal, interest, fees or other amounts, in like funds as received. Any payment which is received by Administrative Agent later than 11:00 a.m. San Francisco, California time, shall be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be, subject to the provisions set forth in the definition of "Interest Period" herein.
(c) Unless Administrative Agent shall have received notice from Company prior to the date on which any payment is due to Banks hereunder from Company that Company will not make such payment in full, Administrative Agent may assume that Company has made such payment in full to Administrative Agent on such date and Administrative Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent Company shall not have made such payment in full to Administrative Agent, each Bank shall repay to Administrative Agent, on request made by Administrative Agent, such amount distributed to such Bank, together with interest thereon for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to Administrative Agent, at the Federal Funds Rate as in effect for each such day.
(a) Unless Administrative Agent shall have received notice from a Bank at least one Business Day prior to the date of any proposed Borrowing (but prior to 10:00 a.m. San Francisco, California time, on the same day with respect to a Borrowing consisting of Base Rate Loans) that such Bank will not make available to Administrative Agent for the account of Company the amount of that Bank's Commitment Percentage of the Borrowing, Administrative Agent may assume that each Bank has made such amount available to Administrative Agent on the Borrowing Date and Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available to Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to Administrative Agent and Administrative Agent in such circumstances has made available to Company such amount, that Bank shall on the next Business Day following such Borrowing Date make such amount available to Administrative Agent, together with interest at the Federal Funds Rate for and determined as of each day during such period.
(b) A certificate of Administrative Agent submitted to any Bank with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to Administrative Agent shall constitute such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to Administrative Agent on the next Business Day following such Borrowing Date, Administrative Agent shall notify Company of such failure to fund and, upon request for payment made by Administrative Agent, Company shall pay such amount to Administrative Agent for Administrative Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Bank to make any Loan on any Borrowing Date shall not relieve any other Bank of any obligation hereunder to make a Loan on such Borrowing Date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
total amount so recovered. Company agrees that any Bank so purchasing a participation from another Bank pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off but subject to Section 10.10) with respect to such participation as fully as if such Bank were the direct creditor of Company in the amount of such participation. Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error), of participations purchased pursuant to this Section and will in each case notify Banks following any such purchases and repayments.
ARTICLE III
(a) Any and all payments by Company to each Bank or Administrative Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, Company shall pay all Other Taxes.
(b) If Company shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Bank, or Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Bank or Administrative Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;
(ii) Company shall make such deductions and withholdings;
(iii) Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and
(iv) Company shall also pay to each Bank or Administrative Agent for the account of such Bank, at the time interest is paid, Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) Company agrees to indemnify and hold harmless each Bank and
Administrative Agent for the full amount of (i) Taxes, (ii) Other Taxes, and
(iii) Further Taxes in the amount that the respective Bank specifies as
necessary to preserve the after-tax yield the Bank would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed, and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes
were correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank or Administrative Agent makes
written demand therefor.
(d) Within 30 days after the date of any payment by Company of Taxes, Other Taxes or Further Taxes, Company shall furnish to each Bank or Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Bank or Administrative Agent.
(e) Company will not be required to pay any additional amounts in respect of Section 3.1(b) to any Bank or Administrative Agent:
(i) if such Bank shall have delivered to Company a Form 1001 (or any successor form) pursuant to Section 9.11(a)(i), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or any applicable tax treaty or regulations or in the official interpretation of any such law, treaty or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 1001(or any successor form); or
(ii) if such Bank shall have delivered to Company a Form 4224 (or any successor form) pursuant to Section 9.11(a)(ii), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 4224 (or any successor form).
(f) If, at any time, Company requests any Bank to deliver any forms or other documentation pursuant to Section 9.11(a)(iii), then Company shall, on demand of such Bank through Administrative Agent, reimburse such Bank for any costs and expenses (including Professional Costs) reasonably incurred by such Bank in the preparation or delivery of such forms or other documentation.
(g) If Company is required to pay additional amounts to any Bank or Administrative Agent pursuant to this Section 3.1, then such Bank or Administrative Agent, as the case may be, shall use its reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or take any other reasonable action so as to eliminate any such additional payment by Company which may thereafter accrue if such change, in the reasonable judgment of such Bank, is not otherwise materially disadvantageous to such Bank or Administrative Agent.
(a) If any Bank determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Bank to Company through Administrative Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies Administrative Agent and Company that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any Offshore Rate Loan, Company shall, upon receipt of notice of such fact and demand from such Bank (with a copy to Administrative Agent), prepay in full such Offshore Rate Loans of that Bank then outstanding, together with interest accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Offshore Rate Loans. If Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, Company shall borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, Company may elect, by giving notice to the Bank through Administrative Agent that all Loans which would otherwise be made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(a) If any Bank determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation, or (ii) the compliance by that Bank with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans in an amount deemed material by such Bank, then Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to Administrative Agent), pay to Administrative Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank with any Capital Adequacy Regulation; affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank's desired return on capital) determines that the amount of such capital is increased in an amount deemed material by such Bank as a consequence of its loans, credits or obligations under this Agreement, then, upon request of such Bank (with a copy to Administrative Agent), Company shall immediately pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase.
(a) any failure of Company to make, on a timely basis, any payment or prepayment of principal of any Offshore Rate Loan (including payments made after any acceleration thereof);
(b) any failure of Company to borrow, continue or convert a Loan after Company has given (or are deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;
(c) any failure of Company to make any prepayment after Company has given a notice in accordance with Section 2.7;
(d) any prepayment of an Offshore Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or
(e) any conversion pursuant to Section 2.4 of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; or including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained.
least 15 days' prior written notice (with a copy to Administrative Agent) of such additional sums from the Bank. Each such notice from a Bank shall set forth in reasonable detail (as determined by the Bank) the basis for such additional sums. If a Bank fails to give notice 15 days prior to the relevant Interest Payment Date, such additional sums shall be payable 15 days from receipt of such notice.
ARTICLE IV
(a) Administrative Agent shall have received, on or before the Closing Date, all of the following documents, in form and substance reasonably satisfactory to Administrative Agent and Majority Banks:
(A) Copies of the resolutions of the board of directors of each Borrower Party (or an authorized committee thereof) approving and authorizing the execution, delivery, and performance by such Borrower Party of the Loan Documents to which such Borrower Party is a party, certified as of the Closing Date by the Secretary or an Assistant Secretary of such Borrower Party.
(B) A certificate of the Secretary or an Assistant Secretary of each Borrower Party certifying, as of the Closing Date, the names and true signatures of the officers of such Borrower Party authorized to execute and deliver, as applicable, this Agreement, and all other Loan Documents to be delivered hereunder.
Each Notice of Borrowing and each Letter of Credit Application submitted by Company hereunder shall constitute a representation and warranty by Company hereunder, as of the date of each such application, request, notice, and disbursement date that the conditions in Section 4.2 are satisfied.
ARTICLE V
Company represents and warrants to Administrative Agent and each Bank that:
Borrower Party, and the Notes, when executed and delivered, will be duly executed and delivered by Company.
(a) And except as would not have a Material Adverse Effect, each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of any Borrower Party, nothing has
occurred which would cause the loss of such qualification. Company and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event that requires notice to be given to the PBGC
has occurred or is reasonably expected to occur; (ii) no Pension Plan has a
Funded Current Liability Percentage of less than 90%; (iii) neither Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan.
such Environmental Laws and Environmental Claims are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect.
(a) The execution and delivery of the Collateral Documents by Borrower Parties, together with (i) the actions taken on or prior to the date hereof pursuant to Sections 4.1(a)(vii) and 4.1(a)(viii), (ii) the actions taken pursuant to Sections 6.9 and 6.11, and (iii) the delivery to Administrative Agent of any Pledged Collateral not delivered to Administrative Agent at the time of execution and delivery of the applicable Collateral Document (all of which Pledged Collateral has been so delivered) are effective to create in favor of Administrative Agent for the benefit of Banks, as security for the respective Secured Obligations (as defined in the applicable Collateral Document in respect of any Collateral), a valid and perfected Lien on all of the Collateral, a security interest in which may be perfected by filing in the United States or possession, and all filings and other actions necessary or desirable to perfect and maintain the perfection of such Liens have been duly made or taken and remain in full force and effect, other than the filing of any UCC financing statements delivered to Administrative Agent for filing (but not yet filed) and the periodic filing of UCC continuation statements in respect of UCC financing statements filed by or on behalf of Administrative Agent.
(b) No authorization, approval or other action by, and no notice to or filing with, any Government Authority in the United States is required for either (i) the pledge or grant by any Borrower Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents, or (ii) the exercise by Administrative Agent of any rights or remedies in respect of any Collateral (whether specifically granted or created pursuant to any of the Collateral Documents or created or provided for by applicable law), except for filings or recordings contemplated by Section 5.14(a) and except as may be required, in connection with the disposition of any Pledged Collateral, by laws generally affecting the offering and sale of securities.
(c) The pledge of the Pledged Collateral pursuant to the Collateral Documents does not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) All information supplied to Administrative Agent by or on behalf of any Borrower Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects.
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so does not have a Material Adverse Effect.
ARTICLE VI
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall (except in the case of Company's reporting covenants) cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(a) Company shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP and in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over Company or any of its subsidiaries. Company shall deliver to Administrative Agent for distribution to Banks:
(i) as soon as practicable and in any event within 30 days after the end of each fiscal month, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event within 45 days after the end of each of the first three fiscal quarters of the fiscal year, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(iv) together with each delivery of any financial statements pursuant to Section 6.1(a)(ii) or 6.1(a)(iii) a Compliance Certificate from Company executed by a Responsible Officer, stating that the signer does not have knowledge of the existence as at the date of such certificate, of any condition or event which constitutes a Default or Event of Default, or, if any such condition or event existed at such date or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto, and demonstrating in reasonable detail compliance during or at the end of such accounting periods, as applicable, with Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.11 and 7.16; and, should there be any material change in GAAP as in effect as of the Closing Date, such Compliance Certificate shall include computations setting forth reconciliation of the items used in computing compliance with the covenants under this Agreement by reason of the differences between GAAP used in the preparation of such financial statements and GAAP as in effect as of the Closing Date;
(v) concurrently with the delivery of the financial statements referred to in Section 6.1(a)(iii), a certificate of Company's independent certified public accountants certifying such financial statement and stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default hereunder or, if any such Default or Event of Default shall exist, stating the nature and status of such event;
(vi) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, a cash flow forecast for Company and its Subsidiaries for the then following 13 weeks and a report setting forth the cash flows of Company and its Subsidiaries for the prior 13 weeks, together with an explanation of any material variance between those results and the results previously projected for those 13 weeks;
(vii) (A) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, (1) a report setting forth the details
of (y) any Lender Derivative/FX Contract to which Company or FinServ is a party, including the Termination Value of any such Lender Derivative/FX Contract, and (z) all other outstanding unsecured Indebtedness of Company or any of its Subsidiaries (including any letters of credit (other than Lender Bridge Letters of Credit and Lender 180 Day Letters of Credit) issued for the benefit of Company and its Subsidiaries) incurred in accordance with Section 7.1(r), and (2) information with respect to all other Derivative/FX Contracts to which Company or any of its Subsidiaries is a party, and (B) promptly upon request, any other information concerning such Derivative/FX Contracts reasonably requested by Administrative Agent;
(ix) promptly after the same are available, copies of each annual report or proxy statement sent to the stockholders of Company, and copies of all annual, regular, periodic and special reports and registration statements which Company may file or, if Company were subject to the Exchange Act, would be required to file with the Securities and Exchange Commission under Sections 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Administrative Agent pursuant hereto;
(x) promptly upon any Responsible Officer of Company obtaining knowledge of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Bank has given any written notice of a claimed Default or Event of Default, a certificate from Company, executed by a Responsible Officer of Company, specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken, and the nature of such claimed Default or Event of Default, event or condition, and what action Company has taken, is taking, and proposes to take with respect thereto;
(xi) promptly upon any Responsible Officer of Company obtaining knowledge of (A) the institution of, or non-frivolous threat of, any material action, suit, proceeding or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by Company to Administrative Agent, or (B) any material development in any action, suit, proceeding or arbitration already disclosed, and in each case Company reasonably expects such institution, threat, or material development to result in any Material Adverse Effect or materially and adversely to affect the ability of Company and its Subsidiaries, taken as a whole, to perform the Obligations or the ability of Banks to enforce the Obligations, Company shall promptly give notice thereof to Administrative Agent and provide such other information (excluding communications covered by the attorney-
client privilege) as may be reasonably requested by Administrative Agent or a Bank to enable their counsel to evaluate such matters;
(xii) promptly upon any Responsible Officer of Company becoming aware of its occurrence, notice of any of the following events affecting Company or any ERISA Affiliate (but in no event more than 10 days after such event), and such Responsible Officer shall also deliver to Administrative Agent and each Bank a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to Company or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a decrease in the Funded Current Liability Percentage for any Pension Plan at the end of any fiscal quarter to less than 90%; or
(xiii) promptly upon receipt thereof, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of Company by independent accountants in connection with the accounts or books of Company or any of its Subsidiaries, or any audit of any of them;
(xiv) promptly upon any discovery or determination that any computer application (including those of its suppliers and vendors) that is material to the business and operations of Company or any of its Subsidiaries will not be Year 2000 Compliant on a timely basis, except to the extent that such failure does not have a Material Adverse Effect, a notice thereof; and
(xv) promptly upon any Responsible Officer of Company becoming aware of its occurrence, a notice of any material change in accounting policies or financial reporting practices by Company or any of its Subsidiaries.
(b) Company will deliver to Administrative Agent for distribution to
each Bank together with the Compliance Certificate required under subsection
(iv) of subsection (a) of this Section, a copy of all press releases and other
statements made available generally by Company to the public during the period
covered by the Compliance Certificate. The press releases and such other
statements covered by this subsection are those which concern material
developments in the business of Company and its Subsidiaries taken as a whole.
(c) Company will deliver to Administrative Agent for distribution to each Bank copies of material financial and other information as Administrative Agent or Majority Banks may reasonably request from time to time.
corporate existence and rights and franchises material to its business and its goodwill except where the failure to do so would not in the aggregate have a Material Adverse Effect.
(a) Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect. Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained, through self- insurance or with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all such failures in the aggregate) have a Material Adverse Effect. From and after the date that is 30 days following the Closing Date, property, general liability, business interruption and automobile insurance policies shall (i) name Collateral Agent for the benefit of Banks as an additional insured thereunder with respect to all Collateral as its interests may appear and, in the case of property insurance, (ii) contain a loss payable subsection or endorsement, satisfactory in form and substance to Administrative Agent, that names Collateral Agent for the benefit of
Banks as the loss payee thereunder for any covered loss with respect to all Collateral, as appropriate. Insurance policies shall provide for at least 30 days prior written notice to Administrative Agent of any material modification or cancellation of such policy.
(b) Upon receipt by Company or any of its Subsidiaries of any insurance proceeds constituting Net Insurance Proceeds, (i) so long as no Event of Default shall have occurred and be continuing, Company or such Subsidiary may retain and apply such Net Insurance Proceeds for working capital purposes, in the case of business interruption insurance proceeds, or to pay or reimburse the costs of repairing, restoring or replacing the assets (or substantially similar assets) in respect of which such Net Insurance Proceeds were received or, to the extent not so applied, as provided in Section 2.8, and (ii) if an Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance Proceeds as provided in Section 2.8.
(a) Company shall, and shall cause each of its Subsidiaries to, (i) permit any authorized representatives designated by a Bank, at the expense of that Bank, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested, and (ii) following the occurrence and during the continuation of an Event of Default, permit any authorized representatives designated by a Bank, at the expense of Company, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, immediately upon request by Administrative Agent.
(b) Company shall deliver to Administrative Agent, together with such
Loan Documents, (i) certified copies of such Subsidiary's Organization
Documents, together with a good standing certificate from the Secretary of State
of the jurisdiction of its organization and each other state in which such
Person is qualified to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a certificate executed by the secretary or similar
officer of such Subsidiary as to (A) the fact that the attached resolutions of
the board of directors of such Subsidiary approving and authorizing the
execution, delivery and performance of such Loan Documents are in full force and
effect and have not been modified or amended and (B) the incumbency and
signatures of the officers of such Subsidiary executing such Loan Documents, and
(iii) a favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent and its counsel, as to (A) the due
organization and good standing of such Subsidiary, (B) the due authorization,
execution and delivery by such Subsidiary of such Loan Documents, (C) the
enforceability of such Loan Documents against such Subsidiary, and (D) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
(i) On or prior to the date that is 60 days after the Closing Date, Company shall have delivered to Administrative Agent:
(B) An opinion of counsel (which counsel shall be reasonably satisfactory to Administrative Agent) in each state in which any such Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to Administrative Agent;
(E) Copies of all recorded documents listed as exceptions to title or otherwise referred to in the policies or in the title reports delivered pursuant to subsection (D); and
(F) (1) Evidence, which may be in the form of a letter from an insurance broker or a municipal engineer, as to whether any Property is a Flood Hazard Property and the community in which any such Flood Hazard Property is located is participating in the National Flood Insurance Program; (2) if there are any such Flood Hazard Properties, Company's written acknowledgement of receipt of written notification from Administrative Agent (y) as to the existence of each such Flood Hazard Property and (z) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program; and (3) in the event that any such Flood Hazard Property is located in a community that participates in the National Flood Insurance Program, evidence that Company has obtained flood insurance in respect of such Flood Hazard Property to the extent required under the applicable regulations of the Board of Governors of the Federal Reserve System.
ARTICLE VII
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(b) Indebtedness under the Loan Documents;
(c) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds;
(d) Guaranty Obligations of Company guaranteeing the Indebtedness of Material Foreign Subsidiaries permitted under Section 7.1(r);
(e) Indebtedness of Company and the other Borrower Parties under the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement and the related loan documents;
(f) Indebtedness of Company in respect of Capital Leases not exceeding $5,000,000 in the aggregate at any time;
(h) Indebtedness of Pledged Foreign Subsidiaries to other Pledged Foreign Subsidiaries;
(i) Indebtedness of Unpledged Foreign Subsidiaries to Pledged Foreign Subsidiaries or other Unpledged Foreign Subsidiaries;
(j) Indebtedness of Company and its Subsidiaries (other than LSFCC or LSFLLC) to FinServ and Indebtedness of FinServ to Company and its other Subsidiaries (other than LSFCC or LSFLLC) in the ordinary course of business;
(l) Derivative/FX Contracts between Company or FinServ and FinServ and the other Subsidiaries of Company (other than LSFCC or LSFLLC) in the ordinary course of business;
(n) Indebtedness of Company and its Material Subsidiaries (other than LSFCC or LSFLLC) secured by Liens permitted under Section 7.2(h) not exceeding $25,000,000 in the aggregate at any time;
(s) Indebtedness of Company to any of its Subsidiaries and other Indebtedness of any of its Subsidiaries to Company or any of its other Subsidiaries outstanding on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(t) other Indebtedness of Company and its Subsidiaries not exceeding $5,000,000 in the aggregate at any time.
(b) Liens for taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.5;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto or if such reserve or other appropriate provision, if any, required by GAAP shall have been made therefor;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(e) Liens securing (i) the performance of tenders, bids, trade contracts (other than for borrowed money), government contracts, leases, statutory obligations, and performance and return-of-money bonds, (ii) contingent obligations on surety and appeal bonds, and (iii) other obligations of a like nature; in each case, incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances that do not interfere with the ordinary conduct of the businesses of Company and its Subsidiaries;
(i) any interest or title of a lessor under any Capital or Operating Lease permitted hereunder (other than any Equipment Financing Transaction);
(k) leases or subleases granted to others in the ordinary course of business not interfering with the ordinary conduct of the business of the grantor thereof;
(l) Liens attaching to ownership interests in joint ventures (whether in partnership, corporate or other form) engaged in the LOS/DOS Business or attaching to intellectual property rights relating to the LOS/DOS Business;
(m) Liens created in connection with (i) Equipment Financing Transactions and (ii) Real Estate Financing Transactions so long as (A) the aggregate amount of all such transactions permitted by this Section 7.2(m) at any time outstanding (as measured by the sum of all Indebtedness secured by such Liens then outstanding or to be so created or assumed) shall not exceed $175,000,000 and (B) Company shall cause, in connection therewith, the prepayments of Loans required by Section 2.8;
(n) Liens created pursuant to applications or reimbursement agreements pertaining to documentary letters of credit which encumber documents and other property relating to such documentary letters of credit and the products and proceeds thereof;
(o) Liens granted pursuant to the Collateral Documents;
(p) Liens securing Indebtedness under the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement;
(q) Liens securing Ordinary Course Derivative/FX Contracts permitted by Section 7.1(r);
(r) other Liens so long as the aggregate outstanding amount of Indebtedness secured by such Liens does not exceed $2,000,000 at any time;
(s) Negative Pledges on accounts receivables of Foreign Subsidiaries and the associated assets of Foreign Subsidiaries in connection with Permitted Foreign Receivable Purchase Facilities;
(t) Negative Pledges on Intellectual Property licensed from third parties; and
(u) Negative Pledges with respect to specific property encumbered to secure payment of particular Indebtedness permitted hereunder.
(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory by Company or any of Subsidiaries to Company or any of its Subsidiaries in ordinary course of business arm's length transactions;
(c) Dispositions of inventory in the ordinary course of business;
(d) Dispositions of accounts receivable from Company to LSFCC and from LSFCC to LSFLLC;
(h) licenses of Intellectual Property in the ordinary course of business;
(i) the Pending IceHouse Disposition;
(l) Dispositions of the Capital Stock of Domestic Subsidiaries that are Guarantors to Company and wholly owned Domestic Subsidiaries that are Guarantors; Dispositions of the Capital Stock of Pledged Foreign Subsidiaries to Company, Domestic Subsidiaries that are Guarantors and other Pledged Foreign Subsidiaries; and Dispositions of the Capital Stock of Unpledged Foreign Subsidiaries to Company or any of its other Subsidiaries; and
(m) Dispositions of accounts receivable to collection agencies the aggregate face amount of which does not exceed $2,000,000.
(a) Company shall not use any portion of the Loan proceeds directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance Indebtedness of Company or others incurred to purchase or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any security in any transaction that is subject to Sections 13 or 14 of the Exchange Act.
(b) Company shall not, directly or indirectly, use any portion of the proceeds of the Loans (i) knowingly to purchase Ineligible Securities from the Arranger during any period in which the Arranger makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by the Arranger, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by the Arranger and issued by or for the benefit of Company or any Affiliate of Company. The Arranger is a registered broker-dealer and permitted to underwrite and deal in certain Ineligible Securities.
PERIOD LEVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 6.00 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
Fiscal Year 2000 5.75 to 1.00
Four Fiscal Quarter Period ending on the last day of the First 5.25 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second 5.00 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third 4.50 to 1.00
Fiscal Quarter of Fiscal Year 2001
Fiscal Year 2001 4.25 to 1.00
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PERIOD INTEREST
------ COVERAGE RATIO
--------------
First Fiscal Quarter of Fiscal Year 2000 1.6 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 1.6 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 1.7 to 1.00
Fiscal Year 2000 1.8 to 1.00
Four Fiscal Quarter Period ending on the last day of the First Fiscal 1.9 to 1.00
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second 2.0 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third Fiscal 2.1 to 1.00
Quarter of Fiscal Year 2001
Fiscal Year 2001 2.2 to 1.00
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PERIOD MINIMUM
------ CONSOLIDATED EBITDA
-------------------
($ in millions)
First Fiscal Quarter of Fiscal Year 2000 $ 102
First Two Fiscal Quarter Period of Fiscal Year 2000 $ 205
First Three Fiscal Quarter Period of Fiscal Year 2000 $ 320
Fiscal Year 2000 $ 440
Four Fiscal Quarter Period ending on the last day of the First $ 465
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the $ 490
Second Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third $ 510
Fiscal Quarter of Fiscal Year 2001
Fiscal Year 2001 $ 540
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(a) engage in any transaction in connection with which Company or any of its Subsidiaries or any of their respective ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i) or 502(l) of ERISA or a tax imposed by Section 4975 of the Code, in either case in an amount in excess of $5,000,000;
(b) fail to make full payment within five Business Days after the date when due of all amounts exceeding $5,000,000 which, under the provisions of any Pension Plan, Company or any of its Subsidiaries or any of their respective ERISA Affiliates is required to pay as contributions thereto, or (as to any Subsidiary organized under the laws of any of the United States) permit to exist any accumulated funding deficiency, whether or not waived, with respect to any Pension Plan in an aggregate amount greater than $5,000,000;
(c) permit the Funded Current Liability Percentage for any Pension Plan to be less than 90%; or
(d) fail to make any payments in an aggregate amount greater than $5,000,000 to any Multiemployer Plan that Company or any of its Subsidiaries, or any of their respective ERISA Affiliates may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto.
As used in this Section, the term "accumulated funding deficiency" has the meaning specified in Section 3(23) of ERISA and Section 412 of the Code and the term "accrued benefit" has the meaning specified in Article 3 of ERISA.
(b) cash and cash equivalents;
(c) advances to officers, directors and employees of Company or any of their respective Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes;
(d) extensions of credit to customers or suppliers of Company or any of its Subsidiaries in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof;
(e) Investments permitted by Section 7.4;
(f) intercompany loans permitted by Sections 7.1(g), 7.1(h), 7.1(i), and 7.1(j);
(g) Investments by Company in any wholly-owned Subsidiary that is a Guarantor and Investments of any wholly-owned Domestic Subsidiary that is a Guarantor in Company or any other wholly-owned Domestic Subsidiary that is a Guarantor;
(h) Investments by Pledged Foreign Subsidiaries in other Pledged Foreign Subsidiaries;
(i) Investments by Unpledged Foreign Subsidiaries in other Unpledged Foreign Subsidiaries;
(k) Investments by Company in any of its Subsidiaries and other Investments of any of its Subsidiaries in Company or any of its other Subsidiaries on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(l) other Investments not exceeding $25,000,000 at any time.
(a) Operating Leases in existence on the Closing Date; and
(b) Operating Leases entered into or assumed by Company or any Subsidiary after the date hereof in the ordinary course of business.
(a) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of any Indebtedness (other than Indebtedness under the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement), or make
any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate or make less onerous any such event or default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any additional rights on the holders of such Indebtedness (or a trustee or other representative on their behalf) which would be materially adverse to Company or to Banks. Company shall not amend or otherwise change the terms of the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement without the written consent of Majority Banks if the effect of such amendment is to extend the stated maturity date thereof or increase the aggregate commitments thereunder. Company shall not amend or otherwise change the terms of the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement to provide for an earlier stated maturity date unless this Agreement is amended to provide for the same maturity date.
(b) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of the Receivables Transfer Agreements other than amendments to extend the term thereof or to preserve the arm's length nature of the purchase and sale effected thereby.
MAXIMUM CAPITAL
FISCAL YEAR EXPENDITURES
----------- ------------
2000 $60,000,000
2001 $60,000,000
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Agreement, the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement.
ARTICLE VIII
(i) A court having jurisdiction shall enter a decree or order for relief in respect of Company or any of its Material Subsidiaries in an involuntary case under any applicable Debtor Relief Laws, which decree or order is not stayed; or any other similar relief shall be granted under any applicable Debtor Relief Laws; or
(ii) A decree or order of a court having jurisdiction for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Company or any of its Material Subsidiaries or over all or a substantial part of their property, shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Company or any of its Material Subsidiaries for all or a substantial part of their property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of Company or any of its Material Subsidiaries, and the continuance of any such events described in this subsection (f)(ii) for 60 days unless stayed, dismissed, bonded or discharged; or
(iii) an involuntary case under any applicable Debtor Relief Laws shall have been commenced against Company or any of its Material Subsidiaries and shall not have been dismissed within 60 days after the commencement of such case; or
Party shall contest the validity or enforceability of any Loan Document in writing or deny in writing that it has any further liability, including with respect to future advances by Banks, under any Loan Document to which it is a party.
(a) declare the Commitment of each Bank to be terminated, whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment, demand, request, protest or other notice of any kind, all of which are hereby expressly waived by Company;
(c) demand immediate payment by Company of an amount equal to the aggregate amount of all outstanding Lender Bridge Letter of Credit Usage to be held in the Cash Collateral Account; and
(d) exercise on behalf of itself and Banks all rights and remedies available to it and Banks under the Loan Documents or applicable law;
the aggregate Obligations owed to each Bank under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all Banks, without priority or preference among Banks. No application of payments will cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of Administrative Agent and Banks hereunder or thereunder or at law in equity.
ARTICLE IX
Each Bank hereby irrevocably (subject to Section 9.9) appoints, designates and authorizes Administrative Agent and Collateral Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, neither Administrative Agent nor Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein, nor shall Administrative Agent or Collateral Agent have or be deemed to have any fiduciary relationship with any Bank, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Administrative Agent or Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" in this Agreement with reference to Administrative Agent or Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
or Collateral Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Administrative Agent-Related Person or Collateral Agent-Related Person shall be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the Properties, books or records of any Borrower Party, or any of Company's Subsidiaries or Affiliates.
(a) Administrative Agent and Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Company), independent accountants and other experts selected by Administrative Agent or Collateral Agent. Administrative Agent and Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless Administrative Agent or Collateral Agent, as the case may be, shall first receive such advice or concurrence of Majority Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of Majority Banks (or all of Banks if required hereunder) and such request and any action taken or failure to act pursuant thereto shall be binding upon all of Banks. Where this agreement expressly permits or prohibits an action unless Majority Banks otherwise determine, and in all other instances, Administrative Agent or Collateral Agent, as the case may be, may, but shall not be required to, initiate any solicitation for the consent or a vote of Banks.
(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by Administrative Agent or Collateral Agent to such Bank for consent, approval, acceptance, or satisfaction, required thereunder to be consented to or approved by or acceptable or satisfactory to the Bank.
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of Banks.
of-pocket expenses (including Professional Costs) incurred by Administrative Agent and Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or financial or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Administrative Agent or Collateral Agent is not reimbursed for such expenses by or on behalf of Company. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Administrative Agent or Collateral Agent.
any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and Banks shall perform all of the duties of Administrative Agent hereunder until such time, if any, as Majority Banks appoint a successor agent as provided for above. Notwithstanding the foregoing, Bank of America may not be removed as Administrative Agent at the request of Majority Banks unless Bank of America shall also simultaneously be replaced as "Collateral Agent" and an "Issuing Bridge Lender" hereunder pursuant to documentation in form and substance reasonably satisfactory to Bank of America.
(a) If any Bank is a "foreign corporation, partnership or trust" within the meaning of the Code and such Bank claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of Administrative Agent, to deliver to Administrative Agent and Company:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, two properly completed and executed copies of IRS Form 1001 (or any successor form) before the payment of any interest in
the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Bank, two properly completed and executed copies of IRS Form 4224 (or any successor form) before the payment of any interest is due in the first taxable year of such Bank and in each succeeding taxable year of such Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 (or any successor form) and such Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to notify Administrative Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Company to such Bank. To the extent of such percentage amount, Administrative Agent will treat such Bank's IRS Form 1001 (or any successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by filing IRS Form 4224 (or any successor form) with Administrative Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax, Administrative Agent may withhold from any interest payment to such Bank an amount equivalent to the applicable withholding tax after taking into account such reduction. However, if the forms or other documentation required by subsection (a) of this Section are not delivered to Administrative Agent, then Administrative Agent may withhold from any interest payment to such Bank not providing such forms or other documentation an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank failed to notify Administrative Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Bank shall indemnify Administrative Agent fully for all amounts paid, directly or indirectly, by Administrative Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Administrative Agent under this Section, together with all costs and expenses (including Professional Costs). The obligation of Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of Administrative Agent.
ARTICLE X
(a) subject to subsection (b), written agreement from Requisite Banks is required for any waiver, amendment, or consent which releases any (i) Collateral other than the release of any Lien encumbering any item of Collateral that is the subject of a Capital Lease, Equipment Financing Transaction, Real Estate Financing Transaction, Permitted Foreign Receivables Purchase Facility or sale or other disposition of assets permitted by Section 7.3 or (ii) Guarantor from a Guaranty other than in connection with the sale of all of the Capital Stock of such Guarantor to any Person (other than an Affiliate of Company) pursuant to a sale or other disposition permitted by Section 7.3; and
(b) written agreement from all Banks is required for any waiver, amendment, or consent which does any of the following:
(i) postpones, extends or delays any date fixed for any payment of principal, interest, fees or other amounts due to Banks (or any of them) hereunder or under any Loan Document;
(ii) reduces the principal of, or the rate of interest specified herein on any Loan, or of any fees or other amounts payable hereunder or under any Loan Document or any mandatory reduction of the Aggregate Bridge Commitment or any mandatory prepayment pursuant to Section 2.8;
(iii) changes the Commitment Percentage or the aggregate unpaid principal amount of the Loans which shall be required for Banks or any of them to take any action hereunder;
(iv) changes the definition of Majority Banks, Requisite Banks or the number of Banks required to take any action under this Agreement;
(v) releases any Lien granted in favor of Collateral Agent with respect to all or substantially all of the Collateral; or
(vi) amends this Section 10.1 or Section 2.13 or 2.14 or 2.15;
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II or IX shall not be effective until actually received by Administrative Agent.
(c) Company acknowledges and agrees that any agreement of Administrative Agent and Banks in Article II to receive certain notices by telephone and facsimile is solely for the convenience and at the request of Company. Administrative Agent and Banks shall be entitled to rely on the authority of any Person purporting to be a Person authorized by Company to give such notice and Administrative Agent and Banks shall not have any liability to Company or other Person on account of any action taken or not taken by Administrative Agent and Banks in reliance upon such telephonic or facsimile notice. The obligation of Company to repay the Loans shall not be affected in any way or to any extent by any failure by Administrative Agent and Banks to receive written confirmation of any telephonic or facsimile notice or the receipt by Administrative Agent and Banks of a confirmation which is at variance with the terms understood by Administrative Agent and Banks to be contained in the telephonic or facsimile notice.
(a) Whether or not the transactions contemplated hereby are consummated, pay or reimburse Bank of America (including in its capacity as Administrative Agent) promptly after demand, for all reasonable costs and expenses incurred by Bank of America (including in its capacity as Administrative Agent) in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Professional Costs and other professional fees incurred by Bank of America (including in its capacity as Administrative Agent) with respect thereto;
(b) Subject to the limitations set forth therein, pay or reimburse Administrative Agent promptly after demand, for all reasonable costs and expenses incurred by Administrative Agent (including the fees, expenses and disbursements of any auditors, accountants, advisors and agents employed or retained by Administrative Agent or its counsel) in connection with obtaining and reviewing the information provided under Section 6.1 or 6.7;
(c) Pay or reimburse Administrative Agent, Collateral Agent, the Arranger and each Bank within five Business Days after demand, for all costs and expenses (including Professional Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding);
(d) Pay or reimburse Administrative Agent and Collateral Agent promptly after demand, for all the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral Agent on behalf of Banks pursuant to any Collateral Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, and reasonable fees, expenses and disbursements of counsel to Administrative Agent and Collateral Agent and of counsel providing any opinions that Administrative Agent, Collateral Agent or Majority Banks may request in respect of the Collateral Documents or the Liens created pursuant thereto; and
(e) Pay or reimburse Collateral Agent promptly after demand, for all reasonable costs and expenses incurred by Collateral Agent in connection with the custody and preservation of the Collateral.
(A) a Bank may enter into an assignment and delegation of less than $5,000,000 if such assignment and delegation consists of such Bank's entire interest;
(C) Company and Administrative Agent may continue to deal solely and directly with such Bank in connection with the interest so assigned to an Assignee until (1) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to Company and Administrative Agent by such Bank and the Assignee; (2) such Bank and its Assignee shall have delivered to Company and Administrative Agent an Assignment and Acceptance and any Note or Notes subject to such assignment; and (3) the assignor Bank or Assignee has paid Administrative Agent a processing fee of $3,500.
(b) From and after the date that Administrative Agent notifies the assignor Bank that it has provided its consent to and received an executed Assignment and Acceptance and payment of the processing fee of $3,500, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights and obligations hereunder and the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than any rights of indemnity) and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by Administrative Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, Company shall execute and deliver to Administrative Agent, new Notes evidencing such Assignee's assigned Loans and, if the assignor Bank has retained a portion of its Loans, replacement Notes in the principal amount of the Loans retained by the assignor Bank (such Notes to be in exchange for, but not in payment of, the Notes held by such Bank). Immediately upon each Assignee's making its payment under the Assignment and Acceptance, this Agreement, shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee. If an assignor Bank has not retained a portion of its Loans, such Bank shall mark its Notes "superseded" and return such Notes to Administrative Agent for delivery to Company.
Participant shall have rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment, consent or waiver would require unanimous consent as described in Section 10.1. In the case of any such participation, the Participant shall not have any rights under this Agreement, or any of the other Loan Documents, and all amounts payable by Company hereunder shall be determined as if such Originator had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement (and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR (S)203.14, and may assign all or any portion of its rights under or interests in this Agreement (and the Notes held by it) to any Affiliate for purposes of creating such a security interest or pledge, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
the other Loan Documents. None of Administrative Agent, Collateral Agent, any Bank, any Administrative Agent-Related Persons and any Collateral Agent-Related Persons shall have any obligation to any Person not a party to this Agreement or other Loan Documents.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES; PROVIDED THAT ADMINISTRATIVE AGENT, COLLATERAL AGENT, BANKS, AND COMPANY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
ARTICLE XI
11.2 Notwithstanding anything hereunder to the contrary, this Article XI shall not release or alter any obligation arising subsequent to the date hereof to comply with the terms and conditions of this Agreement and the other Loan Documents. It is expressly understood and agreed that it is the intent of Company to forever release certain claims against Administrative Agent, Collateral Agent and Banks, including, but not limited to, any claims related to the actions and omissions of Releasees prior to the date hereof, but that nothing herein shall affect the obligations of the Releasees arising subsequent to the date hereof, including, but not by way of limitation, compliance subsequent to the date hereof with all terms and conditions of this Agreement and the other Loan Documents.
11.3 Without limiting the generality of the foregoing, Company for itself and on behalf of the other Releasors expressly releases any and all past, present and future claims in connection with the Released Matters, about which the Releasors do not know or suspect to exist in their favor, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect Company's decision to enter into this release, and to this end Company for itself, and on behalf of each of the other Releasors, waives all rights under Section 1542 of the Civil Code of California, which states in full as follows:
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."
Company knowingly and willingly waives the provisions of Section 1542 and acknowledges and agrees that this waiver is an essential and material term of this release. Company has reviewed this release with Company's legal counsel, and Company understands and acknowledges the significance and consequence of this release and of the specific waiver of Section 1542 of the Civil Code of California.
11.4 Company represents, warrants and agrees that in executing and entering into this release, Company is not relying and has not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Agreement or the other Loan Documents. Company understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to Company or believed by Company to be true. Nevertheless, Company intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and
shall not be subject to termination, modification or rescission by reason of any such difference in facts.
[FORM OF] PLEDGE AND SECURITY AGREEMENT
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D. It is a condition precedent to the effectiveness of the Credit Agreement that Grantors listed on the signature pages hereof shall have granted the security interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks to enter into the Credit Agreement and to induce Derivative/FX Lenders to enter into the Lender Derivative/FX Contracts, each Grantor hereby agrees with Secured Party as follows:
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(g) all information used or useful or arising from the business including all goodwill, trade secrets, trade secret rights, know-how, customer lists, processes of production, ideas, confidential business information, techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section 1, all other general intangibles (including tax refunds, rights to payment or performance, choses in action and judgments taken on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and storage and office facilities, and all accessions thereto and products thereof;
(j) all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; and
Notwithstanding anything herein to the contrary, neither Company nor any Grantor shall be deemed to have granted a security interest in (i) any Principal Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any Pledged Debt of or issued by any Restricted Subsidiary.
(a) This Agreement secures, and the Collateral assigned by each Grantor is collateral security for, the prompt payment or performance in full when due, whether at stated
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(i) with respect to Company, all obligations and liabilities of every nature of Company now or hereafter existing under or arising out of or in connection with the Credit Agreement and the other Loan Documents and all obligations and liabilities of every nature of Company and FinServ, now or hereafter existing under or arising out of or in connection with any Lender Derivative/FX Contract, and
(ii) with respect to each Subsidiary Grantor and Additional Grantor, all obligations and liabilities of every nature of such Grantors now or hereafter existing under or arising out of or in connection with the Guaranty;
in each case together with all extensions or renewals thereof, whether for principal, interest (including without limitation interest that, but for the filing of a petition in bankruptcy with respect to Company or any other Grantor, would accrue on such obligations, whether or not a claim is allowed against Company or such Grantor for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Lender Letters of Credit, payments for early termination or close out of Lender Derivative/FX Contracts, fees, expenses, indemnities or otherwise, whether voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Secured Party, Administrative Agent, any Bank or any Derivative/FX Lender as a preference, fraudulent transfer or otherwise, and all obligations of every nature of Grantors now or hereafter existing under this Agreement.
(b) Any and all security interests, liens, rights and interest of Secured Party in and to any or all of the Collateral are prior to any and all security interests, liens, rights and interest of the several financial institutions party to the Amended and Restated 1999 180 Day Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement from time to time in and to any or all of the Collateral pursuant to the Intercreditor Agreement.
Anything contained herein to the contrary notwithstanding, (a) each Grantor shall remain liable under any contracts and agreements included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under any contracts, licenses, and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of
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any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Each Grantor represents and warrants as follows:
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outstanding warrants, options or other rights to purchase, or other agreements outstanding with respect to, or property that is now or hereafter convertible into, or that requires the issuance or sale of, any Pledged Shares; (iv) the Pledged Debt constitutes all of the issued and outstanding intercompany indebtedness evidenced by a promissory note of the respective issuers thereof owing to such Grantor; (v) Schedule 1(e)(i) sets forth all of the Pledged Shares owned by each Grantor on the date hereof; and (vi) Schedule 1(e)(ii) sets forth all of the Pledged Debt in existence on the date hereof.
(i) a true and complete list of all Trademark Registrations and Trademark applications owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright Registrations and applications for Copyright Registrations owned by such Grantor, in whole or in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not aware of any pending or threatened claim by any third party that any of the Intellectual Property Collateral owned, held or used by such Grantor is invalid or unenforceable that is reasonably likely to have a Material Adverse Effect; and
(v) no effective security interest or other Lien covering all or any part of the Intellectual Property Collateral is on file in the United States Patent and Trademark Office or the United States Copyright Office.
security interests in the Collateral granted to Secured Party for the ratable benefit of Banks, Administrative Agent and Derivative/FX Lenders will constitute perfected security interests therein, to the extent such security interests may be perfected by filing in the United States or possession, prior to all other Liens (except for Liens expressly permitted by the Credit Agreement), and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly made or taken.
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be sufficient as a financing statement and may be filed as a financing statement in any and all jurisdictions.
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Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy of insurance covering the Collateral, except where such violation would not have a Material Adverse Effect;
(b) notify Secured Party of any change in such Grantor's name, identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in such Grantor's chief place of business, chief executive office or residence or the office where such Grantor keeps its records regarding the Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire rights in or the use of any Collateral, use such value for such purposes; and
(e) except as otherwise not prohibited by the Credit Agreement, pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, services, materials and supplies) against, the Collateral.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the places therefor specified on Schedule 4(b), or upon 30 days' prior written notice to Secured Party, at such other places in jurisdictions where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Equipment and Inventory shall have been taken;
(b) except as otherwise permitted by Section 6.6 of the Credit Agreement, cause the Equipment owned by such Grantor to be maintained and preserved in the same
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condition, repair and working order as when new, ordinary wear and tear excepted, and in accordance with such Grantor's past practices, and shall forthwith make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Each Grantor shall promptly furnish to Secured Party a statement respecting any material loss or damage to the Equipment owned by such Grantor, but only to the extent that such loss or damage is material to the Equipment owned by Company and its Subsidiaries, taken as a whole;
(c) keep correct and accurate records of Inventory owned by such Grantor, itemizing and describing the kind, type and quantity of such Inventory, and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of such Grantor's agents or processors, within 30 days of the Closing Date (with respect to existing agents or processors) and promptly after any such Inventory comes into the possession or control of such Grantor's agents or processors (with respect to future agents or processors), instruct such agent or processor to hold all such Inventory for the account of Secured Party and subject to the instructions of Secured Party, and use commercially reasonable efforts, but at no out-of-pocket cost to such Grantor, to obtain waivers or bailee letters in form and substance reasonably satisfactory to Collateral Agent from all public warehouses in which Inventory is maintained and all such agents or processors; and
(e) each Grantor shall, at its own expense, maintain insurance with respect to the Equipment and Inventory in accordance with the terms of the Credit Agreement.
(a) Each Grantor shall keep its chief place of business and chief executive office and the office where it keeps its records concerning the Accounts and Related Contracts, and all originals of all chattel paper that evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon 30 days' prior written notice to Secured Party, at such other location in a jurisdiction where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Accounts and Related Contracts shall have been taken. Each Grantor will hold and preserve such records and chattel paper and will permit representatives of Secured Party at any time during normal business hours to inspect and make abstracts from such records and chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. Promptly upon the request of Secured Party, each Grantor shall deliver to Secured Party complete and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the date on which each Account of such Grantor arose, maintain (i) complete records of such Account, including records of all payments received, credits granted and merchandise returned, and (ii) all documentation relating thereto.
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Collateral; provided, any and all (A) dividends, distributions and interest paid or payable other than in cash in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Securities Collateral, (B) dividends and other distributions paid or payable in cash in respect of any Securities Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise distributed in respect of principal or in redemption of or in exchange for any Securities Collateral, shall be, and shall forthwith be delivered to Secured Party to hold as, Securities Collateral and shall, if received by such Grantor, be received in trust for the benefit of Secured Party, be segregated from the other property or funds of such Grantor and be forthwith delivered to Secured Party as Securities Collateral in the same form as so received (with all necessary endorsements); and (iii) Secured Party shall promptly execute and deliver (or cause to be executed and delivered) to such Grantor all such proxies, dividend payment orders and other instruments as such Grantor may from time to time reasonably request for the purpose of enabling such Grantor to exercise the voting and other consensual rights which it is entitled to exercise pursuant to subsection (i) above and to receive the dividends, distributions, principal or interest payments which it is authorized to receive and retain pursuant to subsection (ii) above.
Upon the occurrence and during the continuation of an Event of Default, (i) upon written notice from Secured Party to any Grantor, all rights of such Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to exercise such voting and other consensual rights; (ii) all rights of such Grantor to receive the dividends, other distributions and interest payments which it would otherwise be authorized to receive and retain pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to receive and hold as Securities Collateral such dividends, other distributions and interest payments; and (iii) all dividends, principal, interest payments and other distributions which are received by such Grantor contrary to the provisions of subsection (ii) of the immediately preceding paragraph or subsection (ii) above shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of such Grantor and shall forthwith be paid over to Secured Party as Securities Collateral in the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Secured Party all such proxies, dividend payment orders and other instruments as Secured Party may from time to time reasonably request, and (ii) without limiting the effect of subsection (i) above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Shares would be entitled (including giving or withholding written consents of shareholders or other holders of equity interests, calling special meetings of shareholders or other holders of equity interests and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Shares on the record books of the issuer thereof) by any other Person (including the issuer of the Pledged Shares or any officer or agent thereof),
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upon the occurrence of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the Intellectual Property Collateral and at all times keep at least one complete set of its records concerning such Collateral at its chief executive office or principal place of business;
(ii) use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision that could or might in any way impair or prevent the creation of a security interest in, or the assignment of, such Grantor's rights and interests in any property included within the definitions of any Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of all trade secrets relating to the products and services sold or delivered under or in connection with the Intellectual Property Collateral, including, without limitation, where appropriate entering into confidentiality agreements with employees and labeling and restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its use of any of the Intellectual Property Collateral, except where the failure to give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which may be consistent with such Grantor's past practices) in the manufacture, sale and delivery of products and services sold or delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured Party's reasonable request statements and schedules further identifying and describing any Intellectual Property Collateral and such other reports in connection with such Collateral, all in reasonable detail.
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during the continuation of any Event of Default and upon written notice to such Grantor of its intention to do so, to notify the obligors with respect to any such amounts of the existence of the security interest created hereby and to direct such obligors to make payment of all such amounts directly to Secured Party, and, upon such notification and at the expense of such Grantor, to enforce collection of any such amounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. After receipt by any Grantor of the notice from Secured Party referred to in the proviso to the preceding sentence and during the continuation of any Event of Default, (i) all amounts and proceeds (including checks and other instruments) received by each Grantor in respect of amounts due to such Grantor in respect of the Intellectual Property Collateral or any portion thereof shall be received in trust for the benefit of Secured Party hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or delivered to Secured Party in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by Section 17 hereof, and (ii) such Grantor shall not adjust, settle or compromise the amount or payment of any such amount or release wholly or partly any obligor with respect thereto or allow any credit or discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to commence and prosecute in its own name, as real party in interest, for its own benefit and at its own expense, such suits, proceedings or other actions for infringement, unfair competition, dilution, misappropriation or other damage, or reexamination or reissue proceedings as are necessary to protect the Intellectual Property Collateral. Secured Party shall provide, at such Grantor's expense, all reasonable and necessary cooperation in connection with any such suit, proceeding or action including, without limitation, joining as a necessary party. Each Grantor shall, within 45 days after the end of each fiscal quarter of Company, notify Secured Party of the institution of, or of any adverse determination likely to have a Material Adverse Effect in, any proceeding (whether in the United States Patent and Trademark Office, the United States Copyright Office or any federal, state, local or foreign court) or regarding such Grantor's ownership, right to use, or interest in any Intellectual Property Collateral. Each Grantor shall provide to Secured Party any information with respect thereto requested by Secured Party.
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Secured Party is hereby authorized to establish and maintain as a blocked account in the name of Company and under the sole dominion and control of Secured Party, a restricted deposit account designated as "Levi Strauss & Co. Cash Collateral Account". All amounts at any time held in the Cash Collateral Account shall be beneficially owned by Grantors but shall be held in the name of Secured Party hereunder, for the benefit of Banks, as collateral security for the Secured Obligations upon the terms and conditions set forth herein. Grantors shall have no right to withdraw, transfer or, except as expressly set forth herein, otherwise receive any funds deposited into the Cash Collateral Account. Anything contained herein to the contrary notwithstanding, the Cash Collateral Account shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or governmental authority, as may now or hereafter be in effect. All
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deposits of funds in the Cash Collateral Account shall be made by wire transfer (or, if applicable, by intra-bank transfer from another account of a Grantor) of immediately available funds, in each case addressed in accordance with instructions of Secured Party. Each Grantor shall, promptly after initiating a transfer of funds to the Cash Collateral Account, give notice to Secured Party by telefacsimile of the date, amount and method of delivery of such deposit. Cash held by Secured Party in the Cash Collateral Account shall not be invested by Secured Party but instead shall be maintained as a cash deposit in the Cash Collateral Account pending application thereof as elsewhere provided in this Agreement. To the extent permitted under Regulation Q of the Board of Governors of the Federal Reserve System, any cash held in the Cash Collateral Account shall bear interest at the standard rate paid by Secured Party to its customers for deposits of like amounts and terms. Subject to Secured Party's rights hereunder, any interest earned on deposits of cash in the Cash Collateral Account shall be deposited directly in, and held in the Cash Collateral Account.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor, Secured Party or otherwise, from time to time in Secured Party's discretion to take any action and to execute any instrument that Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to Administrative Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with Sections 12(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of Default, to file any claims or take any action or institute any proceedings that Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit Agreement, to pay or discharge taxes or Liens (other than Liens permitted under this Agreement or the Credit Agreement) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by Secured Party in its sole discretion, any such payments made by Secured Party to become obligations of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of Default, to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse
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receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do, at Secured Party's option and Grantors' expense, at any time or from time to time, all acts and things that Secured Party deems necessary to protect, preserve or realize upon the Collateral and Secured Party's security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
If any Grantor fails to perform any agreement contained herein, Secured Party may itself perform, or cause performance of, such agreement, and the expenses of Secured Party incurred in connection therewith shall be payable by Grantors under Section 18(b) hereof.
The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which Secured Party accords its own property.
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equipment for the purpose of completing any work in process, taking any actions described in the preceding subsection (iii) and collecting any Secured Obligation, (v) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Secured Party's offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as Secured Party may deem commercially reasonable, (vi) exercise dominion and control over and refuse to permit further withdrawals from any Deposit Account maintained with Secured Party or any Bank constituting a part of the Collateral and (vii) without notice to any Grantor, transfer to or to register in the name of Secured Party or any of its nominees any or all of the Securities Collateral. Secured Party or any Bank or Derivative/FX Lender may be the purchaser of any or all of the Collateral at any such sale and Secured Party, as agent for and representative of Banks and Derivative/FX Lenders (but not any Bank or Derivative/FX Lender in its individual capacity unless Requisite Obligees (as defined in Section 20(a)) shall otherwise agree in writing), shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by Secured Party at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Secured Obligations, Grantors shall be jointly and severally liable for the deficiency and the fees of any attorneys employed by Secured Party to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Secured Party, that Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and each Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their stated maturities.
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prior registration or qualification of such Securities Collateral under the Securities Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Securities Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances and the registration rights granted to Secured Party by such Grantor pursuant hereto, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Securities Collateral for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it. If Secured Party determines to exercise its right to sell any or all of the Securities Collateral, upon written request, each Grantor shall and shall cause each issuer of any Pledged Shares to be sold hereunder from time to time to furnish to Secured Party all such information as Secured Party may request in order to determine the number of shares and other instruments included in the Securities Collateral which may be sold by Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.
(ii) If Secured Party shall determine to exercise its right to sell all or any of the Securities Collateral pursuant to this Section, each Grantor agrees that, upon request of Secured Party (which request may be made by Secured Party in its sole discretion), such Grantor will, at its own expense (A) execute and deliver, and cause each issuer of the Securities Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of Secured Party, advisable to register such Securities Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of Secured Party, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto; (B) use its best efforts to qualify the Securities Collateral under all applicable state securities or "Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Securities Collateral, as requested by Secured Party; (C) cause each such issuer to make available to its security holders, as soon as practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act; (D) do or cause to be done all such other acts and things as may be necessary to make such sale of the Securities Collateral or any part thereof valid and binding and in compliance with applicable law; and (E) bear all reasonable costs and expenses, including reasonable attorneys' fees, of carrying out its obligations under this Section.
VII-22
(iii) Without limiting the generality of Sections 10.4 and 10.5 of the Credit Agreement, in the event of any public sale described herein, each Grantor agrees to indemnify and hold harmless (to the maximum extent permitted under the Securities Act or other applicable law) Secured Party, each Bank and each Derivative/FX Lender and each of their respective directors, officers, employees and agents from and against any loss, fee, cost, expense, damage, liability or claim, joint or several, to which any such Persons may become subject or for which any of them may be liable, under the Securities Act or otherwise, insofar as such losses, fees, costs, expenses, damages, liabilities or claims (or any litigation commenced or threatened in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, registration statement, prospectus or other such document published or filed in connection with such public sale, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will (to the maximum extent permitted under the Securities Act or other applicable law) reimburse Secured Party and such other Persons for any legal or other expenses reasonably incurred by Secured Party and such other Persons in connection with any litigation, of any nature whatsoever, commenced or threatened in respect thereof (including any and all fees, costs and expenses whatsoever reasonably incurred by Secured Party and such other Persons and counsel for Secured Party and such other Persons in investigating, preparing for, defending against or providing evidence, producing documents or taking any other action in respect of, any such commenced or threatened litigation or any claims asserted). This indemnity shall be in addition to any liability which any Grantor may otherwise have and shall extend upon the same terms and conditions to each Person, if any, that controls Secured Party or such Persons within the meaning of the Securities Act.
VII-23
amounts payable to Secured Party pursuant to Section 17 hereof, second, to the extent of any excess, to the cash collateralization pursuant to the terms of this Agreement of any outstanding Lender Letters of Credit in respect of which Company has failed to pay all or a portion of the amounts described above (such cash collateralization to be apportioned among all such Lender Letters of Credit in the manner described above), third, to the extent of any further excess, to the payment of any other outstanding Secured Obligations in such order as Secured Party shall elect, and fourth, to the extent of any further excess, to the payment to whomsoever shall be lawfully entitled to receive such funds.
(a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of Default, (i) Secured Party shall have the right (but not the obligation) to bring suit, in the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property Collateral, in which event each Grantor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement and each Grantor shall promptly, upon demand, reimburse and indemnify Secured Party as provided in Sections 10.4 and 10.5 of the Credit Agreement and Section 18 hereof, as applicable, in connection with the exercise of its rights under this Section, and, to the extent that Secured Party shall elect not to bring suit to enforce any Intellectual Property Collateral as provided in this Section, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property Collateral by others and for that purpose agrees to use its commercially reasonable judgment in maintaining any action, suit or proceeding against any Person so infringing reasonably necessary to prevent such infringement; (ii) upon written demand from Secured Party, each Grantor shall execute and deliver to Secured Party an assignment or assignments of the Intellectual Property Collateral and such other documents as are necessary or appropriate to carry out the intent and purposes of this Agreement; (iii) each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Secured Obligations outstanding only to the extent that Secured Party (or any Bank) receives cash proceeds in respect of the sale of, or other realization upon, the Intellectual Property Collateral; and (iv) within five Business Days after written notice from Secured Party, each Grantor shall make available to Secured Party, to the extent within such Grantor's power and authority, such personnel in such Grantor's employ on the date of such Event of Default as Secured Party may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with the Trademarks, Trademark Registrations and Trademark Rights, such persons to be available to perform their prior functions on Secured Party's behalf and to be compensated by Secured Party at such Grantor's expense on a per diem, pro-rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
VII-24
Except as expressly provided elsewhere in this Agreement and in the Intercreditor Agreement, all proceeds received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to Secured Party and its agents and counsel, and all other expenses, liabilities and advances made or incurred by Secured Party in connection therewith, and all amounts for which Secured Party is entitled to indemnification hereunder and all advances made by Secured Party hereunder for the account of Grantors, and to the payment of all costs and expenses paid or incurred by Secured Party in connection with the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the ratable benefit of the holders thereof) and, as to obligations arising under the Credit Agreement, as provided in the Credit Agreement; and
THIRD: To the payment to or upon the order of Company, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds.
(a) Grantors jointly and severally agree to indemnify Secured Party, each Bank and each Derivative/FX Lender from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the extent such claims, losses or liabilities result solely from Secured Party's or such Bank's or Derivative/FX Lender's gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly and severally agree to pay to Secured Party upon demand (i) the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the administration of this Agreement or the failure by any Grantor to perform or observe any of the provisions hereof and
VII-25
(ii) the amount of any and all costs and expenses, including the fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the exercise or enforcement of any of the rights of Secured Party hereunder.
(c) The obligations of Grantors in this Section 18 shall (i) survive the termination of this Agreement and the discharge of Grantors' other obligations under this Agreement, the Lender Derivative/FX Contracts, the Credit Agreement and the other Loan Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject to the provisions of Section 1(b) thereof.
(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Secured Obligations and the cancellation or termination of the Commitments and the cancellation or expiration of all outstanding Lender Letters of Credit, (ii) be binding upon Grantors and their respective successors and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns. Without limiting the generality of the foregoing subsection (iii), (A), but subject to the provisions of Sections 10.7 and 10.8 of the Credit Agreement, any Bank may assign or otherwise transfer any Loans held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Banks herein or otherwise and (B) any Derivative/FX Lender may assign or otherwise transfer any Lender Derivative/FX Contract to which it is a party to any other Person in accordance with the terms of such Lender Derivative/FX Contract, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Derivative/FX Lenders herein or otherwise.
(b) Upon the payment in full of all Secured Obligations, the cancellation or termination of the Commitments and the cancellation or expiration of all outstanding Lender Letters of Credit, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantors. Upon any such termination Secured Party will, at Grantors' expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination. In addition, upon the proposed sale, transfer or other disposition of any Collateral by a Grantor in accordance with the Credit Agreement for which such Grantor desires to obtain a security interest release from Secured Party, such Grantor shall deliver an officers' certificate (i) stating that the Collateral subject to such disposition is being sold, transferred or otherwise disposed of in compliance with the terms of the Credit Agreement, and (ii) specifying the Collateral being sold, transferred or otherwise disposed of in the proposed transaction. Upon the receipt of such officers' certificate, Secured Party shall, at such Grantor's expense, so long as Secured Party has no reason to believe that the officers' certificate delivered by such Grantor with respect to such sale is not true and correct, execute and deliver such releases of its security interest in such Collateral which is to be so sold, transferred or disposed of, as may be reasonably requested by such Grantor.
VII-26
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed collateral agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
VII-27
(c) Secured Party shall not be deemed to have any duty whatsoever with respect to any Derivative/FX Lender until it shall have received written notice in form and substance satisfactory to Secured Party from a Grantor or the Derivative/FX Lender as to the existence and terms of the applicable Lender Derivative/FX Contract.
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for
VII-28
overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery.
No failure or delay on the part of Secured Party in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. The rules of construction set forth in Section 1.2 of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR, SECURED PARTY, ADMINISTRATIVE AGENT AND BANKS EACH CONSENTS, FOR ITSELF AND
VII-29
EACH GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
VII-30
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
LEVI STRAUSS & CO.
BANK OF AMERICA, N.A., as Collateral Agent, as Secured Party
VII-31
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
|
VII-Sch. A-1
VII-Sch. 1(d)-1
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Percentage of
Class Stock Number of Outstanding
of Stock or Registered Certificate Par Shares Shares Pledged
Stock Issuer Equity Interest Owner Nos. Value
=======================================================================================================
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|
VII-Sch. 1(e)(i)-1
------------------------------------------------------------------------------------------------
Amount of
Debt Issuer Payee Indebtedness
================================================================================================
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
|
VII-Sch. 1(e)(ii)-1
Trademark Registration Registration
Registered Owner Description Number Date
------------------------- ------------------------- ------------------------- -------------------------
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
------------------------- ------------------------- ------------------------- -------------------------
|
VII-Sch. 1(f)(i)-1
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
--------- ---------- --------- -------- -----
|
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- -------
|
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
--------- ---------- --------- -------- -----
VII-Sch. 1(f)(ii)-1
|
Foreign Patents Pending:
-----------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
------------------ ------------------ ------------------ ------------------ ------------------
|
VII-Sch. 1(f)(ii)-2
U.S. Copyrights: ---------------- Title Registration No. Date of Issue Registered Owner ----- ---------------- ------------- ---------------- Foreign Copyright Registrations: -------------------------------- Country Title Registration No. Date of Issue Registered Owner ------- ----- ---------------- ------------- ---------------- Pending U.S. Copyright Registrations & Applications: --------------------------------------------------- Title Reference No. Date of Application Copyright Claimant ----- ------------- ------------------- ------------------ Pending Foreign Copyright Registrations & Applications: ------------------------------------------------------- Country Title Registration No. Date of Issue [Registered Owner] ------- ----- ---------------- ------------- ---------------- |
VII-Sch. 1(f)(iii)-1
Name of Grantor Locations of Equipment and Inventory ------------------------------------------ --------------------------------------------------- |
VII-Sch. 4(b)-1
Name of Grantor Office Locations ------------------------------------------ ------------------------------------------------- |
VII-Sch. 4(c)-1
Name of Grantor Other Names ---------------------------------------------- ---------------------------------------------- |
VII-Sch. 4(d)-1
Grantor Filing Offices ----------------------------------------------- --------------------------------------------- |
VII-Sch. 4(h)-1
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
VII-I-1
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all trademarks, service marks, designs, logos, indicia, tradenames, trade dress, corporate names, company names, business names, fictitious business names, trade styles and/or other source and/or business identifiers and applications pertaining thereto, owned by such Grantor, or hereafter adopted and used, in its business (including, without limitation, the trademarks specifically identified in Schedule A) (collectively, the "Trademarks"), all registrations that have been or may hereafter be issued or applied for thereon in the United States and any state thereof and in foreign countries (including, without limitation, the registrations and applications specifically identified in Schedule A) (the "Trademark Registrations"), all common law and other rights (but in no event any of the obligations) in and to the Trademarks in the United States and any state thereof and in foreign countries (the "Trademark Rights"), and all goodwill of such Grantor's business symbolized by the Trademarks and associated therewith (the "Associated Goodwill"); and
(ii) all proceeds, products, rents and profits of or from any and all of the foregoing Trademark Collateral and, to the extent not otherwise included, all payments under insurance (whether or not Secured Party is the loss payee thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Trademark Collateral. For purposes of this Grant of Trademark Security Interest, the term "proceeds" includes whatever is receivable or received when Trademark Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
VII-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
VII-I-3
United States
Trademark Registration Registration
Registered Owner Description Number Date
------------------------- ------------------------- ------------------------- -------------------------
|
VII-Sch. A-1
[FORM OF] GRANT OF PATENT SECURITY INTEREST
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, subject to the terms and conditions of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the following, in each case whether now or hereafter existing or in
VII-II-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
VII-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
VII-II-3
Registered
Patent No. Issue Date Invention Inventor Owner
------------------ ------------------ ------------------ ------------------ -------------
Patents Pending:
---------------
Applicant's Date Application
Name Filed Number Invention Inventor
------------------ ------------------ ------------------ ------------------ ------------------
|
VII-Sch. A-1
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, subject to the terms and conditions of the Pledge and Security Agreement, Grantor hereby grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the following, in each case whether now or hereafter existing or in
VII-III-1
VII-III-2
the Copyright Collateral shall include, and Grantor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
VII-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
VII-III-4
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
VII-Sch. A-1
|
[FORM OF] PLEDGE SUPPLEMENT
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of _______________.
[GRANTOR]
VII-IV-1
[FORM OF] IP SUPPLEMENT
["Grantor"] grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall be hereafter subject to each of the terms and conditions of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
VII-V-1
[Form of] Counterpart
(i) authorizes the Secured Party to add the information set forth on the Schedules to this Agreement to the correlative Schedules attached to the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the items of property described on the Schedules hereto, shall become part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the Pledge and Security Agreement, as amended hereby, to the extent relating to the undersigned.
[NAME OF ADDITIONAL GRANTOR]
X-Sch. 1-1
EXHIBIT 10.4
[FORM OF] GUARANTY
D. A portion of the proceeds of the Loans may be advanced to Guarantors, and thus the Guarantied Obligations (as hereinafter defined) are being incurred for and will inure to the benefit of Guarantors (which benefits are hereby acknowledged).
E. It is a condition precedent to the effectiveness of the Credit Agreement that Company's obligations thereunder be guarantied by Guarantors.
F. Guarantors are willing irrevocably and unconditionally to guaranty such obligations of Company.
VIII-1
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks and Guarantied Party to enter into the Credit Agreement and to induce Derivative/FX Lenders to enter into the Lender Derivative/FX Contracts, Guarantors hereby agree as follows:
Each Guarantor acknowledges that a portion of the Loans may be advanced to it, that Lender Letters of Credit may be issued for the benefit of its business and that the Guarantied Obligations are being incurred for and will inure to its benefit.
Any interest on any portion of the Guarantied Obligations that accrues after the commencement of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company or FinServ (or, if interest on any portion of the Guarantied Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guarantied Obligations if said proceeding had not been commenced) shall be included in the Guarantied Obligations because it is the intention of each Guarantor and Guarantied Party that the Guarantied Obligations should be determined without regard to any rule of law or order that may relieve Company or FinServ of any portion of such Guarantied Obligations.
In the event that all or any portion of the Guarantied Obligations is paid by Company or FinServ, the obligations of each Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded or recovered directly or indirectly from Guarantied Party or any other Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments that are so rescinded or recovered shall constitute Guarantied Obligations.
VIII-2
Subject to the other provisions of this Section 1, upon the failure of Company or FinServ to pay any of the Guarantied Obligations when and as the same shall become due, each Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate of the unpaid Guarantied Obligations.
VIII-3
and a separate action or actions may be brought and prosecuted against each Guarantor whether or not any action is brought against Company, FinServ or any of such other Guarantors and whether or not Company or FinServ is joined in any such action or actions; and (d) a payment of a portion, but not all, of the Guarantied Obligations by one or more Guarantors shall in no way limit, affect, modify or abridge the liability of such or any other Guarantor for any portion of the Guarantied Obligations that has not been paid. This Guaranty is a continuing guaranty and shall be binding upon each Guarantor and its successors and assigns, and each Guarantor irrevocably waives any right to revoke this Guaranty as to future transactions giving rise to any Guarantied Obligations.
VIII-4
time being found to be illegal, invalid or unenforceable in any respect, (d) the application of payments received from any source to the payment of indebtedness other than the Guarantied Obligations, even though Guarantied Party or the other Beneficiaries, or any of them, might have elected to apply such payment to any part or all of the Guarantied Obligations, (e) any failure to perfect or continue perfection of a security interest in any collateral which secures any of the Guarantied Obligations, (f) any defenses, set-offs or counterclaims which Company or FinServ may assert against Guarantied Party or any Beneficiary in respect of the Guarantied Obligations, including but not limited to failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, and (g) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of a Guarantor as an obligor in respect of the Guarantied Obligations.
VIII-5
As used in this paragraph, any reference to "the principal" includes Company and FinServ, and any reference to "the creditor" includes Guarantied Party and each other Beneficiary. In accordance with Section 2856 of the California Civil Code (a) each Guarantor waives any and all rights and defenses available to it by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California Civil Code, including without limitation any and all rights or defenses such Guarantor may have by reason of protection afforded to the principal with respect to any of the Guarantied Obligations, or to any other guarantor of any of the Guarantied Obligations with respect to any of such guarantor's obligations under its guaranty, in either case pursuant to the antideficiency or other laws of the State of California limiting or discharging the principal's indebtedness or such guarantor's obligations, including without limitation Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and (b) each Guarantor waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a Guarantied Obligation, has destroyed such Guarantor's rights of subrogation and reimbursement against the principal by the operation of Section 580d of the Code of Civil Procedure or otherwise; and even though that election of remedies by the creditor, such as nonjudicial foreclosure with respect to security for an obligation of any other guarantor of any of the Guarantied Obligations, has destroyed such Guarantor's rights of contribution against such other guarantor. No other provision of this Guaranty shall be construed as limiting the generality of any of the covenants and waivers set forth in this paragraph. As provided below, this Guaranty shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflicts of laws principles. This paragraph is included solely out of an abundance of caution, and shall not be construed to mean that any of the above-referenced provisions of California law are in any way applicable to this Guaranty or to any of the Guarantied Obligations.
VIII-6
Party or the other Beneficiaries may have against Company or FinServ, to all right, title and interest Guarantied Party or the other Beneficiaries may have in any such collateral or security, and to any right Guarantied Party or the other Beneficiaries may have against such other guarantor.
Any indebtedness of Company or FinServ now or hereafter held by any Guarantor is subordinated in right of payment to the Guarantied Obligations, and any such indebtedness of Company or FinServ to a Guarantor collected or received by such Guarantor after an Event of Default has occurred and is continuing, and any amount paid to a Guarantor on account of any subrogation, reimbursement, indemnification or contribution rights referred to in the preceding paragraph when all Guarantied Obligations have not been paid in full, shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to be credited and applied against the Guarantied Obligations.
VIII-7
under this Guaranty, such Beneficiary is authorized at any time or from time to time, without notice (any such notice being expressly waived), to set off and to appropriate and to apply any and all deposits (general or special, including but not limited to indebtedness evidence by certificates of deposit, whether matured or unmatured) and any other indebtedness of such Beneficiary owing to a Guarantor and any other property of such Guarantor held by a Beneficiary to or for the credit or the account of such Guarantor against and on account of the Guarantied Obligations and liabilities of such Guarantor to any Beneficiary under this Guaranty.
The rights, powers and remedies given to Beneficiaries by this Guaranty are cumulative and shall be in addition to and independent of all rights, powers and remedies given to Beneficiaries by virtue of any statute or rule of law or in any of the Loan Documents or Lender Derivative/FX Contracts or any agreement between one or more Guarantors and one or more Beneficiaries or between Company or FinServ and one or more Beneficiaries. Any forbearance or failure to exercise, and any delay by any Beneficiary in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.
In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
VIII-8
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty shall inure to the benefit of Beneficiaries and their respective successors and assigns.
EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
VIII-9
(a) Guarantied Party has been appointed to act as Guarantied Party hereunder by Banks. Guarantied Party shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action, solely in accordance with this Guaranty and the Credit Agreement.
(b) Guarantied Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Written notice of
resignation by Administrative Agent pursuant to Section 9.9 of the Credit
Agreement shall also constitute notice of resignation as Guarantied Party under
this Guaranty; removal of Administrative Agent pursuant to Section 9.9 of the
Credit Agreement shall also constitute removal as Guarantied Party under this
Guaranty; and appointment of a successor administrative agent pursuant to
Section 9.9 of the Credit Agreement shall also constitute appointment of a
successor Guarantied Party under this Guaranty. Upon the acceptance of any
appointment as administrative agent under Section 9.9 of the Credit Agreement by
a successor administrative agent, that successor administrative agent shall
thereupon succeed to become vested with all the rights, powers, privileges and
duties of the retiring or removed Guarantied party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
VIII-10
discharged from its duties and obligations under this Guaranty. After any retiring or removed Guarantied Party's resignation or removal hereunder as Guarantied Party, the provisions of this Guaranty shall inure to its benefits as to any actions taken or omitted to be taken by it under this Guaranty while it was Guarantied Party hereunder.
(c) Guarantied Party shall not be deemed to have any duty whatsoever with respect to any Derivative/FX Lender until it shall have received written notice in form and substance satisfactory to Guarantied Party from Company, a Guarantor or the Derivative/FX Lender as to the existence and terms of the applicable Lender Derivative/FX Contract.
[The remainder of this page intentionally left blank.]
VIII-11
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.
BATTERY STREET ENTERPRISES, INC.
By:__________________
Name:________________
Title:_______________
LEVI STRAUSS FINANCIAL CENTER
CORPORATION
By:__________________
Name:________________
Title:_______________
LEVI STRAUSS FUNDING, LLC
By:__________________
Name:________________
Title:_______________
LEVI STRAUSS GLOBAL FULFILLMENT
SERVICES, INC.
By:__________________
Name:________________
Title:_______________
VIII-12
LEVI STRAUSS GLOBAL
OPERATIONS, INC.
By:__________________
Name:________________
Title:_______________
LEVI STRAUSS INTERNATIONAL
By:__________________
Name:________________
Title:_______________
LEVI STRAUSS LATIN AMERICA, INC.
By:__________________
Name:________________
Title:_______________
LEVI'S ONLY STORES, INC.
By:__________________
Name:________________
Title:_______________
VIII-13
NF INDUSTRIES, INC.
By:__________________
Name:________________
Title:_______________
ACKNOWLEDGED AND FOR PURPOSES
OF THE WAIVER OF JURY TRIAL SET
FORTH IN SECTION 14 ONLY, AGREED
AS OF THE DATE FIRST WRITTEN ABOVE
Bank of America, N.A., as Administrative Agent
By:_____________________________
Title: _________________________
VIII-14
[FORM OF] COUNTERPART FOR ADDITIONAL GUARANTORS
IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be duly executed and delivered by its officer thereunto duly authorized as of ______________, ____.
[NAME OF ADDITIONAL GUARANTOR]
By:__________________
Name:________________
Title:_______________
X-Sch. 1-1
EXHIBIT 10.5
EXECUTION COPY
LEVI STRAUSS & CO.
LIMITED WAIVER
RECITALS
WHEREAS, Banks desire to waive certain provisions of the Credit Agreement as set forth below:
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. WAIVER
Without limiting the generality of the provisions of Section 10.1 of the Credit Agreement, the waiver set forth above shall be limited precisely as written and relates solely to the noncompliance by Company with the provisions of Section 7.1(o) of the Credit Agreement in the manner and to the extent described above, and nothing in this waiver shall be deemed to:
(a) constitute a waiver of compliance by Company with respect to
Section 7.1(o) of the Credit Agreement in any other instance or any other
term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Administrative Agent or any Bank may now have or may have in the future under or in connection with the Credit Agreement or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect and in all other respects are hereby ratified and confirmed.
Section 2. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Banks to enter into this Waiver, Company hereby represents and warrants that after giving effect to this Waiver:
(a) as of the date hereof, there exists no Event of Default under the Credit Agreement;
(b) all representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date; and
(c) as of the date hereof, Company has performed all agreements to be performed on its part as set forth in the Credit Agreement.
Section 3. GOVERNING LAW
THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
Section 4. COUNTERPARTS; EFFECTIVENESS
This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Waiver shall become effective upon the execution of a counterpart hereof by Company and Majority Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
LEVI STRAUSS & CO.
BANK OF AMERICA, N.A., as a Bank
THE BANK OF NOVA SCOTIA, as a Co-Syndication Agent and as a Bank
CITICORP U.S.A. INCORPORATED, as a Co-Syndication Agent and as a Bank
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Documentation Agent and as a Bank
BANK ONE, N.A., as a Bank
BANK OF AMERICA, N.A., as Administrative Agent
BANK OF AMERICA, N.A., as Collateral Agent
ACKNOWLEDGED:
BATTERY STREET ENTERPRISES, INC.
LEVI STRAUSS FINANCIAL CENTER CORPORATION
LEVI STRAUSS FUNDING, LLC
LEVI STRAUSS GLOBAL FULFILLMENT SERVICES, INC.
LEVI STRAUSS GLOBAL OPERATIONS, INC.
LEVI STRAUSS INTERNATIONAL
LEVI STRAUSS LATIN AMERICA, INC.
LEVI'S ONLY STORES, INC.
NF INDUSTRIES, INC.
EXHIBIT 10.6
EXECUTION COPY
AMENDED AND RESTATED 1997 364 DAY CREDIT AGREEMENT
among
LEVI STRAUSS & CO.
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Senior Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
and
BANK OF AMERICA, N.A.,
as Agent for Banks
BANK OF AMERICA, N.A.,
as Collateral Agent for Banks
dated as of January 31, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
1.1 Defined Terms............................................................................ 1
1.2 Other Interpretive Provisions............................................................ 25
1.3 Accounting Principles.................................................................... 26
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; the Credit............................................. 26
2.2 Notes; Loan Accounts..................................................................... 26
2.3 Procedure for Borrowing.................................................................. 27
2.4 Conversion and Continuation Elections.................................................... 27
2.5 Voluntary Prepayments.................................................................... 28
2.6 Mandatory Prepayments and Reductions of Aggregate Commitment............................. 28
2.7 Repayment; Scheduled Reductions of Aggregate Commitment.................................. 30
2.8 Interest................................................................................. 31
2.9 Fees..................................................................................... 32
2.10 Computation of Fees and Interest......................................................... 33
2.11 Payments by the Company.................................................................. 33
2.12 Payments by the Banks to the Agent....................................................... 34
2.13 Sharing of Payments, etc................................................................. 34
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.................................................................................... 35
3.2 Illegality............................................................................... 36
3.3 Increased Costs and Reduction of Return.................................................. 37
3.4 Funding Losses........................................................................... 37
3.5 Inability to Determine Rates............................................................. 38
3.6 Reserves on Offshore Rate Loans.......................................................... 38
3.7 Certificates of Banks.................................................................... 39
3.8 Substitution of Banks.................................................................... 39
3.9 Survival................................................................................. 39
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Condition to Closing.................................................................... 39
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization, Powers, Good Standing, Business, Ownership of Subsidiaries and
Capitalization.......................................................................... 43
5.2 Authorization of Borrowing, etc......................................................... 44
5.3 Financial Condition..................................................................... 44
5.4 Title to Properties; Liens.............................................................. 45
5.5 Litigation; Adverse Facts............................................................... 45
5.6 Payment of Taxes........................................................................ 45
5.7 Materially Adverse Agreements; Performance.............................................. 46
5.8 Governmental Regulation................................................................. 46
5.9 ERISA Compliance........................................................................ 46
5.10 Environmental Matters................................................................... 47
5.11 Compliance With Laws.................................................................... 47
5.12 Regulation U............................................................................ 47
5.13 Disclosure.............................................................................. 47
5.14 Matters Relating to Collateral.......................................................... 47
5.15 Intangible Assets....................................................................... 48
5.16 Insurance............................................................................... 48
5.17 Year 2000............................................................................... 48
5.18 Solvency................................................................................ 49
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements and Other Reports.................................................. 49
6.2 Corporate Existence, etc................................................................ 53
6.3 Compliance With Laws, etc............................................................... 53
6.4 Compliance with Agreements.............................................................. 53
6.5 Payment of Taxes and Claims............................................................. 53
6.6 Maintenance of Properties; Insurance.................................................... 53
6.7 Inspection.............................................................................. 54
6.8 Use of Proceeds......................................................................... 54
6.9 Execution of Guaranty and Collateral Documents by Additional Subsidiaries............... 55
6.10 Compliance with ERISA................................................................... 56
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.11 Post Closing Actions................................................................... 56
6.12 Transfer of Receivables................................................................ 58
ARTICLE VII
NEGATIVE COVENANTS
7.1 Indebtedness; Derivative/FX Contracts.................................................. 58
7.2 Limitation on Liens and Negative Pledges............................................... 60
7.3 Dispositions........................................................................... 63
7.4 Fundamental Changes.................................................................... 64
7.5 Use of Proceeds........................................................................ 64
7.6 Leverage Ratio......................................................................... 65
7.7 Interest Coverage Ratio................................................................ 65
7.8 Minimum Consolidated EBITDA............................................................ 66
7.9 Change in Business..................................................................... 66
7.10 ERISA.................................................................................. 66
7.11 Investments............................................................................ 67
7.12 Restricted Payments.................................................................... 68
7.13 Operating Lease Obligations............................................................ 68
7.14 Transactions with Affiliates........................................................... 68
7.15 Amendments of Documents Relating to Indebtedness and Receivables....................... 68
7.16 Consolidated Capital Expenditures...................................................... 69
7.17 Materially Adverse Agreements.......................................................... 69
7.18 Limitations on Upstreaming............................................................. 69
7.19 Change in Auditors..................................................................... 69
7.20 Restricted Subsidiaries................................................................ 69
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default....................................................................... 70
8.2 Remedies............................................................................... 72
8.3 Rights Not Exclusive................................................................... 73
ARTICLE IX
AGENT; COLLATERAL AGENT
9.1 Appointment and Authorization.......................................................... 73
9.2 Delegation of Duties................................................................... 74
9.3 Liability of Agent or Collateral Agent................................................. 74
9.4 Reliance by Agent and Collateral Agent................................................. 74
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TABLE OF CONTENTS
(CONTINUED)
PAGE
9.5 Notice of Default...................................................................... 75
9.6 Credit Decision; Disclosure of Information by Agent and Collateral Agent............... 75
9.7 Indemnification of Agent and Collateral Agent.......................................... 76
9.8 Agent in Individual Capacity........................................................... 76
9.9 Successor Agent........................................................................ 77
9.10 Successor Collateral Agent............................................................. 77
9.11 Withholding Tax........................................................................ 78
9.12 Co-Agents; Managing Agents............................................................. 79
9.13 Collateral Documents, Guaranties and Intercreditor Agreement........................... 79
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers................................................................ 80
10.2 Notices............................................................................... 80
10.3 No Waiver; Cumulative Remedies........................................................ 81
10.4 Costs and Expenses.................................................................... 81
10.5 Company's Indemnification............................................................. 82
10.6 Payments Set Aside.................................................................... 82
10.7 Successors and Assigns................................................................ 83
10.8 Assignments, Participations, etc...................................................... 83
10.9 Confidentiality....................................................................... 84
10.10 Set-off............................................................................... 85
10.11 Notification of Addresses, Lending Offices, etc....................................... 85
10.12 Counterparts.......................................................................... 86
10.13 Severability.......................................................................... 86
10.14 No Third Parties Benefited............................................................ 86
10.15 Change in Accounting Principles....................................................... 86
10.16 Governing Law and Jurisdiction........................................................ 86
10.17 Interpretation........................................................................ 87
10.18 Representation of Banks............................................................... 87
10.19 Waiver of Jury Trial.................................................................. 87
10.20 Amendments and Waivers Regarding Collateral........................................... 88
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ARTICLE XI
GENERAL RELEASE
EXHIBIT LIST
Exhibit I..........................[FORM OF] NOTICE OF CONVERSION/CONTINUATION Exhibit II......................................................[FORM OF] NOTE Exhibit III...................................[FORM OF] COMPLIANCE CERTIFICATE Exhibit IV.......................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY Exhibit V..............................[FORM OF] PLEDGE AND SECURITY AGREEMENT Exhibit VI..................................................[FORM OF] GUARANTY Exhibit VII................................[FORM OF] ASSIGNMENT AND ACCEPTANCE Exhibit VIII....................................................PRIVITY LETTER |
An extra section break has been inserted above this paragraph. Do not delete this section break if you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table of Contents/Authorities headers and footers to appear on any pages following the Table of Contents/Authorities.
AMENDED AND RESTATED 1997 364 DAY CREDIT AGREEMENT
WHEREAS, pursuant to a Waiver dated as of November 12, 1999, Banks agreed to waive certain provisions of the Existing Credit Agreement until February 3, 2000; and
WHEREAS, Company and Banks have agreed to amend and restate the Existing Credit Agreement; and
WHEREAS, Company has agreed to secure its Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of its personal property and certain of its real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital Stock of certain of its Foreign Subsidiaries (other than Restricted Subsidiaries); and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of their respective personal property and certain of their respective real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of their respective Domestic Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign Subsidiaries (other than Restricted Subsidiaries);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
or intangible) of Company or any of its Subsidiaries other than Dispositions permitted by Sections 7.3(a), 7.3(c), 7.3(e), 7.3(f), 7.3(g), 7.3(h), and 7.3(m).
"Bankruptcy" (11 U.S.C. (S) 101, et seq.).
-------
"Base Rate" means, for any day, a fluctuating rate per annum equal to
---------
the higher of (a) the Federal Funds Rate plus 1/2 of 1%, and (b) the rate
----
of interest in effect for such day as publicly announced from time to time
by Bank of America as its "prime rate." Such rate is a rate set by Bank of
America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified
in the public announcement of such change.
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whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.
any Borrower Party pursuant to this Agreement or any of the other Loan Documents in order to grant to Collateral Agent, on behalf of Banks, a Lien on any Property of that Borrower Party as security for the Obligations.
respect to such expenditures), (iii) Consolidated Interest Charges paid in cash, (iv) taxes based on income of Company and its Subsidiaries paid in cash, (v) the excess of bank fees paid over bank fees amortized, and (vi) cash payments for long-term employee benefits and other related liabilities (other than changes in accruals under the Global Success Sharing Plan, Long Term Performance Plan, Leadership Shares and Long Term Incentive Payment Plan).
deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.
authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than obligations under a long term supply contract), which purchase price is (i) due
more than 90 days from the date of incurrence of the obligation in respect thereof, or (ii) evidenced by a note or similar written instrument, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(d) without duplication, lease payment obligations under Capital Leases or Synthetic Lease Obligations; and
(e) without duplication, all Guaranty Obligations of such Person in respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to Majority Banks.
(a) if any Interest Period pertaining to an Offshore Rate Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Maturity Date; and
(d) unless Agent otherwise consents, there may not be more than 24 Interest Periods for Offshore Rate Loans in effect at any time under this Agreement, the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement.
connection with the adjustment or settlement of any claims of Company or such Subsidiary in respect thereof.
Where,
(a) the rate per annum equal to the rate determined by Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(b) in the event that the rate referenced in the preceding subsection
(a) does not appear on such page or service or such page or service shall
cease to be available, the rate per annum equal to the rate determined by
Agent to be the offered rate on such other page or other service that
displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or
(c) in the event that the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by Agent as the rate of interest at which Dollar deposits (for delivery on the first day of such Interest Period) in same day funds in the approximate amount of the applicable Offshore Rate Loan and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.
The determination of the Eurodollar Reserve Percentage and the Offshore Base Rate by Agent shall be conclusive in the absence of manifest error.
reasonably anticipated by such Person, or changes in the value of securities issued by such Person and not for purposes of speculation or taking a "market view" and that do not contain any provision ("walk-away" provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.
interests are customarily granted) to purchasers in receivables purchase transactions that are treated as sales under GAAP, (e) all rights of Foreign Subsidiaries to refunds on account of value added tax in respect of goods sold to an obligor, any receivable from whom is or becomes a defaulted receivable, and (f) proceeds of or judgments relating to any of the foregoing, any debts represented thereby and all rights of action against any Person in connection therewith.
(a) the declaration or payment of any dividend or other distribution by Company or any of its Subsidiaries, directly or indirectly, either in cash or property, on any shares of the Capital Stock of any class of Company or any of its Subsidiaries (except dividends or other distributions payable solely in shares of Capital Stock of Company or any of its Subsidiaries or payable by any Subsidiary to Company or to a wholly-owned Subsidiary of Company);
(b) the purchase, redemption or retirement by Company or any of its Subsidiaries of any shares of its Capital Stock of any class or any warrants, rights or options to purchase or acquire any shares of its Capital Stock, whether directly or indirectly (except the purchase, redemption or retirement of Capital Stock (or any such warrants, rights or options) held by Company or any wholly-owned Subsidiary of Company); and
(c) the prepayment, repayment, redemption, defeasance or other acquisition or retirement for value prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness not otherwise permitted under any Loan Document to be so paid.
arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as "securities" or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.
the laws of which such Bank or Agent, as the case may be, is organized or maintains a lending office.
(i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means "including without limitation."
cumulative and must each be performed, except as expressly stated to the contrary in this Agreement.
(a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, consistently applied; except that, subject to Section 10.15, all financial computations required under this Agreement shall be made in accordance with GAAP as in effect on the Closing Date.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of Company. The fiscal quarters of Company end on the last Sunday in February, May, August, and November of each year. Each fiscal year of Company ends on the last Sunday in November of such year.
(c) References herein to "consolidated" and "consolidated basis" with reference to Company are to Company and its Subsidiaries on a consolidated basis.
ARTICLE II
(a) The Loans made by each Bank shall be evidenced by one or more loan accounts or records maintained by such Bank in the ordinary course of business. The loan accounts or records maintained by Agent and each Bank shall be conclusive evidence, absent manifest error, of the amount of the Loans made by Banks to Company and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of Company hereunder to pay any amount owing with respect to the Loans.
make, or an error in making, a notation thereon with respect to any Loan shall not limit or otherwise affect the obligations of Company hereunder or under any such Note to such Bank.
(a) Company may upon irrevocable notice to Agent in accordance with
Section 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Offshore Rate Loans; or
(ii) elect to convert on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Base Rate Loans; or
(iii) elect to renew on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof);
(b) Company shall deliver in writing (or by facsimile transmission confirmed immediately by a telephone call or by a telephone call confirmed immediately by a facsimile transmission), an irrevocable Notice of Conversion/Continuation to be received by Agent not later than 9:00 a.m., San Francisco, California time, at least three Business Days in advance of the Conversion/Continuation Date, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) with respect to Offshore Rate Loans, the duration of the requested Interest Period.
(c) (i) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, Company has failed to select a new Interest Period to be applicable to such Offshore Rate Loans, and if no Event of Default shall then exist, Company shall be deemed to have elected to continue such Offshore Rate Loans as Offshore Rate Loans with an Interest Period of one month.
(ii) If an Event of Default exists at the time any Interest Period applicable to Offshore Rate Loans expires, Company shall be deemed to have elected to convert Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation (or telephonic notice in lieu thereof), Agent will promptly notify each Bank thereof, or, if no timely notice is provided, Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans with respect to which the notice was given or which are subject to automatic conversion held by each Bank.
(a) Subject to Section 3.4, Company may (from time to time) ratably prepay Loans in whole or in part in the minimum amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, upon notice to Agent given not later than 9:00 a.m. San Francisco, California time:
(i) at least three Business Days' prior to the proposed date of prepayment for Offshore Rate Loans; and
(ii) on the Business Day prior to the proposed date of prepayment for Base Rate Loans.
Each such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination thereof. In the event that Company fails to so specify, any voluntary prepayments of the Loans pursuant to this Section 2.5 shall be applied first to Base Rate Loans to the full amount thereof before application to Offshore Rate Loans. Such notice shall not thereafter be revocable by Company and Agent will promptly notify each Bank thereof and the amount of such Bank's Commitment Percentage of such prepayment. If such notice is given by Company, Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and the amounts required pursuant to Section 3.4. Amounts prepaid may not be reborrowed.
(b) Notice to Agent under this Section shall be in writing, signed by Company or may be by telephone notice promptly confirmed by notice sent by facsimile transmission.
Date Scheduled Reduction ---- ------------------- May 25, 2000 $ 50,000,000 August 24, 2000 $ 50,000,000 November 22, 2000 $100,000,000 February 22, 2001 $ 50,000,000 May 24, 2001 $ 50,000,000 August 23, 2001 $100,000,000 |
(b) Interest on each Loan shall be payable in arrears on each Interest Payment Date. Interest shall also be payable on the date of any prepayment of Loans pursuant to Section 2.5, 2.6 or 2.7 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during any period when principal of the Loans is due and payable, interest shall be payable on request for such payment by the holders of the Loans.
(c) While any Event of Default exists, Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law and including post-petition interest in any proceeding under any Debtor Relief Law) on the principal amount of all Loans, at a rate per annum equal to the Default Rate. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be payable upon demand.
(d) Anything herein to the contrary notwithstanding, the obligations of Company to any Bank hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Bank, and in such event Company shall pay such Bank interest at the lower of (i) the highest rate permitted by applicable law and (ii) the rates required by this Agreement.
(a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.
(b) Agent will notify Company and Banks of each determination of an Offshore Rate. Any failure by Agent to give such notice and any failure by Company and any Bank to receive such notice shall not relieve Company of any obligation to pay interest or provide the basis for any claim against Agent. Agent shall, upon request made by Company or any Bank from time to time, advise such Person(s) of the relevant applicable Offshore Rate(s).
(c) Each determination of an interest rate by Agent pursuant to any provision of this Agreement shall be conclusive and binding on Company and Banks in the absence of manifest error.
(a) All payments (including prepayments) to be made by the Company on
account of principal, interest, fees and other amounts required hereunder shall
be made without set-off or counterclaim and shall be made in Dollars to the
Agent for the ratable account of the Banks at the Agent's Payment Office. Such
payments shall be made in immediately available funds and no later than 11:00
a.m., San Francisco, California time, on the date specified herein. The Agent
will promptly distribute to each Bank the amount of its Commitment Percentage
(or other applicable share as expressly provided herein) of such principal,
interest, fees or other amounts, in like funds as received. Any payment which is
received by the Agent later than 11:00 a.m., San Francisco, California time,
shall be deemed to have been received on the immediately succeeding Business Day
and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be, subject to the provisions set forth in the definition of "Interest Period" herein.
(c) Unless the Agent shall have received notice from the Company prior to the date on which any payment is due to the Banks hereunder from the Company that the Company will not make such payment in full, the Agent may assume that the Company has made such payment in full to the Agent on such date and the Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent the Company shall not have made such payment in full to the Agent, each Bank shall repay to the Agent, on request made by the Agent, such amount distributed to such Bank, together with interest at the Federal Funds Rate for and determined as of each day during the period from and including each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent.
(a) Unless the Agent shall have received notice from a Bank on the Closing Date or, with respect to each Borrowing after the Closing Date, at least one Business Day prior to the date of any proposed Committed Borrowing or the Term Borrowing, as applicable (but
prior to 10:00 a.m. San Francisco, California time, on the same day with respect to a Borrowing consisting of Base Rate Loans) that such Bank will not make available to the Agent for the account of the Company the amount of that Bank's Commitment Percentage of the Committed Borrowing, or the Term Borrowing, as applicable, the Agent may assume that each Bank has made such amount available to the Agent on the Borrowing Date and the Agent may (but shall not be so required), in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to the Agent and the Agent in such circumstances has made available to the Company such amount, that Bank shall on the next Business Day following such Borrowing Date make such amount available to the Agent, together with interest at the Federal Funds Rate for and determined as of each day during such period.
A certificate of the Agent submitted to any Bank with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to the Agent shall constitute such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the Agent on the next Business Day following such Borrowing Date, the Agent shall notify the Company of such failure to fund and, upon request for payment made by the Agent, the Company shall pay such amount to the Agent for the Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date shall not relieve any other Bank of any obligation hereunder to make a Loan on such Borrowing Date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
ARTICLE III
(a) Any and all payments by Company to each Bank or Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, Company shall pay all Other Taxes.
(b) If Company shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Bank, or Agent, then:
(i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Bank or Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;
(ii) Company shall make such deductions and withholdings;
(iii) Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and
(iv) Company shall also pay to each Bank or Agent for the account of such Bank, at the time interest is paid, Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) Company agrees to indemnify and hold harmless each Bank and Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the Bank or Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by Company of Taxes, Other Taxes or Further Taxes, Company shall furnish to each Bank or Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Bank or Agent.
(e) Company will not be required to pay any additional amounts in respect of Section 3.1(b) to any Bank or Agent:
(i) if such Bank shall have delivered to Company a Form 1001 (or any successor form) pursuant to Section 9.11(a)(i), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or any applicable tax treaty or regulations or in the official interpretation of any such law, treaty or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 1001 (or any successor form); or
(ii) if such Bank shall have delivered to Company a Form 4224 (or any successor form) pursuant to Section 9.11(a)(ii), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 4224 (or any successor form).
(f) If, at any time, Company requests any Bank to deliver any forms or other documentation pursuant to Section 9.11(a)(iii), then Company shall, on demand of such Bank through Agent, reimburse such Bank for any costs and expenses (including Professional Costs) reasonably incurred by such Bank in the preparation or delivery of such forms or other documentation.
(g) If Company is required to pay additional amounts to any Bank or Agent pursuant to this Section 3.1, then such Bank or Agent, as the case may be, shall use its reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or take any other reasonable action so as to eliminate any such additional payment by Company which may thereafter accrue if such change, in the reasonable judgment of such Bank, is not otherwise materially disadvantageous to such Bank or Agent.
(a) If any Bank determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by the Bank to Company through Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies Agent and Company that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any Offshore Rate Loan, Company shall, upon receipt of notice of such fact and demand from such Bank (with a copy to Agent), prepay in full such Offshore Rate Loans of that Bank then outstanding, together with interest accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loans. If Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, Company shall borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, Company may elect, by giving notice to the Bank through Agent that all Loans which would otherwise be made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(a) If any Bank determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation, or (ii) the compliance by that Bank with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans in an amount deemed material by such Bank, then Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to Agent), pay to Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank with any Capital Adequacy Regulation; affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank's desired return on capital) determines that the amount of such capital is increased in an amount deemed material by such Bank as a consequence of its loans, credits or obligations under this Agreement, then, upon request of such Bank (with a copy to Agent), Company shall immediately pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase.
(a) any failure of Company to make, on a timely basis, any payment or prepayment of principal of any Offshore Rate Loan (including payments made after any acceleration thereof);
(b) any failure of Company to continue or convert a Loan after Company has given (or are deemed to have given) a Notice of Conversion/Continuation;
(c) any failure of Company to make any prepayment after Company has given a notice in accordance with Section 2.5;
(d) any prepayment of an Offshore Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or
(e) any conversion pursuant to Section 2.4 of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; or including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained.
may: (a) request the Affected Bank to use its reasonable efforts without incurring any material expense to obtain a Replacement Bank; (b) request one or more of the other Banks to acquire and assume all or part of such Affected Bank's Loans and Commitment; or (c) designate a Replacement Bank. Any assignment to a Replacement Bank pursuant to this Section shall be pursuant to an Assignment and Acceptance in compliance with Section 10.8 including payment of the processing fee to Agent (except to the extent that there is any conflict between the provisions of this Section and Section 10.8, in which case the provisions of this Section shall control). If Bank of America is the Affected Bank, it may, at its sole option, resign as Agent or Collateral Agent. Notwithstanding the provisions of Section 9.9 or 9.10, any resignation as Agent or Collateral Agent by Bank of America under this Section shall take effect upon delivery of Bank of America's written resignation to Company and Banks without necessity of further action or lapse of time.
ARTICLE IV
(a) Agent shall have received, on or before the Closing Date, all of the following documents, in form and substance reasonably satisfactory to Agent and Majority Banks:
(A) Copies of the resolutions of the board of directors of each Borrower Party (or an authorized committee thereof) approving and authorizing the execution, delivery, and performance by such Borrower Party of the Loan Documents to which such Borrower Party is a party, certified as of the Closing Date by the Secretary or an Assistant Secretary of such Borrower Party.
(B) A certificate of the Secretary or an Assistant Secretary of each Borrower Party certifying, as of the Closing Date, the names and true signatures of the officers of such Borrower Party authorized to execute and deliver, as applicable, this Agreement, and all other Loan Documents to be delivered hereunder.
of Liens permitted to remain outstanding pursuant to the terms of this Agreement);
ARTICLE V
Company represents and warrants to Agent and each Bank that:
Borrower Party, and the Notes, when executed and delivered, will be duly executed and delivered by Company.
(a) And except as would not have a Material Adverse Effect, each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of any Borrower Party, nothing has
occurred which would cause the loss of such qualification. Company and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event that requires notice to be given to the PBGC
has occurred or is reasonably expected to occur; (ii) no Pension Plan has a
Funded Current Liability Percentage of less than 90%; (iii) neither Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan.
such Environmental Laws and Environmental Claims are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect.
(a) The execution and delivery of the Collateral Documents by Borrower Parties, together with (i) the actions taken on or prior to the date hereof pursuant to Sections 4.1(a)(vii) and 4.1(a)(viii), (ii) the actions taken pursuant to Sections 6.9 and 6.11, and (iii) the delivery to Agent of any Pledged Collateral not delivered to Agent at the time of execution and delivery of the applicable Collateral Document (all of which Pledged Collateral has been so delivered) are effective to create in favor of Agent for the benefit of Banks, as security for the respective Secured Obligations (as defined in the applicable Collateral Document in respect of any Collateral), a valid and perfected Lien on all of the Collateral, a security interest in which may be perfected by filing in the United States or possession, and all filings and other actions necessary or desirable to perfect and maintain the perfection of such Liens have been duly made or taken and remain in full force and effect, other than the filing of any UCC financing statements delivered to Agent for filing (but not yet filed) and the periodic filing of UCC continuation statements in respect of UCC financing statements filed by or on behalf of Agent.
(b) No authorization, approval or other action by, and no notice to
or filing with, any Government Authority in the United States is required for
either (i) the pledge or grant by any Borrower Party of the Liens purported to
be created in favor of Agent pursuant to any of the Collateral Documents, or
(ii) the exercise by Agent of any rights or remedies in respect of
any Collateral (whether specifically granted or created pursuant to any of the Collateral Documents or created or provided for by applicable law), except for filings or recordings contemplated by Section 5.14(a) and except as may be required, in connection with the disposition of any Pledged Collateral, by laws generally affecting the offering and sale of securities.
(c) The pledge of the Pledged Collateral pursuant to the Collateral Documents does not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) All information supplied to Agent by or on behalf of any Borrower Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects.
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so does not have a Material Adverse Effect.
ARTICLE VI
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall (except in the case of Company's reporting covenants) cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(a) Company shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP and in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over Company or any of its subsidiaries. Company shall deliver to Agent for distribution to Banks:
(i) as soon as practicable and in any event within 30 days after the end of each fiscal month, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event within 45 days after the end of each of the first three fiscal quarters of the fiscal year, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(iv) together with each delivery of any financial statements pursuant to Section 6.1(a)(ii) or 6.1(a)(iii) a Compliance Certificate from Company executed by a Responsible Officer, stating that the signer does not have knowledge of the existence as at the date of such certificate, of any condition or event which constitutes a Default or Event of Default, or, if any such condition or event existed at such date or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto, and demonstrating in reasonable detail compliance during or at the end of such accounting periods, as applicable, with Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.11 and 7.16; and, should there be any material change in GAAP as in effect as of the Closing Date, such Compliance Certificate shall include computations setting forth reconciliation of the items used in computing compliance with the covenants under this Agreement by reason of the differences between GAAP used in the preparation of such financial statements and GAAP as in effect as of the Closing Date;
(v) concurrently with the delivery of the financial statements referred to in Section 6.1(a)(iii), a certificate of Company's independent certified public accountants certifying such financial statement and stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default hereunder or, if any such Default or Event of Default shall exist, stating the nature and status of such event;
(vi) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, a cash flow forecast for Company and its Subsidiaries for the then following 13 weeks and a report setting forth the cash flows of Company and its Subsidiaries for the prior 13 weeks, together with an explanation of any material variance between those results and the results previously projected for those 13 weeks;
(vii) (A) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, (1) a report setting forth the details
of (y) any Lender Derivative/FX Contract to which Company or FinServ is
a party, including the Termination Value of any such Lender
Derivative/FX Contract, and (z) all other outstanding unsecured
Indebtedness of Company or any of its Subsidiaries (including any
letters of credit (other than Lender Letters of Credit) issued for the
benefit of Company and its Subsidiaries) incurred in accordance with
Section 7.1(r), and (2) information with respect to all other
Derivative/FX Contracts to which Company or any of its Subsidiaries is
a party, and (B) promptly upon request, any other information
concerning such Derivative/FX Contracts reasonably requested by Agent;
(ix) promptly after the same are available, copies of each annual report or proxy statement sent to the stockholders of Company, and copies of all annual, regular, periodic and special reports and registration statements which Company may file or, if Company were subject to the Exchange Act, would be required to file with the Securities and Exchange Commission under Sections 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Agent pursuant hereto;
(x) promptly upon any Responsible Officer of Company obtaining knowledge of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Bank has given any written notice of a claimed Default or Event of Default, a certificate from Company, executed by a Responsible Officer of Company, specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken, and the nature of such claimed Default or Event of Default, event or condition, and what action Company has taken, is taking, and proposes to take with respect thereto;
(xi) promptly upon any Responsible Officer of Company obtaining knowledge of (A) the institution of, or non-frivolous threat of, any material action, suit, proceeding or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by Company to Agent, or (B) any material development in any action, suit, proceeding or arbitration already disclosed, and in each case Company reasonably expects such institution, threat, or material development to result in any Material Adverse Effect or materially and adversely to affect the ability of Company and its Subsidiaries, taken as a whole, to perform the Obligations or the ability of Banks to enforce the Obligations, Company shall promptly give notice thereof to Agent and provide such other information (excluding communications covered by the attorney-client privilege) as may be reasonably requested by Agent or a Bank to enable their counsel to evaluate such matters;
(xii) promptly upon any Responsible Officer of Company becoming aware of its occurrence, notice of any of the following events affecting Company or any ERISA Affiliate (but in no event more than 10 days after such event), and such Responsible Officer shall also deliver to Agent and each Bank a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to Company or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a decrease in the Funded Current Liability Percentage for any Pension Plan at the end of any fiscal quarter to less than 90%; or
(xiii) promptly upon receipt thereof, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of Company by independent accountants in connection with the accounts or books of Company or any of its Subsidiaries, or any audit of any of them;
(xiv) promptly upon any discovery or determination that any computer application (including those of its suppliers and vendors) that is material to the business and operations of Company or any of its Subsidiaries will not be Year 2000 Compliant on a timely basis, except to the extent that such failure does not have a Material Adverse Effect, a notice thereof; and
(xv) promptly upon any Responsible Officer of Company becoming aware of its occurrence, a notice of any material change in accounting policies or financial reporting practices by Company or any of its Subsidiaries.
(b) Company will deliver to Agent for distribution to each Bank together with the Compliance Certificate required under subsection (iv) of subsection (a) of this Section, a copy of all press releases and other statements made available generally by Company to the public during the period covered by the Compliance Certificate. The press releases and such other statements covered by this subsection are those which concern material developments in the business of Company and its Subsidiaries taken as a whole.
(c) Company will deliver to Agent for distribution to each Bank copies of material financial and other information as Agent or Majority Banks may reasonably request from time to time.
(a) Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect. Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained, through self- insurance or with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all such failures in the aggregate) have a Material Adverse Effect. From and after the date that is 30 days following the Closing Date, property, general liability, business interruption and automobile insurance policies shall (i) name Collateral Agent for the benefit of Banks as an additional insured thereunder with respect to all Collateral as its interests may appear and, in the case of property insurance, (ii) contain a loss payable subsection or endorsement, satisfactory in form and substance to Agent, that names Collateral Agent for the benefit of Banks as the loss payee thereunder for any covered loss with respect to all Collateral, as appropriate. Insurance policies shall provide for at least 30 days prior written notice to Agent of any material modification or cancellation of such policy.
(b) Upon receipt by Company or any of its Subsidiaries of any insurance proceeds constituting Net Insurance Proceeds, (i) so long as no Event of Default shall have occurred and be continuing, Company or such Subsidiary may retain and apply such Net Insurance Proceeds for working capital purposes, in the case of business interruption insurance proceeds, or to pay or reimburse the costs of repairing, restoring or replacing the assets or substantially similar assets in respect of which such Net Insurance Proceeds were received or, to the extent not so applied, as provided in Section 2.6, and (ii) if an Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance Proceeds as provided in Section 2.6.
(a) Company shall, and shall cause each of its Subsidiaries to, (i) permit any authorized representatives designated by a Bank, at the expense of that Bank, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested, and (ii) following the occurrence and during the continuation of an Event of Default, permit any authorized representatives designated by a Bank, at the expense of Company, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, immediately upon request by Agent.
(a) In the event that any Person becomes a Material Domestic Subsidiary after the date hereof, Company will notify Agent of that fact and cause such Material Domestic Subsidiary to execute and deliver to Agent a counterpart of the Guaranty and the Pledge and Security Agreement, and to take all such further actions and execute such further documents and
(b) Company shall deliver to Agent, together with such Loan
Documents, (i) certified copies of such Subsidiary's Organization Documents,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its organization and each other state in which such Person is
qualified to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to Agent,
(ii) a certificate executed by the secretary or similar officer of such
Subsidiary as to (A) the fact that the attached resolutions of the board of
directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (B) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iii) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to Agent and
its counsel, as to (A) the due organization and good standing of such
Subsidiary, (B) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (C) the enforceability of such Loan Documents against
such Subsidiary, and (D) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agent and its counsel.
(i) On or prior to the date that is 60 days after the Closing Date, Company shall have delivered to Agent:
(B) An opinion of counsel (which counsel shall be reasonably satisfactory to Agent) in each state in which any such Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Agent may reasonably request, in each case in form and substance reasonably satisfactory to Agent;
(E) Copies of all recorded documents listed as exceptions to title or otherwise referred to in the policies or in the title reports delivered pursuant to subsection (D); and
(F) (1) Evidence, which may be in the form of a letter from an insurance broker or a municipal engineer, as to whether any Property is a Flood Hazard Property and the community in which any such Flood Hazard Property is
located is participating in the National Flood Insurance Program;
(2) if there are any such Flood Hazard Properties, Company's
written acknowledgement of receipt of written notification from
Agent (y) as to the existence of each such Flood Hazard Property
and (z) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood
Insurance Program; and (3) in the event that any such Flood
Hazard Property is located in a community that participates in
the National Flood Insurance Program, evidence that Company has
obtained flood insurance in respect of such Flood Hazard Property
to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System.
providing that the obligations of Company and FinServ under such agreements will be secured by the Collateral Documents (as defined in the Bridge Credit Agreement).
ARTICLE VII
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(b) Indebtedness under the Loan Documents;
(c) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds;
(d) Guaranty Obligations of Company guaranteeing the Indebtedness of Material Foreign Subsidiaries permitted under Section 7.1(r);
(e) Indebtedness of Company and the other Borrower Parties under the 1997 Second Amended and Restated Credit Agreement and the related loan documents;
(f) Indebtedness of Company in respect of Capital Leases not exceeding $5,000,000 in the aggregate at any time;
(h) Indebtedness of Pledged Foreign Subsidiaries to other Pledged Foreign Subsidiaries;
(i) Indebtedness of Unpledged Foreign Subsidiaries to Pledged Foreign Subsidiaries or other Unpledged Foreign Subsidiaries;
(j) Indebtedness of Company and its Subsidiaries (other than LSFCC or LSFLLC) to FinServ and Indebtedness of FinServ to Company and its other Subsidiaries (other than LSFCC or LSFLLC) in the ordinary course of business;
(l) Derivative/FX Contracts between Company or FinServ and FinServ and the other Subsidiaries of Company (other than LSFCC or LSFLLC) in the ordinary course of business;
(n) Indebtedness of Company and its Material Subsidiaries (other than LSFCC or LSFLLC) secured by Liens permitted under Section 7.2(h) not exceeding $25,000,000 in the aggregate at any time;
(s) Indebtedness of Company to any of its Subsidiaries and other Indebtedness of any of its Subsidiaries to Company or any of its other Subsidiaries outstanding on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(t) other Indebtedness of Company and its Subsidiaries not exceeding $5,000,000 in the aggregate at any time.
(b) Liens for taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.5;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto or if such reserve or other appropriate provision, if any, required by GAAP shall have been made therefor;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(e) Liens securing (i) the performance of tenders, bids, trade contracts (other than for borrowed money), government contracts, leases, statutory obligations, and performance and return-of-money bonds, (ii) contingent obligations on surety and appeal bonds, and (iii) other obligations of a like nature; in each case, incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances that do not interfere with the ordinary conduct of the businesses of Company and its Subsidiaries;
(i) any interest or title of a lessor under any Capital or Operating Lease permitted hereunder (other than any Equipment Financing Transaction);
promulgated by the Federal Reserve Board, and (ii) such deposit account is not intended by Company or any of its Subsidiaries to provide collateral to the depository institution;
(k) leases or subleases granted to others in the ordinary course of business not interfering with the ordinary conduct of the business of the grantor thereof;
(l) Liens attaching to ownership interests in joint ventures (whether in partnership, corporate or other form) engaged in the LOS/DOS Business or attaching to intellectual property rights relating to the LOS/DOS Business;
(m) Liens created in connection with (i) Equipment Financing Transactions and (ii) Real Estate Financing Transactions so long as (A) the aggregate amount of all such transactions permitted by this Section 7.2(m) at any time outstanding (as measured by the sum of all Indebtedness secured by such Liens then outstanding or to be so created or assumed) shall not exceed $175,000,000 and (B) Company shall cause, in connection therewith, the prepayments of Loans required by Section 2.6;
(n) Liens created pursuant to applications or reimbursement agreements pertaining to documentary letters of credit which encumber documents and other property relating to such documentary letters of credit and the products and proceeds thereof;
(o) Liens granted pursuant to the Collateral Documents;
(p) Liens securing (i) Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement, and (ii) obligations under Lender Derivative/FX Contracts;
(q) Liens securing Ordinary Course Derivative/FX Contracts permitted by Section 7.1(r);
(r) other Liens so long as the aggregate outstanding amount of Indebtedness secured by such Liens does not exceed $2,000,000 at any time;
(s) Negative Pledges on accounts receivables of Foreign Subsidiaries and the associated assets of Foreign Subsidiaries in connection with Permitted Foreign Receivable Purchase Facilities;
(t) Negative Pledges on Intellectual Property licensed from third parties; and
(u) Negative Pledges with respect to specific property encumbered to secure payment of particular Indebtedness permitted hereunder.
(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory by Company or any of Subsidiaries to Company or any of its Subsidiaries in ordinary course of business arm's length transactions;
(c) Dispositions of inventory in the ordinary course of business;
(d) Dispositions of accounts receivable from Company to LSFCC and from LSFCC to LSFLLC;
(h) licenses of Intellectual Property in the ordinary course of business;
(i) the Pending IceHouse Disposition;
(l) Dispositions of the Capital Stock of Domestic Subsidiaries that are Guarantors to Company and wholly owned Domestic Subsidiaries that are Guarantors; Dispositions of the Capital Stock of Pledged Foreign Subsidiaries to Company, Domestic Subsidiaries that are Guarantors and other Pledged Foreign Subsidiaries; and Dispositions of the Capital Stock of Unpledged Foreign Subsidiaries to Company or any of its other Subsidiaries; and
(m) Dispositions of accounts receivable to collection agencies the aggregate face amount of which does not exceed $2,000,000.
(a) Company shall not use any portion of the Loan proceeds directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance Indebtedness of Company or others incurred to purchase or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any security in any transaction that is subject to Sections 13 or 14 of the Exchange Act.
(b) Company shall not, directly or indirectly, use any portion of the proceeds of the Loans (i) knowingly to purchase Ineligible Securities from the Arranger during any period in which the Arranger makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by the Arranger, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by the Arranger and issued by or for the benefit of Company or any Affiliate of Company. The Arranger is a registered broker-dealer and permitted to underwrite and deal in certain Ineligible Securities.
PERIOD LEVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 6.00 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
Fiscal Year 2000 5.75 to 1.00
Four Fiscal Quarter Period ending on the last day of the First Fiscal Quarter of 5.25 to 1.00
Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second Fiscal Quarter 5.00 to 1.00
of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third Fiscal Quarter of 4.50 to 1.00
Fiscal Year 2001
Fiscal Year 2001 4.25 to 1.00
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PERIOD INTEREST
------ COVERAGE RATIO
--------------
First Fiscal Quarter of Fiscal Year 2000 1.6 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 1.6 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 1.7 to 1.00
Fiscal Year 2000 1.8 to 1.00
Four Fiscal Quarter Period ending on the last day of the First Fiscal 1.9 to 1.00
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second Fiscal 2.0 to 1.00
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third Fiscal 2.1 to 1.00
Quarter of Fiscal Year 2001
Fiscal Year 2001 2.2 to 1.00
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PERIOD MINIMUM
------ CONSOLIDATED EBITDA
-------------------
($ in millions)
First Fiscal Quarter of Fiscal Year 2000 $ 102
First Two Fiscal Quarter Period of Fiscal Year 2000 $ 205
First Three Fiscal Quarter Period of Fiscal Year 2000 $ 320
Fiscal Year 2000 $ 440
Four Fiscal Quarter Period ending on the last day of the First Fiscal $ 465
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second Fiscal $ 490
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third Fiscal $ 510
Quarter of Fiscal Year 2001
Fiscal Year 2001 $ 540
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(a) engage in any transaction in connection with which Company or any of its Subsidiaries or any of their respective ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i) or 502(l) of ERISA or a tax imposed by Section 4975 of the Code, in either case in an amount in excess of $5,000,000;
(b) fail to make full payment within five Business Days after the date when due of all amounts exceeding $5,000,000 which, under the provisions of any Pension Plan, Company or any of its Subsidiaries or any of their respective ERISA Affiliates is required to pay as contributions thereto, or (as to any Subsidiary organized under the laws of any of the United States) permit to exist any accumulated funding deficiency, whether or not waived, with respect to any Pension Plan in an aggregate amount greater than $5,000,000;
(c) permit the Funded Current Liability Percentage for any Pension Plan to be less than 90%; or
(d) fail to make any payments in an aggregate amount greater than $5,000,000 to any Multiemployer Plan that Company or any of its Subsidiaries, or any of their respective ERISA Affiliates may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto.
As used in this Section, the term "accumulated funding deficiency" has the meaning specified in Section 3(23) of ERISA and Section 412 of the Code and the term "accrued benefit" has the meaning specified in Article 3 of ERISA.
(b) cash and cash equivalents;
(c) advances to officers, directors and employees of Company or any of their respective Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes;
(d) extensions of credit to customers or suppliers of Company or any of its Subsidiaries in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof;
(e) Investments permitted by Section 7.4;
(f) intercompany loans permitted by Sections 7.1(g), 7.1(h), 7.1(i), and 7.1(j);
(g) Investments by Company in any wholly-owned Subsidiary that is a Guarantor and Investments of any wholly-owned Domestic Subsidiary that is a Guarantor in Company or any other wholly-owned Domestic Subsidiary that is a Guarantor;
(h) Investments by Pledged Foreign Subsidiaries in other Pledged Foreign Subsidiaries;
(i) Investments by Unpledged Foreign Subsidiaries in other Unpledged Foreign Subsidiaries;
(k) Investments by Company in any of its Subsidiaries and other Investments of any of its Subsidiaries in Company or any of its other Subsidiaries on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(l) other Investments not exceeding $25,000,000 at any time.
(a) Operating Leases in existence on the Closing Date; and
(b) Operating Leases entered into or assumed by Company or any Subsidiary after the date hereof in the ordinary course of business.
(a) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of any Indebtedness (other than Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement), or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate or make less onerous any such event or default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Indebtedness (or a trustee or other representative on their behalf) which would be materially adverse to Company or to Banks. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement without the written consent of Majority Banks if the effect of such amendment is to extend the stated maturity date thereof or increase the aggregate commitments thereunder. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement to provide for an earlier stated maturity date unless this Agreement is amended to provide for the same maturity date.
(b) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of the Receivables Transfer Agreements other than amendments to extend the term thereof or to preserve the arm's length nature of the purchase and sale effected thereby.
Maximum Capital
Fiscal Year Expenditures
----------- ------------
2000 $60,000,000
2001 $60,000,000
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ARTICLE VIII
(i) A court having jurisdiction shall enter a decree or order for relief in respect of Company or any of its Material Subsidiaries in an involuntary case under any applicable Debtor Relief Laws, which decree or order is not stayed; or any other similar relief shall be granted under any applicable Debtor Relief Laws; or
(ii) A decree or order of a court having jurisdiction for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer
having similar powers over Company or any of its Material Subsidiaries or over all or a substantial part of their property, shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Company or any of its Material Subsidiaries for all or a substantial part of their property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of Company or any of its Material Subsidiaries, and the continuance of any such events described in this subsection (f)(ii) for 60 days unless stayed, dismissed, bonded or discharged; or
(iii) an involuntary case under any applicable Debtor Relief Laws shall have been commenced against Company or any of its Material Subsidiaries and shall not have been dismissed within 60 days after the commencement of such case; or
withdrawal from such Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have notified such withdrawing employer that such employer has incurred a withdrawal liability in an amount exceeding $20,000,000; or
(a) declare the Commitment of each Bank to be terminated, whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment, demand, request, protest or other notice of any kind, all of which are hereby expressly waived by Company;
ARTICLE IX
such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(a) Agent and Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Company), independent accountants and other experts selected by Agent or Collateral Agent. Agent and Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless Agent or Collateral Agent, as the case may be, shall first receive such advice or concurrence of Majority Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of Majority Banks (or all of Banks if required hereunder) and such request and any action taken or failure to act pursuant thereto shall be binding upon all of Banks. Where this agreement expressly permits or prohibits an action unless Majority Banks otherwise determine,
and in all other instances, Agent or Collateral Agent, as the case may be, may, but shall not be required to, initiate any solicitation for the consent or a vote of Banks.
(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by Agent or Collateral Agent to such Bank for consent, approval, acceptance, or satisfaction, required thereunder to be consented to or approved by or acceptable or satisfactory to the Bank.
Subsidiaries or Affiliates which may come into the possession of any Agent Related Person or any Collateral Agent-Related Person.
(a) If any Bank is a "foreign corporation, partnership or trust" within the meaning of the Code and such Bank claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of Agent, to deliver to Agent and Company:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, two properly completed and executed copies of IRS Form 1001 (or any successor form) before the payment of any interest in the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Bank, two properly completed and executed copies of IRS Form 4224 (or any successor form) before the payment of any interest is due in the first taxable year of such Bank and in each succeeding taxable year of such Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 (or any successor form) and such Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to notify Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Company to such Bank. To the extent of such percentage amount, Agent will treat such Bank's IRS Form 1001 (or any successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by filing IRS Form 4224 (or any successor form) with Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax, Agent may withhold from any interest payment to such Bank an amount equivalent to the applicable withholding tax after taking into account such reduction. However, if the forms or other documentation required by subsection (a) of this Section are not delivered to Agent, then Agent may withhold from any interest payment to such Bank not providing such forms or other documentation an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank failed to notify Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Bank shall indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent under this Section, together with all costs and expenses (including Professional Costs). The obligation of Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.
agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Agent at such sale.
ARTICLE X
(a) increases or extends the Commitment of any Bank or reinstates any Commitment terminated pursuant to Section 8.2;
(b) postpones, extends or delays any date fixed for any payment of principal, interest, fees or other amounts due to the Banks (or any of them) hereunder or under any Loan Document;
(c) reduces the principal of, or the rate of interest specified herein on any Loan, or of any fees or other amounts payable hereunder or under any Loan Document or any mandatory reduction of the Aggregate Commitment pursuant to Section 2.6;
(d) changes the Commitment Percentage or the aggregate unpaid principal amount of the Loans which shall be required for the Banks or any of them to take any action hereunder;
(e) changes the definition of Majority Banks or the number of Banks required to take any action under this Agreement; or
(f) amends this Section 10.1 or Sections 2.11 or 2.12 or 2.13;
transmission, or delivered, to the address or number specified for notices on the applicable signature page hereof; or, as to Company or Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as to each other party, at such other address as shall be designated by such party in a written notice to Company and Agent.
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II or IX shall not be effective until actually received by Agent.
(c) Company acknowledges and agrees that any agreement of Agent and Banks in Article II to receive certain notices by telephone and facsimile is solely for the convenience and at the request of Company. Agent and Banks shall be entitled to rely on the authority of any Person purporting to be a Person authorized by Company to give such notice and Agent and Banks shall not have any liability to Company or other Person on account of any action taken or not taken by Agent and Banks in reliance upon such telephonic or facsimile notice. The obligation of Company to repay the Loans shall not be affected in any way or to any extent by any failure by Agent and Banks to receive written confirmation of any telephonic or facsimile notice or the receipt by Agent and Banks of a confirmation which is at variance with the terms understood by Agent and Banks to be contained in the telephonic or facsimile notice.
(a) Whether or not the transactions contemplated hereby are consummated, pay or reimburse Bank of America (including in its capacity as Agent) promptly after demand, for all reasonable costs and expenses incurred by Bank of America (including in its capacity as Agent) in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Professional Costs and other professional fees incurred by Bank of America (including in its capacity as Agent) with respect thereto;
(b) Subject to the limitations set forth therein, pay or reimburse
Agent promptly after demand, for all reasonable costs and expenses incurred by
Agent (including the fees, expenses and disbursements of any auditors,
accountants, advisors and agents employed or retained by Agent or its counsel)
in connection with obtaining and reviewing the information provided under
Section 6.1 or 6.7;
(c) Pay or reimburse Agent, Collateral Agent, the Arranger and each Bank within five Business Days after demand, for all costs and expenses (including Professional Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding);
(d) Pay or reimburse Agent and Collateral Agent promptly after demand, for all the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral Agent on behalf of Banks pursuant to any Collateral Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, and reasonable fees, expenses and disbursements of counsel to Agent and Collateral Agent and of counsel providing any opinions that Agent, Collateral Agent or Majority Banks may request in respect of the Collateral Documents or the Liens created pursuant thereto; and
(e) Pay or reimburse Collateral Agent promptly after demand, for all reasonable costs and expenses incurred by Collateral Agent in connection with the custody and preservation of the Collateral.
force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Bank severally agrees to pay to Agent upon demand its pro rata share of any amount so recovered from or repaid by Agent.
(A) a Bank may enter into an assignment and delegation of less than $5,000,000 if such assignment and delegation consists of such Bank's entire interest;
(C) Company and Agent may continue to deal solely and directly with such Bank in connection with the interest so assigned to an Assignee until (A) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to Company and Agent by such Bank and the Assignee; (B) such Bank and its Assignee shall have delivered to Company and Agent an Assignment and Acceptance and any Note or Notes subject to such assignment; and (C) the assignor Bank or Assignee has paid Agent a processing fee of $3,500.
(b) From and after the date that Agent notifies the assignor Bank that it has provided its consent to and received an executed Assignment and Acceptance and payment of the processing fee of $3,500, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights and obligations hereunder and the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than any rights of indemnity) and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, Company shall execute and deliver to Agent, new Notes evidencing such Assignee's assigned Loans and, if the assignor Bank has retained a portion of its Loans, replacement Notes in the principal amount of the Loans retained by the assignor Bank (such Notes to be in exchange for, but not in payment of, the Notes held by such Bank). Immediately upon each Assignee's making its payment under the Assignment and Acceptance, this Agreement, shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee. If an assignor Bank has not retained a portion of its Loans, such Bank shall mark its Notes "superseded" and return such Notes to Agent for delivery to Company.
(e) Notwithstanding any other provision in this Agreement, any Bank may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement (and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR (S) 203.14, and may assign all or any portion of its rights under or interests in this Agreement (and the Notes held by it) to any Affiliate for purposes of creating such a security interest or pledge, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
directed, of addresses of each of its Lending Offices, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as Agent shall reasonably request.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES; PROVIDED THAT AGENT, COLLATERAL AGENT,
BANKS, AND COMPANY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
10.19 Waiver of Jury Trial. COMPANY, BANKS, AGENT AND COLLATERAL AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. COMPANY, BANKS, COLLATERAL AGENT AND AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
ARTICLE XI
11.2 Notwithstanding anything hereunder to the contrary, this Article XI shall not release or alter any obligation arising subsequent to the date hereof to comply with the terms and conditions of this Agreement and the other Loan Documents. It is expressly understood and agreed that it is the intent of Company to forever release certain claims against Agent, Collateral Agent and Banks, including, but not limited to, any claims related to the actions and omissions of Releasees prior to the date hereof, but that nothing herein shall affect the obligations of the
Releasees arising subsequent to the date hereof, including, but not by way of limitation, compliance subsequent to the date hereof with all terms and conditions of this Agreement and the other Loan Documents.
11.3 Without limiting the generality of the foregoing, Company for itself and on behalf of the other Releasors expressly releases any and all past, present and future claims in connection with the Released Matters, about which the Releasors do not know or suspect to exist in their favor, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect Company's decision to enter into this release, and to this end Company for itself, and on behalf of each of the other Releasors, waives all rights under Section 1542 of the Civil Code of California, which states in full as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Company knowingly and willingly waives the provisions of Section 1542 and acknowledges and agrees that this waiver is an essential and material term of this release. Company has reviewed this release with Company's legal counsel, and Company understands and acknowledges the significance and consequence of this release and of the specific waiver of Section 1542 of the Civil Code of California.
11.4 Company represents, warrants and agrees that in executing and entering into this release, Company is not relying and has not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Agreement or the other Loan Documents. Company understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to Company or believed by Company to be true. Nevertheless, Company intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and shall not be subject to termination, modification or rescission by reason of any such difference in facts.
C. It is a condition precedent to the effectiveness of the Credit Agreement that Grantors listed on the signature pages hereof shall have granted the security interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks to enter into the Credit Agreement, each Grantor hereby agrees with Secured Party as follows:
(ii) all rights, title and interest (including rights acquired pursuant to a license or otherwise) in and to all patents and patent applications and rights and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned or held by such Grantor and all patents and patent applications and rights, title and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned by such Grantor in whole or in part (including, without limitation, the patents and patent
(g) all information used or useful or arising from the business including all goodwill, trade secrets, trade secret rights, know-how, customer lists, processes of production, ideas, confidential business information, techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section 1, all other general intangibles (including tax refunds, rights to payment or performance, choses in action and judgments taken on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and storage and office facilities, and all accessions thereto and products thereof;
(j) all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; and
Notwithstanding anything herein to the contrary, neither Company nor any Grantor shall be deemed to have granted a security interest in (i) any Principal Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any Pledged Debt of or issued by any Restricted Subsidiary.
(i) with respect to Company, all obligations and liabilities of every nature of Company now or hereafter existing under or arising out of or in connection with the Credit Agreement and the other Loan Documents, and
(ii) with respect to each Subsidiary Grantor and Additional Grantor, all obligations and liabilities of every nature of such Grantors now or hereafter existing under or arising out of or in connection with the Guaranty;
in each case together with all extensions or renewals thereof, whether for principal, interest (including without limitation interest that, but for the filing of a petition in bankruptcy with respect to Company or any other Grantor, would accrue on such obligations, whether or not a claim is allowed against Company or such Grantor for such interest in the related bankruptcy proceeding), fees, expenses, indemnities or otherwise, whether voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Secured Party, Agent or any Bank as a preference, fraudulent transfer or otherwise, and all obligations of every nature of Grantors now or hereafter existing under this Agreement.
(b) Any and all security interests, liens, rights and interest of Secured Party in and to any or all of the Collateral are subordinated to any and all security interests, liens, rights and interest of the several financial institutions party to the Bridge Credit Agreement from time to time in and to any or all of the Collateral pursuant to the Intercreditor Agreement.
Anything contained herein to the contrary notwithstanding, (a) each Grantor shall remain liable under any contracts and agreements included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under any contracts, licenses, and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Each Grantor represents and warrants as follows:
locations specified in Schedule 4(b), (iii) from a supplier or a Grantor to a processor, or (iv) to customers of a Grantor.
(i) a true and complete list of all Trademark Registrations and Trademark applications owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned by such Grantor, in whole or in part, that are material to such Grantor's business is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright Registrations and applications for Copyright Registrations owned by such Grantor, in whole or in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not aware of any pending or threatened claim by any third party that any of the Intellectual Property Collateral owned, held or used by such Grantor is invalid or unenforceable that is reasonably likely to have a Material Adverse Effect; and
(v) no effective security interest or other Lien covering all or any part of the Intellectual Property Collateral is on file in the United States Patent and Trademark Office or the United States Copyright Office.
interest granted hereby, (ii) at the reasonable request of Secured Party, deliver and pledge to Secured Party hereunder all promissory notes and other instruments (including checks) and all original counterparts of chattel paper constituting Collateral, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Secured Party, (iii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as Secured Party may request, in order to perfect and preserve the security interests granted or purported to be granted hereby, (iv) furnish to Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Secured Party may reasonably request, all in reasonable detail, (v) if requested by Co-Agents, promptly after the acquisition by such Grantor of any item of Equipment that is covered by a certificate of title under a statute of any jurisdiction under the law of which indication of a security interest on such certificate is required as a condition of perfection thereof, execute and file with the registrar of motor vehicles or other appropriate authority in such jurisdiction an application or other document requesting the notation or other indication of the security interest created hereunder on such certificate of title, (vi) within 45 days after the end of each fiscal quarter of Company, deliver to Secured Party copies of all such applications or other documents filed during such fiscal quarter and copies of all such certificates of title issued during such fiscal quarter indicating the security interest created hereunder in the items of Equipment covered thereby, (vii) at any reasonable time, upon request by Secured Party, exhibit the Collateral to and allow inspection of the Collateral by Secured Party, or persons designated by Secured Party, and (viii) at Secured Party's request, appear in and defend any action or proceeding that may affect such Grantor's title to or Secured Party's security interest in all or any part of the Collateral. Each Grantor hereby authorizes Secured Party to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of any Grantor. Each Grantor agrees that a carbon, photographic or other reproduction of this Agreement or of a financing statement signed by such Grantor shall be sufficient as a financing statement and may be filed as a financing statement in any and all jurisdictions.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy of insurance covering the Collateral, except where such violation would not have a Material Adverse Effect;
V-1O
(b) notify Secured Party of any change in such Grantor's name, identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in such Grantor's chief place of business, chief executive office or residence or the office where such Grantor keeps its records regarding the Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire rights in or the use of any Collateral, use such value for such purposes; and
(e) except as otherwise not prohibited by the Credit Agreement, pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, services, materials and supplies) against, the Collateral.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the places therefor specified on Schedule 4(b), or upon 30 days' prior written notice to Secured Party, at such other places in jurisdictions where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Equipment and Inventory shall have been taken;
(b) except as otherwise permitted by Section 6.6 of the Credit Agreement, cause the Equipment owned by such Grantor to be maintained and preserved in the same condition, repair and working order as when new, ordinary wear and tear excepted, and in accordance with such Grantor's past practices, and shall forthwith make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Each Grantor shall promptly furnish to Secured Party a statement respecting any material loss or damage to the Equipment owned by such Grantor, but only to the extent that such loss or damage is material to the Equipment owned by Company and its Subsidiaries, taken as a whole;
(c) keep correct and accurate records of Inventory owned by such Grantor, itemizing and describing the kind, type and quantity of such Inventory, and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of such Grantor's agents or processors, within 30 days of the Closing Date (with respect to existing agents or processors) and promptly after any such Inventory comes into the possession or control of such Grantor's agents or processors (with respect to future agents or processors), instruct such agent or processor to hold all such Inventory for the account of Secured Party and subject to the instructions of Secured Party, and use commercially reasonable efforts, but at no out-of-pocket cost to such Grantor, to obtain waivers or bailee letters in form and substance reasonably
satisfactory to Collateral Agent from all public warehouses in which Inventory is maintained and all such agents or processors; and
(e) each Grantor shall, at its own expense, maintain insurance with respect to the Equipment and Inventory in accordance with the terms of the Credit Agreement.
(a) Each Grantor shall keep its chief place of business and chief executive office and the office where it keeps its records concerning the Accounts and Related Contracts, and all originals of all chattel paper that evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon 30 days' prior written notice to Secured Party, at such other location in a jurisdiction where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Accounts and Related Contracts shall have been taken. Each Grantor will hold and preserve such records and chattel paper and will permit representatives of Secured Party at any time during normal business hours to inspect and make abstracts from such records and chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. Promptly upon the request of Secured Party, each Grantor shall deliver to Secured Party complete and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the date on which each Account of such Grantor arose, maintain (i) complete records of such Account, including records of all payments received, credits granted and merchandise returned, and (ii) all documentation relating thereto.
checks and other instruments) received by such Grantor in respect of the Accounts and the Related Contracts shall be received in trust for the benefit of Secured Party hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or delivered to Secured Party in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by Section 16 hereof, and (ii) such Grantor shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any account debtor or obligor thereof, or allow any credit or discount thereon.
Upon the occurrence and during the continuation of an Event of Default, (i) upon written notice from Secured Party to any Grantor, all rights of such Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to exercise such voting and other consensual rights; (ii) all rights of such Grantor to receive the dividends, other distributions and interest payments which it would otherwise be authorized to receive and retain pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to receive and hold as Securities Collateral such dividends, other distributions and interest payments; and (iii) all dividends, principal, interest payments and other distributions which are received by such Grantor contrary to the provisions of subsection (ii) of the immediately preceding paragraph or subsection (ii) above shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of such Grantor and shall forthwith be paid over to Secured Party as Securities Collateral in the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Secured Party all such proxies, dividend payment orders and other instruments as Secured Party may from time to time reasonably request, and (ii) without limiting the effect of subsection (i) above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Shares would be entitled (including giving or withholding written consents of shareholders or other holders of equity interests, calling special meetings of shareholders or other holders of equity interests and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Shares on the record books of the issuer thereof) by any other Person (including the issuer of the Pledged Shares or any officer or agent thereof), upon the occurrence of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the Intellectual Property Collateral and at all times keep at least one complete set of its records concerning such Collateral at its chief executive office or principal place of business;
(ii) use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision that could or might in any way impair or prevent the creation of a security interest in, or the
assignment of, such Grantor's rights and interests in any property included within the definitions of any Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of all trade secrets relating to the products and services sold or delivered under or in connection with the Intellectual Property Collateral, including, without limitation, where appropriate entering into confidentiality agreements with employees and labeling and restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its use of any of the Intellectual Property Collateral, except where the failure to give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which may be consistent with such Grantor's past practices) in the manufacture, sale and delivery of products and services sold or delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured Party's reasonable request statements and schedules further identifying and describing any Intellectual Property Collateral and such other reports in connection with such Collateral, all in reasonable detail.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to commence and prosecute in its own name, as real party in interest, for its own benefit and at its own expense, such suits, proceedings or other actions for infringement, unfair competition, dilution, misappropriation or other damage, or reexamination or reissue proceedings as are necessary to protect the Intellectual Property Collateral. Secured Party shall provide, at such Grantor's expense, all reasonable and necessary cooperation in connection with any such suit, proceeding or action including, without limitation, joining as a necessary party. Each Grantor shall, within 45 days after the end of each fiscal quarter of Company, notify Secured Party of the institution of, or of any adverse determination likely to have a Material Adverse Effect in, any proceeding (whether in the United States Patent and Trademark Office, the United States Copyright Office or any federal, state, local or foreign court) or regarding such Grantor's ownership, right to use, or interest in any Intellectual Property Collateral. Each Grantor shall provide to Secured Party any information with respect thereto requested by Secured Party.
requirement that any monetary payment whatsoever be made to such Grantor. In addition, each Grantor hereby grants to Secured Party and its employees, representatives and agents the right to visit such Grantor's and any of its Affiliate's or subcontractor's plants, facilities and other places of business that are utilized in connection with the manufacture, production, inspection, storage or sale of products and services sold or delivered under any of the Intellectual Property Collateral (or which were so utilized during the prior six month period), and to inspect the quality control and all other records relating thereto upon reasonable advance written notice to such Grantor and at reasonable dates and times and as often as may be reasonably requested. To the extent that the Credit Agreement permits any Grantor to license the Intellectual Property Collateral, Secured Party shall promptly enter into a non-disturbance agreement or other similar arrangement, at such Grantor's request and expense, with such Grantor and any licensee of any Intellectual Property Collateral permitted hereunder in form and substance reasonably satisfactory to Secured Party pursuant to which (i) Secured Party shall agree not to disturb or interfere with such licensee's rights under its license agreement with such Grantor so long as such licensee is not in default thereunder, and (ii) such licensee shall acknowledge and agree that the Intellectual Property Collateral licensed to it is subject to the security interest created in favor of Secured Party and the other terms of this Agreement.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor, Secured Party or otherwise, from time to time in Secured Party's discretion to take any action and to execute any instrument that Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with Sections 11(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of Default, to file any claims or take any action or institute any proceedings that Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit Agreement, to pay or discharge taxes or Liens (other than Liens permitted under this Agreement or the Credit Agreement) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of Default, to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do, at Secured Party's option and Grantors' expense, at any time or from time to time, all acts and things that Secured Party deems necessary to protect, preserve or realize upon the Collateral and Secured Party's security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
If any Grantor fails to perform any agreement contained herein, Secured Party may itself perform, or cause performance of, such agreement, and the expenses of Secured Party incurred in connection therewith shall be payable by Grantors under Section 17(b) hereof.
The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which Secured Party accords its own property.
such Grantor's equipment for the purpose of completing any work in process, taking any actions described in the preceding subsection (iii) and collecting any Secured Obligation, (v) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Secured Party's offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as Secured Party may deem commercially reasonable, (vi) exercise dominion and control over and refuse to permit further withdrawals from any Deposit Account maintained with Secured Party or any Bank constituting a part of the Collateral and (vii) without notice to any Grantor, transfer to or to register in the name of Secured Party or any of its nominees any or all of the Securities Collateral. Secured Party or any Bank may be the purchaser of any or all of the Collateral at any such sale and Secured Party, as agent for and representative of Banks (but not any Bank in its individual capacity unless Majority Banks shall otherwise agree in writing), shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by Secured Party at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Secured Obligations, Grantors shall be jointly and severally liable for the deficiency and the fees of any attorneys employed by Secured Party to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Secured Party, that Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and each Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their stated maturities.
and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Securities Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances and the registration rights granted to Secured Party by such Grantor pursuant hereto, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Securities Collateral for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it. If Secured Party determines to exercise its right to sell any or all of the Securities Collateral, upon written request, each Grantor shall and shall cause each issuer of any Pledged Shares to be sold hereunder from time to time to furnish to Secured Party all such information as Secured Party may request in order to determine the number of shares and other instruments included in the Securities Collateral which may be sold by Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.
(ii) If Secured Party shall determine to exercise its right to sell all or any of the Securities Collateral pursuant to this Section, each Grantor agrees that, upon request of Secured Party (which request may be made by Secured Party in its sole discretion), such Grantor will, at its own expense (A) execute and deliver, and cause each issuer of the Securities Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of Secured Party, advisable to register such Securities Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of Secured Party, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto; (B) use its best efforts to qualify the Securities Collateral under all applicable state securities or "Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Securities Collateral, as requested by Secured Party; (C) cause each such issuer to make available to its security holders, as soon as practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act; (D) do or cause to be done all such other acts and things as may be necessary to make such sale of the Securities Collateral or any part thereof valid and binding and in compliance with applicable law; and (E) bear all reasonable costs and expenses, including reasonable attorneys' fees, of carrying out its obligations under this Section.
(iii) Without limiting the generality of Sections 10.4 and 10.5 of the Credit Agreement, in the event of any public sale described herein, each Grantor agrees to indemnify and hold harmless (to the maximum extent permitted under the Securities Act or other applicable law) Secured Party and each Bank and each of their respective directors, officers, employees and agents from and against any loss, fee, cost, expense, damage, liability or claim, joint or several, to which any such Persons may become subject or for which any of them may be liable, under the Securities Act or otherwise, insofar as such losses, fees, costs, expenses, damages, liabilities or claims (or any litigation commenced or threatened in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, registration statement, prospectus or other such document published or filed in connection with such public sale, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will (to the maximum extent permitted under the Securities Act or other applicable law) reimburse Secured Party and such other Persons for any legal or other expenses reasonably incurred by Secured Party and such other Persons in connection with any litigation, of any nature whatsoever, commenced or threatened in respect thereof (including any and all fees, costs and expenses whatsoever reasonably incurred by Secured Party and such other Persons and counsel for Secured Party and such other Persons in investigating, preparing for, defending against or providing evidence, producing documents or taking any other action in respect of, any such commenced or threatened litigation or any claims asserted). This indemnity shall be in addition to any liability which any Grantor may otherwise have and shall extend upon the same terms and conditions to each Person, if any, that controls Secured Party or such Persons within the meaning of the Securities Act.
(a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of Default, (i) Secured Party shall have the right (but not the obligation) to bring suit, in the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property Collateral, in which event each Grantor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement and each Grantor shall promptly, upon demand, reimburse and indemnify Secured Party as provided in Sections 10.4 and 10.5 of the Credit Agreement and Section 17 hereof, as applicable, in connection with the exercise of its rights under this Section, and, to the extent that Secured Party shall elect not to bring suit to enforce any Intellectual Property Collateral as provided in this Section, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property Collateral by others and for that purpose agrees to use its commercially reasonable judgment in maintaining any action, suit or proceeding against any Person so infringing reasonably necessary to prevent such infringement; (ii) upon written demand from Secured Party, each Grantor shall execute and deliver to Secured Party an assignment or assignments of the Intellectual Property Collateral and such other documents as are necessary or appropriate to carry out the intent and purposes of this Agreement; (iii) each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Bank) receives cash proceeds in respect of the sale of, or other realization upon, the Intellectual Property Collateral; and (iv) within five Business Days after written notice from Secured Party, each Grantor shall make available to Secured Party, to the extent within such Grantor's power and authority, such personnel in such Grantor's employ on the date of such Event of Default as Secured Party may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with the Trademarks, Trademark Registrations and Trademark Rights, such persons to be available to perform their prior functions on Secured Party's behalf and to be compensated by Secured Party at such Grantor's expense on a per diem, pro- rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default.
Except as expressly provided elsewhere in this Agreement and in the Intercreditor Agreement, all proceeds received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to Secured Party and its agents and counsel, and all other expenses, liabilities and advances made or incurred by Secured Party in connection therewith, and all amounts for which Secured Party is entitled to indemnification hereunder and all advances made by Secured Party hereunder for the account of Grantors, and to the payment of all costs and expenses paid or incurred by Secured Party in connection with the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the ratable benefit of the holders thereof) and, as to obligations arising under the Credit Agreement, as provided in the Credit Agreement; and
THIRD: To the payment to or upon the order of Company, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds.
(a) Grantors jointly and severally agree to indemnify Secured Party and each Bank from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the extent such claims, losses or liabilities result solely from Secured Party's or such Bank's gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly and severally agree to pay to Secured Party upon demand (i) the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the administration of this Agreement or the failure by any Grantor to perform or observe any of the provisions hereof and (ii) the amount of any and all costs and expenses, including the fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the exercise or enforcement of any of the rights of Secured Party hereunder.
(c) The obligations of Grantors in this Section 17 shall (i) survive the termination of this Agreement and the discharge of Grantors' other obligations under this Agreement, the Credit Agreement and the other Loan Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject to the provisions of Section 1(b) thereof.
(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Secured Obligations and the cancellation or termination of the Commitments, (ii) be binding upon Grantors and their respective successors and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns. Without limiting the generality of the foregoing subsection (iii), but subject to the provisions of Sections 10.7 and 10.8 of the Credit Agreement, any Bank may assign or otherwise transfer any Loans held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Banks herein or otherwise.
(b) Upon the payment in full of all Secured Obligations and the cancellation or termination of the Commitments, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantors. Upon any such termination Secured Party will, at Grantors' expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination. In addition, upon the proposed sale, transfer or other disposition of any Collateral by a Grantor in accordance with the Credit Agreement for which such Grantor desires to obtain a security interest release from Secured
Party, such Grantor shall deliver an officers' certificate (i) stating that the Collateral subject to such disposition is being sold, transferred or otherwise disposed of in compliance with the terms of the Credit Agreement, and (ii) specifying the Collateral being sold, transferred or otherwise disposed of in the proposed transaction. Upon the receipt of such officers' certificate, Secured Party shall, at such Grantor's expense, so long as Secured Party has no reason to believe that the officers' certificate delivered by such Grantor with respect to such sale is not true and correct, execute and deliver such releases of its security interest in such Collateral which is to be so sold, transferred or disposed of, as may be reasonably requested by such Grantor.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed collateral agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
The initial Subsidiary Grantors hereunder shall be such of the Subsidiaries of Company as are signatories hereto on the date hereof. From time to time subsequent to the date hereof, additional Subsidiaries of Company may become parties hereto as additional Grantors (each an
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery.
No failure or delay on the part of Secured Party in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. The rules of construction set forth in Section 1.2 of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.
EACH GRANTOR, BANKS, AGENT AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GRANTOR, BANKS, AGENT AND SECURED PARTY
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
LEVI STRAUSS & CO.
By: _________________________________
Name:________________________________
Title:_______________________________
BANK OF AMERICA, N.A., as Collateral Agent, as Secured Party
By:__________________________________ Name:________________________________ Title:_______________________________
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
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V-Sch. A-1
V-Sch. 1(d)-1
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PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
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V-Sch. 1(e)(i)-1
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PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
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V-Sch. 1(e)(i)-2
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AMOUNT OF
DEBT ISSUER PAYEE INDEBTEDNESS
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V-Sch. 1(e)(ii)-1
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
V-Sch. 1(f)(i)-1
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- -------- -----
|
Applicant's Date Application Name Filed Number Invention [Inventor] ---- ----- ------ --------- -------- |
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- -------- -----
|
V-Sch. 1(f)(ii)-1
Applicant's Date Application Name Filed Number Invention [Inventor] ---- ----- ------ --------- ---------- |
V-Sch. 1(f)(ii)-2
U.S. Copyrights: --------------- Title Registration No. Date of Issue Registered Owner ----- ---------------- ------------- ---------------- |
Country Title Registration No. Date of Issue Registered Owner ------- ----- ---------------- ------------- ---------------- |
Title Reference No. Date of Application Copyright Claimant ----- ------------- ------------------- ------------------ |
Country Title Registration No. Date of Issue [Registered Owner] ------- ----- ---------------- ------------- ---------------- |
V-Sch. 1(f)(iii)-1
Name of Grantor Locations of Equipment and Inventory --------------- ------------------------------------ |
V-Sch. 4(b)-1
Name of Grantor Office Locations --------------- ---------------- |
V-Sch. 4(c)-1
Name of Grantor Other Names --------------- ----------- |
V-Sch. 4(d)-1
Grantor Filing Offices ------- -------------- |
V-Sch. 4(h)-1
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all trademarks, service marks, designs, logos, indicia, tradenames,
V-I-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
V-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
By:_____________________________
Name:___________________________
Title:__________________________
V-I-3
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
V-Sch. A-1
[FORM OF] GRANT OF PATENT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all patents and patent applications and rights and interests in patents and
V-II-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
V-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
By:__________________________
Name:________________________
Title:_______________________
V-II-3
Patent No. Issue Date Invention Inventor Registered Owner
---------- ---------- --------- -------- ----------------
Patents Pending:
---------------
Applicant's Date Application
Name Filed Number Invention Inventor
---- ----- ------ --------- --------
|
V-Sch. A-1
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) under copyright in various published and unpublished works of authorship including,
V-III-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Copyright Collateral granted hereby are
V-III-2
more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
V-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-III-4
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
V-Sch. A-1
|
[FORM OF] PLEDGE SUPPLEMENT
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of _______________.
[GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-IV-1
[FORM OF] IP SUPPLEMENT
["Grantor"] grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall be hereafter subject to each of the terms and conditions of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-V-1
[FORM OF] COUNTERPART
(i) authorizes the Secured Party to add the information set forth on the Schedules to this Agreement to the correlative Schedules attached to the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the items of property described on the Schedules hereto, shall become part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the Pledge and Security Agreement, as amended hereby, to the extent relating to the undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:______________________________
Name:____________________________
Title:___________________________
V-VI-1
EXHIBIT 10.8
[FORM OF] GUARANTY
C. A portion of the proceeds of the Loans may be advanced to Guarantors, and thus the Guarantied Obligations (as hereinafter defined) are being incurred for and will inure to the benefit of Guarantors (which benefits are hereby acknowledged).
D. It is a condition precedent to the effectiveness of the Credit Agreement that Company's obligations thereunder be guarantied by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks and Guarantied Party to enter into the Credit Agreement, Guarantors hereby agree as follows:
VI-1
Each Guarantor acknowledges that a portion of the Loans may be advanced to it, that Lender Letters of Credit may be issued for the benefit of its business and that the Guarantied Obligations are being incurred for and will inure to its benefit.
Any interest on any portion of the Guarantied Obligations that accrues after the commencement of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company (or, if interest on any portion of the Guarantied Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guarantied Obligations if said proceeding had not been commenced) shall be included in the Guarantied Obligations because it is the intention of each Guarantor and Guarantied Party that the Guarantied Obligations should be determined without regard to any rule of law or order that may relieve Company of any portion of such Guarantied Obligations.
In the event that all or any portion of the Guarantied Obligations is paid by Company, the obligations of each Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded or recovered directly or indirectly from Guarantied Party or any other Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments that are so rescinded or recovered shall constitute Guarantied Obligations.
Subject to the other provisions of this Section 1, upon the failure of Company to pay any of the Guarantied Obligations when and as the same shall become due, each Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate of the unpaid Guarantied Obligations.
VI-2
to Company or other affiliates of Company to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder and (ii) under any guaranty which contains a limitation as to maximum amount similar to that set forth in this Section 1(b), pursuant to which the liability of such Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution of such Guarantor pursuant to applicable law or pursuant to the terms of any agreement.
VI-3
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the benefit
of any Beneficiary in respect of this Guaranty or the Guarantied Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that Guarantied Party or the other Beneficiaries, or any of them, may
have against any such security, as Guarantied Party in its discretion may
determine consistent with the Credit Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (f) exercise any other rights available to
Guarantied Party or the other Beneficiaries, or any of them, under the Loan
Documents.
VI-4
Person, (iii) proceed against or have resort to any balance of any deposit
account or credit on the books of any Beneficiary in favor of Company or any
other Person, or (iv) pursue any other remedy in the power of any Beneficiary;
(b) any defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Company including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto or
by reason of the cessation of the liability of Company from any cause other than
payment in full of the Guarantied Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon Guarantied Party's or any other
Beneficiary's errors or omissions in the administration of the Guarantied
Obligations, except behavior that amounts to gross negligence or willful
misconduct; (e) (i) any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Guaranty and any legal
or equitable discharge of such Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any Lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Credit Agreement or any agreement
or instrument related thereto, notices of any renewal, extension or modification
of the Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Sections 3 and 4 hereof and any right to consent to any thereof; and (g) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
As used in this paragraph, any reference to "the principal" includes
Company, and any reference to "the creditor" includes Guarantied Party and each
other Beneficiary. In accordance with Section 2856 of the California Civil Code
(a) each Guarantor waives any and all rights and defenses available to it by
reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code, including without limitation any and all rights or defenses such
Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guarantied Obligations, or to any other guarantor of any
of the Guarantied Obligations with respect to any of such guarantor's
obligations under its guaranty, in either case pursuant to the antideficiency or
other laws of the State of California limiting or discharging the principal's
indebtedness or such guarantor's obligations, including without limitation
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and
(b) each Guarantor waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a Guarantied Obligation,
has destroyed such Guarantor's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise; and even though that election of remedies by the creditor, such as
nonjudicial foreclosure with respect to security for an obligation of any other
guarantor of any of the Guarantied Obligations, has destroyed such Guarantor's
rights of contribution against such other guarantor. No other provision of this
VI-5
Guaranty shall be construed as limiting the generality of any of the covenants and waivers set forth in this paragraph. As provided below, this Guaranty shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflicts of laws principles. This paragraph is included solely out of an abundance of caution, and shall not be construed to mean that any of the above-referenced provisions of California law are in any way applicable to this Guaranty or to any of the Guarantied Obligations.
Any indebtedness of Company now or hereafter held by any Guarantor is subordinated in right of payment to the Guarantied Obligations, and any such indebtedness of Company to a Guarantor collected or received by such Guarantor after an Event of Default has occurred and is continuing, and any amount paid to a Guarantor on account of any subrogation, reimbursement, indemnification or contribution rights referred to in the preceding paragraph when all Guarantied Obligations have not been paid in full, shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to be credited and applied against the Guarantied Obligations.
VI-6
VI-7
shall in any event be effective without the written concurrence of Guarantied Party and, in the case of any such amendment or modification, Guarantors. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
The rights, powers and remedies given to Beneficiaries by this Guaranty are cumulative and shall be in addition to and independent of all rights, powers and remedies given to Beneficiaries by virtue of any statute or rule of law or in any of the Loan Documents or any agreement between one or more Guarantors and one or more Beneficiaries or between Company and one or more Beneficiaries. Any forbearance or failure to exercise, and any delay by any Beneficiary in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.
In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty shall inure to the benefit of Beneficiaries and their respective successors and assigns.
VI-8
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW
EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
VI-9
(a) Guarantied Party has been appointed to act as Guarantied Party hereunder by Banks. Guarantied Party shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action, solely in accordance with this Guaranty and the Credit Agreement.
(b) Guarantied Party shall at all times be the same Person that is Agent under the Credit Agreement. Written notice of resignation by Agent pursuant to Section 9.9 of the Credit Agreement shall also constitute notice of resignation as Guarantied Party under this Guaranty; removal of Agent pursuant to Section 9.9 of the Credit Agreement shall also constitute removal as Guarantied Party under this Guaranty; and appointment of a successor agent pursuant to Section 9.9 of the Credit Agreement shall also constitute appointment of a successor Guarantied Party under this Guaranty. Upon the acceptance of any appointment as agent under Section 9.9 of the Credit Agreement by a successor agent, that successor agent shall thereupon succeed to become vested with all the rights, powers, privileges and duties of the retiring or removed Guarantied party under this Guaranty, and the retiring or removed Guarantied Party under this Guaranty shall promptly (i) transfer to such successor Guarantied Party all sums held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Guarantied Party under this Guaranty, and (ii) take such other actions as may be necessary or appropriate in connection with the assignment to such successor Guarantied Party of the rights created hereunder, whereupon such retiring or removed Guarantied Party shall be discharged from its duties and obligations under this Guaranty. After any retiring or removed Guarantied Party's resignation or removal hereunder as Guarantied Party, the provisions of this Guaranty shall inure to its benefits as to any actions taken or omitted to be taken by it under this Guaranty while it was Guarantied Party hereunder.
[The remainder of this page intentionally left blank.]
VI-10
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.
BATTERY STREET ENTERPRISES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS FINANCIAL CENTER CORPORATION
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS FUNDING LLC
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS GLOBAL FULFILLMENT SERVICES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
VI-11
LEVI STRAUSS GLOBAL OPERATIONS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
LEVI STRAUSS INTERNATIONAL
By:_________________________________
Name:_______________________________
Title:______________________________
LEVI STRAUSS LATIN AMERICA, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
LEVI'S ONLY STORES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
VI-12
NF INDUSTRIES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
ACKNOWLEDGED AND FOR PURPOSES
OF THE WAIVER OF JURY TRIAL SET
FORTH IN SECTION 14 ONLY, AGREED
AS OF THE DATE FIRST WRITTEN ABOVE
Bank of America, N.A., as Agent
By:_______________________________
Title: ___________________________
VI-13
[FORM OF] COUNTERPART FOR ADDITIONAL GUARANTORS
IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be duly executed and delivered by its officer thereunto duly authorized as of ______________, ____.
[NAME OF ADDITIONAL GUARANTOR]
By:__________________________
Name:________________________
Title:_______________________
VIII-Sch. 1-1
EXHIBIT 10.9
EXECUTION COPY
AMENDED AND RESTATED 1999 180 DAY CREDIT AGREEMENT
among
LEVI STRAUSS & CO.
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Documentation Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
and
BANK OF AMERICA, N.A.,
as Administrative Agent for Banks
and
BANK OF AMERICA, N.A.,
as Collateral Agent for Banks
dated as of January 31, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
1.1 Defined Terms...................................................................... 1
1.2 Other Interpretive Provisions...................................................... 27
1.3 Accounting Principles.............................................................. 28
ARTICLE II
THE CREDIT
2.1 Amounts and Terms of Commitments; the Credit....................................... 28
2.2 Notes; Loan Accounts............................................................... 29
2.3 Procedure for Borrowing............................................................ 29
2.4 Conversion and Continuation Elections.............................................. 30
2.5 Lender 180 Day Letters of Credit................................................... 32
2.6 Voluntary Termination or Reduction of Aggregate 180 Day Commitment; Voluntary
Prepayments........................................................................ 37
2.7 Mandatory Prepayments and Reductions of Aggregate 180 Day Commitment............... 38
2.8 Repayment; Scheduled Reductions of Aggregate 180 Day Commitment.................... 40
2.9 Interest........................................................................... 40
2.10 Fees............................................................................... 41
2.11 Computation of Fees and Interest................................................... 42
2.12 Payments by Company................................................................ 43
2.13 Payments by the Banks to Administrative Agent...................................... 44
2.14 Sharing of Payments, etc........................................................... 44
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes............................................................................... 45
3.2 Illegality.......................................................................... 46
3.3 Increased Costs and Reduction of Return............................................. 47
3.4 Funding Losses...................................................................... 48
3.5 Inability to Determine Rates........................................................ 48
3.6 Reserves on Offshore Rate Loans..................................................... 48
3.7 Certificates of Banks............................................................... 49
3.8 Substitution of Banks............................................................... 49
3.9 Survival............................................................................ 49
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Condition to Closing............................................................... 49
4.2 Conditions to Each Borrowing, Issuance of Lender 180 Day Letter of Credit.......... 53
4.3 Conditions Subsequent.............................................................. 53
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization, Powers, Good Standing, Business, Ownership of Subsidiaries and
Capitalization..................................................................... 54
5.2 Authorization of Borrowing, etc.................................................... 54
5.3 Financial Condition................................................................ 55
5.4 Title to Properties; Liens......................................................... 56
5.5 Litigation; Adverse Facts.......................................................... 56
5.6 Payment of Taxes................................................................... 56
5.7 Materially Adverse Agreements; Performance......................................... 56
5.8 Governmental Regulation............................................................ 57
5.9 ERISA Compliance................................................................... 57
5.10 Environmental Matters.............................................................. 57
5.11 Compliance With Laws............................................................... 58
5.12 Regulation U....................................................................... 58
5.13 Disclosure......................................................................... 58
5.14 Matters Relating to Collateral..................................................... 58
5.15 Intangible Assets.................................................................. 59
5.16 Insurance.......................................................................... 59
5.17 Year 2000.......................................................................... 59
5.18 Solvency........................................................................... 60
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements and Other Reports............................................. 60
6.2 Corporate Existence, etc........................................................... 63
6.3 Compliance With Laws, etc.......................................................... 64
6.4 Compliance with Agreements......................................................... 64
6.5 Payment of Taxes and Claims........................................................ 64
6.6 Maintenance of Properties; Insurance............................................... 64
6.7 Inspection......................................................................... 65
6.8 Use of Proceeds.................................................................... 65
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.9 Execution of Guaranty and Collateral Documents by Additional Subsidiaries.......... 66
6.10 Compliance with ERISA.............................................................. 67
6.11 Post Closing Actions............................................................... 67
6.12 Transfer of Receivables............................................................ 69
ARTICLE VII
NEGATIVE COVENANTS
7.1 Indebtedness; Derivative/FX Contracts.............................................. 69
7.2 Limitation on Liens and Negative Pledges........................................... 71
7.3 Dispositions....................................................................... 74
7.4 Fundamental Changes................................................................ 75
7.5 Use of Proceeds.................................................................... 75
7.6 Leverage Ratio..................................................................... 76
7.7 Interest Coverage Ratio............................................................ 76
7.8 Minimum Consolidated EBITDA........................................................ 77
7.9 Change in Business................................................................. 77
7.10 ERISA.............................................................................. 77
7.11 Investments........................................................................ 78
7.12 Restricted Payments................................................................ 79
7.13 Operating Lease Obligations........................................................ 79
7.14 Transactions with Affiliates....................................................... 79
7.15 Amendments of Documents Relating to Indebtedness and Receivables................... 79
7.16 Consolidated Capital Expenditures.................................................. 80
7.17 Materially Adverse Agreements...................................................... 80
7.18 Limitations on Upstreaming......................................................... 80
7.19 Change in Auditors................................................................. 80
7.20 Restricted Subsidiaries............................................................ 81
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default.................................................................... 81
8.2 Remedies............................................................................ 83
8.3 Rights Not Exclusive................................................................ 84
ARTICLE IX
ADMINISTRATIVE AGENT; COLLATERAL AGENT
9.1 Appointment and Authorization...................................................... 85
9.2 Delegation of Duties............................................................... 85
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TABLE OF CONTENT
(CONTINUED)
PAGE
9.3 Liability of Administrative Agent or Collateral Agent.............................. 85
9.4 Reliance by Administrative Agent and Collateral Agent.............................. 86
9.5 Notice of Default.................................................................. 86
9.6 Credit Decision; Disclosure of Information by Administrative Agent and Collateral
Agent.............................................................................. 86
9.7 Indemnification of Administrative Agent and Collateral Agent....................... 87
9.8 Administrative Agent in Individual Capacity........................................ 88
9.9 Successor Administrative Agent..................................................... 88
9.10 Successor Collateral Agent......................................................... 89
9.11 Withholding Tax.................................................................... 89
9.12 Co-Documentation Agents............................................................ 90
9.13 Collateral Documents, Guaranties and Intercreditor Agreement....................... 91
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers............................................................ 91
10.2 Notices........................................................................... 93
10.3 No Waiver; Cumulative Remedies.................................................... 93
10.4 Costs and Expenses................................................................ 93
10.5 Company's Indemnification......................................................... 94
10.6 Payments Set Aside................................................................ 95
10.7 Successors and Assigns............................................................ 95
10.8 Assignments, Participations, etc.................................................. 95
10.9 Confidentiality................................................................... 97
10.10 Set-off........................................................................... 98
10.11 Notification of Addresses, Lending Offices, etc................................... 98
10.12 Counterparts...................................................................... 98
10.13 Severability...................................................................... 98
10.14 No Third Parties Benefited........................................................ 98
10.15 Change in Accounting Principles................................................... 98
10.16 Governing Law and Jurisdiction.................................................... 99
10.17 Interpretation.................................................................... 99
10.18 Representation of Banks........................................................... 99
10.19 Waiver of Jury Trial..............................................................100
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ARTICLE XI
GENERAL RELEASE
EXHIBIT LIST
Exhibit I..........................................[FORM OF] NOTICE OF BORROWING Exhibit II...........................[FORM OF] NOTICE OF CONVERSION/CONTINUATION Exhibit III.......................................................[FORM OF] NOTE Exhibit IV......................................[FORM OF] COMPLIANCE CERTIFICATE Exhibit V .........................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY Exhibit VI...............................[FORM OF] PLEDGE AND SECURITY AGREEMENT Exhibit VII...................................................[FORM OF] GUARANTY Exhibit VIII.................................[FORM OF] ASSIGNMENT AND ACCEPTANCE Exhibit IX........................................................PRIVITY LETTER |
AMENDED AND RESTATED 1999 180 DAY CREDIT AGREEMENT
WHEREAS, pursuant to a Waiver dated as of November 12, 1999, Banks agreed to waive certain provisions of the Existing Credit Agreement until February 3, 2000; and
WHEREAS, Company has agreed to secure its Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of its personal property and certain of its real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital Stock of certain of its Foreign Subsidiaries (other than Restricted Subsidiaries); and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of their respective personal property and certain of their respective real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of their respective Domestic Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign Subsidiaries (other than Restricted Subsidiaries);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
Affiliates (including, in the case of Bank of America, the Arranger), and the officers, directors, employees, agents, counsel, and attorneys-in-fact of such Persons and Affiliates.
current liabilities (excluding any indebtedness for money borrowed having a maturity of less than 12 months from the date of the most recent consolidated balance sheet of Company but which by its terms is renewable or extendable beyond 12 months from such date at the option of the borrower), and (b) all goodwill, trade names, patents, unamortized debt discount and expense and any other like intangibles, all as set forth on the most recent consolidated balance sheet of Company and computed in accordance with generally accepted accounting principles.
shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, covered by such Guaranty Obligation or, if less, the amount to which such Guaranty Obligation is specifically limited, or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the person in good faith.
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than obligations under a long term supply contract), which purchase price is (i) due more than 90 days from the date of incurrence of the obligation in respect thereof, or (ii) evidenced by a note or similar written instrument, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(d) without duplication, lease payment obligations under Capital Leases or Synthetic Lease Obligations; and
(e) without duplication, all Guaranty Obligations of such Person in respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to Majority Banks.
(a) if any Interest Period pertaining to an Offshore Rate Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Maturity Date; and
(d) unless Administrative Agent otherwise consents, there may not be more than 24 Interest Periods for Offshore Rate Loans in effect at any time under this Agreement, the Bridge Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement.
1.333; and (iv) as of the end of any fiscal quarter thereafter, Consolidated EBITDA for the four fiscal quarter period then ended.
Where,
(a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(b) in the event that the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(c) in the event that the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by Administrative Agent as the rate of interest at which
Dollar deposits (for delivery on the first day of such Interest
Period) in same day funds in the approximate amount of the applicable
Offshore Rate Loan and with a term equivalent to such Interest Period
would be offered by Bank of America's London Branch to major banks in
the offshore Dollar market at their request at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period.
Federal Reserve System for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"). The Offshore Rate for each outstanding Offshore Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.
The determination of the Eurodollar Reserve Percentage and the Offshore Base Rate by Administrative Agent shall be conclusive in the absence of manifest error.
arrangement, with respect to the amount of such Permitted Foreign Receivables (based on the financial condition or circumstances of the obligor thereunder), other than such limited recourse as is reasonable given market standards for receivables purchase transactions that are treated as sales under GAAP, taking into account such factors as historical bad debt loss experience and obligor concentration levels.
Banks holding more than 90% of the then aggregate unpaid principal amount of the Loans.
(a) the declaration or payment of any dividend or other distribution by Company or any of its Subsidiaries, directly or indirectly, either in cash or property, on any shares of the Capital Stock of any class of Company or any of its Subsidiaries (except dividends or other distributions payable solely in shares of Capital Stock of Company or any of its Subsidiaries or payable by any Subsidiary to Company or to a wholly-owned Subsidiary of Company);
(b) the purchase, redemption or retirement by Company or any of its Subsidiaries of any shares of its Capital Stock of any class or any warrants, rights or options to purchase or acquire any shares of its Capital Stock, whether directly or indirectly (except the purchase, redemption or retirement of Capital Stock (or any such warrants, rights or options) held by Company or any wholly-owned Subsidiary of Company); and
(c) the prepayment, repayment, redemption, defeasance or other acquisition or retirement for value prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness not otherwise permitted under any Loan Document to be so paid.
then existing debts as they become absolute and matured considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person's capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and (b) such Person is "solvent" within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Commitment.
"United States" and "U.S." each means the United States of
------------- ----
America.
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(i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means "including without limitation."
(a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, consistently applied; except that, subject to Section 10.15, all financial computations required under this Agreement shall be made in accordance with GAAP as in effect on the Closing Date.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of Company. The fiscal quarters of Company end on the last Sunday in February, May, August, and November of each year. Each fiscal year of Company ends on the last Sunday in November of such year.
(c) References herein to "consolidated" and "consolidated basis" with reference to Company are to Company and its Subsidiaries on a consolidated basis.
ARTICLE II
(b) Within the limits of each Bank's Commitment and the Aggregate 180 Day Commitment, and subject to the other terms and conditions hereof, Company may borrow under this subsection, prepay under Section 2.6 or 2.7, and reborrow under this Section.
(c) Loans shall be denominated in Dollars.
(a) The Loans made by each Bank shall be evidenced by one or more loan accounts or records maintained by such Bank in the ordinary course of business. The loan accounts or records maintained by Administrative Agent and each Bank shall be conclusive evidence, absent manifest error, of the amount of the Loans made by Banks to Company and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of Company hereunder to pay any amount owing with respect to the Loans.
(a) Each Borrowing shall be made upon the irrevocable written notice (including notice via facsimile transmission or telephone call confirmed immediately by telephone call or facsimile transmission, respectively) of Company in the form of a Notice of Borrowing, which notice must be received by Administrative Agent not later than 9:00 a.m. San Francisco, California time:
(i) three Business Days prior to the requested Borrowing Date for Offshore Rate Loans; and
(ii) on the requested Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate minimum principal amount of $10,000,000 or any integral multiple of $5,000,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a Business Day;
(C) whether the Borrowing is to be comprised of Offshore Rate Loans or Base Rate Loans; and
(D) the duration of the Interest Period applicable to the Loans included in such notice which are Offshore Rate Loans. If the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Borrowing comprised of Offshore Rate Loans, such Interest Period shall be one month.
(b) Upon receipt of the Notice of Borrowing (or notice by telephone or facsimile transmission followed by prompt confirmation by facsimile transmission or telephone, respectively) Administrative Agent will promptly notify each Bank thereof and of the amount of such Bank's Commitment Percentage of the Borrowing.
(i) Each Bank will make the amount of its Commitment Percentage of the Borrowing available to Administrative Agent, in immediately available funds for the account of Company at Administrative Agent's Payment Office by 10:00 a.m. San Francisco, California time on the Borrowing Date requested by Company.
(ii) The proceeds of all such Loans will then be made available to Company by Administrative Agent at Administrative Agent's Payment Office by crediting Company's concentration account #12335-02255 on the books of Bank of America (or such other account with Bank of America as Company may hereafter designate in a written notice to Administrative Agent) with the aggregate of the amounts made available to Administrative Agent by Banks not later than 11:00 a.m. San Francisco, California time on such Borrowing Date; or will then be remitted by Administrative Agent to such other financial institution or institutions for the account or
accounts of such designees as Company shall designate from time to time in accordance with written instructions from Company delivered to Administrative Agent. To the extent that Loans made by Banks mature on any Borrowing Date, each Bank shall apply the proceeds of any Loans made on such Borrowing Date, to the extent thereof, to the repayment of such maturing Loans, such Loans and repayments intended to be a contemporaneous exchange.
(a) Company may upon irrevocable notice to Administrative Agent in accordance with Section 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Offshore Rate Loans; or
(ii) elect to convert on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Base Rate Loans; or
(b) Company shall deliver in writing (or by facsimile transmission confirmed immediately by a telephone call or by a telephone call confirmed immediately by a facsimile transmission), an irrevocable Notice of Conversion/Continuation to be received by Administrative Agent not later than 9:00 a.m. San Francisco, California time, at least three Business Days in advance of the Conversion/Continuation Date, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) with respect to Offshore Rate Loans, the duration of the requested Interest Period.
(c) (i) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, Company has failed to select a new Interest Period to be applicable to such Offshore Rate Loans, and if no Event of Default shall then exist, Company shall be
deemed to have elected to continue such Offshore Rate Loans as Offshore Rate Loans with an Interest Period of one month.
(ii) If an Event of Default exists at the time any Interest Period applicable to Offshore Rate Loans expires, Company shall be deemed to have elected to convert Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation (or telephonic notice in lieu thereof), Administrative Agent will promptly notify each Bank thereof, or, if no timely notice is provided, Administrative Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans with respect to which the notice was given or which are subject to automatic conversion held by each Bank.
(i) any lack of validity or enforceability of such Lender 180 Day Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) any amendment or waiver of or any consent to departure from such Lender 180 Day Letter of Credit, this Agreement, or any other agreement or instrument relating hereto or thereto;
(iii) the existence of any claim, setoff, defense, or other rights which Company may have at any time against such Issuing 180 Day Lender, Administrative
Agent, Collateral Agent or any Bank, any beneficiary of such Lender 180 Day Letter of Credit (or any persons or entities for whom any such beneficiary may be acting) or any other Person, whether in connection with such Lender 180 Day Letter of Credit, this Agreement, or any other agreement or instrument relating thereto, or any unrelated transactions ;
(iv) any demand, statement, or any other document presented under such Lender 180 Day Letter of Credit proving to be forged, fraudulent, invalid, or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever so long as any such document appeared to comply with the terms of the Lender 180 Day Letter of Credit;
(v) payment by such Issuing 180 Day Lender in good faith under such Lender 180 Day Letter of Credit against presentation of a draft or any accompanying document which does not strictly comply with the terms of such Lender 180 Day Letter of Credit; or any payment made by such Issuing 180 Day Lender under such Lender 180 Day Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Lender 180 Day Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity, condition, packing, value or delivery of any property purported to be represented by documents presented in connection with such Lender 180 Day Letter of Credit or for any difference between any such property and the character, quality, quantity, condition, or value of such property as described in such documents;
(vii) the time, place, manner, order or contents of shipments or deliveries of property as described in documents presented in connection with such Lender 180 Day Letter of Credit or the existence, nature and extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party issuing any documents in connection with such Lender 180 Day Letter of Credit;
(ix) any failure or delay in notice of shipments or arrival of any property;
(x) any error in the transmission of any message relating to such Lender 180 Day Letter of Credit not caused by such Issuing 180 Day Lender, or any delay or interruption in any such message;
(xi) any error, neglect or default of any correspondent of such Issuing 180 Day Lender in connection with such Lender 180 Day Letter of Credit;
(xii) any consequence arising from acts of God, wars, insurrections, civil unrest, disturbances, labor disputes, emergency conditions or other causes beyond the control of such Issuing 180 Day Lender;
(xiii) so long as such Issuing 180 Day Lender in good faith determines that the document appears to comply with the terms of the Lender 180 Day Letter of Credit, the form, accuracy, genuineness or legal effect of any contract or document referred to in any document submitted to such Issuing 180 Day Lender in connection with such Lender 180 Day Letter of Credit;
(xv) any other circumstances whatsoever where such Issuing 180 Day Lender has acted in good faith.
In addition, Company will promptly examine a copy of each Lender 180 Day Letter of Credit and amendments thereto delivered to them and, in the event of any claim of noncompliance with Company's instructions or other irregularity, Company will immediately notify the applicable Issuing 180 Day Lender in writing. Company shall be conclusively deemed to have waived any such claim against such Issuing 180 Day Lender and its correspondents unless such notice is given as aforesaid.
assign a Lender 180 Day Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.
(b) Subject to Section 3.4, Company may (from time to time) ratably prepay Loans in whole or in part in the minimum amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, upon notice to Administrative Agent given not later than 9:00 a.m. San Francisco, California time:
(i) at least three Business Days' prior to the proposed date of prepayment for Offshore Rate Loans; and
(ii) on the Business Day prior to the proposed date of prepayment for Base Rate Loans.
Each such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination thereof. In the event that Company fails to so specify, any voluntary prepayments of the Loans pursuant to this Section 2.6 shall be applied first to Base Rate Loans to the full amount thereof before application to Offshore Rate Loans. Such notice shall not thereafter be revocable by Company and Administrative Agent will promptly notify each Bank thereof and the amount of such Bank's Commitment Percentage of such prepayment. If such notice is given by Company, Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and the amounts required pursuant to Section 3.4.
Notice to Administrative Agent under this Section shall be in writing, signed by Company or may be by telephone notice promptly confirmed by notice sent by facsimile transmission.
Credit Agreement and/or deposit cash in a Cash Collateral Account in an aggregate amount equal to such excess.
(a) Company shall repay the principal amount of the outstanding Loans on the last day of the Availability Period together with interest thereon.
Date Scheduled Reduction
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May 25, 2000 $ 50,000,000
August 24, 2000 $ 50,000,000
November 22, 2000 $100,000,000
February 22, 2001 $ 50,000,000
May 24, 2001 $ 50,000,000
August 23, 2001 $100,000,000
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(b) Interest on each Loan shall be payable in arrears on each Interest Payment Date. Interest shall also be payable on the date of any prepayment of Loans pursuant to Section 2.6, 2.7 or 2.8 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during any period when principal of the Loans is due and payable, interest shall be payable on request for such payment by the holders of the Loans.
(c) While any Event of Default exists, Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law and including post-petition interest in any proceeding under any Debtor Relief Law) on the principal amount of all Loans, at a rate per annum equal to the Default Rate. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be payable upon demand.
(d) Anything herein to the contrary notwithstanding, the obligations of Company to any Bank hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest which may
be lawfully contracted for, charged or received by such Bank, and in such event Company shall pay such Bank interest at the lower of (i) the highest rate permitted by applicable law and (ii) the rates required by this Agreement.
(a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.
(b) Administrative Agent will notify Company and Banks of each determination of an Offshore Rate. Any failure by Administrative Agent to give such notice and any failure by Company and any Bank to receive such notice shall not relieve Company of any obligation to pay interest or provide the basis for any claim against Administrative Agent. Administrative Agent shall, upon request made by Company or any Bank from time to time, advise such Person(s) of the relevant applicable Offshore Rate(s).
(c) Each determination of an interest rate by Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on Company and Banks in the absence of manifest error.
(a) All payments (including prepayments) to be made by Company on account of principal, interest, fees and other amounts required hereunder shall be made without set-off or counterclaim and shall be made in Dollars to Administrative Agent for the ratable account of Banks at Administrative Agent's Payment Office. Such payments shall be made in immediately available funds and no later than 11:00 a.m. San Francisco, California time, on the date specified herein. Administrative Agent will promptly distribute to each Bank the amount of its Commitment Percentage (or other applicable share as expressly provided herein) of such principal, interest, fees or other amounts, in like funds as received. Any payment which is received by Administrative Agent later than 11:00 a.m. San Francisco, California time, shall be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of interest or fees, as the case may be, subject to the provisions set forth in the definition of "Interest Period" herein.
(c) Unless Administrative Agent shall have received notice from Company prior to the date on which any payment is due to Banks hereunder from Company that Company will not make such payment in full, Administrative Agent may assume that Company has made such payment in full to Administrative Agent on such date and Administrative Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent Company shall not have made such payment in full to Administrative Agent, each Bank shall repay to Administrative Agent, on request made by Administrative Agent, such amount distributed to such Bank, together with interest thereon for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to Administrative Agent, at the Federal Funds Rate as in effect for each such day.
(a) Unless Administrative Agent shall have received notice from a Bank at least one Business Day prior to the date of any proposed Borrowing (but prior to 10:00 a.m. San Francisco, California time, on the same day with respect to a Borrowing consisting of Base Rate Loans) that such Bank will not make available to Administrative Agent for the account of Company the amount of that Bank's Commitment Percentage of the Borrowing, Administrative Agent may assume that each Bank has made such amount available to Administrative Agent on the Borrowing Date and Administrative Agent may (but shall not be so required), in reliance upon such assumption, make available to Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to Administrative Agent and Administrative Agent in such circumstances has made available to Company such amount, that Bank shall on the next Business Day following such Borrowing Date make such amount available to Administrative Agent, together with interest at the Federal Funds Rate for and determined as of each day during such period.
(b) A certificate of Administrative Agent submitted to any Bank with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to Administrative Agent shall constitute such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to Administrative Agent on the next Business Day following such Borrowing Date, Administrative Agent shall notify Company of such failure to fund and, upon request for payment made by Administrative Agent, Company shall pay such amount to Administrative Agent for Administrative Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing.
(c) The failure of any Bank to make any Loan on any Borrowing Date shall not relieve any other Bank of any obligation hereunder to make a Loan on such Borrowing Date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
ARTICLE III
(a) Any and all payments by Company to each Bank or Administrative Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, Company shall pay all Other Taxes.
(b) If Company shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Bank, or Administrative Agent, then:
(i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Bank or Administrative Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;
(ii) Company shall make such deductions and withholdings;
(iii) Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and
(iv) Company shall also pay to each Bank or Administrative Agent for the account of such Bank, at the time interest is paid, Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) Company agrees to indemnify and hold harmless each Bank and
Administrative Agent for the full amount of (i) Taxes, (ii) Other Taxes, and
(iii) Further Taxes in the amount that the respective Bank specifies as
necessary to preserve the after-tax yield the Bank would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed, and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes
were correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank or Administrative Agent makes
written demand therefor.
(d) Within 30 days after the date of any payment by Company of Taxes, Other Taxes or Further Taxes, Company shall furnish to each Bank or Administrative Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Bank or Administrative Agent.
(e) Company will not be required to pay any additional amounts in respect of Section 3.1(b) to any Bank or Administrative Agent:
(i) if such Bank shall have delivered to Company a Form 1001 (or any successor form) pursuant to Section 9.11(a)(i), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or any applicable tax treaty or regulations or in the official interpretation of any such law, treaty or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 1001 (or any successor form); or
(ii) if such Bank shall have delivered to Company a Form 4224 (or any successor form) pursuant to Section 9.11(a)(ii), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 4224 (or any successor form).
(f) If, at any time, Company requests any Bank to deliver any forms or other documentation pursuant to Section 9.11(a)(iii), then Company shall, on demand of such Bank through Administrative Agent, reimburse such Bank for any costs and expenses (including Professional Costs) reasonably incurred by such Bank in the preparation or delivery of such forms or other documentation.
(g) If Company is required to pay additional amounts to any Bank or Administrative Agent pursuant to this Section 3.1, then such Bank or Administrative Agent, as the case may be, shall use its reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or take any other reasonable action so as to eliminate any such additional payment by Company which may thereafter accrue if such change, in the reasonable judgment of such Bank, is not otherwise materially disadvantageous to such Bank or Administrative Agent.
(a) If any Bank determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by the Bank to Company through Administrative Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies Administrative Agent and Company that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any Offshore Rate Loan, Company shall, upon receipt of notice of such fact and demand from such Bank (with a copy to Administrative Agent), prepay in full such Offshore Rate Loans of that Bank then outstanding, together with interest accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Offshore Rate Loans. If Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, Company shall borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, Company may elect, by giving notice to the Bank through Administrative Agent that all Loans which would otherwise be made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(a) If any Bank determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation, or (ii) the compliance by that Bank with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans in an amount deemed material by such Bank, then Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to Administrative Agent), pay to Administrative Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation; affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased in an amount deemed
material by such Bank as a consequence of its loans, credits or obligations
under this Agreement, then, upon request of such Bank (with a copy to
Administrative Agent), Company shall immediately pay to the Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate the
Bank for such increase.
(a) any failure of Company to make, on a timely basis, any payment or prepayment of principal of any Offshore Rate Loan (including payments made after any acceleration thereof);
(b) any failure of Company to borrow, continue or convert a Loan after Company has given (or are deemed to have given) a Notice of Borrowing or a Notice of Conversion/Continuation;
(c) any failure of Company to make any prepayment after Company has given a notice in accordance with Section 2.6;
(d) any prepayment of an Offshore Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or
(e) any conversion pursuant to Section 2.4 of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; or including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained.
Upon receipt of such notice, Company may revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted by Company. If Company does not revoke such notice, Banks shall make, convert or continue the Loans, as proposed by Company, in the amount specified in the applicable notice submitted by Company, but such Loans shall be made, converted or continued as Base Rate Loans instead of Offshore Rate Loans.
ARTICLE IV
(a) Administrative Agent shall have received, on or before the Closing Date, all of the following documents, in form and substance reasonably satisfactory to Administrative Agent and Majority Banks:
(A) Copies of the resolutions of the board of directors of each Borrower Party (or an authorized committee thereof) approving and authorizing the execution, delivery, and performance by such Borrower Party of the Loan Documents to which such Borrower Party is a party, certified as of the Closing Date by the Secretary or an Assistant Secretary of such Borrower Party.
(B) A certificate of the Secretary or an Assistant Secretary of each Borrower Party certifying, as of the Closing Date, the names and true signatures of the officers of such Borrower Party authorized to execute and deliver, as applicable, this Agreement, and all other Loan Documents to be delivered hereunder.
Each Notice of Borrowing and each Letter of Credit Application submitted by Company hereunder shall constitute a representation and warranty by Company hereunder, as of the date of each such application, request, notice, and disbursement date that the conditions in Section 4.2 are satisfied.
ARTICLE V
Company represents and warrants to Administrative Agent and each Bank that:
Agreement, Company and its Subsidiaries, taken as a whole, have no material
contingent obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment, which is not reflected in the
unaudited financial statements for its fiscal year ending November 28, 1999, the
notes thereto, or the most recent financial statements delivered pursuant to
Section 6.1 (if any), and which is required by GAAP to be reflected therein.
Since November 28, 1999, there has been no event or circumstance which has a
Material Adverse Effect.
(a) And except as would not have a Material Adverse Effect, each Plan
is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of any Borrower Party, nothing has
occurred which would cause the loss of such qualification. Company and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event that requires notice to be given to the PBGC
has occurred or is reasonably expected to occur; (ii) no Pension Plan has a
Funded Current Liability Percentage of less than 90%; (iii) neither Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan.
(a) The execution and delivery of the Collateral Documents by Borrower Parties, together with (i) the actions taken on or prior to the date hereof pursuant to Sections 4.1(a)(vii) and 4.1(a)(viii), (ii) the actions taken pursuant to Sections 6.9 and 6.11, and (iii) the delivery to Administrative Agent of any Pledged Collateral not delivered to Administrative Agent at the time of execution and delivery of the applicable Collateral Document (all of which Pledged Collateral has been so delivered) are effective to create in favor of Administrative Agent for the benefit of Banks, as security for the respective Secured Obligations (as defined in the applicable Collateral Document in respect of any Collateral), a valid and perfected Lien on all of the Collateral, a security interest in which may be perfected by filing in the United States or possession, and all filings and other actions necessary or desirable to perfect and maintain the perfection of such Liens have been duly made or taken and remain in full force and effect, other than the filing of any UCC financing statements delivered to Administrative Agent for filing (but not yet filed) and the periodic filing of UCC continuation statements in respect of UCC financing statements filed by or on behalf of Administrative Agent.
(b) No authorization, approval or other action by, and no notice to or filing with, any Government Authority in the United States is required for either (i) the pledge or grant by any Borrower Party of the Liens purported to be created in favor of Administrative Agent pursuant to any of the Collateral Documents, or (ii) the exercise by Administrative Agent of any rights or remedies in respect of any Collateral (whether specifically granted or created pursuant to any of the Collateral Documents or created or provided for by applicable law), except for filings or recordings contemplated by Section 5.14(a) and except as may be required, in connection with the disposition of any Pledged Collateral, by laws generally affecting the offering and sale of securities .
(c) The pledge of the Pledged Collateral pursuant to the Collateral Documents does not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) All information supplied to Administrative Agent by or on behalf of any Borrower Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects.
imbedded computer chips (including those of its and its Subsidiaries' customers and vendors) that are material to its or any of its Subsidiaries' business and operations are reasonably expected on a timely basis to be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so does not have a Material Adverse Effect.
ARTICLE VI
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall (except in the case of Company's reporting covenants) cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(a) Company shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP and in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over Company or any of its subsidiaries. Company shall deliver to Administrative Agent for distribution to Banks:
(i) as soon as practicable and in any event within 30 days after the end of each fiscal month, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event within 45 days after the end of each of the first three fiscal quarters of the fiscal year, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the result results of their
operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(iv) together with each delivery of any financial statements pursuant to Section 6.1(a)(ii) or 6.1(a)(iii) a Compliance Certificate from Company executed by a Responsible Officer, stating that the signer does not have knowledge of the existence as at the date of such certificate, of any condition or event which constitutes a Default or Event of Default, or, if any such condition or event existed at such date or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto, and demonstrating in reasonable detail compliance during or at the end of such accounting periods, as applicable, with Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.11 and 7.16; and, should there be any material change in GAAP as in effect as of the Closing Date, such Compliance Certificate shall include computations setting forth reconciliation of the items used in computing compliance with the covenants under this Agreement by reason of the differences between GAAP used in the preparation of such financial statements and GAAP as in effect as of the Closing Date;
(v) concurrently with the delivery of the financial statements referred to in Section 6.1(a)(iii), a certificate of Company's independent certified public accountants certifying such financial statement and stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default hereunder or, if any such Default or Event of Default shall exist, stating the nature and status of such event;
(vi) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, a cash flow forecast for Company and its Subsidiaries for the then following 13 weeks and a report setting forth the cash flows of Company and its Subsidiaries for the prior 13 weeks, together with an explanation of any
material variance between those results and the results previously projected for those 13 weeks;
(vii) (A) as soon as practicable and in any event no later than
10 Business Days after the end of each fiscal month, (1) a report setting forth
the details of (y) any Lender Derivative/FX Contract to which Company or FinServ
is a party, including the Termination Value of any such Lender Derivative/FX
Contract, and (z) all other outstanding unsecured Indebtedness of Company or any
of its Subsidiaries (including any letters of credit (other than Lender Bridge
Letters of Credit and Lender 180 Day Letters of Credit) issued for the benefit
of Company and its Subsidiaries) incurred in accordance with Section 7.1(r), and
(2) information with respect to all other Derivative/FX Contracts to which
Company or any of its Subsidiaries is a party, and (B) promptly upon request,
any other information concerning such Derivative/FX Contracts reasonably
requested by Administrative Agent;
(ix) promptly after the same are available, copies of each annual report or proxy statement sent to the stockholders of Company, and copies of all annual, regular, periodic and special reports and registration statements which Company may file or, if Company were subject to the Exchange Act, would be required to file with the Securities and Exchange Commission under Sections 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Administrative Agent pursuant hereto;
(x) promptly upon any Responsible Officer of Company obtaining knowledge of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Bank has given any written notice of a claimed Default or Event of Default, a certificate from Company, executed by a Responsible Officer of Company, specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken, and the nature of such claimed Default or Event of Default, event or condition, and what action Company has taken, is taking, and proposes to take with respect thereto;
(xi) promptly upon any Responsible Officer of Company obtaining knowledge of (A) the institution of, or non-frivolous threat of, any material action, suit, proceeding or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by Company to Administrative Agent, or (B) any material development in any action, suit, proceeding or arbitration already disclosed, and in each case Company reasonably expects such institution, threat, or material development to result in any Material Adverse
Effect or materially and adversely to affect the ability of Company and its Subsidiaries, taken as a whole, to perform the Obligations or the ability of Banks to enforce the Obligations, Company shall promptly give notice thereof to Administrative Agent and provide such other information (excluding communications covered by the attorney-client privilege) as may be reasonably requested by Administrative Agent or a Bank to enable their counsel to evaluate such matters;
(xii) promptly upon any Responsible Officer of Company becoming aware of its occurrence, notice of any of the following events affecting Company or any ERISA Affiliate (but in no event more than 10 days after such event), and such Responsible Officer shall also deliver to Administrative Agent and each Bank a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to Company or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a decrease in the Funded Current Liability Percentage for any Pension Plan at the end of any fiscal quarter to less than 90%; or
(xiii) promptly upon receipt thereof, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of Company by independent accountants in connection with the accounts or books of Company or any of its Subsidiaries, or any audit of any of them;
(xiv) promptly upon any discovery or determination that any computer application (including those of its suppliers and vendors) that is material to the business and operations of Company or any of its Subsidiaries will not be Year 2000 Compliant on a timely basis, except to the extent that such failure does not have a Material Adverse Effect, a notice thereof; and
(xv) promptly upon any Responsible Officer of Company becoming aware of its occurrence, a notice of any material change in accounting policies or financial reporting practices by Company or any of its Subsidiaries.
(b) Company will deliver to Administrative Agent for distribution to
each Bank together with the Compliance Certificate required under subsection
(iv) of subsection (a) of this Section, a copy of all press releases and other
statements made available generally by Company to the public during the period
covered by the Compliance Certificate. The press releases and such other
statements covered by this subsection are those which concern material
developments in the business of Company and its Subsidiaries taken as a whole.
(c) Company will deliver to Administrative Agent for distribution to each Bank copies of material financial and other information as Administrative Agent or Majority Banks may reasonably request from time to time.
(a) Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect. Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained, through self- insurance or with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all
such failures in the aggregate) have a Material Adverse Effect. From and after the date that is 30 days following the Closing Date, property, general liability, business interruption and automobile insurance policies shall (i) name Collateral Agent for the benefit of Banks as an additional insured thereunder with respect to all Collateral as its interests may appear and, in the case of property insurance, (ii) contain a loss payable subsection or endorsement, satisfactory in form and substance to Administrative Agent, that names Collateral Agent for the benefit of Banks as the loss payee thereunder for any covered loss with respect to all Collateral, as appropriate. Insurance policies shall provide for at least 30 days prior written notice to Administrative Agent of any material modification or cancellation of such policy.
(b) Upon receipt by Company or any of its Subsidiaries of any insurance proceeds constituting Net Insurance Proceeds, (i) so long as no Event of Default shall have occurred and be continuing, Company or such Subsidiary may retain and apply such Net Insurance Proceeds for working capital purposes, in the case of business interruption insurance proceeds, or to pay or reimburse the costs of repairing, restoring or replacing the assets (or substantially similar assets) in respect of which such Net Insurance Proceeds were received or, to the extent not so applied, as provided in Section 2.7, and (ii) if an Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance Proceeds as provided in Section 2.7.
(a) Company shall, and shall cause each of its Subsidiaries to, (i) permit any authorized representatives designated by a Bank, at the expense of that Bank, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, all upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested, and (ii) following the occurrence and during the continuation of an Event of Default, permit any authorized representatives designated by a Bank, at the expense of Company, to visit and inspect any of the properties of Company or any of its Subsidiaries, including their financial and accounting records, and to make copies and take extracts therefrom, and to discuss their affairs, finances and accounts with their officers and independent public accountants, immediately upon request by Administrative Agent.
(b) Company shall deliver to Administrative Agent, together with such
Loan Documents, (i) certified copies of such Subsidiary's Organization
Documents, together with a good standing certificate from the Secretary of State
of the jurisdiction of its organization and each other state in which such
Person is qualified to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a certificate executed by the secretary or similar
officer of such Subsidiary as to (A) the fact that the attached resolutions of
the board of directors of such Subsidiary approving and authorizing the
execution, delivery and performance of such Loan Documents are in full force and
effect and have not been modified or amended and (B) the incumbency and
signatures of the officers of such Subsidiary executing such Loan Documents, and
(iii) a favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent and its counsel, as to (A) the due
organization and good standing of such Subsidiary, (B) the due authorization,
execution and delivery by such Subsidiary of such Loan Documents, (C) the
enforceability of such Loan Documents against such Subsidiary, and (D) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
(c) In the event that (i) Company or any Material Domestic Subsidiary acquires any fee interest or leasehold interest in real property after the date hereof or (ii) at the time any Person becomes a Material Domestic Subsidiary, such Person owns or holds any fee interest or leasehold interest in real property, Company or such Material Domestic Subsidiary will notify Administrative Agent of that fact and deliver, or cause such Material Domestic Subsidiary to, execute and deliver to Administrative Agent, within 30 days of such Person acquiring such Property or becoming a Material Domestic Subsidiary, as the case may be, a fully executed and notarized Mortgage, in proper form for recording in all appropriate places in all
(i) On or prior to the date that is 60 days after the Closing Date, Company shall have delivered to Administrative Agent:
(B) An opinion of counsel (which counsel shall be reasonably satisfactory to Administrative Agent) in each state in which any such Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to Administrative Agent;
appropriate governmental authorities all expenses and premiums of the title company in connection with the issuance of the policies and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Mortgages in the appropriate real estate records;
(E) Copies of all recorded documents listed as exceptions to title or otherwise referred to in the policies or in the title reports delivered pursuant to subsection (D); and
(F) (1) Evidence, which may be in the form of a letter from an insurance broker or a municipal engineer, as to whether any Property is a Flood Hazard Property and the community in which any such Flood Hazard Property is located is participating in the National Flood Insurance Program; (2) if there are any such Flood Hazard Properties, Company's written acknowledgement of receipt of written notification from Administrative Agent (y) as to the existence of each such Flood Hazard Property and (z) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program; and (3) in the event that any such Flood Hazard Property is located in a community that participates in the National Flood Insurance Program, evidence that Company has obtained flood insurance in respect of such Flood Hazard Property to the extent required under the applicable regulations of the Board of Governors of the Federal Reserve System.
60 days after the execution of any such contract, Company will notify Administrative Agent of that fact and promptly take the actions described above with respect to such Property.
ARTICLE VII
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(b) Indebtedness under the Loan Documents;
(c) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds;
(d) Guaranty Obligations of Company guaranteeing the Indebtedness of Material Foreign Subsidiaries permitted under Section 7.1(r);
(e) Indebtedness of Company and the other Borrower Parties under the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement and the related loan documents;
(f) Indebtedness of Company in respect of Capital Leases not exceeding $5,000,000 in the aggregate at any time;
(h) Indebtedness of Pledged Foreign Subsidiaries to other Pledged Foreign Subsidiaries;
(i) Indebtedness of Unpledged Foreign Subsidiaries to Pledged Foreign Subsidiaries or other Unpledged Foreign Subsidiaries;
(j) Indebtedness of Company and its Subsidiaries (other than LSFCC or LSFLLC) to FinServ and Indebtedness of FinServ to Company and its other Subsidiaries (other than LSFCC or LSFLLC) in the ordinary course of business;
(l) Derivative/FX Contracts between Company or FinServ and FinServ and the other Subsidiaries of Company (other than LSFCC or LSFLLC) in the ordinary course of business;
(n) Indebtedness of Company and its Material Subsidiaries (other than LSFCC or LSFLLC) secured by Liens permitted under Section 7.2(h) not exceeding $25,000,000 in the aggregate at any time;
(s) Indebtedness of Company to any of its Subsidiaries and other Indebtedness of any of its Subsidiaries to Company or any of its other Subsidiaries outstanding on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(t) other Indebtedness of Company and its Subsidiaries not exceeding $5,000,000 in the aggregate at any time.
(b) Liens for taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.5;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the Property subject thereto or if such reserve or other appropriate provision, if any, required by GAAP shall have been made therefor;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(e) Liens securing (i) the performance of tenders, bids, trade contracts (other than for borrowed money), government contracts, leases, statutory obligations, and performance and return-of-money bonds, (ii) contingent obligations on surety and appeal bonds, and (iii) other obligations of a like nature; in each case, incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances that do not interfere with the ordinary conduct of the businesses of Company and its Subsidiaries;
(h) purchase money mortgages (including chattel mortgages) or other purchase money liens or conditional sale or other title retention or security agreements incurred by Company or any of its Material Subsidiaries (other than LSFCC or LSFLLC) in connection with the acquisition or construction of any real or personal property, or mortgages or liens or conditional sale or other title retention agreements or security agreements existing on any such
(i) any interest or title of a lessor under any Capital or Operating Lease permitted hereunder (other than any Equipment Financing Transaction);
(k) leases or subleases granted to others in the ordinary course of business not interfering with the ordinary conduct of the business of the grantor thereof;
(l) Liens attaching to ownership interests in joint ventures (whether in partnership, corporate or other form) engaged in the LOS/DOS Business or attaching to intellectual property rights relating to the LOS/DOS Business;
(m) Liens created in connection with (i) Equipment Financing Transactions and (ii) Real Estate Financing Transactions so long as (A) the aggregate amount of all such transactions permitted by this Section 7.2(m) at any time outstanding (as measured by the sum of all Indebtedness secured by such Liens then outstanding or to be so created or assumed) shall not exceed $175,000,000 and (B) Company shall cause, in connection therewith, the prepayments of Loans required by Section 2.7;
(n) Liens created pursuant to applications or reimbursement agreements pertaining to documentary letters of credit which encumber documents and other property relating to such documentary letters of credit and the products and proceeds thereof;
(o) Liens granted pursuant to the Collateral Documents;
(p) Liens securing Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement;
(q) Liens securing Ordinary Course Derivative/FX Contracts permitted by Section 7.1(r);
(r) other Liens so long as the aggregate outstanding amount of Indebtedness secured by such Liens does not exceed $2,000,000 at any time;
(s) Negative Pledges on accounts receivables of Foreign Subsidiaries and the associated assets of Foreign Subsidiaries in connection with Permitted Foreign Receivable Purchase Facilities;
(t) Negative Pledges on Intellectual Property licensed from third parties; and
(u) Negative Pledges with respect to specific property encumbered to secure payment of particular Indebtedness permitted hereunder.
(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory by Company or any of Subsidiaries to Company or any of its Subsidiaries in ordinary course of business arm's length transactions;
(c) Dispositions of inventory in the ordinary course of business;
(d) Dispositions of accounts receivable from Company to LSFCC and from LSFCC to LSFLLC;
(h) licenses of Intellectual Property in the ordinary course of business;
(i) the Pending IceHouse Disposition;
aggregate Investments permitted by Section 7.11(j) shall not exceed $50,000,000 in the aggregate during fiscal year 2000 or $100,000,000 in the aggregate during fiscal year 2001;
(l) Dispositions of the Capital Stock of Domestic Subsidiaries that are Guarantors to Company and wholly owned Domestic Subsidiaries that are Guarantors; Dispositions of the Capital Stock of Pledged Foreign Subsidiaries to Company, Domestic Subsidiaries that are Guarantors and other Pledged Foreign Subsidiaries; and Dispositions of the Capital Stock of Unpledged Foreign Subsidiaries to Company or any of its other Subsidiaries; and
(m) Dispositions of accounts receivable to collection agencies the aggregate face amount of which does not exceed $2,000,000.
(a) Company shall not use any portion of the Loan proceeds directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance Indebtedness of Company or others incurred to purchase or carry Margin Stock, (iii) to extend
credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any security in any transaction that is subject to Sections 13 or 14 of the Exchange Act.
(b) Company shall not, directly or indirectly, use any portion of the proceeds of the Loans (i) knowingly to purchase Ineligible Securities from the Arranger during any period in which the Arranger makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by the Arranger, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by the Arranger and issued by or for the benefit of Company or any Affiliate of Company. The Arranger is a registered broker-dealer and permitted to underwrite and deal in certain Ineligible Securities.
Period Leverage Ratio
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First Fiscal Quarter of Fiscal Year 2000 6.00 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
Fiscal Year 2000 5.75 to 1.00
Four Fiscal Quarter Period ending on the last day of the First Fiscal 5.25 to 1.00
Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second 5.00 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third Fiscal 4.50 to 1.00
Quarter of Fiscal Year 2001
Fiscal Year 2001 4.25 to 1.00
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Interest
Period Coverage Ratio
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First Fiscal Quarter of Fiscal Year 2000 1.6 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 1.6 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 1.7 to 1.00
Fiscal Year 2000 1.8 to 1.00
Four Fiscal Quarter Period ending on the last day of the First 1.9 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Second 2.0 to 1.00
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third 2.1 to 1.00
Fiscal Quarter of Fiscal Year 2001
Fiscal Year 2001 2.2 to 1.00
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Minimum
Period Consolidated EBITDA
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($ in millions)
First Fiscal Quarter of Fiscal Year 2000 $102
First Two Fiscal Quarter Period of Fiscal Year 2000 $205
First Three Fiscal Quarter Period of Fiscal Year 2000 $320
Fiscal Year 2000 $440
Four Fiscal Quarter Period ending on the last day of the First $465
Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the $490
Second Fiscal Quarter of Fiscal Year 2001
Four Fiscal Quarter Period ending on the last day of the Third $510
Fiscal Quarter of Fiscal Year 2001
Fiscal Year 2001 $540
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accounts payable of Company and its Subsidiaries, and other accounting and general customer relationship functions.
(a) engage in any transaction in connection with which Company or any of its Subsidiaries or any of their respective ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i) or 502(l) of ERISA or a tax imposed by Section 4975 of the Code, in either case in an amount in excess of $5,000,000;
(b) fail to make full payment within five Business Days after the date when due of all amounts exceeding $5,000,000 which, under the provisions of any Pension Plan, Company or any of its Subsidiaries or any of their respective ERISA Affiliates is required to pay as contributions thereto, or (as to any Subsidiary organized under the laws of any of the United States) permit to exist any accumulated funding deficiency, whether or not waived, with respect to any Pension Plan in an aggregate amount greater than $5,000,000;
(c) permit the Funded Current Liability Percentage for any Pension Plan to be less than 90%; or
(d) fail to make any payments in an aggregate amount greater than $5,000,000 to any Multiemployer Plan that Company or any of its Subsidiaries, or any of their respective ERISA Affiliates may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto.
As used in this Section, the term "accumulated funding deficiency" has the meaning specified in Section 3(23) of ERISA and Section 412 of the Code and the term "accrued benefit" has the meaning specified in Article 3 of ERISA.
(b) cash and cash equivalents;
(c) advances to officers, directors and employees of Company or any of their respective Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes;
(d) extensions of credit to customers or suppliers of Company or any of its Subsidiaries in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof;
(e) Investments permitted by Section 7.4;
(f) intercompany loans permitted by Sections 7.1(g), 7.1(h), 7.1(i), and 7.1(j);
(g) Investments by Company in any wholly-owned Subsidiary that is a Guarantor and Investments of any wholly-owned Domestic Subsidiary that is a Guarantor in Company or any other wholly-owned Domestic Subsidiary that is a Guarantor;
(h) Investments by Pledged Foreign Subsidiaries in other Pledged Foreign Subsidiaries;
(i) Investments by Unpledged Foreign Subsidiaries in other Unpledged Foreign Subsidiaries;
(k) Investments by Company in any of its Subsidiaries and other Investments of any of its Subsidiaries in Company or any of its other Subsidiaries on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(l) other Investments not exceeding $25,000,000 at any time.
(a) Operating Leases in existence on the Closing Date; and
(b) Operating Leases entered into or assumed by Company or any Subsidiary after the date hereof in the ordinary course of business.
with any Affiliate of Company other than arm's-length transactions with Affiliates that are otherwise not prohibited hereunder.
(a) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of any Indebtedness (other than Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement), or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate or make less onerous any such event or default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any additional rights on the holders of such Indebtedness (or a trustee or other representative on their behalf) which would be materially adverse to Company or to Banks. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement without the written consent of Majority Banks if the effect of such amendment is to extend the stated maturity date thereof or increase the aggregate commitments thereunder. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement or the 1997 Second Amended and Restated Credit Agreement to provide for an earlier stated maturity date unless this Agreement is amended to provide for the same maturity date.
(b) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of the Receivables Transfer Agreements other than amendments to extend the term thereof or to preserve the arm's length nature of the purchase and sale effected thereby.
Maximum Capital
Fiscal Year Expenditures
----------- ------------
2000 $60,000,000
2001 $60,000,000
|
7.17 Materially Adverse Agreements. Company shall not, and shall not suffer or permit any of its Subsidiaries to, become a party to or become subject to any material agreement or instrument or charter or other internal restriction which (in the aggregate as to all such matters) would have a Material Adverse Effect.
7.18 Limitations on Upstreaming. Company shall not, and shall not suffer or permit any of its Subsidiaries to, agree to any restriction or limitation on the making of Restricted Payments or transferring of assets from any Subsidiary to its parent except pursuant to this Agreement, the Bridge Credit Agreement, the Amended and Restated 1997 364 Day Credit Agreement, and the 1997 Second Amended and Restated Credit Agreement.
7.19 Change in Auditors. Company shall not terminate the certified public accountants auditing the books of Company or any of its Subsidiaries unless Company shall have informed Administrative Agent of the reason for the termination and selected new certified public accountants of recognized national standing and reasonably satisfactory to Administrative Agent.
7.20 Restricted Subsidiaries. Company shall not permit any of its Subsidiaries existing as of the Closing Date to become a Restricted Subsidiary other than as a result of a change in Consolidated Net Tangible Assets.
ARTICLE VIII
Loan Documents or in connection herewith shall be false in any material respect on the date as of which made; or
(i) A court having jurisdiction shall enter a decree or order for relief in respect of Company or any of its Material Subsidiaries in an involuntary case under any applicable Debtor Relief Laws, which decree or order is not stayed; or any other similar relief shall be granted under any applicable Debtor Relief Laws; or
(ii) A decree or order of a court having jurisdiction for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Company or any of its Material Subsidiaries or over all or a substantial part of their property, shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Company or any of its Material Subsidiaries for all or a substantial part of their property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of Company or any of its Material Subsidiaries, and the continuance of any such events described in this subsection (f)(ii) for 60 days unless stayed, dismissed, bonded or discharged; or
(iii) an involuntary case under any applicable Debtor Relief Laws shall have been commenced against Company or any of its Material Subsidiaries and shall not have been dismissed within 60 days after the commencement of such case; or
entered or filed against Company or any of its Material Subsidiaries or any of their respective assets and shall remain undischarged, unvacated, unbonded and unstayed for a period of 45 days or in any event later than five days prior to the date of any proposed sale thereunder; or
perfected Lien in any Collateral (other than Inventory in the possession or control of Company's agents or processors) purported to be covered thereby having a fair market value, individually or in the aggregate, exceeding $5,000,000, in each case for any reason other than the failure of Administrative Agent or any Bank to take any action within its control, or (iii) any Borrower Party shall contest the validity or enforceability of any Loan Document in writing or deny in writing that it has any further liability, including with respect to future advances by Banks, under any Loan Document to which it is a party.
(a) declare the Commitment of each Bank to be terminated, whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment, demand, request, protest or other notice of any kind, all of which are hereby expressly waived by Company;
(c) demand immediate payment by Company of an amount equal to the aggregate amount of all outstanding Lender 180 Day Letter of Credit Usage to be held in the Cash Collateral Account; and
(d) exercise on behalf of itself and Banks all rights and remedies available to it and Banks under the Loan Documents or applicable law;
second, to the payment of accrued and unpaid interest on the Loans to and including the date of such application, third, to the payment of the unpaid principal of the Loans, and fourth, to the payment of all other amounts (including fees) then owing to Administrative Agent and Banks under the Loan Documents, in each case paid pro rata to each Bank in the same proportions that the aggregate Obligations owed to each Bank under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all Banks, without priority or preference among Banks. No application of payments will cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of Administrative Agent and Banks hereunder or thereunder or at law in equity.
ARTICLE IX
contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Administrative Agent or Collateral Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Administrative Agent-Related Person or Collateral Agent-Related Person shall be under any obligation to any Bank to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the Properties, books or records of any Borrower Party, or any of Company's Subsidiaries or Affiliates.
(a) Administrative Agent and Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Company), independent accountants and other experts selected by Administrative Agent or Collateral Agent. Administrative Agent and Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless Administrative Agent or Collateral Agent, as the case may be, shall first receive such advice or concurrence of Majority Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of Majority Banks (or all of Banks if required hereunder) and such request and any action taken or failure to act pursuant thereto shall be binding upon all of Banks. Where this agreement expressly permits or prohibits an action unless Majority Banks otherwise determine, and in all other instances, Administrative Agent or Collateral Agent, as the case may be, may, but shall not be required to, initiate any solicitation for the consent or a vote of Banks.
(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by Administrative Agent or Collateral Agent to such Bank for consent, approval, acceptance, or satisfaction, required thereunder to be consented to or approved by or acceptable or satisfactory to the Bank.
purposes of this Section. Without limitation of the foregoing, each Bank shall reimburse Administrative Agent and Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Professional Costs) incurred by Administrative Agent and Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or financial or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Administrative Agent or Collateral Agent is not reimbursed for such expenses by or on behalf of Company. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Administrative Agent or Collateral Agent.
terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article IX and Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and Banks shall perform all of the duties of Administrative Agent hereunder until such time, if any, as Majority Banks appoint a successor agent as provided for above. Notwithstanding the foregoing, Bank of America may not be removed as Administrative Agent at the request of Majority Banks unless Bank of America shall also simultaneously be replaced as "Collateral Agent" and an "Issuing 180 Day Lender" hereunder pursuant to documentation in form and substance reasonably satisfactory to Bank of America.
(a) If any Bank is a "foreign corporation, partnership or trust" within the meaning of the Code and such Bank claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of Administrative Agent, to deliver to Administrative Agent and Company:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, two properly completed and executed
copies of IRS Form 1001 (or any successor form) before the payment of any interest in the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Bank, two properly completed and executed copies of IRS Form 4224 (or any successor form) before the payment of any interest is due in the first taxable year of such Bank and in each succeeding taxable year of such Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 (or any successor form) and such Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to notify Administrative Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Company to such Bank. To the extent of such percentage amount, Administrative Agent will treat such Bank's IRS Form 1001 (or any successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by filing IRS Form 4224 (or any successor form) with Administrative Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax, Administrative Agent may withhold from any interest payment to such Bank an amount equivalent to the applicable withholding tax after taking into account such reduction. However, if the forms or other documentation required by subsection (a) of this Section are not delivered to Administrative Agent, then Administrative Agent may withhold from any interest payment to such Bank not providing such forms or other documentation an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank failed to notify Administrative Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Bank shall indemnify Administrative Agent fully for all amounts paid, directly or indirectly, by Administrative Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Administrative Agent under this Section, together with all costs and expenses (including Professional Costs). The obligation of Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of Administrative Agent.
ARTICLE X
(a) subject to subsection (b), written agreement from Requisite Banks is required for any waiver, amendment, or consent which releases any (i) Collateral other than the release of any Lien encumbering any item of Collateral that is the subject of a Capital Lease, Equipment Financing Transaction, Real Estate Financing Transaction, Permitted Foreign Receivables Purchase Facility or sale or other disposition of assets permitted by Section 7.3 or (ii) Guarantor from a Guaranty other than in connection with the sale of all of the Capital Stock of such Guarantor to any Person (other than an Affiliate of Company) pursuant to a sale or other disposition permitted by Section 7.3; and
(b) written agreement from all Banks is required for any waiver, amendment, or consent which does any of the following:
(i) postpones, extends or delays any date fixed for any payment of principal, interest, fees or other amounts due to Banks (or any of them) hereunder or under any Loan Document;
(ii) reduces the principal of, or the rate of interest specified herein on any Loan, or of any fees or other amounts payable hereunder or under any Loan Document or any mandatory reduction of the Aggregate 180 Day Commitment or any mandatory prepayment pursuant to Section 2.7;
(iii) changes the Commitment Percentage or the aggregate unpaid principal amount of the Loans which shall be required for Banks or any of them to take any action hereunder;
(iv) changes the definition of Majority Banks, Requisite Banks or the number of Banks required to take any action under this Agreement;
(v) releases any Lien granted in favor of Collateral Agent with respect to all or substantially all of the Collateral; or
(vi) amends this Section 10.1 or Section 2.12 or 2.13 or 2.14;
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II or IX shall not be effective until actually received by Administrative Agent.
(c) Company acknowledges and agrees that any agreement of Administrative Agent and Banks in Article II to receive certain notices by telephone and facsimile is solely for the convenience and at the request of Company. Administrative Agent and Banks shall be entitled to rely on the authority of any Person purporting to be a Person authorized by Company to give such notice and Administrative Agent and Banks shall not have any liability to Company or other Person on account of any action taken or not taken by Administrative Agent and Banks in reliance upon such telephonic or facsimile notice. The obligation of Company to repay the Loans shall not be affected in any way or to any extent by any failure by Administrative Agent and Banks to receive written confirmation of any telephonic or facsimile notice or the receipt by Administrative Agent and Banks of a confirmation which is at variance with the terms understood by Administrative Agent and Banks to be contained in the telephonic or facsimile notice.
(a) Whether or not the transactions contemplated hereby are consummated, pay or reimburse Bank of America (including in its capacity as Administrative Agent) promptly after demand, for all reasonable costs and expenses incurred by Bank of America (including in its capacity as Administrative Agent) in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Professional Costs and other professional fees incurred by Bank of America (including in its capacity as Administrative Agent) with respect thereto;
(b) Subject to the limitations set forth therein, pay or reimburse Administrative Agent promptly after demand, for all reasonable costs and expenses incurred by Administrative Agent (including the fees, expenses and disbursements of any auditors, accountants, advisors and agents employed or retained by Administrative Agent or its counsel) in connection with obtaining and reviewing the information provided under Section 6.1 or 6.7;
(c) Pay or reimburse Administrative Agent, Collateral Agent, the Arranger and each Bank within five Business Days after demand, for all costs and expenses (including Professional Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding);
(d) Pay or reimburse Administrative Agent and Collateral Agent promptly after demand, for all the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral Agent on behalf of Banks pursuant to any Collateral Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, and reasonable fees, expenses and disbursements of counsel to Administrative Agent and Collateral Agent and of counsel providing any opinions that Administrative Agent, Collateral Agent or Majority Banks may request in respect of the Collateral Documents or the Liens created pursuant thereto; and
(e) Pay or reimburse Collateral Agent promptly after demand, for all reasonable costs and expenses incurred by Collateral Agent in connection with the custody and preservation of the Collateral.
(A) a Bank may enter into an assignment and delegation of less than $5,000,000 if such assignment and delegation consists of such Bank's entire interest;
(C) Company and Administrative Agent may continue to deal solely and directly with such Bank in connection with the interest so assigned to an Assignee until (1) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to Company and Administrative Agent by such Bank and the Assignee; (2) such Bank and its Assignee shall have delivered to Company and Administrative Agent an Assignment and Acceptance and any Note or Notes subject to such assignment; and (3) the assignor Bank or Assignee has paid Administrative Agent a processing fee of $3,500.
(b) From and after the date that Administrative Agent notifies the assignor Bank that it has provided its consent to and received an executed Assignment and Acceptance and payment of the processing fee of $3,500, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights and obligations hereunder and the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than any rights of indemnity) and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by Administrative Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, Company shall execute and deliver to Administrative Agent, new Notes evidencing such Assignee's assigned Loans and, if the assignor Bank has retained a portion of its Loans, replacement Notes in the principal amount of the Loans retained by the assignor Bank (such Notes to be in exchange for, but not in payment of, the Notes held by such Bank). Immediately upon each Assignee's making its payment under the Assignment and Acceptance, this Agreement, shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee. If an assignor Bank has not retained a portion of its Loans, such Bank shall mark its Notes "superseded" and return such Notes to Administrative Agent for delivery to Company.
Participant shall have rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment, consent or waiver would require unanimous consent as described in Section 10.1. In the case of any such participation, the Participant shall not have any rights under this Agreement, or any of the other Loan Documents, and all amounts payable by Company hereunder shall be determined as if such Originator had not sold such participation; except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement (and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR (S)203.14, and may assign all or any portion of its rights under or interests in this Agreement (and the Notes held by it) to any Affiliate for purposes of creating such a security interest or pledge, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
the other Loan Documents. None of Administrative Agent, Collateral Agent, any Bank, any Administrative Agent-Related Persons and any Collateral Agent-Related Persons shall have any obligation to any Person not a party to this Agreement or other Loan Documents.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES; PROVIDED THAT ADMINISTRATIVE AGENT,
COLLATERAL AGENT, BANKS, AND COMPANY SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
ARTICLE XI
11.2 Notwithstanding anything hereunder to the contrary, this Article XI shall not release or alter any obligation arising subsequent to the date hereof to comply with the terms and conditions of this Agreement and the other Loan Documents. It is expressly understood and agreed that it is the intent of Company to forever release certain claims against Administrative Agent, Collateral Agent and Banks, including, but not limited to, any claims related to the actions and omissions of Releasees prior to the date hereof, but that nothing herein shall affect the obligations of the Releasees arising subsequent to the date hereof, including, but not by way of limitation, compliance subsequent to the date hereof with all terms and conditions of this Agreement and the other Loan Documents.
11.3 Without limiting the generality of the foregoing, Company for itself and on behalf of the other Releasors expressly releases any and all past, present and future claims in connection with the Released Matters, about which the Releasors do not know or suspect to exist in their favor, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect Company's decision to enter into this release, and to this end Company for itself, and on behalf of each of the other Releasors, waives all rights under Section 1542 of the Civil Code of California, which states in full as follows:
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor."
Company knowingly and willingly waives the provisions of Section 1542 and acknowledges and agrees that this waiver is an essential and material term of this release. Company has reviewed this release with Company's legal counsel, and Company understands and acknowledges the significance and consequence of this release and of the specific waiver of Section 1542 of the Civil Code of California.
11.4 Company represents, warrants and agrees that in executing and entering into this release, Company is not relying and has not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Agreement or the other Loan Documents. Company understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to Company or believed by Company to be true. Nevertheless, Company intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and
shall not be subject to termination, modification or rescission by reason of any such difference in facts.
EXHIBIT 10.10
[FORM OF] PLEDGE AND SECURITY AGREEMENT
C. It is a condition precedent to the effectiveness of the Credit Agreement that Grantors listed on the signature pages hereof shall have granted the security interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks to enter into the Credit Agreement, each Grantor hereby agrees with Secured Party as follows:
VI-1
VI-2
(ii) all rights, title and interest (including rights acquired pursuant to a license or otherwise) in and to all patents and patent applications and rights and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned or held by such Grantor and all patents and patent applications and rights, title and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned by such
VI-3
(g) all information used or useful or arising from the business including all goodwill, trade secrets, trade secret rights, know-how, customer lists, processes of production, ideas, confidential business information, techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section 1, all other general intangibles (including tax refunds, rights to payment or performance, choses in action and judgments taken on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and storage and office facilities, and all accessions thereto and products thereof;
VI-4
(j) all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; and
Notwithstanding anything herein to the contrary, neither Company nor any Grantor shall be deemed to have granted a security interest in (i) any Principal Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any Pledged Debt of or issued by any Restricted Subsidiary.
(i) with respect to Company, all obligations and liabilities of every nature of Company now or hereafter existing under or arising out of or in connection with the Credit Agreement and the other Loan Documents, and
VI-5
(ii) with respect to each Subsidiary Grantor and Additional Grantor, all obligations and liabilities of every nature of such Grantors now or hereafter existing under or arising out of or in connection with the Guaranty;
in each case together with all extensions or renewals thereof, whether for principal, interest (including without limitation interest that, but for the filing of a petition in bankruptcy with respect to Company or any other Grantor, would accrue on such obligations, whether or not a claim is allowed against Company or such Grantor for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Lender Letters of Credit, fees, expenses, indemnities or otherwise, whether voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Secured Party, Administrative Agent or any Bank as a preference, fraudulent transfer or otherwise, and all obligations of every nature of Grantors now or hereafter existing under this Agreement.
(b) Any and all security interests, liens, rights and interest of Secured Party in and to any or all of the Collateral are subordinated to any and all security interests, liens, rights and interest of the several financial institutions party to the Bridge Credit Agreement from time to time in and to any or all of the Collateral pursuant to the Intercreditor Agreement.
Anything contained herein to the contrary notwithstanding, (a) each Grantor shall remain liable under any contracts and agreements included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under any contracts, licenses, and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Each Grantor represents and warrants as follows:
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(i) a true and complete list of all Trademark Registrations and Trademark applications owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(i);
VI-7
(ii) a true and complete list of all Patents owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright Registrations and applications for Copyright Registrations owned by such Grantor, in whole or in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not aware of any pending or threatened claim by any third party that any of the Intellectual Property Collateral owned, held or used by such Grantor is invalid or unenforceable that is reasonably likely to have a Material Adverse Effect; and
(v) no effective security interest or other Lien covering all or any part of the Intellectual Property Collateral is on file in the United States Patent and Trademark Office or the United States Copyright Office.
VI-8
Grantor will: (i) at the reasonable request of Secured Party, mark conspicuously
each item of chattel paper included in the Accounts, each Related Contract and,
at the reasonable request of Secured Party, each of its records pertaining to
the Collateral, with a legend, in form and substance satisfactory to Secured
Party, indicating that such Collateral is subject to the security interest
granted hereby, (ii) at the reasonable request of Secured Party, deliver and
pledge to Secured Party hereunder all promissory notes and other instruments
(including checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured Party,
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) furnish to
Secured Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(v) if requested by Co-Agents, promptly after the acquisition by such Grantor of
any item of Equipment that is covered by a certificate of title under a statute
of any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (vi) within 45 days after the end of each fiscal quarter of Company,
deliver to Secured Party copies of all such applications or other documents
filed during such fiscal quarter and copies of all such certificates of title
issued during such fiscal quarter indicating the security interest created
hereunder in the items of Equipment covered thereby, (vii) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, and (viii) at Secured Party's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral. Each Grantor hereby authorizes
Secured Party to file one or more financing or continuation statements, and
amendments thereto, relative to all or any part of the Collateral without the
signature of any Grantor. Each Grantor agrees that a carbon, photographic or
other reproduction of this Agreement or of a financing statement signed by such
Grantor shall be sufficient as a financing statement and may be filed as a
financing statement in any and all jurisdictions.
VI-9
Shares or Pledged Debt pledged pursuant to this Agreement shall not impair the security interest of Secured Party therein or otherwise adversely affect the rights and remedies of Secured Party hereunder with respect thereto.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy
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of insurance covering the Collateral, except where such violation would not have a Material Adverse Effect;
(b) notify Secured Party of any change in such Grantor's name, identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in such Grantor's chief place of business, chief executive office or residence or the office where such Grantor keeps its records regarding the Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire rights in or the use of any Collateral, use such value for such purposes; and
(e) except as otherwise not prohibited by the Credit Agreement, pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, services, materials and supplies) against, the Collateral.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the places therefor specified on Schedule 4(b), or upon 30 days' prior written notice to Secured Party, at such other places in jurisdictions where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Equipment and Inventory shall have been taken;
(b) except as otherwise permitted by Section 6.6 of the Credit Agreement, cause the Equipment owned by such Grantor to be maintained and preserved in the same condition, repair and working order as when new, ordinary wear and tear excepted, and in accordance with such Grantor's past practices, and shall forthwith make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Each Grantor shall promptly furnish to Secured Party a statement respecting any material loss or damage to the Equipment owned by such Grantor, but only to the extent that such loss or damage is material to the Equipment owned by Company and its Subsidiaries, taken as whole;
(c) keep correct and accurate records of Inventory owned by such Grantor, itemizing and describing the kind, type and quantity of such Inventory, and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of such Grantor's agents or processors, within 30 days of the Closing Date (with respect to existing agents or processors) and promptly after any such Inventory comes into the possession or control of such Grantor's agents or processors (with respect to future agents or processors), instruct such agent
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or processor to hold all such Inventory for the account of Secured Party and subject to the instructions of Secured Party, and use commercially reasonable efforts, but at no out-of-pocket cost to such Grantor, to obtain waivers or bailee letters in form and substance reasonably satisfactory to Collateral Agent from all public warehouses in which Inventory is maintained and all such agents or processors; and
(e) each Grantor shall, at its own expense, maintain insurance with respect to the Equipment and Inventory in accordance with the terms of the Credit Agreement.
(a) Each Grantor shall keep its chief place of business and chief executive office and the office where it keeps its records concerning the Accounts and Related Contracts, and all originals of all chattel paper that evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon 30 days' prior written notice to Secured Party, at such other location in a jurisdiction where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Accounts and Related Contracts shall have been taken. Each Grantor will hold and preserve such records and chattel paper and will permit representatives of Secured Party at any time during normal business hours to inspect and make abstracts from such records and chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. Promptly upon the request of Secured Party, each Grantor shall deliver to Secured Party complete and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the date on which each Account of such Grantor arose, maintain (i) complete records of such Account, including records of all payments received, credits granted and merchandise returned, and (ii) all documentation relating thereto.
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compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including checks and other instruments) received
by such Grantor in respect of the Accounts and the Related Contracts shall be
received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section 17
hereof, and (ii) such Grantor shall not adjust, settle or compromise the amount
or payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
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VI-14
receive the dividends, distributions, principal or interest payments which it is authorized to receive and retain pursuant to subsection (ii) above.
Upon the occurrence and during the continuation of an Event of Default, (i) upon written notice from Secured Party to any Grantor, all rights of such Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to exercise such voting and other consensual rights; (ii) all rights of such Grantor to receive the dividends, other distributions and interest payments which it would otherwise be authorized to receive and retain pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to receive and hold as Securities Collateral such dividends, other distributions and interest payments; and (iii) all dividends, principal, interest payments and other distributions which are received by such Grantor contrary to the provisions of subsection (ii) of the immediately preceding paragraph or subsection (ii) above shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of such Grantor and shall forthwith be paid over to Secured Party as Securities Collateral in the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Secured Party all such proxies, dividend payment orders and other instruments as Secured Party may from time to time reasonably request, and (ii) without limiting the effect of subsection (i) above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Shares would be entitled (including giving or withholding written consents of shareholders or other holders of equity interests, calling special meetings of shareholders or other holders of equity interests and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Shares on the record books of the issuer thereof) by any other Person (including the issuer of the Pledged Shares or any officer or agent thereof), upon the occurrence of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the Intellectual Property Collateral and at all times keep at least one complete set of its records concerning such Collateral at its chief executive office or principal place of business;
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(ii) use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision that could or might in any way impair or prevent the creation of a security interest in, or the assignment of, such Grantor's rights and interests in any property included within the definitions of any Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of all trade secrets relating to the products and services sold or delivered under or in connection with the Intellectual Property Collateral, including, without limitation, where appropriate entering into confidentiality agreements with employees and labeling and restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its use of any of the Intellectual Property Collateral, except where the failure to give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which may be consistent with such Grantor's past practices) in the manufacture, sale and delivery of products and services sold or delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured Party's reasonable request statements and schedules further identifying and describing any Intellectual Property Collateral and such other reports in connection with such Collateral, all in reasonable detail.
VI-16
compromise the amount or payment of any such amount or release wholly or partly any obligor with respect thereto or allow any credit or discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to commence and prosecute in its own name, as real party in interest, for its own benefit and at its own expense, such suits, proceedings or other actions for infringement, unfair competition, dilution, misappropriation or other damage, or reexamination or reissue proceedings as are necessary to protect the Intellectual Property Collateral. Secured Party shall provide, at such Grantor's expense, all reasonable and necessary cooperation in connection with any such suit, proceeding or action including, without limitation, joining as a necessary party. Each Grantor shall, within 45 days after the end of each fiscal quarter of Company, notify Secured Party of the institution of, or of any adverse determination likely to have a Material Adverse Effect in, any proceeding (whether in the United States Patent and Trademark Office, the United States Copyright Office or any federal, state, local or foreign court) or regarding such Grantor's ownership, right to use, or interest in any Intellectual Property Collateral. Each Grantor shall provide to Secured Party any information with respect thereto requested by Secured Party.
VI-17
assigns and transferees of Secured Party and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license shall be granted free of charge, without requirement that any monetary payment whatsoever be made to such Grantor. In addition, each Grantor hereby grants to Secured Party and its employees, representatives and agents the right to visit such Grantor's and any of its Affiliate's or subcontractor's plants, facilities and other places of business that are utilized in connection with the manufacture, production, inspection, storage or sale of products and services sold or delivered under any of the Intellectual Property Collateral (or which were so utilized during the prior six month period), and to inspect the quality control and all other records relating thereto upon reasonable advance written notice to such Grantor and at reasonable dates and times and as often as may be reasonably requested. To the extent that the Credit Agreement permits any Grantor to license the Intellectual Property Collateral, Secured Party shall promptly enter into a non-disturbance agreement or other similar arrangement, at such Grantor's request and expense, with such Grantor and any licensee of any Intellectual Property Collateral permitted hereunder in form and substance reasonably satisfactory to Secured Party pursuant to which (i) Secured Party shall agree not to disturb or interfere with such licensee's rights under its license agreement with such Grantor so long as such licensee is not in default thereunder, and (ii) such licensee shall acknowledge and agree that the Intellectual Property Collateral licensed to it is subject to the security interest created in favor of Secured Party and the other terms of this Agreement.
Secured Party is hereby authorized to establish and maintain as a blocked account in the name of Company and under the sole dominion and control of Secured Party, a restricted deposit account designated as "Levi Strauss & Co. Cash Collateral Account". All amounts at any time held in the Cash Collateral Account shall be beneficially owned by Grantors but shall be held in the name of Secured Party hereunder, for the benefit of Banks, as collateral security for the Secured Obligations upon the terms and conditions set forth herein. Grantors shall have no right to withdraw, transfer or, except as expressly set forth herein, otherwise receive any funds deposited into the Cash Collateral Account. Anything contained herein to the contrary notwithstanding, the Cash Collateral Account shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or governmental authority, as may now or hereafter be in effect. All deposits of funds in the Cash Collateral Account shall be made by wire transfer (or, if applicable, by intra-bank transfer from another account of a Grantor) of immediately available funds, in each case addressed in accordance with instructions of Secured Party. Each Grantor shall, promptly after initiating a transfer of funds to the Cash Collateral Account, give notice to Secured Party by telefacsimile of the date, amount and method of delivery of such deposit. Cash held by Secured Party in the Cash Collateral Account shall not be invested by Secured Party but instead shall be maintained as a cash deposit in the Cash Collateral Account pending application thereof as elsewhere provided in this Agreement. To the extent permitted under Regulation Q of the Board of Governors of the Federal Reserve System, any cash held in the Cash Collateral Account shall bear interest at the standard rate paid by Secured Party to its customers for deposits of like amounts and terms. Subject to Secured Party's rights hereunder, any interest earned on deposits of cash in the Cash Collateral Account shall be deposited directly in, and held in the Cash Collateral Account.
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Each Grantor hereby irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor, Secured Party or otherwise, from time to time in Secured Party's discretion to take any action and to execute any instrument that Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to Administrative Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with Sections 12(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of Default, to file any claims or take any action or institute any proceedings that Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit Agreement, to pay or discharge taxes or Liens (other than Liens permitted under this Agreement or the Credit Agreement) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by Secured Party in its sole discretion, any such payments made by Secured Party to become obligations of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of Default, to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do, at Secured Party's option and Grantors' expense, at any time or from time to time, all acts and things that Secured Party deems necessary to protect, preserve or realize upon the Collateral and Secured Party's security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
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If any Grantor fails to perform any agreement contained herein, Secured Party may itself perform, or cause performance of, such agreement, and the expenses of Secured Party incurred in connection therewith shall be payable by Grantors under Section 18(b) hereof.
The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which Secured Party accords its own property.
VI-20
Party at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against Secured Party arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Secured Party accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Secured Obligations, Grantors shall be jointly and severally liable for the deficiency and the fees of any attorneys employed by Secured Party to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to Secured Party, that Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and each Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Secured Obligations becoming due and payable prior to their stated maturities.
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Shares to be sold hereunder from time to time to furnish to Secured Party all such information as Secured Party may request in order to determine the number of shares and other instruments included in the Securities Collateral which may be sold by Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.
(ii) If Secured Party shall determine to exercise its right to sell all or any of the Securities Collateral pursuant to this Section, each Grantor agrees that, upon request of Secured Party (which request may be made by Secured Party in its sole discretion), such Grantor will, at its own expense (A) execute and deliver, and cause each issuer of the Securities Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of Secured Party, advisable to register such Securities Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of Secured Party, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto; (B) use its best efforts to qualify the Securities Collateral under all applicable state securities or "Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Securities Collateral, as requested by Secured Party; (C) cause each such issuer to make available to its security holders, as soon as practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act; (D) do or cause to be done all such other acts and things as may be necessary to make such sale of the Securities Collateral or any part thereof valid and binding and in compliance with applicable law; and (E) bear all reasonable costs and expenses, including reasonable attorneys' fees, of carrying out its obligations under this Section.
(iii) Without limiting the generality of Sections 10.4 and 10.5 of the Credit Agreement, in the event of any public sale described herein, each Grantor agrees to indemnify and hold harmless (to the maximum extent permitted under the Securities Act or other applicable law) Secured Party and each Bank and each of their respective directors, officers, employees and agents from and against any loss, fee, cost, expense, damage, liability or claim, joint or several, to which any such Persons may become subject or for which any of them may be liable, under the Securities Act or otherwise, insofar as such losses, fees, costs, expenses, damages, liabilities or claims (or any litigation commenced or threatened in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, registration statement, prospectus or other such document published or filed in connection with such public sale, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will (to the maximum extent permitted under the Securities Act or other applicable law) reimburse Secured Party and such other Persons for any legal or
VI-22
other expenses reasonably incurred by Secured Party and such other Persons in connection with any litigation, of any nature whatsoever, commenced or threatened in respect thereof (including any and all fees, costs and expenses whatsoever reasonably incurred by Secured Party and such other Persons and counsel for Secured Party and such other Persons in investigating, preparing for, defending against or providing evidence, producing documents or taking any other action in respect of, any such commenced or threatened litigation or any claims asserted). This indemnity shall be in addition to any liability which any Grantor may otherwise have and shall extend upon the same terms and conditions to each Person, if any, that controls Secured Party or such Persons within the meaning of the Securities Act.
(a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of Default, (i) Secured Party shall have the right (but not the obligation) to bring suit, in the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property Collateral, in which event each Grantor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents
VI-23
required by Secured Party in aid of such enforcement and each Grantor shall promptly, upon demand, reimburse and indemnify Secured Party as provided in Sections 10.4 and 10.5 of the Credit Agreement and Section 18 hereof, as applicable, in connection with the exercise of its rights under this Section, and, to the extent that Secured Party shall elect not to bring suit to enforce any Intellectual Property Collateral as provided in this Section, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property Collateral by others and for that purpose agrees to use its commercially reasonable judgment in maintaining any action, suit or proceeding against any Person so infringing reasonably necessary to prevent such infringement; (ii) upon written demand from Secured Party, each Grantor shall execute and deliver to Secured Party an assignment or assignments of the Intellectual Property Collateral and such other documents as are necessary or appropriate to carry out the intent and purposes of this Agreement; (iii) each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Secured Obligations outstanding only to the extent that Secured Party (or any Bank) receives cash proceeds in respect of the sale of, or other realization upon, the Intellectual Property Collateral; and (iv) within five Business Days after written notice from Secured Party, each Grantor shall make available to Secured Party, to the extent within such Grantor's power and authority, such personnel in such Grantor's employ on the date of such Event of Default as Secured Party may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with the Trademarks, Trademark Registrations and Trademark Rights, such persons to be available to perform their prior functions on Secured Party's behalf and to be compensated by Secured Party at such Grantor's expense on a per diem, pro- rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default.
Except as expressly provided elsewhere in this Agreement and in the Intercreditor Agreement, all proceeds received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in the following order of priority:
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FIRST: To the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to Secured Party and its agents and counsel, and all other expenses, liabilities and advances made or incurred by Secured Party in connection therewith, and all amounts for which Secured Party is entitled to indemnification hereunder and all advances made by Secured Party hereunder for the account of Grantors, and to the payment of all costs and expenses paid or incurred by Secured Party in connection with the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the ratable benefit of the holders thereof) and, as to obligations arising under the Credit Agreement, as provided in the Credit Agreement; and
THIRD: To the payment to or upon the order of Company, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds.
(a) Grantors jointly and severally agree to indemnify Secured Party and each Bank from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the extent such claims, losses or liabilities result solely from Secured Party's or such Bank's gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly and severally agree to pay to Secured Party upon demand (i) the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the administration of this Agreement or the failure by any Grantor to perform or observe any of the provisions hereof and (ii) the amount of any and all costs and expenses, including the fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the exercise or enforcement of any of the rights of Secured Party hereunder.
(c) The obligations of Grantors in this Section 18 shall (i) survive the termination of this Agreement and the discharge of Grantors' other obligations under this Agreement, the Credit Agreement and the other Loan Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject to the provisions of Section 1(b) thereof.
(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Secured Obligations and the cancellation or termination of the Commitments and the cancellation or expiration of all outstanding Lender Letters of Credit, (ii) be binding upon Grantors and their respective successors and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns. Without
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limiting the generality of the foregoing subsection (iii), but subject to the provisions of Sections 10.7 and 10.8 of the Credit Agreement, any Bank may assign or otherwise transfer any Loans held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Banks herein or otherwise.
(b) Upon the payment in full of all Secured Obligations, the cancellation or termination of the Commitments and the cancellation or expiration of all outstanding Lender Letters of Credit, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantors. Upon any such termination Secured Party will, at Grantors' expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination. In addition, upon the proposed sale, transfer or other disposition of any Collateral by a Grantor in accordance with the Credit Agreement for which such Grantor desires to obtain a security interest release from Secured Party, such Grantor shall deliver an officers' certificate (i) stating that the Collateral subject to such disposition is being sold, transferred or otherwise disposed of in compliance with the terms of the Credit Agreement, and (ii) specifying the Collateral being sold, transferred or otherwise disposed of in the proposed transaction. Upon the receipt of such officers' certificate, Secured Party shall, at such Grantor's expense, so long as Secured Party has no reason to believe that the officers' certificate delivered by such Grantor with respect to such sale is not true and correct, execute and deliver such releases of its security interest in such Collateral which is to be so sold, transferred or disposed of, as may be reasonably requested by such Grantor.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such
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amendments to financing statements, and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Secured Party of the security interests created hereunder, whereupon such retiring or removed Secured Party shall be discharged from its duties and obligations under this Agreement. After any retiring or removed collateral agent's resignation or removal hereunder as Secured Party, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement while it was Secured Party hereunder.
VI-27
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery.
No failure or delay on the part of Secured Party in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. The rules of construction set forth in Section 1.2 of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
VI-28
EACH GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GRANTOR, BANKS, ADMINISTRATIVE AGENT AND SECURED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
VI-29
LEVI STRAUSS & CO.
By:__________________________________________ Name: _______________________________________ Title:_______________________________________
BANK OF AMERICA, N.A., as Collateral Agent, as Secured Party
By:__________________________________________ Name: _______________________________________ Title:_______________________________________
VI-30
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
|
VI-Sch. A-1
VI-Sch. 1(d)
-------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
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|
VI-Sch. 1(e)(i)-1
-------------------------------------------------------------------------------------------------------
PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
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|
VI-Sch. 1(e)(i)-2
--------------------------------------------------------------------------------
AMOUNT OF
DEBT ISSUER PAYEE INDEBTEDNESS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|
VI-Sch. 1(e)(ii)-1
U.S. Trademarks:
---------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
U.S. Patents Issued:
-------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- ---------- -----
U.S. Patents Pending:
--------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- ----------
Foreign Patents Issued:
----------------------
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
---------- ---------- --------- ---------- -----
|
VI-Sch. 1(f)(ii)-1
Foreign Parents Pending:
-----------------------
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- ----------
|
VI-Sch. 1(f)(ii)-2
U.S. Copyrights: --------------- Title Registration No. Date of Issue Registered Owner ----- ---------------- ------------- ---------------- Foreign Copyright Registrations: -------------------------------- Country Title Registration No. Date of Issue Registered Owner ------- ----- ---------------- ------------- ---------------- Pending U.S. Copyright Registrations & Applications: --------------------------------------------------- Title Reference No. Date of Application Copyright Claimant ----- ------------- ------------------- ------------------ Pending Foreign Copyright Registrations & Applications: ------------------------------------------------------ Country Title Registration No. Date of Issue [Registered Owner] ------- ----- ---------------- ------------- ---------------- |
VI-Sch. 1(f)(iii)-1
Schedule 4(b) to
----------------
Pledge and Security Agreement
-----------------------------
Locations of Equipment and Inventory
------------------------------------
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
VI-Sch. 4(b)-1
|
Schedule 4(c) to
----------------
Pledge and Security Agreement
-----------------------------
Office Locations
----------------
Name of Grantor Office Locations
--------------- ----------------
|
VI-Sch. 4(c)-1
Schedule 4(d) to
----------------
Pledge and Security Agreement
-----------------------------
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
|
VI-Sch. 4(d)-1
Schedule 4(h) to
----------------
Pledge and Security Agreement
-----------------------------
Filing Offices
--------------
Grantor Filing Offices
------- --------------
|
VI-Sch. 4(h)-1
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all trademarks, service marks, designs, logos, indicia, tradenames,
VI-I-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
VI-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
By:__________________________
Name:________________________
Title:_______________________
VI-I-3
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
VI-Sch. A-1
[FORM OF] GRANT OF PATENT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all patents and patent applications and rights and interests in patents and
VI-II-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
VI-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-II-3
Patents Issued:
--------------
Registered
Patent No. Issue Date Invention Inventor Owner
---------- ---------- --------- -------- -----
|
Applicant's Date Application Name Filed Number Invention Inventor ----- ----- ------ --------- -------- |
VI-Sch. A-1
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) under copyright in various published and unpublished works of authorship including,
VI-III-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Copyright Collateral granted hereby are
VI-III-2
more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
VI-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-III-4
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
VI-Sch. A-1
|
[FORM OF] PLEDGE SUPPLEMENT
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of _______________.
[GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-IV-1
[FORM OF] IP SUPPLEMENT
["Grantor"] grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall be hereafter subject to each of the terms and conditions of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
VI-V-1
[FORM OF] COUNTERPART
(i) authorizes the Secured Party to add the information set forth on the Schedules to this Agreement to the correlative Schedules attached to the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the items of property described on the Schedules hereto, shall become part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the Pledge and Security Agreement, as amended hereby, to the extent relating to the undersigned.
[NAME OF ADDITIONAL GRANTOR]
By:_________________________
Name:_______________________
Title:______________________
IX-Sch. 1-1
EXHIBIT 10.11
[FORM OF] GUARANTY
C. A portion of the proceeds of the Loans may be advanced to Guarantors, and thus the Guarantied Obligations (as hereinafter defined) are being incurred for and will inure to the benefit of Guarantors (which benefits are hereby acknowledged).
D. It is a condition precedent to the effectiveness of the Credit Agreement that Company's obligations thereunder be guarantied by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks and Guarantied Party to enter into the Credit Agreement, Guarantors hereby agree as follows:
VII-1
Each Guarantor acknowledges that a portion of the Loans may be advanced to it, that Lender Letters of Credit may be issued for the benefit of its business and that the Guarantied Obligations are being incurred for and will inure to its benefit.
Any interest on any portion of the Guarantied Obligations that accrues after the commencement of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company (or, if interest on any portion of the Guarantied Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guarantied Obligations if said proceeding had not been commenced) shall be included in the Guarantied Obligations because it is the intention of each Guarantor and Guarantied Party that the Guarantied Obligations should be determined without regard to any rule of law or order that may relieve Company of any portion of such Guarantied Obligations.
In the event that all or any portion of the Guarantied Obligations is paid by Company, the obligations of each Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded or recovered directly or indirectly from Guarantied Party or any other Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments that are so rescinded or recovered shall constitute Guarantied Obligations.
Subject to the other provisions of this Section 1, upon the failure of Company to pay any of the Guarantied Obligations when and as the same shall become due, each Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate of the unpaid Guarantied Obligations.
VII-2
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(ii) under any guaranty which contains a limitation as to maximum amount similar
to that set forth in this Section 1(b), pursuant to which the liability of such
Guarantor hereunder is included in the liabilities taken into account in
determining such maximum amount) and after giving effect as assets to the value
(as determined under the applicable provisions of the Fraudulent Transfer Laws)
of any rights to subrogation, reimbursement, indemnification or contribution of
such Guarantor pursuant to applicable law or pursuant to the terms of any
agreement.
VII-3
obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the benefit
of any Beneficiary in respect of this Guaranty or the Guarantied Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that Guarantied Party or the other Beneficiaries, or any of them, may
have against any such security, as Guarantied Party in its discretion may
determine consistent with the Credit Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (f) exercise any other rights available to
Guarantied Party or the other Beneficiaries, or any of them, under the Loan
Documents.
VII-4
books of any Beneficiary in favor of Company or any other Person, or (iv) pursue any other remedy in the power of any Beneficiary; (b) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of Company including, without limitation, any defense based on or arising out of the lack of validity or the unenforceability of the Guarantied Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of Company from any cause other than payment in full of the Guarantied Obligations; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (d) any defense based upon Guarantied Party's or any other Beneficiary's errors or omissions in the administration of the Guarantied Obligations, except behavior that amounts to gross negligence or willful misconduct; (e) (i) any principles or provisions of law, statutory or otherwise, that are or might be in conflict with the terms of this Guaranty and any legal or equitable discharge of such Guarantor's obligations hereunder, (ii) the benefit of any statute of limitations affecting such Guarantor's liability hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any Lien or any property subject thereto; (f) notices, demands, presentments, protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance of this Guaranty, notices of default under the Credit Agreement or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Guarantied Obligations or any agreement related thereto, notices of any extension of credit to Company and notices of any of the matters referred to in Sections 3 and 4 hereof and any right to consent to any thereof; and (g) to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Guaranty.
As used in this paragraph, any reference to "the principal" includes
Company, and any reference to "the creditor" includes Guarantied Party and each
other Beneficiary. In accordance with Section 2856 of the California Civil Code
(a) each Guarantor waives any and all rights and defenses available to it by
reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code, including without limitation any and all rights or defenses such
Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guarantied Obligations, or to any other guarantor of any
of the Guarantied Obligations with respect to any of such guarantor's
obligations under its guaranty, in either case pursuant to the antideficiency or
other laws of the State of California limiting or discharging the principal's
indebtedness or such guarantor's obligations, including without limitation
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and
(b) each Guarantor waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a Guarantied Obligation,
has destroyed such Guarantor's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise; and even though that election of remedies by the creditor, such as
nonjudicial foreclosure with respect to security for an obligation of any other
guarantor of any of the Guarantied Obligations, has destroyed such Guarantor's
rights of contribution against such other guarantor. No other provision of this
Guaranty shall be construed as limiting the generality of any of the covenants
and waivers set
VII-5
forth in this paragraph. As provided below, this Guaranty shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflicts of laws principles. This paragraph is included solely out of an abundance of caution, and shall not be construed to mean that any of the above-referenced provisions of California law are in any way applicable to this Guaranty or to any of the Guarantied Obligations.
Any indebtedness of Company now or hereafter held by any Guarantor is subordinated in right of payment to the Guarantied Obligations, and any such indebtedness of Company to a Guarantor collected or received by such Guarantor after an Event of Default has occurred and is continuing, and any amount paid to a Guarantor on account of any subrogation, reimbursement, indemnification or contribution rights referred to in the preceding paragraph when all Guarantied Obligations have not been paid in full, shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to be credited and applied against the Guarantied Obligations.
VII-6
VII-7
shall in any event be effective without the written concurrence of Guarantied Party and, in the case of any such amendment or modification, Guarantors. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
The rights, powers and remedies given to Beneficiaries by this Guaranty are cumulative and shall be in addition to and independent of all rights, powers and remedies given to Beneficiaries by virtue of any statute or rule of law or in any of the Loan Documents or any agreement between one or more Guarantors and one or more Beneficiaries or between Company and one or more Beneficiaries. Any forbearance or failure to exercise, and any delay by any Beneficiary in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.
In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty shall inure to the benefit of Beneficiaries and their respective successors and assigns.
VII-8
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY ADMINISTRATIVE AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
VII-9
(a) Guarantied Party has been appointed to act as Guarantied Party hereunder by Banks. Guarantied Party shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action, solely in accordance with this Guaranty and the Credit Agreement.
(b) Guarantied Party shall at all times be the same Person that is Administrative Agent under the Credit Agreement. Written notice of resignation by Administrative Agent pursuant to Section 9.9 of the Credit Agreement shall also constitute notice of resignation as Guarantied Party under this Guaranty; removal of Administrative Agent pursuant to Section 9.9 of the Credit Agreement shall also constitute removal as Guarantied Party under this Guaranty; and appointment of a successor administrative agent pursuant to Section 9.9 of the Credit Agreement shall also constitute appointment of a successor Guarantied Party under this Guaranty. Upon the acceptance of any appointment as administrative agent under Section 9.9 of the Credit Agreement by a successor administrative agent, that successor administrative agent shall thereupon succeed to become vested with all the rights, powers, privileges and duties of the retiring or removed Guarantied party under this Guaranty, and the retiring or removed Guarantied Party under this Guaranty shall promptly (i) transfer to such successor Guarantied Party all sums held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Guarantied Party under this Guaranty, and (ii) take such other actions as may be necessary or appropriate in connection with the assignment to such successor Guarantied Party of the rights created hereunder, whereupon such retiring or removed Guarantied Party shall be discharged from its duties and obligations under this Guaranty. After any retiring or removed Guarantied Party's resignation or removal hereunder as Guarantied Party, the provisions of this Guaranty shall inure to its benefits as to any actions taken or omitted to be taken by it under this Guaranty while it was Guarantied Party hereunder.
[The remainder of this page intentionally left blank.]
VII-10
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.
BATTERY STREET ENTERPRISES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS FINANCIAL CENTER CORPORATION
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS FUNDING, LLC
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS GLOBAL FULFILLMENT SERVICES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
VII-11
LEVI STRAUSS GLOBAL OPERATIONS, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS INTERNATIONAL
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI STRAUSS LATIN AMERICA, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
LEVI'S ONLY STORES, INC.
By:___________________________________________
Name:_________________________________________
Title:________________________________________
VII-12
NF INDUSTRIES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
ACKNOWLEDGED AND FOR PURPOSES OF THE
WAIVER OF JURY TRIAL SET FORTH IN
SECTION 14 ONLY, AGREED AS OF THE DATE
FIRST WRITTEN ABOVE Bank of America,
N.A., as Administrative Agent
By:_______________________________
Title: ___________________________
VII-13
[FORM OF] COUNTERPART FOR ADDITIONAL GUARANTORS
IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be duly executed and delivered by its officer thereunto duly authorized as of ______________, ____.
[NAME OF ADDITIONAL GUARANTOR]
By:__________________________
Name:________________________
Title:_______________________
IX-Sch. 1-1
EXHIBIT 10.12
EXECUTION COPY
LEVI STRAUSS & CO.
LIMITED WAIVER
RECITALS
WHEREAS, Banks desire to waive certain provisions of the Credit Agreement as set forth below:
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:
Section 1. WAIVER
Without limiting the generality of the provisions of Section 10.1 of the Credit Agreement, the waiver set forth above shall be limited precisely as written and relates solely to the noncompliance by Company with the provisions of Section 7.1(o) of the Credit Agreement in the manner and to the extent described above, and nothing in this waiver shall be deemed to:
(a) constitute a waiver of compliance by Company with respect to Section 7.1(o) of the Credit Agreement in any other instance or any other term, provision or condition of the Credit Agreement or any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Administrative Agent or any Bank may now have or may have in the future under or in connection with the Credit Agreement or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect and in all other respects are hereby ratified and confirmed.
Section 2. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Banks to enter into this Waiver, Company hereby represents and warrants that after giving effect to this Waiver:
(a) as of the date hereof, there exists no Event of Default under the Credit Agreement;
(b) all representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date; and
(c) as of the date hereof, Company has performed all agreements to be performed on its part as set forth in the Credit Agreement.
Section 3. GOVERNING LAW.
THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
Section 4. COUNTERPARTS; EFFECTIVENESS.
This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Waiver shall become effective upon the execution of a counterpart hereof by Company and Majority Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
LEVI STRAUSS & CO.
BANK OF AMERICA, N.A., as a Bank
THE BANK OF NOVA SCOTIA, as a Co-
Documentation Agent and as a Bank
CITICORP U.S.A. INCORPORATED,
as a Co-Documentation Agent and as a Bank
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Co-Documentation Agent and as a Bank
BANK OF AMERICA, N.A., as Administrative Agent
BANK OF AMERICA, N.A., as Collateral Agent
ACKNOWLEDGED:
BATTERY STREET ENTERPRISES, INC.
LEVI STRAUSS FINANCIAL CENTER CORPORATION
LEVI STRAUSS FUNDING, LLC
LEVI STRAUSS GLOBAL FULFILLMENT SERVICES, INC.
LEVI STRAUSS GLOBAL OPERATIONS, INC.
LEVI STRAUSS INTERNATIONAL
LEVI STRAUSS LATIN AMERICA, INC.
LEVI'S ONLY STORES, INC.
NF INDUSTRIES, INC.
EXHIBIT 10.13
EXECUTION COPY
1997 SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
LEVI STRAUSS & CO.
as Borrower
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Senior Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Managing Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Co-Agents
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Banks
and
BANK OF AMERICA, N.A.,
as Agent for Banks
BANK OF AMERICA, N.A.,
as Collateral Agent for Banks
dated as of January 31, 2000
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1.1 Defined Terms...................................................... 1
1.2 Other Interpretive Provisions...................................... 25
1.3 Accounting Principles.............................................. 26
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; the Credit....................... 27
2.2 Notes; Loan Accounts............................................... 27
2.3 Procedure for Committed Borrowing.................................. 27
2.4 Conversion and Continuation Elections.............................. 27
2.5 Utilization of Aggregate Commitment in Offshore Currencies......... 29
2.6 Bid Borrowings..................................................... 29
2.7 Procedure for Bid Borrowing........................................ 29
2.8 Voluntary Prepayments.............................................. 29
2.9 Mandatory Prepayments and Reductions of Aggregate Commitment....... 29
2.10 Repayment; Scheduled Reductions of Aggregate Commitment............ 31
2.11 Interest........................................................... 32
2.12 Fees............................................................... 32
2.13 Computation of Fees and Interest................................... 33
2.14 Payments by the Company............................................ 34
2.15 Payments by the Banks to the Agent................................. 34
2.16 Sharing of Payments, etc........................................... 35
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.............................................................. 36
3.2 Illegality......................................................... 37
3.3 Increased Costs and Reduction of Return............................ 38
3.4 Funding Losses..................................................... 38
3.5 Inability to Determine Rates....................................... 39
3.6 Reserves on Offshore Rate Loans.................................... 39
3.7 Certificates of Banks.............................................. 39
3.8 Substitution of Banks.............................................. 39
3.9 Survival........................................................... 40
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TABLE OF CONTENTS
(continued)
Page
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Condition to Closing............................................... 40
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization, Powers, Good Standing, Business, Ownership of
Subsidiaries and Capitalization.................................... 44
5.2 Authorization of Borrowing, etc.................................... 44
5.3 Financial Condition................................................ 45
5.4 Title to Properties; Liens......................................... 46
5.5 Litigation; Adverse Facts.......................................... 46
5.6 Payment of Taxes................................................... 46
5.7 Materially Adverse Agreements; Performance......................... 46
5.8 Governmental Regulation............................................ 47
5.9 ERISA Compliance................................................... 47
5.10 Environmental Matters.............................................. 47
5.11 Compliance With Laws............................................... 48
5.12 Regulation U....................................................... 48
5.13 Disclosure......................................................... 48
5.14 Matters Relating to Collateral..................................... 48
5.15 Intangible Assets.................................................. 49
5.16 Insurance.......................................................... 49
5.17 Year 2000.......................................................... 49
5.18 Solvency........................................................... 50
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements and Other Reports............................. 50
6.2 Corporate Existence, etc........................................... 53
6.3 Compliance With Laws, etc.......................................... 54
6.4 Compliance with Agreements......................................... 54
6.5 Payment of Taxes and Claims........................................ 54
6.6 Maintenance of Properties; Insurance............................... 54
6.7 Inspection......................................................... 55
6.8 Use of Proceeds.................................................... 55
6.9 Execution of Guaranty and Collateral Documents by Additional
Subsidiaries....................................................... 55
6.10 Compliance with ERISA.............................................. 56
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TABLE OF CONTENTS
(continued)
Page
6.11 Post Closing Actions............................................... 57
6.12 Transfer of Receivables............................................ 59
ARTICLE VII
NEGATIVE COVENANTS
7.1 Indebtedness; Derivative/FX Contracts.............................. 59
7.2 Limitation on Liens and Negative Pledges........................... 61
7.3 Dispositions....................................................... 63
7.4 Fundamental Changes................................................ 64
7.5 Use of Proceeds.................................................... 65
7.6 Leverage Ratio..................................................... 66
7.7 Interest Coverage Ratio............................................ 66
7.8 Minimum Consolidated EBITDA........................................ 67
7.9 Change in Business................................................. 67
7.10 ERISA.............................................................. 67
7.11 Investments........................................................ 68
7.12 Restricted Payments................................................ 69
7.13 Operating Lease Obligations........................................ 69
7.14 Transactions with Affiliates....................................... 69
7.15 Amendments of Documents Relating to Indebtedness and Receivables... 69
7.16 Consolidated Capital Expenditures.................................. 70
7.17 Materially Adverse Agreements...................................... 70
7.18 Limitations on Upstreaming......................................... 70
7.19 Change in Auditors................................................. 70
7.20 Restricted Subsidiaries............................................ 71
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default................................................... 71
8.2 Remedies........................................................... 73
8.3 Rights Not Exclusive............................................... 74
ARTICLE IX
AGENT; COLLATERAL AGENT
9.1 Appointment and Authorization...................................... 74
9.2 Delegation of Duties............................................... 75
9.3 Liability of Agent or Collateral Agent............................. 75
9.4 Reliance by Agent and Collateral Agent............................. 75
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TABLE OF CONTENTS
(continued)
Page
9.5 Notice of Default.................................................. 76
9.6 Credit Decision; Disclosure of Information by Agent and Collateral
Agent.............................................................. 76
9.7 Indemnification of Agent and Collateral Agent...................... 77
9.8 Agent in Individual Capacity....................................... 77
9.9 Successor Agent.................................................... 78
9.10 Successor Collateral Agent......................................... 78
9.11 Withholding Tax.................................................... 79
9.12 Co-Agents; Managing Agents......................................... 80
9.13 Collateral Documents, Guaranties and Intercreditor Agreement....... 80
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers............................................. 81
10.2 Notices............................................................ 81
10.3 No Waiver; Cumulative Remedies..................................... 82
10.4 Costs and Expenses................................................. 82
10.5 Company's Indemnification.......................................... 83
10.6 Payments Set Aside................................................. 83
10.7 Successors and Assigns............................................. 84
10.8 Assignments, Participations, etc................................... 84
10.9 Designated Bidders................................................. 85
10.10 Confidentiality.................................................... 85
10.11 Set-off............................................................ 86
10.12 Notification of Addresses, Lending Offices, etc.................... 87
10.13 Counterparts....................................................... 87
10.14 Severability....................................................... 87
10.15 No Third Parties Benefited......................................... 87
10.16 Change in Accounting Principles.................................... 87
10.17 Governing Law and Jurisdiction..................................... 87
10.18 Interpretation..................................................... 88
10.19 Representation of Banks............................................ 88
10.20 Waiver of Jury Trial............................................... 88
10.21 Amendments and Waivers Regarding Collateral........................ 89
ARTICLE XI
GENERAL RELEASE
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EXHIBIT LIST
Exhibit I............................[FORM OF] NOTICE OF CONVERSION/CONTINUATION Exhibit II........................................................[FORM OF] NOTE Exhibit III.....................................[FORM OF] COMPLIANCE CERTIFICATE Exhibit IV.........................[FORM OF] CLOSING DATE CERTIFICATE OF COMPANY Exhibit V................................[FORM OF] PLEDGE AND SECURITY AGREEMENT Exhibit VI....................................................[FORM OF] GUARANTY Exhibit VII..................................[FORM OF] ASSIGNMENT AND ACCEPTANCE Exhibit VIII......................................................PRIVITY LETTER |
An extra section break has been inserted above this paragraph. Do not delete this section break if you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table of Contents/Authorities headers and footers to appear on any pages following the Table of Contents/Authorities.
WHEREAS, pursuant to a Waiver dated as of November 12, 1999, Banks agreed to waive certain provisions of the Existing Credit Agreement until February 3, 2000; and
WHEREAS, Company and Banks have agreed to amend and restate the Existing Credit Agreement; and
WHEREAS, Company has agreed to secure its Obligations hereunder and under the other Loan Documents by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of its personal property and certain of its real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of its Domestic Subsidiaries and 65% of the Capital Stock of certain of its Foreign Subsidiaries (other than Restricted Subsidiaries); and
WHEREAS, certain of the Domestic Subsidiaries of Company have agreed to guarantee the Obligations hereunder and under the other Loan Documents and to secure their guaranties by granting to Collateral Agent, on behalf of Banks, a Lien on substantially all of their respective personal property and certain of their respective real property (other than Principal Property), including a pledge of 100% of the Capital Stock of certain of their respective Domestic Subsidiaries and 65% of the Capital Stock of certain of their respective Foreign Subsidiaries (other than Restricted Subsidiaries);
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the parties agree as follows:
ARTICLE I
to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., the International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such agreement.
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) any direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (other than obligations under a long term supply contract), which purchase price is (i) due more than 90 days from the date of incurrence of the obligation in respect thereof, or (ii) evidenced by a note or similar written instrument, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(d) without duplication, lease payment obligations under Capital Leases or Synthetic Lease Obligations; and
(e) without duplication, all Guaranty Obligations of such Person in respect of any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to Majority Banks.
(a) if any Interest Period pertaining to an Offshore Rate Loan would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Maturity Date; and
(d) unless Agent otherwise consents, there may not be more than 24 Interest Periods for Offshore Rate Loans in effect at any time under this Agreement, the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit Agreement.
the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the UCC of any jurisdiction or any comparable law, or the interest of the Person other than Company or any of its Subsidiaries in connection with any Equipment Financing Transaction) and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease or the interest of a purchaser of Permitted Receivables under any Permitted Receivables Purchase Facility.
Financing Transaction and (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans and Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit Agreement) that is secured by a Lien on the equipment in question that is required to be repaid under the terms thereof as a result of such Equipment Financing Transaction.
Offshore Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
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Where,
(a) the rate per annum equal to the rate determined by Agent to be the offered rate that appears on the page of the Telerate Screen that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(b) in the event that the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(c) in the event that the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by Agent as the rate of interest at which Dollar deposits (for delivery on the first day of such Interest Period) in same day funds in the approximate amount of the applicable Offshore Rate Loan and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.
The determination of the Eurodollar Reserve Percentage and the Offshore Base Rate by Agent shall be conclusive in the absence of manifest error.
case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.
any of its Subsidiaries makes, is making, or is obligated to make contributions and includes any Pension Plan.
(a) the declaration or payment of any dividend or other distribution by Company or any of its Subsidiaries, directly or indirectly, either in cash or property, on any shares of the Capital Stock of any class of Company or any of its Subsidiaries (except dividends or other distributions payable solely in shares of Capital Stock of Company or any of its Subsidiaries or payable by any Subsidiary to Company or to a wholly- owned Subsidiary of Company);
(b) the purchase, redemption or retirement by Company or any of its Subsidiaries of any shares of its Capital Stock of any class or any warrants, rights or options to purchase or acquire any shares of its Capital Stock, whether directly or
indirectly (except the purchase, redemption or retirement of Capital Stock (or any such warrants, rights or options) held by Company or any wholly- owned Subsidiary of Company); and
(c) the prepayment, repayment, redemption, defeasance or other acquisition or retirement for value prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness not otherwise permitted under any Loan Document to be so paid.
(i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means "including without limitation."
(a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed in accordance with GAAP, consistently applied; except that, subject to Section 10.16, all financial computations required under this Agreement shall be made in accordance with GAAP as in effect on the Closing Date.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of Company. The fiscal quarters of Company end on the last Sunday in February, May, August, and November of each year. Each fiscal year of Company ends on the last Sunday in November of such year.
(c) References herein to "consolidated" and "consolidated basis" with reference to Company are to Company and its Subsidiaries on a consolidated basis.
ARTICLE II
(a) The Loans made by each Bank shall be evidenced by one or more loan accounts or records maintained by such Bank in the ordinary course of business. The loan accounts or records maintained by Agent and each Bank shall be conclusive evidence, absent manifest error, of the amount of the Loans made by Banks to Company and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of Company hereunder to pay any amount owing with respect to the Loans.
(a) Company may upon irrevocable notice to Agent in accordance with Section 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Offshore Rate Loans; or
(ii) elect to convert on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof) into Base Rate Loans; or
(iii) elect to renew on any Interest Payment Date any Offshore Rate Loans maturing on such Interest Payment Date (or any part thereof in an amount not less than $10,000,000 or that is in an integral multiple of $1,000,000 in excess thereof);
(b) Company shall deliver in writing (or by facsimile transmission confirmed immediately by a telephone call or by a telephone call confirmed immediately by a facsimile transmission), an irrevocable Notice of Conversion/Continuation to be received by Agent not later than 9:00 a.m., San Francisco, California time, at least three Business Days in advance of the Conversion/Continuation Date, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) with respect to Offshore Rate Loans, the duration of the requested Interest Period.
(c) (i) If upon the expiration of any Interest Period applicable to Offshore Rate Loans, Company has failed to select a new Interest Period to be applicable to such Offshore Rate Loans, and if no Event of Default shall then exist, Company shall be deemed to have elected to continue such Offshore Rate Loans as Offshore Rate Loans with an Interest Period of one month.
(ii) If an Event of Default exists at the time any Interest Period applicable to Offshore Rate Loans expires, Company shall be deemed to have elected to convert Offshore Rate Loans into Base Rate Loans effective as of the expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/ Continuation (or telephonic notice in lieu thereof), Agent will promptly notify each Bank thereof, or, if no timely notice is provided, Agent will promptly notify each Bank of the details of any automatic conversion. All conversions and continuations shall be made pro rata according to the respective outstanding principal amounts of the Loans with respect to which the notice was given or which are subject to automatic conversion held by each Bank.
(a) Subject to Section 3.4, Company may (from time to time) ratably prepay Loans in whole or in part in the minimum amount of $10,000,000 or any integral multiple of $1,000,000 in excess thereof, upon notice to Agent given not later than 9:00 a.m. San Francisco, California time:
(i) at least three Business Days' prior to the proposed date of prepayment for Offshore Rate Loans; and
(ii) on the Business Day prior to the proposed date of prepayment for Base Rate Loans.
Each such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination thereof. In the event that Company fails to so specify, any voluntary prepayments of the Loans pursuant to this Section 2.8 shall be applied first to Base Rate Loans to the full amount thereof before application to Offshore Rate Loans. Such notice shall not thereafter be revocable by Company and Agent will promptly notify each Bank thereof and the amount of such Bank's Commitment Percentage of such prepayment. If such notice is given by Company, Company shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and the amounts required pursuant to Section 3.4. Amounts prepaid may not be reborrowed.
(b) Notice to Agent under this Section shall be in writing, signed by Company or may be by telephone notice promptly confirmed by notice sent by facsimile transmission.
Date Scheduled Reduction
---- -------------------
May 25, 2000 $ 50,000,000
August 24, 2000 $ 50,000,000
November 22, 2000 $ 100,000,000
February 22, 2001 $ 50,000,000
May 24, 2001 $ 50,000,000
August 23, 2001 $ 100,000,000
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; provided, however, that Company shall repay the principal amount of the outstanding Loans on the Maturity Date.
(b) Interest on each Loan shall be payable in arrears on each Interest Payment Date. Interest shall also be payable on the date of any prepayment of Loans pursuant to Section 2.8, 2.9 or 2.10 for the portion of the Loans so prepaid and upon payment (including prepayment) in full thereof and, during any period when principal of the Loans is due and payable, interest shall be payable on request for such payment by the holders of the Loans.
(c) While any Event of Default exists, Company shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law and including post-petition interest in any proceeding under any Debtor Relief Law) on the principal amount of all Loans, at a rate per annum equal to the Default Rate. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be payable upon demand.
(d) Anything herein to the contrary notwithstanding, the obligations of Company to any Bank hereunder shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Bank would be contrary to the provisions of any law applicable to such Bank limiting the highest rate of interest which may be lawfully contracted for, charged or received by such Bank, and in such event Company shall pay such Bank interest at the lower of (i) the highest rate permitted by applicable law and (ii) the rates required by this Agreement.
the fifth Business Day after the last day of each fiscal quarter, commencing on the first such day after the Closing Date and (ii) on the Maturity Date.
(a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof.
(b) Agent will notify Company and Banks of each determination of an Offshore Rate. Any failure by Agent to give such notice and any failure by Company and any Bank to receive such notice shall not relieve Company of any obligation to pay interest or provide the basis for any claim against Agent. Agent shall, upon request made by Company or any Bank from time to time, advise such Person(s) of the relevant applicable Offshore Rate(s).
(c) Each determination of an interest rate by Agent pursuant to any provision of this Agreement shall be conclusive and binding on Company and Banks in the absence of manifest error.
(a) All payments (including prepayments) to be made by the Company on account of principal, interest, fees and other amounts required hereunder shall be made without set-off or counterclaim and shall, except as otherwise expressly provided herein, be made to the Agent for the ratable account of the Banks and Designated Bidders at the Agent's Payment Office, and, with respect to principal of, interest on, and any other amounts relating to, any Offshore Currency Loan, shall be made in the Offshore Currency in which such Loan is denominated or payable, and, with respect to all other amounts payable hereunder, shall be made in Dollars. Such payments shall be made in immediately available funds and (i) in the case of Offshore Currency payments, no later than such time on the dates specified herein as may be determined by the Agent to be necessary for such payment to be credited on such date in accordance with normal banking procedures in the place of payment, and (ii) in the case of any Dollar payments no later than 11:00 a.m., San Francisco, California time, on the date specified herein. The Agent will promptly distribute to each Bank or Designated Bidder the amount of its Commitment Percentage (or other applicable share as expressly provided herein) of such principal, interest, fees or other amounts, in like funds as received. Any payment which is received by the Agent later than 11:00 a.m., San Francisco, California time, or later than the time specified by the Agent as provided in clause (i) above in the case of Offshore Currency payments shall be deemed to have been received on the immediately succeeding Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be, subject to the provisions set forth in the definition of "Interest Period" herein.
(c) Unless the Agent shall have received notice from the Company prior to the date on which any payment is due to the Banks or Designated Bidder hereunder from the Company that the Company will not make such payment in full, the Agent may assume that the Company has made such payment in full to the Agent on such date and the Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Bank or Designated Bidder on such due date an amount equal to the amount then due such Bank or Designated Bidder. If and to the extent the Company shall not have made such payment in full to the Agent, each Bank or Designated Bidder shall repay to the Agent, on request made by the Agent, such amount distributed to such Bank or Designated Bidder, together with interest thereon for each day from the date such amount is distributed to such Bank or Designated Bidder until the date such Bank or Designated Bidder repays such amount to the Agent, at the Federal Funds Rate as in effect for each such day with respect to amounts denominated in Dollars and at the Overnight Rate with respect to amounts denominated in an Offshore Currency.
(a) Unless the Agent shall have received notice from a Bank on the Restatement Date or, with respect to each Borrowing after the Restatement Date, at least one Business Day prior to the date of any proposed Committed Borrowing (but prior to 10:00 a.m. San Francisco, California time on the same day with respect to a Borrowing consisting of Base
Rate Committed Loans) that such Bank will not make available to the Agent for the account of the Company the amount of that Bank's Commitment Percentage of the Committed Borrowing, the Agent may assume that each Bank has made such amount available to the Agent on the Borrowing Date and the Agent may (but shall not be so required), in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Bank shall not have made its full amount available to the Agent and the Agent in such circumstances has made available to the Company such amount, that Bank shall on the next Business Day following such Borrowing Date make such amount available to the Agent, together with interest at the Federal Funds Rate for and determined as of each day during such period, or in the case of any Borrowing consisting of Offshore Currency Loans, the Overnight Rate.
A certificate of the Agent submitted to any Bank with respect to amounts owing under this subsection shall be conclusive, absent manifest error. If such amount is so made available, such payment to the Agent shall constitute such Bank's Committed Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the Agent on the next Business Day following such Borrowing Date, the Agent shall notify the Company of such failure to fund and, upon request for payment made by the Agent, the Company shall pay such amount to the Agent for the Agent's account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Committed Loans comprising such Committed Borrowing.
(b) The failure of any Bank to make any Committed Loan on any Borrowing Date shall not relieve any other Bank of any obligation hereunder to make a Committed Loan on such Borrowing Date, but no Bank shall be responsible for the failure of any other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
(a) Any and all payments by Company to each Bank or Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, Company shall pay all Other Taxes.
(b) If Company shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Bank, or Agent, then:
(i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section), such Bank or Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made;
(ii) Company shall make such deductions and withholdings;
(iii) Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and
(iv) Company shall also pay to each Bank or Agent for the account of such Bank, at the time interest is paid, Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) Company agrees to indemnify and hold harmless each Bank and Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that the respective Bank specifies as necessary to preserve the after-tax yield the Bank would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the Bank or Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by Company of Taxes, Other Taxes or Further Taxes, Company shall furnish to each Bank or Agent the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment satisfactory to such Bank or Agent.
(e) Company will not be required to pay any additional amounts in respect of Section 3.1(b) to any Bank or Agent:
(i) if such Bank shall have delivered to Company a Form 1001 (or any successor form) pursuant to Section 9.11(a)(i), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or any applicable tax treaty or regulations or in the official interpretation of any such law, treaty or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 1001 (or any successor form); or
(ii) if such Bank shall have delivered to Company a Form 4224 (or any successor form) pursuant to Section 9.11(a)(ii), and such Bank shall not at any time be entitled to exemption from deduction or withholding of United States Federal income tax in respect of payments by Company hereunder for any reason other than a change in United States law or regulations or in the official interpretation of such law or regulations by any Governmental Authority charged with the interpretation or administration thereof (whether or not having the force of law) after the date of delivery of such Form 4224 (or any successor form).
(f) If, at any time, Company requests any Bank to deliver any forms or other documentation pursuant to Section 9.11(a)(iii), then Company shall, on demand of such Bank through Agent, reimburse such Bank for any costs and expenses (including Professional Costs) reasonably incurred by such Bank in the preparation or delivery of such forms or other documentation.
(g) If Company is required to pay additional amounts to any Bank or Agent pursuant to this Section 3.1, then such Bank or Agent, as the case may be, shall use its reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or take any other reasonable action so as to eliminate any such additional payment by Company which may thereafter accrue if such change, in the reasonable judgment of such Bank, is not otherwise materially disadvantageous to such Bank or Agent.
(a) If any Bank determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Bank or its applicable Lending Office to make Offshore Rate Loans, then, on notice thereof by the Bank to Company through Agent, any obligation of that Bank to make Offshore Rate Loans shall be suspended until the Bank notifies Agent and Company that the circumstances giving rise to such determination no longer exist.
(b) If a Bank determines that it is unlawful for such Bank to maintain any Offshore Rate Loan, Company shall, upon receipt of notice of such fact and demand from such Bank (with a copy to Agent), prepay in full such Offshore Rate Loans of that Bank then outstanding, together with interest accrued thereon and amounts required under Section 3.4, either on the last day of the Interest Period thereof, if the Bank may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such Offshore Rate Loans. If Company is required to so prepay any Offshore Rate Loan, then concurrently with such prepayment, Company shall borrow from the affected Bank, in the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate Loans has been so terminated or suspended, Company may elect, by giving notice to the Bank through Agent that all Loans which would otherwise be made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(a) If any Bank determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation, or (ii) the compliance by that Bank with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Bank of agreeing to make or making, funding or maintaining any Offshore Rate Loans in an amount deemed material by such Bank, then Company shall be liable for, and shall from time to time, upon demand (with a copy of such demand to be sent to Agent), pay to Agent for the account of such Bank, additional amounts as are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by the Bank (or its Lending Office) or any corporation controlling the Bank with any Capital Adequacy Regulation; affects or would affect the amount of capital required or expected to be maintained by the Bank or any corporation controlling the Bank and (taking into consideration such Bank's or such corporation's policies with respect to capital adequacy and such Bank's desired return on capital) determines that the amount of such capital is increased in an amount deemed material by such Bank as a consequence of its loans, credits or obligations under this Agreement, then, upon request of such Bank (with a copy to Agent), Company shall immediately pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank for such increase.
(a) any failure of Company to make, on a timely basis, any payment or prepayment of principal of any Offshore Rate Loan (including payments made after any acceleration thereof);
(b) any failure of Company to continue or convert a Loan after Company has given (or are deemed to have given) a Notice of Conversion/Continuation;
(c) any failure of Company to make any prepayment after Company has given a notice in accordance with Section 2.8;
(d) any prepayment of an Offshore Rate Loan on a day which is not the last day of the Interest Period with respect thereto; or
(e) any conversion pursuant to Section 2.4 of any Offshore Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant Interest Period; or including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Offshore Rate Loans hereunder or from fees payable to terminate the deposits from which such funds were obtained.
may: (a) request the Affected Bank to use its reasonable efforts without incurring any material expense to obtain a Replacement Bank; (b) request one or more of the other Banks to acquire and assume all or part of such Affected Bank's Loans and Commitment; or (c) designate a Replacement Bank. Any assignment to a Replacement Bank pursuant to this Section shall be pursuant to an Assignment and Acceptance in compliance with Section 10.8 including payment of the processing fee to Agent (except to the extent that there is any conflict between the provisions of this Section and Section 10.8, in which case the provisions of this Section shall control). If Bank of America is the Affected Bank, it may, at its sole option, resign as Agent or Collateral Agent. Notwithstanding the provisions of Section 9.9 or 9.10, any resignation as Agent or Collateral Agent by Bank of America under this Section shall take effect upon delivery of Bank of America's written resignation to Company and Banks without necessity of further action or lapse of time.
ARTICLE IV
(a) Agent shall have received, on or before the Closing Date, all of the following documents, in form and substance reasonably satisfactory to Agent and Majority Banks:
(A) Copies of the resolutions of the board of directors of each Borrower Party (or an authorized committee thereof) approving and authorizing the execution, delivery, and performance by such Borrower Party of the Loan Documents to which such Borrower Party is a party, certified as of the Closing Date by the Secretary or an Assistant Secretary of such Borrower Party.
(B) A certificate of the Secretary or an Assistant Secretary of each Borrower Party certifying, as of the Closing Date, the names and true signatures of the officers of such Borrower Party authorized to execute and deliver, as applicable, this Agreement, and all other Loan Documents to be delivered hereunder.
of Liens permitted to remain outstanding pursuant to the terms of this Agreement);
ARTICLE V
Company represents and warrants to Agent and each Bank that:
Borrower Party, and the Notes, when executed and delivered, will be duly executed and delivered by Company.
(a) And except as would not have a Material Adverse Effect, each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS and to the best knowledge of any Borrower Party, nothing has
occurred which would cause the loss of such qualification. Company and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower Party, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event that requires notice to be given to the
PBGC has occurred or is reasonably expected to occur; (ii) no Pension Plan has a
Funded Current Liability Percentage of less than 90%; (iii) neither Company nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); and (iv) neither Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan.
such Environmental Laws and Environmental Claims are not, individually or in the aggregate, reasonably expected to have a Material Adverse Effect.
(a) The execution and delivery of the Collateral Documents by Borrower Parties, together with (i) the actions taken on or prior to the date hereof pursuant to Sections 4.1(a)(vii) and 4.1(a)(viii), (ii) the actions taken pursuant to Sections 6.9 and 6.11, and (iii) the delivery to Agent of any Pledged Collateral not delivered to Agent at the time of execution and delivery of the applicable Collateral Document (all of which Pledged Collateral has been so delivered) are effective to create in favor of Agent for the benefit of Banks, as security for the respective Secured Obligations (as defined in the applicable Collateral Document in respect of any Collateral), a valid and perfected Lien on all of the Collateral, a security interest in which may be perfected by filing in the United States or possession, and all filings and other actions necessary or desirable to perfect and maintain the perfection of such Liens have been duly made or taken and remain in full force and effect, other than the filing of any UCC financing statements delivered to Agent for filing (but not yet filed) and the periodic filing of UCC continuation statements in respect of UCC financing statements filed by or on behalf of Agent.
(b) No authorization, approval or other action by, and no notice
to or filing with, any Government Authority in the United States is required for
either (i) the pledge or grant by any Borrower Party of the Liens purported to
be created in favor of Agent pursuant to any of the Collateral Documents, or
(ii) the exercise by Agent of any rights or remedies in respect of
any Collateral (whether specifically granted or created pursuant to any of the Collateral Documents or created or provided for by applicable law), except for filings or recordings contemplated by Section 5.14(a) and except as may be required, in connection with the disposition of any Pledged Collateral, by laws generally affecting the offering and sale of securities.
(c) The pledge of the Pledged Collateral pursuant to the Collateral Documents does not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(d) All information supplied to Agent by or on behalf of any Borrower Party with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) is accurate and complete in all material respects.
after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so does not have a Material Adverse Effect.
ARTICLE VI
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall (except in the case of Company's reporting covenants) cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(a) Company shall maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP and in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over Company or any of its subsidiaries. Company shall deliver to Agent for distribution to Banks:
(i) as soon as practicable and in any event within 30 days after the end of each fiscal month, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal month and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(ii) as soon as practicable and in any event within 45 days after the end of each of the first three fiscal quarters of the fiscal year, a copy of the consolidated and consolidating balance sheets of Company and its Subsidiaries, as at the end of such period, the related consolidated and consolidating statement of income of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, and the related consolidated statement of cash flows of Company and its Subsidiaries for such fiscal quarter and for the fiscal year to date, certified by the chief financial officer, treasurer or controller of Company as fairly presenting the financial condition of Company and its Subsidiaries in all material respects as at the dates indicated and the results of their operations and changes in cash flows for the periods indicated in accordance with GAAP, except for the absence of footnotes and subject to changes resulting from audit and normal year-end adjustment;
(iv) together with each delivery of any financial statements pursuant to Section 6.1(a)(ii) or 6.1(a)(iii) a Compliance Certificate from Company executed by a Responsible Officer, stating that the signer does not have knowledge of the existence as at the date of such certificate, of any condition or event which constitutes a Default or Event of Default, or, if any such condition or event existed at such date or exists, specifying the nature and period of existence thereof and what action Company has taken, is taking and proposes to take with respect thereto, and demonstrating in reasonable detail compliance during or at the end of such accounting periods, as applicable, with Sections 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.11 and 7.16; and, should there be any material change in GAAP as in effect as of the Closing Date, such Compliance Certificate shall include computations setting forth reconciliation of the items used in computing compliance with the covenants under this Agreement by reason of the differences between GAAP used in the preparation of such financial statements and GAAP as in effect as of the Closing Date;
(v) concurrently with the delivery of the financial statements referred to in Section 6.1(a)(iii), a certificate of Company's independent certified public accountants certifying such financial statement and stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default hereunder or, if any such Default or Event of Default shall exist, stating the nature and status of such event;
(vi) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, a cash flow forecast for Company and its Subsidiaries for the then following 13 weeks and a report setting forth the cash flows of Company and its Subsidiaries for the prior 13 weeks, together with an explanation of any material variance between those results and the results previously projected for those 13 weeks;
(vii) (A) as soon as practicable and in any event no later than 10 Business Days after the end of each fiscal month, (1) a report setting forth the details of
(y) any Lender Derivative/FX Contract to which Company or FinServ is a party, including the Termination Value of any such Lender Derivative/FX Contract, and (z) all other outstanding unsecured Indebtedness of Company or any of its Subsidiaries (including any letters of credit (other than Lender Letters of Credit) issued for the benefit of Company and its Subsidiaries) incurred in accordance with Section 7.1(r), and (2) information with respect to all other Derivative/FX Contracts to which Company or any of its Subsidiaries is a party, and (B) promptly upon request, any other information concerning such Derivative/FX Contracts reasonably requested by Agent;
(ix) promptly after the same are available, copies of each annual report or proxy statement sent to the stockholders of Company, and copies of all annual, regular, periodic and special reports and registration statements which Company may file or, if Company were subject to the Exchange Act, would be required to file with the Securities and Exchange Commission under Sections 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Agent pursuant hereto;
(x) promptly upon any Responsible Officer of Company obtaining knowledge of any condition or event which constitutes a Default or Event of Default, or becoming aware that any Bank has given any written notice of a claimed Default or Event of Default, a certificate from Company, executed by a Responsible Officer of Company, specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken, and the nature of such claimed Default or Event of Default, event or condition, and what action Company has taken, is taking, and proposes to take with respect thereto;
(xi) promptly upon any Responsible Officer of Company obtaining knowledge of (A) the institution of, or non-frivolous threat of, any material action, suit, proceeding or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries not previously disclosed in writing by Company to Agent, or (B) any material development in any action, suit, proceeding or arbitration already disclosed, and in each case Company reasonably expects such institution, threat, or material development to result in any Material Adverse Effect or materially and adversely to affect the ability of Company and its Subsidiaries, taken as a whole, to perform the Obligations or the ability of Banks to enforce the Obligations, Company shall promptly give notice thereof to Agent and provide such other information (excluding communications covered by the attorney-client privilege) as may be reasonably requested by Agent or a Bank to enable their counsel to evaluate such matters;
(xii) promptly upon any Responsible Officer of Company becoming aware of its occurrence, notice of any of the following events affecting Company or any ERISA Affiliate (but in no event more than 10 days after such event), and such Responsible Officer shall also deliver to Agent and each Bank a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to Company or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a decrease in the Funded Current Liability Percentage for any Pension Plan at the end of any fiscal quarter to less than 90%; or
(xiii) promptly upon receipt thereof, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of Company by independent accountants in connection with the accounts or books of Company or any of its Subsidiaries, or any audit of any of them;
(xiv) promptly upon any discovery or determination that any computer application (including those of its suppliers and vendors) that is material to the business and operations of Company or any of its Subsidiaries will not be Year 2000 Compliant on a timely basis, except to the extent that such failure does not have a Material Adverse Effect, a notice thereof; and
(xv) promptly upon any Responsible Officer of Company becoming aware of its occurrence, a notice of any material change in accounting policies or financial reporting practices by Company or any of its Subsidiaries.
(b) Company will deliver to Agent for distribution to each Bank together with the Compliance Certificate required under subsection (iv) of subsection (a) of this Section, a copy of all press releases and other statements made available generally by Company to the public during the period covered by the Compliance Certificate. The press releases and such other statements covered by this subsection are those which concern material developments in the business of Company and its Subsidiaries taken as a whole.
(c) Company will deliver to Agent for distribution to each Bank copies of material financial and other information as Agent or Majority Banks may reasonably request from time to time.
(a) Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition all properties used or useful in the business of Company and its Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof, if the failure to perform such actions would in the aggregate have a Material Adverse Effect. Company shall, and shall cause each of its Subsidiaries to, maintain or cause to be maintained, through self- insurance or with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, if the failure to do so would (as to all such failures in the aggregate) have a Material Adverse Effect. From and after the date that is 30 days following the Closing Date, property, general liability, business interruption and automobile insurance policies shall (i) name Collateral Agent for the benefit of Banks as an additional insured thereunder with respect to all Collateral as its interests may appear and, in the case of property insurance, (ii) contain a loss payable subsection or endorsement, satisfactory in form and substance to Agent, that names Collateral Agent for the benefit of Banks as the loss payee thereunder for any covered loss with respect to all Collateral, as appropriate. Insurance policies shall provide for at least 30 days prior written notice to Agent of any material modification or cancellation of such policy.
(b) Upon receipt by Company or any of its Subsidiaries of any insurance proceeds constituting Net Insurance Proceeds, (i) so long as no Event of Default shall have occurred and be continuing, Company or such Subsidiary may retain and apply such Net Insurance Proceeds for working capital purposes, in the case of business interruption insurance proceeds, or to pay or reimburse the costs of repairing, restoring or replacing the assets or substantially similar assets in respect of which such Net Insurance Proceeds were received or, to the extent not so applied, as provided in Section 2.9, and (ii) if an Event of Default shall have occurred and be continuing, Company shall apply an amount equal to such Net Insurance Proceeds as provided in Section 2.9.
(a) Company shall, and shall cause each of its Subsidiaries to,
(i) permit any authorized representatives designated by a Bank, at the expense
of that Bank, to visit and inspect any of the properties of Company or any of
its Subsidiaries, including their financial and accounting records, and to make
copies and take extracts therefrom, and to discuss their affairs, finances and
accounts with their officers and independent public accountants, all upon
reasonable notice and at such reasonable times during normal business hours and
as often as may be reasonably requested, and (ii) following the occurrence and
during the continuation of an Event of Default, permit any authorized
representatives designated by a Bank, at the expense of Company, to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with their
officers and independent public accountants, immediately upon request by Agent.
(a) In the event that any Person becomes a Material Domestic Subsidiary after the date hereof, Company will notify Agent of that fact and cause such Material Domestic Subsidiary to execute and deliver to Agent a counterpart of the Guaranty and the Pledge and Security Agreement, and to take all such further actions and execute such further documents and
(b) Company shall deliver to Agent, together with such Loan
Documents, (i) certified copies of such Subsidiary's Organization Documents,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its organization and each other state in which such Person is
qualified to do business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to Agent,
(ii) a certificate executed by the secretary or similar officer of such
Subsidiary as to (A) the fact that the attached resolutions of the board of
directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (B) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iii) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to Agent and
its counsel, as to (A) the due organization and good standing of such
Subsidiary, (B) the due authorization, execution and delivery by such Subsidiary
of such Loan Documents, (C) the enforceability of such Loan Documents against
such Subsidiary, and (D) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such Loan
Documents) as Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Agent and its counsel.
(i) On or prior to the date that is 60 days after the Closing Date, Company shall have delivered to Agent:
(B) An opinion of counsel (which counsel shall be reasonably satisfactory to Agent) in each state in which any such Property is located with respect to the enforceability of the form(s) of Mortgages to be recorded in such state and such other matters as Agent may reasonably request, in each case in form and substance reasonably satisfactory to Agent;
(E) Copies of all recorded documents listed as exceptions to title or otherwise referred to in the policies or in the title reports delivered pursuant to subsection (D); and
(F) (1) Evidence, which may be in the form of a letter from an insurance broker or a municipal engineer, as to whether any Property is a Flood Hazard Property and the community in which any such Flood Hazard Property is
located is participating in the National Flood Insurance Program;
(2) if there are any such Flood Hazard Properties, Company's written
acknowledgement of receipt of written notification from Agent (y) as
to the existence of each such Flood Hazard Property and (z) as to
whether the community in which each such Flood Hazard Property is
located is participating in the National Flood Insurance Program;
and (3) in the event that any such Flood Hazard Property is located
in a community that participates in the National Flood Insurance
Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under
the applicable regulations of the Board of Governors of the Federal
Reserve System.
providing that the obligations of Company and FinServ under such agreements will be secured by the Collateral Documents (as defined in the Bridge Credit Agreement).
ARTICLE VII
Company covenants and agrees that, until full and final payment of all Loans and other Obligations, unless Majority Banks waive compliance in writing, Company shall, and shall cause each of its Subsidiaries to, perform and comply with all covenants in this Article.
(b) Indebtedness under the Loan Documents;
(c) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds;
(d) Guaranty Obligations of Company guaranteeing the Indebtedness of Material Foreign Subsidiaries permitted under Section 7.1(r);
(e) Indebtedness of Company and the other Borrower Parties under the Amended and Restated 1997 364 Day Credit Agreement and the related loan documents;
(f) Indebtedness of Company in respect of Capital Leases not exceeding $5,000,000 in the aggregate at any time;
(h) Indebtedness of Pledged Foreign Subsidiaries to other Pledged Foreign Subsidiaries;
(i) Indebtedness of Unpledged Foreign Subsidiaries to Pledged Foreign Subsidiaries or other Unpledged Foreign Subsidiaries;
(j) Indebtedness of Company and its Subsidiaries (other than LSFCC or LSFLLC) to FinServ and Indebtedness of FinServ to Company and its other Subsidiaries (other than LSFCC or LSFLLC) in the ordinary course of business;
(l) Derivative/FX Contracts between Company or FinServ and FinServ and the other Subsidiaries of Company (other than LSFCC or LSFLLC) in the ordinary course of business;
(n) Indebtedness of Company and its Material Subsidiaries (other than LSFCC or LSFLLC) secured by Liens permitted under Section 7.2(h) not exceeding $25,000,000 in the aggregate at any time;
(s) Indebtedness of Company to any of its Subsidiaries and other Indebtedness of any of its Subsidiaries to Company or any of its other Subsidiaries outstanding on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(t) other Indebtedness of Company and its Subsidiaries not exceeding $5,000,000 in the aggregate at any time.
(b) Liens for taxes, fees, assessments or other governmental charges which are not delinquent or remain payable without penalty, or to the extent that non-payment thereof is permitted by Section 6.5;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of
the Property subject thereto or if such reserve or other appropriate provision, if any, required by GAAP shall have been made therefor;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(e) Liens securing (i) the performance of tenders, bids, trade contracts (other than for borrowed money), government contracts, leases, statutory obligations, and performance and return-of-money bonds, (ii) contingent obligations on surety and appeal bonds, and (iii) other obligations of a like nature; in each case, incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances that do not interfere with the ordinary conduct of the businesses of Company and its Subsidiaries;
(i) any interest or title of a lessor under any Capital or Operating Lease permitted hereunder (other than any Equipment Financing Transaction);
(k) leases or subleases granted to others in the ordinary course of business not interfering with the ordinary conduct of the business of the grantor thereof;
(l) Liens attaching to ownership interests in joint ventures (whether in partnership, corporate or other form) engaged in the LOS/DOS Business or attaching to intellectual property rights relating to the LOS/DOS Business;
(m) Liens created in connection with (i) Equipment Financing Transactions and (ii) Real Estate Financing Transactions so long as (A) the aggregate amount of all such transactions permitted by this Section 7.2(m) at any time outstanding (as measured by the sum of all Indebtedness secured by such Liens then outstanding or to be so created or assumed) shall not exceed $175,000,000 and (B) Company shall cause, in connection therewith, the prepayments of Loans required by Section 2.9;
(n) Liens created pursuant to applications or reimbursement agreements pertaining to documentary letters of credit which encumber documents and other property relating to such documentary letters of credit and the products and proceeds thereof;
(o) Liens granted pursuant to the Collateral Documents;
(p) Liens securing (i) Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement, and the Amended and Restated 1997 364 Day Credit Agreement, and (ii) obligations under Lender Derivative/FX Contracts;
(q) Liens securing Ordinary Course Derivative/FX Contracts permitted by Section 7.1(r);
(r) other Liens so long as the aggregate outstanding amount of Indebtedness secured by such Liens does not exceed $2,000,000 at any time;
(s) Negative Pledges on accounts receivables of Foreign Subsidiaries and the associated assets of Foreign Subsidiaries in connection with Permitted Foreign Receivable Purchase Facilities;
(t) Negative Pledges on Intellectual Property licensed from third parties; and
(u) Negative Pledges with respect to specific property encumbered to secure payment of particular Indebtedness permitted hereunder.
(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory by Company or any of Subsidiaries to Company or any of its Subsidiaries in ordinary course of business arm's length transactions;
(c) Dispositions of inventory in the ordinary course of business;
(d) Dispositions of accounts receivable from Company to LSFCC and from LSFCC to LSFLLC;
(h) licenses of Intellectual Property in the ordinary course of business;
(i) the Pending IceHouse Disposition;
(l) Dispositions of the Capital Stock of Domestic Subsidiaries that are Guarantors to Company and wholly owned Domestic Subsidiaries that are Guarantors; Dispositions of the Capital Stock of Pledged Foreign Subsidiaries to Company, Domestic Subsidiaries that are Guarantors and other Pledged Foreign Subsidiaries; and Dispositions of the Capital Stock of Unpledged Foreign Subsidiaries to Company or any of its other Subsidiaries; and
(m) Dispositions of accounts receivable to collection agencies the aggregate face amount of which does not exceed $2,000,000.
(a) Company shall not use any portion of the Loan proceeds directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance Indebtedness of Company or others incurred to purchase or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any security in any transaction that is subject to Sections 13 or 14 of the Exchange Act.
(b) Company shall not, directly or indirectly, use any portion of the proceeds of the Loans (i) knowingly to purchase Ineligible Securities from the Arranger during any period in which the Arranger makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by the Arranger, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by the Arranger and issued by or for the benefit of Company or any Affiliate of Company. The Arranger is a registered broker-dealer and permitted to underwrite and deal in certain Ineligible Securities.
PERIOD LEVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 6.00 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 6.00 to 1.00
Fiscal Year 2000 5.75 to 1.00
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 5.25 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 5.00 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 4.50 to 1.00
Fiscal Year 2001 4.25 to 1.00
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INTEREST
PERIOD COVERAGE RATIO
------ --------------
First Fiscal Quarter of Fiscal Year 2000 1.6 to 1.00
First Two Fiscal Quarter Period of Fiscal Year 2000 1.6 to 1.00
First Three Fiscal Quarter Period of Fiscal Year 2000 1.7 to 1.00
Fiscal Year 2000 1.8 to 1.00
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 1.9 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 2.0 to 1.00
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 2.1 to 1.00
Fiscal Year 2001 2.2 to 1.00
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MINIMUM
PERIOD CONSOLIDATED EBITDA
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($ in millions)
First Fiscal Quarter of Fiscal Year 2000 $ 102
First Two Fiscal Quarter Period of Fiscal Year 2000 $ 205
First Three Fiscal Quarter Period of Fiscal Year 2000 $ 320
Fiscal Year 2000 $ 440
Four Fiscal Quarter Period ending on the last day of the
First Fiscal Quarter of Fiscal Year 2001 $ 465
Four Fiscal Quarter Period ending on the last day of the
Second Fiscal Quarter of Fiscal Year 2001 $ 490
Four Fiscal Quarter Period ending on the last day of the
Third Fiscal Quarter of Fiscal Year 2001 $ 510
Fiscal Year 2001 $ 540
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(a) engage in any transaction in connection with which Company or any of its Subsidiaries or any of their respective ERISA Affiliates would be subject to either a civil penalty assessed pursuant to Section 502(i) or 502(l) of ERISA or a tax imposed by Section 4975 of the Code, in either case in an amount in excess of $5,000,000;
(b) fail to make full payment within five Business Days after the date when due of all amounts exceeding $5,000,000 which, under the provisions of any Pension Plan, Company or any of its Subsidiaries or any of their respective ERISA Affiliates is required to pay as contributions thereto, or (as to any Subsidiary organized under the laws of any of the United States) permit to exist any accumulated funding deficiency, whether or not waived, with respect to any Pension Plan in an aggregate amount greater than $5,000,000;
(c) permit the Funded Current Liability Percentage for any Pension Plan to be less than 90%; or
(d) fail to make any payments in an aggregate amount greater than $5,000,000 to any Multiemployer Plan that Company or any of its Subsidiaries, or any of their respective ERISA Affiliates may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto.
As used in this Section, the term "accumulated funding deficiency" has the meaning specified in Section 3(23) of ERISA and Section 412 of the Code and the term "accrued benefit" has the meaning specified in Article 3 of ERISA.
(b) cash and cash equivalents;
(c) advances to officers, directors and employees of Company or any of their respective Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes;
(d) extensions of credit to customers or suppliers of Company or any of its Subsidiaries in the ordinary course of business and any Investments received in satisfaction or partial satisfaction thereof;
(e) Investments permitted by Section 7.4;
(f) intercompany loans permitted by Sections 7.1(g), 7.1(h), 7.1(i), and 7.1(j);
(g) Investments by Company in any wholly-owned Subsidiary that is a Guarantor and Investments of any wholly-owned Domestic Subsidiary that is a Guarantor in Company or any other wholly-owned Domestic Subsidiary that is a Guarantor;
(h) Investments by Pledged Foreign Subsidiaries in other Pledged Foreign Subsidiaries;
(i) Investments by Unpledged Foreign Subsidiaries in other Unpledged Foreign Subsidiaries;
(k) Investments by Company in any of its Subsidiaries and other Investments of any of its Subsidiaries in Company or any of its other Subsidiaries on the Closing Date and set forth on the certificate delivered pursuant to Section 6.11(e); and
(l) other Investments not exceeding $25,000,000 at any time.
(a) Operating Leases in existence on the Closing Date; and
(b) Operating Leases entered into or assumed by Company or any Subsidiary after the date hereof in the ordinary course of business.
(a) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of any Indebtedness (other than Indebtedness under the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the Amended and Restated 1997 364 Day Credit Agreement), or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate or make less onerous any such event or default or increase any grace period related thereto), change the redemption, prepayment or defeasance provisions thereof, or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Indebtedness (or a trustee or other representative on their behalf) which would be materially adverse to Company or to Banks. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the Amended and Restated 1997 364 Day Credit Agreement without the written consent of Majority Banks if the effect of such amendment is to extend the stated maturity date thereof or increase the aggregate commitments thereunder. Company shall not amend or otherwise change the terms of the Bridge Credit Agreement, the Amended and Restated 1999 180 Day Credit Agreement or the Amended and Restated 1997 364 Day Credit Agreement to provide for an earlier stated maturity date unless this Agreement is amended to provide for the same maturity date.
(b) Company shall not, and shall not suffer or permit any of its Subsidiaries to, amend or otherwise change the terms of the Receivables Transfer Agreements other than amendments to extend the term thereof or to preserve the arm's length nature of the purchase and sale effected thereby.
MAXIMUM CAPITAL
FISCAL YEAR EXPENDITURES
----------- ------------
2000 $60,000,000
2001 $60,000,000
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ARTICLE VIII
(i) A court having jurisdiction shall enter a decree or order for relief in respect of Company or any of its Material Subsidiaries in an involuntary case under any
applicable Debtor Relief Laws, which decree or order is not stayed; or any other similar relief shall be granted under any applicable Debtor Relief Laws; or
(ii) A decree or order of a court having jurisdiction for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Company or any of its Material Subsidiaries or over all or a substantial part of their property, shall have been entered; or the involuntary appointment of an interim receiver, trustee or other custodian of Company or any of its Material Subsidiaries for all or a substantial part of their property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of Company or any of its Material Subsidiaries, and the continuance of any such events described in this subsection (f)(ii) for 60 days unless stayed, dismissed, bonded or discharged; or
(iii) an involuntary case under any applicable Debtor Relief Laws shall have been commenced against Company or any of its Material Subsidiaries and shall not have been dismissed within 60 days after the commencement of such case; or
Section 4001(a)(2) of ERISA) the withdrawing employer's proportionate share of such liability shall exceed such amount); or
(a) declare the Commitment of each Bank to be terminated, whereupon such Commitments shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable; without presentment, demand, request, protest or other notice of any kind, all of which are hereby expressly waived by Company;
(c) exercise on behalf of itself and Banks all rights and remedies available to it and Banks under the Loan Documents or applicable law;
ARTICLE IX
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent or Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term "agent" in this Agreement with reference to Agent or Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(a) Agent and Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Company), independent accountants and other experts selected by Agent or Collateral Agent. Agent and Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless Agent or Collateral Agent, as the case may be, shall first receive such advice or concurrence of Majority Banks as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of Majority Banks (or all of Banks if required hereunder) and such request and any action taken or failure to act pursuant thereto shall be binding upon all of Banks. Where this agreement expressly permits or prohibits an action unless Majority Banks otherwise determine, and in all other instances, Agent or Collateral Agent, as the case may be, may, but shall not be required to, initiate any solicitation for the consent or a vote of Banks.
(b) For purposes of determining compliance with the conditions specified in Section 4.1, each Bank shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by Agent or Collateral Agent to such Bank for consent, approval, acceptance, or satisfaction, required thereunder to be consented to or approved by or acceptable or satisfactory to the Bank.
Collateral Agent herein, neither Agent or Collateral Agent shall have any duty or responsibility to provide any Bank with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Company or any of its Subsidiaries or Affiliates which may come into the possession of any Agent Related Person or any Collateral Agent-Related Person.
though it were not Agent or Collateral Agent, and the terms "Bank" and "Banks" shall include Bank of America in its individual capacity.
(a) If any Bank is a "foreign corporation, partnership or trust" within the meaning of the Code and such Bank claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with and in favor of Agent, to deliver to Agent and Company:
(i) if such Bank claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, two properly completed and executed copies of IRS Form 1001 (or any successor form) before the payment of any interest in the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Bank, two properly completed and executed copies of IRS Form 4224 (or any successor form) before the payment of any interest is due in the first taxable year of such Bank and in each succeeding taxable year of such Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing IRS Form 1001 (or any successor form) and such Bank sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to notify Agent of the percentage amount in which it is no longer the beneficial owner of Obligations of Company to such Bank. To the extent of such percentage amount, Agent will treat such Bank's IRS Form 1001 (or any successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax by filing IRS Form 4224 (or any successor form) with Agent sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Company to such Bank, such Bank agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable withholding tax, Agent may withhold from any interest payment to such Bank an amount equivalent to the applicable withholding tax after taking into account such reduction. However, if the forms or other documentation required by subsection (a) of this Section are not delivered to Agent, then Agent may withhold from any interest payment to such Bank not providing such forms or other documentation an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Bank (because the appropriate form was not delivered or was not properly executed, or because such Bank failed to notify Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Bank shall indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent under this Section, together with all costs and expenses (including Professional Costs). The obligation of Banks under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.
agree in writing) shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by Agent at such sale.
ARTICLE X
(a) increases or extends the Commitment of any Bank or reinstates any Commitment terminated pursuant to Section 8.2;
(b) postpones, extends or delays any date fixed for any payment of principal, interest, fees or other amounts due to the Banks (or any of them) hereunder or under any Loan Document;
(c) reduces the principal of, or the rate of interest specified herein on any Loan, or of any fees or other amounts payable hereunder or under any Loan Document or any mandatory reduction of the Aggregate Commitment pursuant to Section 2.9;
(d) changes the Commitment Percentage or the aggregate unpaid principal amount of the Loans which shall be required for the Banks or any of them to take any action hereunder;
(e) changes the definition of Majority Banks or the number of Banks required to take any action under this Agreement; or
transmission, or delivered, to the address or number specified for notices on the applicable signature page hereof; or, as to Company or Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as to each other party, at such other address as shall be designated by such party in a written notice to Company and Agent.
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery, except that notices pursuant to Articles II or IX shall not be effective until actually received by Agent.
(c) Company acknowledges and agrees that any agreement of Agent and Banks in Article II to receive certain notices by telephone and facsimile is solely for the convenience and at the request of Company. Agent and Banks shall be entitled to rely on the authority of any Person purporting to be a Person authorized by Company to give such notice and Agent and Banks shall not have any liability to Company or other Person on account of any action taken or not taken by Agent and Banks in reliance upon such telephonic or facsimile notice. The obligation of Company to repay the Loans shall not be affected in any way or to any extent by any failure by Agent and Banks to receive written confirmation of any telephonic or facsimile notice or the receipt by Agent and Banks of a confirmation which is at variance with the terms understood by Agent and Banks to be contained in the telephonic or facsimile notice.
(a) Whether or not the transactions contemplated hereby are consummated, pay or reimburse Bank of America (including in its capacity as Agent) promptly after demand, for all reasonable costs and expenses incurred by Bank of America (including in its capacity as Agent) in connection with the development, preparation, delivery, administration and execution of, and any amendment, supplement, waiver or modification to (in each case, whether or not consummated), this Agreement, any Loan Document and any other documents prepared in connection herewith or therewith, and the consummation of the transactions contemplated hereby and thereby, including reasonable Professional Costs and other professional fees incurred by Bank of America (including in its capacity as Agent) with respect thereto;
(b) Subject to the limitations set forth therein, pay or reimburse
Agent promptly after demand, for all reasonable costs and expenses incurred by
Agent (including the fees, expenses and disbursements of any auditors,
accountants, advisors and agents employed or retained by Agent or its counsel)
in connection with obtaining and reviewing the information provided under
Section 6.1 or 6.7;
(c) Pay or reimburse Agent, Collateral Agent, the Arranger and each Bank within five Business Days after demand, for all costs and expenses (including Professional Costs) incurred by them in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or any other Loan Document during the existence of an Event of Default or after acceleration of the Loans (including in connection with any "workout" or restructuring regarding the Loans, and including in any Insolvency Proceeding or appellate proceeding);
(d) Pay or reimburse Agent and Collateral Agent promptly after demand, for all the actual costs and reasonable expenses of creating and perfecting Liens in favor of Collateral Agent on behalf of Banks pursuant to any Collateral Document, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums, and reasonable fees, expenses and disbursements of counsel to Agent and Collateral Agent and of counsel providing any opinions that Agent, Collateral Agent or Majority Banks may request in respect of the Collateral Documents or the Liens created pursuant thereto; and
(e) Pay or reimburse Collateral Agent promptly after demand, for all reasonable costs and expenses incurred by Collateral Agent in connection with the custody and preservation of the Collateral.
force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Bank severally agrees to pay to Agent upon demand its pro rata share of any amount so recovered from or repaid by Agent.
(A) a Bank may enter into an assignment and delegation of less than $5,000,000 if such assignment and delegation consists of such Bank's entire interest;
(C) Company and Agent may continue to deal solely and directly with such Bank in connection with the interest so assigned to an Assignee until (1) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to Company and Agent by such Bank and the Assignee; (2) such Bank and its Assignee shall have delivered to Company and Agent an Assignment and Acceptance and any Note or Notes subject to such assignment; and (3) the assignor Bank or Assignee has paid Agent a processing fee of $3,500.
(b) From and after the date that Agent notifies the assignor Bank that it has provided its consent to and received an executed Assignment and Acceptance and payment of the processing fee of $3,500, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights and obligations hereunder and the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (other than any rights of indemnity) and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by Agent that it has received an executed Assignment and Acceptance and payment of the processing fee, Company shall execute and deliver to Agent, new Notes evidencing such Assignee's assigned Loans and, if the assignor Bank has retained a portion of its Loans, replacement Notes in the principal amount of the Loans retained by the assignor Bank (such Notes to be in exchange for, but not in payment of, the Notes held by such Bank). Immediately upon each Assignee's making its payment under the Assignment and Acceptance, this Agreement, shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee. If an assignor Bank has not retained a portion of its Loans, such Bank shall mark its Notes "superseded" and return such Notes to Agent for delivery to Company.
(e) Notwithstanding any other provision in this Agreement, any Bank may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement (and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board or U.S. Treasury Regulation 31 CFR ss.203.14, and may assign all or any portion of its rights under or interests in this Agreement (and the Notes held by it) to any Affiliate for purposes of creating such a security interest or pledge, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES; PROVIDED THAT AGENT, COLLATERAL AGENT, BANKS, AND COMPANY SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
ARTICLE XI
11.2 Notwithstanding anything hereunder to the contrary, this Article XI shall not release or alter any obligation arising subsequent to the date hereof to comply with the terms and conditions of this Agreement and the other Loan Documents. It is expressly understood and agreed that it is the intent of Company to forever release certain claims against Agent, Collateral Agent and Banks, including, but not limited to, any claims related to the actions and omissions of
Releasees prior to the date hereof, but that nothing herein shall affect the obligations of the Releasees arising subsequent to the date hereof, including, but not by way of limitation, compliance subsequent to the date hereof with all terms and conditions of this Agreement and the other Loan Documents.
11.3 Without limiting the generality of the foregoing, Company for itself and on behalf of the other Releasors expressly releases any and all past, present and future claims in connection with the Released Matters, about which the Releasors do not know or suspect to exist in their favor, whether through ignorance, oversight, error, negligence or otherwise, and which, if known, would materially affect Company's decision to enter into this release, and to this end Company for itself, and on behalf of each of the other Releasors, waives all rights under Section 1542 of the Civil Code of California, which states in full as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Company knowingly and willingly waives the provisions of Section 1542 and acknowledges and agrees that this waiver is an essential and material term of this release. Company has reviewed this release with Company's legal counsel, and Company understands and acknowledges the significance and consequence of this release and of the specific waiver of Section 1542 of the Civil Code of California.
11.4 Company represents, warrants and agrees that in executing and entering into this release, Company is not relying and has not relied upon any representation, promise or statement made by anyone which is not recited, contained or embodied in this Agreement or the other Loan Documents. Company understands and expressly assumes the risk that any fact not recited, contained or embodied therein may turn out hereafter to be other than, different from, or contrary to the facts now known to Company or believed by Company to be true. Nevertheless, Company intends by this release to release fully, finally and forever all Released Matters and agrees that this release shall be effective in all respects notwithstanding any such difference in facts, and shall not be subject to termination, modification or rescission by reason of any such difference in facts.
[FORM OF] PLEDGE AND SECURITY AGREEMENT
C. It is a condition precedent to the effectiveness of the Credit Agreement that Grantors listed on the signature pages hereof shall have granted the security interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks to enter into the Credit Agreement, each Grantor hereby agrees with Secured Party as follows:
(ii) all rights, title and interest (including rights acquired pursuant to a license or otherwise) in and to all patents and patent applications and rights and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned or held by such Grantor and all patents and patent applications and rights, title and interests in patents and patent applications under any domestic or foreign law that are presently, or in the future may be, owned by such Grantor in whole or in part (including, without limitation, the patents and patent
(g) all information used or useful or arising from the business including all goodwill, trade secrets, trade secret rights, know-how, customer lists, processes of production, ideas, confidential business information, techniques, processes, formulas, and all other proprietary information;
(h) to the extent not included in any other paragraph of this Section 1, all other general intangibles (including tax refunds, rights to payment or performance, choses in action and judgments taken on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures and storage and office facilities, and all accessions thereto and products thereof;
(j) all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; and
Notwithstanding anything herein to the contrary, neither Company nor any Grantor shall be deemed to have granted a security interest in (i) any Principal Property, (ii) any Capital Stock of any Restricted Subsidiary or (iii) any Pledged Debt of or issued by any Restricted Subsidiary.
(i) with respect to Company, all obligations and liabilities of every nature of Company now or hereafter existing under or arising out of or in connection with the Credit Agreement and the other Loan Documents, and
(ii) with respect to each Subsidiary Grantor and Additional Grantor, all obligations and liabilities of every nature of such Grantors now or hereafter existing under or arising out of or in connection with the Guaranty;
in each case together with all extensions or renewals thereof, whether for principal, interest (including without limitation interest that, but for the filing of a petition in bankruptcy with respect to Company or any other Grantor, would accrue on such obligations, whether or not a claim is allowed against Company or such Grantor for such interest in the related bankruptcy proceeding), fees, expenses, indemnities or otherwise, whether voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Secured Party, Agent or any Bank as a preference, fraudulent transfer or otherwise, and all obligations of every nature of Grantors now or hereafter existing under this Agreement.
(b) Any and all security interests, liens, rights and interest of Secured Party in and to any or all of the Collateral are subordinated to any and all security interests, liens, rights and interest of the several financial institutions party to the Bridge Credit Agreement from time to time in and to any or all of the Collateral pursuant to the Intercreditor Agreement.
Anything contained herein to the contrary notwithstanding, (a) each Grantor shall remain liable under any contracts and agreements included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under any contracts, licenses, and agreements included in the Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
Each Grantor represents and warrants as follows:
locations specified in Schedule 4(b),(iii) from a supplier or a Grantor to a processor, or (iv) to customers of a Grantor.
(i) a true and complete list of all Trademark Registrations and Trademark applications owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned by such Grantor, in whole or in part, that are material to such Grantor's business, is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright Registrations and applications for Copyright Registrations owned by such Grantor, in whole or in part, is set forth in Schedule 1(f)(iii);
(iv) after reasonable inquiry, such Grantor is not aware of any pending or threatened claim by any third party that any of the Intellectual Property Collateral owned, held or used by such Grantor is invalid or unenforceable that is reasonably likely to have a Material Adverse Effect; and
(v) no effective security interest or other Lien covering all or any part of the Intellectual Property Collateral is on file in the United States Patent and Trademark Office or the United States Copyright Office.
interest granted hereby, (ii) at the reasonable request of Secured Party, deliver and pledge to Secured Party hereunder all promissory notes and other instruments (including checks) and all original counterparts of chattel paper constituting Collateral, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Secured Party, (iii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as Secured Party may request, in order to perfect and preserve the security interests granted or purported to be granted hereby, (iv) furnish to Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Secured Party may reasonably request, all in reasonable detail, (v) if requested by Co-Agents, promptly after the acquisition by such Grantor of any item of Equipment that is covered by a certificate of title under a statute of any jurisdiction under the law of which indication of a security interest on such certificate is required as a condition of perfection thereof, execute and file with the registrar of motor vehicles or other appropriate authority in such jurisdiction an application or other document requesting the notation or other indication of the security interest created hereunder on such certificate of title, (vi) within 45 days after the end of each fiscal quarter of Company, deliver to Secured Party copies of all such applications or other documents filed during such fiscal quarter and copies of all such certificates of title issued during such fiscal quarter indicating the security interest created hereunder in the items of Equipment covered thereby, (vii) at any reasonable time, upon request by Secured Party, exhibit the Collateral to and allow inspection of the Collateral by Secured Party, or persons designated by Secured Party, and (viii) at Secured Party's request, appear in and defend any action or proceeding that may affect such Grantor's title to or Secured Party's security interest in all or any part of the Collateral. Each Grantor hereby authorizes Secured Party to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of any Grantor. Each Grantor agrees that a carbon, photographic or other reproduction of this Agreement or of a financing statement signed by such Grantor shall be sufficient as a financing statement and may be filed as a financing statement in any and all jurisdictions.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement or any applicable statute, regulation or ordinance or any policy of insurance covering the Collateral, except where such violation would not have a Material Adverse Effect;
(b) notify Secured Party of any change in such Grantor's name, identity or corporate structure within 30 days of such change;
(c) give Secured Party 30 days' prior written notice of any change in such Grantor's chief place of business, chief executive office or residence or the office where such Grantor keeps its records regarding the Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to acquire rights in or the use of any Collateral, use such value for such purposes; and
(e) except as otherwise not prohibited by the Credit Agreement, pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, services, materials and supplies) against, the Collateral.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the places therefor specified on Schedule 4(b), or upon 30 days' prior written notice to Secured Party, at such other places in jurisdictions where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Equipment and Inventory shall have been taken;
(b) except as otherwise permitted by Section 6.6 of the Credit Agreement, cause the Equipment owned by such Grantor to be maintained and preserved in the same condition, repair and working order as when new, ordinary wear and tear excepted, and in accordance with such Grantor's past practices, and shall forthwith make or cause to be made all repairs, replacements and other improvements in connection therewith that are necessary or desirable to such end. Each Grantor shall promptly furnish to Secured Party a statement respecting any material loss or damage to the Equipment owned by such Grantor, but only to the extent that such loss or damage is material to the Equipment owned by Company and its Subsidiaries, taken as a whole;
(c) keep correct and accurate records of Inventory owned by such Grantor, itemizing and describing the kind, type and quantity of such Inventory, and such Grantor's cost therefor;
(d) if any Inventory is in the possession or control of any of such Grantor's agents or processors, within 30 days of the Closing Date (with respect to existing agents or processors) and promptly after any such Inventory comes into the possession or control of such Grantor's agents or processors (with respect to future agents or processors), instruct such agent or processor to hold all such Inventory for the account of Secured Party and subject to the instructions of Secured Party, and use commercially reasonable efforts, but at no out-of-pocket cost to such Grantor, to obtain waivers or bailee letters in form and substance reasonably
satisfactory to Collateral Agent from all public warehouses in which Inventory is maintained and all such agents or processors; and
(e) each Grantor shall, at its own expense, maintain insurance with respect to the Equipment and Inventory in accordance with the terms of the Credit Agreement.
(a) Each Grantor shall keep its chief place of business and chief executive office and the office where it keeps its records concerning the Accounts and Related Contracts, and all originals of all chattel paper that evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon 30 days' prior written notice to Secured Party, at such other location in a jurisdiction where all action that may be necessary or desirable, or that Secured Party may request, in order to perfect and protect any security interest granted or purported to be granted hereby, or to enable Secured Party to exercise and enforce its rights and remedies hereunder, with respect to such Accounts and Related Contracts shall have been taken. Each Grantor will hold and preserve such records and chattel paper and will permit representatives of Secured Party at any time during normal business hours to inspect and make abstracts from such records and chattel paper, and each Grantor agrees to render to Secured Party, at Grantor's cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. Promptly upon the request of Secured Party, each Grantor shall deliver to Secured Party complete and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than three (3) years from the date on which each Account of such Grantor arose, maintain (i) complete records of such Account, including records of all payments received, credits granted and merchandise returned, and (ii) all documentation relating thereto.
checks and other instruments) received by such Grantor in respect of the Accounts and the Related Contracts shall be received in trust for the benefit of Secured Party hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over or delivered to Secured Party in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by Section 16 hereof, and (ii) such Grantor shall not adjust, settle or compromise the amount or payment of any Account, or release wholly or partly any account debtor or obligor thereof, or allow any credit or discount thereon.
Upon the occurrence and during the continuation of an Event of Default, (i) upon written notice from Secured Party to any Grantor, all rights of such Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to exercise such voting and other consensual rights; (ii) all rights of such Grantor to receive the dividends, other distributions and interest payments which it would otherwise be authorized to receive and retain pursuant hereto shall cease, and all such rights shall thereupon become vested in Secured Party who shall thereupon have the sole right to receive and hold as Securities Collateral such dividends, other distributions and interest payments; and (iii) all dividends, principal, interest payments and other distributions which are received by such Grantor contrary to the provisions of subsection (ii) of the immediately preceding paragraph or subsection (ii) above shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of such Grantor and shall forthwith be paid over to Secured Party as Securities Collateral in the same form as so received (with any necessary endorsements).
In order to permit Secured Party to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Secured Party all such proxies, dividend payment orders and other instruments as Secured Party may from time to time reasonably request, and (ii) without limiting the effect of subsection (i) above, each Grantor hereby grants to Secured Party an irrevocable proxy to vote the Pledged Shares and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Shares would be entitled (including giving or withholding written consents of shareholders or other holders of equity interests, calling special meetings of shareholders or other holders of equity interests and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Shares on the record books of the issuer thereof) by any other Person (including the issuer of the Pledged Shares or any officer or agent thereof), upon the occurrence of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the Intellectual Property Collateral and at all times keep at least one complete set of its records concerning such Collateral at its chief executive office or principal place of business;
(ii) use commercially reasonable efforts so as not to permit the inclusion in any contract to which it hereafter becomes a party of any provision that could or might in any way impair or prevent the creation of a security interest in, or the
assignment of, such Grantor's rights and interests in any property included within the definitions of any Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the secrecy of all trade secrets relating to the products and services sold or delivered under or in connection with the Intellectual Property Collateral, including, without limitation, where appropriate entering into confidentiality agreements with employees and labeling and restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its use of any of the Intellectual Property Collateral, except where the failure to give such notice would not have a Material Adverse Effect;
(v) use a commercially appropriate standard of quality (which may be consistent with such Grantor's past practices) in the manufacture, sale and delivery of products and services sold or delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured Party's reasonable request statements and schedules further identifying and describing any Intellectual Property Collateral and such other reports in connection with such Collateral, all in reasonable detail.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make, unless
and until such Grantor, in its commercially reasonable judgment, decides
otherwise, (i) any application relating to any of the Intellectual Property
Collateral owned, held or used by such Grantor and identified on Schedules
1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is pending as of the date of
this Agreement, (ii) any Copyright Registration on any existing or future
unregistered but copyrightable works (except for works of nominal commercial
value or with respect to which such Grantor has determined in the exercise of
its commercially reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or invention
comprising Intellectual Property Collateral, and (iv) any Trademark opposition
and cancellation proceedings, renew Trademark Registrations and Copyright
Registrations and do any and all acts which are necessary or desirable to
preserve and maintain all rights in all Intellectual Property Collateral. Any
expenses incurred in connection therewith shall be borne solely by Grantors.
Subject to the foregoing, each Grantor shall give Secured Party written notice
of any abandonment of any Intellectual Property Collateral registered with a
Governmental Authority or any pending patent application or any Patent within 45
days after the end of each fiscal quarter of Company.
(d) Except as provided herein, each Grantor shall have the right to commence and prosecute in its own name, as real party in interest, for its own benefit and at its own expense, such suits, proceedings or other actions for infringement, unfair competition, dilution, misappropriation or other damage, or reexamination or reissue proceedings as are necessary to protect the Intellectual Property Collateral. Secured Party shall provide, at such Grantor's expense, all reasonable and necessary cooperation in connection with any such suit, proceeding or action including, without limitation, joining as a necessary party. Each Grantor shall, within 45 days after the end of each fiscal quarter of Company, notify Secured Party of the institution of, or of any adverse determination likely to have a Material Adverse Effect in, any proceeding (whether in the United States Patent and Trademark Office, the United States Copyright Office or any federal, state, local or foreign court) or regarding such Grantor's ownership, right to use, or interest in any Intellectual Property Collateral. Each Grantor shall provide to Secured Party any information with respect thereto requested by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a security interest in the Collateral pursuant hereto, each Grantor, effective upon the occurrence and during the continuation of an Event of Default, hereby assigns, transfers and conveys to Secured Party the nonexclusive right and license to use all trademarks, tradenames, copyrights, patents or technical processes (including, without limitation, the Intellectual Property Collateral) owned or used by such Grantor that relate to the Collateral and any other collateral granted by such Grantor as security for the Secured Obligations, together with any goodwill associated therewith, all to the extent necessary to enable Secured Party to realize on the Collateral in accordance with this Agreement and to enable any transferee or assignee of the Collateral to enjoy the benefits of the Collateral; provided, however, the license granted under this Section shall not be construed to limit such Grantor's ability to take reasonable steps, in accordance with its then current business practices, to protect and preserve the Trademarks, the Trademark Registrations, the Trademark Rights and the Associated Goodwill. This right shall inure to the benefit of all successors, assigns and transferees of Secured Party and its successors, assigns and transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license shall be granted free of charge, without
requirement that any monetary payment whatsoever be made to such Grantor. In addition, each Grantor hereby grants to Secured Party and its employees, representatives and agents the right to visit such Grantor's and any of its Affiliate's or subcontractor's plants, facilities and other places of business that are utilized in connection with the manufacture, production, inspection, storage or sale of products and services sold or delivered under any of the Intellectual Property Collateral (or which were so utilized during the prior six month period), and to inspect the quality control and all other records relating thereto upon reasonable advance written notice to such Grantor and at reasonable dates and times and as often as may be reasonably requested. To the extent that the Credit Agreement permits any Grantor to license the Intellectual Property Collateral, Secured Party shall promptly enter into a non-disturbance agreement or other similar arrangement, at such Grantor's request and expense, with such Grantor and any licensee of any Intellectual Property Collateral permitted hereunder in form and substance reasonably satisfactory to Secured Party pursuant to which (i) Secured Party shall agree not to disturb or interfere with such licensee's rights under its license agreement with such Grantor so long as such licensee is not in default thereunder, and (ii) such licensee shall acknowledge and agree that the Intellectual Property Collateral licensed to it is subject to the security interest created in favor of Secured Party and the other terms of this Agreement.
Each Grantor hereby irrevocably appoints Secured Party as such Grantor's attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor, Secured Party or otherwise, from time to time in Secured Party's discretion to take any action and to execute any instrument that Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of Default, to obtain and adjust insurance required to be maintained by such Grantor or paid to Agent under the Credit Agreement;
(b) upon the occurrence and during the continuance of an Event of Default, to ask for, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of Default, to receive, endorse and collect any drafts or other instruments, documents and chattel paper in connection with Sections 11(a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of Default, to file any claims or take any action or institute any proceedings that Secured Party may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral;
(e) except as otherwise permitted by Section 6.5 of the Credit Agreement, to pay or discharge taxes or Liens (other than Liens permitted under this Agreement or the Credit Agreement) levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations of such Grantor to Secured Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of Default, to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with Accounts and other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do, at Secured Party's option and Grantors' expense, at any time or from time to time, all acts and things that Secured Party deems necessary to protect, preserve or realize upon the Collateral and Secured Party's security interest therein in order to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
If any Grantor fails to perform any agreement contained herein, Secured Party may itself perform, or cause performance of, such agreement, and the expenses of Secured Party incurred in connection therewith shall be payable by Grantors under Section 17(b) hereof.
The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the exercise of reasonable care in the custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of Collateral in its possession if such Collateral is accorded treatment substantially equal to that which Secured Party accords its own property.
such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding subsection (iii) and collecting
any Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Bank constituting a part of
the Collateral and (vii) without notice to any Grantor, transfer to or to
register in the name of Secured Party or any of its nominees any or all of the
Securities Collateral. Secured Party or any Bank may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as agent for and
representative of Banks (but not any Bank in its individual capacity unless
Majority Banks shall otherwise agree in writing), shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale. Each purchaser
at any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. Secured
Party shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Grantor hereby waives any claims against Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantors shall be jointly and severally liable
for the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against such Grantor, and each Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Securities Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges that any such private sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act) and, notwithstanding such circumstances and the registration rights granted to Secured Party by such Grantor pursuant hereto, each Grantor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Securities Collateral for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would, or should, agree to so register it. If Secured Party determines to exercise its right to sell any or all of the Securities Collateral, upon written request, each Grantor shall and shall cause each issuer of any Pledged Shares to be sold hereunder from time to time to furnish to Secured Party all such information as Secured Party may request in order to determine the number of shares and other instruments included in the Securities Collateral which may be sold by Secured Party in exempt transactions under the Securities Act and the rules and regulations of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.
(ii) If Secured Party shall determine to exercise its right to sell all or any of the Securities Collateral pursuant to this Section, each Grantor agrees that, upon request of Secured Party (which request may be made by Secured Party in its sole discretion), such Grantor will, at its own expense (A) execute and deliver, and cause each issuer of the Securities Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of Secured Party, advisable to register such Securities Collateral under the provisions of the Securities Act and to cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the opinion of Secured Party, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto; (B) use its best efforts to qualify the Securities Collateral under all applicable state securities or "Blue Sky" laws and to obtain all necessary governmental approvals for the sale of the Securities Collateral, as requested by Secured Party; (C) cause each such issuer to make available to its security holders, as soon as practicable, an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act; (D) do or cause to be done all such other acts and things as may be necessary to make such sale of the Securities Collateral or any part thereof valid and binding and in compliance with applicable law; and (E) bear all reasonable costs and expenses, including reasonable attorneys' fees, of carrying out its obligations under this Section.
(iii) Without limiting the generality of Sections 10.4 and 10.5 of the Credit Agreement, in the event of any public sale described herein, each Grantor agrees to indemnify and hold harmless (to the maximum extent permitted under the Securities Act or other applicable law) Secured Party and each Bank and each of their respective directors, officers, employees and agents from and against any loss, fee, cost, expense, damage, liability or claim, joint or several, to which any such Persons may become subject or for which any of them may be liable, under the Securities Act or otherwise, insofar as such losses, fees, costs, expenses, damages, liabilities or claims (or any litigation commenced or threatened in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, registration statement, prospectus or other such document published or filed in connection with such public sale, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will (to the maximum extent permitted under the Securities Act or other applicable law) reimburse Secured Party and such other Persons for any legal or other expenses reasonably incurred by Secured Party and such other Persons in connection with any litigation, of any nature whatsoever, commenced or threatened in respect thereof (including any and all fees, costs and expenses whatsoever reasonably incurred by Secured Party and such other Persons and counsel for Secured Party and such other Persons in investigating, preparing for, defending against or providing evidence, producing documents or taking any other action in respect of, any such commenced or threatened litigation or any claims asserted). This indemnity shall be in addition to any liability which any Grantor may otherwise have and shall extend upon the same terms and conditions to each Person, if any, that controls Secured Party or such Persons within the meaning of the Securities Act.
(a) Anything contained herein to the contrary notwithstanding, upon the occurrence and during the continuation of an Event of Default, (i) Secured Party shall have the right (but not the obligation) to bring suit, in the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual Property Collateral, in which event each Grantor shall, at the request of Secured Party, do any and all lawful acts and execute any and all documents required by Secured Party in aid of such enforcement and each Grantor shall promptly, upon demand, reimburse and indemnify Secured Party as provided in Sections 10.4 and 10.5 of the Credit Agreement and Section 17 hereof, as applicable, in connection with the exercise of its rights under this Section, and, to the extent that Secured Party shall elect not to bring suit to enforce any Intellectual Property Collateral as provided in this Section, each Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property Collateral by others and for that purpose agrees to use its commercially reasonable judgment in maintaining any action, suit or proceeding against any Person so infringing reasonably necessary to prevent such infringement; (ii) upon written demand from Secured Party, each Grantor shall execute and deliver to Secured Party an assignment or assignments of the Intellectual Property Collateral and such other documents as are necessary or appropriate to carry out the intent and purposes of this Agreement; (iii) each Grantor agrees that such an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Bank) receives cash proceeds in respect of the sale of, or other realization upon, the Intellectual Property Collateral; and (iv) within five Business Days after written notice from Secured Party, each Grantor shall make available to Secured Party, to the extent within such Grantor's power and authority, such personnel in such Grantor's employ on the date of such Event of Default as Secured Party may reasonably designate, by name, title or job responsibility, to permit such Grantor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Grantor under or in connection with the Trademarks, Trademark Registrations and Trademark Rights, such persons to be available to perform their prior functions on Secured Party's behalf and to be compensated by Secured Party at such Grantor's expense on a per diem, pro- rata basis consistent with the salary and benefit structure applicable to each as of the date of such Event of Default.
Except as expressly provided elsewhere in this Agreement and in the Intercreditor Agreement, all proceeds received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied in the following order of priority:
FIRST: To the payment of all costs and expenses of such sale, collection or other realization, including reasonable compensation to Secured Party and its agents and counsel, and all other expenses, liabilities and advances made or incurred by Secured Party in connection therewith, and all amounts for which Secured Party is entitled to indemnification hereunder and all advances made by Secured Party hereunder for the account of Grantors, and to the payment of all costs and expenses paid or incurred by Secured Party in connection with the exercise of any right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the ratable benefit of the holders thereof) and, as to obligations arising under the Credit Agreement, as provided in the Credit Agreement; and
THIRD: To the payment to or upon the order of Company, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, of any surplus then remaining from such proceeds.
(a) Grantors jointly and severally agree to indemnify Secured Party and each Bank from and against any and all claims, losses and liabilities in any way relating to, growing out of or resulting from this Agreement and the transactions contemplated hereby (including without limitation enforcement of this Agreement), except to the extent such claims, losses or liabilities result solely from Secured Party's or such Bank's gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(b) Subject to Section 6.7 of the Credit Agreement, Grantors jointly and severally agree to pay to Secured Party upon demand (i) the amount of any and all reasonable costs and expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the administration of this Agreement or the failure by any Grantor to perform or observe any of the provisions hereof and (ii) the amount of any and all costs and expenses, including the fees and expenses of its counsel and of any experts and agents, that Secured Party may incur in connection with the exercise or enforcement of any of the rights of Secured Party hereunder.
(c) The obligations of Grantors in this Section 17 shall (i) survive the termination of this Agreement and the discharge of Grantors' other obligations under this Agreement, the Credit Agreement and the other Loan Documents, and (ii) as to any Grantor that is a party to a Guaranty, be subject to the provisions of Section 1(b) thereof.
(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Secured Obligations and the cancellation or termination of the Commitments, (ii) be binding upon Grantors and their respective successors and assigns, and (iii) inure, together with the rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns. Without limiting the generality of the foregoing subsection (iii), but subject to the provisions of Sections 10.7 and 10.8 of the Credit Agreement, any Bank may assign or otherwise transfer any Loans held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Banks herein or otherwise.
(b) Upon the payment in full of all Secured Obligations and the cancellation or termination of the Commitments, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantors. Upon any such termination Secured Party will, at Grantors' expense, execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination. In addition, upon the proposed sale, transfer or other disposition of any Collateral by a Grantor in accordance with the Credit Agreement for which such Grantor desires to obtain a security interest release from Secured
Party, such Grantor shall deliver an officers' certificate (i) stating that the Collateral subject to such disposition is being sold, transferred or otherwise disposed of in compliance with the terms of the Credit Agreement, and (ii) specifying the Collateral being sold, transferred or otherwise disposed of in the proposed transaction. Upon the receipt of such officers' certificate, Secured Party shall, at such Grantor's expense, so long as Secured Party has no reason to believe that the officers' certificate delivered by such Grantor with respect to such sale is not true and correct, execute and deliver such releases of its security interest in such Collateral which is to be so sold, transferred or disposed of, as may be reasonably requested by such Grantor.
(b) Secured Party shall at all times be the same Person that is
Collateral Agent under the Credit Agreement. Written notice of resignation by
Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this Agreement; removal
of Collateral Agent pursuant to Section 9.10 of the Credit Agreement shall also
constitute removal as Secured Party under this Agreement; and appointment of a
successor collateral agent pursuant to Section 9.10 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Collateral Agent under
Section 9.10 of the Credit Agreement by a successor collateral agent, that
successor collateral agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed Secured
Party under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed collateral agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
The initial Subsidiary Grantors hereunder shall be such of the Subsidiaries of Company as are signatories hereto on the date hereof. From time to time subsequent to the date hereof, additional Subsidiaries of Company may become parties hereto as additional Grantors (each an
(a) Unless otherwise specifically provided in this Agreement, all notices, requests and other communications provided for hereunder shall be in writing (including, unless the context expressly otherwise provides, telegraphic, telex, facsimile transmission or cable communication, provided that any matter transmitted by facsimile transmission (i) shall be immediately confirmed by a telephone call to the recipient at the number specified on the applicable signature page hereof, and (ii) shall be followed promptly by a hard copy original thereof) and mailed, telegraphed, telexed, sent by facsimile transmission, or delivered, to the address or number specified for notices on the applicable signature page hereof; or, as to any Grantor or Collateral Agent, to such other address as shall be designated by such party in a written notice to the other parties, and as to each other party, at such other address as shall be designated by such party in a written notice to each Grantor and Collateral Agent.
(b) All such notices and communications shall, when transmitted by overnight delivery, telegraphed, telecopied by facsimile, telexed or cabled, be effective when delivered for overnight delivery or to the telegraph company, transmitted by telecopier, confirmed by telex answerback or delivered to the cable company, respectively, or if delivered, upon delivery.
No failure or delay on the part of Secured Party in the exercise of any power, right or privilege hereunder shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of New York are used herein as therein defined. The rules of construction set forth in Section 1.2 of the Credit Agreement shall be applicable to this Agreement mutatis mutandis.
EACH GRANTOR, BANKS, AGENT AND SECURED PARTY EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GRANTOR, BANKS, AGENT AND SECURED PARTY
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, Grantors and Secured Party have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
LEVI STRAUSS & CO.
By:________________________________________ Name:______________________________________ Title:_____________________________________
BANK OF AMERICA, N.A., as Collateral Agent, as Secured Party
By:________________________________________ Name:______________________________________ Title:_____________________________________
Schedule A
----------
Name Notice Address for each Subsidiary
---- ----------------------------------
Grantor
-------
|
V-Sch. A-1
V-Sch. 1(d)-1
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PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
=======================================================================================================
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|
V-Sch. 1(e)(i)-1
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PERCENTAGE OF
CLASS STOCK NUMBER OUTSTANDING
OF STOCK OR REGISTERED CERTIFICATE PAR OF SHARES
STOCK ISSUER EQUITY INTEREST OWNER NOS. VALUE SHARES PLEDGED
=======================================================================================================
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|
V-Sch. 1(e)(i)-2
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AMOUNT OF
DEBT ISSUER PAYEE INDEBTEDNESS
=================================================================================================
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|
V-Sch. 1(e)(ii)-1
Schedule 1(f)(i) to
-------------------
Pledge and Security Agreement
-----------------------------
U.S. Trademarks:
---------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
Foreign Trademarks:
------------------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
V-Sch. 1(f)(i)-1
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
--------- ---------- --------- -------- -----
|
Applicant's Date Application
Name Filed Number Invention [Inventor]
---- ----- ------ --------- -------
|
[Registered
Patent No. Issue Date Invention [Inventor] Owner]
--------- ---------- --------- -------- -----
|
V-Sch. 1(f)(ii)-1
Applicant's Date Application Name Filed Number Invention [Inventor] ---- ----- ------ --------- --------- |
V-Sch. 1(f)(ii)-2
V-Sch. 1(f)(iii)-1
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
V-Sch. 4(b)-1
|
Name of Grantor Office Locations
--------------- ----------------
V-Sch. 4(c)-1
|
Schedule 4(d) to
----------------
Pledge and Security Agreement
-----------------------------
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
|
V-Sch. 4(d)-1
Schedule 4(h) to
----------------
Pledge and Security Agreement
-----------------------------
Filing Offices
--------------
Grantor Filing Offices
------- --------------
|
V-Sch. 4(h)-1
[FORM OF] GRANT OF TRADEMARK SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all trademarks, service marks, designs, logos, indicia, tradenames,
V-I-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page is intentionally left blank.]
V-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the __ day of _______, 2000.
[NAME OF GRANTOR]
By:________________________
Name:______________________
Title:_____________________
V-I-3
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------ ----
|
V-Sch. A-1
[FORM OF] GRANT OF PATENT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) in and to all patents and patent applications and rights and interests in patents and
V-II-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
V-II-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ____________, 2000.
[NAME OF GRANTOR]
By:____________________
Name:
Title:
V-II-3
Patents Issued:
--------------
Registered
Patent No. Issue Date Invention Inventor Owner
---------- ---------- --------- -------- -----
|
Applicant's Date Application Name Filed Number Invention Inventor ---- ----- ------ --------- -------- |
V-Sch. A-1
[FORM OF] GRANT OF COPYRIGHT SECURITY INTEREST
(i) all rights, title and interest (including rights acquired pursuant to a license or otherwise but only to the extent permitted by agreements governing such license or other use) under copyright in various published and unpublished works of authorship including,
V-III-1
Grantor does hereby further acknowledge and affirm that the rights and remedies of Secured Party with respect to the security interest in the Copyright Collateral granted hereby are
V-III-2
more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
[The remainder of this page intentionally left blank.]
V-III-3
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security Interest to be duly executed and delivered by its officer thereunto duly authorized as of the ___ day of ___________, 2000.
[NAME OF GRANTOR]
By: _____________________________
Name: ___________________________
Title: __________________________
V-III-4
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- -------------------
V-Sch. A-1
|
[FORM OF] PLEDGE SUPPLEMENT
Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed on
the schedule attached hereto shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Securities Collateral and shall
secure all Secured Obligations.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of _______________.
[GRANTOR]
By: ____________________________
Name: __________________________
Title: _________________________
V-IV-1
[FORM OF] IP SUPPLEMENT
["Grantor"] grants to Secured Party a security interest in all of Grantor's right, title and interest in and to the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] listed on Schedule A attached hereto. All such [Trademark Collateral] [Patent Collateral] [Copyright Collateral] shall be deemed to be part of the [Trademark Collateral] [Patent Collateral] [Copyright Collateral] and shall be hereafter subject to each of the terms and conditions of the Pledge and Security Agreement and the Grant.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By: __________________________
Name: ________________________
Title: _______________________
V-V-1
[FORM OF] COUNTERPART
(i) authorizes the Secured Party to add the information set forth on the Schedules to this Agreement to the correlative Schedules attached to the Pledge and Security Agreement;
(ii) agrees that all Collateral of the undersigned, including the items of property described on the Schedules hereto, shall become part of the Collateral and shall secure all Secured Obligations; and
(iii) makes the representations and warranties set forth in the Pledge and Security Agreement, as amended hereby, to the extent relating to the undersigned.
[NAME OF ADDITIONAL GRANTOR]
By: _________________________
Name: _______________________
Title: ______________________
VIII-Sch. 1-1
EXHIBIT 10.15
[FORM OF] GUARANTY
C. A portion of the proceeds of the Loans may be advanced to Guarantors, and thus the Guarantied Obligations (as hereinafter defined) are being incurred for and will inure to the benefit of Guarantors (which benefits are hereby acknowledged).
D. It is a condition precedent to the effectiveness of the Credit Agreement that Company's obligations thereunder be guarantied by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to induce Banks and Guarantied Party to enter into the Credit Agreement, Guarantors hereby agree as follows:
VI-1
Each Guarantor acknowledges that a portion of the Loans may be advanced to it, that Lender Letters of Credit may be issued for the benefit of its business and that the Guarantied Obligations are being incurred for and will inure to its benefit.
Any interest on any portion of the Guarantied Obligations that accrues after the commencement of any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of Company (or, if interest on any portion of the Guarantied Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding, such interest as would have accrued on such portion of the Guarantied Obligations if said proceeding had not been commenced) shall be included in the Guarantied Obligations because it is the intention of each Guarantor and Guarantied Party that the Guarantied Obligations should be determined without regard to any rule of law or order that may relieve Company of any portion of such Guarantied Obligations.
In the event that all or any portion of the Guarantied Obligations is paid by Company, the obligations of each Guarantor hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) is rescinded or recovered directly or indirectly from Guarantied Party or any other Beneficiary as a preference, fraudulent transfer or otherwise, and any such payments that are so rescinded or recovered shall constitute Guarantied Obligations.
Subject to the other provisions of this Section 1, upon the failure of Company to pay any of the Guarantied Obligations when and as the same shall become due, each Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to the aggregate of the unpaid Guarantied Obligations.
VI-2
to Company or other affiliates of Company to the extent that such indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder and (ii) under any guaranty which contains a limitation as to maximum amount similar to that set forth in this Section 1(b), pursuant to which the liability of such Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement, indemnification or contribution of such Guarantor pursuant to applicable law or pursuant to the terms of any agreement.
VI-3
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations, (c) request and accept other guaranties of the Guarantied
Obligations and take and hold security for the payment of this Guaranty or the
Guarantied Obligations, (d) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations, or
any other obligation of any Person with respect to the Guarantied Obligations,
(e) enforce and apply any security now or hereafter held by or for the benefit
of any Beneficiary in respect of this Guaranty or the Guarantied Obligations and
direct the order or manner of sale thereof, or exercise any other right or
remedy that Guarantied Party or the other Beneficiaries, or any of them, may
have against any such security, as Guarantied Party in its discretion may
determine consistent with the Credit Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (f) exercise any other rights available to
Guarantied Party or the other Beneficiaries, or any of them, under the Loan
Documents.
VI-4
Person, (iii) proceed against or have resort to any balance of any deposit
account or credit on the books of any Beneficiary in favor of Company or any
other Person, or (iv) pursue any other remedy in the power of any Beneficiary;
(b) any defense arising by reason of the incapacity, lack of authority or any
disability or other defense of Company including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto or
by reason of the cessation of the liability of Company from any cause other than
payment in full of the Guarantied Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon Guarantied Party's or any other
Beneficiary's errors or omissions in the administration of the Guarantied
Obligations, except behavior that amounts to gross negligence or willful
misconduct; (e) (i) any principles or provisions of law, statutory or otherwise,
that are or might be in conflict with the terms of this Guaranty and any legal
or equitable discharge of such Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs, recoupments
and counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any Lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of this Guaranty, notices of default under the Credit Agreement or any agreement
or instrument related thereto, notices of any renewal, extension or modification
of the Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred to in
Sections 3 and 4 hereof and any right to consent to any thereof; and (g) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
As used in this paragraph, any reference to "the principal" includes
Company, and any reference to "the creditor" includes Guarantied Party and each
other Beneficiary. In accordance with Section 2856 of the California Civil Code
(a) each Guarantor waives any and all rights and defenses available to it by
reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code, including without limitation any and all rights or defenses such
Guarantor may have by reason of protection afforded to the principal with
respect to any of the Guarantied Obligations, or to any other guarantor of any
of the Guarantied Obligations with respect to any of such guarantor's
obligations under its guaranty, in either case pursuant to the antideficiency or
other laws of the State of California limiting or discharging the principal's
indebtedness or such guarantor's obligations, including without limitation
Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure; and
(b) each Guarantor waives all rights and defenses arising out of an election of
remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a Guarantied Obligation,
has destroyed such Guarantor's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise; and even though that election of remedies by the creditor, such as
nonjudicial foreclosure with respect to security for an obligation of any other
guarantor of any of the Guarantied Obligations, has destroyed such Guarantor's
rights of contribution against such other guarantor. No other provision of this
VI-5
Guaranty shall be construed as limiting the generality of any of the covenants and waivers set forth in this paragraph. As provided below, this Guaranty shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the State of New York, without regard to conflicts of laws principles. This paragraph is included solely out of an abundance of caution, and shall not be construed to mean that any of the above-referenced provisions of California law are in any way applicable to this Guaranty or to any of the Guarantied Obligations.
Any indebtedness of Company now or hereafter held by any Guarantor is subordinated in right of payment to the Guarantied Obligations, and any such indebtedness of Company to a Guarantor collected or received by such Guarantor after an Event of Default has occurred and is continuing, and any amount paid to a Guarantor on account of any subrogation, reimbursement, indemnification or contribution rights referred to in the preceding paragraph when all Guarantied Obligations have not been paid in full, shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to be credited and applied against the Guarantied Obligations.
VI-6
VI-7
shall in any event be effective without the written concurrence of Guarantied Party and, in the case of any such amendment or modification, Guarantors. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
The rights, powers and remedies given to Beneficiaries by this Guaranty are cumulative and shall be in addition to and independent of all rights, powers and remedies given to Beneficiaries by virtue of any statute or rule of law or in any of the Loan Documents or any agreement between one or more Guarantors and one or more Beneficiaries or between Company and one or more Beneficiaries. Any forbearance or failure to exercise, and any delay by any Beneficiary in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.
In case any provision in or obligation under this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS, GUARANTIED PARTY AND THE OTHER BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Guaranty shall inure to the benefit of Beneficiaries and their respective successors and assigns.
VI-8
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW
EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, COLLATERAL AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR, COLLATERAL AGENT, BANKS AND GUARANTIED PARTY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
VI-9
(a) Guarantied Party has been appointed to act as Guarantied Party hereunder by Banks. Guarantied Party shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action, solely in accordance with this Guaranty and the Credit Agreement.
(b) Guarantied Party shall at all times be the same Person that is Agent
under the Credit Agreement. Written notice of resignation by Agent pursuant to
Section 9.9 of the Credit Agreement shall also constitute notice of resignation
as Guarantied Party under this Guaranty; removal of Agent pursuant to Section
9.9 of the Credit Agreement shall also constitute removal as Guarantied Party
under this Guaranty; and appointment of a successor agent pursuant to Section
9.9 of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
agent under Section 9.9 of the Credit Agreement by a successor agent, that
successor agent shall thereupon succeed to become vested with all the rights,
powers, privileges and duties of the retiring or removed Guarantied party under
this Guaranty, and the retiring or removed Guarantied Party under this Guaranty
shall promptly (i) transfer to such successor Guarantied Party all sums held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Guarantied Party under this Guaranty, and (ii) take such other actions as may be
necessary or appropriate in connection with the assignment to such successor
Guarantied Party of the rights created hereunder, whereupon such retiring or
removed Guarantied Party shall be discharged from its duties and obligations
under this Guaranty. After any retiring or removed Guarantied Party's
resignation or removal hereunder as Guarantied Party, the provisions of this
Guaranty shall inure to its benefits as to any actions taken or omitted to be
taken by it under this Guaranty while it was Guarantied Party hereunder.
[The remainder of this page intentionally left blank.]
VI-10
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first written above.
BATTERY STREET ENTERPRISES, INC.
By:______________________
Name:____________________
Title:___________________
LEVI STRAUSS FINANCIAL CENTER
CORPORATION
By:_____________________
Name:___________________
Title:__________________
LEVI STRAUSS FUNDING, LLC
By:_____________________
Name:___________________
Title:__________________
LEVI STRAUSS GLOBAL FULFILLMENT
SERVICES, INC.
By:_____________________
Name:___________________
Title:__________________
VI-11
LEVI STRAUSS GLOBAL
OPERATIONS, INC.
By:_____________________
Name:___________________
Title:__________________
LEVI STRAUSS INTERNATIONAL
By:_____________________
Name:___________________
Title:__________________
LEVI STRAUSS LATIN AMERICA, INC.
By:______________________
Name:____________________
Title:___________________
LEVI'S ONLY STORES, INC.
By:_____________________
Name:___________________
Title:__________________
VI-12
NF INDUSTRIES, INC.
By:_____________________
Name:___________________
Title:__________________
ACKNOWLEDGED AND FOR PURPOSES
OF THE WAIVER OF JURY TRIAL SET
FORTH IN SECTION 14 ONLY, AGREED
AS OF THE DATE FIRST WRITTEN ABOVE
Bank of America, N.A., as Agent
By:_____________________________
Title: _________________________
VI-13
[FORM OF] COUNTERPART FOR ADDITIONAL GUARANTORS
IN WITNESS WHEREOF, the undersigned has caused this Counterpart to be
duly executed and delivered by its officer thereunto duly authorized as of
______________, ____.
[NAME OF ADDITIONAL GUARANTOR]
By:_______________________________
Name:_____________________________
Title:____________________________
VIII-Sch. 1-1
EXHIBIT 10.16
[___] FEBRUARY 2000
RECEIVABLES PURCHASE AGREEMENT
TULIP ASSET PURCHASE COMPANY B.V.
as Purchaser
[LEVI STRAUSS __________]
as Seller
and
LEVI STRAUSS & CO
as Parent
CONTENTS
CLAUSE PAGE 1. INTERPRETATION..................................................... 1 2. OFFER FOR RECEIVABLES.............................................. 13 3. ACCEPTANCE, PURCHASE AND ASSIGNMENT................................ 14 4. CALCULATION OF PURCHASE PRICE/DEFERRED PURCHASE PRICE PROVISIONS... 16 5. LIMITED GUARANTEE.................................................. 17 6. NOTICE TO DEBTORS.................................................. 19 7. DOWNGRADE TRIGGER.................................................. 19 8. FURTHER ASSURANCE.................................................. 20 9. INDEMNITY.......................................................... 21 10. PAYMENTS........................................................... 22 11. NETTING-OFF OF PAYMENTS............................................ 23 12. APPOINTMENT OF SERVICER............................................ 23 13. REPRESENTATIONS AND WARRANTIES..................................... 24 14. COVENANTS.......................................................... 26 15. TAXES AND INCREASED COSTS.......................................... 30 16. DEFAULT INTEREST AND INDEMNITY..................................... 31 17. FEES, COSTS AND EXPENSES........................................... 32 18. DEEMED COLLECTIONS................................................. 33 19. BENEFIT OF AGREEMENT............................................... 33 20. DISCLOSURE OF INFORMATION.......................................... 34 21. REMEDIES AND WAIVERS............................................... 35 22. PARTIAL INVALIDITY................................................. 35 |
23. NO LIABILITY AND NO PETITION....................................... 35 24. NOTICES AND AMENDMENTS............................................. 36 25. LAW................................................................ 38 26. JURISDICTION....................................................... 38 |
THIS AGREEMENT is made the [ ] day of December 1999.
BETWEEN
(1) TULIP ASSET PURCHASE COMPANY B.V., a Dutch private company with limited liability having its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands (the "PURCHASER"); and
(2) [LEVI STRAUSS ____________], a company with its registered office at
[_______________], RC [___________] (the "SELLER").
(3) LEVI STRAUSS & CO. a Delaware corporation having its head office at 1155 Battery Street, San Francisco, CA 94120, USA (the "PARENT").
WHEREAS
(A) The Seller and the Purchaser agree, upon the terms and subject to the conditions hereof, that the Seller may from time to time offer to sell and to assign Eligible Receivables to the Purchaser and the Purchaser shall accept any such offer upon the terms hereof.
(B) The Purchaser and the Servicer have agreed, upon the terms and subject to the conditions of the Servicing Agreement, to appoint the Servicer to act for the Purchaser in the performance of certain services in relation to the Purchased Receivables.
NOW IT IS HEREBY AGREED as follows:
PART 1
INTERPRETATION
1. INTERPRETATION
1.1 In this Agreement and in the Recitals hereto, except so far as the context otherwise requires:
"ACCOUNT BANK" means ABN AMRO Bank N.V. acting through its office at Amsterdam and any person appointed as Account Bank under the Accounts Administration Agreement;
"ACCOUNTS ADMINISTRATION AGREEMENT" means the accounts administration agreement dated on or about the date hereof between ABN AMRO Bank N.V. as Accounts Administrator, the Purchaser and the Issuer;
"ACCOUNTS ADMINISTRATOR" means ABN AMRO Bank N.V. acting through its office at Amsterdam and any person appointed as accounts administrator under the Accounts Administration Agreement;
"ADVANCES" means all Advances and Same Day Advances pursuant to the Liquidity Facility Agreement and all Drawings under the Standby Letter of Credit Agreement (as in each case defined therein);
"ADVERSE CLAIM" means any charge, encumbrance, proprietary or security interest, right of retention, lien or privilege / voorrecht, or other right or claim in, over or on any person's assets or properties in favour of any other person (but excluding the rights of the Debtor under any Contract in respect of the use or possession of goods the subject of such Contract);
"AGGREGATE OUTSTANDING NOMINAL AMOUNT" means, with respect to all Purchased Receivables, at any time the aggregate amount of the Outstanding Nominal Amount of each Purchased Receivable;
"AGGREGATE RECEIVABLES INVESTMENT" means at any time the Aggregate Outstanding Nominal Amount of Purchased Receivables purchased prior to the relevant calculation date plus Receivables subject to an Offer and in relation to which a Loan under the Funding Agreements has been entered into minus the Outstanding Nominal Amount of each Purchased Receivable which is a Defaulted Receivable and, for the purposes of Clause 3.4 and the Termination Event numbered 13 in the Fourth Schedule only, the total being converted into Dollars using a conversion rate equal to the weighted average of the rates of conversion applicable to each Hedging Transaction entered into by the Purchaser for delivery of currency against Dollars;
"AVERAGE COLLECTION PERIOD" means at any time a period of days equal to the product of (a) one, or, if greater, a fraction the numerator of which shall be the amount set forth in the most recent Monthly Report as the Nominal Amount of all Receivables at the beginning of the period to which the Monthly Report relates and the denominator of which shall be the Collections as set forth in the most recent Monthly Report for the period to which the Monthly Report relates, and (b) 30;
"COLLECTIONS" means, with respect to any Purchased Receivable, all cash collections, finance, interest, late payment or similar charges and other cash proceeds of such Receivable or other amounts received or recovered in respect thereof, including, without limitation, any payments made on any bill of exchange, promissory note or other negotiable instrument issued in respect of such Receivable to any holder thereof (whether or not issued in contravention of any provisions of this Agreement), all cash proceeds of Related Security with respect to such Receivable and any Deemed Collections of such Receivable, and all recoveries of value added tax from any relevant tax authority relating to any Defaulted Receivable;
"COLLECTION ACCOUNT" shall have the meaning given to it in the Servicing Agreement;
"COLLECTION PAYMENT DATE" means the fifth business day following the end of the immediately preceding Collection Period;
"COLLECTION PERIOD" means, in relation to a Collection Payment Date falling during the year 2000, the monthly reporting period (as described below) preceding that in which such Collection Payment Date falls, provided that the first Collection Period shall commence on the first Purchase Date:
MONTHLY REPORTING PERIOD FOR THE YEAR 2000
2 January 2000 to 30 January 2000
30 January 2000 to 7 February 2000
27 February 2000 to 2 April 2000
2 April 2000 to 30 April 2000
30 April 2000 to 28 May 2000
28 May 2000 to 2 July 2000
2 July 2000 to 30 July 2000
30 July 2000 to 27 August 2000
27 August 2000 to 1 October 2000
1 October 2000 to 29 October 2000
29 October 2000 to 30 November 2000
|
and, in respect of Collection Payment Dates in subsequent years, the relevant collection period shall be determined by reference to such monthly reporting periods as shall be agreed from time to time between the Seller and the Purchaser;
provided that in each case the first Collection Period shall commence on the first Purchase Date.
"CONDITIONS PRECEDENT" means the conditions precedent to the valid delivery of an Offer set out in the First Schedule;
"Contract" means each of the agreements between the Seller and a Debtor which is subject to the General Terms and Conditions set out in the Fifth Schedule or as otherwise approved
by the Purchaser, pursuant to which a Debtor shall be obliged to pay for goods purchased from or services provided by the Seller;
"CP PROGRAMME" means the commercial paper programme established by the Issuer pursuant to the Dealer Agreements;
"CREDIT AND COLLECTION POLICIES" means the credit and collection policies and practices from time to time applied by the Seller and notified in writing to the Purchaser in relation to Receivables in accordance with the laws of Belgium and any other jurisdiction in which the Seller originates or administers Receivables;
"DEALER AGREEMENTS" means the dealer agreements relating to the CP Programme dated on or after 1 December 1995 between the Issuer and the Dealers (as defined therein);
"DEBTOR" means a person set out in the records of the Seller as being obliged to make payments for the provision of goods or services evidenced by a Contract for which an invoice has been issued (or, if different, the person so obliged);
"DEBTOR LIMIT" means [3%] of the Programme Limit, except as otherwise provided in the Seventh Schedule (as amended from time to time);
"DEEMED COLLECTION" has the meaning given to it in Clause 18 hereof;
"DEFAULTED RECEIVABLE" means any Receivable (other than a Disputed Receivable or a Written-Off Receivable) which is not paid by the relevant Debtor (including, without limitation, payments made by third parties on behalf of the Debtor) to the Servicer by the end of the Collection Period during which such Receivable becomes more than 90 days overdue for payment from its Receivable Due Date or in respect of which the related Debtor is insolvent or a declaration has been made by the Seller that such Receivable is irrecoverable or legal proceedings have been commenced for its recovery or which the Seller has transferred to the doubtful receivables account provided that in respect of any Receivable which is credit-insured with an insurance company acceptable to the Purchaser, only the uninsured portion of such Receivable shall be deemed a Defaulted Receivable;
"DEFERRED PURCHASE PRICE" means that portion of the Purchase Price of a tranche of Receivables being the subject of an Offer which is payable to the Seller on a deferred basis pursuant to the terms of this Agreement;
"DELINQUENCY RATIO CURRENT MONTH" means, in respect of each Collection Period, the average of the Outstanding Nominal Amount on the last business days of such Collection Period and each of the two immediately preceding Collection Periods of the Purchased Receivables which are Delinquent Receivables or Defaulted Receivables (but are not Written-Off Receivables), divided by the Outstanding Nominal Amount of Purchased Receivables (excluding any Written-Off Receivables) on the last business day of such Collection Period, expressed as a percentage, provided that all Purchased Receivables
which were not Eligible Receivables on their respective Purchase Date shall be excluded from this calculation;
"DELINQUENCY RATIO ROLLING AVERAGE" means at any time the average of the
[six most recent Delinquency Ratios Current Month;]
"DELINQUENT RECEIVABLE" means any Receivable (other than a Disputed Receivable) which is not paid to the Servicer by the 60th day following the Receivable Due Date relating thereto provided that in respect of any Receivable which is credit-insured with an insurance company acceptable to the Purchaser, only the uninsured portion of such Receivable shall be deemed a Delinquent Receivable;
"DILUTION" means any discount expense, rebate, refund, billing error expense (including invoice substitution), credit against Purchased Receivables and other adjustment or allowance in respect of Purchased Receivables permitted or incurred by the Seller;
"DILUTION RATIO" means in respect of each Collection Period, the dollar equivalent of the Dilutions which have occurred during such Collection Period divided by the dollar equivalent of the sales which have occurred during such Collection Period and expressed as a percentage;
"DISCOUNT" means, with respect to the calculation of the Purchase Price an amount equal to the greater of (a) zero and (b) the amount calculated as the Discount Protection Amount less the amount of any credit balance in the Discount Reserve Ledger immediately prior to the credit of the Discount resulting from this calculation;
"DISCOUNT PROTECTION AMOUNT" means, subject to Clause 7(i), with respect of the calculation of the Purchase Price, the higher of (x) [__] and (y) the amount derived from the following formula:
(A+B)*C+(D*E)
where:
A = the Dilution Ratio Current Month of the preceding month; B = the Loss Ratio Current Month of the preceding month; C = Stress Factor: 2.25; D = USD LIBOR (three months) + 0.43% E = 0.33 (average annual maturity of receivables) |
"DISCOUNT RESERVE LEDGER" means a ledger of the Operating Account maintained by or on behalf of the Purchaser which is credited with
(a) the aggregate amount of Discount taken on each Purchase;
(b) any interest earned on the Operating Account;
(c) any Collection received by the Purchaser in respect of a Purchased Receivable which is a Defaulted Receivable previously debited to such ledger; and
is debited with
(aa) the Outstanding Nominal Amount of every Defaulted Receivable;
(bb) the amount of each instalment of Deferred Purchase Price paid to the Seller;
(cc) the payment of interest by the Purchaser under the Funding Agreements relating to the funding of Purchases hereunder; and
(dd) the payment of fees, costs and expenses by the Purchaser in relation to this Agreement, the Servicing Agreement or the Funding Agreements relating to the funding of Purchases hereunder;
"DISPUTED RECEIVABLE" means any Receivable in respect of which payment is disputed (in whole or in part, with or without justification) by the Debtor owing such Receivable whether by reason of any matter concerning the goods in respect of which the original invoice was issued or by reason of any other matter whatsoever or in respect of which a set-off or counterclaim is being claimed by such Debtor;
"DOWNGRADE TRIGGER" means the long-term senior unsecured debt of the Parent
(a) being rated BB- or less by Standard & Poor's or (b) being rated Ba3 or
less by Moody's, as the case may be;
"ELIGIBLE RECEIVABLE" means any Receivable satisfying the criteria specified in the Second Schedule;
"EURO" means the currency introduced at the start of the third stage of economic and monetary union pursuant to the Treaty establishing the European Union;
"FACILITIES" means each of the Liquidity Facility Agreement and the Standby Letter of Credit Agreement;
"FEE" means the fee calculated in accordance with Clause 17 hereof;
"FEE LETTER" means the fee letter from ABN AMRO Bank N.V. to the Seller dated as of the date hereof specifying the fees payable by the Seller;
"FOREIGN LOANS" means all outstanding loans made to the Purchaser pursuant to the Funding Agreement for the purpose of financing or refinancing any purchase (or the
funding of any purchase) of Foreign Receivables by the Purchaser or ABN
AMRO Bank N.V.;
"FOREIGN RECEIVABLES" means "Receivables" as defined under any Foreign RPA;
"FOREIGN RPA" means any receivables purchase agreement generally similar to this Agreement and made or to be made between any affiliate of the Seller and the Purchaser or ABN AMRO Bank N.V. providing for the purchase of receivables by the Purchaser or ABN AMRO Bank N.V. (in the latter case, with a view to the onward sale of such receivables to the Purchaser);
"FUNDING AGREEMENTS" means the loan agreement between the Purchaser and the Issuer under which the Issuer may agree from time to time to advance moneys to the Purchaser for the purchase of receivables (or the funding of the purchase of receivables) and any other agreement whereby the Purchaser acquires or may acquire funds for the purposes of purchasing Purchased Receivables hereunder and/or purchasing (or funding the purchase of) Foreign Receivables under any Foreign RPA, but shall exclude the Facilities;
"HEDGING TRANSACTION" means Hedging Transaction entered into by the Purchaser to hedge its exposure from the Purchaser Funding Agreement in connection with the funding of the purchase of such Receivable for the delivery to the Purchaser of US dollars against the delivery by the Purchaser of Euro or any other legacy currency taking part in the Single European currency;
"INVOICE DATE" in relation to any Receivable means the date of issue of the related invoice and specified in the Offer relating to such Receivable;
"ISSUER" means Tulip Funding Corporation, a company incorporated with limited liability, having its registered office at 15 East North Street, City of Dover, Kent County, Delaware, United States;
"LIQUIDITY FACILITY AGREEMENT" means the liquidity facility agreement dated on or about the date hereof between the Purchaser, ABN AMRO Bank N.V. and the Banks (as defined therein) and any extension or renewal thereof;
"LOANS" means all outstanding loans or part thereof made to the Purchaser pursuant to the Funding Agreement for the purpose of financing or refinancing any purchase hereunder;
"LOSS RATIO CURRENT MONTH" means, in respect of each Collection Period, the Outstanding Nominal Amount of those Purchased Receivables which have become Defaulted Receivables during such Collection Period, divided by the Outstanding Nominal Amount of Purchased Receivables (excluding any Written- Off Receivables) on the last business day of such Collection Period, expressed as a percentage;
"LOSS RATIO ROLLING AVERAGE" means at any time the average of the six most recent Loss Ratios Current Month;
"MATURED VALUE" means, in respect of any Loan or Foreign Loan, the sum of
(a) the principal amount thereof, (b) all unpaid interest which is
scheduled to become due (whether or not then due) under such Loan and (c)
all unpaid fees and other amounts which are then known and scheduled to
become due (whether or not then due) on, or in connection with such Loan,
in each case payable to, or for the benefit of the Issuer; for the purposes
of calculating whether the Aggregate Receivables Investment denominated in
[Belgian francs] exceeds the Matured Value of the Loans, the Outstanding
Nominal Amount of each Receivable shall be converted into US dollars using
such rate of exchange as the Purchaser notifies the Seller was the rate of
exchange contracted in the Hedging Transaction entered into by the
Purchaser to hedge its exposure from the Funding Agreement in connection
with the funding of the purchase of such Receivable for the delivery to the
Purchaser of US dollars against the delivery by the Purchaser of [Belgian
francs];
"MONTHLY REPORT" means the monthly report delivered by the Servicer pursuant to Clause 6.2 of the Servicing Agreement or by the Seller pursuant to Clause 14.1(a)(ii) of this Agreement in the form set out in the Sixth Schedule or as otherwise agreed from time to time between the Seller and the Purchaser;
"MOODY'S" means Moody's Investors Service, Inc.;
"NOMINAL AMOUNT" means, with respect to any Receivable, the principal amount of such Receivable as reflected in the books of the Seller;
"NOTE" means a commercial paper note issued by the Issuer for the purpose of funding the Purchaser under the Funding Agreement and purchased by a Dealer pursuant to the Dealer Agreements and includes the commercial paper notes represented by a Note in global form;
"OFFER" means a written offer in substantially the form set out in Part 1 of the Third Schedule;
"OFFER DATE" means any date on which the Seller makes an Offer to the Purchaser;
"OPERATING ACCOUNT" means the interest bearing account or accounts designated as such in the Third Schedule of the Servicing Agreement and operated by ABN AMRO Bank N.V. as Accounts Administrator in the name of the Purchaser at the Account Bank utilised for the time being for the purposes of the Servicing Agreement and the Accounts Administration Agreement or such other account or accounts as may for the time being be in addition thereto or substituted therefor in accordance with the provisions of the Accounts Administration Agreement;
"OUTSTANDING NOMINAL AMOUNT" means, with respect to any Purchased Receivable, at any time the Nominal Amount of such Purchased Receivable as determined by the most recent Monthly Report less the amount of Collections received by the Purchaser and applied to the Nominal Amount of such Purchased Receivable Provided that Collections shall not be treated as received by the Purchaser until credited to the Operating Account and provided
further that such Outstanding Nominal Amount shall be restored in the amount and to the extent of any Collections so received and applied if at any time the distribution of such Collections is rescinded or must otherwise be returned for any reason;
"PROGRAMME LIMIT" means USD [200,000,000]; for the purposes of calculating whether the Aggregate Receivables Investment denominated in [Euro] exceeds the Programme Limit, the Outstanding Nominal Amount of each Receivable shall be converted into US dollars using such rate of exchange as the Purchaser notifies the Seller was the rate of exchange contracted in the Hedging Transaction entered into by the Purchaser to hedge its exposure from the purchase of such Receivable for the delivery to the Purchaser of US dollars against the delivery by the Purchaser of [Euros];
"purchase" means an acquisition of a Receivable and the Related Security hereunder pursuant to an Offer;
"Purchase Date" means, with respect to any Purchase, the date upon which such Purchase is completed;
"PURCHASE PRICE" shall have the meaning given thereto in Clause 4.1;
"PURCHASE PRICE ADVANCE" MEANS that portion of the Purchase Price of a tranche of Receivables the subject of an Offer, equal to the aggregate of the Nominal Amount of each Receivable less the Discount calculated with respect to the proposed Purchase, and payable on a Purchase Date;
"PURCHASED RECEIVABLES" means any Receivables assigned, sold or transferred or purported to be assigned, sold or transferred to the Purchaser pursuant hereto;
"Receivable" means any and all present and future indebtedness coming or having come into existence prior to the termination hereof and owed or purported to be owed to the Seller by a Debtor, and includes unless otherwise specified herein, any Related Security and any Purchased Receivable;
"RECEIVABLE DUE DATE" in relation to any Receivable means the original date on which such Receivable is due and payable;
"RECORDS" means, in respect of any Receivable, all Contracts, correspondence, notes of dealings and other documents, books, books of account, registers, records and other information (including, without limitation, computer programmes, tapes, discs, punch cards, data processing software and related property and rights) maintained (and recreated in the event of destruction of the originals thereof) with respect to such Receivable and the related Debtor;
"RELATED SECURITY" means with respect to any Receivable:
(a) all Adverse Claims of the Seller on any property from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements signed by a Debtor describing any collateral security securing such Receivables;
(b) all guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise;
(c) all Records related to such Receivable; and
(d) all proceeds at any time howsoever arising out of the resale, redemption or other disposal of (net of collection costs), or dealing with, or judgments relating to, any of the foregoing, any debts represented thereby, and all rights of action against any person in connection therewith;
"SERVICER" means such person so designated from time to time in accordance with the Servicing Agreement;
"SERVICES" means the services to be provided by the Servicer under the Servicing Agreement;
"SERVICING AGREEMENT" means the servicing agreement dated on or about the date hereof between the Purchaser and the Seller, in its capacity as servicer;
"STANDARD & POOR'S" means Standard & Poor's, a division of The McGraw-Hill Companies;
"STANDBY LETTER OF CREDIT AGREEMENT" means the standby letter of credit agreement originally dated 1 December 1995 between ABN AMRO Bank N.V. as L/C Bank and Tapco, and any renewal or extension thereof;
"TERMINATION DATE" means the date upon which a Termination Event occurs or, if such date is not a business day, the next following business day;
"TERMINATION EVENT" means any of the events specified in the Fourth Schedule; and
"WRITTEN-OFF RECEIVABLES" means any Receivable which has been written off as irrecoverable for accounting purposes by the Seller in accordance with the Seller's general accounting practices.
1.2 Any reference in this Agreement to:
"ADMINISTRATION", "BANKRUPTCY", "DISSOLUTION", "LIQUIDATION", "RECEIVERSHIP" or "WINDING-UP" of any person shall be construed so as to include any equivalent or analogous proceedings under the laws of the jurisdiction in which such person is
incorporated (or, if not a company or corporation, domiciled) or any jurisdiction in which such person has its principal place of business.
an "AFFILIATE" of any company shall be construed as a reference to any company which is a subsidiary of such former company, of which such former company is a subsidiary, or which is a subsidiary of a holding company of which such former company is also a subsidiary;
"BANK" or the "L/C BANK" shall be construed so as to include its respective successors and assigns in accordance with their respective interests;
"BEF" or "BELGIAN FRANC" shall be construed as a reference to the lawful currency for the time being of the Kingdom of Belgium, [ ] shall be construed as a reference to the lawful currency for the time being of [ ] and " "US$", "USD" or "DOLLAR" shall be construed as a reference to the lawful currency for the time being of the United States of America;
"BUSINESS DAY" means any day (other than a Saturday or a Sunday) on which banks are open for business in Amsterdam, [Brussels] or (where so specified herein) in the place for payment of the relevant amount;
"CONTROL" shall have the meaning defined pursuant to [articles 2 and 3 of the Belgian royal decree of 6 March 1990 on the consolidated accounts of enterprises];
"CLAUSE", "PART", "RECITAL" or "SCHEDULE" is, subject to any contrary indication, a reference to a clause or part hereof or a recital or schedule hereto;
"ENCUMBRANCE" shall be construed as a reference to a mortgage, charge,
pledge, lien or other encumbrance securing any obligation of any person or
any other type of preferential arrangement (including, without limitation,
title transfer and retention arrangements) having a similar effect and for
the avoidance of doubt shall not include (i) a right of counterclaim or
(ii) a right of set-off arising by contract or operation of law not
constituting a mortgage or charge under applicable law;
"HOLDING COMPANY" of a company shall be construed as a reference to any company of which the first-mentioned company is a subsidiary;
"PERSON" shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;
"STAMP DUTY" shall be construed as a reference to any stamp, registration or other transaction or documentary tax (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying out any of the same);
"SUBSIDIARY" shall have the meaning defined pursuant to [articles 2 and 3 of the Belgian royal decree of 6 March 1990 on the consolidated accounts of enterprises];
"TAX" shall be construed so as to include any tax, levy, impost, duty or other charge of a similar nature (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) arising under applicable law;
"VALUE ADDED TAX" shall be construed so as to include any value added tax under any jurisdiction.
1.3 The headings in this Agreement shall not affect its interpretation.
1.4 Words denoting the singular number only shall include the plural number also and vice versa; and words denoting persons only shall include firms and corporations and vice versa.
1.5 References in this Agreement to any statutory provision shall be deemed also to refer to any statutory or other modification, re-enactment or replacement thereof or any statutory instrument, order or regulation made thereunder or under any such re-enactment.
1.6 The Schedules shall form part of this Agreement.
1.7 Terms defined in the Servicing Agreement, Standby Letter of Credit Agreement, Liquidity Facility Agreement and Accounts Administration Agreement shall, unless otherwise defined herein or the context otherwise requires, bear the same meaning herein.
1.8 Save where the contrary is indicated in this Agreement, any reference in this Agreement to a time of day shall be construed as a reference to time in Amsterdam.
PART 2
SALES AND ASSIGNMENT OF RECEIVABLES
2. OFFER FOR RECEIVABLES
2.1 At any time after the Conditions Precedent have been fulfilled to the satisfaction of, or waived by, the Purchaser but in any event before the Termination Date, the Seller may offer to sell and to assign to the Purchaser Eligible Receivables and their Related Security on any date by delivering to the Purchaser an Offer meeting the requirements set forth below.
2.2 Each Offer delivered pursuant to Clause 2.1 shall:-
(a) specify the aggregate Nominal Amount of such Receivables, and the Purchase Price Advance and Discount in relation to such Offer;
(b) identify in relation to each such Receivable:
(i) the name and account number of the Debtor owing such Receivable and its address;
(ii) the Invoice Date and invoice number;
(iii) the Receivable Due Date; and
(iv) the Nominal Amount of each such Receivable;
(c) specify the proposed Purchase Date for such Receivables, which shall be a business day falling not less than three and not more than ten business days after the date of the Purchaser's receipt of the Offer and which shall also be a day on which banks are open for business in New York City;
(d) specify the bank and account into which the Purchase Price Advance is to be paid.
2.3 Delivery of an Offer pursuant to Clause 2.1 shall constitute (i) an irrevocable offer by the Seller binding upon it to sell and to assign to the Purchaser each of the Receivables designated in such Offer and the Related Security and (ii) a representation by the Seller that in relation to such Offer each of the statements set out in Clause 13 is true in all material respects on and as of the date of the Offer Provided always that the Purchaser may at any time require and the Seller shall thereupon provide all information necessary
to satisfy the Purchaser that such representations are materially true in respect of each Receivable specified in the related Offer.
2.4 The Purchaser shall, at the Seller's request, notify the Seller on each
Offer Date and/or Purchase Date (a) for the purposes of calculating the
Discount Protection Amount of (i) the Aggregate Receivables Investment, and
(ii) the interest rate, and (b) of the amount of any credit balance in the
Discount Reserve Ledger.
3. ACCEPTANCE, PURCHASE AND ASSIGNMENT
3.1 Upon delivery of an Offer in accordance with Clause 2.1, the Purchaser shall accept such Offer in respect of all Receivables the subject of such Offer if:
(a) no Termination Event shall have occurred and be continuing as at the proposed Purchase Date (including without limitation the Termination Event numbered 13 in the Fourth Schedule);
(b) the Conditions Precedent have been fulfilled to the satisfaction of the Purchaser or waived by it;
(c) the Offer meets the requirements of Clause 2.2;
(d) the representations and warranties set out in Clause 11 are true in all material respects;
(e) the Purchase Price Advance has been correctly calculated;
(f) on the proposed Purchase Date, assuming the Offer is accepted, the sum of the Matured Value of the Loans (after taking into account any increase thereto required to fund the Purchase Price Advance in respect of the Offer) and the Matured Value of the Foreign Loans will not exceed the Programme Limit;
(g) the Liquidity Termination Date referred to in the Liquidity Facility Agreement (as in force from time to time) shall not have arrived subject to an extension of such Liquidity Termination Date;
(h) [all consents and approvals required under any credit insurance policies for the sale and transfer of any credit-insured Receivables included in the Offer have been obtained by the Seller from the relevant insurance company];
by depositing not later than 2.15 p.m. (Amsterdam time), or any other time as may be specified from time to time by the Purchaser in view of the then prevailing systems and practices for the settlement of payments, to the account specified in the Offer in immediately available funds on the relevant Purchase Date, a sum equal to the Purchase Price Advance, whereupon such Receivables and Related Security shall be sold and
assigned to the Purchaser and title thereto shall pass from the Seller to the Purchaser. Within one business day of receipt of the Purchase Price Advance, the Seller shall provide a receipt to the Purchaser substantially in the form set out in Part 2 of the Third Schedule.
Provided always that, if any of the conditions referred to above (save for
those conditions which refer to the valid title of the Seller and the
transferability of the relevant Receivable) are not met to any extent, then
(whether or not the Purchaser is aware of the breach of such conditions)
this shall affect neither the validity of the Purchaser's title to the
relevant Receivables nor any remedy the Purchaser may have for such breach
whether under this Agreement or at law.
3.2 If any Receivable or the Related Security is not transferred for any reason the Seller shall be obliged to take all actions necessary for the transfer of such Receivable or Related Security without undue delay and at its own expense. The Seller shall indemnify the Purchaser against any loss or expense incurred by the Purchaser as a result of the failure to transfer the same, other than any loss or expense resulting from the negligence or default on the part of the Purchaser in effecting such transfer.
3.3 The Seller shall indemnify the Purchaser against any loss or expense incurred by the Purchaser as a result of any purported revocation of an Offer or any failure by the Seller to complete the sale, purchase and assignment of the Receivables specified in an Offer.
3.4 If, at any time on or before the close of business on any business day of the Seller, the Aggregate Receivables Investment hereunder and under the Foreign RPAs is less than the aggregate of the Matured Value of the Loans outstanding from the Issuer to the Purchaser and all outstanding Advances (where applicable converted to US dollars at the rate specified in the relevant agreement), the Seller shall sell to the Purchaser an additional amount of Eligible Receivables at such Purchase Price as is necessary to reduce such deficiency to zero.
3.5 Without limiting the obligation of the Seller under Clause 3.4, if the Seller is in breach of its obligations under Clause 3.4 the only remedy available to the Purchaser shall be to declare the occurrence of a Termination Event and the Purchaser shall have no right to any monetary compensation or to seek to compel the Seller to effect any such additional sales.
3.6 For the avoidance of doubt, the parties confirm their intention that any Purchase under this Agreement shall constitute a true sale of the Purchased Receivables, and not a security arrangement for any obligations of the Seller. The Purchaser shall have full title and interest in and to the Purchased Receivables, shall be free to further dispose of such Purchased Receivables, and subject to the payment to the Seller of the purchase price thereof in accordance with Clause 4 shall be fully entitled to receive and retain for its own account any Collections in respect of such Purchased Receivables. Should any court, however, rule that this Agreement (or any Purchase under this Agreement)
constitutes a security arrangement rather than a true sale, then this Agreement (and any Purchase under the Agreement) shall be interpreted so as to mean that the Seller has pledged the Purchased Receivables to the Purchaser as security for all obligations of the Seller under this Agreement (including any Purchase under this Agreement) and the Servicing Agreement, and all provisions hereof and thereof shall be construed mutatis mutandis.
4. CALCULATION OF PURCHASE PRICE/DEFERRED PURCHASE PRICE PROVISIONS
4.1 The Purchase Price of any Receivables to be sold and assigned to the Purchaser on a Purchase Date shall comprise of (i) the Purchase Price Advance relating thereto paid in accordance with Clause 3.1 hereof and save as otherwise provided herein, calculated by the Seller (with calculations in reasonable detail) as of the date of the related Offer in the manner set out in this Agreement and (ii) the Deferred Purchase Price as provided in Clause 4.2, calculated and payable in the manner described in Clauses 4.3 and 4.4.
4.2 Upon acceptance of any Offer pursuant to Clause 3.1, the Deferred Purchase Price relating to the Receivables which were subject to such Offer shall constitute a deferred purchase price credit granted to the Purchaser by the Seller and shall, subject to the adjustments specified herein, be payable to the Seller in accordance with the terms hereof.
4.3 On any Collection Payment Date prior to the Termination Date, the Purchaser shall calculate the amount standing to the credit of the Discount Reserve Ledger and the Discount Protection Amount (including for the purposes of this calculation the effect of any sale of Receivables occurring on such date and if there is no such sale, calculating a notional Discount Protection Amount based on the existing Purchased Receivables). If the amount standing to the credit of the Discount Reserve Ledger exceeds the Discount Protection Amount then, if the Termination Date has not then occurred, the Purchaser shall pay to the Seller by way of an instalment of the Deferred Purchase Price an amount equal to such excess on such Collection Payment Date (but only if and to the extent that there are funds credited to the Operating Account which the Accounts Administrator is entitled to apply in the order of priorities in Clause 8.4 of the Accounts Administration Agreement). For the avoidance of doubt but without prejudice to Clause 4.4 hereof, no instalment of Deferred Purchase Price shall be payable on or following the Termination Date.
4.4 Once the outstanding amount of all Notes and Advances, the proceeds of which have been used to fund Purchases hereunder, shall have been reduced to zero the Purchaser shall pay to the Seller by way of further instalments of Deferred Purchase Price, upon each following Collection Payment Date, an amount equal to the Collection made during the preceding Collection Period in respect of the Purchased Receivables less any amount
which falls to be paid on such date out of the Collections in accordance with Clause 8.4 of the Accounts Administration Agreement. For the avoidance of doubt, the Purchased Receivables remain at all times the property of, and vested in, the Purchaser.
4.5 No interest or other charges shall accrue or be payable by the Purchaser in respect of any outstanding amount of any Deferred Purchase Price.
5. LIMITED GUARANTEE
5.1 The Seller guarantees the due and punctual payment by the Debtors of all Purchased Receivables that will be outstanding on the Termination Date up to an amount equal to 10% of the aggregate Outstanding Nominal Amount of all Purchased Receivables as of the Termination Date (the "GUARANTEE CAP").
5.2 On each Collection Payment Date after the occurrence of a Termination Event, the Seller shall pay to the Purchaser:
(a) on the first such Collection Payment Date, an amount equal to the total Outstanding Nominal Amount of all Purchased Receivables which are Defaulted Receivables on the Termination Date;
(b) on the second and third such Collection Payment Dates, an amount equal to the total Outstanding Nominal Amount of all Purchased Receivables which have become Defaulted Receivables since the preceding Collection Payment Date; and
(c) on the fourth such Collection Payment Date, an amount equal to the excess of the Guarantee Cap over the total amounts already paid under paragraphs (a) and (b);
provided however that the Seller's obligations under this Clause 5.2:
(i) shall in no event exceed the Guarantee Cap; and
(ii) shall cease as soon as any instalment of Deferred Purchase Price becomes payable to the Seller pursuant to Clause 4.4.
5.3 The payments made pursuant to Clause 5.2 shall be treated as an advance on the Seller's obligation to pay over to the Purchaser, pursuant to Clause 4.4 of the Servicing Agreement (in its capacity as Servicer), the amount of all Collections received by it. Such advances shall be regarded as relating to the last Purchased Receivables to remain uncollected, and the guarantee set out in Clause 5.1 implies that these advances shall be irrecoverable by the Seller even if those last Purchased Receivables forever remain uncollected.
5.4 Should the Collections made in respect of the Purchased Receivables outstanding as of the Termination Date ultimately exceed their aggregate Outstanding Nominal Amount as
of the Termination Date minus the advances paid pursuant to Clause 5.2, then the excess shall be regarded as having been paid over already by the Seller to the Purchaser by way of these advances, and to that extent the Seller shall be dispensed from further paying over to the Purchaser, pursuant to Clause 4 of the Servicing Agreement (in its capacity as Servicer), the amount of such Collections.
5.5 The Parent jointly and severally guarantees the obligations of the Seller under Clause 5.2.
5.6 The liability of the Parent under this Clause 5 shall not be discharged or impaired by:
(a) the winding-up, dissolution, administration or re-organisation of any of the Servicer or the Seller or any other person or any change in status, function, control or ownership;
(b) any obligations of the Seller or the Servicer under this Agreement or the Servicing Agreement being or becoming illegal, invalid, unenforceable or ineffective in any respect;
(c) time or other indulgence being granted or agreed to be granted to the Seller, the Servicer in respect of its obligations hereunder or under the Servicing Agreement;
(d) time or other indulgence being granted or agreed to be granted to any Debtor;
(e) any amendment or any variation, waiver or release of, any obligation of the Seller or the Servicer under this Agreement or the Servicing Agreement;
(f) the existence or validity of any other security taken in relation to any Purchased Receivable or the enforcement or failure to enforce any such security;
(g) any amendment or variation to the terms of the Purchased Receivables or any Related Security;
(h) any other act, event, neglect or omission which would or might otherwise operate to impair or discharge the Parent's liability hereunder.
5.7 The Parent agrees that, so long as any amount is or may be owed by the Seller or the Servicer hereunder or under the Servicing Agreement, or the Seller or the Servicer is under any actual or contingent obligation hereunder, the Parent shall not exercise any rights which the Parent may at any time have, by reason of performance by it of its obligations hereunder:
(a) to be indemnified by the Servicer or the Seller; and/or
(b) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Purchaser hereunder.
The claims of the Parent against the Seller or the Servicer shall in any event be subordinated to the rights of the Purchaser under this Agreement or the Servicing Agreement.
6. NOTICE TO DEBTORS
The Purchaser acknowledges and agrees that unless and until (i) a Termination Event has occurred, or (ii) the Purchaser reasonably considers it necessary to protect its interest in the payments due in respect of the Purchased Receivables and serves written notice on the Seller to such effect (setting out its reasons therefor) and the Seller fails to rectify the situation referred to in such notice within three business days, or if the remedy consists of a payment, within five business days, it shall not give a notice to any Debtor of the assignment to the Purchaser of the Purchased Receivables; and the Seller acknowledges that upon the occurrence of (i) or (ii) it may be required by the Purchaser (without prejudice to the right of the Purchaser in respect of the same) to give notice at its own costs to any Debtor of such assignment in which case the Seller shall promptly notify the relevant Debtors of the Purchaser's interest in the Purchased Receivables. Any such notice shall specify the bank account into which all future payments in respect of Purchased Receivables shall be made.
7. DOWNGRADE TRIGGER
Upon the occurrence of a Downgrade Trigger:
(i) The Discount Protection Amount shall mean, with respect of the calculation of the Purchase Price, the higher of (x) [_] and (y) the amount derived from the following formula:
(A+B)*C+(D*E)
where:
A = the Dilution Ratio Current Month of the preceding month; B = the Loss Ratio Current Month of the preceding month; C = Stress Factor: 2.25; D = USD LIBOR (three months)+ 0.43% E = 0.33 (average annual maturity of receivables); |
(ii) if the Seller is no longer the Servicer, the Seller shall, in addition to its obligations under Clause 14.1 and in particular Clause 14.1(a)(ii), furnish the Purchaser with bi-monthly reports substantially in the form of the Sixth Schedule hereof, to be submitted to the Purchaser (i) in accordance with clause 14.1(ii) on the third business day before each Collection Payment Date, and (ii) on twelfth day following the same Collection Payment Date.
(iii) All Collections in respect of Purchased Receivables shall be transferred (for same day value) on a weekly basis (every [Levi's to specify day of week suitable for each Seller] into the Operating Account.
(iv) The Purchaser shall be entitled to notify the Seller of:
. a revised Loss Ratio Current Month;
. a revised Loss Ratio Rolling Average;
. a revised Delinquency Ratio Current Month;
. a revised Delinquency Ratio Rolling Average.
8. FURTHER ASSURANCE
The Seller agrees that from time to time, at its own expense, it will promptly execute and deliver all instruments and documents and take all action that the Purchaser may reasonably request in order to perfect or protect the assignment of the Purchased Receivables or to enable the Purchaser to exercise or enforce any of its rights under this Agreement.
PART 3
INDEMNITY AND PAYMENTS
9. INDEMNITY
9.1 Without limiting any other rights which the Purchaser may have hereunder or under applicable law, the Seller hereby agrees immediately to indemnify the Purchaser and its respective officers, directors and agents or any assignee, from and against any and all damages, losses, claims, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees (if any), and disbursements including any value added tax thereon (all of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them relating to or resulting from:
(a) reliance on any representation or warranty made by the Seller (or any officers of the Seller), under or in connection with this Agreement, any Monthly Report or any other information or report delivered by the Seller which shall have been false, incorrect or omitting of any material fact at the time made or deemed made;
(b) the failure by the Seller (or any officer of the Seller) to comply with any applicable law, rule or regulation with respect to any Purchased Receivable, Related Security or the related Contract, or the non-conformity of any Purchased Receivable, Related Security or the related Contract with any such applicable law, rule or regulation;
(c) any dispute, claim, offset or defence (other than the effects of the bankruptcy of the Debtor) of the Debtor to the payment of a Purchased Receivable, including, without limitation, a defence based on such Receivable or the related Contract or the Related Security not being a legal, valid and binding obligation of such Debtor enforceable against it in accordance with its terms, or any claim resulting from the Receivables being governed by the general business terms of the Debtor, or any other claim resulting from the sale of goods related to such Receivable or the failure to perform any obligations related to such goods or the failure to perform any obligations related to any applicable laws, rules or regulations in respect thereof;
(d) any product liability claims or personal injury or property damage suit or other similar or related claims or action of whatever sort arising out of or in connection with the goods which are the subject of any Purchased Receivable;
(e) any disclosure of information regarding the Debtors by the Seller to the Purchaser or the supply of any Contracts, Records and all other related documents to the Purchaser;
(f) any claim arising from collection activities conducted by the Seller, including, without limitation, any failure by the Seller, whether as Seller or in its capacity as Servicer, to transfer any Collection to the Operating Account; and
(g) any related indemnities given by the Purchaser in each of the Facilities, to the extent that the same relate to the Purchased Receivables or the transactions contemplated in this Agreement,
excluding, however, (i) Indemnified Amounts resulting solely from the negligence or wilful misconduct on the part of the Purchaser or its agents or (ii) Indemnified Amounts arising out of the failure of any Debtor to pay amounts lawfully owed in respect of a Purchased Receivable.
9.2 Promptly after receipt by the Purchaser of notice of any claim or the commencement of any action or proceedings with respect to which an Indemnified Amount may become payable, the Purchaser will notify the Seller in writing of such a claim or of the commencement of such action and the Seller shall be entitled and obliged at its own expense to assume the defence of such action or proceeding in the name of the Purchaser and the Seller shall be entitled and obliged to take, in the name of the Purchaser, such action as the Seller shall see fit to defend or avoid liability for any such Indemnified Amount or to recover the same from any third party.
9.3 The Purchaser hereby agrees promptly to notify the Seller with reasonable detail if it becomes aware of any circumstances which could reasonably be expected to lead to a claim on the part of the Purchaser under Clause 9.1.
9.4 If at any time the Seller is obliged under the provisions of this Agreement to indemnify or reimburse the Purchaser in respect of any sum under the Liquidity Facility Agreement of Standby Letter of Credit Agreement, the Seller agrees that losses or expenses incurred by any Bank or the Agent referred to in the Liquidity Facility Agreement or the L/C Bank, as applicable, shall be deemed to be the losses or expenses of the Purchaser for this purpose.
10. PAYMENTS
10.1 On each date upon which this Agreement requires an amount to be paid by
either party hereunder, such party shall save as expressly provided herein
make the same available to the payee by payment in the relevant currency
and in immediately available, freely transferable, cleared funds to either
(i) such account and bank as the relevant payee shall have specified for
this purpose (where such payee is the Seller) or (ii) the Operating Account
(where such payee is the Purchaser).
10.2 All payments made by the Seller hereunder shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim.
11. NETTING-OFF PAYMENTS
The Purchaser may, but need not, apply any sum at any time due from it hereunder to the Seller in or towards satisfaction of any amount then due from the Seller and, for this purpose, the Purchaser may apply the sum so due from it in or towards the purchase of such amounts of such other currencies as may be required to effect such application.
12. APPOINTMENT OF SERVICER The servicing, administering and collection of the Purchased Receivables shall be conducted by the Servicer, pursuant to the Servicing Agreement.
PART 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
13. REPRESENTATIONS AND WARRANTIES
13.1 The Seller represents and warrants to the Purchaser that:
(a) Corporate Existence and Power
The Seller is a corporation duly organised, validly existing and in good standing under the laws of [________] and has all corporate power and all governmental licences, authorisations, consents and approvals required to carry on its business in [________].
(b) Corporate and Governmental Authorisation; Contravention
The execution, delivery and performance by the Seller of this Agreement and the transactions contemplated hereby are within its corporate powers, have been duly authorised by all necessary corporate action, require no action by or in respect of, or filing, recording or enrolling with, any governmental body, agency court official or other authority, and do not contravene, or constitute a default under, any provision of applicable law or regulation or by-laws of the Seller or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Seller or result in the creation or imposition of any Adverse Claim on the assets of the Seller (other than in favour of the Purchaser pursuant to this Agreement).
(c) Binding Effect
This Agreement constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms, subject to bankruptcy, insolvency, reorganisation, moratorium or similar law or proceedings.
(d) No Proceedings
(i) Neither the Seller nor any of its affiliates has taken any corporate action nor have any steps been taken or legal proceedings been started or threatened against the relevant company for its winding-up, bankruptcy, gerechtelijk akkoord / concordat, liquidation, dissolution, reorganisation or annulment as a legal entity or for the appointment of an gerechtelijke bewindvoerder / administrateur judiciaire, commissaire special / bijzondere bewindvoerder, sekwester / sequestre, receiver, administrator, administrative receiver, trustee, liquidator, sequestrator or similar officer of the relevant company or of any or all of its assets or revenues;
(ii) no action or administrative proceeding of or before any court arbitrator or agency has been started or (to the best of the knowledge and belief of the Seller) threatened (1) which could reasonably be expected to have a material adverse effect on the Seller's business or financial condition or on its ability to perform its obligations under this Agreement or (2) as to which, in its opinion, there is a material likelihood of an adverse judgment which could reasonably be expected to have a material adverse effect on its business or financial condition or on its ability to perform its obligations under this Agreement; and
(iii) the Seller is not in a stoppage of payment situation; further, the Seller is entering into this Agreement and makes each Offer hereunder for the Seller's own commercial benefit in good faith.
(e) Accuracy of Information
All information heretofore furnished by the Seller to the Purchaser for the purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Seller to the Purchaser will be, true and accurate in every material respect, on the date that such information is stated or certified.
(f) Place of Business
The chief place of business and chief executive office of the Seller are located at the address of the Seller referred to herein, the offices where the Seller keeps all its Records, are located at the address(es) described herein or such other locations notified to the Purchaser in accordance with Clause 24 in jurisdictions where all action required under this Agreement has been taken and completed.
(g) Good Title
Upon each Purchase Date hereunder the Purchaser shall acquire the ownership of each Purchased Receivable assigned on such Purchase Date and the Related Security with respect thereto, and to the best of the Seller's knowledge and belief, free and clear of any Adverse Claim (other than in favour of the Purchaser).
(h) Eligibility
To the best of the Seller's knowledge and belief, each Receivable the subject of the related Offer is an Eligible Receivable in the Nominal Amount specified in such Offer.
(i) Floating Charge
There is no floating charge (pand op handelszaak / gage sur fonds de commerce) or similar encumbrance under the law of any jurisdiction over the businesses of the Seller, nor any undertaking or mandate with a view to the creation of any such floating charge or similar encumbrance.
13.2 The representations and warranties referred to in Clause 13.1 shall be given by the Seller to the Purchaser (i) on the date hereof, (ii) on each date on which an Offer is made pursuant to Clause 2.1, (iii) on each Purchase Date and (iv) except for Clause 13.1(h) on each date on which any Purchased Receivable is outstanding.
14. COVENANTS
14.1 At all times from the date hereof to the later of the Termination Date and the date on which the Aggregate Receivables Investment is zero and no sums are due and payable by the Seller to the Purchaser hereunder:
(a) Financial Reporting
The Seller will maintain for itself and each of its subsidiaries a system of accounting established and administered in accordance with generally accepted [Belgian] accounting laws and principles, and furnish or notify to the Purchaser as the case may be:
(i) Annual Reporting
within nine calendar months after the close of each of its fiscal years, an audit report certified by independent certified public accountants (to the extent such audit report is available), acceptable to the Purchaser, prepared in accordance with [Belgian] accounting law and generally accepted accounting principles for itself and its subsidiaries, including balance sheets as of the end of such period, related profit and loss statements;
(ii) Monthly Reporting
if the Seller is no longer acting as Servicer, not later than the third business day before each Collection Payment Date, a Monthly Report related to the relevant Collection Period;
(iii) Notice of Termination Event
by facsimile to be confirmed by letter as soon as possible and in any event within five days after the occurrence of each Termination Event, a statement of the Seller setting forth details of such Termination Event and the action which the Seller proposes to take with respect thereto;
(iv) Change in Credit and Collection Policies
- prior to implementation, any change in or amendment to the Credit and Collection Policies which the Seller does not in his reasonable opinion consider to be material, and
- any material change in or amendment to the Credit and Collection Policies for approval prior to implementation, such approval not to be unreasonably withheld. If such approval is not given by the Purchaser, no such change or amendment of the Credit or Collection Policies will be implemented; and
(v) Other Information
such other information (including non-financial information) as the Purchaser may from time to time reasonably request.
(b) Conduct of Business
The Seller shall do all things necessary to remain duly organised, validly existing and in good standing under the law of [Belgium] and maintain all requisite authority to conduct its business in [Belgium].
(c) Compliance with Laws
The Seller shall comply in all respects which could be regarded as material in the context of the transactions contemplated by this Agreement, with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject.
(d) Furnishing of Information and Inspection of Records
The Seller shall have systems in place in relation to Receivables that are capable of providing the information to which the Purchaser is reasonably and properly entitled pursuant to this Agreement, use all reasonable endeavours to maintain such systems in working order, and permit the Purchaser, any firm of independent accountants and/or any other representatives of the Purchaser upon ten days' prior written notice (unless a Termination Event has occurred in which case no notice is required) to enter during normal business hours under the direct supervision of the Seller upon its premises to:
(i) inspect and satisfy itself or themselves that the systems are in place, maintained in working order and are capable of providing the information to which it or they are reasonably and properly entitled pursuant to this Agreement; and
(ii) examine and make copies of and extracts from all Records;
Provided that no Records, files or other information other than that to which the Purchaser is entitled so to examine, copy or make abstracts from shall be removed from the Seller's premises and such Records, files or other information shall remain confidential and shall not be used or disclosed or divulged to any person (except to the extent and in the circumstances permitted by this Agreement and the Servicing Agreement and in accordance with applicable law) without the prior consent of the Seller, such consent not to be unreasonably withheld.
(e) Keeping of Records
The Seller shall keep and maintain Records, on a Receivable by Receivable basis, for the purposes of identifying, in particular, at any time, any amount paid by and to each Debtor, any amount due by or to a Debtor, the source of receipts which are paid into each Collection Account and the Operating Account, and the balance from time to time outstanding on each Collection Account with respect to each Debtor. The Seller shall give the Purchaser notice of any material change to its administrative and operating procedures in relation to the keeping and maintaining of Records.
(f) Performance and Compliance with Purchased Receivables and Contracts
The Seller shall at its expense, in a timely manner fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts and Related Security documents related to the Purchased Receivables as if interests in such Purchased Receivables had not been assigned and sold hereunder.
(g) Credit and Collection Policies
The Seller shall comply in all material respects with the Credit and Collection Policies in regard to each Purchased Receivable, any Related Security and the related Contract as if interests in such Purchased Receivables had not been assigned and sold hereunder.
(h) Accounts
The Seller shall ensure that each Collection Account will be open on the date hereof with resolutions, instructions and signature authorities applying thereto in the form required by the Purchaser. The Seller undertakes that the resolutions and instructions relating to the Collection Accounts will not be changed without prior written notification to and consent of the Purchaser.
The Seller shall:
(i) procure that any payment which is not appropriated to a particular Purchased Receivable by the Debtor, and which is incapable of being so
appropriated by the Seller shall be applied to Purchased Receivables based upon the ratio that Purchased Receivables from such Debtor bear to all Receivables from such Debtor; and
(ii) not create, or participate in the creation of, or permit to exist, any Adverse Claim in relation to the Collection Accounts other than as disclosed and existing as at the date of this Agreement.
(iii) Insurance Approvals
The Seller shall ensure that, in respect of any Receivable which is credit-insured, it shall comply with all requirements of the relevant insurance policies relating thereto including, for the avoidance of doubt, the obtaining of any consents or approvals required under the policies in respect of the sale and transfer of such Receivables by the Seller to the Purchaser hereunder.
14.2 During the term of this Agreement, unless the Purchaser shall otherwise consent in writing:
(a) Sales, Liens, etc
Except as otherwise provided herein, the Seller shall not sell, assign or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to any goods the subject of any Purchased Receivable or any Purchased Receivable or related Contract or Related Security, or assign any right to receive income in respect thereof or attempt, purport or agree to do any of the foregoing.
(b) Extension or Amendment of Receivables
Except as otherwise permitted hereunder or under the Servicing Agreement, the Seller shall not extend, amend or otherwise modify the terms of any Purchased Receivable, or amend, modify or waive any term or condition of any Contract related thereto.
(c) Bills of exchange, etc
Except with the prior written consent of the Purchaser, the Seller shall not draw any bill of exchange in connection with a Purchased Receivable, nor demand or receive from any Debtor, or otherwise permit the creation by any Debtor of, any promissory note in connection with a Purchased Receivable.
PART 5
Miscellaneous
15. Taxes and Increased Costs
15.1 The Seller shall pay all stamp duty, registration and other similar taxes (but for the avoidance of doubt excluding the Purchaser's income taxes, if applicable) to which this Agreement, the Accounts Administration Agreement, any Funding Agreements or each of the Facilities or any judgment given in connection herewith or therewith may at any time become subject subsequent to the date of this Agreement and, from time to time on demand of the Purchaser, immediately indemnify the Purchaser against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying any such tax, except those penalties and interest charges that are due to the negligence or wilful misconduct of the Purchaser or its agents provided that, in the case of any payment relating to the Standby Letter of Credit Agreement, the Seller shall only be required to pay (a) amounts payable solely in respect of, or as a result of the transaction contemplated by this Agreement and the funding thereof and (b) such proportion of any general cost equal to the proportion which the L/C Portion relating to the transaction contemplated in this Agreement bears to the then Available L/C Portion (both terms as defined in the Standby Letter of Credit Agreement). The Purchaser shall, as soon as it becomes aware that any such stamp duty, registration or other similar taxes may become due, inform the Seller of the same. The Purchaser and the Seller shall cooperate to the extent practicable, and the Purchaser shall endeavour to take such measures as shall be practicable, with a view to lawfully avoiding any such stamp duty, registration or other similar taxes and expenses.
15.2 All payments to be made by the Seller to the Purchaser hereunder shall be made free and clear of and without deduction for or on account of tax unless the Seller is required to make such a payment subject to the deduction or withholding of tax, in which case the sum payable by the Seller in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Purchaser receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made.
15.3 The Seller shall from time to time on demand of the Purchaser (i) reimburse the Purchaser for all sums payable by the Purchaser under Clauses 13.1, 13.2 and 13.5 of the Standby Letter of Credit Agreement to any person in respect of any increase for deduction or withholding for or on account of tax imposed subsequent to the date of this Agreement and any amount payable by the Purchaser to any person or the L/C Bank by way of indemnity against a payment on account of tax imposed subsequent to the date of
this Agreement on or in relation to any sum received or receivable under the Standby Letter of Credit Agreement by such person or the L/C Bank, or any liability in respect of any increased costs of the L/C Bank and in each case, only on any amount paid which is referable to the funding by the Purchaser of Purchased Receivables (ii) reimburse the Purchaser for all sums payable by the Purchaser under Clauses 16.4, 19.4 and 19.5 of the Liquidity Facility Agreement to any person in respect of any increase for deduction or withholding for or on account of tax imposed subsequent to the date of this Agreement or in relation to any sum received or receivable under the Liquidity Facility Agreement by such person or the Agent, the Banks or any liability in respect of any increased costs.
15.4 Any demand made by the Purchaser under Clause 15.1, 15.2 or 15.3 above shall be accompanied by a statement, duly certified by an officer of the Purchaser, giving reasonable particulars of the claim for reimbursement which shall be relied upon and agreed as authoritative by the Seller.
15.5 The Purchaser hereby agrees promptly to notify the Seller if it becomes aware of any circumstances which could reasonably be expected to lead to a claim on the part of the Purchaser under this Clause 15.
16. Default Interest and Indemnity
16.1 If any sum due and payable by the Seller hereunder is not paid on the due date therefor in accordance with the provisions of Clause 10 or if any sum due and payable by the Seller under any judgment of any court in connection herewith is not paid on the date of such judgment, the period beginning on such due date or, as the case may be, the date of such judgment and ending on the date upon which the obligation of such Seller to pay such sum (the balance thereof for the time being unpaid being herein referred to as an "unpaid sum") is discharged shall be divided into successive periods, each of which (other than the first) shall start on the last day of the preceding period and the duration of each of which shall be selected by the Purchaser to match the interest period selected by the Purchaser.
16.2 During each such period relating thereto as is mentioned in Clause 16.1 an unpaid sum shall, to the extent permitted by law and provided that the Seller shall be in default, bear interest at the rate per annum which is the sum of 2 per cent plus the rate at which ABN AMRO Bank N.V. was offering to prime banks in the London (or, in respect of [Belgian francs, Brussels]) Interbank Market deposits in the currency in which such unpaid sum is denominated for the period for which such rate is to be determined at 11.00 a.m. on the date upon which quotations would ordinarily be given by prime banks in the London (or, in respect of [Belgian francs, Brussels]) Interbank Market for deposits in such currency for such period Provided that, if, for any such period, ABN AMRO Bank N.V. was not offering deposits in the currency in which such unpaid sum is denominated for the required period, the rate of interest applicable to such unpaid sum shall be determined by
reference to the cost to the Purchaser of obtaining such deposits from such sources as it may reasonably select.
16.3 Any interest which shall have accrued under Clause 16.2 in respect of an unpaid sum shall be due and payable and shall be paid by the Seller at the end of the period by reference to which it is calculated or on such other dates as the Purchaser may specify by written notice to the Seller.
16.4 The Seller undertakes to indemnify the Purchaser against any loss or expense, including reasonable legal fees, which it may sustain or incur as a consequence of any default by the Seller in the performance of any of the obligations expressed to be assumed by it in this Agreement, other than any loss or expense resulting from the negligence or default on the part of the Purchaser in connection with such performance.
16.5 The Purchaser hereby agrees to notify the Seller if it becomes aware of any circumstances which could reasonably be expected to lead to a claim on the part of the Purchaser under this Clause 16.
17. Fees, Costs and Expenses
17.1 In consideration of the obligations of the Purchaser incurred hereunder the Seller shall pay to the Purchaser the fees specified in the Fee Letter.
17.2 Other Facilities, Fees etc.
The Seller shall, from time to time (i) on demand of the Purchaser reimburse the Purchaser in an amount equal to the Liquidity Facility Fee (relating to the funding of Purchases hereunder) payable by the Purchaser to the Agent both for the Agent's account and for the account of the Banks under the Liquidity Facility Agreement, (ii) on demand of the Purchaser reimburse the Purchaser for all costs and expenses (including reasonable legal fees) together with any value added tax thereon incurred or in connection with the enforcement and/or preservation of any of the rights of the Banks and the Agent (on its behalf and/or for the account of the Banks) (each as defined in the Liquidity Facility Agreement) under the Liquidity Facility Agreement, (iii) on demand of the Purchaser reimburse the Purchaser in an amount equal to the L/C Fee payable by the Purchaser under Clause 4.1 of the Standby Letter of Credit Agreement, (iv) on demand of the Purchaser reimburse the Purchaser in an amount equal to the costs and expenses payable by the Purchaser in respect of any exercise of its rights under the Servicing Agreement, (v) on demand of the Purchaser reimburse the Purchaser in an amount equal to the Accounts Administration Fee payable by the Purchaser pursuant to Clause 10.2 of the Accounts Administration Agreement and any charges of the Account Bank payable by the Purchaser pursuant to Clause 3 of the Accounts Administration Agreement, (vi) on demand of the Purchaser reimburse the Purchaser for all amounts payable by the Purchaser to the Issuer pursuant to Clauses 7 and 8 of the Funding Agreement, and (vii)
on demand of the Purchaser reimburse the Purchaser the fees, costs and expenses of the directors of the Purchaser and any holding company of the Purchaser.
18. Deemed Collections
18.1 If on any day (i) a Purchased Receivable becomes a Disputed Receivable,
(ii) any representation or warranty in Clause 13 in respect of a Purchased
Receivable proves at any time to have been incorrect when made, or (iii)
any Purchased Receivable proves not to have been an Eligible Receivable at
the Purchase Date, then the Seller shall be deemed to have received on such
day a Collection (a "Deemed Collection") in an amount equal to the
Outstanding Nominal Amount of such Purchased Receivable.
18.2 If the Outstanding Nominal Amount of any Purchased Receivable is reduced by reason of (i) any set-off or counterclaim or (ii) any discount or other trade credit, or (iii) any credit note issued by the Seller to the Debtor, then the Seller shall be treated as having received the amount of such reduction on the date of such reduction for such Receivable in addition to any other amounts which may be received or receivable on such Receivable and such reduction thereof shall for the purposes of this Agreement be treated as a Deemed Collection in an amount equal to the amount of such reduction.
18.3 If any Receivable which is purported to be sold and assigned to the Purchaser hereunder shall have been collected in whole or in part (including a Deemed Collection pursuant to Clause 18.1 and 18.2) prior to the Purchase Date, then the portion thereof which shall have been so collected shall be treated for the purposes of this Agreement as a Deemed Collection thereof received on the date of the Purchase Date.
18.4 If on any day the Seller is in receipt of a Deemed Collection the Seller shall hold such amount for and to the order and benefit of the Purchaser and shall pay such amount to the Operating Account on the next Collection Payment Date, as if the same were a Collection.
18.5 Upon the receipt of the Deemed Collection referred to in items (i) to (iii) of Clause 18.1, the Purchaser shall re-assign to the Seller (without recourse or warranty on the part of the Purchaser and at the sole cost of the Seller) the relevant Receivable and the Related Security, and any Collections thereafter received in respect of such Receivable shall be the sole property of the Seller.
19. Benefit of Agreement
19.1 This Agreement shall be binding upon and enure to the benefit of each party hereto and its successors and persons deriving title hereunder.
19.2 The Seller shall not be entitled to assign or transfer all or any of its rights, benefits and obligations hereunder.
20. Disclosure of Information
Neither of the parties hereto shall, during the continuance of this Agreement or after its termination, disclose to any person, firm or company whatsoever (except with the authority of the other party hereto) any information which that party has acquired under or in connection with this Agreement other than:
(i) to employees, officers or agents of any of ABN AMRO Bank N.V., the Banks under the Facilities, the Issuer, Standard & Poor's, Moody's and the Dealers under the Dealer Agreements (but not, for the avoidance of doubt, holders of commercial paper issued thereunder);
(ii) in connection with any proceedings arising out of or in connection with this Agreement, any Funding Agreement, each of the Facilities or the preservation or maintenance of its rights thereunder, subject to prior notice to the Seller;
(iii) if required to do so by an order of a court of competent jurisdiction whether in pursuance of any procedure for discovering documents or otherwise subject to prior notice to the Seller;
(iv) pursuant to any law or regulation or requirement of any governmental agency in accordance with which that party is required or accustomed to act subject to prior notice to the Seller;
(v) to any governmental, banking or taxation authority or competent jurisdiction subject to prior notice to the Seller;
(vi) to its auditors or legal or other professional advisers;
Provided that the above restriction shall not apply to:
(a) employees or officers or agents of any of the parties referred to in
(i) above, any part of whose functions are or may be in any way
related to this Agreement;
(b) information already known to a recipient otherwise than in breach of this Clause;
(c) information also received from another source on terms not requiring it to be kept confidential; and
(d) information which is or becomes publicly available otherwise than in breach of this Clause.
21. Remedies and Waivers
21.1 No failure to exercise, nor any delay in exercising, on the part of any party hereto, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy.
21.2 The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.
22. Partial Invalidity
Without prejudice to any other provision hereof, if one or more provisions hereof is or becomes invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any party such invalidity, illegality or unenforceability in such jurisdiction or with respect to such party or parties shall not, to the fullest extent permitted by applicable law, render invalid, illegal or unenforceable such provision or provisions in any other jurisdiction or with respect to any other party or parties hereto. Such invalid, illegal or unenforceable provision shall be replaced by the parties with a provision which comes as close as reasonably possible to the commercial intentions of the invalid, illegal or unenforceable provision.
23. No Liability and No Petition
23.1 No recourse under any obligation, covenant, or agreement of the Purchaser contained in this Agreement shall be had against any shareholder, officer or director of either the Purchaser or the Issuer as such, by the enforcement of any assessment or by any proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that this Agreement is a corporate obligation of the Purchaser and no liability shall attach to or be incurred by the shareholders, officers, agents or directors of either the Purchaser or the Issuer as such, or any of them, under or by reason of any of the obligations, covenants or agreements of such Purchaser contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by the Purchaser of any of such obligations, covenants or agreements, either at law or by statute or constitution, of every such shareholder, officer, agent or director is hereby expressly waived by the Seller as a condition of and consideration for the execution of this Agreement.
23.2 The Seller hereby undertakes to the Purchaser that, until one year and one day has elapsed after the payment of all sums outstanding and owing under the latest maturing note under the CP Programme, it will not petition or commence proceedings for the administration or winding up (nor join any person in a petition or proceedings for the administration or winding up) of the Purchaser nor will it enforce any judgment against the Purchaser if to do so would cause the financial situation of the Purchaser to become such as to make it liable to insolvency proceedings. The Seller acknowledges that its
recourse against the Purchaser in respect of any matter provided in this
Agreement shall be limited at any time to the extent of the aggregate of
(a) the unpaid amount of any Purchase Price Advance payable hereunder, and
(b) the Deferred Purchase Price due, owing or payable to it at that time
(but only if and to the extent that there are funds credited to the
Operating Account which the Accounts Administrator is entitled to apply in
accordance with in the Accounts Administration Agreement).
23.3 The Seller may, subject to Clause 23.2, demand performance by the Purchaser of its obligations hereunder and enforce these obligations, but waives the right to demand rescission of any Purchase. The Seller waives any unpaid seller's lien that it may have under article 20, 5 of the Mortgage Law or otherwise.
24. Notices and Amendments
24.1 Each communication to be made hereunder shall, (except expressly permitted otherwise) be made in writing but, unless otherwise stated, may be made by facsimile or letter.
24.2 Any communication or document to be made or delivered by any one person to another pursuant to this Agreement shall (unless that other person has by fifteen days' written notice to the other specified another address) be made or delivered to that other person at the address identified with its signature below and shall be deemed to have been made or delivered (in the case of any communication made by facsimile) when despatched or (in the case of any communication made by letter) when left at that address. Any communication sent by facsimile shall be promptly confirmed by letter but the non-delivery or non-receipt of any such letter shall not affect the validity of the original facsimile communication.
24.3 Each communication and document made or delivered hereunder shall be in English.
24.4 Any notice given to the Purchaser hereunder shall be copied to such other person as the Purchaser may instruct from time to time.
24.5 The Purchaser may act in accordance with any communication which may from time to time be, or purport to be, given on behalf of any one or more of those persons whom the Purchaser can reasonably believe on a summary examination of the relevant documents to be the authorised officers of the Seller, without further enquiry by the Purchaser (as the case may be) as to the authority or identity of the person making or purporting to make such communication and regardless of the circumstances prevailing at the time of such communication. The Purchaser may treat any such communication as fully authorised by and binding upon the Seller and may (but need not) take such steps in connection with or in reliance upon such communication as the Purchaser may in good faith consider appropriate.
24.6 This Agreement may be executed in one or more counterparts.
24.7 No variation of this Agreement (including this Clause 24.7) shall be effective unless it is in writing and signed by (or by some person duly authorised by) each of the parties and unless each of the Rating Agencies has confirmed in writing that the rating of the indebtedness for borrowed money issued or sold by the Issuer will not be downgraded, withdrawn or suspended as a result of such variation.
PART 6
LAW AND JURISDICTION
25. LAW
This Agreement shall be governed by and construed in accordance with the laws of [________].
26. JURISDICTION
Any dispute in connection with this Agreement shall be subject to the jurisdiction of the courts of [________].
Signed in two originals the day and year first before written. The pages of this Agreement and the Servicing Agreement executed on the date hereof were initialled for the purposes of authentication by ________________________ on behalf of the Purchaser and ________________________ on behalf of the Seller.
THE PURCHASER
TULIP ASSET PURCHASE COMPANY B.V.
By:
Gustav Mahlerlaan 10,
POBox 283,
1082 PP Amsterdam
The Netherlands
Telefax:+ 31 20 628 4666
Attention: Tuncay Sevincer / Frank Boesveldt
THE SELLER
_______________________ _______________________ By: By: Address: Address: Fax: Fax: Telephone: Telephone: |
Attention: Attention:
THE PARENT
LEVIS STRAUSS & Co
_______________________ _______________________ By: By: Address: Address: Fax: Fax: Telephone: Telephone: |
Attention: Attention:
THE FIRST SCHEDULE
CONDITIONS PRECEDENT
1. Copies of a resolution of the Seller's board of directors, and any other necessary corporate documents, approving this Agreement, the Servicing Agreement and the other documents to be delivered by it and the transactions contemplated hereunder.
2. Certified copies of the statutes of the Seller.
3. A certificate of the Seller certifying (a) the names and signatures of the officers authorised on behalf of the Seller to execute this Agreement, the Servicing Agreement and any other documents to be delivered by it hereunder, on which certificate the Purchaser may conclusively rely until such time as the Purchaser shall receive from the Seller a revised certificate meeting the requirements of this paragraph 3 and (b) the authenticity of the by-laws of the Seller.
4. A legal opinion from Clifford Chance [Brussels] in form and substance satisfactory to the Purchaser.
5. Copy of the latest financial statements of the Seller. These financial statements shall be audited to the extent that such audited statements are available.
6. Copy of the Servicing Agreement as executed.
7. Copy of the Monthly Report for the calendar month immediately preceding the date hereof.
8. Copy of any other statements or contracts the Purchaser deems necessary with regard to receivables offered.
9. Confirmation from the Rating Agencies in the customary form satisfactory to the Purchaser as regards (a) the rating of the transaction and (b) the rating of the Notes.
10. Evidence that the conditions precedent provided for under each Foreign RPA entered into on or about the date hereof have been satisfied.
11. Confirmation from the Purchaser of receipt of the structuring fee (in respect of first Purchase Date only).
THE SECOND SCHEDULE
ELIGIBLE RECEIVABLES AND ELIGIBLE DEBTORS
"ELIGIBLE RECEIVABLES" means Receivables which at their proposed Purchase Date:
1. were originated pursuant to a Contract in the Seller's ordinary course of business, in accordance with the approved Credit and Collection Policies of the Seller;
2. are owed by an Eligible Debtor, as defined hereunder in this Second Schedule;
3. constitute legally valid and enforceable obligations of the related Debtors enforceable against such Debtors in accordance with the terms of such Receivables subject to no right of rescission, set-off, withholding, suspension, counterclaim or other defence other than those provided for under mandatory rules of applicable law;
4. can be easily segregated and identified for ownership and Related Security purposes on any day;
5. arise from the sale of goods or the provision of services by the Seller and are such that the delivery of the goods or the provision of services giving rise to the Receivables have been completed and such goods or services have been accepted by the related Debtor;
6. are not Delinquent Receivables and are neither Defaulted, or Disputed Receivables and there has been no breach of any obligation (other than a payment obligation) by any party to any Contract;
7. are obligations which can be transferred by way of sale and assignment, and of which the transfer by way of sale and assignment is not subject to any contractual or legal restriction;
8. are obligations in respect of which no bill of exchange, promissory note or other negotiable instrument has been issued;
9. are owned by the Seller and are free and clear of any Adverse Claims;
10. are evidenced by an invoice issued to the relevant Debtor which will be sufficient to prove a claim therefor against the related Debtor in relevant courts, which complies with the relevant VAT and other taxation requirements, and which shows the amount and percentage of VAT applied if any;
11. do not carry interest and are not subject to withholding taxes;
12. have been created in compliance with all applicable laws and all required consents, approvals and authorisations have been obtained in respect thereof;
13. if purchased, are such that the Nominal Amount of such Receivables, together with the Aggregate Outstanding Nominal Amount of any other outstanding Purchased Receivables from the same Debtor and affiliates of the same Debtor, are not in excess of the Debtor Limit (but any such Receivables shall be ineligible only to the extent of such excess); if several Receivables owing from the same Debtor and, as the case may be, its affiliates are included in any Offer and, pursuant to this paragraph, part of them only may constitute Eligible Receivables, then eligibility shall be granted in priority to:
(a) the Receivables with an earlier invoice date;
(b) in the case of Receivables with the same invoice date, those with a later due date;
(c) in the case of Receivables with the same invoice date and due date, those with the higher invoice amount; and
(d) in the case of Receivables with the same invoice date, due date and invoice amount, those with the lower invoice serial number;
14. are not Receivables due from a Debtor against or by whom an application for the institution of bankruptcy, concordat judiciaire / gerechtelijk akkord, composition or any other insolvency procedure has been or will have been made within the meaning of any applicable insolvency law;
15. are Receivables in respect of which the Purchaser has not notified the Seller that the Purchaser has determined that such Receivables or class of Receivables is not reasonably acceptable for Purchase hereunder;
16. are Receivables due from a Debtor which the Purchaser has not notified the Seller that Receivables from such Debtor are not Eligible Receivables (and the Purchaser shall not be entitled to give such notification without reasons or on the basis of abusive and clearly unreasonable grounds);
17. are payable by Debtors which are not the Debtors of any Defaulted Receivable and are not, and have not been within the period of three years ending on the proposed Purchase Date, the Debtors of any Receivable payable to the Seller, which Receivable would be a Defaulted Receivable had it then been owned by the Seller and included in the relevant Offer;
18. are Receivables the Nominal Amount of which remains a debt, has not been paid and has not been discharged by set-off or otherwise;
19. are Receivables the sale of which in the manner herein contemplated will not be recharacterised as any other type of transaction and will be effective to pass to the Purchaser full and unencumbered title thereto and the benefit thereof to the Purchaser and
no further act, condition or thing will be required to be done in connection therewith to enable the Purchaser to require payment of any such Receivable or the enforcement of any such right in any court other than the giving of notice to the Debtor of the assignment of such Receivable by the Seller to the Purchaser;
20. are Receivables the sale and/or assignment of which will not violate any law or any agreement by which the Seller may be bound and upon such sale and assignment such Receivables will not be available to the creditors of the Seller on its liquidation;
21. had an original term of no more than [ ] days, and are denominated and payable in any of the following currencies:
[BEF Belgian franc]
[EUR Euro, if and when introduced];
[ ]
22. are Receivables governed by [________] law, owing from Debtors established in [________] in relation to their [________] establishment, and the terms and conditions of which do not provide for the jurisdiction of any court or arbitration tribunal outside [________];
23. are not subject to, and did not arise in connection with a contract which is subject to, the [consumer credit law of 12 June 1991];
24. are not subject to, and did not arise in connection with a contract which is subject to, public procurement (openbare aanbestedingen / marches publics) laws and regulations;
25. did not originate from the resale of products which had been acquired by the Seller subject to a reservation of title, unless the reservation of title has lapsed already due to the payment of the original acquisition price;
26. do not represent claims in connection with the execution by the Seller of a contract which is partly subcontracted to a third party; and
27. do not arise under or in relation to Contracts which constitute leasing, hire, hire purchase or contract hire transactions.
* * *
An "ELIGIBLE DEBTOR" at any relevant time:
1. is a Debtor which is approved as such by the Purchaser (which approval shall not be unreasonably withheld);
2. is a customer of the Seller granted credit in accordance with the Seller's normal procedures and billed by the Seller on a regular basis;
3. at the time of the assignment of the Receivables to the Purchaser, has not entered into a voluntary arrangement with its creditors, been declared bankrupt, been defendant in an action for its bankruptcy which remains undismissed for a period of thirty days, has not taken any corporate action nor had legal proceedings commenced against it for its gerechtelijk akkoord/ concordat, dissolution, liquidation, been subject to the appointment of a gerechtelijke bewindvoerder / administrateur judiciaire, sekwester / sequestre or similar officer, been in a situation of stoppage of payments (staking van betalingen / cessation de paiements), or been subject to any event similar to any of the above under the laws of any jurisdiction;
4. is not an affiliate of the Seller;
5. is not, except with the Purchaser's prior consent, a country, state, local government, municipality, public body, government entity, state owned corporation or other public sector body; and
6. is not an individual and does not have the benefit of consumer credit legislation.
THE THIRD SCHEDULE
PART 1
FORM OF OFFER
To: Tulip Asset Purchase Company B.V. From: [ ] Dated: [ ] |
Dear Sirs,
1. We refer to a receivables purchase agreement (such receivables purchase agreement, as from time to time amended, supplemented or novated being herein called the "RECEIVABLES PURCHASE AGREEMENT") dated on or about [____________] and originally made between yourselves as Purchaser, Levi Strauss & CO as Parent and ourselves as Seller.
2. Terms defined in the Receivables Purchase Agreement shall bear the same meaning herein.
3. We hereby offer to sell, to assign and to transfer to you, pursuant to the Receivables Purchase Agreement, the Receivables listed in the Schedule hereto and the Related Security at a Purchase Price calculated in accordance with the Receivables Purchase Agreement and notify you that:
(a) (i) the aggregate Nominal Amount of all the offered Receivables, calculated as at the date hereof, is [ ];
(ii) the Purchase Price Advance in respect of all the offered Receivables, calculated as at the date hereof, is [ ]; and
(iii) the Discount in respect of all the offered Receivables, calculated as at the date hereof, is [ ];
(b) the proposed Purchase Date is [ ];
(c) the Purchase Price Advance is to be paid into account no.
[specify number] in the name of [specify account name] at
[specify bank name and address].
This Offer constitutes an irrevocable offer by us binding upon us to assign and to sell to you the ownership interest in the Receivables and Related Security referred to in this Offer.
Yours faithfully,
..................................
for and on behalf of
[ ]
PART 2
FORM OF RECEIPT
To: Tulip Asset Purchase Company B.V.
From: [ ] as Seller
Dated: [ ]
Dear Sirs,
1. We refer to a receivables purchase agreement (such receivables purchase agreement, as from time to time amended, supplemented or novated being herein called the "RECEIVABLES PURCHASE AGREEMENT") dated on or about [____________] and originally made between yourselves as Purchaser, Levi Strauss & CO as Parent and ourselves as Seller.
2. Terms defined in the Receivables Purchase Agreement shall bear the same meaning herein. This Receipt is given pursuant to Clause 3.1 of the Receivables Purchase Agreement.
3. We hereby acknowledge receipt of the Purchase Price Advance on the
[specify date] in respect of the Receivables identified in the offer
dated [ ], calculated in accordance with the Receivables Purchase
Agreement.
Yours faithfully,
........................
for and on behalf of
[ ]
THE FOURTH SCHEDULE
TERMINATION EVENTS
1. The Seller and/or the Servicer, so long as the Seller is Servicer, fails to make payment under this Agreement and/or the Servicing Agreement on the date such payment is due and payable as specified in such Agreement, or upon demand where no date is specified, subject to a three day grace period after notification.
2. The Seller and/or the Servicer, so long as the Seller is Servicer, fails to perform any of their other obligations under this Agreement and/or the Servicing Agreement, subject to a three day grace period after notification.
3. Any representation or warranty in this Agreement or in any report or any information provided by the Seller is materially false or incorrect.
4. The Seller enters into a voluntary arrangement with its creditors, is declared bankrupt, is defendant in an action for its bankruptcy which remains undismissed for a period of thirty days, takes any corporate action or has legal proceedings commenced against it for its gerechtelijk akkoord / concordat, dissolution, liquidation, or a gerechtelijk bestuurder / administrateur judiciaire, sekwester / sequestre or similar officer is appointed in relation to the Seller, or any stoppage of payments (staking van betalingen/ cessation de paiements) occurs.
5. Any material adverse change occurs in the financial position or the collection procedures of the Seller.
6. There is a default by the Seller or any seller under any Foreign RPA in respect of any of their payment obligations to third parties in aggregate in excess of USD 25,000,000 or its equivalent at any time.
7. Subject to the provisions of clause 7, the Loss Ratio Current Month reported in any Monthly Report exceeds [______]%.
8. Subject to the provions of clause 7, the Loss Ratio Rolling Average in any Monthly Report exceeds [______]%.
9. Subject to the provions of clause 7, the Delinquency Ratio Current Month in any Monthly Report exceeds [______]%.
10. Subject to the provions of clause 7, the Delinquency Ratio Rolling Average in any Monthly Report exceeds [______]%.
11. Subject to the provions of clause 7, the Dilution Ratio in any Monthly Report exceeds [___]%.
12. The credit rating of the Parent which is a dependent rating for the transaction is down-graded below the level necessary to maintain the rating of the CP Programme.
13. The credit rating of the CP Programme is down-graded by any rating agency or a rating agency determines that a failure to declare a Termination Event would result in the credit rating of the CP Programme being downgraded.
14. The Purchaser notifies the Seller that it has received notification from the provider(s) of credit facilities pursuant to the Liquidity Facility Agreement and/or the Standby Letter of Credit Agreement to the effect that the cost to them of providing or maintaining such facilities has increased by reason of (i) any change in law or its interpretation or administration and/or (ii) compliance with any request from or requirement of any central bank, fiscal or monetary or other authority, in either case occurring subsequent to the date of this Agreement and being outside the control of the Purchaser and the relevant credit facility provider(s), unless the Seller agrees to pay such increased cost.
15. The Aggregate Receivables Investment hereunder and under the Foreign RPAs becomes, and remains for three business days, less than the aggregate of the Matured Value of the Loans outstanding from the Issuer to the Purchaser and all outstanding Advances (where applicable converted to US dollars at the rate specified in the relevant agreement).
16. Any Foreign RPA is terminated by way of Termination Event (as defined in the Foreign RPA).
17. The Seller ceases to be under control of the Parent.
THE FIFTH SCHEDULE
GENERAL TERMS AND CONDITIONS
THE SIXTH SCHEDULE
FORM OF MONTHLY REPORT
THE SEVENTH SCHEDULE
DEBTOR LIMITS
EXHIBIT 10.17
[___] JANUARY 2000
SERVICING AGREEMENT
TULIP ASSET PURCHASE COMPANY B.V.
AS PURCHASER
[LEVI STRAUSS _______]
AS SERVICER
AND
LEVI STRAUSS & CO
AS PARENT
CONTENTS
CLAUSE PAGE 1. DEFINITIONS........................................................... 1 2. APPOINTMENT OF SERVICER............................................... 3 3. THE SERVICES.......................................................... 4 4. COLLECTIONS AND THE ACCOUNTS.......................................... 5 5. COSTS, EXPENSES AND REMUNERATION...................................... 6 6. INFORMATION........................................................... 7 7. COVENANTS OF THE SERVICER............................................. 7 8. SERVICER'S INDEMNITY.................................................. 9 9. SERVICES NON-EXCLUSIVE................................................ 9 10. TERMINATION........................................................... 10 11. CHANGE OF SERVICER.................................................... 11 12. FURTHER ASSURANCE..................................................... 11 13. DISCLOSURE OF INFORMATION............................................. 13 14. NOTICES AND COUNTERPARTS.............................................. 14 15. VARIATION............................................................. 14 16. ASSIGNMENT............................................................ 14 17. PARTIAL INVALIDITY.................................................... 14 18. NO LIABILITY AND NO PETITION.......................................... 14 19. GOVERNING LAW......................................................... 15 20. JURISDICTION.......................................................... 15 |
THE SCHEDULES
The First Schedule : Form of Monthly Report The Second Schedule : The Collection Accounts The Third Schedule: : The Operating Accounts |
THIS SERVICING AGREEMENT is made the [ ] day of December 1999
BETWEEN
(1) TULIP ASSET PURCHASE COMPANY B.V., a Dutch private company with limited liability having its registered office at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands (the "PURCHASER");
(2) [LEVI STRAUSS _________], a [________] company having its registered office at [________________________] RC [____] (the "SERVICER", which expression shall include any person appointed as servicer for the Purchaser for the purpose of and in accordance with this Agreement), and
(3) LEVI STRAUSS & CO. a Delaware corporation having its head office at 1155 Battery Street, San Fransisco, CA 94120, USA (the "PARENT").
WHEREAS:
(A) The Seller and the Purchaser have agreed, upon the terms and subject to the conditions of the Receivables Purchase Agreement referred to below, that the Seller may from time to time offer to sell and to assign Eligible Receivables to the Purchaser and the Purchaser shall accept any such offer upon the terms thereof.
(B) The Servicer is willing to act for the Purchaser in the performance of certain services in relation to the Purchased Receivables upon the terms and subject to the conditions contained in this Agreement.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement and in the Recitals hereto, except so far as the context otherwise requires:
"ACCOUNT BANK" means ABN AMRO Bank N.V. acting through its office at Amsterdam and any person appointed as Account Bank under the Accounts Administration Agreement;
"ACCOUNTS ADMINISTRATION AGREEMENT" means the accounts administration agreement dated on or about the date hereof between ABN AMRO Bank N.V., the Purchaser and the Issuer;
"ACCOUNTS ADMINISTRATOR" means ABN AMRO Bank N.V. acting through its office at Amsterdam and any person appointed as accounts administrator under the Accounts Administration Agreement;
"ADVANCE" means all Advances and Same Day Advances pursuant to the Liquidity Facility Agreement and all Drawings under the Standby Letter of Credit (as in each case defined therein);
"COLLECTION ACCOUNT" means each of the accounts set out in the Second Schedule with the Collection Account Banks utilised for the time being by the Seller and/or the Servicer in relation to Collections on the Purchased Receivables or such other account or accounts as may for the time being be in addition thereto or substituted therefor;
"COLLECTION ACCOUNT BANKS" means each of the banks set out in the Second Schedule or such other banks as may for the time being be nominated by the Seller and/or the Servicer in addition thereto or substituted therefor;
"CP PROGRAMME" means the commercial paper programme established by the Issuer pursuant to the Dealer Agreements;
"DEALER AGREEMENTS" means the dealer agreements relating to the CP Programme dated on or after 1 December 1995 between the Issuer and the Dealers (as defined therein);
"DISCOUNT PROTECTION AMOUNT" shall have the same meaning as in the Receivables Purchase Agreement;
"DISCOUNT RESERVE LEDGER" shall have the same meaning as in the Receivables Purchase Agreement;
"ENCUMBRANCE" means (a) any mortgage, charge, pledge, lien or other encumbrance securing any obligation of any person, or (b) any type of preferential arrangement (including any title transfer and retention arrangement) the effect of which is to give a creditor a preferential position in relation to any asset.
"ISSUER" means Tulip Financing Corporation a company incorporated with limited liability and having its registered office at 15 East North Street, City of Dover, Kent County, Delaware, United States;
"MONTHLY REPORT" means the monthly report delivered by the Servicer pursuant to Clause 6.2 in the form set out in the First Schedule or as otherwise agreed from time to time between the Servicer and the Purchaser;
"NOTE" means a commercial paper note issued by the Issuer for the purpose of funding the Purchaser under the Funding Agreement and purchased by a Dealer pursuant to the Dealer Agreements and includes the commercial paper notes represented by a Note in global form;
"OPERATING ACCOUNT" means the interest bearing accounts designated as such in the Third Schedule and operated by ABN AMRO Bank N.V. as Accounts Administrator in the name of the Purchaser at the Account Bank utilised for the time being for the purposes of the Servicing Agreement and the Accounts Administration Agreement or such other account or accounts as may for the time being be in addition thereto or substituted therefor in accordance with the provisions of the Accounts Administration Agreement;
"PURCHASED RECEIVABLES" means any Receivables assigned, sold or transferred or purported to be assigned, sold or transferred to the Purchaser pursuant to the Receivables Purchase Agreement;
"RECEIVABLES PURCHASE AGREEMENT" means the receivables purchase agreement dated on or about the date hereof between the Purchaser and the Seller;
"RECORD" means, in respect of any Receivable, all Contracts, correspondence, notes of dealings and other documents, books, books of account, registers, records and other information (including, without limitation, computer programmes, tapes, discs, punch cards, data processing software and related property and rights) maintained (and recreated in the event of destruction of the originals thereof) with respect to such Receivable and the related Debtor;
"SELLER" means [Levi Strauss __________];
"SERVICES" means the services to be provided by the Servicer hereunder;
"TERMINATION DATE" means the date upon which a Termination Event occurs or, if such date is not a business day, the next following business day; and
"TERMINATION EVENT" shall have the same meaning as in the Receivables Purchase Agreement.
1.2 Any reference in this Agreement to a "BUSINESS DAY" means any day (other
than a Saturday or a Sunday) on which banks are open for business in
[Amsterdam or ________].
1.3 The headings in this Agreement shall not affect its interpretation.
1.4 Words denoting the singular number only shall include the plural number also and vice versa; and words denoting persons only shall include firms and corporations and vice versa.
1.5 References in this Agreement to any statutory provision shall be deemed also to refer to any statutory or other modification, re-enactment or replacement thereof or any statutory instrument, order or regulation made thereunder or under any such re-enactment.
1.6 The Schedules shall form part of this Agreement.
1.7 Terms defined in the Receivables Purchase Agreement shall unless otherwise defined herein or the context otherwise requires, bear the same meanings herein.
1.8 Save where the contrary is indicated in this Agreement, any reference in this Agreement to a time of day shall be construed as a reference to time in Amsterdam.
2. APPOINTMENT OF SERVICER
2.1 Subject to Clause 3, until termination pursuant to Clause 10, the Purchaser hereby appoints [____________] to be the Servicer in its name and on its behalf to service, collect and administer all Purchased Receivables and perform all related functions in the same manner as it services Receivables other than the Purchased Receivables, and the Servicer hereby accepts such appointment by the Purchaser on the terms and subject to the conditions of this Agreement.
2.2 During the continuance of its appointment hereunder, the Servicer shall, subject to the terms and conditions of this Agreement have the full power, authority and right to do or cause to be done any and all things which the Servicer reasonably considers necessary, convenient or incidental to the administration of the Purchased Receivables or the exercise of the rights, powers, duties and discretions referred to in Clause 2.1 and the performance of its other duties and obligations under this Agreement.
3. THE SERVICES
3.1 Without prejudice to the generality of Clause 2, the duties of the Servicer shall include the provision of the Services and the specific duties set out in this Agreement.
3.2 The Servicer shall:
(a) give directions with respect to each Collection Account in respect of the transfers and payments to be made hereunder;
(b) endeavour at its own expense to recover amounts due from Debtors in accordance with the Credit and Collection Policies and in particular (but without prejudice to the generality of the foregoing) exercise all enforcement measures concerning amounts due from Debtors. For this purpose the Servicer is hereby authorised to sue Debtors in any court in [________] or in any other competent jurisdiction for the account of the Purchaser, the Purchaser being obliged where necessary to assist the Servicer in exercising all rights and remedies under and in connection with the relevant Purchased Receivables;
(c) keep Records, books of account and documents relating to Purchased Receivables and any receivables otherwise made or serviced by the Servicer such that the Purchased Receivables can separately be identified;
(d) keep records for all taxation purposes, including for the purposes of value added tax;
(e) hold all Records relating to the Purchased Receivables in its possession to the order and the benefit of the Purchaser;
(f) assist the Purchaser in discharging any Related Security in respect of any Purchased Receivables which have been repaid; and
(g) assist the Purchaser's auditors and provide information to them upon request.
3.3 The Servicer shall not sub-contract or delegate the performance of any of its obligations under this Agreement without the approval of the Purchaser, such approval not to be unreasonably withheld.
3.4 The Servicer shall, where its obligations hereunder have been sub- contracted in accordance with Clause 3.3 above, remain fully liable to the Purchaser to the same extent and under the same terms as if the Servicer itself was servicing the Receivables.
4. COLLECTIONS AND THE ACCOUNTS
4.1 The Servicer hereby covenants with the Purchaser that (i) on the date hereof the Collection Accounts and the Collection Account Banks are those (and only those) set out in the Second Schedule and (ii) thereafter the Servicer shall not alter or permit any alteration to be made to the contents of the Second Schedule or to the resolutions and instructions relating to the Collection Accounts without the prior written notification to the Purchaser.
4.2 (a) The Servicer shall use all reasonable endeavours to make all
Collections or to ensure payment of all sums, due under or in
connection with the Purchased Receivables and Related Security on
behalf of the Purchaser and will on behalf of the Purchaser enforce
all covenants and obligations of Debtors due to the Purchaser in the
same manner as it does in relation to its Receivables generally and,
where applicable, in accordance with the Credit and Collection
Policies.
(b) The Servicer covenants with the Purchaser that it will comply with the
Credit and Collection Policies in regard to each Purchased Receivable,
any Related Security and the related Contract. If the Servicer shall
propose to modify the Credit and Collection Policies in connection
with the Purchased Receivables, it shall give prior written notice of
such modification to the Purchaser and, if such modification is
considered by the Servicer, in its reasonable opinion, to be material,
such modification shall only take effect with the prior written
consent of the Purchaser, which shall not be unreasonably withheld.
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4.3 The Servicer shall procure that, in relation to each Purchased Receivable, all Collections in respect of Purchased Receivables shall be made into the Collection Accounts forthwith upon receipt by the Servicer of the amount in question (and to the extent practicable on the same day as such receipt). In respect of any Collections received by any sub-contractor appointed in accordance with Clause 3.3, the Servicer shall be deemed to receive such Collections as soon as the same have been paid to such sub-contractor.
4.4 The Servicer shall procure that, subject always to the provisions of Clause 7 of the Receivables Purchase Agreement:
(a) prior to the giving of notice to the Servicer pursuant to Clause 10.1, on each Collection Payment Date all Collections in respect of Purchased Receivables received during the immediately preceding Collection Period shall be transferred (for same day value) into the Operating Account; and
(b) after the giving of notice to the Servicer pursuant to Clause 10.1, all Collections in respect of Purchased Receivables shall be transferred (for same day value) on a daily basis into the Operating Account.
4.5 The Servicer hereby covenants and declares that, pending such transfer to the Operating Account, all sums paid into or otherwise standing to the credit of the Collection Accounts in relation to Purchased Receivables shall be held by it to the order and the benefit of the Purchaser and that it will give directions to the Collection Account Banks in relation to such sums on and subject to the terms of this Agreement (including, but not limited to, Clause 4) and comply with its duties and obligations hereunder.
4.6 The Servicer shall keep and maintain Records, on a Receivable by Receivable basis, for the purposes of identifying, in particular, at any time amounts paid by and to each Debtor, any amount due by or to a Debtor, the source of receipts which are paid into each Collection Account and the Operating Account, and the balance from time to time outstanding on each Collection Account with respect to each Debtor. The Servicer shall give the Purchaser notice of any material change to its administrative and operating procedures in relation to the keeping and maintaining of Records and any such material change shall only take effect with the prior written consent of the Purchaser, which shall not be unreasonably withheld.
4.7 If the Servicer receives any money whatsoever arising from the Purchased Receivables, or otherwise, which money belongs to the Purchaser or is to be paid to the Purchaser or into the Operating Account, pursuant to this Agreement or otherwise, it will hold such money to the order and the benefit of the Purchaser and will forthwith upon receipt thereof whether by the Servicer itself or any sub-contractor pay or hold the same in accordance with the relevant terms of this Agreement or as otherwise directed by the Purchaser.
5. COSTS, EXPENSES AND REMUNERATION
5.1 The Servicer undertakes on behalf of the Purchaser, that it shall incur, for its own account, any costs, expenses and charges in connection with the enforcement of any Receivable and/or the Purchaser's rights and remedies in relation thereto and it is agreed that the Servicer shall have no recourse or claim for indemnification or payment against the Purchaser in respect of such costs, expenses and charges.
5.2 The Servicer is not entitled to any remuneration or indemnity in respect of the performance of its duties under this Agreement save as expressly provided herein. The Servicer acknowledges that the undertakings of the Purchaser under the
Receivables Purchase Agreement constitute adequate consideration for its own undertakings hereunder.
6. INFORMATION
6.1 The Servicer shall keep safe and shall use all reasonable endeavours to maintain Records and shall maintain either in computer readable form or in legible writing Records in relation to each Purchased Receivable. The Servicer shall keep Records in relation to the Purchased Receivables in a manner such that it is easily distinguishable from Records in relation to other receivables of which the Servicer is originator, owner or servicer.
6.2 The Servicer shall prepare the Monthly Report for the Purchaser in respect of the Purchased Receivables and shall deliver the same to the Purchaser not later than the third business day before each Collection Payment Date, provided that upon the occurrence of a Downgrade Trigger the Servicer shall deliver two Monthly Reports to the Purchaser (i) not later than the third business day before each Collection Payment Date, and (ii) on the twelfth day following the Collection Payment Date.
6.3 The Servicer shall prepare and deliver to the Purchaser such further information and/or reports, whether in writing or otherwise, as the Purchaser may reasonably require from time to time. All reports or certificates delivered by the Servicer under this Clause 6 shall be signed by an authorised signatory of the Servicer.
7. COVENANTS OF THE SERVICER
7.1 The Servicer hereby covenants with the Purchaser that it will:
(a) give the time and attention of a proper merchant and will exercise the due care of a proper merchant in the performance of the Services with respect to the Purchased Receivables;
(b) ensure that the procedures that are applied by the Servicer in connection with the recovery of Collections and the management of the Purchased Receivables are the same as those applied by the Servicer in connection with receivables beneficially owned by the Seller;
(c) consider the interests of the Purchaser the L/C Bank and the Agent in its relations with Debtors and in its exercise of any discretion arising from its performance of the Services;
(d) obtain and keep in force all licences, approvals, authorisations and consents which may be necessary or desirable in connection with the performance of the Services;
(e) at its expense and in a timely manner fully perform and comply with all provisions, covenants and other promises required to be observed by it under
the Contracts and Related Security documents related to the Purchased Receivables;
(f) comply with all legal requirements in relation to all Purchased Receivables;
(g) not terminate, amend or revoke this Agreement without the prior consent of the Purchaser the L/C Bank and the Agent;
(h) not, without the prior consent of the Purchaser, change the Receivable Due Date relevant to a Purchased Receivable, if such change would impair the collectability of such Purchased Receivable;
(i) not create or permit to subsist any Encumbrance over all or any of the Collection Accounts;
(j) not sell, assign or otherwise dispose of, or create or permit to exist any Adverse Claim upon or with respect to any goods the subject of any Purchased Receivable or any Purchased Receivable or Related Contract or Related Security, or upon or with respect to any Collection Account, or assign any right to receive income in respect thereof or attempt, purport or agree to do any of the foregoing; and
(k) except as otherwise permitted under this Agreement or under the Receivables Purchase Agreement, not without the prior consent of the Purchaser (which shall not be unreasonable withheld) extend, amend or otherwise modify the terms of any Purchased Receivable or amend, modify or waive any term or condition of any Contract related thereto,
Provided always that the Servicer shall have no power to enter into any new contracts on behalf of the Purchaser nor to act as any form of branch, agency or representative of the Purchaser nor to direct, administer or manage any aspect of the Purchaser's business (without prejudice to the specific activities expressly contemplated in this Agreement). Equally the Servicer shall be liable only to perform the Services herein specified; the Purchaser shall have no right to direct the Servicer.
7.2 The covenants of the Servicer shall remain in force until this Agreement is terminated, but without prejudice to any right or remedy of the Purchaser arising from breach of any such covenant prior to the date of termination of this Agreement.
7.3 The Servicer shall have systems in place in relation to the Purchased Receivables that are capable of providing the information to which the Purchaser is reasonably and properly entitled pursuant to this Agreement and shall use all reasonable endeavours to maintain such systems in working order.
7.4 The Servicer hereby agrees that the Purchaser, any firm of independent auditors retained by the Purchaser and/or any other representatives of the Purchaser shall be authorised to conduct at the expenses of the Servicer an annual site visit of the
premises of the Servicer, the first such visit taking place one year following the date of this Agreement, in order to:
(a) inspect and satisfy itself or themselves that the systems are in place, maintained in working order and are capable of providing the information to which it or they are reasonably and properly entitled pursuant to this Agreement or the Receivables Purchase Agreement; and
(b) examine and make copies of and abstracts from all Records;
Provided that no Records, files or other information other than to that which the Purchaser is entitled so to examine, copy or make abstracts from shall be removed from the Servicer's premises and such Records, files or other information shall remain confidential and shall not be used or disclosed or divulged to any person (except to the extent and in the circumstances permitted by this Agreement and the Receivables Purchase Agreement and in accordance with applicable law) without the prior consent of the Servicer, such consent not to be unreasonably withheld.
7.5 Notwithstanding the foregoing, the Servicer at the request of the Purchaser, shall allow reasonable access during normal business hours to any representative of the Purchaser and allow such representative to perform the duties specified in Clause 7.4 (a) and (b) hereof.
8. SERVICER'S INDEMNITY
8.1 The Servicer shall indemnify the Purchaser and its respective directors,
officers and employees against all liabilities, losses, damages, actions,
proceedings and claims (and costs, demands and expenses including
reasonable legal expenses incidental thereto) which may be brought against,
suffered or incurred by the Purchaser, and/or such directors, officers and
employees by reason of any wrongful or negligent act, default or omission
by the Servicer or any director, officer, employee or agent of the Servicer
(including, for the avoidance of doubt, any sub-contractor of the Servicer)
in the performance of its duties hereunder.
8.2 The Servicer shall have no liability for any obligation of a Debtor under any Purchased Receivables and nothing herein shall constitute a guarantee, or similar obligation, by the Servicer of any Purchased Receivables or any Debtor.
8.3 The Servicer shall have no liability for the obligations of the Purchaser and nothing herein shall constitute a guarantee, or similar obligation, by the Servicer of the Purchaser in respect of any obligations thereof.
9. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Servicer from rendering services similar to those provided for in this Agreement to other persons, firms or companies carrying on business similar to or in competition with the business of the Purchaser.
10. TERMINATION
10.1 If any of the following events shall occur:
(i) the Servicer and/or the Seller, so long as the Seller is Servicer, fails to make payment under this Agreement and/or the Receivables Purchase Agreement on the date such payment is due and payable as specified in such Agreement, or upon demand where no date is specified, subject to a three day grace period after notification;
(ii) the Servicer and/or the Seller, so long as the Seller is Servicer, fails to perform any of its other obligations under this Agreement and/or the Receivables Purchase Agreement, subject to a three day grace period after notification;
(iii) any representation or warranty in this Agreement or in any report or any information provided by the Servicer is materially false or incorrect;
(iv) the Servicer and/or the Seller enters into a voluntary arrangement with its creditors, is declared bankrupt, is defendant in an action for its bankruptcy which remains undismissed for a period of thirty days, takes any corporate action or legal proceedings are started against it for its gerechtelijk akkoord / concordat, dissolution or liquidation, or a gerechtelijke bewindvoerder / administrateur judiciaire, sekwester / sequestre or similar officer is appointed in relation to the Servicer and/or the Seller, or any stoppage of payments (staking van betalingen / cessation de paiements) occurs;
(v) any material adverse change occurs in the financial position or the collection procedures of the Servicer; or
(vi) there is a default by the Seller or any of the Sellers under the Foreign RPAs in respect of any of their payment obligations to third parties in aggregate in excess of [USD 25,000,000] or its equivalent at any time;
(vii) there is a change of control of the Servicer,
then the Purchaser may, without prejudice to its other rights, by notice in writing to the Servicer terminate the appointment of the Servicer under this Agreement.
10.2 On and after termination of the appointment of the Servicer under this Agreement pursuant to Clause 10.1, all rights, obligations (other than liability for breaches of this Agreement by the Servicer or liability in tort on the part of the Servicer prior to such termination and the Servicer's obligations under Clauses 10.3, 12 and 13 and the Servicer's liability under Clause 8.1 with respect to the performance of its duties hereunder), authority and power of the Servicer under this Agreement shall be terminated and of no further effect.
10.3 Upon termination of the appointment of the Servicer under this Agreement pursuant to Clause 10.1, the Servicer shall forthwith deliver to the Accounts Administrator or as it shall direct the Records in its possession or under its control relating to the affairs of or belonging to the Purchaser and the Purchased Receivables and any Related Security and any other security therefor and any moneys then held by the Servicer on behalf of the Purchaser and shall take such further action as the Purchaser may reasonably direct, including (but without limitation), if so requested, granting or assigning or sub-licensing such licences in respect of intellectual property of the Servicer as may be necessary to enable the Services to be performed by a substitute servicer.
10.4 The appointment of the Servicer under this Agreement shall terminate (but without affecting any accrued rights and liabilities hereunder) at such time as (i) the Purchaser has no further interest in any of the Purchased Receivables and no further commitment under the Receivables Purchase Agreement and (ii) the Servicer is notified by the Purchaser that such is the case.
10.5 Following termination of the appointment of the Servicer the Servicer shall be entitled to receive, on the date such amounts would have fallen to be paid but for such termination, all fees and other moneys, if any, accrued up to the date of termination but shall not be entitled to any other or further compensation otherwise than pursuant to Clause 5.
11. CHANGE OF SERVICER
If notice is given to terminate the appointment of the existing Servicer in accordance with this Agreement and to appoint a new Servicer, the existing Servicer and the Purchaser shall execute such documents and take such actions as such new Servicer and the Purchaser may require for the purpose of vesting in such new Servicer the rights and obligations of the existing Servicer under this Agreement and releasing the existing Servicer from its future obligations under this Agreement.
12. GUARANTEE
12.1 The Parent irrevocably and unconditionally guarantees to the Purchaser the due and punctual observance and performance of all terms, conditions and covenants on the part of the Servicer contained in this Agreement and agrees to pay from time to time on first demand any and every sum or sums of money which the Servicer is at any time liable to pay to the Purchaser under or pursuant to this Agreement and which has become due and payable but has not been paid at the time such demand is made.
12.2 The Parent irrevocably and unconditionally agrees as a primary and independent obligation to indemnify the Purchaser from time to time on demand from and against any loss incurred by the Purchaser as a result of any of the obligations of the Servicer under or pursuant to this Agreement being or becoming void, voidable, unenforceable or ineffective as against the Servicer for any reaon whatsoever, whether or not known
to the Purchaser or any other person, the amount of such loss being the amount which the Purchaser would otherwise have been entitled to recover from the Servicer.
12.3 The obligations of the Parent herein contained shall constitute and be continuing obligations notwithstanding any settlement of account or other matter or thing whatsoever and shall not be considered satisfied by any intermediate payment or satisfaction of all or any of the obligations of the Servicer under this Agreement and shall continue in full force and effect until final payment in full of all amounts owing by the Servicer hereunder total satisfaction of all the actual and contingent obligations of the Servier hereunder.
12.4 The obligations of the Parent herein contained shall not be discharged, impaired or otherwise affected by:
(i) the winding-up, dissolution, administration or re-organisation of the Servicer or any other person or any change in its status, function, control or ownership;
(ii) any of the obligations of the Servicer or any other person hereunder being or becoming illegal, invalid, unenforceable or ineffective in any respect;
(iii) time or other indulgence being granted or agreed to be granted to the Servicer or any other person in respect of its obligations hereunder;
(iv) any amendment to, or any variation, waiver or release of, any obligations of the Servicer or any other person hereunder;
(v) any failure to take, or fully to take, any security contemplated hereby or otherwise agreed to be taken in respect of the obligations of the Servicer hereunder;
(vi) any other act, event or omission which, but for this Clause 12.4, might operate to discharge, impair or otherwise affect any of the obligations of the Parent herein contained or any other rights, power or remedies conferred upon the Purchaser by the Agreement.
12.5 The Parent agrees that, so long as any amounts are or may be owed by the Servicer hereunder or the Servicer is under any actual or contingent obligations hereunder, the Parent shall not exercise any rights which the Parent may at any time have, by reason of the performance by it of its obligations hereunder:
(i) to be indemnified by the Servicer; or
(ii) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Purchaser hereunder.
13. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to take all such further actions and execute any further documents as may be necessary or desirable to give full effect to the arrangements contemplated by this Agreement.
14. DISCLOSURE OF INFORMATION
None of the parties hereto shall, during the continuance of this Agreement or after its termination, disclose to any person, firm or company whatsoever (except with the authority of the other parties hereto) any information which that party has acquired under or in connection with this Agreement other than:
(a) to employees, officers or agents of any of ABN AMRO Bank N.V., the Banks under the Liquidity Facility Agreement, the Facilities, the Issuer, Standard & Poor's, Moody's, and the Dealers under the Dealer Agreements (but not, for the avoidance of doubt, holders of commercial paper issued thereunder);
(b) in connection with any proceedings arising out of or in connection with this Agreement, any Funding Agreement, either of the Facilities or the preservation or maintenance of its rights thereunder, subject to prior notice to the Servicer;
(c) if required to do so by an order of a court of competent jurisdiction whether in pursuance of any procedure for discovering documents or otherwise subject to prior notice to the Servicer;
(d) pursuant to any law or regulation or requirement of any governmental agency in accordance with which that party is required or accustomed to act subject to prior notice to the Servicer;
(e) to any governmental, banking or taxation authority or competent jurisdiction subject to prior notice to the Servicer; or
(f) to its auditors or legal or other professional advisers,
Provided that the above restriction shall not apply to:
(i) employees or officers or agents of the parties referred to in (a) above any part of whose functions are or may be in any way related to this Agreement;
(ii) information already known to a recipient otherwise than in breach of this Clause;
(iii) information also received from another source on terms not requiring it to be kept confidential; and
(iv) information which is or becomes publicly available otherwise than in breach of this Clause.
15. NOTICES AND COUNTERPARTS
15.1 Each communication to be made hereunder shall (except expressly permitted otherwise) be made in writing but, unless otherwise stated, may be made by facsimile or letter.
15.2 Any communication or document to be made or delivered by one person to another pursuant to this Agreement shall (unless that other person has by fifteen days' written notice to the other specified another address) be made or delivered to that other person at the address identified with its signature below and shall be deemed to have been made or delivered (in the case of any communication made by facsimile) when despatched or (in the case of any communication made by letter) when left at that address. Any communication sent by facsimile shall be promptly confirmed by letter but the non-delivery or non-receipt of any such letter shall not affect the validity of the original facsimile communication.
15.3 Each communication and document made or delivered pursuant to this Agreement shall be in English.
15.4 This Agreement may be executed in one or more counterparts.
16. VARIATION
No variation of this Agreement (including this Clause 15) shall be effective unless it is in writing and signed by (or by some person duly authorised by) each of the parties and unless each of the Rating Agencies has confirmed in writing that the rating of the indebtedness for borrowed money issued or sold by the Issuer will not be downgraded, withdrawn or suspended as a result of such variation.
17. ASSIGNMENT
The Servicer may not assign its rights or transfer its obligations under this Agreement.
18. PARTIAL INVALIDITY
Without prejudice to any other provision hereof, if one or more provisions hereof is or becomes invalid, illegal or unenforceable in any respect in any jurisdiction or with respect to any party such invalidity, illegality or unenforceability in such jurisdiction or with respect to such party or parties shall not, to the fullest extent permitted by applicable law, render invalid, illegal or unenforceable such provision or provisions in any other jurisdiction or with respect to any other party or parties hereto. Such invalid, illegal or unenforceable provision shall be replaced by the parties with a provision which comes as close as reasonably possible to the commercial intentions of the invalid, illegal or unenforceable provision.
19. NO LIABILITY AND NO PETITION
19.1 No recourse under any obligation, covenant, or agreement of the Purchaser contained in this Agreement shall be had against any shareholder, officer or director of the Purchaser as such, by the enforcement of any assessment or by any proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that this Agreement is a corporate obligation of the Purchaser and no personal liability shall attach to or be incurred by the shareholders, officers, agents or directors of the Purchaser as such, or any of them, under or by reason of any of the obligations, covenants or agreements of such Purchaser contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by the Purchaser of any of such obligations, covenants or agreements, either at law or by statute or constitution, of every such shareholder, officer, agent or director is hereby expressly waived by the Servicer as a condition of and consideration for the execution of this Agreement.
19.2 The Servicer hereby undertakes to the Purchaser that, until one year and one day has elapsed after the payment of all sums outstanding and owing under the latest maturing note under the CP Programme, it will not petition or commence proceedings for the administration or winding up (nor join any person in a petition or proceedings for the administration or winding up) of the Purchaser nor will it enforce any judgement against the Purchaser if to do so would cause the Purchaser's financial situation to become such as to make it liable to insolvency proceedings. The Servicer acknowledges that its recourse against the Purchaser in respect of any matter provided in this Agreement shall be limited at any time to the extent of the aggregate of (a) the unpaid amount of any Purchase Price Advance payable under the Receivables Purchase Agreement, and (b) the Deferred Purchase Price due, owing or payable to it thereunder at that time (but only if and to the extent that there are funds credited to the Operating Account which the Accounts Administrator is entitled in accordance with the terms of the Accounts Administration Agreement).
20. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the law of [________], and insofar as is necessary in relation to the powers and authority granted to the Servicer pursuant to Clause to sue Debtors in the courts of any jurisdiction, by the law of such jurisdiction.
21. JURISDICTION
Any dispute in connection with this Agreement shall be subject to the jurisdiction of the courts of Brussels.
Signed in two originals the day and year first before written.
SIGNATURES
TULIP ASSET PURCHASE COMPANY B.V.
By:
Address:
Fax:
Attention:
[LEVI STRAUSS __________________]
By:
Address:
Fax:
Attention:
LEVI STRAUSS & Co
By:
Address:
Fax:
Attention:
THE FIRST SCHEDULE
[FORM OF MONTHLY REPORT]
See overleaf
THE SECOND SCHEDULE
THE COLLECTION ACCOUNTS
ACCOUNT N(DEGREES). ACCOUNT NAME NAME AND ADDRESS OF
COLLECTION ACCOUNT BANK
THE THIRD SCHEDULE
OPERATING ACCOUNTS
EXHIBIT 10.18
THIS IS A SUPPLY AGREEMENT dated as of the 30th day of March, 1992 (the "Agreement"), between CONE MILLS CORPORATION, a North Carolina corporation ("Cone"), and LEVI STRAUSS & CO., a Delaware corporation ("LS&CO.").
WHEREAS, Cone is a major supplier of LS&CO. and LS&CO. is Cone's largest customer; and
WHEREAS, Cone and LS&CO. have maintained, for more than 75 years, a unique, cooperative supplier/customer relationship for the development of Cone XXX denim fabrics used in the LS&CO. 501(R) family of jeans, a relationship premised in part on management compatibility and continuity; and
WHEREAS, Cone and LS&CO. desire to solidify their relationship and assure its continuity;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is acknowledged, it is agreed:
1.1 "Change in Control" means the occurrence of any of the following events:
(a) the individuals who at the date of this Agreement comprise the members of the Cone Board of Directors (together with any new director whose election by the Board of Directors or whose nomination for election by the company's shareholders was approved by a majority of the directors then still in office who were directors at the date of this Agreement or who were nominated by them) shall cease for any reason to comprise at least a majority of the members of the Board of Directors;
(b) Cone consolidates with or merges into any other corporation or any corporation consolidates with or merges into Cone, or Cone becomes a subsidiary of another corporation, if, after giving effect to the transaction, the holders of Cone's voting securities immediately before the
effective date of the transaction hold less than 50% of the voting securities of the surviving or parent corporation; or
(c) any person (other than any person who is a director or stockholder of Cone at the date of this Agreement, Cone, a subsidiary of Cone or a Cone employee benefit plan, including any trustee of such a plan acting as trustee) shall purchase or otherwise acquire or hold beneficial ownership of securities of Cone and, as a result of those purchases and acquisitions, directly or indirectly beneficially owns in the aggregate securities of Cone representing 50% or more of Cone's then outstanding voting securities (it being understood that the terms "person" and "beneficial ownership" used in this paragraph 1.1(c) have the meanings given them in Sections 13 (d) and 14 and Rule 13d 3, respectively, of and under the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
1.2 "Contract Price" means, at any point in time, the average market price per yard then being paid by LS&CO. in the ordinary course of business (excluding special arrangements not in effect on the date of this Agreement and not generally prevailing in the market) for indigo denim of comparable weight and color purchased for all jeans applications excluding the 501(R) jeans family, plus a percentage premium which has been paid for 501(R) jeans fabric over and above the average price for the aforementioned fabrics for the immediately preceding sixteen (16) calendar quarters.
1.4 "White Oak Plant" means Cone's facility known as the White Oak Plant located on Fairview Street in Greensboro, North Carolina, including the real property, machinery and equipment and furnishings and fixtures and service functions located at such facility.
1.5 "Vendor Certification Requirements" means the quality, service and fabric construction qualifications established in writing by LS&CO. for its vendors from time to time.
1.6 "XXX Denim" means any and all denim fabric of the construction and physical characteristics which has been approved by LS&CO. in its Vendor Certification Program for use, or is in fact used, in the 501(R) family of jeans.
2.1 Generally: LS&CO. agrees to purchase from Cone, and Cone agrees to manufacture and sell to LS&CO., all XXX Denim that may be required by LS&CO. in its business. Cone shall not sell, or otherwise make XXX Denim available, to any person other than LS&CO., and LS&CO. shall not purchase, or otherwise obtain XXX Denim from, any other source than Cone, during the term of the obligations created by this Section 2; that is, this is an "exclusive" agreement on the part of both LS&CO. and Cone.
2.2 Ordering and Pricing: Cone shall deliver XXX Denim to LS&CO. in accordance with specific orders placed by LS&CO. Cone and LS&CO. shall document those orders and deliveries by use of, and their terms (including, without limitation, those relating to warranties, remedies and shipment terms and except as otherwise set forth in this Agreement) shall be governed by, the Order Documentation. Cone and LS&CO. shall determine the price for a specific delivery at or before the time LS&CO. places the order for that delivery, it being understood that Cone and LS&CO. intend to be bound in respect of and to conclude these specific sales even though the price for specific sales is not settled as of the date of this Agreement.
2.3 Term: The obligations of Cone and LS&CO. under this Section 2 shall continue until the termination of those obligations in accordance with Section 3 or 5 of this Agreement. A Change in Control shall not of itself impair, limit or affect or limit those obligations, in any respect, unless and until LS&CO. provides to Cone the written notice contemplated by Section 3.2 of this Agreement.
3.1 Generally: For a period of one year from and after a Change in Control, LS&CO. may elect to terminate the requirements obligation established by Section 2 of this Agreement and implement an alternative, "wind-down" arrangement on the terms and conditions set forth in this Section 3, it being understood that
this one-year period may, at LS&CO.'s option, be treated as not "running" until LS&CO. receives notice from Cone of a Change in Control as contemplated by Section 11 of this Agreement.
3.2 Commencement and Term: The termination of Section 2 and the alternative arrangement established by this Section 3 shall become effective on the date Cone receives a written notice to that effect from LS&CO., and shall, unless terminated in accordance with Section 5 of this Agreement, remain in effect for a period of three years after that notice is received by Cone.
3.3 Quantity: Cone shall be obligated to manufacture and sell to LS&CO. up to thirty million (30,000,000) yards of XXX Denim during each calendar quarter during the effective period described in Section 3.2, it being understood that this amount shall be prorated for any partial quarters. LS&CO. shall be obligated to purchase from Cone only those amounts of XXX Denim it orders, but shall have no "requirements" or minimum purchase obligation.
3.4 Ordering: Cone shall deliver XXX Denim to LS&CO. in accordance with specific orders placed by LS&CO. Cone and LS&CO. shall document those orders and deliveries by use of, and their terms including, without limitation, those relating to warranties, remedies and shipment terms and except as otherwise set forth in this Agreement) shall be governed by, the Order Documentation.
3.5 Price: The price per yard for XXX Denim sold under this Section 3 will be the Contract Price as of the order date, calculated and effective. in accordance with the normal practice of the parties as it exists on the date of this Agreement. In addition, LS&CO. shall pay Cone an amount equal to 1.5% of the total purchase price of purchases by LS&CO. of XXX Denim for any calendar quarter in which LS&CO. purchases less than 15 million (15,000,000) yards of XXX Denim.
3.6 Exclusivity: During the effective period described in Section 3.2 of this Agreement, and so long as LS&CO. purchases ten million (10,000,000) yards of XXX Denim per calendar quarter under this Section 3, Cone will sell XXX Denim exclusively to LS&CO.
3.7 Later Change in Control: A decision by LS&CO. not to elect to
implement the alternative arrangement contemplated by this
Section 3 within one year after a Change in Control shall not
limit
or otherwise affect its ability to so elect-following a later Change in Control.
4.2 Term and Exercise of Option: The term of the option shall begin on the date of delivery by LS&CO. to Cone of the notice contemplated by Section 3.2 of this Agreement and shall expire upon the earlier of: (a) three years after that notice is received by Cone or (b) on the fourth anniversary of the Applicable Change in Control. If and after the option becomes exercisable as contemplated by Section 4.1 of this Agreement, LS&CO. may exercise it by delivering to Cone a written notice to that effect. Cone and LS&CO. agree to execute the lease agreement upon exercise by LS&CO. of its option.
4.3 Cooperation: Cone shall cooperate with LS&CO. and take such further actions as may be reasonably appropriate in order to enable LS&CO. to obtain XXX Denim through exercising its option, including, without limitation, maintaining the White Oak Plant in good repair and proper order, facilitating transition relationships with Cone's suppliers and other customers, and, after the Applicable Change in Control, permitting LS&CO. and its contractors, agents, employees, and permitted assigns to enter on and to inspect the property, and to conduct such engineering, mechanical, environmental, and other investigations as they may reasonably desire, all to be performed at LS&CO.'s expense. Cone and LS&CO. shall annually review changes and proposed changes by Cone in the manufacturing capabilities of the White Oak Plant and, should Cone, in accordance with its management and financial policies and practices, shift XXX Denim manufacturing
capacities such that LS&CO. could not obtain XXX Denim by operating the White Oak Plant as contemplated by Section 4.1 of this Agreement, LS&CO. and Cone shall negotiate in good faith to adjust, in an equitable manner, the provisions of this Section 4 in order to provide LS&CO. with the ability to obtain XXX Denim by operating and retaining the output of such other facilities. Cone represents and warrants to LS&CO. that it is seized of the White Oak Plant in fee simple.
5.1 Generally: This Agreement shall terminate upon the earlier of:
(a) March 30, 1997, if LS&CO. does not deliver to Cone the notice
contemplated by Section 3.2 of this Agreement, and as that
expiration date may be extended as described in this Section 5.1;
(b) if LS&CO. delivers to Cone the notice contemplated by Section
3.2 of this Agreement, three years after the delivery of that
notice; or (c) its termination in accordance with Sections 5.2 or 5.3 of this Agreement. Unless this Agreement has or is to be terminated as described in clauses (b) and (c) of the preceding sentence, the term (that is, the expiration date) of this Agreement shall, upon March 30 of each year, be automatically extended by one year, unless Cone or LS&CO. provides written notice to the other, during the month of February of that year, of its desire not to extend the term (for example, if such notice of non-extension is not given in February 1993, the term of this Agreement shall automatically be extended to March 30, 1998). If notice of non-extension is given, the term of the Agreement shall expire on the then effective expiration date.
5.2 Certain Events: Either party, at its option and without prejudice to any other remedy to which it may be entitled either at law or in equity, may immediately terminate this Agreement by written notice to the other party on the occurrence of any of the following events: (i) the other party shall file a petition in bankruptcy or shall be adjudged a bankrupt; (ii) the other party shall file a petition in reorganization under the provisions of Federal or State bankruptcy laws; (iii) the other party shall become or be declared insolvent; (iv) a receiver of all or substantially all of the property of the other party shall be appointed and not removed within thirty days; (v) the other party shall make a general assignment for the benefit of its creditors; or (vi) there shall be a material breach by the other party of any provision of this Agreement or a substantial failure by the other party to perform one or more of its obligations under this Agreement, which shall not have been cured within fifteen (15) days after written notice specifying the nature of such breach or failure.
5.3 Termination by LS&CO.: LS&CO. may, upon thirty (30) days written notice to Cone, terminate its obligations under Section 2 for any reason or for no reason, but that act shall have the effect of terminating the entire Agreement including, without limitation, its Sections 3 and 4.
5.4 Effect of Termination: It is understood and agreed that, with respect to any termination of this Agreement, Cone and LS&CO. shall be bound to perform their obligations in respect of orders for XXX Denim outstanding as of the date of notice of termination or, in the case of termination by passage of time in accordance with clause (a) of Section 5.1, the date of termination.
To Cone:
Cone Mills Corporation
1201 Maple Street
Greensboro, North Carolina 27405
Attn: President
with copy to:
Cone Mills Corporation
1201 Maple Street
Greensboro, North Carolina 27405
Attn: General Counsel
To LS&CO.:
Levi Strauss & Co.
Levi's Plaza
1155 Battery Street/LS-7
San Francisco,. California 94111
Attn: President
with copy to:
Levi Strauss & Co.
Levi's Plaza
1155 Battery Street/LS-7
San Francisco, California 94111
Attn: General Counsel
notices or statements called for by a "shareholder rights" or similar plan, it receives from a third party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the date and year first above written.
CONE MILLS CORPORATION
By: ________________________
Title: _________________
LEVI STRAUSS & CO.
By: _________________________
Title:___________________
Exhibits:
Exhibit A Order Documentation
Exhibit B Form of Lease Agreement
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THIS IS A FIRST AMENDMENT TO SUPPLY AGREEMENT dated as of April 15, 1992 (the "First Amendment"), between CONE MILLS CORPORATION, a North Carolina corporation ("Cone"), and LEVI STRAUSS & CO., a Delaware corporation ("LS&CO.").
Cone and LS&CO. are parties to a Supply Agreement, dated as of March 30, 1992 (the "Agreement"). They wish to amend the Agreement in the manner described in this First Amendment. This First Amendment is intended to be and is an "instrument in writing signed by both parties" as contemplated by Section 9 (captioned "Entire Agreement; Amendment") of the Agreement.
THE PARTIES AGREE AS FOLLOWS:
Section 1.3 of the Agreement is amended in its entirety as follows:
"Order Documentation" means the purchase orders, confirmations of sales, invoices, releases, electronic data interchange protocols and communications and other documents and communications customarily used by Cone and LS&CO. in documenting orders by, and shipments to, LS&CO., of XXX Denim.
Section 9 of the Agreement is amending by amending its last sentence in its entirety as follows:
This Agreement may not be amended or modified except by an instrument in writing signed by both parties. The Order Documentation may not be amended or modified except as approved by both parties, it being understood that Cone and LS&CO. have and continue to work cooperatively in adapting new technologies and practices in order to improve the efficiency of ordering and shipment of XXX Denim.
The signature page of the Agreement is amended by deleting the phrase "Exhibit A Order Documentation" appearing below the signatures, it being understood that the Agreement now has only one exhibit, the form of lease agreement identified as "Exhibit B."
Except as expressly described in this First Amendment, Cone and LS&CO. do not intend to and are not modifying any other provisions of the Agreement, and the Agreement, as amended by this First Amendment, remains in full force and effect
IN WITNESS WHEREOF, the parties have caused this First Amendment to be executed by their duly authorized officers as of the date and year first above written.
CONE MILLS CORPORATION
By: ________________________
Title: _________________
LEVI STRAUSS & CO.
By: ________________________
Title: _________________
EXHIBIT 10.19
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS ASSOCIATES, INC.
As Amended and Restated
Effective November 27, 1989
Page
----
SECTION 1 INTRODUCTION AND PERSONS TO WHOM PLAN APPLIES................................................ 1
1.1 Introduction................................................................................... 1
1.2 Persons to Whom Plan Applies................................................................... 1
SECTION 2 DEFINITIONS.................................................................................. 3
2.1 "Act".......................................................................................... 3
2.2 "Actuary"...................................................................................... 3
2.3 "Administrative Committee"..................................................................... 3
2.4 "Affiliated Company"........................................................................... 3
2.5 "Alternate Payee".............................................................................. 3
2.6 "Annuity Contract"............................................................................. 3
2.7 "Annuity Starting Date"........................................................................ 3
2.8 "Beneficiary".................................................................................. 4
2.9 "Benefit Service".............................................................................. 4
2.10 "Board of Directors"........................................................................... 4
2.11 "Break in Service"............................................................................. 4
2.12 "Casual Employee".............................................................................. 5
2.13 "Code"......................................................................................... 5
2.14 "Committee".................................................................................... 5
2.15 "Common-Law Spouse"............................................................................ 5
2.16 "Company"...................................................................................... 5
2.17 "Compensation"................................................................................. 5
2.18 "Deferred Retirement Benefit".................................................................. 7
2.19 "Deferred Retirement Date" or "Deferred Retirement"............................................ 7
2.20 "Disability Retirement Service"................................................................ 7
2.21 "Domestic Partner"............................................................................. 7
2.22 "Domestic Relations Order"..................................................................... 7
2.23 "Early Retirement Benefit"..................................................................... 7
2.24 "Early Retirement Date" or "Early Retirement".................................................. 7
2.25 "Effective Date"............................................................................... 7
2.26 "Employee"..................................................................................... 7
2.27 "Equivalent Actuarial Value"................................................................... 9
2.28 "Final Average Compensation"................................................................... 9
2.29 "High-3 Year Average Compensation"............................................................. 9
2.30 "Highly Compensated Employee".................................................................. 11
2.31 "Highly Compensated Former Employee"........................................................... 12
2.32 "Home Office Salary Grade"..................................................................... 13
2.33 "Hour of Service".............................................................................. 13
2.34 "Investment Committee"......................................................................... 13
2.35 "Investment Manager"........................................................................... 13
2.36 "IRS".......................................................................................... 13
2.37 "Labor Department"............................................................................. 13
|
2.38 "Legally Married"............................................................................... 13 2.39 "LS&CO."........................................................................................ 13 2.40 "Member"........................................................................................ 13 2.41 "Membership Date"............................................................................... 13 2.42 "Misconduct".................................................................................... 13 2.43 "Normal Retirement Age"......................................................................... 14 2.44 "Normal Retirement Benefit"..................................................................... 14 2.45 "Normal Retirement Date" or "Normal Retirement"................................................. 14 2.46 "Participating Company"......................................................................... 14 2.47 "PBGC".......................................................................................... 14 2.48 "Plan".......................................................................................... 14 2.49 "Plan Year"..................................................................................... 14 2.50 "Qualified Domestic Relations Order"............................................................ 14 2.51 "Qualified Joint and Survivor Annuity".......................................................... 14 2.52 "Regulations"................................................................................... 14 2.53 "Rehire Anniversary Year"....................................................................... 15 2.54 "Required Beginning Date"....................................................................... 15 2.55 "Retiree Coordinator"........................................................................... 15 2.56 "Retirement Benefit."........................................................................... 15 2.57 "Retirement Date"............................................................................... 15 2.58 "Service"....................................................................................... 15 2.59 "Social Security Benefit"....................................................................... 17 2.60 "Social Security Retirement Age"................................................................ 17 2.61 "Straight Life Annuity"......................................................................... 17 2.62 "Surviving Spouse".............................................................................. 18 2.63 "Survivor Annuity".............................................................................. 18 2.64 "Terminated Plan"............................................................................... 18 2.65 "Totally and Permanently Disabled" or "Total and Permanent Disability".......................... 18 2.66 "Trust Agreement"............................................................................... 18 2.67 "Trust Fund".................................................................................... 18 2.68 "Trustee"....................................................................................... 18 2.69 "Unmarried Partner"............................................................................. 18 2.70 "Vested Retirement Benefit"..................................................................... 19 2.71 "Vested Retirement Benefit Payment Date"........................................................ 19 2.72 "Year of Service"............................................................................... 19 SECTION 3 MEMBERSHIP AND TRANSFERS...................................................................... 20 3.1 Commencement of Membership...................................................................... 20 3.2 Termination of Membership....................................................................... 20 3.3 Rehired Members................................................................................. 20 3.4 Rehired Employees............................................................................... 21 SECTION 4 RETIREMENT DATE............................................................................... 22 4.1 Normal Retirement Date.......................................................................... 22 4.2 Early Retirement Date........................................................................... 22 4.3 Deferred Retirement Date........................................................................ 22 4.4 Postponement of Retirement Benefits............................................................. 22 |
SECTION 5 RETIREMENT BENEFIT............................................................................ 23 5.1 Basic Retirement Benefit........................................................................ 23 5.2 Coordination of Retirement Benefits............................................................. 23 5.3 Reduction of Retirement Benefit................................................................. 23 5.4 Retirement Benefit of Certain Reemployed Members................................................ 23 SECTION 6 NORMAL RETIREMENT BENEFIT..................................................................... 24 6.1 Payment of Benefits............................................................................. 24 6.2 Termination of Employment after Normal Retirement Age........................................... 24 SECTION 7 EARLY RETIREMENT BENEFIT...................................................................... 25 7.1 Payment of Early Retirement Benefit............................................................. 25 7.2 Postponement of Early Retirement Benefit........................................................ 25 SECTION 8 TERMINATION OF SERVICE BEFORE RETIREMENT...................................................... 27 8.1 Payment of Vested-Retirement Benefits........................................................... 27 8.2 Early Payment of Vested Retirement Benefits..................................................... 27 8.3 Death Before the Payment of Vested Retirement Benefits.......................................... 27 8.4 Limitation On Vested Retirement Benefit Eligibility............................................. 28 SECTION 9 DISABILITY BEFORE RETIREMENT.................................................................. 29 9.1 Eligibility for Disability Service.............................................................. 29 9.2 Forfeiture of Disability Service................................................................ 29 SECTION 10 DEATH BENEFITS............................................................................... 31 10.1 Survivor Annuity................................................................................ 31 10.2 Amount of Survivor Annuity...................................................................... 31 10.3 Entitlement to Death Benefit.................................................................... 32 SECTION 11 METHOD OF PAYMENT............................................................................ 33 11.1 Normal Form of Benefit for Married Members...................................................... 33 11.2 Normal Form of Benefit for Single Members....................................................... 33 11.3 Optional Forms Of Benefit....................................................................... 33 11.4 Limitation on Optional Forms of Benefit......................................................... 34 11.5 Mandatory Cash Out of Benefits Less than $3,500................................................. 34 11.6 Reduction of Benefits........................................................................... 35 SECTION 12 BENEFIT ELECTIONS............................................................................ 36 12.1 Election of Optional Forms of Benefits.......................................................... 36 12.2 Written Explanation and Election Form........................................................... 36 12.3 Applicable Election Period and Form of Election................................................. 37 12.4 Special Circumstances Governing Elections....................................................... 38 SECTION 13 PAYMENT AND SUSPENSION OF BENEFITS........................................................... 40 13.1 Payment of Benefits............................................................................. 40 13.2 Suspension of Benefits.......................................................................... 40 |
SECTION 14 MAXIMUM AMOUNT OF RETIREMENT BENEFIT......................................................... 43 14.1 Scope of Limitations on Benefits................................................................ 43 14.2 Basic Limitations on Benefits................................................................... 43 14.3 Adjustments to Limitations...................................................................... 43 14.4 Minimum Benefit................................................................................. 44 14.5 TRA 86 Protected Benefits....................................................................... 44 14.6 Multiple Plans.................................................................................. 44 14.7 Special Limitations on Benefits................................................................. 45 SECTION 15 BENEFICIARIES................................................................................ 46 SECTION 16 FUNDING AND CONTRIBUTIONS.................................................................... 47 16.1 Contributions................................................................................... 47 16.2 Actuarial Assumptions........................................................................... 47 16.3 Trust Fund...................................................................................... 47 16.4 Expenses of the Plan............................................................................ 47 SECTION 17 ADMINISTRATION OF THE PLAN................................................................... 49 17.1 Administrative Committee........................................................................ 49 17.2 Control and Management of Plan Assets........................................................... 49 17.3 Trustees and Investment Managers................................................................ 49 17.4 Committee Membership............................................................................ 50 17.5 Reports to Board of Directors................................................................... 50 17.6 Employment of Advisers.......................................................................... 50 17.7 Limitations on Committee Actions................................................................ 51 17.8 Committee Meetings.............................................................................. 51 17.9 Accounting and Disbursement of Plan Assets...................................................... 51 SECTION 18 CLAIMS AND REVIEW PROCEDURES................................................................. 52 18.1 Applications for Benefits....................................................................... 52 18.2 Denial of Applications.......................................................................... 52 18.3 Requests for Review............................................................................. 52 18.4 Decisions on Review............................................................................. 52 18.5 Exhaustion of Administrative Remedies........................................................... 53 SECTION 19 TERMINATION OF EMPLOYER PARTICIPATION........................................................ 54 19.1 Termination by Participating Company............................................................ 54 19.2 Effect of Termination........................................................................... 54 19.3 IRS Termination Procedure....................................................................... 54 19.4 PBGC Termination Procedure...................................................................... 55 19.5 Termination of the Plan......................................................................... 55 SECTION 20 AMENDMENT, MERGER OR TERMINATION OF THE PLAN AND TRUST....................................... 56 20.1 Right to Amend.................................................................................. 56 20.2 Plan Merger or Consolidation.................................................................... 56 20.3 Termination of the Plan......................................................................... 56 |
20.4 Partial Termination of the Plan................................................................................... 56 20.5 Manner of Distribution............................................................................................ 57 SECTION 21 INALIENABILITY OF BENEFITS..................................................................................... 58 21.1 No Assignment Permitted........................................................................................... 58 21.2 Return of Contributions........................................................................................... 58 21.3 Qualified Domestic Relations Orders............................................................................... 58 SECTION 22 SPECIAL SERVICE PROVISIONS FOR EMPLOYEES OF BATTERY STREET ENTERPRISES, INC. OR ANY OF ITS SUBSIDIARIES........ 61 SECTION 23 SPECIAL SERVICE PROVISIONS FOR EMPLOYEES OF OBERMAN MANUFACTURING COMPANY, TOP-NOTCH MANUFACTURING COMPANY, INCORPORATED AND MILLER BELTS LTD., INC................................................................................... 62 SECTION 24 SPECIAL SERVICE AND BENEFIT PROVISIONS FOR CERTAIN FORMER EMPLOYEES OF ASIAN PACIFIC INDUSTRIES, INC........... 63 SECTION 25 ACTUARIAL EQUIVALENCE FACTORS.................................................................................. 64 SECTION 26 TOP HEAVY BENEFITS............................................................................................. 66 SECTION 27 GENERAL LIMITATIONS AND PROVISIONS............................................................................. 69 27.1 No Employment Right.............................................................................................. 69 27.2 Payments from the Trust Fund..................................................................................... 69 27.3 Payments to Minors or Incompetents............................................................................... 69 27.4 Lost Members or Beneficiaries.................................................................................... 69 27.5 Personal Data to the Administrative Committee.................................................................... 69 27.6 Insurance Contracts.............................................................................................. 70 27.7 Notice to the Administrative Committee........................................................................... 70 27.8 Notices to Members and Beneficiaries............................................................................. 70 27.9 Word Usage....................................................................................................... 70 27.10 Headings......................................................................................................... 70 27.11 Governing Law.................................................................................................... 70 27.12 Heirs and Successors............................................................................................. 70 27.13 Withholding...................................................................................................... 70 |
As Amended and Restated Effective November 27, 1989
By this instrument Levi Strauss Associates Inc. amends and restates the Plan to comply with the Tax Reform Act of 1986, as amended, and related legislation. The provisions of this amended and restated Plan will generally be effective November 27, 1989, except as specifically stated otherwise in this document (the "Effective Date"). Levi Strauss Associates Inc. intends that the Plan as so amended and restated and the Trust Fund established under the Plan, will continue to qualify as a plan and trust which meet the requirements of sections 401(a) and 501(a), respectively, of the Internal Revenue Code of 1986, as amended.
amended and restated Plan will not reduce any Member's Retirement Benefit under the Plan, as determined on the date immediately preceding the Effective Date, and this Plan will be construed accordingly.
When used in this Plan document the following terms will have the following meanings:
(a) A corporation that is a member of a controlled group of corporations (as defined in section 414(b) of the Code) which includes Levi Strauss Associates Inc.;
(b) Any trade or business (whether or not incorporated) that is in common control (as defined in section 414(c) of the Code) with Levi Strauss Associates Inc.;
(c) An organization (whether or not incorporated) that is a member of an affiliated service group (as defined in section 414(m) of the Code) which includes Levi Strauss Associates Inc.;
(d) Any other entity required to be aggregated with Levi Strauss Associates Inc. under section 414(o) of the Code; and
(e) Any other entity designated as an Affiliated Company by the Board of Directors.
Benefit Service with respect to a Member who is Totally and Permanently Disabled, will include any additional Benefit Service credited under Section 9.1.
Benefit Service with respect to a Member who is on a military leave of absence will include any Benefit Service required to be credited under the Military Selective Services Act, as amended, or any other federal law of similar import. If a Member who is on a military leave of absence becomes Totally and Permanently Disabled, Benefit Service with respect to the Member will include any additional Benefit Service the Member receives under Section 9.1.
Benefit Service with respect to a Member who is reemployed by the Company as an Employee or a Casual Employee after his or her Vested Retirement Benefit Payment Date, Early Retirement Date, Normal Retirement Date or Deferred Retirement Date, will mean the number of Years of Service and fractions of such years during which the Member is so reemployed, determined under Section 13.2 of the Plan. Years of Service will be determined by the Administrative Committee based on such months of Benefit Service. Such additional Benefit Service will be added to the Member's Benefit Service earned before his or her Vested Retirement Benefit Payment Date, Early Retirement Date, Normal Retirement Date, or Deferred Retirement Date as provided in Section 5.4. A Member who retires and is reemployed by the Company as a Retiree Coordinator will not resume membership in the Plan or accrue additional Benefit Service under this Section 2.9 or Section 13.2.
If an employee is a sales representative, account manager or account executive, or any of the 3, for the entire Plan Year (or the portion of the Plan Year during which he or she is a Member), his or her Compensation will not exceed the following limits, as determined by the Committee:
(a) A sales representative's Compensation will not exceed the maximum for the LS&CO. Home Office Salary Grade 5 salary range in effect at the end of such Plan Year; and
(b) An account manager's Compensation will not exceed the maximum for the LS&CO. Home Office Salary Grade 6 salary range in effect at the end of such Plan Year; and
(c) Effective on and after November 26, 1990, an account executive's Compensation will not exceed the maximum for the LS&CO. Home Office Salary Grade 7 salary range in effect at the end of such Plan Year. Prior to November 26, 1990, an account executive's Compensation will not exceed the maximum for the Home Office Salary Grade 6 in effect at the end of such Plan Year.
In the case of an Employee who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, Compensation will be the amount determined by the Administrative Committee to be the amount which would have been paid to the employee if he or she had been on the domestic service payroll of the Company.
The term "Compensation" will not include:
(a) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, except as provided above;
(b) Relocation expenses;
(c) Any ordinary income recognized by the employee related to the exercise of any right granted by any stock option plan maintained by the Company or an Affiliated Company;
(d) Payments under the Company's long-term performance plan;
(e) Any severance payments;
(f) Payments from the Company's Long Term Disability Plan;
(g) "Imputed Income;" or
(h) Perks.
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after the Effective Date, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. For Plan Years beginning in and after 1991, the $200,000 Compensation adjustment that takes effect on January 1 of each year is effective for the Plan Year beginning in that year. For the 1989 and 1990 Plan Years, the $200,000 Compensation adjustment that is effective January 1 of 1989 and 1990 will be used for the Plan Year that ends in each of such years. In determining the Compensation of an Employee, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying those rules, the term "family" will include only the spouse of the Employee and any lineal descendants of the Employee who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
(a) Relates to the provision of child support, alimony, or marital property rights to a spouse, child, or other dependent of a Member; and
(b) Is entered or made under the domestic relations or community property laws of any state.
(a) Any employee of LS&CO. who is not paid from the home office of Levi Strauss Associates Inc.;
(b) Any employee of a Participating Company other than LS&CO. who is not paid on a salary or commission basis;
(c) Any stocktaker, service representative, Retiree Coordinator or "Temporary Employee;"
(d) Any employee who is not employed in a state or territory of the United States or who receives no remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code);
(e) Any alien who:
(i) Receives remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code); and
(ii) Has been transferred by the Company from a job outside the United States to a job within the United States, during any period with respect to which the alien is benefiting (by reason of accruing a benefit or making or having contributions made on the alien's behalf) under:
(A) A retirement plan established or maintained outside the United States by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of the Company; or
(B) The Levi Strauss International Retirement Plan for Third Country National Employees or any successor or similar plan maintained by the Company or an Affiliated Company;
(f) A United States citizen locally hired by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of a Participating Company;
(g) Any employee who is included in a unit of employees covered by a negotiated collective bargaining agreement which does not provide for his or her membership in the Plan;
(h) A "leased employee" (as defined in section 414(n) or section 414(o) of the Code) who is providing services to the Company or an Affiliated Company;
(i) Any employee who is covered by an personal employment contract that expressly provides he or she will not be eligible for membership in the Plan; or
(j) An employee who is included in a group or classification of employees on a payroll of a company designated by the Board of Directors as not being eligible to participate in the Plan.
A member of the board of directors of the Company is not eligible for membership in the Plan unless he or she is also an Employee of the Company. The Board of Directors may on a nondiscriminatory basis, designate as an Employee a person described in (c), (d), (f) or (j ) above. Such designation must be made in writing after receiving the advice of counsel.
Any "Temporary Employee" and any stocktaker employed by the Company will not be treated as an Employee, except for the purposes of and in accordance with receiving benefits computed under the Terminated Plan. A "Temporary Employee" means a person who:
(i) Is hired to fill, for a period not to exceed 6 calendar months, a position which arises from either an emergency situation or the temporary absence of an Employee; and
(ii) Is subject, as a condition of such employment, to termination without prior notice at any time.
A person's status as an Employee will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
"Compensation" includes the Member's wages, salaries, fees for professional services and other amounts received (without regard to whether an amount is paid in cash) for personal services actually performed in the course of employment with the Company or an Affiliated Company to the extent that the amounts are includable in gross income (including but not limited to commissions paid sales representatives, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements or expenses under a nonaccountable plan (as defined in section 1.62(c) of the Code)) determined without regard to the exclusions from gross income under sections 931 and 939 of the Code. "Compensation" will also include:
(a) In the case of a Member who is an employee within the meaning of section 401(c) of the Code, the Member's earned income (as described under section 401(c)(2) of the Code) determined without regard to the exclusions from gross income similar to those in sections 931 and 939 of the Code;
(b) Any foreign earned income as defined under section 911 (b) of the Code, regardless of whether such income is excludable from the gross income of the Employee under section 911 of the Code;
(c) Amounts described in sections 104 (a) (3), 105 (a) and 105(b) of the Code, but only to the extent that such amounts are includable in the gross income of the Employee;
(d) Amounts paid or reimbursed by the Company or an Affiliated Company for moving expenses incurred by the Employee, but only to the extent that such amounts are not deductible by the Employee under section 217 of the Code;
(e) The value of a nonqualified stock option granted to the Employee by the Company or an Affiliated Company, but only to the extent that the value of the option is includable in the gross income of the Employee for the taxable year when granted; and
(f) The amount includable in the gross income of the Employee upon making an election described in section 83(b) of the Code.
(a) Company contributions to a deferred compensation plan that before application of the limitations of section 415 of the Code are not includable in the Employee's gross income for federal income tax purposes in the taxable year of the Employee in which the contributions are made;
(b) Company contributions to a simplified employee pension plan described in section 408(k) of the Code to the extent that such contributions are not considered as compensation for the taxable year in which contributed;
(c) Any distributions from a deferred compensation plan regardless of whether such amounts are includable in gross income of the Employee for federal income tax purposes in the taxable year of distribution;
(d) Amounts realized from the exercise of a nonqualified stock option;
(e) Amounts realized when restricted stock or property becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(f) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and
(g) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are excludable from gross income of the Employee); Company contributions to a cafeteria plan described in section 125 of the Code, or Company contributions (whether or not under a salary reduction arrangement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether or not the contributions are excludable from the gross income of the Employee).
In determining the High-3 Year Average Compensation for each Plan Year beginning on or after the Effective Date, compensation for any Plan Year in excess of $200,000, or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) (the "401 (a) (17) limitation"), will be disregarded. For Plan Years beginning in and after 1991, the adjustment to the 401(a)(17) limitation that takes effect on January 1 of each year is effective for the Plan Year beginning in that year. For the 1989 and 1990 Plan Years, the adjustment to the 401(a)(17) limitation that is effective January 1 of 1989 and 1990 will be used for the Plan Year that ends in each of such years. In determining the compensation of an Employee, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying those rules, the term "family" will include only the spouse of the Employee and any lineal descendants of the Employee who have not reached age 19 before the close of the Plan Year.
(a) During the preceding Plan Year:
(i) Was at any time a 5% owner of the Company or an Affiliated Company (as defined in section 416(i)(1) of the Code);
(ii) Received "compensation" from the Company or an Affiliated Company in excess of $75,000 (as adjusted under Regulations or rulings issued by the IRS);
(iii) Received "compensation" from the Company or an Affiliated Company in excess of $50,000 (as adjusted under Regulations or rulings issued by the IRS) and was in the top 20% of employees of the Company and all Affiliated Companies when ranked on the basis of "compensation" paid during such Plan Year (referred to as the "Top Paid Group" under IRS Regulations); or
(iv) Was at any time an officer of the Company or an Affiliated Company and received "compensation" greater than 50% of the amount in effect under section 415(b)(1)(A) of the Code; or
(b) During the Plan Year:
(i) Was at any time a 5% owner of the Company or an Affiliated Company (as defined in section 416(i)(1) of the Code); or
(ii) Satisfies the requirements of paragraphs (ii), (iii), or
(iv) of Section 2.30(a) and is a member of the group consisting of the 100
employees of the Company and all Affiliated Companies paid the greatest
"compensation" during the Plan Year.
For purposes of determining the number of employees in the Top Paid Group under Section 2.30(a)(iii) for a Plan Year, the following employees, as described in sections 414(q)(8) and (11) of the Code, will be excluded:
(i) Those who have not completed 6 months of Service;
(ii) Those who normally work less than 17-1/2 hours per week;
(iii) Those who normally work less than 6 months during any year;
(iv) Those who have not attained age 21;
(v) Those subject to a collective bargaining agreement; and
(vi) Nonresident aliens who receive no earned income from sources within the United States.
The Administrative Committee will determine whether an employee is an officer based on the responsibilities of the employee with the Company or an Affiliated Company. Of those employees determined to be officers, no more than 50 employees (or, if less, the greater of 3 employees or 10% of the employees, excluding all employees described in sections 414 (q) (8) and (11) of the Code) will be treated as officers. Further, if no officer receives the level of "compensation" described in Section 2.30(a)(iv), the highest paid officer of the Company and all Affiliated Companies will be treated as a Highly Compensated Employee described in Section 2.30(a)(iv).
For purposes of determining whether an employee is a Highly Compensated Employee only, any person who is a member of the family of a 5% owner or of a Highly Compensated Employee in the group consisting of the 10 Highly Compensated Employees paid the greatest compensation during the Plan Year:
(i) Will not be considered a separate employee; and
(ii) Any "compensation" paid to such person and the Company or Employee contributions made on behalf of such person will be treated as if it were paid to or on behalf of the 5% owner or Highly Compensated Employee.
For purposes of the immediately preceding sentence, the term "family" means, with respect to any employee, the employee's spouse and lineal ascendants or descendants and the spouses of such lineal ascendants or descendants.
The term "compensation" for purposes of this Section 2.30 means compensation as defined in section 415(c)(3) of the Code, determined without regard to section 125 of the Code (regarding contributions to a cafeteria plan), section 402(a)(8) of the Code (regarding contributions to a 401(k) plan) and section 402(h)(1)(B) of the Code (regarding contributions to a simplified employee pension plan), and in the case of employer contributions made under a salary reduction agreement, without regard to section 403(b) of the Code (regarding annuity contracts).
(a) The employee's year of separation from Service; or
(b) Any Plan Year ending on or after the employee's 55th birthday.
An employee who performs no services for the Company or an Affiliated Company during the Plan Year will be treated as a former employee.
(a) Has committed an act of embezzlement, fraud or theft with respect to the property of the Company or an Affiliated Company or any person with whom the Company or an Affiliated Company does business;
(b) Has deliberately disregarded the rules of the Company or an Affiliated Company in such a manner as to cause material loss, damage or injury to, or otherwise endanger the property or employees of the Company or an Affiliated Company;
(c) Has made any unauthorized disclosure of any of the secrets or confidential information of the Company or an Affiliated Company;
(d) Has engaged in any conduct which constitutes unfair competition with the Company or an Affiliated Company;
(e) Has induced any person to breach any contract with the Company or an Affiliated Company; or
(f) Has sold Company or Affiliated Company products to an unauthorized account or has assisted an authorized account in wholesaling Company or Affiliated Company products.
(a) The date the Employee retires;
(b) The date the Employee dies;
(c) The date the Employee terminates employment; or
(d) On the first anniversary of the date the Employee is absent from service for any other reason (e.g., an authorized period of absence, as described in paragraphs (i) and (ii), etc. below).
However, the Service of a Member who becomes Totally and Permanently Disabled and who continues to accrue Service under Section 9.1 will not terminate on the date the Member terminates employment with the Company.
Subject to any applicable rules of the Administrative Committee (which rules will be uniformly applicable to all Employees similarly situated), Service includes:
(i) Periods of vacation;
(ii) Periods of absence whether or not the Employee is paid, not to exceed 12 calendar months, authorized by the Company for sickness, temporary disability or personal reasons;
(iii) Periods of service in the Armed Forces of the United States, if and to the extent required by the Military Selective Service Act, as amended, or any other federal law of similar import; provided that the Employee returns to Service with the Company or an Affiliated Company within the time his or her employment rights are protected by such law; and
(iv) Any period of 12 consecutive months or less, beginning on the first day of the month after a Member terminates employment and ending on the last day of the month preceding the Member's reemployment date, if the Member performs at least 1 Hour of Service within the first month of reemployment. Such period of Service will only be considered for determining Membership in the Plan and determining the Member's Vested Retirement Benefit, Early Retirement Benefit and Disability Retirement Benefit.
Effective November 25, 1985, solely for the purpose of determining whether an Employee has incurred a Break in Service, Service will end on the second anniversary of the first day of a period of absence caused by any of the following:
(i) The Employee's pregnancy;
(ii) The birth of the Employee's child;
(iii) The placement of a child with the Employee in connection with the adoption of the child by the Employee; or
(iv) The care of the Employee's child immediately following the child's birth or adoption.
The Administrative Committee may require the Employee to provide evidence that the period of absence was due to one of the reasons described above.
A Member's Service will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
If an Employee terminates employment and is reemployed after incurring a Break in Service, as defined in Section 2.11, Service will recommence on the date the Employee again performs 1 Hour of Service. A Member will receive credit for the aggregate of all periods of Service, except as follows:
If the Member has incurred a 60 consecutive month Break in Service, Service before such 60-month Break in Service will only be counted if the Member had a Vested Retirement Benefit under Section 2.70 before such 60 consecutive month Break in Service; and
If a Member's Service as of November 25, 1985, would be disregarded under the Terminated Plan in effect as of such date, such Service will continue to be disregarded on and after November 25, 1985, under this Plan to the extent permitted by applicable law.
(a) There are no increases in the level of such old age benefits after such computation date;
(b) If the Member retired on an Early Retirement Date, the Member is not paid any Compensation on or after his or her Early Retirement Date;
(c) If the Member terminates Service other than on his or her Early Retirement Date and before his or her 65th birthday the Member continues to be paid annual Compensation from such computation date 'until his or her 65th birthday at his or her annual rate of Compensation (as determined by the Administrative Committee) in effect on such computation date; and
(d) The Member does not fail to qualify for, or lose such old age insurance benefits by failure to apply for such benefits, entry into covered employment or otherwise.
(a) With respect to a Member who dies on or after the Annuity Starting Date, the spouse to whom such Member was Legally Married as of the Annuity Starting Date; and
(b) With respect to a Member who dies before the Annuity Starting Date, the spouse to whom such Member was Legally Married for at least 1 year as of the date of the Member's death.
If a Member divorces his or her Surviving Spouse after the Member's Annuity Starting Date, such Surviving Spouse will continue to be the Member's Surviving Spouse for purposes of the Plan unless provided otherwise based on the terms of a Qualified Domestic Relations Order under Section 21.3. The preceding sentence will apply regardless of whether the Member remarries after his or her divorce from such Surviving Spouse. For purposes of the Plan, the term "Surviving Spouse" will not include a Common-Law Spouse.
(a) The Member and "partner" live together;
(b) The Member and "partner" are financially interdependent;
(c) The Member and "partner" are jointly responsible for each other's common welfare;
(d) The Member and "partner" consider themselves as life partners; and
(e) The Member registers his or her partner as an Unmarried Partner with LS&CO.
A "partner" does not include a Member's roommate, sibling, parent or other blood relative. In addition, to qualify as an Unmarried Partner neither the Member or the partner must be Legally Married. A "partner" who satisfies all of the above characteristics will not qualify as an Unmarried Partner until 1 year after the date the Member registers the partner as an Unmarried Partner with LS&CO., unless at the time the Member registers the partner, the Member provides proof that the Member and his or her Domestic Partner have been together in a relationship which satisfies the above requirements for at least 1 year, in which case the partner will qualify as a Domestic Partner on such registration date. The determination of whether a partner qualifies as an Unmarried Partner will be made by the Administrative Committee in its sole and absolute discretion.
(a) Completed 5 Years of Service;
(b) Become eligible for benefits under Section 4.1 on account of the attainment of Normal Retirement Age; or
(c) Become eligible for the Disability Retirement Service provided in
Section 9.1.
The term "Vested Retirement Benefit" also includes a Member's normal retirement
benefit earned under the Terminated Plan as of December 30, 1985. If the Plan
becomes Top Heavy, a Member's Vested Retirement Benefit will be determined under
Section 26.
Years of Service and fractions of such years with respect to a Member who has terminated Service and returns to Service with the Company will be determined under Sections 2.58 and 3.3. Years of Service with respect to an Employee who has terminated Service and returns to Service with the Company will be determined under Sections 2.58 and 3.4.
(a) The first anniversary of the date the Employee's Service commenced; or
(b) The date on which he or she becomes an Employee.
The Administrative Committee will take any necessary or appropriate action
to enroll each Employee eligible to be enrolled in the Plan under this Section
3. If it is determined that an Employee has for any reason not been timely
enrolled in the membership of the Plan, such Employee will be retroactively
enrolled to the extent permitted by law.
(a) Termination of Service for the purpose of retirement after his or her Early Retirement Date, Normal Retirement Date or Deferred Retirement Date;
(b) Death;
(c) Total and Permanent Disability (unless the Member continues to accrue Service under Section 9.1);
(d) Termination of employment with the Company; or
(e) Upon any Break in Service.
The membership of a Member who, without any Break in Service, ceases to be an Employee will not end but no subsequent Service will be treated as Benefit Service unless and until the Member again becomes an Employee.
(a) If the Member had a Vested Retirement Benefit at the time of his or her Break in Service or, alternatively, has not incurred a 60 consecutive month Break in Service, then the Member will recommence membership in the Plan on:
(i) The date of his or her reemployment, if the Member is rehired as an Employee, or
(ii) The date he or she becomes an Employee, if the Member is not rehired as an Employee.
The Member's prior Service will be taken into account for purposes of determining his or her Vested Retirement Benefit under Section 2.70 and years of Benefit Service under Section 2.9.
(b) If the Member did not have a Vested Retirement Benefit at the time of his or her Break in Service and has incurred a 60 consecutive month Break in Service, then the Member will be considered a new hire and begin Membership in the Plan on the date he or she satisfies the eligibility requirements described in Section 3.1. The Member's prior Service will not be taken into account for purposes of determining his or her Vested Retirement Benefit under Section 2.70 and years of Benefit Service under Section 2.9.
(a) If the Employee has not incurred a 60 consecutive month Break in Service, the Employee will begin membership in the Plan on the date he or she satisfies the eligibility requirements described in Section 3.1 taking into account his or her prior Years of Service. The Employee's prior Service will also be taken into account for purposes of determining his or her Vested Retirement Benefit under Section 2.70 and years of Benefit Service under Section 2.9.
(b) If the Employee has incurred a 60 consecutive month Break in Service, the Employee will be considered a new hire and will begin membership in the Plan on the date he or she satisfies the eligibility requirements described in Section 3.1 based on his or her date of rehire without taking into account his or her prior Years of Service. The Employee's prior Service will not be taken into account for purposes of determining his or her Vested Retirement Benefit under Section 2.70 and years of Benefit Service under Section 2.9.
(a) Payment of a Member's Early Retirement Benefit must begin no later than the month which includes his or her Normal Retirement Date; and
(b) Payment of a Member's Normal Retirement Benefit or Deferred Retirement Benefit must begin no later than the Member's Required Beginning Date.
(a) 2% of the Member's Final Average Compensation multiplied by the Member's Benefit Service not in excess of 25 years, less
(b) 2% of the Member's Social Security Benefit multiplied by the Member's Benefit Service not in excess of 25 years, plus
(c) 0.25% of the Member's Final Average Compensation multiplied by the Member's Benefit Service in excess of 25 years.
A Member's Retirement Benefit will be subject to adjustment as provided in Sections 5.2, and 5.3 and, if the Member is a reemployed Member, will be calculated in accordance with Section 5.4.
(a) In the case of a Member who continues to be employed as an Employee, or in the case of a Member who terminated employment with the Company after reaching Normal Retirement Age but is reemployed before beginning to receive monthly Retirement Benefit payments, payment of the Member's Retirement Benefit will begin (in the form determined under Section 11) as of the last day of the month in which the Member is deemed to retire. If a Member who is deemed to retire under this Section 6.2 does not make a valid election for payment of the Member's Retirement Benefit, the Member's Retirement Benefit will be paid as a 50% Qualified Joint and Survivor Annuity.
(b) In the case of a Member who is reemployed as an Employee after reaching Normal Retirement Age and beginning to receive monthly Retirement Benefit payments but whose benefits are suspended under Section 13.2, payment of the Member's Retirement Benefit will recommence (in the same form as before the suspension) as of the last day of the month in which the Member is deemed to retire.
Any Member whose Retirement Benefit begins to be paid will be deemed to be reemployed as of the first day of any subsequent calendar month in which he or she is paid (or entitled to payment) for 40 or more Hours of Service, and the Retirement Benefit suspension provisions of Section 13.2 will apply.
A Member who retires on an Early Retirement Date will be entitled to receive the percentage of his or her Retirement Benefit based on the Member's age as of his or her Early Retirement Date as described in the following Table:
Table A
-------
Age at Member's Early Retirement Date Percentage Factor
------------------------------------- -----------------
55 70%
56 74%
57 78%
58 82%
59 86%
60 90%
61 92%
62 94%
63 96%
64 98%
65 100%
|
In applying the above table, the Member's age at his or her Early Retirement Date will be computed to years and completed months and the percentages will be interpolated. Payment of a Member's reduced Early Retirement Benefit will begin on the last day of the month in which the Member's Early Retirement Date occurs.
If the Administrative Committee determines that a Member who is eligible to retire on an Early Retirement Date has engaged in any act of Misconduct while in Service, the Early Retirement Benefit payable to the Member will be the Equivalent Actuarial Value of his or her accrued Retirement Benefit.
death as described in Section 10.1. The Member may revoke an election to delay the payment of his or her Early Retirement Benefit at any time before the Annuity Starting Date.
A Member who, at any time between December 1 and December 30, 1985, was a member of the Terminated Plan and was in Service, will have a vested right to his or her Retirement Benefit earned up to and including December 30, 1985. Other persons, the liabilities of whose benefits were assumed by this Plan, will continue to have the same vested right to benefits that they had in the Terminated Plan (if any).
Table B
-------
Age at Commencement Percentage Factor
------------------- -----------------
55 42%
56 45%
57 49%
58 53%
59 58%
60 63%
61 69%
62 76%
63 83%
64 91%
65 100%
|
Such an election must be received by the Administrative Committee at least 30 days before the date on which benefit payments are to begin. Payment of the Member's Vested Retirement Benefit will begin on the last day of any month before the Member's Normal Retirement Date and on or after his or her 55th birthday.
(a) Normal Retirement Date under Section 6;
(b) Early Retirement Date under Section 7;
(c) Total and Permanent Disability under Section 9; or
(d) Death under Section 10;
then no Retirement Benefit will be payable under the Plan upon the Member's termination of Service unless the Member has completed 5 Years of Service or has a right to a Vested Retirement Benefit under Section 26.
(i) The Member is no longer Totally and Permanently Disabled;
(ii) The Member elects an Early Retirement Date;
(iii) The Member reaches his or her earliest Normal Retirement Date; or
(iv) Disability benefits are no longer payable to the Member under the Levi Strauss & Co. Welfare Plan.
However, if the Administrative Committee determines that the Member engaged in any act of Misconduct while in Service, he or she will not be entitled to accrue additional Service under this Section 9.1 or any other provision of the Plan. The Retirement Benefit of a Member who is Totally and Permanently Disabled who engages in an act of Misconduct will be determined based on the Member's Benefit Service as of the date the Member became Totally and Permanently Disabled, as provided in Section 8.
Committee determines that the Member has engaged in any act of Misconduct while in Service, no additional Disability Service will be credited to the Member under Section 9.1.
(a) If the Member dies before the earlier of his or her Early Retirement Age or Normal Retirement Age, the Surviving Spouse or Domestic Partner will receive a monthly benefit equal to the monthly benefit the Surviving Spouse or Domestic Partner would have received if the Member:
(i) Separated from Service on the date of his or her death (unless the Member had separated from Service before his or her death, in which case the Member's actual date of separation from Service will be used);
(ii) Survived until the earliest age the Member could have begun receiving benefit payments under the Plan;
(iii) Elected to receive a 50% Qualified Joint and Survivor Annuity, with his or her Surviving Spouse or Domestic Partner as contingent annuitant, beginning on the earliest age the Member could have begun receiving benefit payments under the Plan; and
(iv) Died on the day after such annuity became effective.
(b) If the Member dies after the earlier of his or her Early Retirement Age or Normal Retirement Age, the Surviving Spouse or Domestic Partner will receive a monthly benefit equal to the monthly benefit the Surviving Spouse or Domestic Partner would have received if the Member had retired on the first day of the month coincident with or next following the date of the Member's death with a 50% Qualified Joint and Survivor Annuity, with his or her Surviving Spouse or Domestic Partner as contingent annuitant. The payments to the Surviving Spouse or Domestic Partner will begin no later than the last day of the month following the date of the Member's death.
Neither the Member nor the Surviving Spouse nor the Domestic Partner may waive the Survivor Annuity.
the life expectancies of the Member and the Beneficiary, as determined under section 72(t) of the Code.
If the Member's Beneficiary dies before benefit payments begin, the 10-Year
Certain and Life Option selected by the Member will automatically be cancelled
and the Member's benefit will be paid in the normal form of benefit specified in
Section 11.1 or 11.2, as appropriate, unless the Member elects another optional
form of benefit under Section 12.1.
The Administrative Committee will provide each eligible Member with notice
of the direct transfer option as required by section 402(f) of the Code (the
"Section 402(f) Notice") at least 90 days and not less than 30 days before the
Annuity Starting Date. The Member will have at least 30 days after the Section
402(f) Notice is provided to elect to have his or her Retirement Benefit paid in
the form of a direct transfer. The Member may elect to waive this 30 day
election period by affirmatively electing, before the expiration of the 30 day
period, to have his or her Retirement Benefit paid in the form of a direct
transfer. If the Member makes such an election, no other benefits will be
payable from the Plan to the Member and his or her Beneficiary.
The interest rate specified in Section 25 will be used for determining a single sum of Equivalent Actuarial Value of the Member's Retirement Benefit.
The interest rate specified in Section 25 will be used for determining a single sum Equivalent Actuarial Value of the Member's Retirement Benefit.
The written explanation will contain:
(a) A description of the Qualified Joint and Survivor Annuity and Straight Life Annuity described in Section 11.1 and Section 11.2;
(b) Notice of the Member's right to waive the Qualified Joint and Survivor Annuity or Straight Life Annuity by electing an optional form of benefit;
(c) A description of the different optional forms of benefit described in Section 11.3;
(d) Notice of the requirement that the Member's spouse must consent to the Member's waiver of the Qualified Joint and Survivor Annuity and election of an optional form of benefit;
(e) Notice of the Member's right to revoke the waiver of the Qualified Joint and Survivor Annuity or Straight Life Annuity and election of an optional form of benefit during the Election Period specified in Section 12.3;
(f) A general explanation of the financial effect of election of each of the optional forms of benefit; and
(g) Notice that the Member may request an explanation of the specific financial effect, in terms of monthly payments, on the Member's benefit of making an election.
If the Member requests a written explanation of the specific financial effect of electing an optional form of benefit under the Plan during the Election Period, such explanation will be provided to the Member within 30 days of the date of his or her request. Alternatively, the Administrative Committee may in its discretion, before a request by a Member, include the written explanation of the specific financial effect of electing an optional form of benefit under the Plan in the explanatory notice described above.
(a) The date of the Member's death; or
(b) The later of:
(i) The Member's Annuity Starting Date; or
(ii) 90 days after the date that such written explanation is furnished.
During the Election Period, any election not to take payment in the normal form of benefit provided in Section 11.1 and Section 11.2 will be revocable. After the expiration of the Election Period, any election made will be irrevocable, and the Member will not be entitled to make an election if no election has been made. A Member may elect to begin receiving monthly benefit payments before the expiration of the Election Period. If the Member is Legally Married and elects to receive his or her Retirement Benefit in a form other than the Qualified Joint and Survivor Annuity, such election will not be effective without the written consent of his or her spouse. A Member who elects to begin receiving monthly benefit payments before the expiration of the Election Period may, nevertheless, elect to change his or her benefit election, and elect another optional form of benefit during the remainder of the Election Period. If a Member makes such an election, his or her Retirement Benefit will begin being paid in the new optional benefit form as soon as practicable after the Administrative Committee receives the Member's benefit election.
If a Legally Married Member elects to receive his or her Retirement Benefit
in a form other than the Qualified Joint and Survivor Annuity specified in
Section 11.1 and/or designates a person other than his or her spouse as his or
her contingent annuitant, the election or designation will be effective only if
consented to by the Member's spouse. The consent must:
Be in writing;
Acknowledge the effect of the election and/or designation and the spouse's consent thereto;
Be witnessed by a notary public; and
Be delivered to the Administrative Committee.
No spousal consent will be required if the Administrative Committee determines to its satisfaction that the spouse cannot be located or that there exist such other circumstances
preventing such consent that may be prescribed in applicable Regulations or rulings issued by the IRS. The Administrative Committee may determine a Member's marital status in accordance with such reasonable procedures as it may adopt from time to time.
If an active or separated Member's spouse or contingent annuitant dies before payment of the Member's Retirement Benefit begins and the Member elected a contingent annuitant option under Section 11.3, such form of benefit will be automatically cancelled and the Member will be deemed not to have selected an optional form of benefit (if an optional contingent annuitant benefit was elected). The Member may later elect an optional form of benefit if the election is timely made. Each Member may (with the written consent of his or her spouse if the Member is Legally Married) change any election of a form of benefit by executing a new election in accordance with this Section 12 until the expiration of the Election Period.
If a Member is reemployed by the Company after his or her Early Retirement
Date or Vested Retirement Benefit Payment Date described in Section 8.2 and the
Member's Retirement Benefit payments are suspended under Section 13.2(a) or
Section 13.2(b), the Member's prior benefit election will automatically be
cancelled and of no effect. Upon the Member's later termination of Service, the
Administrative Committee will provide the Member with the written explanation of
the optional forms of benefit payable under the Plan and obtain a new benefit
election and spousal consent, if the Member is Legally Married. Upon the
Member's later termination of Service, his or her Retirement Benefit (as
adjusted under Section 13.2(d) after the Member's reemployment) will be paid in
the form in which the Member elects under Section 13.2.
If the Equivalent Actuarial Value of a Member's Retirement Benefit, is $3,500 or less as of the date of the Member's separation from Service, such benefit will be paid in the form of a single sum under Section 11.5.
(i) The last day of the Plan Year in which the Member reaches age 65;
(ii) The last day of the Plan Year in which the Member separates from Employment with the Company; or
(iii) The last day of the Plan Year which contains the 10th anniversary of the date the Member began membership in the Plan; or
(b) The Required Beginning Date.
All Retirement Benefit payments will be made in accordance with the minimum distribution and incidental benefit requirements of section 401(a)(9) of the Code which require generally that certain minimum amounts be distributed to the Member each calendar year, beginning with the calendar year in which the Member's Required Beginning Date falls, in order to assure that certain minimum amounts be paid to the Member and that only "incidental" benefits be provided to the Member's Beneficiaries. Any distribution option required by section 401(a)(9) of the Code will override and supersede any inconsistent distribution options provided for in the Plan.
If a Member who is receiving monthly benefit payments on account of his or
her Early Retirement or Vested Retirement Benefit Payment Date described in
Section 8.2 is reemployed by the Company as an Employee, such monthly benefit
payments will be suspended upon the Member's reemployment. Such monthly benefit
payments will recommence (in the form elected by the Member under Section 12)
upon the Member's subsequent termination of Service.
If a Member who is receiving monthly benefit payments on account of his or
her Early Retirement or Vested Retirement Benefit Payment Date described in
Section 8.2 is reemployed by the Company as a Casual Employee, such monthly
benefit payments will be suspended after the Member completes 950 Hours of
Service during a Rehire Anniversary year. Such benefit payments will not
recommence until the Member's termination of Service. At such time, the Member's
Retirement Benefit will be paid in the form elected by the Member under Section
12.
Such offset will be made for a Member who is reemployed by the Company after his
or her Early Retirement or Vested Retirement Benefit Payment Date described in
Section 8.2 for each month of the Member's reemployment. Any additional
Retirement Benefit earned by the Member will be paid in the form provided by
Section 12.4.
(a) Any annuity payable to a Member for life as part of a Qualified Joint and Survivor Annuity or as part of a Survivorship Option elected by the Member under Section 11.3 and having the effect of a "qualified joint and survivor annuity" within the meaning of section 417 of the Code;
(b) Any Straight Life Annuity payable to a Member under Section 11.2 or 11.3; and
(c) Any other Survivorship Option or other option elected by a Member under Section 11.3 (including both the annuity payable to the Member and any other annuity or benefit payable).
(a) The $90,000 limitation in effect under section 415(b)(1)(a) of the Code (as adjusted to take into account changes in the cost-of-living under any Regulations or rulings of the IRS) (the "$90,000 Limitation"); or
(b) 100% of the Member's High-3 Year Average Compensation (the "Compensation Limitation"), subject, however, to the following provisions of this Section 14.
If a Member's benefit would exceed the above limitation, then the Member's benefit will be reduced as necessary. However, the Member's benefit will in no event be reduced below the amount of such benefit as of November 27, 1983, determined under the Terminated Plan (including its benefit limitations) as then in effect.
payable before the Member reaches age 62, the $90,000 Limitation will be reduced as provided in the preceding sentence until age 62 and will be further reduced for each month by which the benefit commencement date precedes the Member's 62nd birthday. In adjusting the $90,000 Limitation for the payment of benefits before age 62, the interest rate used will be the greater of 5% per annum or the rate used for determining actuarial reductions for Early payment of benefits described in Section 25 of this Plan.
(a) The annual benefits payable under all defined benefit plans maintained by the Company or an Affiliated Company with respect to the Member does not exceed $1,000 multiplied by the Member's Years of Service (not to exceed 10); and
(b) The Member has not participated in any defined contribution plan (within the meaning of section 414(i) of the Code) maintained by the Company or an Affiliated Company.
Compensation Limitation by taking into account the benefits payable and the contributions made under any other plans maintained by the Company or Affiliated Company which are qualified under section 401(a) of the Code. If such other plan is a defined contribution plan, then the sum of the "defined benefit plan fraction" (as defined in section 415(e)(2) of the Code) and the "defined contribution plan fraction" (as defined in section 415(e)(3) of the Code) may not exceed 1. In any case where the combined fraction is in excess of 1, then the Retirement Benefit payable under this Plan will be reduced (but not below the Member's Retirement Benefit as of the last day of the Plan Year beginning before January 1, 1987). The reduction will be of sufficient amount to eliminate the excess over the combined maximum.
If the Plan becomes Top Heavy and, therefore, subject to the provisions of
Section 26, then for purposes of determining the "defined benefit plan fraction"
and the "defined contribution plan fraction," a factor of 100% will be
substituted for the factor of 125% used in calculating the denominators of such
fractions, unless both of the following conditions are satisfied:
(a) The Plan is not Super Top Heavy as defined in Section 26 of the Plan; and
(b) The contributions and benefits on behalf of all Participants other than Key Employees meet the requirements of section 416(h) of the Code.
(a) After payment to a Member described in the preceding paragraph of all of his or her "benefits" under the Plan, the value of the Plan assets equals or exceeds 110% of the value of current liabilities as defined in section 412(l)(7) of the Code; or
(b) The value of "benefits" for a Member described in the preceding paragraph is less than 1% of the value of current liabilities; or
(c) The value of "benefits" payable to the Member under the Plan does not exceed the amount described in section 411(a)(11)(A) of the Code regarding the restrictions on mandatory single sum distributions of less than $3,500.
"Benefits" include any periodic income, any withdrawal values payable to a living Member, and any death benefits not provided for by insurance on the Member's life.
If no Beneficiary designation is in effect under Section 11.3 at the time of a Member's death, or if no designated Beneficiary survives the Member, the payment of the Member's Vested Retirement Benefit, if any, will be made to the following persons in the order listed:
(a) To the Member's Surviving Spouse, if any;
(b) If the Member has no Surviving Spouse, then to his or her children;
(c) If the Member has no living children, then to his or her parents;
(d) If the Member has no living parents, then to his or her brothers and sisters; or
(e) If the Member has no living brothers and sisters, then to his or her estate.
The Administrative Committee will, in its sole and absolute discretion, determine the right of such persons to receive the benefit payable with respect to a Member, if any. If the Administrative Committee is in doubt as to the right of any person to receive such amount, the Administrative Committee may direct the Trustee to retain such amount, without liability for any interest on such amount, until the rights to such amount are determined, or, alternatively, may direct the Trustee to pay such amount into any court of appropriate jurisdiction and such payment will be a complete discharge of the liability of the Plan and the Trust Fund.
(a) The premiums for termination insurance payable to the PBGC;
(b) The fees and expenses of any employee and of the Trustee for the performance of their duties under the Trust Agreement;
(c) The expenses incurred by the members of the Administrative Committee and of the Investment Committee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants and actuaries and any outside agents and cost of services provided with respect to the Plan); and
(d) All other proper charges and disbursements of the Trustee or the members of the Administrative Committee and of the Investment Committee (including settlements of claims or legal actions approved by counsel to the Plan),
An election by the Participating Companies to pay all or a part of the above expenses directly will not bind the Participating Companies as to their rights to elect, with respect to the same or other expenses, at any other time to have such expenses paid from the Trust Fund or to have the
Trustee reimburse the Participating Companies for expenditures already made. In estimating costs under the Plan, administrative costs may be anticipated.
In administering the Plan, the Administrative Committee (a) will act in a nondiscriminatory manner to the extent required by section 401(a) and related sections of the Code, and (b) will at all times discharge its duties in accordance with the standards set forth in section 404(a)(1) of the Act.
(a) Appoint 1 or more Trustees to hold the assets of the Plan in trust and to enter into a trust agreement with each Trustee it appoints;
(b) Appoint 1 or more Investment Managers for any assets of the Plan and to enter into an investment management agreement with each Investment Manager it appoints;
(c) Remove any Trustee or Investment Manager so appointed;
(d) Direct the investment of any Plan assets not assigned to an Investment Manager or to the Trustee; and
(e) Perform such other functions as are specifically assigned to the Investment Committee under the Plan.
In addition, the Investment Committee will have the responsibility for monitoring and reviewing the investment performance of the Plan to ensure that it is consistent with the requirements of the Act and the Code and the funding policy adopted by the Administrative Committee. The Investment Committee will establish the necessary parameters or standards regarding Plan investments to ensure that such criteria continue to be met.
(a) The Investment Committee directs how those assets will be invested;
(b) The Investment Committee allocates the authority to manage those assets to 1 or more Investment Managers; or
(c) The Plan prescribes how those assets will be invested.
Each Investment Manager appointed will have the exclusive authority to manage, including the power to acquire and dispose of, the Plan assets assigned to it by the Investment Committee, except to the extent that the Investment Committee prescribes how those assets will be invested. The Trustee and each Investment Manager will be solely responsible for diversifying the investment, in accordance with section 404(a)(1)(C) of the Act, of the Plan assets assigned to them by the Investment Committee, except to the extent that the Investment Committee directs or the Plan prescribes how those assets will be invested.
To the maximum extent permitted by law, no member of either Committee will be personally liable by reason of any contract or other instrument executed by him or her, or on his or her behalf, in his or her capacity as a member of such Committee, nor for any mistake of judgment made in good faith. The Company will indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Company's own assets), each member of the Administrative Committee and Investment Committee and each other officer, employee or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan or to the management and control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan, unless arising out of such person's own fraud or willful misconduct.
exercise of discretion. Any such delegation of discretion will be subject to revocation at any time at the discretion of the appropriate Committee.
(a) The specific reasons for the denial;
(b) The specific references to the Plan provisions on which the denial was based;
(c) A description of any information or material necessary to perfect the application;
(d) An explanation of why such material is necessary; and
(e) An explanation of the Plan's review procedure.
The written notice will be given to the applicant within 90 days after the Administrative Committee receives the application, unless special circumstances require an extension of time for processing the application. In no event will the extension exceed a period of 90 days from the end of the initial 90-day period. If an extension is required, written notice of the need for the extension will be furnished to the applicant before the end of the initial 90-day period. The notice will indicate the special circumstances requiring the extension of time and the date by which the Administrative Committee expects to give a decision. If written notice is not given to the applicant within the initial 90-day period, then the application will be deemed to have been denied (for purposes of Section 18.3) upon the expiration of such period.
extension of time for processing, but in no event will the decision on review be given more than 120 days after the Administrative Committee receives the request for review. If an extension is required, written notice of the need for an extension will be given to the applicant before the end of the initial 60-day period. The Administrative Committee will give prompt, written notice of its decision to the applicant. If the Administrative Committee confirms the denial of the application for a benefit in whole or in part, the notice will state, in a manner calculated to be understood by the applicant, the specific reasons for the denial and specific references to the Plan provisions on which the decision is based. To the extent that the Administrative Committee overrules the denial of the application for a benefit, such benefit will be paid to the applicant.
(a) Submitted a written application for a benefit in accordance with
Section 18.1;
(b) Been notified that the application is denied;
(c) Filed a written request for a review of the application in accordance with Section 18.3; and
(d) Been notified in writing that the Administrative Committee has affirmed the denial of the application.
A claimant may bring an action without completing the above steps after the Administrative Committee has failed to act on the claim within the time prescribed in Section 18.2 and Section 18.4.
If the Plan is terminated with respect to a Participating Company, the Retirement Benefit of any Highly Compensated Employee and any Highly Compensated Former Employee of such company will be limited to a benefit that is nondiscriminatory under section 401(a)(4) of the Code.
(a) At least 60 days before the date on which the Participating Company's participation in the Plan is to be terminated, the Administrative Committee will provide Members and Beneficiaries with a Notice of Intent to Terminate the Plan with respect to the Participating Company. As soon as administratively practicable after such Notice of Intent to Terminate is provided, the Administrative Committee will file notice with the PBGC indicating that the Plan is to be terminated with respect to the Participating Company.
(b) If the PBGC issues a Notice of Noncompliance within 60 days after it receives notice of the termination of the Plan, the Administrative Committee will refrain from taking any further action to terminate the Plan with respect to the Participating Company and will cooperate with the PBGC with respect to such termination of the Plan. Alternatively, the Administrative Committee may declare the termination of the Plan to be null and void with respect to the Participating Company and continue to treat the Plan with respect to such Company as an ongoing Plan for all purposes under the Act and the Code.
(c) If the PBGC does not issue a notice of noncompliance within 60 days after it receives notice of the termination of the Plan, then the Administrative Committee will distribute the distributable reserve to Members employed by the Participating Company in accordance with Section 20.5 of the Plan and the applicable Regulations issued by the PBGC regarding plan terminations.
If the PBGC issues revised Regulations regarding plan terminations, such Regulations will supersede and override any inconsistent provisions of this Plan, and any termination of the Plan with respect to a Participating Company will be accomplished under the terms and provisions of such Regulations.
On the complete termination of the Plan, LS&CO. and all or any Participating Companies, as determined by the Board of Directors or its designee, will receive such amounts, if any, as remain in the Trust Fund after the satisfaction of all liabilities under the Plan.
will be liable for the insufficiency. Alternatively, the Administrative Committee may postpone Retirement Benefit distributions to such Members until their subsequent termination of employment with the Company in accordance with other provisions of the Plan.
If the Plan is liquidated, the Administrative Committee will instruct the Trustee to purchase nontransferable deferred annuities for each person entitled to Retirement Benefit distributions, with the monthly payment provided by the annuity, the form of the annuity, and the date on which payments will commence under the annuity to be determined in accordance with the preceding Sections of the Plan. If the assets held in the Trust Fund are insufficient to purchase all of such annuities, the assets will be allocated among the Members in the manner prescribed by section 4044(a) of the Act. However, the Board of Directors, or its designee, and the Administrative Committee will not instruct the Trustee to liquidate the Trust Fund before complying with the Act.
The following arrangements are not prohibited under the Plan:
(a) Arrangements for the withholding of tax from benefit distributions;
(b) Arrangements for the recovery of benefit overpayments;
(c) Arrangements for the recovery of amounts described in section 4045(b) of the Act in the event of the termination of the Plan and the recapture of such amounts; or
(d) Arrangements for direct deposit of benefit payments to an account in a bank, savings and loan association or credit union (provided that such arrangement is not part of an arrangement constituting an assignment or alienation).
In addition, the return of Company contributions under Section 21.2 and the creation, assignment or recognition of a right to all or a portion of a Member's Retirement Benefit under a Qualified Domestic Relations Order under Section 21.3 will not violate this Section 21.1.
(i) The Domestic Relations Order clearly specifies the name and last known mailing address (if any) of the Member and the name and last known mailing address of each Alternate Payee covered by the order, the amount or percentage of the Member's Retirement Benefit to be paid to each Alternate Payee or the manner in which such amount or percentage is to be determined, and the number of payments or period to which such order applies.
(ii) The Domestic Relations Order specifically indicates that it applies to this Plan.
(iii) The Domestic Relations Order does not require this Plan to
provide any type or form of benefit, or any option, not otherwise provided
under the Plan, and it does not require the Plan to provide increased
benefits (determined on the basis of actuarial equivalence factors in
Section 25).
(iv) The Domestic Relations Order does not require the payment of all or a portion of a Member's Retirement Benefit to an Alternate Payee which is required to be paid to another Alternate Payee under another order previously determined to qualify as a Qualified Domestic Relations Order.
Date will be used for purposes of calculating the Equivalent Actuarial Value of the Retirement Benefit payable to the Alternate Payee.
Within a reasonable period of time after receipt of a copy of the Domestic Relations Order, the Administrative Committee will determine whether the order is a Qualified Domestic Relations Order and notify the Member and each Alternate Payee of its determination. The determination of the status of a Domestic Relations Order as a Qualified Domestic Relations Order will be made in accordance with such uniform and nondiscriminatory rules and procedures as may be adopted by the Administrative Committee from time to time. If monthly benefits are presently being paid with respect to a Member named in a Domestic Relations Order which may qualify as a Qualified Domestic Relations Domestic Relations Order, or if the Member's Retirement Benefit becomes payable after receipt of the order, the Administrative Committee will notify the Trustee to segregate and hold the amounts which would be payable to the Alternate Payee or payees designated in the order if the order is ultimately determined to be a Qualified Domestic Relations Order.
If the Administrative Committee determines that the order is a Qualified Domestic Relations Order within 18 months of receipt of the order, the Administrative Committee will instruct the Trustee to pay the segregated amounts (plus any earnings on such amounts) to the Alternate Payee specified in the Qualified Domestic Relations Order. Conversely, if within the same 18 month period the Administrative Committee determines that the Domestic Relations Order is not a Qualified Domestic Relations Order, or if the status of the order as a Qualified Domestic Relations Order is not resolved, the Administrative Committee will instruct the Trustee to pay the segregated amounts (plus any earnings on such amounts) to the person or persons who would have been entitled to such amounts if the order had not been entered. If the Administrative Committee determines that a Domestic Relations Order is a Qualified Domestic Relations Order after the close of the 18 month period mentioned above, the determination will be applied prospectively only. The determination of the Administrative Committee as to the status of a Domestic Relations Order as a Qualified Domestic Relations Order will be binding and conclusive on all interested parties, present and future, subject to the claims review provisions of Section 18.
Unless otherwise required by the Act, the provisions of this Section 22 will apply only in the case of an Employee who was treated as an active employee of Koracorp Industries, Inc. or any of its subsidiaries on September 10, 1979 (the date such companies were acquired by Diversified Apparel Enterprises, Inc., the predecessor of Battery Street Enterprises, Inc. ) and who became an Employee either by transferring directly to the employ of the Company from Diversified Apparel Enterprises, Inc. or any of its subsidiaries, or by remaining an active employee at least until December 1, 1980, when Diversified Apparel Enterprises, Inc. and certain of its subsidiaries became Participating Companies of the Terminated Plan. Such an Employee will accrue Service under the Plan under paragraphs (a) and (b) below.
(a) In addition to Service as defined in Section 2.58, Service will also include, solely for purposes of determining Years of Service under Section 3, Section 4.1, Section 8, Section 9 and Section 10.2, all years and monthly fractions of such years of continuous employment with Koracorp Industries, Inc. or any of its subsidiaries, which was provided before the acquisition of such companies by Diversified Apparel Enterprises, Inc.
(b) In addition to Benefit Service as defined in Section 2.9, Benefit Service will also include all years and monthly fractions of such years of continuous employment with Diversified Apparel Enterprises, Inc. or any of its subsidiaries after September 10, 1979, and before December 1, 1980.
In addition to Benefit Service and Service as defined in Sections 2.9 and 2.58, respectively, Benefit Service and Service will also include all years and monthly fractions of such years of continuous employment with Oberman Manufacturing Company or Top-Notch Manufacturing Company, Incorporated beginning after June 1, 1966, and ending before the date such entities were acquired by LS&CO. and who became an Employee before November 28, 1977, by virtue of being paid at the equivalent of LS&CO.'s Home Office Salary Grade 12 or above and, thus, transferring to the LS&CO. Home Office Payroll.
In the case of a person who became an Employee as a result of the acquisition of the assets of Asian Pacific Industries, Inc. on December 31, 1986, Service as defined in Section 2.58 will include employment with Asian Pacific Industries, Inc. and its subsidiaries and affiliates before such acquisition to the same extent as if such employment had been with the Company. Employment with Asian Pacific Industries, Inc. and its subsidiaries and affiliates before such acquisition will not, however, be counted for purposes of determining a Member's Benefit Service under Section 2.9.
Unless otherwise specified in the Plan, the following actuarial assumptions will be used for purposes of calculating various forms of benefit under the Plan:
(i) Except as provided in paragraph (ii), the Mortality Table used under the Plan will be the 1983 Group Annuity Mortality Table, assuming a relevant population that consists of 50% males and 50% females.
(ii) For purposes of determining the Actuarial Equivalent of benefits which begin to be paid before a Member's Normal Retirement Date under the Plan, the mortality table used will be the 1951 Group Annuity table on a female basis. The resulting factors will be rounded to the next higher percentage.
(i) For purposes of calculating a single sum payment made after November 1, 1992, under Section 11.3 or Section 11.5, the interest rate used under the Plan will equal the interest rate or rates that would be used by the PBGC for purposes of determining the present value of a lump sum distribution on plan termination, determined as of the first day of the month during which the notice of the optional forms of benefit payable under the Plan and election form described in Section 12.2 is distributed (or would otherwise be distributed to the Member if the single sum Actuarial Equivalent of his or her Retirement Benefit was not less than $3,500) which will not be more than 120 days before the Annuity Starting Date.
(ii) For single sum distributions made during the period beginning November 1, 1991, and ending on November 1, 1992, the interest rate used under the Plan will equal whichever of the rates described in (A) or (B) below which produces the greater single sum benefit:
(A) The interest rate used by the PBGC for purposes of determining the present value of a lump sum on plan termination, determined as of the first date of the month in which the notice of the optional forms of benefit payable under the Plan and election form described in Section 12.2 is distributed to the Member (or would otherwise be distributed to the Member if the lump sum Actuarial Equivalent of his or her Retirement Benefit was not less than $3,500); or
(B) The interest rate used by the PBGC for purposes of determining the present value of a lump sum on plan termination, determined as of the first date of the month in which the distribution occurs.
(iii) For single sum distributions made before November 1, 1991, the interest rate or rates used under the Plan will equal the interest rate or rates used by the
PBGC for purposes of determining the present value of a lump sum on plan termination, determined as of the first day of the month in which the distribution occurs.
(iv) For purposes of calculating all other optional forms of benefit under the Plan, the interest rate used will be 7%.
(v) For purposes of determining the Equivalent Actuarial Value of Retirement Benefit payments beginning before a Member's Normal Retirement Date under the Plan, the interest rate used will be 6%.
If the Plan becomes "Top Heavy," the provisions of this Section 26 will become operative. The Plan will be Top Heavy for a Plan Year if, on the last day of the prior Plan Year (the "Determination Date"), more than 60% of the present value of the "Accrued Benefits" under the Plan are credited to or allocable to "Key Employees." For purposes of determining the present value of a Member's Accrued Benefit, turnover is to be ignored. The Plan will be "Super Top Heavy" if, on the Determination Date, more than 90% of the present value of the Accrued Benefits under the Plan are credited or allocable to Key Employees.
"Accrued Benefit" means the value of the Member's Retirement Benefit as determined under Section 5 of the Plan (and the Member's accrued benefit determined under any other defined benefit plans which are members of a "Required Aggregation Group" of which this Plan is also a member). The Member's Accrued Benefit will be increased by any distributions made to the Member during the 5-year period ending on the Determination Date; except the Accrued Benefit of a Member who has not performed any services for the Company or an Affiliated Company during such 5-year period and the Accrued Benefit of any Member who was formerly a Key Employee will be disregarded. The present value will be determined as of the most recent "Valuation Date" that is within the 12-month period ending on the "Determination Date" and as described in the Regulations under the Code, using an interest rate of 7% per year and the 1983 Group Annuity Mortality Table, assuming a relevant population that consists of 50% males and 50% females. In determining the present value, benefits not related to retirement benefits will be excluded, and subsidized Early retirement benefits and subsidized benefit options will be excluded unless deemed to be nonproportional subsidies as described in the Regulations under the Code. The Valuation Date is the same as the valuation date used for determining minimum funding standards under section 412 of the Code, whether or not a valuation was performed during the year.
A "Key Employee" means a key employee as defined in section 416 of the Code.
If the Administrative Committee determines (in its sole and absolute discretion, but under the provisions of section 416 of the Code) that the Plan is a constituent in an "Aggregation Group" this Plan will be considered Top Heavy or Super Top Heavy only if the Aggregation Group is a "Top Heavy Group" or a "Super Top Heavy Group." An "Aggregation Group" includes:
(a) Each plan intended to qualify under section 401(a) of the Code sponsored by the Company or an Affiliated Company in which 1 or more Key Employees participate;
(b) Each other plan of the Company or an Affiliated Company that is considered in conjunction with such plans in determining whether or not the discrimination and coverage requirements of section 401(a)(4) and section 410 of the Code are satisfied; and
(c) In the discretion of the Administrative Committee, any other such plan of the Company or an Affiliated Company, which, when considered in conjunction with the plans referred to above, satisfies the nondiscrimination and coverage requirements of section 401(a)(4) and section 410 of the Code.
A "Top Heavy Group" is an Aggregation Group in which the sum (determined as of the Determination Date) of the present value of the cumulative Accrued Benefits for Key Employees (as determined by the Administrative Committee) under all "defined benefit plans" (as defined in section 414(j) of the Code) included in such group plus the aggregate of the amounts credited to accounts of Key Employees under all "defined contribution plans" (as defined in section 414(i) of the Code) included in such group, exceed 60% of the total of such amounts for all Employees and Beneficiaries covered by such plans. A "Super Top Heavy Group" is an Aggregation Group for which the sum so determined for Key Employees exceeds 90% of the sum so determined for all Employees and Beneficiaries. Such determination will be made in accordance with section 416 of the Code.
If the Plan becomes Top Heavy, then the Retirement Benefit credited to each Participant other than a Key Employee will not be less than the product of:
(i) 2% multiplied by the Participant's Years of Service (as determined in accordance with this Section 26) or
(ii) 20%; and
(b) The Participant's "Average Yearly Compensation."
A Member's Years of Service will not include Years of Service beginning before January 1, 1984, or Years of Service ending in a Plan Year during which the Plan is not Top Heavy. The "Average Yearly Compensation" of a Member will be the average rate of annual Compensation in effect for a Member during the 5 consecutive calendar years in which the Member's Compensation is the greatest, excluding Plan Years ending before January 1, 1984, and Plan Years beginning after the last Plan Year during which the Plan was Top Heavy. "Compensation" means compensation as defined in section 414(q)(7) of the Code.
If the Plan becomes Top Heavy, the Vested Retirement Benefit of a Member who terminates service with the Company or an Affiliated Company before his or her Normal Retirement Date or death will be equal to the percentage of his or her Accrued Benefit determined under the following schedule:
Years of Service Vested Percentage ---------------- ----------------- Less than 2 0% 2 but less than 3 20% 3 but less than 4 40% 4 but less than 5 60% 5 but less than 6 80% 6 or more 100% |
If the Plan at any time is Top Heavy and later ceases to be Top Heavy, each Member who is credited with less than 2 Years of Service as of the last day of the last Plan Year in which the Plan is Top Heavy will have his or her Vested Retirement Benefit determined under Section 2.70
(unless and until the Plan again becomes Top Heavy). If a Member has at least 3 Years of Service on the last day of the last Plan Year in which the Plan is Top Heavy, for each future Plan Year his or her Vested Retirement Benefit will be calculated in accordance with this Section 26 as though the Plan were Top Heavy. If a Member does not have at least 3 Years of Service on the last day of the last Plan Year in which the Plan is Top Heavy, his or her Vested Retirement Benefit for each future Plan Year will be calculated in accordance with Section 2.70.
information is filed by or with respect to him or her. The Administrative Committee is entitled to rely on personal data given to it by a Member.
(a) In such form as is prescribed from time to time by the Administrative Committee;
(b) Mailed by first-class mail or delivered to such location as will be specified by the Administrative Committee; and
(c) Deemed to have been given and delivered only upon actual receipt by the Administrative Committee at such location.
Administrative Committee will be authorized to withhold taxes from the payment of any benefits under the Plan, in accordance with applicable law.
LEVI STRAUSS ASSOCIATES INC.
By: /s/
---------------------------------------
Donna Goya
Its: Sr. Vice President
----------------------------------
ATTEST:
|
By:______________________
REVISED HOME OFFICE PLAN
OF
LEVI STRAUSS ASSOCIATES INC.
AMENDMENT
WHEREAS, LEVI STRAUSS ASSOCIATES INC. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss Associates Inc. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan to provide an early retirement program;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to any other officer of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on June 1, 1993, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the Plan is amended by the addition of an Addendum, to read as set forth on the attached exhibit.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on November 22, 1994.
/s/
----------------------------------------
Donna J. Goya
Senior Vice President
|
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS ASSOCIATES, INC.
EARLY RETIREMENT
INCENTIVE PROGRAM
a. Such Member is on the Home Office payroll of the Company on or after November 21, 1994;
b. Such Member has at least (i) 15 Years of Service as of June 1, 1995 and is not a Highly Compensated Employee for the Plan Year ending in 1994, or (ii) 20 Years of Service as of November 27, 1994 and is a Highly Compensated Employee for the Plan Year ending in 1994;
c. Such Member is at least age 50 as of (i) June 1, 1995 for a Member who is not a High Compensated Employee for the Plan Year ending in 1994; or (ii) November 27, 1994 for a Member who is a Highly Compensated Employee for the Plan Year ending in 1994; and
d. Such Members was laid off or resigned from employment in the Company's domestic contracting organization, the Richardson Technology Center or the LSNA Information Resources Organization on or after February 1, 1994 and before November 28, 1994, and received severance pay in connection with such layoff or resignation.
5. Other Plan Provisions.
a. A benefit under this Addendum shall be subject to Section 14.
b. Except as set forth in this Addendum, the provisions of the Plan shall apply to a benefit payable under the Program
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS ASSOCIATES INC.
AMENDMENT
The Revised Home Office Pension Plan of Levi Strauss Associates Inc. is hereby amended as set forth below:
1. Effective November 28, 1994, Section 5 is amended by a new Section 5.5. to read as set forth below:
(a) The Member's accrued benefit determined with respect to the benefit formula applicable for the Plan Year beginning as of November 28, 1994, as applied to the Member's total years of Benefit Service taken into account under the Plan for purposes of benefit accruals, or
(b) The sum of:
(i) The Member's accrued benefit as of the last day of the last Plan Year beginning before January 1, 1994, frozen in accordance with section 1.401(a)(4)-13 of the Code, and
(ii) The Member's accrued benefit determined under the benefit formula applicable for the Plan Year beginning as of November 28, 1994, as applied to the Member's Benefit Service for Plan Years beginning after 1993.
2. Effective as of the first day of the Plan Year beginning in 1993,
Section 11 is amended by the addition of a new Section 11.7, to read as set
forth below:
(a) Eligible rollover distribution. Any distribution of all or any portion of the balance to the credit of the distributee, except that it does not include:
(i) Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified period of ten years or more.
(ii) Any distribution to the extent it is required under section 401(a)(9) of the Code.
(iii) The portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to Employer securities).
(b) Eligible retirement plan.
(i) An individual retirement account described in section 408(a) of the Code.
(ii) An individual retirement annuity described in section 408(b) of the Code.
(iii) An annuity plan described in section 403(a) of the Code.
(iv) A qualified trust described in section 401(a) of the Code that accepts the distributee's eligible rollover distribution.
(v) However, in the case of an eligible rollover distribution to a surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.
(c) Distributee. A Member or former Member, his or her surviving spouse, or his or her spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order
(d) Direct rollover. A payment by the Plan to the eligible retirement plan specified by the distributee.
To facilitate installment payments under Section 11.7, the Administrative Committee, in its sole discretion, may segregate all or any part of the Participant's Benefit in a separate account.
Dated: November __, 1995.
/s/
----------------------------------
Donna J. Goya
Senior Vice President
|
REVISED HOME OFFICE PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan to provide an early retirement window;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the Plan is amended as of June 3, 1996 by the addition of an Addendum, to read as set forth on the attached exhibit.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on April ______1997.
/s/
----------------------------------
Donna J. Goya
Senior Vice President
|
JUNE 1996
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
EARLY RETIREMENT WINDOW
a. Such Member is on the Home Office payroll of the Company, is eligible for benefits under a long-term disability program sponsored by the Company, or is Totally and Permanently Disabled;
b. Such Member has at least 14 Years of Service on or before June 2, 1997; and
c. Such Member is at least age 49 on or before June 2, 1997.
i. 70% of the Eligible Member's Retirement Benefit; or
ii. The Benefit based on application of the Percentage Factor provided in Table A of Section 7.1 opposite the Eligible Member's actual age (as of the retirement date approved pursuant to Section 3).
a. A benefit under this Addendum shall be subject to Section 14.
b. Except as set forth in this Addendum, the provisions of the Plan shall apply to a benefit payable under the Window.
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Revised Home Office Pension Plan of Levi Strauss & Co. Retirement Plan (the "HOPP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company established the HOPP for the benefit of its employees and amended and restated the HOPP to comply with the Tax Reform Act of 1986, the Unemployment Compensation Amendments of 1992, and the Revenue Reconciliation Act of 1993;
WHEREAS, the Company requested that the Internal Revenue Service issue a favorable determination letter regarding the tax-qualified status of the HOPP;
WHEREAS, the Internal Revenue Service conditioned its issuance of a favorable determination upon the adoption of certain amendments to the restated HOPP;
WHEREAS, the Company desires to satisfy such conditions and Article 20 of the HOPP provides that the Company may amend the HOPP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the HOPP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the HOPP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the HOPP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of November 27, 1989, the Company amends the HOPP as set forth below:
1. Section 10.2(b) of the HOPP is amended in its entirety to read as follows:
(b) If the Member dies after the earlier of his or her Early Retirement Age or Normal Retirement Age, the Surviving Spouse or Domestic Partner will receive a monthly benefit equal to the monthly benefit the Surviving Spouse or Domestic Partner would have received if the Member had retired on the first day of the month coincident with or next following the later of the date of the Member's death or the date as of which the Surviving Spouse or Domestic Partner elects to receive the monthly benefit (but not later than the Member's Normal Retirement Age) (the "Presumed Retirement Date") with
a 50% Qualified Joint and Survivor Annuity, with his or her Surviving Spouse or Domestic Partner as contingent annuitant. The payments to the Surviving Spouse or Domestic Partner will begin no later than the last day of the month following the Presumed Retirement Date.
2. Section 11.7 of the HOPP is hereby deleted in its entirety.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
May 8, 1997 /s/ ------------------------------ -------------------------------- Date Donna J. Goya |
REVISED HOME OFFICE PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company amended the Plan effective June 3, 1996, to provide an early retirement window as set forth on the Addendum to the Plan;
WHEREAS, the Company desires to amend such early retirement window to provide for participation by certain Members who terminate employment after July 15, 1997 without having elected to participate in the early retirement window as of the date of termination of employment;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the Plan is amended as of July 15, 1997 by the addition of an Addendum, to read as set forth on the attached exhibit.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on July ______1997.
/s/
-----------------------------------
Donna J. Goya
Senior Vice President
|
JULY 1997
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
EARLY RETIREMENT WINDOW
a. Such Member (i) either is on the Home Office payroll of the Company or was on the Home Office payroll of the Company as of July 15, 1997, (ii) is eligible for benefits under a long-term disability program sponsored by the Company or (iii) is Totally and Permanently Disabled;
b. Such Member has at least 14 Years of Service on or before June 2, 1997; and
c. Such Member is at least age 49 on or before June 2, 1997.
i. 70% of the Eligible Member's Retirement Benefit; or
ii. The Benefit based on application of the Percentage Factor provided in Table A of Section 7.1 opposite the Eligible Member's actual age (as of the retirement date approved pursuant to Section 3).
a. A benefit under this Addendum shall be subject to Section 14.
b. Except as set forth in this Addendum, the provisions of the Plan shall apply to a benefit payable under the Window.
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Revised Home Office Pension Plan of Levi Strauss & Co. Retirement Plan (the "HOPP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company desires to amend the HOPP to provide for the maximum involuntary lump sum cash-out permitted by the Uruguay Round of the General Agreement on Tariffs and Trade ("GATT") legislation, and Article 20 of the HOPP provides that the Company may amend the HOPP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the HOPP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the HOPP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the HOPP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of December 1, 1997, the Company amends the HOPP as set forth below:
1. Section 11.5 of the HOPP is amended to replace "$3,500" wherever it appears with "$5,000."
2. Section 25 of the HOPP is amended as follows:
a. Wherever it appears, "$3,500" is replaced with "$5,000."
b. Existing Section 25(b)(i), (ii), (iii), (iv) and (v), and
all cross-references thereto, are redesignated as Section
25(b)(iii), (iv), (v), (vi) and (vii), respectively.
c. Section 25(b) of the HOPP is amended by the addition of the following new paragraphs:
(i) For purposes of calculating a single sum payment made
on or after November 30, 1998, under Section 11.3 or
Section 11.5, the interest rate used under the Plan
will equal the rate of interest on 30-year U.S.
Treasury securities as in effect in the October
preceding the Plan Year in which such distribution is to commence.
(ii) For single-sum distributions made during the period beginning December 1, 1997, and ending November 29, 1998, the interest rate used under the Plan will equal whichever of the rate described in (A) or (B) below which produces the greater single-sum benefit:
(A) The interest rate equal to the rate of interest on 30-year U.S. Treasury securities as in effect in the October preceding the Plan Year in which such distribution is to commence; or
(B) The interest rate equal to the rate of interest on 30-year U.S. Treasury securities as in effect in the second month preceding the effective date for such distribution.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
11/25/97 /s/ ------------------ -------------------------------- Date Donna J. Goya |
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company is closing certain facilities;
WHEREAS, the Company desires to amend the Plan to provide for enhanced early payment factors for certain terminated vested participants whose jobs with the Company are eliminated by reason of such closings and for certain employees terminated in connection with a reduction in force;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the Plan is amended as of December 1, 1997, as follows:
2. A new subsection 8.2(b) is added to read as set forth below:
(i) A Member (A) who has a right to receive his or her Vested Retirement Benefit, (B) who was an "Affected Employee" (as such term is defined in Section 8.2(c)(i) below), (C) whose employment with the Company was terminated by reason of the shut- down of the "Closing Facility" (as such term is defined in Section 8.2(c)(ii) below), and (D) who had attained 25 Years of
Service as of the date the Member's Employment with the Company terminated; or
(ii) A Member (A) who has a right to receive his or her Vested Retirement Benefit, (B) whose employment with the Company was terminated in connection with a layoff as a result of a reduction in force or reorganization implemented by the Company in July through September 1997, inclusive, (C) who had attained 25 Years of Service as of the date the Member's employment with the Company terminated, and (D) was not a Highly Compensated Employee during 1997.
The amount distributable to the Member will equal a percentage of the Member's Vested Retirement Benefit based on the Member's age on the date the Member's benefit payments begin. Such percentage shall be determined pursuant to Table A set forth in Section 7. 1.
Such an election must be received by the Administrative Committee at least 30 days before the date on which benefit payments are to begin. Payment of the Member's Vested Retirement Benefit will begin on the last day of any month before the Member's Normal Retirement Date and on or after his or her 55th birthday.
3. A new subsection 8.2(c) is added to read as set forth below:
(c) For purposes of subsection 8.2(b),
(i) the term "Affected Employee" means an Employee in the U.S. Operations and Sourcing Organization, excluding Employees in the following organizations:
(A) Latin American Customer Fulfillment Region
(B) Asia Customer Fulfillment Region
(C) Logistics, except for "Transportation Employees."
For purposes of this section, the term "Transportation Employees" means Employees in the following job classifications:
(I) Manager Assistant Field Transportation
(II) Source Relation Manager
(III) Supervisor Customer Service
(IV) Supervisor Traffic
(V) Transportation Coordinator
(VI) Trucker
(VII) Administrative Assistant (excluding Customer Service Centers positions)
(VIII) Office Clerical/Office Information Center
(excluding Customer Service Centers positions)
(IX) Exempt Dispatcher
(ii) the term "Closing Facility" shall mean any of the following facilities:
El Paso Airways 520M Knoxville, TN (Sewing) 532M El Paso Eastside 525M Roswell, NM 549M
El Paso Lomaland 522M Albuquerque, NM 501M Fayetteville, Ark. 527M San Angelo, TX 552M Harrison, Ark. 530M Centerville, TN 515M |
Knoxville, TN (Finishing) 611F
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on June 8, 1998.
/s/
---------------------------------
Donna J. Goya
Senior Vice President
|
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan, effective November 30, 1998, to provide an early retirement enhancement to certain employees who are laid off by the Company on or before November 29, 1999;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective November 30, 1998, the Plan is amended by the as follows:
1. Existing Section 8.2 is amended by the addition of a new subsection (d) to read as set forth below:
Such an election must be received by the Administrative Committee at least 30 days before the date on which benefit payments are to begin. Payment of the Member's Vested Retirement Benefit will begin on the last day of any month before the Member's Normal Retirement Date and on or before his or her 55/th/ birthday.
2. The Plan is amended by the addition of a new November 1998 Addendum to read as set forth in the attached exhibit.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on October 5, 1998.
/s/
---------------------------------
Donna J. Goya
Senior Vice President
|
NOVEMBER 1998
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AND THE
LEVI STRAUSS ASSOCIATES INC.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
1998 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is laid off by the Company;
b. Such Member has at least 15 Years of Service at the time of election to retire under the 1998 Enhancement or would have had 15 Years of Service as of November 29, 1999, if not for being laid off by the Company and retirement under the 1998 Enhancement; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999;
d. Such Member's salary grade is not Grade 9 or higher.
this Addendum and such retirement date shall be deemed to be an Early Retirement Date under the Plan.
i. 70% of the Participating Member's Retirement Benefit; or
ii. If applicable to the Participating Member, the Benefit based on application of the Percentage Factor provided in Table A of Section 7.1 opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3).
a. A benefit under this Addendum shall be subject to Section 14.
b. Except as set forth in this Addendum, the provisions of the Plan shall apply to a benefit payable under the 1998 Enhancement.
An Employee is laid off within the meaning of the Plan if he or she is involuntarily separated from employment with the Company at the written direction of the Company due to a lay off.
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan, effective November 30, 1998, to provide an early retirement enhancement and full vesting to certain employees who are Laid Off by the Company on or before November 29, 1999;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW THEREFORE, any Member who is "Laid Off" (as defined in the attached Addendum) by the Company and who terminates employment between November 30, 1998 and November 29, 1999 shall be fully vested in his or her Retirement Benefit effective as of his or her termination of employment; and
FURTHER, effective November 30, 1998, the November 1998 Addendum to the Plan is hereby revised in its entirety as set forth in the attached exhibit.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this 19th day of November, 1998.
LEVI STRAUSS & CO.
By: /s/
---------------------------------
Donna J. Goya
Senior Vice President
|
NOVEMBER 1998
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
4. Benefits.
i. 70% of the Participating Member's Retirement Benefit under the Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1 of the Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above).
REVISED HOME OFFICE PENSION PLAN OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "Plan");
WHEREAS, pursuant to Section 20.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan, effective November 25, 1998, to add an account described under Section 401(h) of the Internal Revenue Code of 1986, as amended, to the Plan to provide medical benefits for retired members of the Plan;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the Plan is amended effective November 25, 1998 by the addition of an Addendum, to read as set forth in the attached exhibit.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this 25th day of November, 1998.
LEVI STRAUSS & CO.
By: /s/ ------------------------------ Donna J. Goya Senior Vice President |
ADDENDUM TO THE
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
Subject to the provisions of this Addendum, an account (hereinafter referred to as the "Health Care Account") shall be established under this Plan for the purpose of funding medical benefits for retired employees, their spouses and dependents in accordance with section 401(h) of the Code. The provisions of this Addendum shall be effective as of _____, 1998.
As used in this Addendum, the phrase "medical benefits" shall mean any medical expense described in Section 213(d)(1) of the Code deductible under section 213 of the code, and properly reimbursable under the terms and conditions of the Comprehensive Welfare Plan for Home Office Payroll Employees and retirees (hereinafter referred to as the "Health Care Plan"), as amended from time to time. The provisions of the Health Care Plan are incorporated herein by this reference.
The individuals eligible for medical benefits under the Health Care Account shall include only those retired Members who are eligible for retiree medical benefits under the Health Care Plan and who are actually covered under the Health Care Plan, and their spouses and dependents if they are actually covered under the Health Care Plan. Notwithstanding the foregoing, no retired Member who is a "key employee" within the meaning of section 401(h)(6) shall be eligible to receive medical benefits under the Health Care Account.
The Health Care Account shall be maintained on the books of the Plan as a
separate account, but shall be maintained only for record-keeping purposes. For
investment purposes, the assets attributable to the Health Care Account may be
commingled with other Plan assets. The separate account shall be credited with
(i) Company contributions specifically designated as contributions to the Health
Care Account, (ii) transfers of excess pension assets, if any, pursuant to
Section 7 of this Addendum, and (iii) gains credited on such contributions and
transferred pension assets. The separate account shall be charged with (A)
losses on Company contributions and transferred pension assets, and (B)
distributions from Health Care Account used to provide medical benefits. Gains
and losses shall be determined under a reasonable accounting system established
by the Committee.
Health Care Account, the Company shall specifically designate the portion of each contribution to the Plan that is allocable to the Health Care Account. No contributions to the Health Care Account shall be accepted from Employees or Members.
Medical benefits under the Health Care Plan may be paid from the Health Care Account, in such amounts and at such times as may be determined by the Administrative Committee, but only to the extent the Health Care Account is sufficiently funded to pay such benefits.
The Health Care Account is expressly authorized to accept a transfer of excess assets, so long as any such transfer is a qualified transfer under the requirements of section 420 of the Code, as in effect at the time of the transfer.
No amounts contributed to the Health Care Account, and no earnings on such contributions, may be used for, or diverted to, any purpose other than providing medical benefits under the Health Care Plan prior to the satisfaction of all Health Care Plan liabilities funded by the Health Care Account. If all such Health Care Plan liabilities have been satisfied, any amounts remaining in the Health Care Account shall be returned to the Company.
Subject to the requirements of Section 8 of this Addendum, the Company expressly reserves the right to amend or terminate the Health Care Account at any time. The Company has also
reserved the right to amend or terminate the Health Care Plan and may do so independently of any decision or action to amend or terminate the Health Care Account. In addition, the Company may spin off all or a portion of the Health Care Account and cause the spun-off portion to be merged into a 401(h) account in another pension plan, merged into a trust described in Section 501(c)(9) of the Code, or merged into a welfare benefit fund described in Section 419 of the Code.
In accordance with the provisions of Treasury Regulation 1.401-14(b)(2), the Health Care Account shall be operated in a manner that does not discriminate in favor of officers, shareholders, supervisory employees or "highly compensated employees" within the meaning of section 414(q) of the Code.
(a) In General. The Health Care Account shall be administered by the
Administrative Committee, who shall have the sole and exclusive authority to
interpret the provisions of this Addendum. The Administrative Committee shall
have the power to adopt any and all administrative procedures necessary to
accomplish the purposes of the Health Care Account, including the power to
establish financial arrangements for the purpose of paying medical benefits in
accordance with the terms of the Health Care Plan. Nothing in this Addendum
shall preclude the Administrative Committee from causing the Health Care Account
to pay medical benefits directly to health care providers or insurance carriers,
or pay such benefits indirectly through financial institutions, a trust
described in Section 501(c)(9) of the Code, or another account described in
Section 401(h) of the Code.
(b) Administrative Expenses. Administrative expenses associated with medical benefits provided under the Health Care Plan which are not paid directly by the Company may be paid from the Health Care Account.
Notwithstanding any other provision of this Plan, no amounts contributed the Health Care Account, and no earnings on such contributions, shall be treated as party of any Member's accrued benefit for purposes of the minimum vesting rules of Section 411(a) of the Code and Section 203 of the Act, the minimum accrual rules of Section 411(b) of the Code and Section 204 of the Act, and the `anti- cutback" rules of Section 411(d)(6) of the Code and Section 204(g) of the Act. Nor shall any such amounts be treated as "benefit liabilities" subject to protection upon termination of the Plan under Title IV of the Act. In addition, the Health Care Account Section 302 of the Act, shall not be subject to the joint and survivor annuity requirements of Sections 401(a)(11) and 417 of the Code and Section 205 of the Act, and shall not be subject to the rules regarding mergers, spin-offs, and asset transfers under Sections 401(a)(12) and 414(1) of the Code and Section 208 of the Act.
the Company to the Health Care Account shall be returned to the Company, and this Addendum shall cease to be effective.
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
LEVI STRAUSS & CO.
EMPLOYEE LONG-TERM INVESTMENT AND
SAVINGS PLAN
REVISED HOME OFFICE PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP"), the Levi Strauss & Co. Long- Term Investment and Savings Plan (the "ELTIS"), and the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP") (collectively, the "Plans");
WHEREAS, the Company desires to amend the Plans to provide that the definitions of compensation used under the Plans are as consistent as reasonably practical and are administratively convenient;
WHEREAS, each Plan provides that the Company may amend the Plan at any time and any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plans and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plans;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plans, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective December 1, 1997:
1. Section 2.14 of the EIP is amended as set forth on Exhibit A-1 hereto;
2. The final paragraph of Section 2.23 of the EIP is amended as set forth on Exhibit A-2 hereto;
3. Section 2.68 of the EIP is amended as set forth on Exhibit A-3 hereto;
4. Section 12.1(b) of the EIP is amended as set forth on Exhibit A-4 hereto;
5. Section 2.12 of the ELTIS is amended as set forth on Exhibit B-1 hereto;
6. The final paragraph of Section 2.20 of the ELTIS is amended as set forth on Exhibit B-2 hereto;
7. Section 2.57 of the ELTIS is amended as set forth on Exhibit B-3 hereto;
8. Section 10. 1 (b) of the ELTIS is amended as set forth on Exhibit B-4;
9. Section 2.17 of the HOPP is amended as set forth on Exhibit C-1 hereto; and
10. Section 2.29 of the HOPP is amended as set forth on Exhibit C-2 hereto.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on the date set forth below.
11/25/98________________ /s/
--------------------------------
Date Donna J. Goya
Senior Vice President
|
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Matching Contributions, Nonelective Contributions or Profit Sharing Contributions to the Plan and/or amounts paid to the Member according to an election under Section 6.2.
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
"Compensation" for purposes of this Section 2.23 means Total Compensation as defined in Section 2.68 of the Plan.
Total compensation in excess of $200,000 or any successor limitation as provided for the Plan Years in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded.
12.1 ...
(b) 25 % of the Member's compensation for such Plan Year. Compensation means Total Compensation for Plan Years beginning after December 31, 1997. For Plan Years beginning prior to January 1, 1998, "Compensation" means Total Compensation without regard to section 125 of the Code or section 402(a)(8) of the Code.
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Matching Contributions or Special Company Contributions to the Plan under Section 5.2;
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
"Compensation" for purposes of this Section 2.20 means Total Compensation as defined in Section 2.57 of the Plan.
Total compensation in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded.
10.1 ...
(b) 25% of the Member's compensation for such Plan Year. Compensation means Total Compensation for Plan Years beginning after December 31, 1997. For Plan Years beginning prior to January 1, 1998, "Compensation" means Total Compensation without regard to section 125 of the Code or section 402(a)(8) of the Code.
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Contributions to another plan maintained by the Company (other than cash or deferred contributions under Section 401(k) of the Code;
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section.401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
For Plan Years beginning prior to January 1, 1998, "Compensation" means compensation which would be shown in Box 1 of Form W-2, plus any amounts which were excluded from Box 1 of Form W-2 pursuant to section 125 of the Code or section 402(a)(8) of the Code. For Plan Years beginning after December 31, 1997, "Compensation" means compensation which would be shown in Box 1 of Form W-2.
Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted under section 401(a)(17) of the Code). (The "401(a)(17) limitation"), will be disregarded. The adjustment to the 401(a)(17) limitation that takes effect on January 1 of each year is effective for the Plan Year beginning ____________.
RESOLUTIONS TO AMEND THE
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
LEVI STRAUSS & CO.
REVISED EMPLOYEE RETIREMENT PLAN
LEVI STRAUSS & CO.
RETIREMENT PLAN FOR
OVER-THE-ROAD TRUCK DRIVERS AND DISPATCHERS
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP"), the Levi Strauss & Co. Revised Employee Retirement Plan (the "ERP"), and the Levi Strauss & Co. Retirement Plan for Over-the-Road Truck Drivers (the "ORTD") (collectively referred to as the "Plans");
WHEREAS, pursuant to Section 20.1 of the HOPP, Section 21.1 of the ERP, and Section 20.1 of the ORTD, the Board of Directors of the Company is authorized to amend the Plans at any time and for any reason;
WHEREAS, the Company desires to amend the Plans, effective February 22, 1999, to provide special benefits to certain employees who are laid off by the Company as a result of LS&CO.'s shift from manufacturing operations (as determined by the appropriate Plan Administrator);
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plans and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plans;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plans, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments attached herein are within such limits to the delegated authority of Donna J. Goya;
NOW THEREFORE, BE IT RESOLVED, the HOPP is amended as of February 22, 1999 by the addition of a February 1999 Addendum, to read as set forth on the attached exhibit;
FURTHER RESOLVED, the ERP is amended as of February 22, 1999 by the addition of an Appendix H, to read as set forth on the attached exhibit; and
FURTHER RESOLVED, the ORTD is amended as of February 22, 1999 by the addition of an Appendix D to read as set forth on the attached exhibit.
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on this 3rd day of May, 1999.
LEVI STRAUSS & CO.
By: /s/ ------------------------------ Donna J. Goya Senior Vice President |
FEBRUARY 1999
ADDENDUM
TO THE
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
ENHANCED EARLY RETIREMENT PROGRAM
FOR EMPLOYEES LAID OFF
AS A RESULT OF
LS&CO.'S SHIFT FROM MANUFACTURING
shall be entitled to the greater of the following benefits if he/she would attain at least age 50 as of the Determination Date:
i. 70% of the Member's Retirement Benefit under the Plan, if the Member would be at least age 50 as of the Determination Date, but is not yet age 56 as of his/her Retirement Date; or
ii. the Retirement Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1 of the Plan opposite the Member's actual age (as of the Retirement Date), if the Member is 56 or older as of his/her Retirement Date.
Payment of such benefit will be effective with respect to the last day of the month in which the Member's Retirement Date occurs.
Harlingen Morrilton Murphy Mountain City Valdosta Wichita Falls Warsaw Johnson City El Paso-Cypress McAllen |
The term Closing Facility shall not include the decommissioning of a plant or facility where the intent is to transfer some of the jobs from a closing plant or facility to a geographically proximate worksite and where some employees from the closing plant or facility are laid off and others are offered jobs at the new plant or facility.
. The Determination Date for any Member whose Notice Date is February 22, 1999 and whose job is physically located within one of the Closing Facilities identified above shall be February 21, 2000.
. The Determination Date for any Member whose Notice Date is after February 22, 1999 and whose job is not physically located at one of the Closing Facilities but who is Laid Off in connection with LS&CO.'s shift from manufacturing shall be February 21, 2000.
. The Determination Date for any Member whose Notice Date is after February 22, 1999 and whose job is physically located at one of the Closing Facilities shall be the date which is 12 consecutive calendar months after the Notice Date for such Member.
The Plan Administrator may delegate to other persons or entities responsibilities for performing certain of the duties of the Plan Administrator under the terms of the Program and may seek such expert advice as the Plan Administrator deems reasonably necessary with respect to the Program. The Plan Administrator shall be entitled to rely upon the information and advice furnished by such delegates and experts, unless actually knowing such information and advice to be inaccurate or unlawful.
REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP");
WHEREAS, pursuant to Section 20.1 of the HOPP, the Board of Directors of the Company is authorized to amend those Plans at any time and for any reason;
WHEREAS, the Company desires to revise the eligibility provisions of the Fiscal 1999 Enhanced Early Retirement Program for Laid Off Employees;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board, to adopt certain amendments to the Plans and such authorization has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within the delegated authority of Robert D. Haas;
NOW, THEREFORE, paragraph 2 of the November 1998 Addendum to the HOPP is hereby amended, effective as of the adoption of this Amendment, to read as follows:
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999 or such later date as described below;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
The Company, in its sole and exclusive discretion, may elect to extend the employment of a Member (who otherwise would have terminated employment prior to November 29, 1999) for a reasonable period after November 29, 1999. A Member will not fail to be eligible for the 1999 Enhancement by virtue of such continued employment, provided that the continued employment is for bona fide business reasons.
If a Member is eligible for the Enhanced Early Retirement Program for Employees Laid off as a Result of LS&CO.'s Shift from Manufacturing, he/she shall not be eligible for benefits under this 1999 Enhancement."
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this 22nd day of November, 1999.
LEVI STRAUSS & CO.
By: /s/ ------------------------------- Robert D. Haas Chairman of the Board of Directors |
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP"); and
WHEREAS, Section 20.1 of the HOPP provides that the Board of Directors of LS&CO. is authorized to amend the HOPP at any time and for any reason; and
WHEREAS, the HOPP has consistently provided, and been interpreted to provide, benefits exclusively for persons considered by LS&CO. to be employees of the "Company" (as defined under Section 2.16 of the HOPP) and to exclude from coverage individuals who perform services for the Company and who are categorized as independent contractors or leased employees, or in any other non-employee category, regardless of whether such persons are determined to be common law or statutory employees of the Company, and LS&CO. desires to reaffirm the practice of covering only those individuals whom LS&CO. designates as employees of the Company; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the HOPP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the HOPP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the HOPP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, Section 2.26 of the HOPP is hereby amended in its entirety, effective as of November 30, 1998, to read as follows:
"2.26 "Employee" means any person who is employed by the Company
--------
excluding:
---------
(a) Any employee of the Company who is not paid from the
|
home office payroll of LS&CO.;
(b) Any employee of a Participating Company other than LS&CO. who is not paid on a salary or commission basis;
(c) Any stocktaker, service representative, Retiree Coordinator or "Temporary Employee;"
(d) Any employee who is not employed in a state or territory of the United States or who receives no remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code);
(e) Any alien who:
(i) Receives remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code); and
(ii) Has been transferred by the Company from a job outside the United States to a job within the United States, during any period with respect to which the alien is benefiting (by reason of accruing a benefit or making or having contributions made on the alien's behalf) under:
(A) A retirement plan established or maintained outside the United States by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of the Company; or
(B) The Levi Strauss International Retirement Plan for Third Country National Employees or any successor or similar plan maintained by the Company or an Affiliated Company;
(f) A United States citizen locally hired by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of a Participating Company;
(g) Any employee who is included in a unit of employees covered by a negotiated collective bargaining agreement which does not provide for his or her membership in the Plan;
(h) Any individual who must be treated as an employee of the Company for limited purposes under the leased employee provisions of Code Section 414(n);
(i) Any individual providing services to the Company pursuant to a contract designating him/her as an independent contractor or consultant;
(j) Any individual providing services to the Company pursuant to an agreement between the Company and a third party; or
(k) Any employee who is included in a group or classification of employees on a payroll of a company designated by the Board of Directors as not being eligible to participate in the Plan.
A member of the Board of Directors of the Company is not eligible for membership in the Plan unless he or she is also an Employee of the Company.
Any "Temporary Employee" and any stocktaker employed by the Company will not be treated as an Employee, except for the purposes of and in accordance with receiving benefits computed under the Terminated Plan. For purposes of this Section 2.26, a "Temporary Employee" means a person who:
(i) Is hired to fill a position which arises from either an emergency situation or the temporary absence of an Employee;
(ii) Is subject, as a condition of such employment, to termination without prior notice at any time; and
(iii) Is designated by LS&CO. as a "Temporary Employee."
A person's status as an Employee will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons notwithstanding any contrary determination of Employee status by any court or governmental agency including, but not limited to, the Internal Revenue Service."
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on November 22, 1999.
LEVI STRAUSS & CO.
/s/
--------------------------------
Donna J. Goya
Senior Vice President
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REVISED HOME OFFICE PENSION PLAN
OF
LEVI STRAUSS & CO.
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP");
WHEREAS, pursuant to Section 20.1 of the HOPP, the Board of Directors of the Company is authorized to amend the HOPP at any time and for any reason;
WHEREAS, the Company desires to amend the HOPP, effective November 29, 1999, to adjust the calculation of single sum payments under the HOPP made pursuant to the Company's Enhanced Early Retirement Program For Employees Laid Off as a Result of LS&CO.'s Shift from Manufacturing;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the HOPP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the HOPP;
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the HOPP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein is within such limits to the delegated authority of Donna J. Goya;
NOW THEREFORE, effective as of November 29, 1999, paragraph (i) of
Section 25(b) of the HOPP is hereby amended in its entirety to read as follows:
"(i) For purposes of calculating a single sum payment made on or after November 30, 1998, under Section 11.3 or Section 11.5, the interest rate used under the Plan will equal the rate of interest on 30-year U.S. Treasury securities as in effect in the October preceding the Plan Year in which such distribution is to commence; except that, for purposes of calculating a single sum payment made on or after November 29, 1999, under the February 1999 Addendum hereto (i.e., the "Enhanced Early Retirement Program For Employees Laid Off as a Result of LS&CO.'s Shift From Manufacturing"), the interest rate used under the Plan will equal whichever of the rate described in (A) or (B) below which produces the greater single-sum benefit:
(A) The interest rate equal to the rate of interest on 30- year U.S. Treasury securities as in effect in the October preceding the Plan Year in which such distribution is to commence; or
(B) The interest rate equal to the rate of interest on 30- year U.S. Treasury securities as in effect in October, 1998."
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this 22nd day of November, 1999.
LEVI STRAUSS & CO.
By: /s/ -------------------------------- Donna J. Goya Senior Vice President |
REVISED HOME OFFICE PENSION PLAN
OF LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP"); and
WHEREAS, Section 20.1 of the HOPP provides that the Board of Directors of LS&CO. is authorized to amend the HOPP at any time and for any reason; and
WHEREAS, LS&CO. desires to amend the HOPP to impose a time limit in which a Member must submit proof of continuing disability status in order to continue accruing additional benefit service and years of service under the HOPP; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the HOPP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the HOPP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the HOPP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the HOPP is hereby amended as follows, effective as of the dates set forth below:
1. Section 2.65 of the HOPP is hereby amended, effective as of the date this amendment is adopted, by adding the following sentence to the end thereof to read as follows:
"The Administrative Committee may require a Member who is receiving disability benefits under the Federal Social Security Act to provide proof of continuing disability status from the Social Security Administration. In instances where the Administrative Committee determined that the Member is Totally and Permanently Disabled based on competent medical evidence, the Administrative Committee may require such Member to provide additional competent medical evidence as proof of continuing disability status."
2. Paragraph (a) of Section 9.1 of the HOPP is hereby amended, effective
as of the date this amendment is adopted, by adding a new subparagraph
(v) to the end thereof to read as follows:
(v) The Member fails to provide proof of his/her continuing disability status under Section 2.65 within ninety (90) days of the Administrative Committee's request."
3. Section 9.2 of the HOPP is hereby amended, effective as of the date this amendment is adopted, by adding the following paragraph to the end thereof to read as follows:
"In the case of a former Member who fails to timely submit proof of continuing disability to the Administrative Committee upon request in accordance with Section 9.1(a)(v), such former Member shall forfeit the right to receive any Disability Service under Section 9.1 with respect to that time period beginning as of the ninety-first (91st) day after the Administrative Committee requests such proof and ending on the date such Member furnishes proof satisfactory to the Administrative Committee."
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on November 22, 1999.
LEVI STRAUSS & CO.
/s/
-------------------------------
Donna J. Goya
Senior Vice President
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EXHIBIT 10.20
EMPLOYEE INVESTMENT PLAN OF
(As Amended and Restated Effective November 27, 1989, with main text reflecting certain changes as of September 1, 1994)
(As Amended and Restated Effective November 27, 1989, with main text reflecting certain changes as of September 1, 1994)
PAGE
----
SECTION 1 INTRODUCTION AND PERSONS TO WHOM PLAN APPLIES................................................. 1
1.1 Introduction.................................................................................. 1
1.2 Persons to Whom Plan Applies.................................................................. 1
SECTION 2 DEFINITIONS................................................................................... 3
2.1 "Accounts".................................................................................... 3
2.2 "Act"......................................................................................... 3
2.3 "Administrative Committee".................................................................... 3
2.4 "Affiliated Company".......................................................................... 3
2.5 "Alternate Payee"............................................................................. 4
2.6 "Annual Additions"............................................................................ 4
2.7 "Annuity Starting Date"....................................................................... 4
2.8 "Beneficiary"................................................................................. 4
2.9 "Board of Directors".......................................................................... 4
2.10 "Break in Service"............................................................................ 5
2.11 "Code"........................................................................................ 5
2.12 "Committee"................................................................................... 5
2.13 "Company"..................................................................................... 5
2.14 "Compensation"................................................................................ 5
2.15 "Domestic Relations Order".................................................................... 7
2.16 "Effective Date".............................................................................. 7
2.17 "Employee".................................................................................... 7
2.18 "ESP"......................................................................................... 9
2.19 "Fair Market Value"........................................................................... 9
2.20 "Forfeiture".................................................................................. 9
2.21 "FPSP"........................................................................................ 9
2.22 "Fund"........................................................................................ 9
2.23 "Highly Compensated Employee"................................................................. 9
2.24 "Highly Compensated Former Employee".......................................................... 11
2.25 "Home Office Salary Grade".................................................................... 11
2.26 "Hour of Service"............................................................................. 11
2.27 "Inactive Member"............................................................................. 11
2.28 "Insider"..................................................................................... 11
2.29 "Investment Committee"........................................................................ 11
2.30 "Investment Manager".......................................................................... 11
2.31 "IRS"......................................................................................... 11
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2.32 "Labor Department"............................................................................ 11
2.33 "LSAI Stock".................................................................................. 11
2.34 "LS&CO."...................................................................................... 12
2.35 "Matching Account"............................................................................ 12
2.36 "Matching Contribution"....................................................................... 12
2.37 "Member"...................................................................................... 12
2.38 "Member Contributions"........................................................................ 12
2.39 "Membership Date"............................................................................. 12
2.40 "Misconduct".................................................................................. 12
2.41 "Mutual Fund"................................................................................. 12
2.42 "Nonelective Account"......................................................................... 12
2.43 "Nonelective Contribution".................................................................... 13
2.44 "Normal Retirement Age"....................................................................... 13
2.45 "Participating Company"....................................................................... 13
2.46 "Plan"........................................................................................ 13
2.47 "Plan Benefit"................................................................................ 13
2.48 "Plan Year"................................................................................... 13
2.49 "Post-Tax Account"............................................................................ 13
2.50 "Post-Tax Contributions"...................................................................... 13
2.51 "Pre-Tax Account"............................................................................. 13
2.52 "Pre-Tax Contributions"....................................................................... 13
2.53 "Profit Sharing 401(k) Account"............................................................... 13
2.54 "Profit Sharing Regular Account".............................................................. 13
2.55 "Profit Sharing Contribution"................................................................. 14
2.56 "PSP"......................................................................................... 14
2.57 "Qualified Domestic Relations Order".......................................................... 14
2.58 "Qualified Member"............................................................................ 14
2.59 "Quarter"..................................................................................... 14
2.60 "Registration Rights Agreement"............................................................... 14
2.61 "Regulations"................................................................................. 14
2.62 "Required Beginning Date"..................................................................... 14
2.63 "Retiree Coordinator"......................................................................... 14
2.64 "Rollover Account"............................................................................ 14
2.65 "Rollover Contributions"...................................................................... 15
2.66 "Service"..................................................................................... 15
2.67 "Surviving Spouse"............................................................................ 16
2.68 "Total Compensation........................................................................... 16
2.69 "Totally and Permanently Disabled"............................................................ 17
2.70 "Trust Agreement"............................................................................. 17
2.71 "Trust Fund".................................................................................. 18
2.72 "Trustee"..................................................................................... 18
2.73 "Valuation Date".............................................................................. 18
2.74 "Vested Interest"............................................................................. 18
2.75 "Year of Service"............................................................................. 18
SECTION 3 MEMBERSHIP AND TRANSFER....................................................................... 19
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3.1 Commencement of Membership.................................................................... 19
3.2 Rehired and Transferred Employees............................................................. 19
3.3 Suspension of Membership...................................................................... 19
3.4 Termination of Membership..................................................................... 19
3.5 Highly Compensated Employees.................................................................. 19
SECTION 4 MEMBER CONTRIBUTIONS.......................................................................... 21
4.1 Election to Make Contributions................................................................ 21
4.2 Maximum Pre-Tax Contributions................................................................. 21
4.3 Change or Suspension of Contributions......................................................... 21
4.4 Resumption of Contributions................................................................... 21
4.5 Withholding and Deposit With Trustee; Crediting Accounts...................................... 21
4.6 Distribution of Excess Contributions and Deferrals............................................ 22
4.7 Rollover Contributions........................................................................ 22
SECTION 5 MATCHING AND NONELECTIVE CONTRIBUTIONS........................................................ 24
5.1 Matching Contribution......................................................................... 24
5.2 Nonelective Contribution...................................................................... 24
5.3 Deposit with Trustee; Crediting Accounts...................................................... 25
5.4 Curtailment or Distribution from Plan of Excess Aggregate Contributions....................... 26
SECTION 6 PROFIT SHARING CONTRIBUTION................................................................... 27
6.1 Amount and Form............................................................................... 27
6.2 Cash Election by Members...................................................................... 27
6.3 Deposit With Trustee; Crediting Accounts...................................................... 27
6.4 Distribution of Excess Contributions and Deferrals............................................ 28
SECTION 7 TRUST FUND, INVESTMENTS AND INVESTMENT DIRECTIONS............................................. 29
7.1 Trust Fund.................................................................................... 29
7.2 Investment of Contributions................................................................... 29
7.3 Reinvestment of Accounts...................................................................... 30
7.4 Investment by Alternate Payees................................................................ 31
7.5 Allocation of Voting Rights................................................................... 31
7.6 Exercise of Voting Rights..................................................................... 32
7.7 Other Instructions by Members................................................................. 33
7.8 Participant Directed Accounts................................................................. 34
SECTION 8 VALUATIONS AND STATEMENTS..................................................................... 35
8.1 Valuation of Accounts......................................................................... 35
8.2 Statements.................................................................................... 35
SECTION 9 WITHDRAWALS................................................................................... 36
9.1 Withdrawals from Post-Tax Accounts............................................................ 36
9.2 Withdrawals from Rollover Accounts............................................................ 36
9.3 Hardship Withdrawals.......................................................................... 36
9.4 Withdrawals From Stock Fund................................................................... 38
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9.5 Payment of Withdrawals........................................................................ 39
9.6 Valuation Date................................................................................ 39
9.7 Source of Withdrawals......................................................................... 39
9.8 Limitation on Withdrawals by Insiders......................................................... 39
9.9 Additional Limitations on Withdrawals......................................................... 40
9.10 Withdrawals by Alternate Payees............................................................... 40
SECTION 10 LOANS......................................................................................... 41
10.1 Amount of Loans............................................................................... 41
10.2 Terms of Loans................................................................................ 42
10.3 Source of Loans; Application of Loan Payments................................................. 43
10.4 Default....................................................................................... 44
SECTION 11 PLAN BENEFITS................................................................................. 45
11.1 Vesting in Accounts........................................................................... 45
11.2 Amount of Plan Benefit........................................................................ 45
11.3 Valuation of Plan Benefit..................................................................... 45
11.4 Rehire Before Five One-Year Breaks in Service................................................. 45
11.5 Form of Payment............................................................................... 45
11.6 Time of Payment............................................................................... 48
11.7 Death Benefit................................................................................. 49
11.8 Limitation on Time of Payment................................................................. 49
11.9 Undeliverable Checks.......................................................................... 49
SECTION 12 ALLOCATION LIMITATIONS........................................................................ 50
12.1 Limitation on Annual Additions................................................................ 50
12.2 Combined Limitation on Benefits and Contributions............................................. 50
12.3 Disposition of Excess Annual Additions........................................................ 50
SECTION 13 FUNDING POLICY AND METHOD..................................................................... 52
13.1 Contributions................................................................................. 52
13.2 Trust Fund.................................................................................... 52
13.3 Expenses of the Plan.......................................................................... 52
13.4 Cash Requirements............................................................................. 52
13.5 Independent Accountant........................................................................ 52
13.6 Loans from Parties-In-Interest................................................................ 53
SECTION 14 BENEFICIARIES................................................................................. 54
SECTION 15 ADMINISTRATION AND OPERATION OF THE PLAN...................................................... 55
15.1 Plan Administrator............................................................................ 55
15.2 Control and Management of Plan Assets......................................................... 55
15.3 Trustees and Investment Managers.............................................................. 55
15.4 Committee Membership.......................................................................... 56
15.5 Reports to Board of Directors................................................................. 56
15.6 Employment of Advisers........................................................................ 56
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15.7 Limitations on Committee Actions.............................................................. 56
15.8 Committee Meetings............................................................................ 57
SECTION 16 CLAIMS AND REVIEW PROCEDURES.................................................................. 53
16.1 Applications for Benefits..................................................................... 58
16.2 Denial of Applications........................................................................ 58
16.3 Requests for Review........................................................................... 58
16.4 Decisions on Review........................................................................... 59
16.5 Exhaustion of Administrative Remedies......................................................... 59
SECTION 17 TERMINATION OF EMPLOYER PARTICIPATION......................................................... 53
17.1 Termination by Participating Company.......................................................... 60
17.2 Effect of Termination......................................................................... 60
17.3 IRS Termination Procedure..................................................................... 60
17.4 Termination of the Plan....................................................................... 60
SECTION 18 AMENDMENT, MERGER OR TERMINATION OF THE PLAN AND TRUST........................................ 61
18.1 Right to Amend................................................................................ 61
18.2 Plan Merger or Consolidation.................................................................. 61
18.3 Termination of the Plan....................................................................... 61
18.4 Partial Termination of the Plan............................................................... 61
18.5 Manner of Distribution........................................................................ 61
18.6 Restrictions on Liquidation of Trust Upon Termination......................................... 62
SECTION 19 INALIENABILITY OF BENEFITS.................................................................... 63
19.1 No Assignment Permitted....................................................................... 63
19.2 Return of Contributions....................................................................... 63
19.3 Qualified Domestic Relations Orders........................................................... 64
SECTION 20 TOP-HEAVY PROVISIONS.......................................................................... 66
20.1 Determination of Top-Heavy Status............................................................. 66
20.2 Minimum Allocations........................................................................... 66
20.3 Minimum Vesting............................................................................... 67
20.4 Effect of Change in Top-Heavy Status on Vesting............................................... 67
20.5 Impact on Maximum Benefits.................................................................... 67
SECTION 21 GENERAL LIMITATIONS AND PROVISIONS............................................................ 53
21.1 No Employment Rights.......................................................................... 68
21.2 Payments from the Trust Fund.................................................................. 68
21.3 Payments to Minors or Incompetents............................................................ 68
21.4 Lost Members or Other Persons................................................................. 68
21.5 Personal Data to the Administrative Committee................................................. 68
21.6 Insurance Contracts........................................................................... 69
21.7 Notice to the Administrative Committee........................................................ 69
21.8 Notices to Members and Beneficiaries.......................................................... 69
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21.9 Word Usage.................................................................................... 69
21.10 Headings...................................................................................... 69
21.11 Governing Law................................................................................. 69
21.12 Heirs and Successors.......................................................................... 69
21.13 Withholding................................................................................... 69
APPENDIX A PRIOR PLAN PROVISIONS................................................................A-1
APPENDIX B BLACKOUT PROVISIONS..................................................................B-1
APPENDIX C FUNDS................................................................................C-1
APPENDIX D ADDITIONAL ELIGIBLE WITHDRAWALS AND LOANS............................................D-1
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(As Amended and Restated Effective November 27, 1989, with main text reflecting certain changes as of September 1, 1994)
Effective October 1, 1988, the PSP and the FPSP were merged into the ESP. Effective August 1, 1989, the ESP was amended, restated and renamed the Employee Investment Plan of Levi Strauss Associates Inc. (the "EIP"). The EIP was amended from time to time after August 1, 1989, to comply with certain provisions of relevant law or implement other changes desired by Levi Strauss Associates Inc.
By this amendment and restatement (the "Plan"), Levi Strauss Associates Inc. intends to amend the EIP (1) to comply with the Tax Reform Act of 1986 and other applicable legislation and (2) effective September 1, 1994, to effect certain plan design changes, including changes relating to a change in recordkeeper. Levi Strauss Associates Inc. intends that the Plan continue to qualify as a profit sharing plan under section 401(a) and related sections of the Code and as a cash or deferred arrangement under section 401(k) of the Code and that the trust established under the Plan continue to qualify as a tax-exempt trust under section 501(a) of the Code.
This amended and restated Plan is generally effective on November 27 1989. Certain provisions of the Plan which were in effect on or after November 27, 1989, but which were amended before September 1, 1994 are included in Appendix A.
provided under this Plan, or unless the Member again becomes an Employee on or after the Effective Date. This amended and restated Plan will not reduce any Member's Plan Benefit under the Plan, as determined on the date immediately preceding the Effective Date, and this Plan will be construed accordingly.
When used in this Plan document the following terms will have the following meanings:
(a) Matching Account;
(b) Nonelective Account;
(c) Post-Tax Account;
(d) Pre-Tax Account;
(e) Profit Sharing 401(k) Account;
(f) Profit Sharing Regular Account; and
(g) Rollover Account.
(a) A corporation that is a member of a controlled group of corporations (as defined in section 414(b) of the Code) which includes Levi Strauss Associates Inc.;
(b) Any trade or business (whether or not incorporated) that is in common control (as defined in section 414(c) of the Code) with Levi Strauss Associates Inc.;
(c) An organization (whether or not incorporated) that is a member of an affiliated service group (as defined in section 414(m) of the Code) which includes Levi Strauss Associates Inc.;
(d) Any other entity required to be aggregated with Levi Strauss Associates Inc. under section 414(o) of the Code; or
(e) Any other entity designated as an Affiliated Company by the Board of Directors.
(a) The amount of employer contributions and forfeitures allocated to the Member under any qualified defined contribution plan maintained by the Company and any Affiliated Company, including Profit Sharing Contributions, Matching Contributions, Nonelective Contributions and Forfeitures under this Plan;
(b) The aggregate employee contributions which the Member contributes to all qualified retirement plans maintained by the Company and all Affiliated Companies, including Post-Tax Contributions to this Plan;
(c) The amount of contributions made on behalf of the Member to any qualified defined contribution plan maintained by the Company and all Affiliated Companies under an election by the Member under a qualified cash or deferred arrangement, including Pre-Tax Contributions to this Plan; and
(d) Contributions allocated to any individual medical benefit account (within the meanings of sections 415(l) and 419A(d)(2) of the Code) that is established for the Member.
Employee contributions will be determined without regard to any rollover contributions (as defined in sections 402(a)(5), 403(a)(4), 403(b)(8) and 403(d)(3) of the Code) and without regard to any employee contributions to a simplified employee pension plan which are excludable from income under section 408(k)(6) of the Code. In addition, the 25% of compensation limitation described in section 415(c)(1)(B) of the Code will not apply to any contribution for medical benefits (within the meaning of section 419A(f)(2) of the Code) after the Member's separation from Service which is treated as an Annual Addition.
any agent, its authority to perform any act under the Plan, including without limitation those matters involving the exercise of discretion. Any such delegation of discretion will be subject to revocation at any time at the discretion of the Board of Directors. Any reference to the Board of Directors in connection with such delegated authority will be deemed a reference to the delegate or delegates.
If a Member is a territory manager, an account manager or an account executive, or any of the 3, for the entire Plan Year (or portion of the Plan Year during which he or she is a Member), his or her Compensation for purposes of determining the Member's share of any allocation of Matching Contributions, Profit Sharing Contributions and Forfeitures will not exceed the following limits, as determined by the Administration Committee:
(a) The Compensation of a territory manager at the time as of which the allocation is made will not exceed the maximum for the Home Office Salary Grade 5 salary range in effect at the end of such Plan Year;
(b) The Compensation of an account manager at the time as of which the allocation is made will not exceed the maximum for the Home Office Salary Grade 6 salary range in effect at the end of such Plan Year; and
(c) The Compensation of an account executive at the time as of which the allocation is made will not exceed the maximum for the Home Office Salary Grade 7 salary range in effect at the end of such Plan Year.
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Matching Contributions, Nonelective Contributions or Profit Sharing Contributions to the Plan under Sections 0 and 0 or amounts paid to the Member according to an election under Section 0;
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan;
(g) Severance payments;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section
401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
(a) Relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of a Member; and
(b) Is entered or made under the domestic relations or community property laws of any state.
(a) Any employee of LS&CO, who is not paid from the home office of Levi Strauss Associates Inc.
(b) Any employee of a Participating Company other than LS&CO. who is not paid on a salary or commission basis; or
(c) Any stocktaker, service representative, Retiree Coordinator or "Temporary Employee;"
(d) Any employee who is not employed in a state or territory of the United States or who receives no remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code);
(e) Any alien who:
(i) Receives remuneration from the Company which constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the Code); and
(ii) Has been transferred by the Company from a job outside the United States to a job within the United States, during any period with respect to which the alien is
benefiting (by reason of accruing a benefit or making or having contributions made on the alien's behalf) under:
(A) A retirement plan established or maintained outside of the United States by a foreign subsidiary (including a domestic subsidiary operating abroad) or foreign division of the Company; or
(B) The Levi Strauss International Retirement Plan for Third Country National Employees or any successor or similar plan maintained by the Company or any Affiliated Company;
(f) A United States citizen locally hired by a foreign subsidiary (including a domestic subsidiary operating abroad) or foreign division of the Company;
(g) Any employee who is included in a unit of employees covered by a negotiated collective-bargaining agreement which does not provide for his or her membership in the Plan;
(h) A "leased employee" (as defined in section 414(n) or section 414(o) of the Code) who is providing services to the Company or an Affiliated Company;
(i) Any employee who is covered by an individual employment contract that expressly provides he or she will not be eligible for membership in the Plan;
(j) An employee who is included in a group or classification of employees on the payroll of a company designated by the Board of Directors as not being eligible to participate in the Plan; or
(k) A Highly Compensated Employee, with respect to the eligibility to make Member Contributions or receive an allocation of Matching Contributions, Nonelective Contributions, Profit Sharing Contributions and Forfeitures only.
A member of the board of directors of the Company is not eligible for membership in the Plan unless he or she is also an Employee of the Company. The Board of Directors may on a nondiscriminatory basis, designate as an Employee a person described in (c), (d), (f) or (j) above. Such designation must be made in writing after receiving the advice of counsel.
A "Temporary Employee" means a person who:
(i) Is hired to fill, for a period not to exceed 6 calendar months, a position which arises from either an emergency situation or the temporary absence of an Employee; or
(ii) Is subject, as a condition of such employment, to termination without prior notice at any time.
A person's status as an Employee will be determined by the Administrative Committee, and such determination will be conclusive and binding on all persons.
(a) During the preceding Plan Year:
(i) Was at any time a 5% owner of the Company or an Affiliated Company (as defined in section 416(i)(1) of the Code);
(ii) Received "compensation" from the Company or an Affiliated Company in excess of $75,000 (as adjusted under Regulations or rulings issued by the IRS);
(iii) Received "compensation" from the Company or an Affiliated Company in excess of $50,000 (as adjusted under Regulations or rulings issued by the IRS) and was in the top 20% of employees of the Company and all Affiliated Companies when ranked on the basis of "compensation" paid during such Plan Year (referred to as the "Top Paid Group" under IRS Regulations); or
(iv) Was at any time an officer of the Company or an Affiliated Company and received "compensation" greater than 50% of the amount in effect under section 415(b)(1)(A) of the Code; or
(b) During the Plan Year:
(i) Was at any time a 5% owner of the Company or an Affiliated Company (as defined in section 416(i)(1) of the Code); or
(ii) Satisfies the requirements of paragraphs (ii), (iii), or
(iv) of Section 0(a) and is a member of the group consisting of the 100
employees of the Company and all Affiliated Companies paid the greatest
"compensation" during the Plan Year.
For purposes of determining the number of employees in the Top Paid Group for a Plan Year, the following employees, as described in section 414(q)(8) and section 414(q)(11) of the Code, will be excluded:
(i) Those who have not completed 6 months of service;
(ii) Those who normally work less than 17-1/2 hours per week;
(iii) Those who normally work less than 6 months during any year;
(iv) Those who have not attained age 21;
(v) Those subject to a collective bargaining agreement; and
(vi) Nonresident aliens who receive no earned income from sources within the United States.
The Administrative Committee will determine whether an employee is an officer based on the responsibilities of the employee with the Company or an Affiliated Company. Of those employees determined to be officers, no more than 50 employees (or, if less, the greater of 3 employees or 10% of the employees, excluding all employees described in section 414(q)(8) and section 414(q)(11) of the Code) will be treated as officers. Further, if no officer receives the level of "compensation" described in Section 0(a)(iv), the highest paid officer of the Company and all Affiliated Companies will be treated as a Highly Compensated Employee described in Section 0(a)(iv).
For purposes of determining whether an employee is a Highly Compensated Employee only, any person who is a member of the family of a 5% owner or of a Highly Compensated Employee in the group consisting of the 10 Highly Compensated Employees paid the greatest "compensation" during the Plan Year:
(i) Will not be considered a separate employee; and
(ii) Any "compensation" paid to the person and any Company or Employee contributions made on behalf of the person will be treated as if it were paid to or on behalf of the 5% owner or Highly Compensated Employee.
For purposes of the immediately preceding sentence, the term "family" means, with respect to any employee, the employee's spouse and lineal ascendants or descendants and the spouses of such lineal ascendants or descendants.
"Compensation" for purposes of this Section 0 means Total Compensation as defined in Section 0 of the Plan, determined without regard to section 125 of the Code (regarding contributions to a cafeteria plan); section 402(a)(8) of the Code (regarding contributions to a 401(k) plan) and section 402(h)(1)(B) of the Code (regarding contributions to a simplified employee pension plan); and in the case of employer contributions made under a salary reduction agreement, without regard to section 403(b) (regarding annuity contracts).
(a) The employee's year of separation from Service; or
(b) Any Plan Year ending on or after the employee's 55th birthday.
An employee who performs no services for the Company or an Affiliated Company during the Plan Year will be treated as a former employee.
(a) Has committed an act of embezzlement, fraud or theft with respect to the property of the Company or an Affiliated Company or any person with whom the Company or an Affiliated Company does business;
(b) Has deliberately disregarded the rules of the Company or an Affiliated Company in such a manner as to cause material loss, damage or injury to, or otherwise endanger the property or employees of the Company or an Affiliated Company;
(c) Has made any unauthorized disclosure of any of the secrets or confidential information of the Company or an Affiliated Company;
(d) Has engaged in any conduct that constitutes unfair competition with the Company or an Affiliated Company;
(e) Has induced any person to breach any contract with the Company or an Affiliated Company; or
(f) Has sold Company or an Affiliated Company products to an unauthorized
account or has assisted an authorized account in wholesaling Company or an Affiliated Company products.
(a) The date the Employee retires;
(b) The date the Employee dies;
(c) The date the Employee terminates employment; or
(d) The first anniversary of the date the Employee is absent from Service for any other reason (e.g. an authorized leave of absence as described in paragraphs (i) and (ii), etc. below).
Subject to any applicable rules of the Administrative Committee (which rules will be uniformly applicable to all Employees similarly situated), Service includes:
(i) Periods of vacation;
(ii) Periods of absence whether or not the Employee is paid, not to exceed 12 calendar months, authorized by the Company for sickness, temporary disability or personal reasons;
(iii) Periods of service in the Armed Forces of the United States, if and to the extent required by the Military Selective Services Act, as amended, or any other federal law of similar import; provided that the Employee returns to Service with the Company or an Affiliated Company within the time his or her employment rights are protected by such law; and
(iv) Any period of 12 consecutive months or less, beginning on the first day of a month after a Member terminates employment and ending on the last day of the month preceding the Member's reemployment date, if the Member performs at least 1 Hour of Service within the first month of reemployment.
(i) The date of such retirement, death or termination; or
(ii) 12 months after the start of a leave, vacation or holiday or onset of disability or sickness.
All Service will be aggregated, whether or not such Service is performed consecutively, and every partial month will be deemed to be one full month of Service.
An Employee's Period of Service will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
(a) In the case of a Member who is an employee within the meaning of section 401(c) of the Code, the Member's earned income (as described under section 401(c)(2) of the Code) determined without regard to any exclusions from gross income similar to those under section 931 and section 933 of the Code;
(b) Any foreign earned income as defined under section 911(b) of the Code, regardless of whether such income is excludable from the gross income of the Member under section 911 of the Code;
(c) Amounts described in sections 104(a)(3), 105(a) and 105(b) of the Code, but only to the extent that such amounts are includable in the gross income of the Member;
(d) Amounts paid or reimbursed by the Company or an Affiliated Company for moving expenses incurred by the Member, but only to the extent that such amounts are not
deductible by the Member under section 217 of the Code;
(e) The value of a nonqualified stock option granted to the Member by the Company or an Affiliated Company, but only to the extent that the value of the option is includable in the gross income of the Member for the taxable year when granted; and
(f) The amount includable in the gross income of the Member upon making an election described in section 83(b) of the Code.
(a) Company contributions to a plan of deferred compensation that, to the extent that before the application of the limitations under section 415 of the Code to that plan, the contributions are not includable in the Member's gross income for federal income tax purposes in the taxable year of the Member in which the contributions are made;
(b) Company contributions under a simplified employee pension plan described in section 408(k) of the Code to the extent that such contributions are not considered as compensation for the taxable year in which contributed;
(c) Any distributions from a plan of deferred compensation regardless of whether such amounts are includable in gross income of the Member for federal income tax purposes in the taxable year of distribution;
(d) Amounts realized from the exercise of a nonqualified stock option;
(e) Amounts realized when restricted stock (or property) held by the Member either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(f) Amounts realized from the sale, exchange or other distribution of stock acquired under an incentive stock option; and
(g) Other amounts that receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includable in the gross income of the Member) or contributions made by an employer (whether or not under a salary reduction arrangement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether or not the contributions are excluded from the gross income of the Member.
For Plan Years beginning on and after the Effective Date, Total Compensation in excess of $200,000 or any successor limitation as provided for the Plan Year in Section 401(a)(17) of the Code, (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Total Compensation of a Member, the family aggregation rules under section 414(q) of the Code will apply, except that in applying those rules, the term "family" will only include the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A suspended Member's Accounts will continue to share in the income, gains, losses and expenses of the Trust Fund.
(a) Make Rollover Contributions to the Plan under Section 0;
(b) Direct the investment of his or her Accounts under Section 0;
(c) Make withdrawals from his or her Accounts under Section 0; and
(d) Obtain Plan loans under Section 0.
An Inactive Member will continue to be subject to the remaining provisions of the Plan. The Administrative Committee will periodically determine whether Members in the Plan are Highly Compensated Employees and any such Member's status will change from an Active Member to an Inactive Member as soon as practicable after the Administration Committee makes such determination.
has only been used to hold qualified plan distributions. A Rollover Contribution will be permitted only if the Employee establishes that:
(a) The Rollover Contribution includes no assets other than those attributable to employer contributions, earnings on employer contributions and earnings on employee contributions under plans qualified under section 401(a) of the Code; and
(b) If the amount was received by the Employee from a qualified plan, the Rollover Contribution qualifies as an "eligible rollover distribution" under section 402(c)(4) of the Code; or
(c) If the amount was received by the Employee from an individual retirement account, which contains funds described in Section 4.7(a) only, the distribution from such account represented a total distribution of such account.
The Rollover Contribution will be paid to the Trustee as soon as practicable,
credited to the Employee's Rollover Account and invested as described in Section
7. If it is determined that a Member's Rollover Contribution mistakenly failed
to qualify under the Code as a tax-free rollover, then the balance in the
Member's Rollover Account attributable to the mistaken contribution immediately
will be segregated from all other Plan assets, treated as a nonqualified trust
established by and for the benefit of the Member, and distributed to the Member.
Such a mistaken contribution will be deemed never to have been a part of the
Plan.
(a) No Matching Contribution will be made for a particular Plan Year or portion of a Plan Year;
(b) A lesser Matching Contribution will be made, in view of Company performance, and economic and financial conditions prevailing and anticipated at the time; or
(c) A greater Matching Contribution will be made for a particular Plan Year or portion of a Plan Year.
No Matching Contribution will be made for a Member unless he or she:
(a) Is an Employee on the last day of the final preceding payroll period with respect to which a Member may make a Contribution which would be matched by a portion of such Matching Contribution; or
(b) Ceased to be an Employee during the Plan Year:
(i) After attaining age 55 and completing 15 years of Service;
(ii) After attaining Normal Retirement Age;
(iii) By reason of death; or
(iv) By reason of Total and Permanent Disability,
and his or her Accounts have not been distributed under Section 0.
The Matching Contribution may be made in the form of cash or in the form of shares of LSAI Stock, or a combination of both.
sole discretion may determine. Except to the extent necessary to satisfy the requirements of section 401(k) or section 401(m) of the Code, no Nonelective Contribution will be made for a Member unless he or she:
(a) Is an Employee on the date as of which a Nonelective Contribution is allocated; or
(b) Ceased to be an Employee during the Plan Year:
(i) After attaining age 55 and completing 15 years of Service;
(ii) After attaining age 65;
(iii) By reason of death; or
(iv) By reason of Total and Permanent Disability,
and his or her Accounts have not been distributed under Section 0.
The Nonelective Contribution may be made in the form of cash or in the form of shares of LSAI Stock, or a combination of both.
(a) The date the Matching Contribution is made to the Plan; or
(b) The end of the Plan Year during which the Member Contributions with respect to which such Matching Contribution is made.
Forfeitures arising under Section 0 with respect to any Member's Matching Account during a Plan Year will be allocated among other Members as an additional Matching Contribution for such Plan Year and credited to such Members' Matching Accounts.
The Nonelective Contribution will be paid to the Trustee after such
contribution is authorized by the Board of Directors, but no later than 12
months after the end of the Plan Year in which such contribution is made. The
amount allocated to each Member's Nonelective Account will be determined by the
Board of Directors, or if the Board declines to make such determination, the
Administrative Committee. A Member's Nonelective Contribution will be allocated
and credited to the Member's Nonelective Account as of the end of the Plan Year
with respect to which the Nonelective Contribution is made. Nothing in this
Section 0 will be construed as requiring an
allocation of a Nonelective Contribution to be made on behalf of any Highly Compensated Employee within the meaning of section 401(k) or section 401(m) of the Code.
(a) The Matching Contribution and/or Nonelective Contribution will not be made to the Plan, if the Matching Contribution and/or Nonelective Contribution has not been made to the Plan as of the date on which the Matching and/or Nonelective Contributions are determined to constitute an Excess Aggregate Contribution; or
(b) The Matching Contribution and/or Nonelective Contribution (and any earnings on such contributions) will be distributed to the Member by the end of the next Plan Year, if the Matching Contribution and/or Nonelective Contribution has been made to the Plan before the date on which the Matching and/or Nonelective Contributions are determined to constitute an Excess Aggregate Contribution.
The Matching Contribution and/or Nonelective Contribution made on behalf of Highly Compensated Employees having the highest rate of Matching Contribution and/or Nonelective Contribution will be reduced and/or distributed first, under the terms of the applicable Regulations. Any reduction and/or distribution of a Matching Contribution and/or Nonelective Contribution made will be limited to the amount which, in the judgment of the Administrative Committee, is expected to meet the requirements of section 401(m)(6)(B) of the Code.
(a) An amount equal to the Forfeitures attributable to Members' Profit Sharing Accounts that were allocated to Members for the preceding Plan Year; and
(b) The amount which Members elect to receive directly in cash under Section 0.
No Profit Sharing Contribution will be made for any Plan Year if such contribution would result in the Plan failing to satisfy the requirements of section 410(b) of the Code. The Profit Sharing Contribution may be made in the form of cash, in the form of other property acceptable to the Trustee, or a combination of both.
Except as provided in the next following sentence, forfeitures arising under Section 0 with respect to any Member's Profit Sharing Account during a Plan Year will be allocated among other Active Members who are Employees on the last working day of such Plan Year as a Profit Sharing Contribution for such Plan Year and, will be credited to such Active Members' Profit Sharing 401(k) Account or Profit Sharing Regular Account, as appropriate. However, in the Plan Year
ending in 1994, forfeitures under Section 11.1 as of June 30, 1994, will be
allocated among Active Members who are employees on June 30, 1994 (and credited
as provided in the immediately preceding sentence), and forfeitures under
Section 11.1 with respect to a Member's Profit Sharing Account as of the end of
the Plan Year ending in 1994 will be allocated among Active Members who are
employees on the last working day of the Plan Year (and credited as provided in
the immediately preceding sentence).
Generally, twice each Plan Year, the Investment Committee will obtain an independent appraisal of the Fair Market Value of LSAI Stock. The Investment Committee will notify the Trustee of such Fair Market Value promptly after completion of the appraisal.
described below.
The Investment Committee will effect a Suspension, in its sole discretion, by determining that the Member Contributions held in the Holding Account and earnings on such contributions will remain in the Holding Account rather than be transferred to another Fund. If the Investment Committee effects a Suspension, the Administrative Committee, in such manner and under such procedures as it deems appropriate, will promptly provide Members whose Member Contributions and earnings are subject to the Suspension the opportunity to elect whether such amounts will remain held in the Holding Account. If the Member fails to file an election on the prescribed form by the date determined by the Administrative Committee, such amounts will remain in the Holding Account subject to the remaining provisions of the Plan. If a Member elects to have such amounts transferred to another Fund, such amounts will be transferred to such other Fund.
The Trustee will seek to acquire LSAI Stock for the Stock Fund at a price no greater than Fair Market Value, to the extent that any cash Matching Contributions and Forfeitures and Nonelective Contributions deposited in the Stock Fund and Member Contributions transferred to Stock Fund exceed the cash requirements of the Stock Fund as determined by the Administrative Committee. The Trustee may acquire LSAI Stock from a "Party-in-Interest" (as defined in section 3(14) of the Act) or a "Disqualified Person" (as defined in section 4975(e)(2) of the Code) for no more than Adequate Consideration in accordance with the requirements of section 408(e) of the Act.
Funds as of such day. A Member's election must be made in a manner prescribed by the Administrative Committee.
If the stockholders of Levi Strauss Associates Inc. are entitled to
vote with respect to any of the following matters, then only in connection with
such matters, the Trustee will vote the shares of LSAI Stock held in the Trust
Fund in accordance with the Members' directions to the Trustee as provided in
Section 0:
(a) Any merger or consolidation of Levi Strauss Associates Inc. with any other
corporation, unless the stockholders of Levi Strauss Associates Inc. immediately before the merger or consolidation would own (immediately after the merger or consolidation) equity securities of the surviving corporation or acquiring corporation or a parent entity possessing more than 5/6 of the voting power of the surviving corporation or acquiring corporation or parent entity;
(b) Any plan of complete liquidation of Levi Strauss Associates Inc.;
(c) Any dissolution of Levi Strauss Associates Inc.; or
(d) Any plan or agreement for the sale or disposition by Levi Strauss Associates Inc. of all or substantially all of its assets, unless the stockholders of Levi Strauss Associates Inc. immediately before the sale or disposition would own (immediately after the sale or disposition) equity securities of the acquiring entity or a parent entity possessing more than 5/6 of the voting power of the acquiring entity or parent entity.
Before any annual or special meeting at which LSAI Stock will be voted on the matters described in Section 0, the Board of Directors will cause to be delivered to each Member the proxy statement and any related materials prepared for holders of LSAI Stock, a request for written voting instructions, and the voting instructions form prescribed by the Board of Directors for this purpose. Each Member who wishes to exercise his or her voting rights must complete and return such form to the Trustee before the date prescribed by the Board of Directors. Once received by the Trustee, a Member's voting instructions may be revoked, subject to such conditions as the Trustee may impose.
Any shares of LSAI Stock with respect to which the Trustee receives timely, written voting instructions from Members will be voted by the Trustee in accordance with such instructions on the matters described in Section 0. The Trustee also will determine the ratio of affirmative votes, negative votes and abstentions with respect to each matter described in Section 0 for which it has received timely voting instructions from Members. The Trustee will then vote on such matters all shares of LSAI Stock allocated to Members' Accounts with respect to which it has not received timely voting instructions in accordance with the ratios so determined. If the Trustee determines that voting such shares in accordance with such ratios would violate its fiduciary responsibilities under the Act, it will vote such shares of stock in accordance with such fiduciary requirements. The Trustee will aggregate any fractional shares and, after rounding down to the next lower integer if the total is not a whole number, will vote an equivalent number of whole shares of LSAI Stock.
For purposes of this Section 0, each Member will be a "Named Fiduciary" as defined under
section 402(a) of the Act with respect to the shares of LSAI Stock allocated to his or her Accounts.
(i) Any offer to purchase LSAI Stock by Levi Strauss Associates Inc.;
(ii) Any offer to purchase less than 5% of all of the outstanding shares of common stock of Levi Strauss Associates Inc., including LSAI Stock held in the Trust Fund; or
(iii) Any public offering of LSAI Stock under the Registration Rights Agreement.
In the event of an Acquisition Offer, each Member will be entitled to
instruct the Trustee confidentially (on a form to be prescribed by the
Administrative Committee) with respect to the disposition of those shares of
LSAI Stock which then would be subject to the Member's voting instructions under
Section 0. If the Trustee receives such an instruction by a date determined by
the Trustee and communicated to Members, the Trustee will tender such LSAI Stock
in accordance with such instruction. Any LSAI Stock as to which the Trustee does
not receive instructions within such period will not be tendered by the Trustee.
The Trustee will obtain and distribute to each Member all appropriate materials pertaining to the Acquisition Offer, including any statement of the position of Levi Strauss Associates Inc. with respect to such offer issued under Regulation 14e-2 promulgated under the Securities Exchange Act of 1934, as soon as practicable after such materials are issued. If Levi Strauss Associates Inc. is not required to or fails to issue such statement within 5 business days after the commencement of such offer, the Trustee will distribute such materials to each Member without such statement by Levi Strauss Associates Inc. and will separately distribute such statement, if any, as soon as practicable after it is issued. Levi Strauss Associates Inc. may require verification of the Trustee's compliance with the Members' confidential voting instructions by an independent auditor selected by Levi Strauss Associates Inc.
For purposes of this Section 0, each Member will be a "Named Fiduciary" as defined under section 402(a) of the Act with respect to the shares of LSAI Stock allocated to his or her Accounts.
makes an offer to purchase LSAI Stock the Investment Committee will determine whether, and to what extent, the Plan will sell LSAI Stock to Levi Strauss Associates Inc. in connection with such offer.
(a) The purchase of the Member's primary residence; or
(b) The payment of expenses relating to the post-secondary education of the Member or the Member's spouse or children, including expenses for tuition fees, room, board or books,
the Member will be suspended from making Member Contributions for at least 3 fiscal months following any such withdrawal. The Member may resume making Member Contributions following the suspension period as of the first pay period following the suspension period by filing the prescribed form with the Administrative Committee in advance.
(i) Expenses for extraordinary and unreimbursed medical or hospital expenses incurred by the Member, the Member's spouse, any dependent of the Member or a nondependent parent or child of the Member;
(ii) Amounts necessary for the Member, the Member's spouse, any dependent of the Member, or a nondependent parent or child of the Member to obtain medical or hospital care;
(iii) The payment of tuition and related educational expenses for the next 12 months of post-secondary education for the Member, the Member's spouse or child, or
any dependent of the Member;
(iv) The payment of expenses incurred by the Member in purchasing his or her primary residence;
(v) The need to prevent the eviction of the Member from his or her primary residence or foreclosure on the Member's primary residence;
(vi) The payment of funeral expenses for a family member or relative of the Member;
(vii) The loss of income resulting from an abbreviated work schedule required by the Member's health, the loss of employment by the Member's working spouse, garnishment of the Member's wages or material reduction in the compensation of the Member or the Member's working spouse from such Member's or spouse's primary employer;
(viii) The loss of income, real property or personal property as a result of any natural disaster as specified on Appendix D to the Plan by any individual or entity empowered to amend the Plan; or
(ix) Effective July 1, 1995, the need to pay attorney's fees, fines, penalties, judgments, assessments or other costs related to legal proceedings on behalf of the Member or the Member's spouse or dependents.
(i) All or part of the Member's Matching Account and the Vested Interest in his or her Profit Sharing Regular Account (excluding contributions made with respect to any period during which the Member was a resident of the United Kingdom) invested in any Fund or any combination of such Funds, if the amount of the withdrawal is needed to meet an Immediate and Heavy Financial Need of the Member due to:
(A) Funeral Expenses for a family member or relative of the Member;
(B) An abbreviated work schedule required by the Member's health, a loss of income due to health, the loss of employment by the Member's working spouse or garnishment of the Member's wages;
(C) The payment of extraordinary and unreimbursed medical or hospital expenses incurred by a nondependent parent or child of the Member; or
(D) Effective July 1, 1995, the need to pay attorney's fees, fines,
penalties, judgments, assessments or other costs related to legal proceedings on behalf of the Member or the Member's spouse or dependents.
(ii) All or part of the Member's Vested Interest in his or her Profit Sharing Regular Account (excluding any Profit Sharing Contributions made with respect to any period during which the Member was a resident of the United Kingdom) invested in any Fund or any combination of such Funds, if the amount of the withdrawal is needed to meet Immediate and Heavy Financial Needs of the Member arising from:
(A) Foreclosure on the primary residence of the Member; or
(B) The loss of income, real property or personal property as a result of any other natural disaster as specified on Appendix D to the Plan by any individual or entity empowered to amend the Plan.
(i) Reimbursement or compensation by insurance or otherwise;
(ii) Reasonable liquidation of the Member's assets, including assets of the Member's spouse and minor children that are reasonably available to the Member, to the extent such liquidation would not itself cause an immediate and heavy financial need;
(iii) Cessation of Member Contributions; or
(iv) A loan from the Member's Accounts under Section 0 or a loan from a commercial source on reasonable commercial terms.
Unless the Member requests otherwise, the amount of the Member's hardship withdrawal will include the amount of any federal, state or local taxes or any penalties reasonably anticipated to result from the withdrawal. Such sums will be withheld at the time such hardship withdrawal is distributed to the Member.
permit such withdrawal.
(a) Post Tax-Account;
(b) Rollover Account;
(c) Pre-Tax Account;
(d) Profit Sharing 401(k) Account;
(e) Profit Sharing Regular Account; and
(f) Matching Account.
Except as provided above, within any Account, amounts invested in each Fund will be liquidated in order from the lowest risk Fund to the highest risk Fund. The determination of the relative risk of each Fund shall be made by the Investment Committee, in its sole discretion, from time to time.
If the Investment Committee determines that it is not feasible for the Trustee to prudently liquidate the necessary amount invested in any Fund in accordance with Members' withdrawal requests, the Investment Committee will so advise the Administrative Committee which will direct that such steps be taken as it considers necessary or desirable for the protection of Members' Accounts, including the reordering of liquidation priorities or a pro rata reduction in the amount of each Member's withdrawal.
(i) The proceeds of the loan will be used to acquire, construct or rehabilitate the Member's primary residence, or to refinance any loan or loans previously made to the Member by a third party for any of these purposes;
(ii) The loan is required by the Member for the payment of expenses relating to the post-secondary education of the Member or the Member's spouse or children, including expenses for tuition, fees, room, board or books; or
(iii) The loan is required by the Member due to the loss of income, real property or personal property as a result of any natural disaster as specified on Appendix D to the Plan by any individual or entity empowered to amend the Plan.
(i) Effective on and after a date determined by the Administrative Committee and announced to Members, a Member may borrow up to 100% of the balance credited to his or her Matching Account and/or Pre-Tax Account. A loan from the Member's Pre-Tax Account will be permitted only if the Administrative Committee determines that the Member is Totally and Permanently Disabled or that the proceeds will be used to satisfy a hardship described in Section 0(i) through Section 0(viii).
(ii) A Member may borrow up to 100% of the balance credited
to his or her Post-Tax Account and/or Rollover Account. Such loans will
be permitted for any reason, but will be subject to Section 0
(regarding the maximum loan amount), Section 0 (regarding loan terms),
Section 0 (regarding source of loans) and Section 0 (regarding events
of default), in addition to other applicable provisions of the Plan. In
no case will a Member be permitted to borrow any portion of such
Accounts invested in the Stock Fund or the Holding Account.
(ii) 50% of the Member's Vested Interest in all of the Member's Accounts.
The amount of any loan must be a multiple of $100 and may not be less than $1,000. Only 4 loans to a Member may be outstanding at any time (no more than 2 of which may be for the acquisition, construction or rehabilitation of the Member's primary residence, or to refinance any loan or loans previously made by a third party for these purposes).
(i) The residence of the Member, in the case of a loan under
Section 0(i) (regarding the acquisition, construction or rehabilitation
of the Member's primary residence);
(ii) The residence of the Member to the extent agreed upon by the Member and the Administrative Committee, in the case of a loan for expenses for the post-secondary education of the Member or the Member's spouse or children which is made from the Member's Profit Sharing Regular Account under 0(ii), or the Member's Post-Tax Account or the Member's Rollover Account under Section 0(ii); and
(iii) The Account or Accounts that funded the loan to the extent that such Account or Accounts fund the loan.
No loans will be secured by the Member's Account or Accounts in an amount greater than 50% of the Vested Interest and value of the balance of the Account of such Member at the time such loan was made.
deductions. If loan payments are not made for a period of up to 365 days due to the Member's temporary absence from active work, such missed payments may be made:
(i) In a single sum after the Member returns to active work;
(ii) Ratably over the remaining period of the loan;
(iii) In a single sum together with the final payment provided for under the note; or
(iv) In another manner mutually agreed upon by the Member and the Administrative Committee.
However, loan repayments by a Member who has been absent temporarily must recommence by the end of the one-year period following the date the Member's temporary absence began or, if earlier, upon the first paycheck after the Member's return to active work.
(i) 5 years after the date the loan is made (15 years after the date the loan is made if the loan is used to acquire the Member's principal residence); or
(ii) The date the Member's Plan Benefit is distributed under
Section 0.
(a) Post-Tax Account;
(b) Rollover Account;
(c) Pre-Tax Account;
(d) Profit Sharing 401(k) Account;
(e) Profit Sharing Regular Account; and
(f) Matching Account.
If less than the entire amount of any Account is required to fund the loan, amounts invested in the Funds will be liquidated to fund the loan in order from the lowest risk Fund to the highest risk Fund. The determination of the relative risk of each Fund shall be made by the Investment Committee, in its sole discretion, from time to time.
If the Investment Committee determines that it is not feasible for the Trustee to prudently liquidate the necessary amount invested in any Fund in accordance with Members' loan requests, the Investment Committee will so advise the Administrative Committee. The Administrative Committee will direct that such steps be taken as it considers necessary or desirable for the protection of Members' Accounts, including the reordering of liquidation priorities or a pro rata reduction in the amount of each Member's loan. The promissory note executed by the Member will be reflected in reporting the balance of the Member's Account or Accounts that funded the loan. Principal and interest payments will be credited to the Member's Account or Accounts in proportion to the extent that such Account or Accounts funded the loan. Such principal and interest payments shall be invested in Funds in proportion to the extent that the funds loaned to the Member were invested in such Funds at the time such loan was made to the Member.
Member's Plan Benefit remaining in the Trust Fund by the number of installments elected less the number of installments already paid.
If the Member elects that only a portion of his Plan Benefit be paid in the form of installments or an annuity, then the remainder of such benefit will be paid in a lump sum.
A married Member may elect another form of annuity or may designate another joint annuitant with his or her spouse's consent. The spouse's consent must:
(i) Be in writing;
(ii) Acknowledge the effect of the alternate form of annuity or specifically identify the alternate joint annuitant;
(iii) Be witnessed by a notary public; and
(iv) Be given within 90 days before the Annuity Starting Date.
The spouse's consent to receive an alternate form of annuity or the designation of a Beneficiary will not be binding on a subsequent spouse if the Member remarries. The Member may revoke such an election at any time before the Annuity Starting Date in which case the Member's benefit will be paid in the form of a joint and survivor annuity to the Member and his or her spouse, unless the
Member elects an alternate form of benefit or Beneficiary designation with his or her spouse's consent. If benefits are payable to a joint annuitant other than the Member's spouse, the present value of the benefits payable to the joint annuitant will not exceed 50% of the present value of the benefits payable to the Member (determined as of the Annuity Starting Date).
The Administrative Committee will provide to each Member who elects to receive an annuity a written explanation in nontechnical language containing the following information:
(i) A description of the terms and conditions of the joint and survivor annuity and the single life annuity;
(ii) A statement that the Member may elect during the Election Period described below to waive the joint and survivor annuity or life annuity by electing any optional form of benefit provided under the Plan;
(iii) A statement that the Member may revoke the waiver of the joint and survivor annuity or life annuity during the Election Period and the effect of such revocation;
(iv) Notice of the requirement that the Member's spouse must consent to the waiver of the joint and survivor annuity and election of any optional form of benefit;
(v) A general explanation of the financial effect of election of each of the optional forms of benefit provided under the Plan; and
(vi) A statement that the Member may request an explanation of the specific financial effect, in terms of monthly payments, on the Member's Plan Benefit of making an election.
The Election Period will begin 90 days before the Annuity Starting Date and end on the Annuity Starting Date, unless the Member requests additional information from the Administrative Committee, in which case it will end no later than 90 days after the Member receives such additional information. During the Election Period any election not to take the joint and survivor annuity or life annuity will be revocable. Upon the expiration of the Election Period, any election made will be irrevocable and the Member will not be required nor eligible to make an election if no election had been made.
The following rules will govern benefit payments from the Plan.
(i) 1 year after the last day of the Plan Year in which the Member ceases to be an Employee by reason of reaching Normal Retirement Age, Total and Permanent Disability or death;
(ii) 5 years after the last day of the Plan Year in which the Member ceases to be an Employee for any other reason; or
(iii) The Member's Required Beginning Date.
If a payment with respect to an Account invested in the Stock Fund has been delayed to the Member's Required Beginning Date and the Administrative Committee determines that the cash in the Stock Fund is insufficient to make such payment, LSAI Stock will be paid to the Member or Beneficiary unless the Company redeems sufficient shares of LSAI Stock at Fair Market Value to make such payment in cash.
Member each calendar year, beginning with the calendar year in which the Member's Required Beginning Date occurs, in order to assure that certain minimum amounts be paid to the Member and that only "incidental" benefits be provided to the Member's Beneficiaries. Furthermore, any payment option required by section 401(a)(9) of the Code will override and supersede any inconsistent payment provision provided for in the Plan.
(a) The last day of the Plan Year in which the Member reaches Normal Retirement Age;
(b) The last day of the Plan Year in which the Member ceases to be an Employee;
(c) The earliest date on which the Administrative Committee can reasonably ascertain the amount of the Member's Plan Benefit; or
(d) The earliest date on which the Administrative Committee can reasonably locate the Member (or his or her Beneficiary).
In no event, however, will the payment of a Member's Plan Benefit begin later than the Member's Required Beginning Date.
(a) $30,000 (or, if greater, 1/4 of the dollar limitation for defined benefit plans in effect under section 415(b)(1)(A) of the Code) as adjusted to take into account changes in the cost of living;
(b) 25% of the Member's Total Compensation for such Plan Year.
If a Member's Annual Additions would exceed the above limitation, then such Annual Additions will be reduced by reducing the components of such additions, as necessary, in the order in which they are listed in Section 0.
The Plan Year will be the "limitation year" (as defined under section 415 of the Code) unless the Board of Directors designates another 12 consecutive month period as the limitation year under a written resolution adopted by the Board of Directors.
(a) Any Profit Sharing Contribution and Forfeitures attributable to Profit Sharing Accounts that cannot be allocated to the Member will be deducted from the amount of the Profit Sharing Contribution which otherwise would be made under Section 0, but such reduction will not affect the amounts allocable under Section 0 to Members whose Profit Sharing Contribution component of Annual Additions is not reduced.
(b) Any Matching Contribution and Forfeitures attributable to
Matching Accounts that cannot be allocated to the Member will be deducted from
the amount of the Matching Contribution which otherwise would be made under
Section 0, but such reduction will not affect the amounts allocable under
Section 0 to Members whose Matching Contribution component of Annual Additions
is not reduced.
(c) Any Nonelective Contribution that cannot be allocated to the Member will be deducted from the amount of any Nonelective Contribution which otherwise would be made
under Section 0, but such reduction will not affect the amounts allocable under
Section 0 to Members whose Nonelective Contribution portion of Annual Additions
is not reduced.
(d) Any Post-Tax Contributions made by the Member (increased by any income or reduced by any losses allocable to such Contributions) will be returned to the Member in cash.
(e) Any Pre-Tax Contributions will be credited to a suspense account on behalf of the Member. All amounts credited to such account will be treated as Pre-Tax Contributions for successive Plan Years and will be allocated annually to the Member under Section 0 (to the extent such allocation is not prohibited by Section 0) until exhausted. No gains or losses will be credited to the suspense account and no additional Pre-Tax Contributions, or any Matching Contribution, Nonelective Contribution or Profit Sharing Contribution will be made by or on behalf of the Member so long as any amount remains in the suspense account.
(a) The fees and expenses of any employee and of the Trustee for the performance of their duties under the Trust Agreement;
(b) The expenses incurred by the members of the Administrative Committee and of the Investment Committee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants and actuaries and any outside agents and cost of services provided for the Plan); and
(c) All other proper charges and disbursements of the Trustee or the members of the Administrative Committee and of the Investment Committee (including settlements of claims or legal actions approved by counsel to the Plan).
The expenses of administering the Plan may be paid out of the Trust Fund if the Participating Companies do not pay such expenses directly in such proportions as determined by the Administrative Committee. An election by the Participating Companies to pay all or a part of the above expenses directly will not bind such companies as to their rights to elect, with respect to the same or other expenses, at any other time to have such expenses paid from the Trust Fund or to have the Trustee reimburse the Participating Companies for expenditures already made. In estimating costs under the Plan, administrative costs may be anticipated.
independent qualified public accountant to conduct such examinations and to express such opinions as may be required by section 103(a)(3) of the Act. The Administrative Committee may remove and discharge the person so engaged, in which event it will engage a successor independent qualified public accountant to perform such examinations and to express such opinions.
If no Beneficiary designation is in effect under Section 0 at the time of a Member's death, or if no designated Beneficiary survives the Member, the payment of the Member's Plan Benefit, if any, will be made to the following persons in the order listed:
(a) To the Member's Surviving Spouse, if any;
(b) If the Member has no Surviving Spouse, then to his or her living children;
(c) If the Member has no living children, then to his or her living parents;
(d) If the Member has no living parents, then to his or her living brothers and sisters; or
(e) If the Member has no living brothers and sisters, then to his or her estate.
The Administrative Committee will, in its sole and absolute discretion, determine the right of such persons to receive the Member's Plan Benefit, if any. If the Administrative Committee is in doubt as to the right of any person to receive such benefit, the Administrative Committee may direct the Trustee to retain such benefit, without liability for any interest, until the rights to such benefit are determined, or, alternatively, may direct the Trustee to pay such benefit into any court of appropriate jurisdiction and such payment will be a complete discharge of the liability of the Plan and the Trust Fund.
In administering the Plan, the Administrative Committee (a) will act in a nondiscriminatory manner to the extent required by section 401(a) and related sections of the Code, and (b) will at all times discharge its duties in accordance with the standards described in section 404(a)(1) of the Act.
(a) Appoint 1 or more trustees to hold the assets of the Plan in trust and to enter into a trust agreement with each trustee it appoints;
(b) Appoint 1 or more Investment Managers for any assets of the Plan and to enter into an investment management agreement with each Investment Manager it appoints;
(c) Direct the investment of any Plan assets not assigned to an Investment Manager or to the Trustee; and
(d) Perform such other functions as are specifically assigned to the Investment Committee under the Plan.
(a) The Investment Committee directs how those assets will be invested;
(b) The Investment Committee allocates the authority to manage those assets to one or more Investment Managers; or
(c) The Plan prescribes how those assets will be invested.
Each Investment Manager appointed under Section 13.2 will have the exclusive authority to manage, including the power to acquire and dispose of, the Plan assets assigned to it by the Investment Committee, except to the extent that the Plan prescribes how those assets will be invested. The Trustee and each Investment Manager will be solely responsible for diversifying the investment, in accordance with section 404(a)(1)(C) of the Act, of the Plan assets assigned to them by the Investment Committee, except to the extent that the Investment Committee directs or the Plan prescribes how those assets will be invested.
To the maximum extent permitted by law, no member of either Committee will be personally liable by reason of any contract or other instrument executed by him or her or on his or her behalf in his or her capacity as a member of such Committee nor for any mistake of judgment made in good faith. The Company will indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Company's own assets), each member of the Administrative Committee and Investment Committee and each other officer, employee or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan or to the management and control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Company) arising out of any act or omission to act in connection with the Plan, unless arising out of such person's own fraud or willful misconduct.
or benefits under the Plan. The members of the Administrative Committee and of the Investment Committee will not receive any special compensation for serving in their capacities as members of such Committees but will be reimbursed for any reasonable expenses incurred in performing their Committee duties. Except as otherwise required by the Act, no bond or other security will be required of either Committee or any Committee member in any jurisdiction. Any person may serve on both Committees, and any member of either Committee, any subcommittee or agent to whom either Committee delegates any authority, and any other person or group of persons, may serve in more than one fiduciary capacity (including service both as a trustee and an administrator) with respect to the Plan.
(a) The specific reasons for the denial;
(b) The specific references to the Plan provisions on which the denial was based;
(c) A description of any information or material necessary to perfect the application;
(d) An explanation of why such material is necessary; and
(e) An explanation of the Plan's review procedure.
The written notice will be given to the applicant within 90 days after the Administrative Committee receives the application, unless special circumstances require an extension of time for processing the application. In no event will the extension exceed a period of 90 days from the end of the initial 90-day period. If an extension is required, written notice of the need for the extension will be given to the applicant before the end of the initial 90-day period. The notice will indicate the special circumstances requiring an extension of time and the date by which the Administrative Committee expects to give a decision. If written notice is not given to the applicant within the initial 90-day period, then the application will be deemed to have been denied (for purposes of Section 0) upon the expiration of such period.
(a) Submitted a written application for a Plan Benefit in accordance with Section 0;
(b) Been notified that the application is denied;
(c) Filed a written request for a review of the application in accordance with Section 0; and
(d) Been notified in writing that the Administrative Committee has affirmed the denial of the application.
A Member may bring an action without completing the above steps after the Administrative Committee has failed to act on the claim within the time prescribed in Section 0 and Section 0.
cash and liquidate it by making benefit payments to Members in accordance with the modes of payment provided for in Section 0. Alternatively, with the consent of the Board of Directors, or its designee, the Administrative Committee may direct the Trustee to hold the Members' Plan Benefit in the Trust Fund until such Members or their Beneficiaries become eligible to receive benefit payments under the terms and provisions of this Plan.
(a) The Member's retirement;
(b) The Member's death;
(c) The Member's disability (as determined by the Administrative Committee);
(d) The Member's termination of employment;
(e) The Member's attainment of age 59-1/2;
(f) The termination of the Plan, provided that neither the Company nor an Affiliated Company maintains a successor plan;
(g) The disposition, to a corporation that is not an Affiliated Company, of substantially all of the assets (within the meaning of section 409(d)(2) of the Code) used by the Company in the trade or business in which the Member is employed, provided that the Member continues employment with the transferee corporation and the Company continues to maintain the Plan; or
(h) The disposition, to a corporation that is not an Affiliated Company, of the Company's interest in a subsidiary in which the Member is employed, provided that the Member continues employment with the subsidiary and the Company continues to maintain the Plan.
A distribution may be made under (f), (g), or (h) above only if it constitutes a total distribution of the entire balance of the Member's Accounts.
The following arrangements are not prohibited under the Plan:
(a) Arrangements for the withholding of tax from benefit distributions;
(b) Arrangements for the recovery of benefit overpayments; or
(c) Arrangements for direct deposit of benefit payments to an account in a bank, savings and loan association or credit union (provided that such arrangement is not part of an arrangement constituting an assignment or alienation).
In addition, the return of Company Contributions under Section 0 and the creation, assignment or recognition of a right to all or a portion of a Member's Plan Benefit under a Qualified Domestic Relations Order under Section 0 will not violate this Section 0.
(i) The Domestic Relations Order clearly specifies the name and last known mailing address (if any) of the Member and the name and last known mailing address of each Alternate Payee covered by the order, the amount or percentage of the Member's Plan Benefit to be paid to each Alternate Payee or the manner in which such amount or percentage is to be determined, and the number of payments or period to which such order applies.
(ii) The Domestic Relations Order specifically indicates that it applies to this Plan.
(iii) The Domestic Relations Order does not require this Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan, and it does not require the Plan to provide increased benefits.
(iv) The Domestic Relations Order does not require the payment of all or a portion of a Member's Plan Benefit to an Alternate Payee which is required to be paid to another Alternate Payee under another order previously determined to qualify as a Qualified Domestic Relations Order.
Payee who may be entitled to benefits under a previously received Qualified Domestic Relations Order) of the receipt of any Domestic Relations Order which could qualify as a Qualified Domestic Relations Order. At the same time, the Administrative Committee will advise the Member and each Alternate Payee of the Plan provisions relating to the determination of the qualified status of such orders.
Within a reasonable period of time after receipt of a copy of the Domestic Relations Order, the Administrative Committee will determine whether the order is a Qualified Domestic Relations Order and notify the Member and each Alternate Payee of its determination. The determination of the status of a Domestic Relations Order as a Qualified Domestic Relations Order will be made in accordance with such uniform and nondiscriminatory rules and procedures as may be adopted by the Administrative Committee from time to time. If monthly benefits are presently being paid with respect to a Member named in a Domestic Relations Order which may qualify as a Qualified Domestic Relations Order, or if the Member's Plan Benefit becomes payable after receipt of the order, the Administrative Committee will notify the Trustee to segregate and hold the amounts which would be payable to the Alternate Payee or payees designated in the order if the order is ultimately determined to be a Qualified Domestic Relations Order.
If the Administrative Committee determines that the Domestic Relations Order is a Qualified Domestic Relations Order within 18 months of receipt of the order, the Administrative Committee will instruct the Trustee to pay the segregated amounts (plus any earnings on such amounts) to the Alternate Payee specified in the Qualified Domestic Relations Order. Conversely, if within the same 18 month period the Administrative Committee determines that the Domestic Relations Order is not a Qualified Domestic Relations Order, or if the status of the order as a Qualified Domestic Relations Order is not resolved, the Administrative Committee will instruct the Trustee to pay the segregated amounts (plus any earnings on such amounts) to the person or persons who would have been entitled to such amounts if the order had not been entered. If the Administrative Committee determines that a Domestic Relations Order is a Qualified Domestic Relations Order after the close of the 18 month period mentioned above, the determination will be applied prospectively only. The determination of the Administrative Committee as to the status of a Domestic Relations Order as a Qualified Domestic Relations Order will be binding and conclusive on all interested parties, present and future, subject to the claims review provisions of Section 0.
A "Key Employee" means a key employee as defined in section 416 of the Code.
If the Administrative Committee, in its sole and absolute discretion, but under the provisions of section 416 of the Code, determines that the Plan is a constituent in an "Aggregation Group", this Plan will be considered Top Heavy or Super Top Heavy only if the Aggregation Group is a "Top Heavy Group" or a "Super Top Heavy Group."
An "Aggregation Group" includes:
(a) Each plan intended to qualify under section 401(a) of the Code sponsored by the Company or an Affiliated Company in which 1 or more Key Employees participate;
(b) Each other plan of the Company or an Affiliated Company that is considered in conjunction with such plans in determining whether or not the discrimination and coverage requirements of section 401(a)(4) and section 410 of the Code are satisfied; and
(c) In the discretion of the Administrative Committee, any other such plan of the Company or an Affiliated Company, which, when considered in conjunction with the plans referred to above, satisfies the nondiscrimination and coverage requirements of section 401(a)(4) and section 410 of the Code.
A "Top Heavy Group" is an Aggregation Group in which the sum (determined as of the Determination Date) of the aggregate of the amounts credited to the accounts of Key Employees under all "defined contribution plans" (as defined in section 414(i) of the Code) included in such group plus the present value of the cumulative accrued benefits for Key Employees under all "defined benefit plans" (as defined in section 414(j) of the Code) included in such group, exceed 60% of the total of such amounts for all employees and beneficiaries covered by such plans. A "Super Top Heavy Group" is an Aggregation Group for which the sum so determined for Key Employees exceeds 90% of the sum so determined for all employees and beneficiaries. Such determination will be made by the Administrative Committee in accordance with section 416 of the Code.
(a) 3%; or
(b) The percentage equal to the largest percentage that any Key Employee for that Plan Year receives of Pre-Tax Contributions, Matching Contributions, Nonelective Contributions, Profit Sharing Contributions and Forfeitures allocated on behalf of that Key Employee's Total Compensation for that Plan Year, as limited by Section 0 below.
The minimum allocation will be determined without regard to any contributions made or benefits available under the federal Social Security Act.
rely on personal data given to it by a Member.
(a) In such form as is prescribed from time to time by the Administrative Committee;
(b) Mailed by first-class mail or delivered to such location as will be specified by the Administrative Committee, or provide by electronic means, including telephone, as permitted by the Administrative Committee; and
(c) Deemed to have been given and delivered only upon actual receipt by the Administrative Committee or its designee at the location.
IN WITNESS WHEREOF, LEVI STRAUSS ASSOCIATES INC. has caused this Plan to be executed and its corporate seal to be hereunto affixed by its duly authorized officers, as of this 21st day of November, 1995.
LEVI STRAUSS ASSOCIATES INC.
By: /s/
----------------------------------
Donna Goya
Its: Sr. Vice President
|
(As Amended and Restated Effective November 27, 1989)
This Appendix A states the provisions of the Plan in effect on or after the Effective Date (November 27, 1989) which were amended before September 1, 1994. The provisions of the Plan in effect as of September 1, 1994 are presented in the main text of this amended and restated Plan.
1. Effective before November 21, 1990, Section 2.1 of the Plan, then designated as Section 18.1, read as follows:
2. Effective before November 21, 1990, Section 2.6 of the Plan, then designated as Section 15.4, read as follows:
(a) The amount of employer contributions and forfeitures allocated to the Member as of any date within such Plan Year under any qualified defined contribution plan maintained by the Affiliated Group, including Profit Sharing Contributions, Matching Contributions and Forfeitures under this Plan;
(b) The aggregate employee contributions which the Member contributes during such Plan Year to all qualified retirement plans maintained by the Affiliated Group, including Post-Tax Contributions to this Plan; and
(c) The amount of contributions made on behalf of the Member for such Plan Year to any qualified defined contribution plan maintained by the Affiliated Group under a salary deferral election by the Member under a qualified cash or deferred arrangement, including Pre-Tax Contributions to this Plan.
3. Effective August 13, 1990, the following clause was added to the end of the fourth sentence
of Section 2.8 of the Plan, then designated as Section 10.9:
"or the Administrative Committee is satisfied the spouse cannot be located."
4. Before November 26, 1990, an account executive's Compensation under Section 2.14 of the Plan could not exceed the maximum for the Home Office Salary Grade 6 salary range in effect at the end of such a Plan Year.
5. Effective before August 13, 1990, the last paragraph of 2.17 of the Plan, then designated as Section 18.46, read as follows:
(a) Is hired to fill, for a period not to exceed six calendar months, a position which arises from either an emergency situation or from the temporary absence of an Eligible Employee;
(b) Is subject, as a condition of such employment, to termination without prior notice at any time; and
(c) Does not complete a 365-day Period of Service.
6. Effective before November 21, 1990, Section 2.17 of the Plan, then designated as Section 18.10, read as follows:
(a) Included in a unit of employees covered by a collective- bargaining agreement that does not provide that such Employee will be eligible to participate in the Plan;
(b) A stocktaker, service representative, retiree coordinator or Temporary Employee;
(c) A nonresident alien who receives no remuneration from a Participating Company that constitutes income from sources within the United States (within the meaning of section 861(a)(3) of the code);
(d) Any alien who (i) receives remuneration from the
Company which constitutes income from sources within the United States (within the meaning of Section 861(a)(3) of the Code) and (ii) has been transferred by the Company from a job outside the United States to a job within the United States, during any period in respect of which the alien is benefiting (by reason of accruing a benefit or making or having contributions made on such alien's behalf) under (A) a retirement plan established or maintained outside of the United States by a foreign subsidiary (including a domestic subsidiary operating abroad) or foreign division of the Company or (B) the Levi Strauss International Retirement Plan for Third Country National Employees or any successor or similar plan maintained by the Company or any member of the Affiliated Group;
(e) A United States citizen locally hired by a foreign subsidiary (including a domestic subsidiary operating broad) or foreign division of a Participating Company;
(f) Not paid on a salary or commission basis;
(g) Covered by an individual employment contract that expressly provides that he or she will not be eligible for membership in the Plan; or
(h) A "leased employee" (as defined in section 414(n) of the Code) who is providing services to a member of the Affiliated Group.
The Board of Directors on a nondiscriminatory basis may
designate as an Eligible Employee any person described in
(c), (d), (e) or (f) above. Such designation must be made in
writing after receiving the advice of counsel.
A person's status as an Eligible Employee will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
7. Effective on and after November 26, 1990, Section 2.17 of the Plan, then designated as Section 18.10, was amended to exclude Highly Compensated Employees as Eligible Employees for purposes of making Member Contributions and for receiving an allocation of Matching Contributions, Nonelective Contributions, Profit Sharing Contributions and Forfeitures under the Plan.
8. Effective before November 21, 1990, Section 2.34 of the Plan, then designated as Section 18.23, read as follows:
9. Effective before November 26, 1990, Section 2.35 of the Plan, then designated as Section
18.24, read as follows:
10. Effective before July 1, 1991, Section 2.37 of the Plan, then designated as
Section 18.12, read as follows:
11. Section 2.40 and Section 2.41 of the Plan, then designated as Section 18.28 and Section 18.29, were added to the Plan, effective on and after November 21, 1990.
12. Section 3.5 of the Plan, then designated as Section 2.5, was added to the Plan effective on and after November 26, 1990.
13. Effective before November 21, 1990, Section 5 of the Plan, then designated as Section 4, read as follows:
Account as of the earlier of the date the Matching Contributions are made to the Plan or the end of the Plan Year during which the Member made the Member Contributions with respect to which such Matching Contributions are made. Forfeitures arising under Section 10.4 with respect to any Member's Matching Account during a Plan Year will be allocated among other Members as additional Matching Contributions for such Plan Year and credited to such Members' Matching Accounts.
(a) Such Matching Contributions will not be made to the Plan, if the Matching Contributions have not been made to the Plan as of the date on which such Matching Contributions are determined to constitute excess aggregate contributions, or
(b) Such Matching Contributions (and any earnings on such Matching Contributions) will be distributed to the Member no later than 2-1/2 months after the end of the Plan Year, if such Matching Contributions have been made to the Plan before the date as of which the Matching Contributions are determined to constitute excess aggregate contributions.
14. Effective before January 1, 1993, Section 4.7 of the Plan read as follows:
(a) The Rollover Contribution includes no assets other than those attributable to employer contributions, earnings on employer contributions and earnings on employee contributions under plans qualified under section 401(a) of the Code;
(b) Such Contribution includes no assets other than those attributable to a qualified total distribution, as defined in section 402(a)(S)(E)(i) of the Code; and
(c) If the amount was received by the Employee from an individual retirement account, the distribution from such account represented a total distribution thereof.
The Rollover Contribution shall be paid to the Trustee as soon as practicable, credited to the Employee's Rollover Account and invested as described in Section 7. If it is determined that a Member' 5 Rollover Contribution mistakenly failed to qualify under the Code as a tax-free rollover, then the balance in the Member' 5 Rollover Account attributable to the mistaken contribution immediately shall be segregated from all other Plan assets, treated as a nonqualified trust established by and for the benefit of the Member, and distributed to the Member. Such a mistaken contribution shall be deemed never to have been a part of the Plan.
15. Effective before November 26, 1990, the following sentence appeared at the end of Section 6.2 of the Plan, then designated as Section 5.2:
Forfeitures arising under Section 10.5 with respect to any Member's Profit Sharing Account during a Plan Year will be allocated among other Members who are Employees on the last working day of such Plan Year as additional Profit Sharing Contributions for such Plan Year and, subject to Section 5.2, will be credited to such Members' Profit Sharing Accounts.
16. Fund E was added to the Plan, as an investment option under Section 7.1, effective March 1, 1991.
17. Effective before November 21, 1990, Section 7.2 of the Plan, then designated as Section 6.2, read as follows:
adequate consideration for Stock within the meaning of section 3(18) of ERISA, all Member Contributions that are invested in the Segregated Account and any earnings on such contributions will be transferred from the Segregated Account to Fund D, and no Matching Contribution will be made with respect to such Member Contributions. If the Trustee determines that the Fair Market Value does not exceed adequate consideration for stock, the Administrative Committee will notify Members of such Fair Market Value and the Company's stockholders of the Trustee's intention to purchase Stock. Each Member who has Member Contributions invested in the Segregated Account will have the opportunity to elect to have such Member Contributions and any earnings on such contributions transferred from the Segregated Account to Fund A, Fund B, Fund C, Fund D and/or Fund H in 25% increments of such Member Contributions and earnings. If a Member files such an election on the prescribed form by the date determined by the Administrative Committee, the Member's Member Contributions that are invested in the Segregated Account and any earnings on such contributions will be transferred to the Fund(s) elected by the Member. If a Member fails to file such an election on the prescribed form by the date determined by the Administrative Committee, the Member's Member Contributions that are invested in the Segregated Account and any earnings on such contributions automatically will be transferred to Fund C. At the time when Member Contributions and earnings are transferred to Fund C, the Participating Companies will make a Matching Contribution under Section 4.1 unless the Board of Directors determines that no Matching contribution will be made. The Trustee will seek to acquire Stock for Fund C at a price no greater than Fair Market Value to the extent any cash Matching Contributions deposited in Fund C and Member Contributions transferred to Fund C exceed the cash requirements of Fund C as determined by the Administrative Committee. The Trustee may acquire Stock from a party- in-interest or a disqualified person for no more than adequate consideration (as defined in section 3(18) of ERISA) in accordance with the requirements of section 408(e) of ERISA.
If any Member's Member Contributions in excess of the cash requirements of Fund C have not been invested in Stock when the Fair Market Value of Stock is next determined because insufficient Stock was available to the Trustee, the Member may elect to have such Member Contributions and any earnings on such contributions transferred to Fund A, Fund B, Fund D and/or Fund H in 25% increments in accordance with procedures established by the Administrative Committee. In the absence of such an election, the Member Contributions and earnings will remain in Fund C for investment in Stock at the new Fair Market Value to the extent Stock is available. Any Matching Contributions and earnings on such contributions that have not been invested in Stock will remain in Fund C, whether or not the Member elects to transfer the excess Member Contributions to another Fund.
Any Member who requests a distribution of his or her Plan Benefit under Section 10 before a date on which Matching Contributions are made to the Plan will be deemed to have elected not to invest in Fund C such Member's Member Contributions and earnings on such contributions which were held in the Segregated Account immediately before such request.
18. Before May 31, 1991, Member investment directions had to be in increments of 25% of the Member's Accounts.
19. Effective on and after October 29, 1990, Section 7.2 of the Plan, then designated as Section 6.2, was amended to give the Investment Committee the discretion to effect a "Suspension."
20. Before July 1, 1991, the phrase "as of the last day of each quarter during a Plan Year" in Section 7.3 of the Plan, then designated as Section 6.2, was replaced by the phrase "as of the last day of each Quarter."
21. Section 7.4 of the Plan, then designated as Section 6.4, was added to the Plan effective on and after January 1, 1991.
22. Effective before February 28, 1991 clause (i) of Section 7.7 of the Plan, then designated as section 17.5, read as follows:
(i) any offer to purchase stock by the Company if it is for purposes of making cash distributions under the Plan.
23. Section 7.7(c) of the Plan, then designated as Section 17.5(b), was added to the Plan, effective on and after February 28, 1991.
24. Effective with respect to Hardship Withdrawals made before August 13, 1990, the final paragraph of Section 9.3 of the Plan, then designated as Section 8.3, was not applicable.
25. The last clause of Section 9.3(a)(vii) became effective for hardship withdrawals made after May 3, 1993.
26. Effective before the issuance of final regulations under section 401(k) of the Code, the Plan provided for hardship withdrawals from Members' Nonelective Accounts.
27. Effective with respect to withdrawals made before November 21, 1990,
Section 9.4 of the Plan, then designated as Section 8.4, read as follows:
28. Effective with respect to withdrawals made before November 21, 1990,
Section 9.5 of the Plan, then designated as Section 8.5, read as follows:
29. Effective with respect to withdrawals made before June 25, 1990, Section 9.7 of the Plan, then designated as Section 8.7, read as follows:
A Member's Accounts will be liquidated to the extent
necessary to fund a withdrawal under Section 8.3 in the
following order of priority: Post-Tax Account, Rollover
Account, Pre-Tax Account, Profit Sharing Account and
Matching Account. Within a Member's Profit Sharing Account,
the portion attributable to amounts which the Member could
have elected to receive in cash under Section 5.2 will be
liquidated only after the balance of the Member's Vested
Interest in his or her Profit Sharing Account has been
liquidated. Within any Account, amounts invested in each
Fund will be liquidated in the following order of priority:
Fund D, Fund B, Fund H and Fund A. If the Investment
Committee determines that it is not feasible for the Trustee
to prudently liquidate the necessary amount invested in any
Fund in accordance with Members' withdrawal requests, the
Investment Committee will so advise the Administrative
Committee which will direct that such steps be taken as it
considers necessary or desirable for the protection of
Members' Accounts, including the reordering of liquidation
priorities or a pro rata reduction in the amount of each
Member's withdrawal.
30. Effective with respect to withdrawals made after June 25, 1990, but before November 21, 1990, Section 9.7 of the Plan, then designated as Section 8.7, read as follows:
Account held in Fund C, the portion of the Member's Pre-Tax
Account held in Fund C, the balance of the Member's Profit
Sharing Account, the Matching Account and the Nonelective
Account. Except as provided above, within any Account,
amounts invested in each Fund will be liquidated in the
following order of priority; Fund D, Fund B, Fund H and Fund
A.
31. Effective before April 1, 1990, Section 10.1(a) of the Plan, then designated as Section 9.1(a), read as follows:
32. Effective before March 1, 1991, Section 10.1(b) of the Plan, then designated as Section 9.1(b), read as follows:
33. Effective before April 1, 1990 Section 10.1(d) of the Plan, then designated as Section 9.1(c), read as follows:
twice in any Plan Year.
34. Effective before April 1, 1990 Section 10.2 of the Plan, then designated as
Section 9.2, read as follows:
(a) Be made under a promissory note secured by (i)
the residence that the Member acquires, in the case of
a loan from the Member's Profit Sharing Account, and
(ii) the Account(s) that funded the loan;
(b) Be subject to a substantially level payment schedule, as determined by the Administrative Committee, with payments to be made at least quarterly and whenever possible to be made through semi-monthly payroll deductions;
(c) Bear interest at a fixed rate determined by the Administrative Committee based upon the prime interest rate in effect at a commercial bank as of the first day of December, March, June or September immediately preceding the date on which the loan is approved, plus 1%; and
(d) Provide for repayment in full, whether from
the Member's Accounts or otherwise, on or before the
earlier of (i) 5 years after the date the loan is made
(15 years after the date the loan is made if the loan
is used to acquire the Member's principal residence) or
(ii) the date the Member's Plan Benefit is distributed
under Section 10.
35. Effective for the Period beginning April 1, 1990, and ending November 20, 1990, Section 10.2 of the Plan, then designated as Section 9.2, read as follows:
(a) Be made under a promissory note secured by
(i) the residence of the Member, in the case of a loan under Section 9.1(a)(i) or, to the extent agreed upon by the Member and the Administrative Committee, in the case of the loan under 9.1(a)(ii) for reasons set forth in 8.1(b); and
(ii) the Account(s) that funded the loan to the extent that such Account(s) funds the loan; provided, however that:
(A) in the case of a loan made on or after April 1, 1990, under 9.1(a)(i), or a loan made under 9.1(a)(ii) and secured by the Member's residence, the Plan's security interest in the Member's Profit Sharing Account will not extend to the portion of such Account attributable to amounts which the Member could have elected to receive in cash under Section 5.2 ("Elective Profit Sharing Contributions"); and
(B) in the case of any other loan made under Section 9.1(a)(ii), the promissory note with respect to such loan will be secured by portions of the Account other than Elective Profit Sharing Contributions only to the extent that the amount of such loan exceeds the amount of Elective Profit Sharing Contributions available to secure such promissory note;
(b) Be subject to a substantially level payment
schedule, as determined by the Administrative Committee,
with payments to be made at least quarterly and whenever
possible to be made through semi-monthly payroll deductions;
provided, however, that in the event that payments are not
made for a period of up to 90 days due to the Member's
temporary absence from active work, such payments may be
made (i) in a single sum after the Member returns to active
work, (ii) ratably over the remaining period of the loan,
(iii) in a single sum together with the final payment
provided for under the note, or (iv) in another manner
mutually agreed upon by the Member and the Administrative
Committee;
(c) Bear interest at a fixed rate determined by the Administrative Committee based upon the prime interest rate in effect at a commercial bank as of the first day of December, March, June or September immediately preceding the date on which the loan is approved, plus 1%; and
(d) Provide for repayment in full, whether from the
Member's Accounts or otherwise, on or before the earlier of
(i) 5 years after the date the loan is made (15 years after
the date the loan is made if the loan is used to acquire the
Member's principal residence) or (ii) the date the Member's
Plan Benefit is distributed under Section 10.
36. Effective November 21, 1990, Section 10.2 of the Plan, then designated as
Section 9.2, was amended to read as set forth in this amended and restated
Plan.
37. Effective with respect to loans made before March 1, 1991, Section 10.3 of the Plan, then designated as Section 9.3, read as follows:
vested portion of the Member's Accounts that are being used
to fund the loan, in the following order of priority: Post-
Tax Account, Rollover Account, Pre-Tax Account, Profit
Sharing Account, and the portion attributable to amounts
which the Member could have elected to receive in cash under
Section 5.2 will be used to fund a loan only after the
balance of the Member's Vested Interest in his or her Profit
Sharing Account has been so used. Amounts invested in Fund
A, Fund B and Fund H will be liquidated and transferred to
Fund D for disbursement from Fund D. If less than the entire
amount of any Account is required to fund the loan, amounts
invested in the Funds will be liquidated to fund the loan in
the following order of priority: Fund D, Fund B, Fund H and
Fund A. If the Investment Committee determines that it is
not feasible for the Trustee to prudently liquidate the
necessary amount invested in any Fund in accordance with
Members' loan requests, the Investment Committee will so
advise the Administrative Committee which will direct that
such steps be taken as it considers necessary or desirable
for the protection of Members' Accounts, including the
reordering of liquidation priorities or a pro rata reduction
in the amount of each Member's loan. The promissory note
executed by the Member will be deposited in the Member's
Account(s) that funded the loan. Principal and interest
payments will be credited to the Member's Account(s) that
funded the loan and invested in Fund D.
38. Effective with respect to loans made before November 26, 1990, the second to last sentence of Section 10.4 of the Plan, then designated as Section 9.4, read as follows:
If an involuntary withdrawal from the Member's Profit Sharing Account is declared, the Member's Vested Interest in such Account will be determined as provided in Section 12.2.
39. Effective before November 26, 1990, Section 11.1(a) of the Plan, then designated as Section 10.1(a), read as follows:
(a) A Member's Vested Interest in his or her Pre- Tax Account, Post-Tax Account and Rollover Account (if any) will be 100% at all times. Except as provided in Section 10.1(c), a Member's Vested Interest in his or her Matching Account will be 100% at all times.
40. Effective before November 26, 1990, Section 11.1(b) and (c) of the Plan, then designated as Section 10.1(b) and (c), read as follows:
(b) A Member's Vested Interest in the portion of
his or her Profit Sharing Account attributable to amounts
which the Member could have elected to receive in cash under
Section 5.2 will be 100% at all times. The Member's Vested
Interest in the remainder of his or her Profit Sharing
Account will be 100% if the Member attains age 65 as an
Employee, dies while an Employee or becomes Totally and
Permanently Disabled while an
Employee. Until a Member's Vested Interest in the remainder of such Account becomes 100% under the preceding sentence, the Member's Vested Interest in the remainder of such Account will be determined according to the following schedule based on the Member's completed Years of Service:
Completed
Years of Service Vested Interest
---------------- ---------------
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
|
(c) If the Administrative Committee determines that any Member who has not reached age 65 and who has completed less than 5 Years of Service engaged in any act of misconduct while an Employee, the Member will have no Vested Interest in his or her Matching Account and the Member's Vested Interest in his or her Profit Sharing Account will consist solely of the amounts described in the first sentence of Section 10.1(b). The balance of such Accounts will be forfeited under Section 10.5.
41. Effective before November 26, 1990, Section 10.2 of the Plan read as follows:
42. Effective before November 26, 1990, Section 10.5 of the Plan read as follows:
43. Effective before August 6, 1990, Section 11.5(a) of the Plan, then designated as Section 10.7(a), read as follows:
(a) Monthly installments over a period not exceeding the reasonable life expectancy of the Member (or Beneficiary), as determined under the mortality table specified in Appendix B to the Revised Home Office Pension Plan of Levi Strauss & Co. The amount of each installment will be determined by dividing the value of the portion of the Plan Benefit remaining in the Trust Fund by the number of installments elected less the number of installments already paid.
44. Effective before August 1, 1989, Section 12.2 of the Plan, then designated as Section 15.2, read as follows:
45. Effective before November 21, 1990, Section 12.3 of the Plan, then designated as Section 15.3, read as follows:
(a) Profit Sharing Contributions and Forfeitures attributable to Profit Sharing Accounts that cannot be allocated to the Member will be deducted from the amount of Profit Sharing Contributions which otherwise would be made under Section 5, but such reduction will not affect the amounts allocable under Section 5.3 to Members whose Profit Sharing Contribution component of Annual Additions is not reduced.
(b) Matching Contributions and Forfeitures attributable to Matching Accounts that cannot be allocated to the Member will be deducted from the amount of Matching Contributions which otherwise would be made under Section 4, but such reduction will not affect the amounts allocable under Section 4.2 to Members whose Matching
Contribution component of Annual Additions is not reduced.
(c) Post-Tax Contributions made by the Member (increased by any income or reduced by any losses allocable to such Contributions) will be returned to the Member in cash.
(d) Pre-Tax Contributions made by the Member will be reduced under Section 3.4. Any Pre-Tax Contributions that cannot be handled in accordance with Section 3.4 will be credited to a suspense account on behalf of the Member. All amounts credited to such account will be treated as Pre-Tax Contributions for successive Plan Years and will be allocated annually to the Member under Section 3 (to the extent such allocation is not prohibited by Section 15.1) until exhausted. No gains or losses will be credited to such account and no additional Pre-Tax Contributions, Matching Contributions or Profit Sharing Contributions will be made by or on behalf of the Member so long as any amount remains in such account.
46. Effective before November 21, 1990, Section 13.1 of the Plan, then designated as 11.1, read as follows:
47. Effective before November 21, 1990, Section 18.3 of the Plan, then designated as Section 14.3, read as follows:
48. Effective before November 21, 1990, Section 20.2 of the Plan, then designated as paragraph (b) in Appendix A, read as follows:
this Plan and employer contributions and forfeitures allocated under any other defined contribution plan of the Aggregation Group on behalf of any Member who is employed on the last regularly scheduled working day of the Plan Year and who is not a Key Employee will not be less than a percentage of the Member's Total Compensation equal to the lesser of (i) 3%; or (ii) the percentage equal to the largest percentage that any Key Employee for that Plan Year receives of Pre-Tax Contributions, Matching Contributions, Profit Sharing Contributions and Forfeitures allocated on behalf of that Key Employee's Total Compensation for that Plan Year as limited by (e) below. The minimum allocation will be determined without regard to any contributions made or benefits available under the Federal Social Security Act.
49. Effective before November 21, 1990, Section 20.2 of the Plan, then designated as Section 17.7, read as follows:
50. Effective for the period beginning January 1, 1990 and ending July 16, 1990, Appendix C to the Plan, read as follows:
As of January 1, 1990, Members will not make Member Contributions as Pre-Tax Contributions.
51. Effective on and after July 17, 1990, Appendix C to the Plan read as follows:
As of January 1, 1990, Members will not make Member Contributions as Pre-Tax Contributions; provided, however, that after July 16, 1990, such provision will not apply to any Member who is not a "Highly Compensated Employee," within the meaning of section 414(q) of the Code.
(a) A Blackout Period is a period of time during which Affected Requests shall not be processed or effected.
(b) An Affected Request is any of the following requests by a Member (or Beneficiary) for an action or an event under the Plan, or any of the following Plan functions or events:
(i) Reinvestment of Accounts pursuant to Section 7 of the Plan;
(ii) Valuation of Accounts and distribution of statements pursuant to Section 8 of the Plan;
(iii) Withdrawals pursuant to Section 9 of the Plan;
(iv) Loans pursuant to Section 10 of the Plan; and
(v) Distribution of Plan Benefits pursuant to Section 11 of the Plan.
In addition, the Blackout Coordinator, in its declaration of the Blackout Period or in any supplementary action regarding the Blackout Period, may designate as Affected Requests any other requests by a Member (or Beneficiary) or other Plan functions or events which are otherwise allowed or provided for under the Plan, or may declare that specified requests or Plan functions or events encompassed by (b)(i)-(v) above shall not constitute Affected Requests, for all or a designated portion of the Blackout Period.
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Fidelity Investment Grade Bond Fund
- Fidelity Asset Manager: Income
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Magellan Fund
- Fidelity Contrafund
- Fidelity Overseas Fund
- Sponsor Stock Fund
The Fund designated as the Holding Account referenced in Section 7.1 shall be the Fidelity Retirement Government Money Market Portfolio.
The Fund designated as the Fund to receive contributions for which no proper Member investment direction has been received shall be the Fidelity Retirement Government Money Market Portfolio.
In accordance with Sections 9.3(a)(viii), 9.3(b)(ii)(B) and 10.1(a)(iii), losses relating to natural disasters described herein may form a basis for withdrawals or loans.
1998 Flood in Kansas
None.
__________________/s/___________________________ Donna J. Goya, Sr. Vice President 11/19/98 -------- |
EMPLOYEE INVESTMENT PLAN
OF
LEVI STRAUSS ASSOCIATES INC.
AMENDMENTS
WHEREAS, LEVI STRAUSS ASSOCIATES INC. (the "Company") has adopted the Employee Investment Plan of Levi Strauss Associates Inc. (the "Plan");
WHEREAS, pursuant to Section 18.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason,
WHEREAS, the Company desires to amend the Plan in order to expand the provisions relating to withdrawals in the event of financial hardship;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to any other officer of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on June 1, 1993, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the Plan subject, to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of the date set forth below, paragraph (a) of subsection. 9.3 of the Plan is hereby amended as follows:
1. The word "or" which follows the semicolon in subparagraph (vii) is hereby deleted.
2. The period at the end of subparagraph (viii) is hereby deleted and replaced with a semicolon and the word "or."
3. A new subparagraph (ix) is hereby added to read as set forth below:
(ix) The need to pay attorney's fees, fines, penalties, judgments, assessments or other costs related to legal proceedings on behalf of the Member or the Member's spouse or dependents.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on July 6, 1995.
/s/
---------------------------------------------
Donna J. Goya
Senior Vice President
|
EMPLOYEE INVESTMENT PLAN
OF
LEVI STRAUSS ASSOCIATES INC.
AMENDMENTS
WHEREAS, LEVI STRAUSS ASSOCIATES INC. (the "Company") has adopted the Employee Investment Plan of Levi Strauss Associates Inc. (the "Plan");
WHEREAS, pursuant to Section 18.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company and certain of its major stockholders are considering a transaction intended to ensure the long-term private, family ownership of the Company (the "Transaction") and which would involve the elimination of Company stock as an investment under the Plan;
WHEREAS, by resolutions duly adopted on November 30, 1995, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt amendments to the Plan in order to accommodate and reflect the possibility of the Transaction and any related transactions; and
WHEREAS, the amendments herein are within the scope of such delegated authority of Robert D. Haas;
NOW, THEREFORE, effective as of the date hereof, the Plan is hereby amended by the addition of Appendix F, to read as set forth on the attached exhibit.
IN WITNESS WHEREOF, the undersigned has set his hand hereunto, on December 7 1995.
/s/
--------------------------------------------
Robert D. Haas
Chairman of the Board and Chief Executive
Officer
|
EXHIBIT
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS ASSOCIATES INC.
APPENDIX F
SUSPENSION OF STOCK FUND INVESTMENTS
AND RELATED PROVISIONS
1. Introduction.
Effective as of December 7, 1995, the provisions of this Appendix F to the Plan are applicable with respect to the transactions and events specified below, instead of the provisions of the main text of, or other appendices to, the Plan which would otherwise govern such transactions and events.
2. Special Provisions.
(a) Stock Fund Transactions,.
(i) All reinvestment of Accounts under Section 7.3, withdrawals under Section 9, loans under Section 10 and distributions of Plan Benefits under Section 11 shall be suspended effective for requests received on or after December 15, 1995, to the extent that such transactions would have resulted in the distribution or transfer of funds from the Stock Fund.
(ii) (A) Except as provided in (B) below, any duty, responsibility or function assigned to the Investment Committee with respect to matters relating to the Stock Fund after the Effective Date, including but not limited to obtaining an appraisal of the Fair Market Value of LSAI Stock, is hereby assigned to the Chief Executive Officer of the Company (the "CEO"), or to any person or entity designated in writing by the CEO. The CEO, or the individual or entity designated by the CEO, if any, shall be referred to as the "Coordinator."
(B) The assignment provided in (A) above does not apply to any responsibility of the Investment Committee in discharging its duties under the Plan in connection with a transaction or event which may result in the sale, conversion or other disposition of the LSAI Stock held by the Plan, including but not limited to acting on behalf of the Plan with respect to the exercise of stockholders' rights associated with mergers (for example, dissenter's rights under relevant state law) and responses to purchase offers as described in Section 7.7(c).
(iii) Nothing herein is intended to require the Coordinator
to obtain a Fair Market Value of LSAI Stock during
the suspension of Stock Fund transactions provided in
Section F.2(a)(i) above.
(iv) The responsibilities of the Investment Committee under the Plan which are not described in the assignment provided in Section F.2(a)(i) above shall remain in full force and effect.
(b) Investments and Investment Directions.
(i) No additional investment of Member Contributions or Company Contributions shall be made to the Stock Fund.
(ii) Effective for pay periods beginning December 25, 1995, all Member Contributions held in the Retirement Government Money Market Fund pending potential investment in the Stock Fund shall be transferred to the Retirement Money Market Fund, all current Member Contributions shall be deposited in the fund designated by the Member for the investment of such Member Contributions, and the Retirement Money Market Fund shall be the Fund to receive contributions for which no proper investment direction has been received.
(iii) With respect to any Matching Contribution which is made with respect to Member Contributions made, on or after May 29, 1995:
(A) A transfer of Member Contributions to the Stock Fund is not required in order for the Company to make a Matching Contribution.
(B) The first Matching Contribution made after the date of this Appendix shall be made with respect to Member Contributions made on or before December 24, 1995 on behalf of a Member who was an Employee on November 22, 1995, or ceased to be an Employee between May 29, 1995 and November 22, 1995 by reason of an event described in Section 5.1(b)(i)-(iv). Any subsequent Matching Contributions, and the time for making any such Matching Contribution, shall be determined by the Company, in its sole discretion.
(C) Matching Contributions shall be made in cash and deposited in the Fund designated by the Member as of the date of deposit for investment of his or her Member contributions or, if no such designation is in effect, in the Retirement Money Market
Fund.
EMPLOYEE INVESTMENT PLAN
OF
LEVI STRAUSS ASSOCIATES, INC.
AMENDMENTS
WHEREAS, LEVI STRAUSS ASSOCIATES INC. (the "Company") has adopted the Employee Investment Plan of Levi Strauss Associates Inc. (the "Plan");
WHEREAS, pursuant to Section 18.1 of the Plan, the Board of Directors of the Company is authorized to amend the Plan at any time and for any reason;
WHEREAS, the Company desires to amend the Plan in order to readmit a limited number of Highly Compensated Employees to active participation under certain circumstances;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to any other officer of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on June 1, 1993, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the Plan subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective November 27, 1998, the Plan is hereby amended as set forth below:
1. The current text of Section 3.5 is redesignated as Section 3.5(a).
2. Current Sections 3.5(a) through (d) are redesignated as Sections 3.5(a)(i) through iv).
3. The first sentence of current Section 3.5 is amended to read as set forth below:
Any Highly Compensated Employee will only be eligible for membership in the Plan as an Inactive Member or as set forth in Section 3.5(b), and in either case only if he or she satisfies the eligibility requirements of Section 3.1.
4. Section 3.5 is amended by a new Section 3.5(b), to read, as set forth below:
5. The Plan is amended by a new Appendix E, to read as set forth on the attached exhibit hereto.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on December 21, 1995.
/s/
--------------------------------
Donna J. Goya
Senior Vice President
|
EXHIBIT TO EMPLOYEE INVESTMENT PLAN AMENDMENT
EMPLOYEE INVESTMENT PLAN OF
LEVI, STRAUSS ASSOCIATES INC.
APPENDIX E
Pursuant to Section 3-5(b) of the Plan, the Highly Compensated Employees described below are eligible to participate in this Plan as Members:
1. For the Plan Year ending in 1996, Highly Compensated Employees whose compensation (as determined pursuant to Section. 2.23) for the Plan Year ending in 1995 did not exceed $95,000.
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS ASSOCIATES INC.
APPENDIX D
ADDITIONAL ELIGIBLE WITHDRAWALS AND LOANS
In accordance with Sections 9.3(a)(viii), 9.3(b)(ii)(B) and 10.1(a)(iii), losses relating to natural disasters described herein may form a basis for withdrawals or loans.
1. (a) Description of Natural Disaster.
1995 flood in Sonoma County, California.
(b) Limitations.
None.
/s/
----------------------------------------
Donna J. Goya, Senior Vice President
5/15/95
----------------------------------------
Dated
|
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS ASSOCIATES INC.
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 27, 1989,
WITH MAIN TEXT REFLECTING CERTAIN CHANGES AS OF SEPTEMBER 1, 1994)
LEVI STRAUSS & CO.
AMENDMENTS TO EXECUTIVE COMPENSATION
AND EMPLOYEE BENEFIT PLANS
WHEREAS, LSAI HOLDING CORP. ("Holdings"), LEVI STRAUSS ASSOCIATES INC. ("LSAI") and LEVI STRAUSS & CO. ("LS&CO.") have established and maintained various employee benefit plans listed on Exhibit A hereto for the benefit of their eligible employees (the "Plans");
WHEREAS, the Plans generally provide that LSAI is the sponsor of the Plans, although certain Plans provide that Holdings, LS&CO. or other direct or indirect subsidiaries of Holdings, LSAI or LS&CO. is the Plan sponsor;
WHEREAS, effective October 1, 1996 (the "Merger Effective Date"), Holdings and LSAI were merged with and into LS&CO. (the "Merger"), and LS&CO. from the Merger Effective Date is the owner or corporate parent, as appropriate, with respect to all of the assets and business held by Holdings, LSAI and LS&CO. before the Merger;
WHEREAS, after the Merger, LS&CO. is the successor Plan sponsor of any Plan which was sponsored by Holdings or LSAI before the Merger,
WHEREAS, LS&CO. desires to amend the Plans to reflect that after the Merger LS&CO. is the Plan sponsor of each Plan;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plans and to delegate to certain other officers of LS&CO- the authority to adopt certain amendments to the Plans; and
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plans, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the Merger Effective Date, the Plans are hereby amended as set forth below:
1. The Employee. Investment Plan of Levi Strauss Associates Inc. (the "EIP") is amended as set forth below:
a. The name of the EIP, whenever it appears, is changed to the "Employee Investment Plan of Levi Strauss & Co. "
b. Section 1.1 of the EIP is amended by the addition of a new paragraph to read as set forth below:
"Effective as of October 1, 1996, Levi Strauss Associates Inc. and its parent, LSAI Holding Corp., were merged into Levi Strauss & Co. Thereafter, Levi Strauss & Co. is the plan sponsor of the EIP. "
c. Sections 2.4, 2.9, 2.17, 2.33, 2.45, 2.60, 2.70, 7.5 and 7.7 and the execution clause are amended by replacing all references to "Levi Strauss Associates Inc. " with Levi Strauss & Co."
d. Section 2.13 is amended by removing the reference to 'Levi Strauss Associates Inc."
2. The Levi Strauss Associates Inc. Employee Long-Term Investment and Savings Plan (the -ELTIS") is amended as set forth below:
a. The name of the ELTIS, wherever it appears, is changed to "The Levi Strauss & Co. Employee Long-Term Investment and Savings Plan. "
b. Section 1. 1 is amended by the addition of a new paragraph to read as set forth below:
"Effective as of October 1, 1996, Levi Strauss Associates Inc. and its parent, LSAI Holding Corp., were merged into Levi Strauss & Co. Thereafter, Levi Strauss & Co. is the plan sponsor of ELTIS."
c. Sections 2.4, 2.9, 2.16, 2.29, 2.37, 2.47, 2.59, 6.5 and 6.7 and the execution clause are amended by replacing all references to "Levi Strauss Associates Inc." with "Levi Strauss & Co."
d. Section 2.12 is amended by removing the reference to '"Levi Strauss Associates Inc."
3. The Revised Home Office Pension Plan of Levi Strauss Associates Inc. (the "HOPP") is amended as set forth below:
a. The name of the HOPP, wherever is appears, is changed to the "Revised Home Office Pension Plan of Levi Strauss & Co."
b. Section 1. 1 is amended by the addition of a new paragraph to read as set forth below:
"Effective as of October 1. 1996, Levi Strauss Associates Inc. and its parent, LSAI Holding Corp., were merged into Levi Strauss & Co. Thereafter Levi Strauss & Co. is the plan sponsor of the Plan."
c. Sections 2.4, 2.10, 2.26 and 2.46 and the execution clause are amended by replacing all references to "Levi Strauss Associates Inc." with "Levi Strauss & Co."
d. Section 2.16 is amended by removing the reference to "Levi Strauss Associates Inc."
4. The Levi Strauss Associates Inc. Revised Employee Retirement Plan (the "ERP") is amended as set forth below:
a. The name of the ERP, wherever is appears, is changed to the "Levi Strauss & Co. Revised Employee Retirement Plan. "
b. Section 1. 1 is amended by the addition of a new paragraph to read as set forth below:
"Effective as of October 1, 1996, Levi Strauss Associates Inc. and its parent, LSAI Holding Corp., were merged into Levi Strauss & Co. Thereafter Levi Strauss & Co. is the plan sponsor of the Plan."
c. Sections 2.4, 2.10, 2.26 and 2.47 and the execution clause are amended by replacing all references to "Levi Strauss Associates Inc." with "Levi Strauss & Co."
d. Section 2.16 is amended by removing the reference to "Levi Strauss Associates Inc."
5. The Levi Strauss Associates Inc. Retirement Plan for Over-the-Road Truck Drivers and Dispatchers (the "OTRD") is amended as set forth below:
a. The name of the OTRD, wherever is appears, is changed to the "Levi Strauss & Co. Retirement Plan for Over-the-Road Truck Drivers and Dispatchers."
b. Section 1 - 1 is amended by the addition of a new paragraph to read as set forth below:
"Effective as' of October 1, 1996, Levi Strauss Associates Inc. and its parent, LSAI Holding Corp., were merged into Levi Strauss & Co. Thereafter Levi Strauss & Co. is the plan sponsor of the Plan."
c. Sections 2.4, 2.9, 2.25 and 2.44 and the execution clause are amended by replacing all references to "Levi Strauss Associates Inc." with "Levi Strauss & Co."
d. Section 2,15 is amended by removing the reference to "Levi Strauss Associates Inc."
6. For each Plan which is not amended by Sections 1 through 5 above (the "Nonqualified Plans"), each reference in the name of a Nonqualified Plan to "LSAI Holding Corp." or "Levi Strauss Associates Inc." is hereby replaced by "Levi Strauss & Co."
7. Each of the Nonqualified Plans is amended by the addition of an Addendum to read as set forth on the Exhibit B hereto.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on January 24, 1997.
/s/
-------------------------------------
Donna J. Goya
Senior Vice President for
Global Human Resources
|
EXHIBIT A
Employee Investment Plan of Levi Strauss Associates Inc.
Levi Strauss Associates Inc. Employee Long-Term Investment and Savings Plan
Revised Home Office Pension Plan of Levi Strauss Associates Inc.
Levi Strauss Associates Inc. Revised Employee Retirement Plan
Levi Strauss Associates Inc. Retirement Plan for Over-the-Road Truck Drivers and Dispatchers
Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan
Levi Strauss Associates Inc. Excess Benefit Restoration Plan
Partners in Performance Long-Term Incentive Plan
LSAI Holding Corp. Deferred Compensation Plan for Outside Directors
Levi Strauss Associates Inc. Deferred Compensation Plan for Executives
Levi Strauss Asso6ates Inc. Long-Term Performance Plan
EXHIBIT B
MERGER ADDENDUM
Effective October 1, 1996 (the "Merger Date"), LSAI Holding Corp. and Levi Strauss Associates Inc. were merged with and into Levi Strauss & Co. ("LS&CO."). From and after the Merger Date, LS&CO. is the plan sponsor of the Plan. Further, unless the context clearly indicates to the contrary, all references to the "Company" shall mean LS&CO. and all references to the "Board of Directors" of LSAI Holding Corp., Levi Strauss Associates Inc. or the "Company" shall refer to the Board of Directors of LS&CO.
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Levi Strauss & Co. Employee Investment Plan (the "EIP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company established the EIP for the benefit of its employees and amended and restated the EIP to comply with the Tax Reform Act of 1986, the Unemployment Compensation Amendments of 1992, and the Revenue Reconciliation Act of 1993;
WHEREAS, the Company requested that the Internal Revenue Service issue a favorable determination letter regarding the tax-qualified status of the EIP;
WHEREAS, the Internal Revenue Service conditioned its issuance of a favorable determination upon the adoption of certain amendments to the restated EIP; and
WHEREAS, the Company desires to satisfy such conditions and Article 18 of the EIP provides that the Company may amend the EIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the EIP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of November 27, 1989, except to the extent that another effective date is specifically provided below, the Company amends the EIP as set forth below:
1. Section 2.66 of the EIP is amended by the addition of the following:
If an Employee's absence is attributable to maternity or paternity leave, the Employee's Service shall include the first 12 months of such absence. Further, the second 12 months of absence for such reason shall be considered neither Service nor absence from Service.
2. Section 2.8 of the EIP is amended by the addition of the following:
However, a married participant's spouse shall be the participant's
beneficiary unless the participant's spouse consents in writing to the designation of another beneficiary and such consent is witnessed by a notary public.
3. Sections 4.6 and 4.7, and all references thereto, are renumbered "4.7" and 114.8.
4. A new Section 4.6 is added to the EIP as follows:
4.6 Limitation on Contributions.
(i) 125 % of the average deferral percentage for all other employees eligible to make Pre-Tax Contributions; or
(ii) the lesser of (A) 2 multiplied by the average deferral percentage for all employees eligible to make Pre-Tax Contributions other than Highly Compensated Employees or (B) the average deferral percentage for such employees plus 2 percentage points.
The average deferral percentage for any group of employees is the average of the ratios (calculated separately for each employee) of the amount of Pre-Tax Contributions (and any other contributions treated as elective deferrals under section 401(k) of the Code) made on behalf of each employee for the Plan Year, divided by the employee's compensation. Compensation for purposes of this Section 4.6(a) shall be determined in a manner consistent with sections 401(k) and 414(s) of the Code.
This Section 4.6(a) shall be interpreted in a manner consistent with section 401(k)(3) and 1.401(k)-I(b) of the Code.
(i) 125% -of the average contribution percentage of all other employees eligible to make such contributions; or
(ii) the lesser of (A) 2 multiplied by the average contribution percentage of such other employees or (B) the average contribution percentage for such other employees plus 2 percentage points.
The average contribution percentage for any group of employees is the average of the ratios (calculated separately for each employee) of the sum of Post-Tax Contributions and Matching Contributions (and other contributions aggregate
with such contributions for purposes of this test and section 401(m) of the Code) paid under the Plan on behalf of the Employee for the Plan Year, divided by the Employee's compensation. Compensation for purposes of this Section 4.6(b) shall be determined in a manner consistent with sections 401(m) and 414(s) of the Code.
This Section 4.6(b) shall be interpreted in a manner consistent with sections 401(m) and 1.401(m)-l of the Code.
5. Renumbered Section 4.7(a) of the EIP is amended by the addition of the following:
In the event that the average deferral ratio of a Highly Compensated Employee is determined under the family aggregation rules of Code section 401(k)-l(g)(1)(ii)(C), the amount of any Excess Contributions shall be determined by reducing such deferrals under the leveling method provided in Code section 1.401(k)-l(f)(2) and the Excess Contributions shall be allocated among the family members in proportion to the contributions of each family member whose contributions have been combined with such Member.
6. Renumbered Section 4.7(c) is amended in its entirety to read as follows:
7. A new Section 4.7(d) is added to the EIP as follows:
excess deferrals previously distributed for the Employee's taxable year ending in the same Plan Year.
8. A new Section 4.9 is added to the EIP as follows:
9. Section 5.4 of the EIP is amended by the addition of the following:
Excess aggregate contributions (and income allocable thereto) shall be designated as excess aggregate contributions and distributed within 12 months after the end of the Plan Year to the Highly Compensated Employees on the basis of the respective portions of such excess aggregate contributions attributable to each of such Highly- Compensated Employees. Further, the excess aggregate contributions so distributed shall include Matching Contributions to the extent necessary to satisfy section, 401(a)(4) of the Code, as provided in section 1.401(m)-1(e)(4) of the Code.
In the event that the actual contribution ratio of a Highly Compensated Employee is determined under the family aggregation rules, the amount of the Excess Aggregate Contribution shall be determined by reducing such contribution under the leveling method provided in Code section 1.402(m)-l(e)(2) and the Excess Aggregate contribution shall be allocated among the family members in proportion to the contributions of each family member whose contributions have been combined with such Member.
10. Section 5.4(b) of the EIP is amended in its entirety to read as follows:
5.4(b) The Matching Contribution and/or Nonelective Contribution (and any earnings on such contributions up to the date of distribution, determined in a manner consistent with 1.401(m)-1(e)(3)(ii) of the Code) will be distributed to the Member by the end of the next Plan Year, if the' Matching Contribution and/or Nonelective Contribution has been made to the Plan before the date on which the Matching and/or Nonelective Contributions are determined to constitute an Excess Aggregate Contribution.
11. Effective January 24, 1997, Section 9.1 is hereby amended to read as set forth below:
12. Effective January 24, 1997, the EIP is hereby amended by the addition of a new Section 11.10, to read as set forth below:
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
4/8/97 /s/ ------------------------------------ -------------------------------- Date Donna J. Goya |
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Levi Strauss & Co. Employee Investment Plan (the "EIP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company desires to amend the EIP to expand the sources of Participant loans in certain respects and Article 18 of the EIP provides that the Company may amend the EIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the EIP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of September 1, 1997, the Company amends
Section 10 of the EIP in its entirety to read as set forth below:
SECTION 10 LOANS.
10.1 Amount of Loans.
(i) The proceeds of the loan will be used to acquire, construct or rehabilitate the Member's primary residence, or to refinance any loan or loans previously made to the Member by a third party for any of these purposes;
(ii) The loan is required by the Member for the payment of expenses relating to the post-secondary education of the Member or the Member's spouse or children, including expenses for tuition, fees, room, board or books; or
(iii) The loan is required by the Member due to the loss of income, real
property or personal property as a result of any natural disaster as specified on Appendix D to the Plan by any individual or entity empowered to amend the Plan.
(i) $50,000, less the amount by which such aggregate balance has been reduced by repayments of principal during the one-year period ending on the day before the new loan is made; or
(ii) 50% of the Member's Vested Interest in all of the Member's Accounts.
The amount of any loan must be a multiple of $100 and may not be less than $1,000. Only 4 loans to a Member may be outstanding at any time (no more than 2 of which may be for the acquisition, construction or rehabilitation of the Member's primary residence, or to refinance any loan or loans previously made by a third party for these purposes).
(i) The Account or Accounts that funded the loan to the extent that such Account or Accounts fund the loan; and
(ii) Such other security as the Administration Committee may require.
No loans will be secured by the Member's Account or Accounts in an amount greater than 50% of the Vested Interest and value of the balance of the Account of such Member at the time such loan was made.
to be made at least quarterly and whenever possible to be made through semi-monthly payroll deductions. If loan payments are not made for a period of up to 365 days due to the Member's temporary absence from active work, such missed payments may be made.
(i) In a single sum after the Member returns to active work;
(ii) Ratably over the remaining period of the loan;
(iii) In a single sum together with the final payment provided for under the note; or
(iv) In another manner mutually agreed upon by the Member and the Administrative Committee,
However, loan repayments by a Member who has been absent temporarily must recommence by the end of the one-year period following the date the Member's temporary absence began or, if earlier, upon the first paycheck after the Member's return to active work.
(i) 5 years after the date the loan is made (15 years after the date the loan is made if the loan is used to acquire the Member's principal residence); or
(ii) The date the Member's Plan Benefit is distributed under Section 11.
(a) Post-Tax Account;
(b) Rollover Account;
(c) Pre-Tax Account;
(d) Profit Sharing 401(k) Account;
(e) Profit Sharing Regular Account; and
(f) Matching Account,
If less than the entire amount of any Account is required to fund the loan, amounts invested in the Funds will be liquidated to fund the loan pro rata from each Fund in which the Account is invested.
If the Investment Committee determines that it is not feasible for the Trustee to prudently liquidate the necessary amount invested in any Fund in accordance with Members' loan requests, the Investment Committee will so advise the Administrative Committee. The Administrative Committee will direct that such steps be taken as it considers necessary or desirable for the protection of Members' Accounts, including the reordering of liquidation priorities or a pro rata reduction in the amount of each Member's loan. The promissory note executed by the Member will be reflected in reporting the balance of the Member's Account or Accounts that funded the loan, Principal and interest payments will be credited to the Member's Account or Accounts in proportion to the extent that such Account or Accounts funded the loan. Such principal and interest payments shall be invested in Funds in proportion to the extent that the funds loaned to the Member were invested in such Funds at the time such loan was made to the Member.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
9/9/97________________________ __________./s/______________ Date Donna J. Goya |
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Levi Strauss & Co. Employee Investment Plan (the "EIP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company desires to amend the EIP to provide for the maximum involuntary lump sum cash-out permitted by the Uruguay Round of the General Agreement on Tariffs and Trade ("GATT")( legislation, and Article 18 of the EIP provides that the Company may amend the EIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the EIP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna 1. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of December 1, 1997, except to the extent that another effective date is specifically provided below, the Company amends the EIP as set forth below:
Section 11.6(a) is amended by replacing "$3,500" wherever it appears with "$5,000."
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
11/25/97_________________________ _______/s/__________________________ Date Donna J. Goya |
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP");
WHEREAS, the Company desires to amend Appendix C of the EIP to reflect revised investment alternatives available under the EIP;
WHEREAS, Article 18 of the EIP provides that the Company may amend the EIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of the Company the authority to adopt certain amendments to the EIP;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof, and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of December 1, 1997, the Company amends Appendix C of the EIP to read as set forth on the attached Exhibit.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
11/25/98_____________________ ______/s/________________________ Date Donna J. Goya |
EXHIBIT
EMPLOYEE INVESTMENT PLAN OF LEVI STRAUSS & CO.
APPENDIX C
FUNDS
Fidelity Retirement Money Market
Fidelity Investment Grade Bond Fund (phased out 3/31/98, mapped to U.S. Bond Index)
Fidelity U.S. Bond Index Fund (eff. 3/31/98)
Fidelity Asset Manager: Income (phased out 9/30/98, mapped to Freedom Income Fund)
Fidelity Asset Manager (phased out 9/30/98, mapped to Dodge & Cox Balanced Fund)
Fidelity Asset Manager: Growth (phased out 9/30/98, mapped to Freedom 2020 Fund)
Fidelity Contrafund
Fidelity Magellan
Fidelity Overseas (closed 11/1/96, mapped to MSIF International Portfolio)
Morgan Stanley Institutional Fund International Portfolio (eff. 11/1/96)
Fidelity US Equity Index-Commingled Pool (eff. 4/30/96)
Fidelity Growth & Income (eff. 4/30/96)
Fidelity Low-Priced Stock (eff. 4/30/96)
Fidelity Freedom Income Fund (eff. 9/19/97)
Fidelity Freedom 2000 Fund (eff. 9/19/97)
Fidelity Freedom 2010 Fund (eff. 9/19/97)
Fidelity Freedom 2020 Fund (eff. 9/19/97)
Fidelity Freedom 2030 Fund (eff. 9/19/97)
Dodge & Cox Balanced Fund (eff. 3/31/98)
The Fund designated as the Fund to receive contributions for which no proper Member investment direction has been received shall be the Fidelity Retirement Money Market Fund.
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
LEVI STRAUSS & CO.
EMPLOYEE LONG-TERM INVESTMENT AND
SAVINGS PLAN
REVISED HOME OFFICE PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP"), the Levi Strauss & Co. Long- Term Investment and Savings Plan (the "ELTIS"), and the Revised Home Office Pension Plan of Levi Strauss & Co. (the "HOPP") (collectively, the "Plans");
WHEREAS, the Company desires to amend the Plans to provide that the definitions of compensation used under the Plans are as consistent as reasonably practical and are administratively convenient;
WHEREAS, each Plan provides that the Company may amend the Plan at any time and any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plans and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plans;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plans, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective December 1, 1997:
1. Section 2.14 of the EIP is amended as set forth on Exhibit A-1 hereto;
2. The final paragraph of Section 2.23 of the EIP is amended as set forth on Exhibit A-2 hereto;
3. Section 2.68 of the EIP is amended as set forth on Exhibit A-3 hereto;
4. Section 12.1(b) of the EIP is amended as set forth on Exhibit A-4 hereto;
5. Section 2.12 of the ELTIS is amended as set forth on Exhibit B-1 hereto;
6. The final paragraph of Section 2.20 of the ELTIS is amended as set forth on Exhibit B-2 hereto;
7. Section 2.57 of the ELTIS is amended as set forth on Exhibit B-3 hereto;
8. Section 10. 1 (b) of the ELTIS is amended as set forth on Exhibit B-4;
9. Section 2.17 of the HOPP is amended as set forth on Exhibit C-1 hereto; and
10. Section 2.29 of the HOPP is amended as set forth on Exhibit C-2 hereto.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on the date set forth below.
_11/25/98_______________ ______/s/__________________
Date Donna J. Goya
Senior Vice President
|
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Matching Contributions, Nonelective Contributions or Profit Sharing Contributions to the Plan and/or amounts paid to the Member according to an election under Section 6.2.
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
"Compensation" for purposes of this Section 2.23 means Total Compensation as defined in Section 2.68 of the Plan.
Total compensation in excess of $200,000 or any successor limitation as provided for the Plan Years in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded.
12.1 ...
(b) 25 % of the Member's compensation for such Plan Year. Compensation means Total Compensation for Plan Years beginning after December 31, 1997. For Plan Years beginning prior to January 1, 1998, "Compensation" means Total Compensation without regard to section 125 of the Code or section 402(a)(8) of the Code.
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Matching Contributions or Special Company Contributions to the Plan under Section 5.2;
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
"Compensation" for purposes of this Section 2.20 means Total Compensation as defined in Section 2.57 of the Plan.
Total compensation in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded.
10.1 ...
(b) 25% of the Member's compensation for such Plan Year. Compensation means Total Compensation for Plan Years beginning after December 31, 1997. For Plan Years beginning prior to January 1, 1998, "Compensation" means Total Compensation without regard to section 125 of the Code or section 402(a)(8) of the Code.
In the case of a Member who is working abroad or who is working for a foreign subsidiary of the Company, but continues to be paid from the home office of the Company, "Compensation" will be the amount determined by the Administrative Committee to be the amount that would have been paid to the Member had he or she been on a domestic payroll of the Company.
(a) Contributions to another plan maintained by the Company (other than cash or deferred contributions under Section 401(k) of the Code;
(b) Amounts paid or contributed to any group insurance plan or other employee benefit plan established or maintained by the Company or an Affiliated Company, including contributions to nonqualified deferred compensation plans, and any matching contribution made under the Company's Capital Accumulation Plan, except as provided above;
(c) Relocation expenses;
(d) Ordinary income recognized by the employee related to the exercise of any right granted under a stock option plan maintained by the Company or an Affiliated Company;
(e) Compensation paid by the Company or an Affiliated Company as a nonrecurring or special bonus, tax reimbursement or award;
(f) Payments under the Company's long-term performance plan or long- term incentive plan;
(g) Severance payments or pay in lieu of notice;
(h) Payments from the Company's Long Term Disability Plan;
(i) "Imputed income;" or
(j) "Perks."
"Imputed Income" means the amount of income recognized by a Member who receives Company paid life insurance in excess of $50,000 and such other amounts the Administrative Committee determines to be imputed income to the Member under the Code. "Perks" include, but are not limited to, Company paid parking, Company provided car allowances, and the flexible perk allowances provided to certain Members which may be used by the Member for financial counseling or planning; tax preparation or advice; excess medical expenses; physical examinations; additional life insurance, disability insurance, accidental death and dismemberment insurance or liability insurance; business lunch club dues or legal expenses.
For Plan Years beginning on and after November 27, 1989, Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section.401(a)(17) of the Code (as adjusted as provided under section 401(a)(17) of the Code) will be disregarded. In determining the Compensation of a Member, the family aggregation rules of section 414(q)(6) of the Code will apply, except that in applying these rules, the term "family" will include only the spouse of the Member and any lineal descendants of the Member who have not reached age 19 before the close of the Plan Year.
A Member's Compensation will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons.
For Plan Years beginning prior to January 1, 1998, "Compensation" means compensation which would be shown in Box 1 of Form W-2, plus any amounts which were excluded from Box 1 of Form W-2 pursuant to section 125 of the Code or section 402(a)(8) of the Code. For Plan Years beginning after December 31, 1997, "Compensation" means compensation which would be shown in Box 1 of Form W-2.
Compensation for any Plan Year in excess of $200,000 or any successor limitation as provided for the Plan Year in section 401(a)(17) of the Code (as adjusted under section 401(a)(17) of the Code). (The "401(a)(17) limitation"), will be disregarded. The adjustment to the 401(a)(17) limitation that takes effect on January 1 of each year is effective for the Plan Year beginning ____________.
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP"); and
WHEREAS, Section 18.1 of the EIP provides that LS&CO. may amend the EIP at any time and for any reason; and
WHEREAS, the EIP has consistently provided, and been interpreted to provide, benefits exclusively for persons considered by LS&CO. to be employees of the "Company" (as defined under Section 2.13 of the EIP) and to exclude from coverage individuals who perform services for the Company and who are categorized as independent contractors or leased employees, or in any other non-employee category, regardless of whether such persons are determined to be common law or statutory employees of the Company, and LS&CO. desires to reaffirm the practice of covering only those individuals whom LS&CO. designates as employees of the Company; and
WHEREAS, LS&CO. desires to amend Appendix E to the EIP to clarify those eligible highly compensated employees that are eligible to participate under the EIP; and
WHEREAS, LS&CO. desires to amend the EIP to clarify the treatment of Matching Contributions associated with excess contributions; and
WHEREAS, LS&CO. desires to amend the EIP to clarify that employees must complete twelve full calendar months of service in order to become eligible to participate under the EIP; and
WHEREAS, LS&CO. desires to amend the EIP to clarify that Members are not required to first request a loan in order to qualify for a hardship withdrawal if the effect of the loan would be to increase the financial hardship; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the EIP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREOF, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the EIP is hereby amended as follows, effective as of the dates set
forth below:
1. Section 2.17 of the EIP is hereby amended in its entirety, effective as of November 30, 1998, to read as follows:
(a) Any employee of the Company who is not paid from the home office payroll of LS&CO.;
(b) Any employee of a Participating Company other than LS&CO. who is not paid on a salary or commission basis;
(c) Any stocktaker, service representative, Retiree Coordinator or "Temporary Employee;"
(d) Any employee who is not employed in a state or territory of the United States or who receives no remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 816(a)(3) of the Code);
(e) Any alien who:
(i) Receives remuneration from the Company that constitutes income from sources within the United States (within the meaning of section 816(a)(3) of the Code); and
(ii) Has been transferred by the Company from a job outside the United States to a job within the United States, during nay period with respect to which the alien is benefiting (by reason of accruing a benefit or making or having contributions made on the alien's behalf) under:
(A) A retirement plan established or maintained outside the United States by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of the Company; or
(B) The Levi Strauss International Retirement Plan for Third Country National Employees or any successor or similar plan maintained by the Company or an Affiliated Company;
(f) A United States citizen locally hired by a foreign subsidiary (including a domestic subsidiary operating abroad) or a foreign division of the Company;
(g) Any employee who is included in a unit of employees covered by a negotiated collective bargaining agreement which does not provide for his or her membership in the Plan;
(h) Any individual who must be treated as an employee of the
Company for limited purposes under the leased employee provisions of Code
Section 414(n);
(i) Any individual providing services to the Company pursuant to a contract
designating him/her as an independent contractor or consultant;
(j) Any individual providing services to the Company pursuant to an agreement between the Company and a third party;
(k) Any employee who is included in a group or classification of employees on a payroll of a company designated by the Board of Directors as not being eligible to participate in the Plan; or
(l) A Highly Compensated Employee with respect to the eligibility to make Member Contributions or receive an allocation of Matching Contributions, nonelective Contributions, Profit Sharing Contributions and Forfeitures only, except as otherwise provided under Appendix E.
A member of the Board of Directors of the Company is not eligible for membership in the Plan unless he or she is also an Employee of the Company.
For purposes of this Section 2.17, a "Temporary Employee" means a person who:
(i) Is hired to fill a position which arises from either an emergency situation of the temporary absence of an Employee; and
(ii) Is subject, as a condition of such employment, to termination without prior notice at any time; and
(iii) Is designated by LS&CO. as a "Temporary Employee."
A person's status as an Employee will be determined by the Administrative Committee and such determination will be conclusive and binding on all persons notwithstanding and contrary determination of Employee status by any court or governmental agency including, but not limited to, the Internal Revenue Service."
2. Effective as of the date this amendment is adopted, the second to last sentence of Section 2.66 of the EIP is hereby amended to read as follows:
"All Service will be aggregated, whether or not such Service is performed consecutively, and every partial month will be deemed to be one full month of Service; except that for purposes of eligibility under Section 3.1, an Employee must complete twelve (12) full calendar months of Service."
3. Effective as of December 1, 1997, Section 4.7 of the EIP is hereby amended by adding the following new paragraph (e) to read as follows:
4. Effective as of the date this amendment is adopted, subparagraph (iv) of paragraph (c) of Section 9.3 of the EIP is amended to read as follows:
?(iv) A loan from the Member's Accounts under Section 10.1 or a loan from a
commercial source on reasonable terms, to the extent such loan
would not itself cause an immediate and heavy financial need."
|
5. Appendix E of the EIP is hereby amended in its entirety, effective as of December 1, 1997, to read as follows:
"Pursuant to Section 3.5(b) of the Plan, the Highly Compensated Employees described below are eligible to participate in this Plan as Members:
1. For any Plan Year ending in or after the 1996 calendar year, Highly Compensated Employees whose compensation (as determined pursuant to Section 2.23) for the prior Plan Year did not exceed $95,000.?
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on November 22, 1999.
LEVI STRAUSS & CO.
_____/s/____________________________ Donna J. Goya Senior Vice President |
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP"); and
WHEREAS, Section 18 of the EIP provides that LS&CO. may amend the EIP at any time and for any reason; and
WHEREAS, LS&CO. desires to amend the EIP to provide that loans made on or after February 1, 2000 shall (1) be immediately offset after ninety (90) days after the date a Member terminates employment, and (2) generally be limited to two outstanding loans at any one time; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the EIP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the EIP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREOF, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the EIP is hereby amended as follows, effective as of the dates set forth below:
1. Effective as of February 1, 2000, paragraph (c) of Section 10.1 of the EIP is amended by adding the following sentence to the end thereof to read as follows:
"Notwithstanding the foregoing, effective February 1, 2000, only 2 loans to a Member may be outstanding at any time; provided, however, that those existing loans as of February 1, 2000 in excess of 2 shall not be counted for purposes of this limitation."
2. Effective as of February 1, 2000, paragraph (d) of Section 10.2 of the EIP is amended by read as follows:
(i) 5 years after the date the loan is made (15 years after the date the loan is made if the loan is used to acquire the Member's principal residence);
(ii) The date the Member's Plan Benefit is distributed under Section 11; or
(iii) In the case of any loan made on or after February 1, 2000, ninety
(90) days after the date the Member terminates employment for any
reason with the Company or an Affiliated Company and is not a party
in interest with respect to the Plan under Section 3(14) of the Act.
In the event that a Member's loan is repaid due to termination of employment, in accordance with (iii) above, such Member's entire unpaid loan balance will become immediately due and payable by way of an offset of such Member's corresponding Accounts, as described under Sections 10.3 and 10.4.?
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on December 23, 1999.
LEVI STRAUSS & CO.
____/s/_________________________ Donna J. Goya Senior Vice President |
LEVI STRAUSS ASSOCIATES INC.
EMPLOYEE LONG-TERM INVESTMENT
AND SAVINGS PLAN
APPENDIX D
ADDITIONAL ELIGIBLE WITHDRAWALS
In accordance with Section 8.3(b)(viii), losses relating to natural disasters described herein may form a basis for withdrawals.
1. (a) Description of Natural Disaster.
Las Vegas Storm/Flood in Summer 1999
(b) Limitations.
None
/s/
----------------------------------------------
Donna J. Goya, Senior Vice President
12/23/99
--------
Date
|
EMPLOYEE INVESTMENT PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Employee Investment Plan of Levi Strauss & Co. (the "EIP"); and
WHEREAS, Section 18 of the EIP provides that LS&CO. may amend the EIP at any time and for any reason; and
WHEREAS, LS&CO. desires to amend the EIP effective April 3, 2000 to eliminate the one year service requirement for employee contributions; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board, to adopt certain amendments to the EIP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the EIP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the EIP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREOF, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the EIP is hereby amended as follows, effective as of the dates set forth below:
1. Effective as of April 3, 2000, the second to last sentence of Section 2.66 of the EIP is hereby amended to read as follows:
"All Service will be aggregated, whether or not such Service is performed consecutively, and every partial month will be deemed to be one full month of Service, except that only full calendar months will be taken into account for purposes of eligibility for (a) becoming a Member under Section 3.1 and, (b) the Matching Contribution under Section 5.1?
2. Effective as of April 3, 2000, Section 3.1 of the EIP is hereby amended in its entirety to read as follows:
designate a Beneficiary under Section 2.8 and Section 14.?
3. Effective as of April 3, 2000, the first sentence of Section 5.1 of the EIP is hereby amended to read as follows:
"Except as provided below, for each period (an "Accumulated Period") during a Plan Year with respect to the pay period coinciding with or next following the day on which a Member completes a year of Service, the Company will make a Matching Contribution to the Plan in an amount equal to 50% of each Member's Contributions for the Accumulation Period."
* * *
IN WITNESS WHEREOF, the undersigned has set your hand hereunto, on March 10, 2000.
LEVI STRAUSS & CO.
_______________/s/_______________ Donna J. Goya Senior Vice President |
EXHIBIT 10.21
CAPITAL ACCUMULATION PLAN OF
LEVI STRAUSS & CO.
PLAN DOCUMENT AND
EMPLOYEE BOOKLET
This Capital Accumulation Plan of Levi Strauss & Co. Plan Document and Employee Booklet (the "Booklet") contains the terms of the Capital Accumulation Plan of Levi Strauss & Co. (the "Plan") and constitutes the Plan document. Under the Plan, Levi Strauss & Co. and certain of its subsidiaries (collectively, the "Company") are making available to eligible employees an opportunity, through payroll deductions, to contribute money to individual retail brokerage accounts offered by Charles Schwab & Co., Inc. ("Charles Schwab"). Under the Plan the Company will match certain employee contributions with contributions to the employee's brokerage account equal to 75% of the employee contributions. Each individual employee is solely responsible for selecting and monitoring his or her investment choices, paying related commissions and charges, and for investment results from participation in the Plan. The Plan is intended to make individual investment more convenient for employees.
You should review this Booklet carefully. An overview of the Plan appears in Part 1 of this Booklet. Particular features of the Plan are presented in a question-and-answer format in the second part of this Booklet. Part 3 contains information about the federal income tax consequences of participation in the Plan. You should also carefully review the separate materials provided by Charles Schwab.
This Booklet originated May 28, 1996, and was last updated August 1, 1998
PART 1. OVERVIEW
Key features of the Plan include:
. Home Office payroll employees are eligible to participate in the Plan if they have completed at least one year of service and would be eligible to participate in the Employee Investment Plan ("EIP") if not for that plan's exclusion of employees whose compensation exceeds the applicable maximum limitation.
. The Plan allows eligible employees to contribute money through payroll deduction and receive a 75% matching employer contribution (the "Match").
. An employee may contribute any fixed contribution percentage (using a whole
percentage) up to 10% of the employee's covered compensation to the Plan
(prior to October 1, 1997, contribution was based on a fixed amount.)
Contributions are made on an after-tax basis. The employer contributions and
any dividends or capital gains earned by investments made with employee or
employer contributions are current income to the employee for tax purposes.
Tax reporting with respect to investments made with these funds is the
responsibility of the employee, not the Company. Charles Schwab will issue a
Form 1099 to participants after the close of each year.
. Employee contributions and the Match will be sent to an individual retail brokerage account established in the employee's name at Charles Schwab (the "Account") and placed in a Charles Schwab money market fund of the employee's choice. Employees may invest the funds in any investment offered by Charles Schwab. All investment decisions, related commissions and charges, and investment results are the responsibility of the employee, not the Company.
. THE COMPANY DOES NOT ENDORSE, RECOMMEND OR GUARANTEE ANY INVESTMENT OR SERVICE OFFERED, PROVIDED OR PROMISED BY CHARLES SCHWAB OR ANY OTHER OFFEROR OF INVESTMENTS. THE COMPANY IS NOT RESPONSIBLE FOR INVESTMENT OPTIONS, INDIVIDUAL INVESTMENT CHOICES OR THE RETURNS ON INVESTMENTS. EACH EMPLOYEE IS RESPONSIBLE FOR MONITORING HIS OR HER OWN ACCOUNT. ALL FUNDS CONTRIBUTED BY THE EMPLOYEE AND THE COMPANY UNDER THE PLAN ARE DEPOSITED IN THE EMPLOYEE'S ACCOUNT. NEITHER THE COMPANY NOR ANY TRUST HOLDS ANY OF THESE FUNDS.
. Employees will own the Account and have full control over investments in the Account. Dividends and interest paid on Account investments will be deposited into the Account.
. The value of the Match on your payroll deductions is taxable compensation; thus, applicable taxes will be withheld from your regular pay, and the entire Match will be deposited in your Account.
. An employee may withdraw funds from the employee's Account whenever he or she wants to do so. However, when an active employee withdraws funds from his or her Account, the employee's contributions by payroll deduction, and contributions with respect to AIP and the Match will be suspended for one year unless the withdrawal was for one of the stated hardship reasons (see questions 23-25).
. The Company will have the right to obtain certain information regarding employees' Accounts in order to administer the Plan.
. Upon termination of employment for any reason, the terminating employee (or his/her beneficiary) has the right to do anything with the Account he/she chooses, including continuing to contribute and making partial or complete withdrawals, although the Match will cease. The Company has no right to the Account whatsoever (except in the rare case of a mistaken contribution (see question 26)).
. Neither you, your dependents, your beneficiary nor anyone else has the right or claim to benefits under the Plan other than those described in the Plan.
PLEASE NOTE THAT THE ABOVE IS BUT A BRIEF OVERVIEW OF THE PLAN. YOU ARE ENCOURAGED TO CAREFULLY READ THIS ENTIRE BOOKLET, TOGETHER WITH MATERIALS PROVIDED BY CHARLES SCHWAB. THE PLAN
IS NOT AN EMPLOYMENT CONTRACT AND NONE OF THE PLAN PROVISIONS GUARANTEE YOUR EMPLOYMENT WITH THE COMPANY OR AFFECT THE RIGHT OF THE COMPANY TO TERMINATE YOUR EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE. THIS BOOKLET IS NOT INTENDED TO IMPLY ANY PROMISE OF CONTINUED EMPLOYMENT WITH THE COMPANY. IN FACT, EMPLOYMENT WITH THE COMPANY MAY BE ENDED WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE, AT ANY TIME, BY EITHER THE COMPANY OR YOU.
PART 2. INFORMATION ABOUT THE PLAN
1. WHAT IS THE PLAN?
The Plan is a payroll deduction program that allows eligible employees to contribute money to an individual retail brokerage account maintained by Charles Schwab (the "Account"). It also provides for an employer contribution equal to 75% of the employee's contributions (the "Match"). (For information about the Match, see question 7.) The Account is a regular brokerage account; employees are responsible for their own investments. Company involvement is limited to the contribution and Match features of the Plan.
2. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to attract, retain, motivate and reward eligible employees of the Company, and to provide employees with an arrangement intended to make individual investment more convenient for employees.
3. WHO MAY PARTICIPATE IN THE PLAN?
You may participate in the Plan if you otherwise could participate in the EIP, but have been excluded from active participation in that plan because your compensation exceeds the maximum limitation provided in the EIP. For current fiscal year 1998 participation in the Plan, your earnings in the previous fiscal year must be greater than $95,000. This earning limitation may be changed from time to time. In order to otherwise have been eligible to participate in the EIP, you must have at least one year of service as an employee of the Company or any subsidiary of the Company, and currently be paid on the Home Office payroll and employed by the Company or any subsidiary of the Company that has adopted the EIP. Those subsidiaries include Levi Strauss International, Levi's Only Stores ("LOS"), Custom Clothing Technology Corp. ("CCTC"), and Britannia Sportswear Ltd. (prior to its sale in August, 1997.) In addition, you must not be covered by a collective bargaining agreement or a member of certain other excluded groups. If you have question about your eligibility to participate in the Plan, you may contact U.S. Retirement Benefits.
4. HOW DO I PARTICIPATE?
5. WHEN MAY I ENROLL IN THE PLAN?
You may enroll and begin your participation in the Plan effective on the first day of any payroll period after you have completed one year of service (whether before or after the effective date of the Plan) if you otherwise are an eligible employee at that time.
6. HOW MUCH MAY I INVEST THROUGH THE PLAN?
You may authorize the Company to deduct, in a fixed contribution percentage (using a whole percentage), up to 10% of your covered compensation in each pay period. Your covered compensation for purposes of the Plan is explained in question 11. You may change your contribution as frequently as every pay period, with 20 days' notice. You also may transfer funds from other sources to the Account outside of the Plan, but these transfers will not earn the Match (see question 12) and will be subject to the same withdrawal rules as your Plan contributions and Match (see question 23).
7. WHAT ARE THE AMOUNT AND CONDITIONS FOR THE MATCH?
Your contributions deducted from each pay check and AIP payment under the Plan earn the Match, which is an employer payment equal to 75% of your contributions under the Plan. The Match is taxable immediately, and appropriate taxes will be withheld from your regular pay and AIP payment so that the entire Match will go to your Account. See question 33 for information about the Company's ability to change or end the Match.
8. WHAT HAPPENS IF MY PAY CHANGES DURING THE YEAR?
Effective October 1, 1997, if your pay increases during the year, your payroll deduction for the Plan will also increase because your deduction is based on your designated contribution percentage. Likewise, your payroll deduction for the Plan will decrease if your pay is reduced during the year because your deduction is based on your designated contribution percentage. Prior to October 1, 1997, you were required to submit a change of your contribution amount to U.S. Retirement Benefits to reflect your pay increase or decrease. No retroactive deductions or retroactive match are allowed.
9. IS THERE A WAY FOR ME TO MAKE A CAP CONTRIBUTION ON A HAND-DRAWN CHECK?
CAP is administered as individual direct deposit accounts with Charles Schwab. The contribution and match must go through the automated payroll system to complete the deposit. This is not possible to do with a hand-drawn check. For this reason, there is no CAP deduction taken from a hand-drawn check, and therefore, no Match is made.
10. HOW DO I MAKE A CONTRIBUTION ON MY AIP PAYMENT?
Prior to 1998, you were allowed to write a check for up to 10% of your AIP and submit it to U.S. Retirement Benefits in order to make a CAP contribution from your AIP and to receive a Company Match on your contribution. A payroll system change in October, 1997 has alleviated these steps. Now, your AIP contribution and Match are automatically processed through the payroll system.
11. WHAT IS MY "COVERED COMPENSATION" UNDER THE PLAN?
Generally, your covered compensation is your base pay, plus any amounts which would have been included in your base pay if not for the deferral of such amounts under any deferred compensation program of the Company, and your AIP. For purposes of Matches made in 1996 and 1997, covered compensation for Territory managers, Account Managers and Account Executives is limited to specified maximum amounts for grades 5, 6, and 7, respectively. Effective 12/1/97, as a result of the change in pay structure for the sales force, it is no longer required to have company match limits for the sales group.
12. MAY I INVEST OTHER THAN BY PAYROLL DEDUCTIONS?
Yes. You own the Account and may make contributions at any time and in any amount to the Account by personal check. These contributions should be sent to Charles Schwab directly; they should NOT be sent to the Company. Generally, these additional funds are not subject to the Plan and do not earn the Match. However, because ANY withdrawals from the Account, other than those classified as "hardship" withdrawals, will cause all payroll and the Match under the Plan to stop for a 12-month period, you may be better served opening another investment account outside of the Plan.
13. WHEN DO MY PAYROLL DEDUCTIONS BEGIN?
Your payroll deductions will begin on the second pay period following enrollment.
14. WHAT HAPPENS TO MY PAYROLL DEDUCTION?
The amount you authorize for deduction will be deducted from your paycheck. It will be sent to Charles Schwab and held in a money market fund unless you redirect your funds and Match to other investments. You may call Charles Schwab and arrange for those funds to be invested in any investment offered by Charles Schwab. You should be aware that Charles Schwab may have requirements, limitations, commissions, conditions and fees with respect to the investment of funds contributed to the Account. Such matters are solely within the control of Charles Schwab and not the Company. Fulfillment or compliance with any of these requirements, limitations or
conditions and payment of any applicable commissions and fees are the responsibility of the participating employee.
15. MAY I CHANGE THE LEVEL OF MY PAYROLL DEDUCTION?
Yes. You may decrease or increase your contributions by changing your contribution percentage (but not above the 10% limit) at any time. You may stop your deductions at any time. Those actions will become effective at the later of the time you choose or within two payroll periods after you return the proper forms to U.S. Retirement benefits (see question 6 and 8).
16. HOW LONG WILL MY PAYROLL DEDUCTION AUTHORIZATION REMAIN IN EFFECT?
Your participation in the Plan will remain unchanged and effective until you become ineligible to participate or you stop or change the level of your payroll deduction (see question 6 and question 15).
17. HOW WILL INVESTMENTS BE MADE?
You will need to contact Charles Schwab directly once you have your CAP account number. You have sole responsibility for your investments. The Company will not make or monitor your investments under the Plan and does not undertake to provide you with investment information. Neither the Company nor any person, group or function within the Company (including but not limited to the Investment Committee under the qualified plans of U.S. Retirement Benefits) has any responsibility for your investments. The Account is a regular brokerage account; Company involvement is limited to the Match and contributions features of the Plan.
18. IN WHOSE NAME WILL MY ACCOUNT BE REGISTERED?
Your Account will be a regular individual brokerage account registered in your name with Charles Schwab. Unlike the EIP, you (not a trust) will own the investments directly and in your name. No funds are set aside in a trust or held by the Company. Your investments through the Account can go up or down, and any risk of loss is borne by you.
19. WILL STOCK OF THE COMPANY BE AN INVESTMENT OPTION?
No. No stock of or interest in the Company will be an investment option.
20. WHAT HAPPENS IF MY INVESTMENTS LOSE MONEY, THE STOCK MARKETS CRASH OR SOMETHING HAPPENS TO CHARLES SCHWAB? WILL THE COMPANY PROTECT ME AND MY INVESTMENTS?
No. The Company will not protect you from these or other events. You, alone, are responsible for your investments.
21. WILL I RECEIVE STATEMENTS ABOUT MY INVESTMENTS?
Yes. Charles Schwab will send you periodic statements and transaction confirmation. The frequency and content of any information regarding your Account are entirely the responsibility of Charles Schwab, not the Company.
22. MAY I SELL MY INVESTMENTS?
Yes. You may buy and sell as much as you wish (subject to any conditions applicable to your investments.) However, you should remember that these transactions may have charges, costs, fees (including commissions) and tax consequences. These charges and other amounts are your responsibility, not the Company's responsibility.
23. MAY I WITHDRAW FUNDS FROM MY ACCOUNT?
You own the Account and may withdraw funds at any time. However, withdrawal of any funds from your Account, regardless of the source (e.g., payroll deduction, Match, dividends and contributions outside of the Plan), except for hardship purposes, will cause your payroll deductions and Match to be suspended for 12 months from the later of the date of withdrawal or the date that the contribution suspension can first be effected by the Company. After the suspension period is over, it is your responsibility to reinitiate payroll deductions by contacting U.S. Retirement Benefits. You may continue to make contributions by personal check directly to Charles Schwab during the suspension period, but you will not receive a Match. Please be aware that transfer of funds or investments from CAP to another broker or investment accounts is a withdrawal.
24. WHAT ARE THE QUALIFYING HARDSHIPS WHICH WOULD ALLOW ME TO CONTINUE MAKING CONTRIBUTIONS AFTER A WITHDRAWAL?
Withdrawals in the amount necessary to satisfy the following hardships will not result in suspension:
(i) The payment of extraordinary and unreimbursed medical or hospital expenses incurred by you, your spouse, any of your dependents or those of your spouse or any nondependent parent or child of you or your spouse;
(ii) The payment of expenses for tuition, books, room-and-board and required supplies for the next academic year of post-secondary education for you, your spouse or child, or any of your or your spouse's dependents;
(iii) The payment of expenses incurred by you in buying your primary residence;
(iv) The need to prevent your eviction from your primary residence or foreclosure of your primary residence;
(v) The payment of funeral expenses for a family member or relative;
(vi) The loss of income resulting from an abbreviated work schedule required by your or your spouse's health, a loss of employment by your working spouse or the garnishment of your or your spouse's wages; or
(vii) Payment of taxes resulting from capital gains, dividends or other taxable events within the plan.
(viii) The loss of income, real property, or personal property as a result of any natural disaster approved as hardship withdrawal under EIP.
25. WHAT MUST I DO TO HAVE MY WITHDRAWAL BE CONSIDERED A HARDSHIP WITHDRAWAL?
It is your responsibility to provide U.S. Retirement Benefits with appropriate evidence that your withdrawal is for one of the hardship reasons discussed in question 24. The form of evidence required for a hardship withdrawal is specified by U.S. Retirement Benefits. Please contact U.S. Retirement Benefits to discuss evidence requirements for hardship withdrawals. If you provide the required evidence at least 30 days before your withdrawal and the Company agrees that your reason qualifies as a hardship, there will be no suspension of your participation. If you do not submit your required evidence at least 30 days before your withdrawal, or if the Company
26. WHAT HAPPENS IF I'M NO LONGER AN EMPLOYEE?
After your employment terminates, you may do anything with the Account as you wish. The Company has no authority to involve itself with your Account after termination. However, if a Match is contributed to your Account by mistake after you are no longer an employee, the Company can cause the Match to be returned to the Company.
27. CAN I GET A LOAN FROM THE PLAN?
No. There is no loan feature in the CAP.
28. WHAT HAPPENS IF I GET DIVORCED?
A transfer out of your Account or division of your Account in connection with a divorce or marital property settlement will not be considered a withdrawal if the transfer or division is pursuant to a final order of a court with jurisdiction over the matter. Any other transfer or division in connection with your divorce will be considered a withdrawal from your Account and will result in suspension. It is your responsibility to provide the appropriate documents to U.S. Retirement Benefits before any suspension is imposed.
29. WHAT ARE THE TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN?
Information about the federal income tax consequences of participating in the Plan is presented in Part 3 of this Booklet. That discussion includes information about, among other things, the need to withhold taxes in connection with the payment of the Match and the potential taxation of dividends and gains from transactions in Account investments. You are encouraged to read Part 3 carefully and to consult with your own tax advisor about the specific tax consequences to your participation in the Plan.
30. IS THE PLAN "QUALIFIED" UNDER THE TAX CODE?
No. The Plan is not intended to be and is not a "qualified" plan under the Internal Revenue Code. It is not a plan described in sections 401(a), 401(k) or 423 of the Internal Revenue Code and none of the special benefits of those provisions, including but not limited to deferral of taxes on contributions or investment earnings, are available with respect to participation in the Plan.
31. IS THE PLAN GOVERNED BY ERISA?
No. The Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, including but not limited to the reporting, disclosure and fiduciary responsibility rules.
32. WHO ADMINISTERS THE PLAN?
The Plan is administered by the Administrative Committee under the tax-qualified employee benefit plans of the Company (the "Administrative Committee") to the extent described below. Except to the extent that such responsibility is otherwise delegated by the Board of Directors of LS&CO. or the Administrative Committee, the Administrative Committee is responsible for the administration of the Plan in the following respects:
(i) Determination of eligibility for participation;
(ii) Determination of whether the reason for a withdrawal satisfies as one of the hardships specified in the Booklet;
(iii) Interpretation of the Booklet; and
(iv) The promulgation of forms relating to participation in the Plan, excluding any forms required by Charles Schwab in connection with the Account.
It is expected that the Administrative Committee will delegate some or all of its responsibilities to U.S. Retirement Benefits.
Charles Schwab is responsible for the following:
(i) The investments offered to participants in the Plan;
(ii) The provision of information to participants regarding the Accounts including, but not limited to, information regarding assets held in the Account, dividends paid with respect to Account investments, gains (or losses) on transactions involving Account investments, and taxes for which the participant may be liable with respect to the Account or its investments; and
(iii) The execution of instructions for and transactions in the Accounts.
Charles Schwab has complete responsibility with respect to the Accounts. The Company is not responsible for any requirements, conditions, investment options or other decisions by Charles Schwab, or for the content or timing of any communications or reports from Charles Schwab.
33. MAY THE PLAN BE TERMINATED OR CHANGED?
Yes. The Company anticipates that the Plan will continue. However, the Company may amend, terminate or suspend the Plan -- including the existence or amount of the Match, the suspension rules or the brokerage firm -- at any time and for any reason. The Plan may be amended in writing by the Board of Directors of LS&CO. or by any person to whom the Board of Directors has directly or indirectly delegated the authority to amend the Plan. For purposes of any delegation of authority to amend employee benefit plans of the Company, this Plan shall constitute an employee benefit plan.
Charles Schwab may also change its rules, policies, investment choices and fee and commissions structure. Those changes, and any communications about them, are the responsibility of Charles Schwab.
34. MAY I OBTAIN ADDITIONAL INFORMATION ABOUT THE PLAN OR THE COMPANY?
Yes. You may obtain additional information about the Plan and its administrators by contacting the Manager of U.S. Retirement Benefits at 1155 Battery Street IH1/4, San Francisco, CA 94111 (415) 501-1532. The Company may distribute information about the Plan by e-mail or voice mail in lieu of or in addition to hard copy.
PART 3. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF
PARTICIPATION IN THE PLAN
The following description of United States federal income tax consequences is based on existing statutes, regulations and interpretations. These rules are complex and may change without notice. The description is intended to be general and should not be relied upon as specific tax advice for any individual employee. The tax consequences of participation in the Plan may vary depending upon individual circumstances; each employee should consult with his or her own tax advisor. This description does not discuss tax consequences of participation in the Plan under any local or state law or the law of any country other than the United States.
The Plan is a voluntary investment program. There is no identifiable tax benefit to your participation in the Plan. Specifically, you should be aware of the following:
. Your payroll deduction contributions to the Plan are made on an after-tax basis; that is, the contributions are included in your gross salary and are subject to federal income, employment (including Social Security) and other taxes.
. You will have taxable income upon the payment of the Match. The Company is required to withhold specific amounts of tax in connection with the Match.
. Buying and selling of securities and other investments in your Account may generate taxable income, either as capital gains or ordinary income. It will be your responsibility to report this income and pay any applicable taxes.
. In order for you to correctly report and pay any taxes with respect to the investment of your Account, you must accurately record your basis in any investment.
THE RESPONSIBILITY TO ASCERTAIN ANY REPORTABLE INCOME WITH RESPECT TO YOUR ACCOUNT, AND TO REPORT SUCH INCOME AND PAY ANY APPLICABLE TAXES, BELONGS SOLELY TO YOU. THE COMPANY HAS NO RESPONSIBILITY FOR SUCH TAXES OR TAX REPORTING. FOR INFORMATION RELATING TO ANY TAX FOR WHICH YOU ARE LIABLE WITH RESPECT TO THE ACCOUNT, YOU SHOULD LOOK TO CHARLES SCHWAB AND/OR ANY OTHER OFFEROR OF INVESTMENTS HELD IN YOUR ACCOUNT.
******
THIS PLAN IS NOT AN EMPLOYMENT CONTRACT AND NONE OF THE PLAN PROVISIONS GUARANTEE YOUR EMPLOYMENT WITH THE COMPANY OR AFFECT THE RIGHT OF THE COMPANY TO TERMINATE YOUR EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE. THIS BOOKLET IS NOT INTENDED TO IMPLY ANY PROMISE OF CONTINUED EMPLOYMENT WITH THE COMPANY. IN FACT, EMPLOYMENT WITH THE COMPANY MAY BE ENDED WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE, AT ANY TIME, BY EITHER THE COMPANY OR YOU. NOBODY OTHER THAN THE CHIEF EXECUTIVE OFFICER, PRESIDENT OR A SENIOR VICE PRESIDENT OF THE
COMPANY MAY ENTER INTO ANY AGREEMENT WITH AN EMPLOYEE THAT GUARANTEES HIS OR HER EMPLOYMENT. IF THERE IS AN AGREEMENT BY THESE EXECUTIVES IMPLYING PROMISE OF CONTINUED EMPLOYMENT WITH THE COMPANY, THE AGREEMENT MUST BE IN WRITING AND SIGNED BY THE CHIEF EXECUTIVE OFFICER, PRESIDENT OR A SENIOR VICE PRESIDENT.
YOU, NOT THE COMPANY, ARE RESPONSIBLE FOR THE INVESTMENT DECISIONS AND OUTCOMES OF YOUR ACCOUNT.
CAPITAL ACCUMULATION PLAN OF
LEVI STRAUSS & CO.
AMENDMENTS
WHEREAS, LEVI STRAUSS & CO. ("LS&CO.") maintains the Capital Accumulation Plan of Levi Strauss & Co. (the "CAP"); and
WHEREAS, Part 2, Q&A-33 of the CAP provides that LS&CO. may amend the CAP at any time and for any reason; and
WHEREAS, LS&CO. desires to amend the CAP effective April 3, 2000 to eliminate the one year service requirement for employee contributions; and
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of LS&CO. authorized Robert D. Haas, Chairman of the Board, to adopt certain amendments to the CAP and to delegate to certain other officers of LS&CO. the authority to adopt certain amendments to the CAP; and
WHEREAS, on December 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the CAP, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREOF, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, the CAP is hereby amended as follows, effective as of the dates set forth below:
1. Effective as of April 3, 2000, the first bullet of Part 1 of the CAP is hereby amended in its entirety to read as follows:
"Prior to April 3, 2000, Home Office payroll employees are eligible to participate in the Plan if they have completed at least one year of service and would be eligible to participate in the Employee Investment Plan ("EIP") if not for that plan's exclusion of employees whose compensation exceeds the applicable maximum limitation. Effective as of April 3, 2000, Home Office payroll employees are eligible to participate in the Plan if they have completed at least one hour of service and would be eligible to participate in the EIP if not for that
plan's exclusion of employees whose compensation exceeds the applicable maximum limitation."
2. Effective as of April 3, 2000, the fourth sentence of Part 2, Q&A-3 of the CAP is hereby amended to read as follows:
"In order to otherwise have been eligible to participate in the EIP, you must (1) have at least one year of service as an employee of the Company or any subsidiary of the Company; except that effective as of April 3, 2000, you must have only one hour of service as an employee of the Company or any subsidiary of the Company, and (2) currently be paid on the Home Office payroll and employed by the Company or any subsidiary of the Company that has adopted the EIP."
3. Effective as of April 3, 2000, Part 2, Q&A-5 of the CAP is hereby amended in its entirety to read as follows:
"Prior to April 3, 2000, you may enroll and begin participation in the Plan effective on the first day of any payroll period after you have completed one year of service (whether before or after the effective date of the Plan) if you otherwise are an eligible employee at that time. Effective as of April 3, 2000, you may enroll and begin your participation in the Plan effective on the first day of any payroll period coinciding with or following the date you perform one hour of service, if you otherwise are an eligible employee at that time."
4. Effective as of April 3, 2000, the first sentence of Part 2, Q&A-7 of the CAP is hereby amended to read as follows:
"After you have completed one year of service, your contributions deducted from each paycheck and AIP payment under the Plan earn the Match, which is an employer payment equal to 75% of your contributions under the Plan."
* * *
IN WITNESS WHEREOF, the undersigned has set her hand hereunto, on March ____, 2000.
LEVI STRAUSS & CO.
Senior Vice President
EXHIBIT 10.22
LEVI STRAUSS ASSOCIATES INC.
1996 SPECIAL DEFERRAL PLAN
(1994 Grants)
1. PURPOSE.
The purpose of this Levi Strauss Associates Inc. Special Deferral Plan (1994 Grants) (the "Plan") is to enable a select group of highly compensated management employees of Levi Strauss Associates Inc. and its subsidiaries (collectively, the "Company") to convert the compensation element of certain stock appreciation rights into deferred cash compensation. By means of this Plan, the Company seeks to retain and motivate this group of key management personnel.
2. DEFINITIONS.
2.1 ADMINISTRATOR. "Administrator" means the Personnel Committee of the Board, another committee of the Board appointed pursuant to Section 3.1, or the Board itself, administering this Plan as provided in Section 3.1.
2.2 BENEFICIARY. "Beneficiary" means a beneficiary designated by a Participant pursuant to Section 6.5.
2.3 BOARD. "Board" means the Board of Directors of LSAI Holding Corp., the parent corporation of the Company.
2.4 DEFERRAL AMOUNT. "Deferral Amount" is the portion of an SAR Conversion Amount that a Participant elects to defer, or to continue to defer, under this Plan.
2.5 ELECTED DISTRIBUTION YEAR. "Elected Distribution Year" means the calendar year selected by a Participant to receive payment of part, or all (at the Participant's election), of the balance credited (at the time of payment) to a Reserve Account of the Participant. The Elected Distribution Year cannot be earlier than the calendar year following the calendar year in which a Reserve Account Vests nor later than the calendar year in which the Reserve Account's Last Payment Date occurs; however, a Reserve Account may have more than one Elected Distribution Year.
2.6 FIRST PAYMENT DATE. "First Payment Date" means the earlier of
(i) the first business day of January of the Elected Distribution Year and (ii)
the first business day of January immediately following the date a Participant's
employment by the Company terminates, whether voluntarily, involuntarily, or by
reason of the Participant's death or incapacity.
2.7 LAST PAYMENT DATE. "Last Payment Date" means the first business day of January following the seventh anniversary of the grant date of an SAR.
2.8 PARTICIPANT. A "Participant" is a Company employee who, on or before August 31, 1996, (a) holds one or more SARs, (b) elects to participate in this Plan pursuant to Section 4.1, and (c) in connection with that election surrenders his or her SARs to the Company.
2.9 PARTICIPATION YEAR. "Participation Year" means a fiscal year of the Company during which an individual is a Participant.
2.10 RESERVE ACCOUNT. "Reserve Account" means an unfunded, unsecured book reserve account maintained on behalf of a Participant in respect of a Vested or Vesting portion of an SAR pursuant to Section 6.
2.11 SAR. "SAR" means each Vested or Vesting portion of a stock appreciation right issued by Levi Strauss Associates Inc. under its 1992 Executive Stock Appreciation Rights Plan. For example, if a stock appreciation right was granted for 900 shares, Vesting in equal increments in 1995, 1996, and 1997, each of those increments would be an "SAR" for purposes of this Plan.
2.12 SAR CONVERSION AMOUNT. "SAR Conversion Amount" means the excess of (i) $265 (plus an increment based upon money-market fund rates measured from April 17, 1996 to the date on which an SAR Conversion Amount is credited to a Participant's Reserve Account) over (ii) the nominal exercise price per share of an SAR, multiplied by the number of nominal shares as to which the SAR was granted.
2.13 SAR CONVERSION ELECTION. "SAR Conversion Election" means an election pursuant to Section 4.1.
2.14 SAR PLAN. "SAR Plan" means the Company's 1992 Executive Stock Appreciation Rights Plan.
2.15 SUBSEQUENT DEFERRAL ELECTION. "Subsequent Deferral Election" means an election made pursuant to Section 5.2.
2.16 VESTED. "Vested" has the meaning given in Section 4.2.
3. ADMINISTRATION.
3.1 ADMINISTRATOR. This Plan shall be administered by (i) the Personnel Committee of the Board, (ii) if so determined by the Board, by a committee consisting of not less than two directors, or (iii) in default of a committee acting pursuant to (i) or (ii), the Board (in any case, the "Administrator"). The Administrator may act only by a majority of its members. The Administrator may delegate administrative duties to such employees of the Company as it deems proper. The Board at any time may terminate the authority delegated to any committee pursuant to this Section 3.1 and reinstate administration of this Plan in itself.
3.2 ADMINISTRATOR'S DETERMINATIONS BINDING. The Administrator may adopt, alter, or repeal administrative rules, guidelines, and practices governing this Plan as it shall deem advisable from time to time, may interpret the terms and provisions of this Plan, may correct any defect, omission, or inconsistency in this Plan, and shall supervise administration of this Plan. All decisions made by the Administrator under this Plan (including without limitation, decisions made pursuant to Section 11) shall be binding upon all persons, including the Company and all Participants. No member of the Administrator shall be liable for any action that he or she, in good faith, takes or fails to take with respect to this Plan.
4. ELECTIONS; VESTING.
4.1 SAR CONVERSION ELECTIONS. Subject to the terms and conditions of this Plan, on or before August 31, 1996, any Participant may elect to convert into deferred cash compensation all or part of the SAR Conversion Amount as to any SAR he or she holds at the time of the election. The election shall be made by filing a copy of the form attached to this Plan (or such other form as the Administrator may specify from time to time) with the Administrator at the principal executive offices of the Company. The election shall specify the Deferral Amount and Elected Distribution Year and shall be effective on the date it is delivered to the Administrator. By making the election , the Participant waives all rights he or she may possess under the SAR Plan with respect to the SAR(s) as to which participation in this Plan is elected.
5. PAYMENT OF PLAN BENEFITS.
5.1 LUMP-SUM DISTRIBUTIONS FROM RESERVE ACCOUNTS. Subject to any Subsequent Deferral Elections of the Participant, the amount of a Participant's Reserve Account shall be distributed to the Participant as soon as practicable after the First Payment Date.
5.2 SUBSEQUENT DEFERRAL ELECTION. On or before the first business day of November before the date that a distribution from a Participant's Reserve Account otherwise is to be made pursuant to this Plan, the Participant may, by filing with the Administrator a "Subsequent Deferral Election" (using such form as the Administrator prescribes from time to time), defer payment of all or a portion of such distribution for an additional one-year period (or a longer period approved by the Administrator). Any such Subsequent Deferral Election shall be effective only with the consent of the Administrator; however, as it is in the Company's interest to defer payments of compensation, the Administrator shall be deemed to consent to a Subsequent Deferral Election unless the Administrator notifies the Participant in writing, within ten business days after receipt of the Subsequent Deferral Election, that consent is not given. Each Subsequent
Deferral Election shall be filed with the Administrator at the principal executive offices of the Company. Under no circumstances, however, may a Subsequent Deferral Election defer the distribution from a Participant's Reserve beyond its Last Payment Date.
5.3 TERMINATION OF EMPLOYMENT. If a Participant's employment by the Company terminates for any reason, whether voluntary, involuntary, or by reason of death or disability, then notwithstanding any other provision of this Plan, the First Payment Date for all the Participant's Reserve Accounts that are Vested as of the termination date (plus deemed investment amounts accruing to such portions between the termination and distribution dates) shall be the first business of January immediately following termination. All non-Vested Reserve Accounts (plus deemed investment amounts accruing to such Reserve Accounts) of a terminated Participant shall be forfeited as of the termination date.
5.4 HARDSHIP. Upon the request of a Participant and based upon a showing of financial hardship, the Administrator may, in its sole discretion, accelerate the time of payment of that portion (up to all) of the amounts credited to the Participant's Vested Reserve Accounts necessary to avoid such hardship. For purposes of this Plan, "hardship" includes any need, circumstance, or event that is considered a "hardship" under the then-current provisions of the Company's Employee Investment Plan (whether or not the Participant participates in such plan) and such other needs, circumstances, or events that the Administrator, in its sole discretion, determines are consistent with the goals of the Company and the requirements of administration of this Plan.
6. RESERVE ACCOUNTS.
6.1 ESTABLISHMENT AND MAINTENANCE. The Administrator shall establish and maintain a separate Reserve Account for each SAR as to which a Participant makes an SAR Conversion Election. Each Reserve Account shall be credited with the amount of the Deferral Amount in respect of the SAR and with earnings and realized and unrealized gains with respect to such Deferral Amount, based on the investment tracking options selected by the Participant, and shall be charged with any amount distributed to or with respect to, the Participant from the Reserve Account in accordance with this Plan, with realized and unrealized losses incurred by the Reserve Account based on the investment tracking options selected by the Participant, and with any expenses, fees, and withholding taxes properly chargeable to the Reserve Account under this Plan.
6.2 DEEMED INVESTMENT OF ACCOUNTS. By written directions to the Administrator, each Participant shall direct the deemed investment of each of his or her Reserve Accounts among the investment-tracking options available under this Plan. In the absence of timely instructions, a Participant's Reserve Accounts shall be treated as invested in a cash management money market fund (or, if there is no cash management money market fund among the choices available under this Plan, in the investment fund that most closely resembles a cash management money market fund). In accordance with rules established by the Administrator, each Participant shall be allowed to modify his or her investment-tracking directions (or the initial deemed investment made in the absence of directions from the Participant) with respect to all or any portion of each of his or her Reserve Accounts, effective as of the date of the modification established by the Administrator. By making investment-tracking alternatives available under this Plan, the
Company makes no representation, warranty, or guarantee regarding the prudence or desirability of, or the return to be expected from, any alternative, nor does the Company undertake that any alternative selected by a Participant will result in a return of principal or deemed investment return to any of a Participant's Reserve Accounts.
6.3 DESIGNATION OF AVAILABLE INVESTMENT OPTIONS. The Administrator shall select the investment-tracking options that will initially be available with respect to Reserve Accounts. The Administrator shall have the power and authority, in its sole and absolute discretion, to add any new investment- tracking option considered desirable and to eliminate any investment-tracking option previously available. If an investment-tracking option is eliminated, any Reserve Account tracking that option shall be treated as held without investment instructions pursuant to Section 6.2 until the Participant elects another investment-tracking option for that Reserve Account.
6.4 VALUATION OF ACCOUNTS; STATEMENTS. Following the end of each calendar quarter, the Administrator shall value each Reserve Account, based on the fair market value of its deemed investments as of the close of the quarter. Each Reserve Account shall be valued separately. Any earnings and realized and unrealized gains attributable to a Reserve Account shall be credited to such Account, and any amounts distributed from, any realized and unrealized losses incurred by, and any expenses and fees properly chargeable to, a Reserve Account shall be charged against such Account. As soon as practicable after the valuation, the Administrator shall provide each Participant (or, if applicable, Beneficiary) a written statement of the value of each of his or her Reserve Accounts.
6.5 BENEFICIARIES. A Participant may designate a Beneficiary or Beneficiaries (using the form attached to this Plan as (or such other form as the Administrator may specify from time to time)), to receive the net amount of the Participant's Vested Reserve Accounts upon the Participant's death. A Participant may at any time revoke the designation or substitute another Beneficiary or Beneficiaries by delivery to the Administrator of a properly executed designation form. If there is no valid designation of a Beneficiary on file with the Administrator, the net amount of a deceased Participant's Vested Reserve Accounts shall be payable to the Participant's surviving spouse, or if the Participant does not have a surviving spouse, the Participant's estate. If a Participant has a living spouse at the time the Participant designates a Beneficiary other than the Participant's spouse, the Participant's spouse must consent in writing to the designation.
6.6 NONASSIGNABILITY OF RIGHTS. The right of a Participant or any other person to payment from the Company under this Plan may not be sold, assigned, transferred, pledged, encumbered, or subject to attachment or garnishment, except pursuant to court order that the Administrator determines in its sole discretion to be valid and enforceable.
6.7 NO TRUST CREATED. Nothing contained in, and no action taken pursuant to the provisions of, this Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and the Participant or any other person. Any funds that may be invested to fund the obligations of the Company under this Plan shall continue for all purposes to be part of the general assets of the Company, and no person other than the Company shall have any interest in such assets by virtue of this Plan. To the extent that any person acquires the right to receive a payment from the Company under this Plan, such right shall be no greater than the right of
any unsecured general creditor of the Company. The Company shall at all times retain title to, and beneficial ownership of, all assets that the Company may set aside or designate to meet its obligations under this Plan. The Company is under no obligation to set aside, or actually to invest, funds under this Plan.
7. COSTS; TAX WITHHOLDING; TAX AND INVESTMENT ADVICE.
The Company shall bear all costs and expenses of administering this Plan and maintaining Reserve Accounts. The Company may deduct from a Participant's Reserve Accounts, or from distributions from a Reserve Accounts, all federal, state, local, or foreign withholding (including without limitation, employment taxes) or other taxes that it determines in its sole discretion are required to be withheld due to the deferral or payment of amounts pursuant to this Plan. Each Participant is responsible for his or her own federal, state, local. or foreign tax liabilities in connection with this Plan. The Company is not giving, and is not responsible for, any tax, investment, or financial advice to any Participant in connection with this Plan.
8. NO EMPLOYMENT RIGHTS.
Nothing in this Plan or in any related document confers upon any Participant or other person any right to continue in the employ of the Company or affects the right of the Company to terminate the employment of that person at any time with or without cause.
9. INDEMNIFICATION.
Each member of the Administrator and each officer and employee of the Company shall, to the fullest extent permissible by law, be indemnified by the Company against any and all liabilities arising by reason of any action taken or omitted in connection with this Plan, including expenses reasonably incurred in the defense of any claim.
10. AMENDMENT, TERMINATION OR SUSPENSION.
The Administrator may, at any time and from time to time, amend this Plan. Rights and obligations existing at the time of any such amendment shall not be materially and adversely altered or impaired except with the consent of the affected Participants. The Administrator may suspend or terminate this Plan at any time. Termination of this Plan shall not affect the payment of amounts then credited to a Participant's Reserve Accounts, unless the Participant consents to a different manner of payment or the Company elects to distribute all Participants' Reserve Accounts immediately in lump sums (which the Company may do regardless of tax or other consequences to Participants).
11. CLAIMS AND REVIEW PROCEDURE.
The Administrator shall determine each Participant's and Beneficiary's right to payments under this Plan. If a Participant or Beneficiary disagrees with the Administrator's determination, he or she may make a written claim for payments inconsistent with that determination. Any such claim shall be filed with the Administrator at the principal executive offices of the Company. The Administrator shall review the claim and notify the claimant of its decision in writing within 90 days after the claim is received. If the Administrator denies the claim, in whole or in part, the notice shall specify the reasons for denial, references to the Plan provisions upon which denial is based, any additional information or material necessary to perfect the claim, and procedures for further review of the claim. Within 60 days after receipt of the notice of denial, the claimant may file a written appeal of the denial of the claim, identifying the grounds, facts, and any other matter upon which the appeal is based. The Administrator shall give the claimant a reasonable opportunity to review pertinent Plan documents in preparing an appeal. The Administrator shall furnish the claimant a final decision within 60 days after receipt of the request for review. If the Administrator affirms the denial of the claim in whole or in part, it shall specify in writing the reasons for the affirmance, with specific references to the Plan provisions upon which the affirmance is based.
12. GOVERNING LAW.
This Plan shall be construed and interpreted in all respects in accordance with the laws of the State of California as applied to contracts entered into by residents of that State and entirely to be performed within that State.
13. NO ADDITIONAL BENEFITS.
For purposes of computing benefits to which a Participant may be entitled at any time under any employee compensation or benefit plan maintained by the Company, any payments under this Plan shall not be taken into account as compensation to a Participant.
14. MISCELLANEOUS.
(a) No Participant shall under any circumstances have any interest in any particular property or assets of the Company under this Plan. The benefits conferred by this Plan are not intended to be equity interests in the Company, and Participants shall have no equity interest in the Company by virtue of participation in this Plan. The individuals entitled to payments under this Plan shall have no voting or similar rights or rights to financial or other information concerning the Company. Rights under this Plan shall not be transferable or assignable under any circumstances, except as specifically provided in this Plan.
(b) Neither the establishment and operation of, nor the creation of any interest under, this Plan limits the ability of the Company or any parent corporation of the Company to reclassify, recapitalize, or otherwise change its capital or debt structure or to merge, consolidate, convey any or all or its assets, dissolve, wind up, or otherwise reorganize.
(c) This Plan represents the final, exclusive, and complete statement of the terms of the Plan, and supersedes any and all prior or contemporaneous understandings, representations, documents, and communications of the Company, any parent corporation of the Company, and any employee of the foregoing, relating to the subject matter of this Plan.
(d) This Plan is intended only to provide cash payments for work performed
for the Company, payment of which is not systematically deferred to the
termination of employment or beyond and does not provide retirement income to
employees within the meaning of Department of Labor Regulation Section 2510.3-
2(c). Payments under this Plan shall be made from the general funds of the
Company, and no special or separate fund shall be established, or other
segregation of assets made, to assure payment.
15. ADOPTION. This Plan was adopted by the Company on June 3, 1996.
EXHIBIT 10.23
KEY EMPLOYEE RECOGNITION AND COMMITMENT PLAN
OF
LEVI STRAUSS & CO.
This document describes how the Key Employee Recognition and Commitment Plan of Levi Strauss & Co. works. It explains:
. The purpose of the Plan;
. Who administers the Plan;
. Who is eligible to receive an award under the Plan;
. How individual awards are determined;
. What a Unit is and how it works;
. When awards are paid; and
. What happens in the event of termination of employment.
This is the official Plan document, which contains the exclusive and complete description of the terms this Plan. This Plan may be amended from time to time, at the discretion of the Administrator.
Page
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Key Employee Recognition and Commitment Plan of Levi Strauss & Co. 1
Appendix One: Glossary of Terms 17
Appendix Two: Time Line of Actions Under This Plan 20
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The Key Employee Recognition and Commitment Plan of Levi Strauss & Co. ("Plan") recognizes and rewards key employees for making contributions, over time, to the Company's success. Awards are based on achievement of long-term financial and corporate values objectives of the Company.
. To recognize selected key employees who have made, continue to make, have the potential to make, or are expected to make substantial contributions to the Company.
. To engender a commitment to the continued success of the Company.
. To engender a commitment to enhance pride of association with the Company.
. To provide a financial award for meeting long-term financial objectives measured by cash flow and for modeling and promoting Company values and integrating such values into all business decisions.
. To encourage and reward team performance.
. The Plan starts on the first day of fiscal year 1997, and ends on the last day of fiscal year 2003.
. The Plan is administered under the direction of the Administrator. The Administrator's determinations and interpretations (including, without limitation, those relating to determination of Financial Unit Value, Settlement Unit Value, Corporate Values Score, and those relating to payment upon employment termination) shall be binding on all
Participants. In administering the Plan, the Administrator will consult with the Chief Executive Officer. The Administrator may delegate any of its duties to others.
. The Administrator's responsibilities include, but are not limited to, approving:
-- An employee's participation in the Plan, as nominated by the Chief Executive Officer;
-- Financial and corporate values measures and objectives;
-- Participants' individual target awards;
-- Corporate Values Scores;
-- Settlement Unit Values;
-- Award Payments;
-- Interpretation of the Plan; and
-- Plan amendments.
. Participants are employees of the Company and Subsidiaries who are nominated by the Chief Executive Officer and approved by the Administrator.
. A written Award Agreement will be created for each Participant that documents the number of Units granted and other terms, conditions, and rights as determined by the Administrator.
. Participants' individual target awards are determined by the Administrator.
. A Participant will receive a one-time grant of Units as of the first day of fiscal year 1997. Subsequently, the Administrator may, at its discretion, grant additional Units to Participants, including new Participants.
. The number of Units granted is determined by dividing the Participant's individual target award by $1,000.
. The Company's EBITDA is the measure used to set the Company's financial objectives and to assess performance against those objectives.
. The Company's EBITDA means the audited net income of the Company on a consolidated basis before (1) interest, (2) taxes, (3) depreciation, (4) amortization, (5) costs and expenses relating to the Company's acquisition of Levi Strauss Associates Inc., including compensation-related expenses resulting from such acquisition, such as with respect to stock options and stock appreciation rights, (6) all accruals and expenses directly relating to the operation of the Global Success Sharing Plan, and (7) all accruals and expenses directly relating to the operation of this Plan, all as determined by the Administrator.
. The financial objectives are shown below in Table I on page 5.
. The Company's achievement of financial objectives will be expressed as Financial Unit Value, as shown in Table II on page 5.
. The use of Corporate Values Score is intended to align the financial rewards under the Plan with the Company's strategic aim of promoting and integrating Company values into business decisions and practices.
. The Chief Executive Officer may seek Participants' recommendations in establishing or revising the corporate values objectives for purposes of this Plan. The Chief Executive Officer will initially determine the corporate values objectives during the fiscal year 1997 and may subsequently revise them. The Administrator may review the initial or revised corporate values objectives at the Administrator's initiation and discretion.
. The Company's and the Participants' collective achievement of the corporate values objectives will be reviewed by the Chief Executive Officer, with the Participants' input, on a cumulative and on-going basis at such times as the Chief Executive Officer may decide in his or her sole discretion.
. The Company's and the Participants' collective achievement of corporate values objectives, as of the end of fiscal years 2001, 2002, and 2003, will be expressed as the Corporate Values Score. The range of the Corporate Values Score will be determined by the Chief Executive Officer, with input from the Participants', in fiscal year 1997. The Chief Executive Officer will determine the Corporate Values Score, subject to review and modification by the Administrator at the Administrator's initiative and discretion.
. If Corporate Values Score is not measured for any particular fiscal year, the last measured Corporate Values Score will be used in determining Settlement Unit Value (as defined below under "Settlement Unit Value and Award Payment").
. Award Payment is the cash payable to a Participant upon exercise of his or her vested Units. The amount of Award Payment is determined by multiplying the number of Units exercised by the applicable Settlement Unit Value.
. Settlement Unit Value is determined by multiplying the Financial Unit Value by the Corporate Values Score (each as applicable during the Exercise Period in which the vested Units are exercised).
. The Financial Unit Value will be determined as of the last day of fiscal years 2001, 2002, and 2003, based on the Company's achievement of financial objectives.
. Table I shows the Company's financial objectives, i.e., threshold and target EBITDA levels for fiscal years 2001, 2002, and 2003:
Table I
=================================================================================================================== CUMULATIVE EBITDA IN END OF FISCAL YEAR END OF FISCAL YEAR END OF FISCAL YEAR U.S. $ (IN BILLIONS) 2001 2002 2003 ------------------------------------------------------------------------------------------------------------------- TARGET $6.2 $8.1 $10.2 ------------------------------------------------------------------------------------------------------------------- THRESHOLD $4.8 $6.0 $ 7.2 =================================================================================================================== |
. Table II shows the Financial Unit Value upon meeting threshold and target EBITDA levels for fiscal years 2001, 2002, and 2003.
Table II
===================================================================================================================
FINANCIAL UNIT VALUE END OF FISCAL YEAR END OF FISCAL YEAR END OF FISCAL YEAR
2001 2002 2003
-------------------------------------------------------------------------------------------------------------------
TARGET $667 $833 $1,000
-------------------------------------------------------------------------------------------------------------------
THRESHOLD $ 0 $ 0 $ 0
===================================================================================================================
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. As of end of each fiscal year 2001, 2002, and 2003,
-- The Financial Unit Value will be zero if the Company's EBITDA meets or is less than the threshold level.
-- If the Company's EBITDA meets the target level, the Financial Unit Value will be as shown above in Table II.
-- If the Company's EBITDA is between the threshold level and the target level, the Financial Unit Value will be interpolated on a straight- line basis.
-- If the Company's EBITDA exceeds the target level, the Financial Unit Value will be extrapolated on a straight-line basis.
-- There is no maximum on the Financial Unit Value.
. The Performance Period for the Units will be up to 7 years. The Performance Period of the Units for an individual Participant also depends on employment termination, as discussed further on pages 8-12 regarding termination of employment.
. The Units granted effective as of the beginning of fiscal year 1997 will vest in 25% increments on the last day of fiscal years 1997, 1998, 1999, and 2000, respectively. All other grants will be subject to vesting terms established by the Administrator.
. The vested Units will become exercisable in 33-1/3% increments on the last day of fiscal years 2001, 2002, and 2003, respectively. Once vested Units become exercisable, a Participant can exercise all or any portion of his or her vested Units, by delivering to the Company, during any Exercise Period, an exercise notice in a form to be prescribed by the Administrator.
. Vested Units that have not been exercised by the end of fiscal year 2003 will be automatically deemed exercised during the second quarter of fiscal year 2004, and Award Payment will be paid as soon as practicable thereafter.
. A Participant who is eligible to participate in the Company's Deferred Compensation Plan For Executives may defer receipt of Award Payment payable upon future exercise of his or her vested Units, to the extent permitted under and in accordance with the terms of the Deferred Compensation Plan for Executives. A Participant who elects to defer must elect irrevocably, on a form to be prescribed by the Administrator, during the applicable Deferral Election Period.
. For any Participant who is not eligible to participate in the Company's Deferred Compensation Plan For Executives and whose Company-related income is subject to taxation outside of the United States, deferral of receipt of Award Payment will be subject to local law and at the discretion of the Administrator, as of the beginning of the applicable Deferral Election Period.
. Applicable Deferral Election Periods are as follows:
-- With respect to vested Units that become exercisable at the end of fiscal year 2001, the Deferral Election Period is the second quarter of fiscal year 2001.
-- With respect to vested Units that become exercisable at the end of fiscal year 2002, the Deferral Election Period is the second quarter of fiscal year 2002.
-- With respect to vested Units that become exercisable at the end of fiscal year 2003, the Deferral Election Period is the second quarter of fiscal year 2003.
. Table III shows the vesting and exercise schedule, Exercise Periods, and the Deferral Election Periods.
Table III
==================================================================================================================================
FISCAL YEAR PERCENTAGE OF UNITS RIGHT TO EXERCISE VESTED PERCENTAGE OF VESTED EXERCISE PERIOD DEFERRAL ELECTION
VESTED (ON THE LAST UNITS (ON THE LAST DAY UNITS EXERCISABLE PERIODS (FOR ELIGIBLE
DAY OF THE FISCAL OF THE FISCAL YEAR) (ON THE LAST DAY OF PARTICIPANTS)
YEAR) THE FISCAL YEAR)
------------------------------------------------------------------------------------------------------------------------------
1997 25% No 0 N/A N/A
------------------------------------------------------------------------------------------------------------------------------
1998 25% No 0 N/A N/A
------------------------------------------------------------------------------------------------------------------------------
1999 25% No 0 N/A N/A
------------------------------------------------------------------------------------------------------------------------------
2000 25% No 0 N/A N/A
------------------------------------------------------------------------------------------------------------------------------
2001 -- Yes first 33-1/3 2nd quarter of 2nd quarter of FY
FY 2002 2001
------------------------------------------------------------------------------------------------------------------------------
2002 -- Yes second 33-1/3 2nd quarter of 2nd quarter of FY
FY 2003 2002
------------------------------------------------------------------------------------------------------------------------------
2003 -- Yes/Automatic third 33-1/3 2nd quarter of 2nd quarter of FY
FY 2004 2003
===============================================================================================================================
|
. Appendix Two on pages 20-22 shows a time line illustrating when the corporate values objectives are established, when Corporate Values Scores are measured, when Financial Unit Values are measured, when Units become vested and exercisable, the Exercise Periods during which vested Units can be exercised, and the Deferral Election Periods in which to elect to defer receipt of Award Payments.
. Notwithstanding any other provision of this Plan, the Administrator may, in its discretion, accelerate the vesting schedule or require any Participant to cash out or exercise all vested Units at the applicable Settlement Unit Value, regardless of the tax, financial, or other consequence to the Participant of such acceleration, exercise, or cashout.
. A Participant who Retires during the second half of a fiscal year will be treated for vesting purposes as if he or she had continued in employment through the end of such fiscal year. A Participant who Retires during the first half of a fiscal year will not be given any credit for vesting purposes for employment during such fiscal year.
. A Participant who Retires can exercise his or her vested Units only in accordance with the vesting and exercise schedule shown in Table III on page 7.
. A Participant who dies during a fiscal year will be treated for vesting purposes as if he or she had survived and remained employed through the end of such fiscal year.
. The Beneficiary of a Participant who terminates employment due to death will receive a lump-sum cashout of the Participant's unexercised vested Units as soon as practicable.
. The amount of the lump-sum cashout will be determined by multiplying the number of unexercised vested Units by the applicable Settlement Unit Value.
. The applicable Settlement Unit Values will be determined as shown in Table IV:
Table IV
-----------------------------------------------------------------------------
TERMINATION OF EMPLOYMENT DUE TO SETTLEMENT UNIT VALUE
DEATH DURING
-----------------------------------------------------------------------------
FY 1997 $125
-----------------------------------------------------------------------------
FY 1998 $250
-----------------------------------------------------------------------------
FY 1999 $375
-----------------------------------------------------------------------------
FY 2000 $500
-----------------------------------------------------------------------------
1st half of FY 2001 $500
-----------------------------------------------------------------------------
2nd half of FY 2001 Settlement Unit Value based on Financial
Unit Value and Corporate Values Score as
the end of FY 2001
8
|
-----------------------------------------------------------------------------
1st half of FY 2002 Settlement Unit Value based on Financial
Unit Value and Corporate Values Score as
the end of FY 2001
-----------------------------------------------------------------------------
2nd half of FY 2002 Settlement Unit Value based on Financial
Unit Value and Corporate Values Score as
the end of FY 2002
-----------------------------------------------------------------------------
1st half of FY 2003 Settlement Unit Value based on Financial
Unit Value and Corporate Values Score as
the end of FY 2002
-----------------------------------------------------------------------------
2nd half of FY 2003 Settlement Unit Value based on Financial
Unit Value and Corporate Values Score as
the end of FY 2003
===============================================================================
|
. A Participant who terminates employment due to Permanent Disability during a fiscal year will be treated for vesting purposes as if his or her employment had continued through the end of such fiscal year.
. A Participant who terminates employment due to Permanent Disability can exercise his or her vested Units only in accordance with the vesting and exercise schedule shown in Table III on page 7.
. Notwithstanding the preceding provision of this Plan, a Participant who terminates employment due to Permanent Disability may apply, because of hardship or other reasons, to the Administrator for a cashout of his or her unexercised vested Units at any time. The Administrator may grant or deny the application in the Administrator's sole discretion.
. If the Administrator approves a cashout of unexercised vested Units before the Participant would otherwise be able to exercise them, the cashout will be paid as soon as practicable. The amount of such cashout will be determined by multiplying the number of Units cashed out by the applicable Settlement Unit Value.
. The applicable Settlement Unit Value depends on when a Participant's termination of employment occurs. The applicable Settlement Unit Value will be determined in the same manner as for termination of employment due to death, as set forth in Table IV on page 9.
. A Participant who terminates employment by resignation during the second half of a fiscal year will be treated for vesting purposes as if he or she had continued in employment through the end of such fiscal year. A Participant who resigns during the first half of a fiscal year will not be given any credit for vesting purposes for employment during such fiscal year.
. A Participant who terminates employment by resignation will receive a lump- sum cashout of unexercised vested Units as soon as practicable.
. The amount of the lump-sum payment will be determined by multiplying the number of unexercised vested Units by the applicable Settlement Unit Value.
. The applicable Settlement Unit Value depends on when a Participant's termination of employment occurs. The applicable Settlement Unit Value will be determined in the same manner as for termination of employment due to death, as set forth in Table IV on page 9.
. A Participant who terminates employment due to layoff during a fiscal year will be treated for vesting purposes as if his or her employment had continued through the end of such fiscal year.
. A Participant who terminates employment due to layoff can exercise his or her vested Units only in accordance with the vesting and exercise schedule shown on Table III on page 7.
. Notwithstanding the preceding provision of the Plan, a Participant who terminates employment due to layoff may apply, because of hardship or other reason, to the Administrator for a cashout of his or her unexercised vested Units at any time. The Administrator may grant or deny the application in the Administrator's sole discretion.
. If the Administrator approves a cashout of unexercised vested Units before the Participant would otherwise be able to exercise them, the cashout will be paid as soon as practicable. The amount of such cashout will be determined by multiplying the number of Units cashed out by the applicable Settlement Unit Value.
. The applicable Settlement Unit Value depends on when a Participant's termination of employment occurs. The applicable Settlement Unit Value will be determined in the same manner as for termination of employment due to death, as set forth in Table IV on page 9.
. If a Participant's employment is terminated for unsatisfactory performance or misconduct, the Participant will forfeit all Units, vested or otherwise, and any other rights under the Plan, and will not be entitled to any payment under the Plan.
. The Administrator will determine in its sole discretion whether a termination for unsatisfactory performance or misconduct exists in individual cases.
. A Participant will forfeit all Units, vested or otherwise, and any other rights under the Plan, and will not be entitled to any payment under the Plan, if:
-- The Participant commits an act of misconduct while an employee of the Company or a Subsidiary, regardless of whether his or her employment is terminated by the Company or Subsidiary; or
-- The Participant commits a breach of his or her Award Agreement at any time, including after termination of employment.
. The Administrator will determine in its sole discretion whether a Participant's act constitutes an act of misconduct or breach.
. As part of the Award Agreement, each Participant shall name a person or persons as the Beneficiary who is to receive any distribution payable under the Plan in the event of the Participant's death. The most recently designated Beneficiary will apply to all distributions, unless otherwise specified by the Participant. In the event that no Beneficiary has been properly designated, or if no properly designated Beneficiary survives the Participant, the Participant's estate shall be the Participant's Beneficiary.
. The Company may deduct from the cash payment to be paid upon exercise or cashout of vested Units any applicable taxes (e.g., U.S. federal, state, local or other taxes) required to be withheld by virtue of the exercise of the Units.
. The Company or any Subsidiary has not and will not provide any tax, financial, legal, or other advice related to participation in the Plan, including, but not limited to, tax or financial consequences of participating in the Plan. No provision of the Plan will be interpreted as giving such advice.
. Units granted and payments made with respect to those Units will not be considered compensation when determining any other Company-sponsored benefits (e.g., pension benefits, CAP benefits), except as provided under the Deferred Compensation Plan For Executives in the event a Participant elects to defer receipt of Award Payment under this Plan, as described on page 6.
. No Units or other rights granted under or provided by this Plan are assignable or transferable by Participants, or otherwise subject to levy, attachment, or execution of a judgment of any kind, except as provided for by a Participant's will or by the laws of descent and distribution.
. Qualified Domestic Relations Order
-- Notwithstanding the preceding provision of the Plan, cash payable to a Participant under this Plan may be paid to an "alternate payee," as such person is defined in section 414(p)(8) of the Code.
-- The amount payable to an alternate payee is as provided by a domestic relations order with respect to the Plan that would constitute a qualified domestic relations order within the meaning of section 404(p)(1)(A) of the Code, as if the Plan were subject to Code section 414(p).
-- Determination of whether an order would constitute a qualified domestic relation order will be made by the Administrator, or its designee, in its sole discretion.
-- The rights of any alternative payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the Administrator may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
. A Participant's right to exercise Units under the Plan are exercisable during the Participant's lifetime only by the Participant or his or her legal representative.
. The Plan is unfunded. A Participant's right to receive payments under the Plan is an unsecured claim against the general assets of the Company. Although the Company may establish a bookkeeping reserve to meet its obligations, any rights acquired by any Participant are no greater than the right of any unsecured general creditor of the Company.
. No provision of the Plan gives anyone any interest in any particular property or asset of the Company or any stockholder rights, such as voting or dividend rights. The Company shall not be required to segregate any assets that may at any time be represented by cash or Units, nor shall the Company, Board of Directors, or the Administrator be deemed to be a trustee of any cash or Units to be paid or granted under this Plan. Any liability of the Company to any holder with respect to a grant of Units under this Plan shall be based solely upon any contractual obligations that may be created by this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance or security interest in, any property of the Company or any Subsidiary. Neither the Company, the Board of Directors, nor the Administrator shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. No Subsidiary shall have any obligation or liability to any person under this Plan.
. The establishment and operation of this Plan, including the grant of Units under this Plan, will not limit the ability of the Company or of any Subsidiary to reclassify, recapitalize, or otherwise change its capital or debt structure; to merge, consolidate, convey any or all of its assets, dissolve, liquidate, windup, or otherwise reorganize; or to take any action in respect of its manufacturing, marketing, distribution, merchandising, management, or any other aspect of its business, regardless of the impact on EBITDA or otherwise.
. No provision of the Plan gives any Participant or anyone else the right to remain employed with the Company or its Subsidiary. The Company, and each Subsidiary, reserves the right to terminate any Participant's employment at any time, with or without cause and with or without notice.
. The Administrator may modify, amend, or terminate any and all provisions of the Plan, and establish rules and procedures for its administration, at its discretion and without notice. Plan termination shall have the effect of terminating all unvested Units.
. If any provision of this Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision were not part of the Plan.
. Failure of the Company to enforce at any time any provision of this Plan shall in no way be construed to be a waiver of such provision or any other provision of the Plan.
. The Plan and all individual Award Agreements hereunder will be governed by the laws of the State of California. In applying the laws of the State of California, its rules on choice of law will be disregarded.
. This official Plan document represents the exclusive and complete statement of the terms of the Plan, and supersedes any and all prior or contemporaneous understandings, representations, documents, and communications between the Company or any Subsidiary and any Participant, whether oral or written, relating to its subject matters. The formal name of this Plan is the "Key Employee Recognition And Commitment Plan of Levi Strauss & Co." In the event of any conflict between the provisions of this official
Plan document, as amended from time to time, and any other document describing or otherwise relating to the Plan, this official Plan document shall control.
To record the adoption of the Key Employee Recognition and Commitment Plan of Levi Strauss & Co., the Company has caused its duly authorized officer to execute this document.
Levi Strauss & Co.
By: _________________________
Title: Chief Executive Officer
Date: _______________________
Sharing Plan, and (7) all accruals and expenses directly relating to the operation of this Plan, all as determined by the Administrator.
APPENDIX TWO: TIME LINE OF ACTIONS UNDER THIS PLAN
----------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
* FY 1997 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
? . Corporate values objectives are established during FY 1997 and may be ?
revised thereafter.
. The range of the Corporate Values Score will be determined during FY 1997.
?
. 25% Units
Vested
-------------------------------------------------------------------------------------------------------
* FY 1998 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
?
. Additional 25%
Units Vested
-------------------------------------------------------------------------------------------------------
* FY 1999 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
?
. Additional 25%
Units Vested
-------------------------------------------------------------------------------------------------------
* FY 1999 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
?
. Additional 25%
Units Vested
|
* The Company's and the Participants' collective achievement of the corporate values objectives will be reviewed by the Chief Executive Officer, with the Participants' input, on a cumulative and on-going basis as such times as the Chief Executive Officer may decide in his or her sole discretion.
-------------------------------------------------------------------------------------------------------
* FY 2001 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
. If eligible, may ?
irrevocably elect . First 33-1/3%
to defer receipt of exercisable
payment upon
exercise of first
33-1/3%, which
becomes
exercisable at the
end of FY 2001,
regardless of
when actually
exercised
-------------------------------------------------------------------------------------------------------
* FY 2002 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
. Financial Unit . May exercise ?
Value determined the first 33-1/3% . Second 33-1/3%
. Corporate Values . If eligible, may exercisable
Score determined irrevocably elect
to defer receipt of
payment upon
exercise of
second
33-1/3%, which
becomes
exercisable at the
end of FY 2002,
regardless of
when actually
exercised
|
* The Company's and the Participants' collective achievement of the corporate values objectives will be reviewed by the Chief Executive Officer, with the Participants' input, on a cumulative and on-going basis as such times as the Chief Executive Officer may decide in his or her sole discretion.
-------------------------------------------------------------------------------------------------------
* FY 2003 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
. Financial Unit . May exercise ?
Value determined second 33-1/3% . Third 33-1/3%
. Corporate Values plus any other exercisable
Score determined unexercised
vested Units
. If eligible, may
irrevocably elect
to defer receipt of
payment upon
exercise of
third
33-1/3%, which
becomes
exercisable at the
end of FY 2003,
regardless of
when actually
exercised
-------------------------------------------------------------------------------------------------------
FY 2004 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
. Financial Unit . Automatic
Value determined exercise of
. Corporate Values unexercised,
Score determined vested Units
|
* The Company's and the Participants' collective achievement of the corporate values objectives will be reviewed by the Chief Executive Officer, with the Participants' input, on a cumulative and on-going basis as such times as the
Chief Executive Officer may decide in his or her sole discretion.
EXHIBIT 10.24
GLOBAL SUCCESS SHARING PLAN
ARTICLE I
PURPOSE
Section 1.
Section 1.1. The Global Success Sharing Plan is designed to provide the world-wide employees of Levi Strauss & Co. ("Company") and its Subsidiaries with the opportunity to share in the value created during the six-year period following the acquisition of LSAI by the Company, by providing a cash payment to them if the Company achieves specified cash flow objectives on a consolidated basis.
ARTICLE II
DEFINITIONS
"Administrator" means the Human Resources Council of the Company.
"Adjusted Pool Amount" means the Aggregate Pool Amount less the sum of all Interim Payouts.
"Aggregate Pool Amount" is the applicable portion (if any) of cumulative EBITDA during the Measurement Period available for distribution to Eligible Participants, which will be calculated in accordance with Section 6.1.
"Aggregate Target Payout Amount" means an amount, which will be calculated as of the last day of the Measurement Period, equal to the sum of all individual Target Payout Amounts excluding the Target Payout Amount for any Eligible Participant who receives an Interim Payout.
"Board" means the Board of Directors of the Company.
"Cause" means good reason for termination of employment, as determined by the Administrator, in its sole discretion, including, but not limited to, substandard performance, unacceptable behavior, or poor attendance. For the purposes of the Plan, misconduct is not included in this definition and is outlined separately under "Misconduct". The fact that an employee is terminated for "cause" within the meaning of a particular jurisdiction's laws, regulations, governing judicial precedents or employment practice, will not mean that such employee has been
terminated for Cause for purposes of this Plan unless the Administrator, in its sole discretion, so determines.
"Company" means Levi Strauss & Co., a Delaware corporation, and any successor by operation of law thereto, including by reason of merger, consolidation or similar transaction, or otherwise.
"Compensation" means the amount of a Participant's annual compensation in effect as of April 17, 1996 (stated in non-U.S. currency, where applicable), determined in accordance with the formula applicable to such Participant, as set forth in Article V. Compensation is used to determine the U.S. Dollar-based Target Payout Amount.
"EBITDA" means the audited net income of the Company on a consolidated basis before (1) interest, (2) taxes, (3) depreciation, (4) amortization, (5) costs and expenses relating to the Company's acquisition of LSAI, including compensation-related expenses resulting from such acquisition, such as with respect to stock options and stock appreciation rights, and (6) all accruals and expenses directly relating to the operation of the Plan.
"Effective Date" means November 27, 1995, which was the first day of fiscal 1996.
"Eligible Participant" has the meaning set forth in Section 4.3.
"Eligible Quarters" means the number of full fiscal quarters a Participant is employed during the Measurement Period. Eligible Quarters are used to determine whether a Plan Participant is an Eligible Participant, as outlined in Section 4.3, and to determine such Eligible Participant's Eligible Quarter Percent. The following three factors exist in calculating Eligible Quarters:
1. For most Participants, Eligible Quarters equals the number of full fiscal quarters between the Employment Date and the earlier of (1) the termination of such Participant's status as an employee of the Company or any Subsidiary of the Company and (2) the last day of the Measurement Period;
2. For Participants who terminate (other than for Misconduct) during the Measurement Period and subsequently are rehired within one year of that termination date, the calculation of Eligible Quarters is different. It equals the sum of (1) the number of full consecutive fiscal quarters worked by such Participant during the Measurement Period before such termination plus (2) the number of full consecutive fiscal quarters worked by such Participant during the Measurement Period after such rehiring;
3. Normally, an approved leave of absence would not constitute a break in service, and the time of such leave would be included in calculating the number of full fiscal quarters served. The Administrator, however, reserves the right to approve whether particular leaves of absence will constitute a break in service.
"Eligible Quarter Percent" equals, except as noted in the exception below, a fraction, the numerator of which is an Eligible Participant's Eligible Quarters and the denominator of which is 24 (the number of full fiscal quarters over the life of the Plan). As an example, the equation for an Eligible Participant's Eligible Quarter Percent is:
For any Eligible Participant (1) who is a U.S. Hourly Participant, and (2) who was employed throughout 1996 and (3) who is terminated due to Plant Closure after the last day of fiscal year 1996, the "Eligible Quarter Percent" will equal 100% regardless of number of actual quarters worked.
"Employment Date" means, for any Participant, the later of (1) the Effective Date and (2) the date of such Participant's initial employment with the Company or a Subsidiary of the Company.
"Final Exchange Rate" means the Company's internal balance sheet exchange rate in effect as of the end of fiscal year 2001. It is used for converting U.S. Dollars amounts into the applicable non-U.S. currency at the end of the Plan. In the event that an exchange rate is needed that is not listed on the Company's internal balance sheet, one will be determined by the Administrator. This determination, which will be conclusive and binding on all Participants, will be arrived at in consultation with the Company's treasury department and based on one or more published applicable exchange rates in effect as of the end of fiscal year 2001.
"Final Payout Factor" equals a fraction, the numerator of which is the Adjusted Pool Amount and the denominator of which is the Aggregate Target Payout Amount. This percent will then be applied to each Eligible Participant's Target Payout Amount to determine his or her ultimate payout. As an example, the equation for the Final Payout Factor is:
"Hourly" means those employees within the U.S. which include, without limitation, Union employees, others in similar types of work situations or who similarly participate in Levi's annual Cash Performance Plan. In all events, Hourly status will be determined by the Administrator and will be conclusive and binding on all Participants.
"Interim Exchange Rate" as of any date in a given fiscal quarter, means the Company's internal balance sheet exchange rate for converting U.S. Dollars into any applicable non-U.S. currency, at the end of that fiscal quarter. The Interim Exchange Rate is used to determine Interim Payouts. In the event that an exchange rate is needed, but is not listed on the Company's internal balance sheet, one will be determined by the Administrator. This determination, which will be conclusive and binding on all Participants, will be arrived at in consultation with the Company's treasury department and based on one or more published applicable exchange rates in effect at the end of the affected fiscal quarter.
"Interim Payout" means the amount of any payment made to a Participant prior to the expiration of the Measurement Period. The rules for the calculation of this amount are set forth in Section 6.2 (b).
"Measurement Period" means the period from the Effective Date through the end of fiscal year 2001.
"Misconduct" means termination of employment for reasons of misconduct, as determined by the Administrator, in its sole discretion. The fact that an employee is terminated for "misconduct" within the meaning of a particular jurisdiction's laws, regulations, governing judicial precedents or employment practice, will not mean that such employee has been terminated for Misconduct for purposes of this Plan unless the Administrator, in its sole discretion, so determines.
"Participant" has the meaning set forth in Section 4.1.
"Plan" means the Global Success Sharing Plan.
"Subsidiary" means any corporation of which more than 50% of the outstanding shares having ordinary voting power are owned or controlled by the Company, and any other entity that the Board, in its sole discretion, deems to be a Subsidiary.
"Target Payout Amount" equals an amount calculated for an Eligible Participant which is the product of such Eligible Participant's Compensation multiplied by the Eligible Participant's Eligible Quarter Percent. This amount is U.S. Dollar-based, using the Initial Exchange Rate, and is used to determine the Aggregate Target Payout Amount. As an example, the equation for an Eligible Participant's Target Payout Amount is:
------------------------------------------------------------
Participant Participant Initial
Compensation X Eligible X Exchange
(In Local Currency) Quarter Percent Rate
------------------------------------------------------------
|
ARTICLE III
ADMINISTRATOR
Section 3.
ARTICLE IV
ELIGIBILITY
Section 4.
(a) Subject to paragraphs (b) through (c), and to the other terms and conditions of the Plan, an individual will be an "Eligible Participant", and thereby eligible to receive a cash payment under the Plan, only if he or she qualifies as a Participant, as defined in Section 4.1, for a period of at least 12 Eligible Quarters during the Measurement Period. A Participant need not be an employee on the last date of the Measurement Period in order to be an Eligible Participant.
(b) Notwithstanding the foregoing provisions of this Section 4.3, if a Participant's employment is terminated, the minimum threshold of Eligible Quarters listed in the following table are required for the Participant to be deemed an Eligible Participant:
----------------------------------------------------------------------------
ELIGIBLE
QUARTER
TERMINATION TYPE THRESHOLD COMMENTS/PROVISIONS
----------------------------------------------------------------------------
Death 4
----------------------------------------------------------------------------
Disability 4
----------------------------------------------------------------------------
Involuntary with Cause 12 Cause as defined in Plan
----------------------------------------------------------------------------
Involuntary without Cause 4 Cause as defined in Plan
----------------------------------------------------------------------------
Layoff 4
----------------------------------------------------------------------------
Misconduct Not Eligible Misconduct as defined in Plan
----------------------------------------------------------------------------
Retirement 4 In accordance with applicable
pension plans
----------------------------------------------------------------------------
Voluntary 12
----------------------------------------------------------------------------
|
For purposes of this Section 4.3(b), if a Subsidiary or other business unit of the Company is sold or otherwise disposed of during the Measurement Period, persons who are employed by that Subsidiary or business unit immediately prior to the time such sale or disposition is consummated shall be deemed terminated involuntarily and not for Cause as of the date such sale or disposition is consummated.
(c) For purposes of Article IV, where reference is made to an individual being "listed in the records" of the Company or its Subsidiaries as an employee, the
presumption will be that the records of the Company and its Subsidiaries are accurate, but actual employment status will govern. Consequently, if, in accordance with Company practice, an individual should have been listed in the records as an employee, but was not so listed, such individual will be deemed so listed and, conversely, if, in accordance with Company practice, an employee should not have been listed in the records as an employee, such individual will be deemed not so listed. The fact that an individual may be characterized as an "employee" for purposes other than the Plan (for example, taxes, or tort law) will not govern whether an employee was, or should have been "listed in the records" as employee in accordance with Company practice. In the event of any dispute as to employment status, the Administrator will determine, based on the records of the Company and its Subsidiaries and such other evidence as the Administrator takes into account whether, and during what period, an individual should have been listed in the records as an employee, and the Administrator's decision will be conclusive and binding on all parties.
ARTICLE V
DETERMINATION OF "COMPENSATION"
Section 5.
(a) For purposes of the Plan, "Compensation" for any non-Hourly Participant who is employed by the Company or a Subsidiary of the Company on April 17, 1996 means such Participant's annual base salary as of April 17, 1996. For purposes of Section 5.2, "annual base salary" will be calculated before any salary reduction contribution made to 401(k) or deferred compensation plans but will not include (1) awards under any bonus, profit, cash sharing plan (including, without limitation, the Partners in Performance program and the Long-Term Performance Plan), or stock options, restricted stock or stock appreciation rights, (2) any cash payments relating to the impact of the acquisition of LSAI by the Company on the EIP, ELTIS or ESAP plans, (3) any Company matching contribution under any plan, (4) overtime, or (5) any other special awards, and portions of any Participant's salary that were voluntarily deferred by the Participant will be deemed to have been paid to such Participant in the year earned, not in the year received.
(b) For purposes of the Plan, "Compensation" for any non-Hourly Participant who is hired after April 17, 1996 means an amount equal to the implied 1996
annual base salary for such Participant, which will be calculated by applying the "compa ratio" relating to such Participant's annual base salary as of the date of hire to the salary range used as of April 17, 1996.
ARTICLE VI
DETERMINATION AND PAYMENT OF POOL
Section 6.
(a) Except as provided in Section 6.2(b), the amount paid to each Eligible Participant under the Plan will be equal to the product of (1) such Eligible Participant's Target Payout Amount and (2) the Final Payout Factor. As an example, the equation for an Eligible Participant's payout amount is:
----------------------- Target Final Payout X Payout Amount Factor ----------------------- |
-------------------------------------------------------------------- Target Actual Cumulative Projected Cumulative Payout X EBITDA as of / EBITDA as of Amount Last Quarter Employed Last Quarter Employed -------------------------------------------------------------------- |
(c) The amount paid to an Eligible Participant under the Plan who receives an Interim Payout pursuant to Section 6.3(b) for a reason other than death will be determined by the Administrator, in its sole discretion.
(d) Amounts payable pursuant to this Section 6.2 will be first calculated in U.S. Dollars based on the Initial Exchange Rate (which is used to convert Compensation into U.S. Dollars in order to calculate Target Payout Amounts). Payments to individuals employed outside of the United States will, however, be made in the applicable local currency in an amount calculated by converting the U.S. Dollar amount calculated hereunder into the local currency based on (1) the Final Exchange Rate for payouts under Section 6.2(a) and (2) the Interim Exchange Rate of the last fiscal quarter the Eligible Participant was employed for payouts under Sections 6.2(b) or (c).
(a) Except as otherwise provided in this Section 6.3, all payments under the Plan will be made as soon as practicable following the end of the Measurement Period.
(b) Payments under the Plan to any Eligible Participant whose employment is terminated for any reason other than death will be made only at the end of the Measurement Period.
(c) All Eligible Participants whose employment is terminated by reason of death will be entitled to an Interim Payout. Such Interim Payout will be made as soon as practicable following the employee's death, taking into account reasonable time periods for making the necessary calculations hereunder.
ARTICLE VII
SPECIAL PROVISIONS
Section 7.
Plan as may be required to comply or conform with local law, regulation or custom. Such amendments and modifications may have limited application to a specific Subsidiary, division or jurisdiction and need not apply to all Participants. Any amendment made in accordance with this Section 7.2 which the Administrator reasonably believes is a material amendment will require approval of the Board. Each such amendment or modification will be in writing and attached to this Plan.
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.
Section 8.1. The Board will have the right in its sole discretion to amend or terminate the Plan.
ARTICLE IX
MISCELLANEOUS
Section 9.
(a) The Plan is intended to provide only for a one-time special cash payment, payment of which is not systematically deferred to the termination of employment or beyond and which does not provide retirement income to employees, within the meaning of Department of Labor Regulation Section 2510.3-2(c). Payments under the Plan will be paid from the general funds of the Company or its Subsidiaries, as appropriate, and no special or separate fund will be established or other segregation of assets made to assure payment.
(b) No Participant or other person will have under any circumstances any interest in any particular property or assets of the Company or its Subsidiaries. The benefits conferred by the Plan and the interests thereunder are not intended to be equity interests in the Company or its Subsidiaries and Participants will have no equity interest in the Company or its Subsidiaries by virtue of their participation in the Plan. The individuals entitled to benefits conferred by the Plan and the interests thereunder will have no voting or similar rights, or rights to financial or other information concerning the Company or its Subsidiaries. Such benefits and interests will not be transferable or assignable under any circumstances, other than payments under the Plan in the event of an Eligible Participant's death, which will be transferable by will or the laws of descent and distribution.
This Plan was adopted by the Board of Directors of the Company on April 23, 1996.
Levi Strauss & Co.
By: ___________________
Robert D. Haas
Chairman and
Chief Executive Officer
ANNEX A
APPLICABLE EBITDA PERCENTAGES
Level of Cumulative EBITDA during the Applicable Measurement Period Percentage ------------------ ---------- |
Greater than $0 and less than
$5.0 billion 0%
Greater than or equal to $5.0
billion and less than $6.0 billion 3%
Greater than or equal to $6.0
billion and less than $7.0 billion 5%
Greater than or equal to $7.0
billion and less than $7.58 billion 8%
Greater than or equal to $7.58 billion 10%
A-1
|
ANNEX B
CURRENCY APRIL 17, 1996 RATE
-------- -------------------
Argentinean Peso 1.00
Austrian Schilling 10.6304
Australian Dollar .79
Belgian Franc 30.95
Brazilian Real .99
Canadian Dollar .74
Swiss Franc 1.23
Chilean Peso 407
Colombian Peso 1,054
Costa Rican Colon 203
Deutsche Mark 1.51
Danish Krone 5.81
European Currency Unit 1.24
Spanish Peseta 126
Finish Markka 4.73
French Franc 5.12
British Pound 1.51
Greek Drachma 242
Hong Kong Dollar 7.74
Hungarian Forint 149
Indonesian Rupiah 2,327
Irish Pound 1.56
Israeli Shekel 3.17
Indian Rupee 34.20
Italian Lira 1,577
Japanese Yen 108
South Korean Won 779
Moroccan Dirham 8.68
Netherlands Guilder 1.68
Maltese Pound .36
Mexican Peso 7.42
Malaysian Ringgit 2.49
Norwegian Krone 6.50
New Zealand Dollar .68
B-1
|
ANNEX B
CURRENCY APRIL 17, 1996 RATE
-------- -------------------
Peruvian Sol 2.36
Philippine Peso 26.18
Pakistani Rupee 34.63
Polish Zloty 2.6235
Portuguese Escudo 155
Swedish Krona 6.75
Singapore Dollar 1.41
Thai Baht 25.33
Turkish Lira 73,402
New Taiwan Dollar 27.15
Venezuelan Bolivar 285
Czech Republic Crowns 27.61
South African Rand 4.23
Russian Ruble 4,912
Mauritian Rupee 19.28
Slovak Republic Crowns 30.45
Uruguayan Peso 7.53
Honduran Lempura 11.02
Dominican Peso 13.71
El Salvador Colon 8.73
Guatemala Quetzal 6.12
Tunisian Dinar .98
B-2
|
ANNEX C
Projected
Cumulative
EBITDA
------
Fiscal 1996 (In millions)
Q1 $ 238
2 476
3 714
4 952
Fiscal 1997
Q1 1,211
2 1,470
3 1,729
4 1,988
Fiscal 1998
Q1 2,272
2 2,556
3 2,840
4 3,124
Fiscal 1999
Q1 3,460
2 3,796
3 4,132
4 4,468
Fiscal 2000
Q1 4,845
2 5,222
3 5,599
4 5,976
Fiscal 2001
Q1 6,377
2 6,778
3 7,179
4 7,580
|
For purposes of the Plan, all references to fiscal quarters or fiscal years will mean fiscal quarters and years in accordance with the Company's fiscal year in effect as of the end of fiscal year 2001.
EXHIBIT 10.25
LEVI STRAUSS ASSOCIATES INC.
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
The Levi Strauss Associates Inc. Deferred Compensation Plan for Executives (hereinafter the "Plan") is maintained by Levi Strauss Associates Inc. (the "Company") for the benefit of employees who are eligible pursuant to the terms of the Plan.. The Plan became effective upon approval of the Board of Directors of Levi Strauss & Co. in 1971. The Plan has been amended or restated from time to time.
which precludes the employee from participating in a deferred compensation plan offered by the Company.
For all purposes under the Plan: (a) "total compensation" shall mean base salary, but shall not include any payments under or contributions to the Company's Long Term Disability Plan or other group insurance or any employee benefit plan maintained by the Company; (b) "total bonuses" shall mean payments made under the Company's Management Incentive Plan (hereinafter "MIP") or under any regularly paid bonus program other than the Long Term Performance Plan, and any non-recurring special bonus which is designated as being part of "total bonuses" in writing by the Administrator (identified as set forth in Article 9 below); and (c) for individual on expatriate assignment, "total compensation" shall be defined as base salary adjusted by appropriate expatriate-related deductions and allowances as determined by the Administrator.
under this Plan. Amounts of total bonuses deferred by an Eligible Employee shall not be less than the greater of (i) $5,000 or (ii) five percent (5%) of his or her total bonuses.
5(d)(ii), within 30 days after such effective date) and at least two weeks prior to commencement of the first payroll period with respect to which the election is to be effective, but no such election shall be permitted after November 15 of any calendar year.
Compensation shall be vested only to the extent that such amounts would be vested under the HOPP, the Excess BRP and the Supplemental BRP, as applicable.
(c) The Deferred Compensation of an Eligible Employee at any time shall include Deferred Compensation arising under prior provisions of the Plan.
announced by Bank of America in San Francisco, California, effective as of the last day of the calendar month on which such interest in computed, plus (ii) one-twelfth (1/12) of two percent (2%) per annum; except that for any calendar year beginning prior to January 1, 1980, interest shall be credited in accordance with the procedures specified in the Plan as then in effect.
Except as provided below, for amounts deferred pursuant to an election after January 1, 1983, interest shall be computed at a monthly interest rate equal to one-twelfth (1/12) of the annual reference rate charged for commercial loans, as most recently announced by Bank of America in San Francisco, California, effective as of the last day of the calendar month on which such interest is computed.
Such interest shall be credited to the account of each participating Eligible Employee on the books of the Company or Participating Subsidiary as of December 31 of such calendar year.
reductions in value of the Deferred Compensation of an Eligible Employee who elects such standards. The availability of any such alternative measurement standard and the terms applicable to such standard (including, but not limited to, the method and frequency with which increases or decreases are reflected in the amount of Deferred Compensation) are solely in the discretion of the Administrator.
(c) An Eligible Employee's Pension Make-Up Deferred Compensation shall not be credited with interest or otherwise available for additions or deletions pursuant to any measurement standard offered pursuant to Article 5(b).
All Deferred Compensation under the Plan shall be payable as follows:
notifies the Administrator of his election to have a portion of his total compensation for a given calendar year payable as Deferred Compensation under the Plan:
(i) Specify a date for either a lump sum payment of his or her Deferred Compensation or commencement of payment of his or her Deferred Compensation in ratable annual installments over a period longer than five (5) years, but not to exceed ten (10) years; and/or
(ii) Specify that such monthly installments commence on other than the date of retirement but no later than his or her attainment of age seventy and one-half (70-1/2).
(i) the Eligible Employee or, in the case of death of the Eligible Employee prior to the commencement of payment of Deferred Compensation for any year, the Eligible Employee's Beneficiary, may file a request to accelerate payment of such Deferred Compensation. Such petition shall specify a date for lump sum payment or a period for payment which commences not later than the Eligible Employee's attainment of age seventy and one-half (70-1/2) or actual retirement, whichever is later, and ends no later than one hundred and twenty (120) months after the Eligible Employee would attain age seventy and one-half (70-1/2).
(ii) The Eligible Employee or, in the case of the death of the Eligible Employee prior to the commencement of payment of Deferred Compensation for any year, the Eligible Employee's surviving spouse if such spouse is the Eligible Employee's Beneficiary, may file a request to have the Deferred Compensation applied towards the purchase of an annuity contract which satisfies the criteria set forth herein; provided that the amount of Deferred Compensation available for such purchase equals or exceeds $50,000. Such annuity contract shall be purchased with a single premium, owned by the Company, have an annuity starting date within one (1) year from the date of purchase and provide for substantially equal
periodic payments during the annuity period. The petition for purchase of an annuity shall specify whether the annuity period is to be over the life of the Eligible Employee, the joint lives of the Eligible Employee and the Eligible Employee's spouse, or over the life of the Eligible Employee's spouse. The petition also shall specify an annuity starting date, which shall not be later than the later of the Eligible Employee's retirement date or the Eligible Employee's attainment of age seventy and one-half (70-1/2).
(iii) A request filed by an Eligible Employee on an Eligible Employee's surviving spouse or Beneficiary under Section 6(d)(i) or (ii) shall be filed with Personnel Committee (the "Committee") of the Board of Directors of LSAI Holding Corp. ("Holdings"), and the disposition of such a request shall be determined by the Committee, or its delegate, in its sole discretion.
Employee (or, in the event of death, to an Eligible Employee's Beneficiary) in one lump sum a portion or all of the unpaid balance of such Eligible Employee's Deferred Compensation to the extent necessary to alleviate the hardship. For purposes of the Plan, a hardship shall include any need, circumstance or event which is considered a hardship under the then current provisions of the Employee Investment Plan of Levi Strauss Associates Inc. (whether or not the Eligible Employee participates in such plan) and such other needs, circumstances or events which the Administration, in its sole discretion, determines are consistent with the goals of the Company for the Plan and the requirements of administration of the Plan.
In the event the Administrative Committee approves a hardship distribution to an Eligible Employee under this Section 6(f), deferrals of such Eligible Employee's total compensation automatically shall be cancelled for the remaining portion of the calendar year in which the Eligible Employee's request is filed with the Administrative Committee.
for which an election was made prior to January 1, 1983, and reaffirmed prior to June 15, 1985.
(i) Notwithstanding any other provisions of this Plan to the contrary and subject to the following sentence, the vested Pension Make-Up Deferred Compensation shall be paid to the Eligible Employee, his or her surviving spouse or his beneficiary in the same time or times, in the same form and subject to the same form and subject to the same adjustments as his or her benefit under HOPP, the Excess BRP and the Supplemental BRP, as applicable; provided, that if the Pension Make-Up Deferred Compensation is attributable to two or more of such plans, then the time and form shall be determined separately for each of such components. The foregoing notwithstanding, if the Eligible Employee is not a participant in the Excess BRP or the Supplemental BRP and the present value of his or her vested Pension Make-Up Deferred Compensation is $50,000 or less, such present value shall be paid to the Eligible Employee or the Eligible Employee's Beneficiary in a lump sum, and such payment shall extinguish such Eligible Employee's or Beneficiary's right to Pension Make-Up Deferred Compensation with respect to employment prior to the date of such payment. For the purposes of the preceding sentence, the
present value of the Pension Make-Up Deferred Compensation shall be determined by the Administrator in a uniform and nondiscriminatory manner.
(i) For purposes of this Plan:
(i) the term "disability" shall have the same meaning as the term "Total and Permanent Disability" (or any successor term) under the Revised Home Office Pension Plan of the Company, or any successor thereto (the "HOPP");
(ii) the term "retirement" shall mean the termination of employment with the Company or any subsidiary thereof with the right to an immediate benefit under (the "HOPP"), providing that an Eligible Employee who is not a participant in the HOPP at the time of his or her termination of employment shall be deemed to have incurred a retirement if the Eligible Employee would have been eligible for an immediate benefit under the HOPP if he or she had been participating in the HOPP at such time.
All payments of Deferred Compensation hereunder shall be paid in cash from the general funds of the Company or the Participating Subsidiary, whichever was the employer at the time of the deferral, and no special or separate fund shall, trust or account be established in the name of any Eligible Employee or beneficiary or other segregation of assets made to assure such payments; provided, however, that the Company or the Participating Subsidiary, as the case may be, may establish a bookkeeping reserve to meet its obligation hereunder. No sponsor of any financial entity which is utilized as a measurement standard, such as a designated mutual fund sponsor or bank, shall have any responsibility for payment of Deferred Compensation hereunder, and no Eligible Employee shall have an account with such a sponsor in connection with the Eligible Employee's participation in the Plan. Any account which the Company may, from time
to time, establish with any financial entity which is utilized as a measurement standard under the Plan, and any increases to or distributions from such account, shall remain the property of the Company. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create or be construed to create a trust of any kind or a fiduciary relationship between the Company or the Participating Subsidiary or the Administrator and any employee or other person. To the extent that any person acquires a right to receive payments from the Company or the Participating Subsidiary under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company or the Participating Subsidiary.
are determined, or the Administrator may direct the Company or Participating Subsidiary to pay such amount into any court of appropriate jurisdiction, and such payment shall completely discharge the liability of the Plan, the Company and Participating Subsidiary therefor.
For purposes of this Plan, the "Administrator" shall be the Director of
Employee Benefits or such other person as the Chief Executive Officer of the
Company may designate from time to time. The Plan, except for Sections 6(d) and
6(f), shall be administrated by the Administrator, who shall have full power,
discretion and authority to interpret, construe and administer the Plan and any
part thereof. The Administrator's interpretations and constructions of the Plan
and actions thereunder shall, except as otherwise determined by the Board of
Directors of the Company or the Personnel Committee thereof, be binding and
conclusive on all person for all purposes. The Administrator's interpretations
and constructions of the Plan and actions thereunder, except as otherwise
determined by the Board of Directors of Holdings, the Committee or the
Administrative Committee (for the purposes referenced in Section 6(f)), shall be
binding and conclusive on all persons for all purposes.
The Plan may be amended, suspended or terminated, in whole or in part, by the Board of Directors of Holdings or the Committee, or the delegate of either, but no such action shall retroactively impair or otherwise adversely affect the rights of any person to Deferred Compensation under the Plan which has accrued prior to the date of such action, as determined by the Administrator.
Any other provision of this Plan notwithstanding, an Eligible Employee's Deferred Compensation under the Plan shall be payable to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in any domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section 414(p) of the Code. Determinations under this section (a), including but not limited to determination of whether an order would constitute a qualified domestic relations order, shall be made by the Administrator, or its designee, in its sole discretion. The rights of any alternate payee hereunder are subject to the
provisions of the Plan as administered with respect to alternate payees, and the Administrator may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
such form as is prescribed from time to time by the Administrator, shall be mailed by first-class mail, transmitted by facsimile or delivered to such location as shall be specified by the Administrator and shall be deemed to have been given and delivered only upon actual receipt thereof by the Administrator at such location.
APPENDIX A
(EFFECTIVE AS OF MARCH 11, 1996)
1. The provisions of Section 4(a)(iii)(A) notwithstanding a deferral election with respect to compensation to be paid in calendar year 1996 may be made on or before December 26, 1995.
2. On or after March 12, 1996 and before March 30, 1996, an eligible employee who is an expatriate (as defined below) may make a deferral election, including an amendment of a deferral election previously submitted, with respect to compensation to be paid for services performed in pay periods commencing in 1996, but after March 31, 1996; provided, however, that any amendment of or substitution for a previously filed deferral election under this Appendix A cannot decrease the amount of compensation deferred pursuant to the previously filed election. For purposes of this Section 2 of Appendix A, an expatriate is an employee who is on an expatriate assignment outside of the United States.
LEVI STRAUSS & CO.
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
JANUARY 1998
APPENDIX
During the period from January 1, 1998 through February 13, 1998, any individual with Deferred Compensation credited to him or her under the Plan may, but is not required to, file with the Administrator a revised election with respect to the payment of such Deferred Compensation. However, any revised election must satisfy the following conditions:
1. The effective date for a revised election shall be twelve months after the date on which it is received by the Administrator;
2. No revised election shall require payments to be made as of any date prior to the effective date of the revised election not prevent any payment otherwise scheduled to be made as of any date prior to the effective date of the revised election;
3. A revised election must be in a form prescribed by the Administrator;
4. A revised election must be received by the Administrator before February 14, 1998; and
5. A revised election shall be effective only for Deferred Compensation with respect to which an individual may make a distribution election under the Plan.
Any distribution election made under provisions of the Plan other than a revised election made under this Appendix shall be effective except to the extent that such election is superseded by a revised election under this
Appendix.
EXHIBIT 10.26
(As adopted January 17, 1977 and as amended through July 19, 1988)
The Levi Strauss Associates Inc. Deferred Compensation Plan for Outside Directors (hereinafter the "Plan") became effective upon approval by the Executive Committee of the Board of Directors of Levi Strauss & Co. on January 17, 1977 and amended and restated most recently on July 19, 1988 by the delegate of the Board of Directors of Levi Strauss Associates Inc. (the "Company").
The persons eligible to participate in this Plan shall be those members of the Board of Directors of the Company who are not otherwise employed by the Company as an executive or in any other capacity. These persons are generally referred to by the Company as "outside directors".
For all purposes under the Plan, "total compensation" shall mean all fees or other compensation for services as an outside director of the Company, but shall not include any LTPP Payment and further shall not include any payments under or contributions to any group insurance or other benefit plan maintained by the company or any reimbursement for expenses. For all purposes under the Plan, "LTPP Payment" shall mean any payment under the Levi Strauss Associates Inc. Long-Term Performance Plan.
Any person eligible to participate in this Plan may elect that a portion or all of this total compensation for a calendar year shall be payable only as Deferred Compensation under the Plan. Such election shall be made in writing to the Corporate Secretary at least two (2) weeks prior to the' commencement of such calendar year.
In addition, an eligible outside director may make an election during the first year of service as a director of the Company. Such election under the Plan shall be made in writing to the Corporate Secretary on the date of election to the Board of Directors of the
Company. In no case, however, shall such election under the plan be permitted after December 15, of any calendar year. An election for a given year shall be irrevocable.
Any person eligible to participate in the Plan may elect that a portion or all of any LTPP Payment shall be payable as Deferred Compensation under the Plan; provided, however, that the minimum amount that may be deferred is the greater of $5,000 or five percent (5$) of each LTPP Payment than payable. Deferral elections shall be made at the same time and in the same manner as elections to defer LTPP Payments are made under Article 5 of the Levi Strauss Associates Inc. Long-Term Performance Plan.
Beginning on January 1, 1982, interest shall be computed monthly as of the last day of each calendar month on the undistributed balance of each eligible outside director's Deferred Compensation at the end of such calendar month. Such interest shall be computed at a monthly interest rate equal to one-twelfth (1/12) of the annual interest rate charged for commercial loans to most creditworthy customers, as most recently announced by Bank of America in San Francisco, California, effective as of the last day of the calendar month on which such interest is computed; except that for any calendar year beginning prior to January 1, 1982, interest shall be credited in accordance with the procedures specified in the Plan as then in effect. Such interest shall be credited to the account of each outside director on the books of the Company as of December 31 of such calendar year.
All Deferred Compensation under the Plan (including interest credited under
Section 6) shall be payable as follows:
At the time that an outside director notifies the Corporate Secretary of his election to defer compensation, he shall specify that payment of the Deferred Compensation shall commence (1) when the outside director ceases to be a director of the Company, (2) when the outside director retires from his or her principal occupation, or (3) the later of (1) or (2). The amount of the outside director's Deferred Compensation shall be paid to him over a five (5) year period in sixty (60) ratable monthly installments commencing on the first day of the calendar month following the date selected above. An eligible outside director may, however, at the time that he notifies the Corporate Secretary of his election
to have all or a portion of his total compensation for a given calendar year payable as Deferred Compensation under the Plan:
(i) specify a longer period, not to exceed ten (10) years, over which his Deferred Compensation for such year shall be paid for him, or
(ii) specify the payment shall be in the form of a lump sum.
Notwithstanding the outside director's election, all payments of Deferred Compensation must be completed prior to ten years after the outside director reaches or would have reached age 70 1/2.
In the event that the eligible outside director's service is terminated by death, or in the event of an eligible outside director's death after termination of services, the unpaid balance of his Deferred Compensation shall be paid in a lump sum to his Beneficiary within thirty (30) days after his death; except that at the time an eligible outside director notifies the Corporate Secretary of his election to have all or a portion of his total compensation for a given calendar year payable as Deferred Compensation under the Plan, such eligible outside director may elect that such unpaid balance be paid in a lump sum at a designated time within the five (5) year period following death of the eligible outside director or in ratable monthly installments over a five (5) year period or a specified longer period not to exceed ten (l0) years.
Notwithstanding the outside director's election, all payments of Deferred Compensation must be completed prior to ten years after the outside director would-have reached age 70 1/2.
Upon a showing of financial hardship, the Personnel Committee of the Board of Directors may, in its sole discretion, direct the Company to pay to an eligible outside director (or, in the event of death, to an eligible outside director's Beneficiary) in one lump sum, a portion, or all of the unpaid balance of such eligible outside director's Deferred Compensation to the extent necessary to alleviate the hardship. A hardship is an emergency beyond the control of the eligible outside director and his Beneficiary.
An outside director who is no longer a outside director or, in the case of the death of an outside director prior to the commencement of payment of Deferred Compensation for any year, the outside director's Beneficiary, may file a petition to accelerate payment of Deferred Compensation. The Outside Director appointed by the Personnel Committee of the Board of Directors of the Company pursuant to Section 6(d) of the Levi Strauss Associates Inc. Deferred Compensation Plan for Executives shall consider and act upon such petitions and the Outside Director shall have the sole discretion to approve or disapprove such petitions. In the petition, the outside director or Beneficiary, as the case may be, shall with respect to the Deferred Compensation specify (1) a date for lump sum payment or (2) a period to receive payments which is not later or longer than the date for lump sum payment or period to commence specified in the election pursuant to Section 6(a) or 7(b).
In lieu of the provisions for payment of Deferred Compensation set forth Subsections (a), (b), (c) and (d) above, the outside director may elect payment of his LTPP Payment to be made as follows: Twenty percent (20%) of the LTPP Payment to be paid as soon as practical after the amounts have been determined by the awarding company; thereafter in ratable annual installments in July of each of the following four years.
All payments of Deferred Compensation hereunder shall be paid in cash from the general funds of the company, and no special or separate fund shall be established or other segregation of assets made to assure such payments; provided, however, that the Company may establish a bookkeeping reserve to meet its obligations hereunder. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall, create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Company or the Corporate Secretary and any outside director or other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.
Each eligible outside director shall file with the Corporate Secretary a written designation of one or more persons as the Beneficiary who shall be entitled to receive the amount of compensation, if any, payable under the Plan upon his death. An eligible outside director may from time to time revoke or change his Beneficiary designation without the consent of
any prior Beneficiary by filing a new designation with the Corporate Secretary. 'the last such designation received by the Corporate Secretary shall be controlling; provided, however, that no designation or change or revocation thereof, shall be effective unless received by the corporate Secretary prior to the eligible outside director's death, and in no event shall it be effective as of a date prior to such receipt.
If no such Beneficiary designation is in effect at the time of an eligible outside director's death, or if no designated Beneficiary survives the eligible outside director, or if such designation conflicts with law, the eligible outside director's estate shall be the Beneficiary entitled to receive the amount. The Corporate Secretary may direct the Company to retain such amount, without liability for any interest thereon, until the rights thereto are determined, or he may direct the Company to pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Company therefor.
The Plan, except for Sections 7(c) and 7(d), shall be administered by the Corporate Secretary who shall have full power, discretion and authority to interpret, construe and administer the Plan and any part thereof. The Corporate Secretary's interpretations and constructions of the Plan and actions thereunder shall, except as otherwise determined by the Board of Directors of the Company or the Personnel Committee thereof, be binding and conclusive on all persons for all purposes.
The Plan may be amended, suspended or terminated, in whole or in part, by the Board of Directors of the Company or the Personnel Committee thereof, or the delegate of either, but no such action shall retroactively impair or otherwise adversely affect the rights of any person to payment of Deferred Compensation under the Plan which has accrued prior to the date of such action, as determined by the Corporate Secretary.
The right of any eligible outside director or other person to the payment of Deferred Compensation under the Plan may not be assigned, transferred, pledged or encumbered, either voluntarily or by operation of law, except as provided in Section 9 above with respect to designations of Beneficiaries hereunder or as may otherwise be required by law. If any person shall attempt to, or shall, assign, transfer, pledge or encumber any amount payable hereunder, or if by reason of his bankruptcy or other event happening at any time any such payment would be made subject to his debts or liabilities or would otherwise devolve upon anyone else and not be enjoyed by him or his Beneficiary, the
Corporate Secretary may, in his sole discretion, terminate such persons interest in any such payment and direct that the same be held and applied to, or for the benefit of such person, his spouse, children or other dependents, or any other persons deemed to be the natural objects of his bounty, or any of them, in such manner as the Corporate Secretary may deem proper.
If the Corporate Secretary shall find that any person to whom any payment is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, then any payment due .(unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to his spouse, a child, a parent, or a brother or sister, or any other-person deemed by the Corporate Secretary to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Corporate secretary may determine. Any such payment shall be a complete discharge of the liabilities of the Company under the Plan.
Each eligible outside director shall file with the Corporate Secretary such pertinent information concerning himself and his Beneficiary as the Corporate Secretary may specify, and no eligible outside director or Beneficiary or other person shall have any rights or be entitled to any benefits under the Plan unless-such information is filed by or with respect to him.
All elections, designations, requests, notices, instructions, and other communications from an eligible outside director, Beneficiary or other person to the Corporate Secretary required or permitted under the Plan shall be in such form as is prescribed from time to time by the Corporate Secretary, shall be mailed by first class mail or delivered to such location as shall be specified by the.- Corporate Secretary and shall be deemed to have been given and delivered only upon actual receipt thereof by the Corporate Secretary at such location.
All notices, statements, reports and other communications from the Corporate Secretary to any eligible outside director, Beneficiary or other person required or permitted under the Plan shall be deemed to have been duly given when delivered to, or when mailed by first-class mail, postage prepaid and addressed to, such eligible outside director, Beneficiary or other person at his address last appearing on the records of the Company.
Neither the Plan nor any action taken hereunder shall be construed as giving to any outside director the right to be retained as a director of the Company.
The captions preceding the Sections hereof have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions hereof.
The Plan and all rights thereunder shall be governed by and construed in accordance with the laws of the State of California.
To record the restatement of the Plan, the following duly authorized officer pursuant to delegated authority has executed this document.
LEVI STRAUSS ASSOCIATES INC.
By__________________________
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Deferred Compensation Plan for Outside Directors (the "Plan");
WHEREAS, the Company desires to amend the Plan in order to provide outside directors of the Company with alternative measurements for growth of Deferred Compensation under the Plan;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends Article 6 of the Plan in its entirety to read as set forth below:
The Deferred Compensation of an eligible outside director shall be credited with increases and, as appropriate, decreases to reflect the performance of the measurement standard offered by the Company pursuant to this Article 6 and selected by the eligible outside director. If with respect to all or a portion an eligible outside director's Deferred Compensation, such outside director fails to elect a measurement standard or if a measurement standard becomes unavailable under the Plan without an effective successor election by the eligible outside director, such Deferred Compensation shall receive credits pursuant to Article 6(b)(i) below.
With respect to amounts of Deferred Compensation for which the interest measurement standard is applicable, interest shall be computed monthly as of the last day of each calendar month on the undistributed balance of each eligible outside director's Deferred Compensation at the end of such calendar month. Such interest shall be computed at a monthly interest rate equal to one-twelfth (1/ 12) of the annual interest rate charged for commercial loans to most creditworthy customers, as most recently announced by Bank of America in San Francisco, California, effective as of the last day of the calendar month on which such interest is computed; except that for any calendar year beginning prior to January 1, 1982, interest shall be credited in accordance with the procedures specified in the Plan as then in effect. Such interest shall be credited to the account of each outside director on the books of the Company as of December 31 of such calendar year.
The Company may from time to time offer one or more measurement standards in addition to the standard described in Article 6(b)(i) above. Such alternative measurement standards offered by the Company may include standards which have different potential for risk and return and could result in reductions in value of the Deferred Compensation of an Outside Director who elects such standards. The availability of any such alternative measurement standard, and the terms applicable to such standard (including, but not limited to, the method and frequency with which increases or decreases are reflected in the amount of Deferred Compensation) are solely in the discretion of the Company.
The Administrator, in its discretion, shall prescribe procedures for election of measurement standards and changes in measurement standards applicable to Deferred Compensation.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on ________ __,1994.
Senior Vice President
EXHIBIT 10.27
EXCESS BENEFIT RESTORATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 27, 1989)
LEVI STRAUSS ASSOCIATES INC.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS ASSOCIATES INC.
SUPPLEMENTAL BENEFITS RESTORATION PLAN
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP", respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs in order to assist certain persons associated with the Company in avoiding transactions which could result in liability under Section 16(b) of the Securities Exchange Act of 1934, as amended;
WHEREAS, by resolutions duly adopted on June 22, 1989 and June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on October 20, 1989, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. Section 4 of the Excess BRP is amended by the addition of a new subsection (c), to read as set forth below:
(c) Any contrary provision of the Plan notwithstanding, to the extent that any portion of the benefit hereunder of an Eligible Employee who is an Insider is attributable to amounts deemed to have been invested in the Stock Fund pursuant to the second paragraph of Section 3(b), such portion shall not be payable prior to the earlier of the termination of employment, death, retirement or disability of such Eligible Employee. For purposes of this Section 4(c), (i) the term "Insider" shall mean an Eligible Employee who is subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, and (ii) the phrases or terms "termination of employment", "retirement" and "disability" shall have the meaning that such phrases or
terms, or the equivalent phrases or terms, have under the Qualified Plan which maintain such Stock Fund.
2. Section 4 of the Supplemental BRP is amended by the addition of a new subsection (c), to read as set forth below:
(c) Any contrary provision of the Plan notwithstanding, to the extent that any portion of the benefit hereunder of an Eligible Employee who is an Insider is attributable to amounts deemed to have been invested in the Stock Fund pursuant to Section 3(c)(2), such portion shall not be payable prior to the earlier of the termination of employment, death, retirement or disability of such Eligible Employee. For purposes of this Section 4(c), (i) the term "Insider" shall mean an Eligible Employee who is subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, and (ii) the phrases or terms "termination of employment", "retirement" and "disability" shall have the meaning that such phrases or terms, or the equivalent phrases or terms, have under the Qualified Plan which maintains such Stock Fund.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on February 9, 1993.
LEVI STRAUSS ASSOCIATES INC.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS ASSOCIATES INC.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP," respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs to provide for an orderly and systematic division of interests under the BRPs pursuant to an appropriate domestic relations order;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. The Excess BRP is amended by the addition of a new Section 10 to read as set forth below:
Section 10
Any other provision of this Plan notwithstanding, an Eligible Employee's benefit under the Plan shall be payable to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in a domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section
414(p) of the Code. Determinations under this Section 10, including but not limited to determination of whether an order would constitute a qualified domestic relations order, shall be made by the Committee, or its designee, in its sole discretion. The rights of any alternate payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the Committee may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
2. The Supplemental BRP is amended by the addition of a new Section X to read as set forth below:
Section X
Any other provision of this plan notwithstanding, an Eligible Employee's benefit under the Plan shall be payable to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in a domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section 414(p) of the Code. Determinations under this Section 10, including but not limited to determination of whether an order would constitute a qualified domestic relations order, shall be made by the Committee, or its designee, in its sole discretion. The rights of any alternate payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the Committee may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
LEVI STRAUSS ASSOCIATES INC.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS ASSOCIATES INC.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP", respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs to permit the expansion of options for crediting certain bookkeeping accounts maintained under the BRPs;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof,
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. Section 3(b) of the Excess BRP is amended in its entirety to read as set forth below:
(b) The difference between the aggregate amount of contributions which would have been allocated for plan years beginning before November 26, 1990 in respect of the Eligible Employee under the Qualified Plans that are defined contribution plans without regard to the Benefit Limitation and the aggregate amount of contributions actually allocated in respect of such Eligible Employee thereunder, adjusted to reflect the performance of any measurement standard selected pursuant to Section 3(d) ("performance adjustments"); provided, however, that to the extent that such amount would have consisted of pre-tax or post-tax employee contributions, such amount will be credited hereunder only to the extent that the Eligible Employee executes a salary
reduction agreement in a form suitable to the Committee. For purposes of determining performance adjustments hereunder, amounts payable pursuant to this Section 3(b) shall be deemed to be subject to the applicable performance standard as of the date such amounts would have been allocated under the Qualified Plan if not for the Benefit Limitation.
At any time that participants under a Qualified Plan invest amounts contributed on their behalf to such Plan in a fund which invests primarily in the common stock of the Company (the "Stock Fund"), the Eligible Employee shall be permitted to elect whether any portion of the amount described in the immediately preceding paragraph shall be deemed to be invested in the Stock Fund, provided that such amount would have been available for investment in the Stock Fund at such time if not for the Benefit Limitation. If the Eligible Employee elects to have such amount deemed to be invested in the Stock Fund, the Eligible Employee's benefit under this Section 3(b) shall include (i) an amount equal to any employer matching contribution which would have been made to the Qualified Plan had such investment been made in the Stock Fund, and (ii) in lieu of performance adjustments as described in the immediately preceding paragraph, gains or losses in respect of the deemed contributions to the Stock Fund to reflect the gains or losses in the Stock Fund during the same period. In addition, any amounts credited to an Eligible Employee pursuant to the first paragraph of this Section 3(b) with respect to Nonelective Contributions which, by reason of the Benefit Limitation, could not be made to a Qualified Plan shall be deemed to be invested in the Stock Fund as of the next purchase of common stock of the Company by the Stock Fund which occurs after such amounts are credited under this Plan, and, thereafter, such amounts shall, in lieu of performance adjustments, reflect gains and losses in the manner prescribed in clause "(ii)" of the immediately preceding sentence. The election permitted under this paragraph generally shall be subject to the same limitations as are applicable to similar elections under the relevant Qualified Plan, except as provided otherwise by the Committee.
2. Section 3 of the Excess BRP is amended by the addition of a new subsection (d), to read as set forth below:
(d)(1) Performance adjustments effected with respect to Plan benefits described in Section 3(b) above shall be determined pursuant to paragraph 2 below, except to the extent that the Committee offers, and the Eligible Employee elects, alternative measurement standards pursuant to paragraph 3 below.
(2) The performance adjustment pursuant to this paragraph 2 shall be interest, computed monthly, at a rate determined by the Committee to be equivalent to the reference rate charged for commercial loans by the Bank of America N.T. & S.A. on the last day of each such month.
(3) The Committee may, but is not required to, offer one or more measurement standards in addition to the standard described in paragraph 2. Such alternative measurement standards offered by the Committee may include standards which have different potential for risk and return and could result in reductions in value of the Plan benefits of an Eligible Employee who elects such standards. The determination of such standards, terms and conditions for electing such standards and receiving credits for gains and losses attributable to such standards, shall be in the sole discretion of the Committee.
3. Section 3(c) of the Supplemental BRP is amended in its entirety to read as set forth below:
(c) An amount determined as follows: (1) If any Eligible Employee's contributions to the Qualified Plans for a fiscal year are limited by section 401(a)(17) or 401(m) of the Code and the Eligible Employee executes a salary reduction agreement in a form suitable to the Committee, the Eligible Employee's compensation for the remainder of such fiscal year shall be reduced by an amount equal to the contributions that the Eligible Employee cannot make to the Qualified Plans, and such amount shall be credited to a bookkeeping account under the Plan. The bookkeeping account also shall be credited with an amount equal to any profit sharing contribution or nonelective contribution that would have been made with respect to such Employee under the Qualified Plans, adjusted to reflect the performance of any measurement standard selected pursuant to Section 3(e) ("performance adjustments"). For purposes of determining performance adjustments hereunder, amounts payable pursuant to this Section 3(c) shall be deemed to be subject to the applicable performance standard as of the date such amounts would have been allocated under the Qualified Plan if not for the limitations pursuant to section 401(a)(17) and 401(m) of the Code.
(2) At any time that participants under a Qualified Plan invest amounts contributed on their behalf to such Plan in a fund which invests primarily in the common stock of the Company (the "Stock Fund"), the Eligible Employee shall be permitted to elect to have amounts credited to the bookkeeping account deemed to be invested in the Stock Fund, provided that such amounts would have been available for investment in the Stock Fund at such time if not for the limitations imposed by sections 401(a)(17) and 401(m) of the Code. In addition, amounts credited with respect to nonelective contributions which would have been made to the Qualified Plans shall be deemed to be invested in the Stock Fund. If the Eligible Employee elects to have such amounts deemed to be invested in the Stock Fund, the bookkeeping account also shall be credited with the amount equal to any employer matching contribution which would have been made to the Qualified Plan if such investment had been made in the Stock Fund, and such amount also shall be deemed to be invested in the Stock Fund. With respect to amounts deemed to be invested in the Stock Fund pursuant to this
Section 3(c)(2), the bookkeeping account, in lieu of performance adjustments pursuant to the immediately preceding paragraph, shall be credited with gains and losses as if such amounts were invested in the Stock Fund. The election permitted under this paragraph generally shall be subject to the same limitations which are applicable to similar elections under the relevant Qualified Plan, except as provided otherwise by the Committee.
4. Section 3 of the Supplemental BRP is amended by the addition of a new subsection (e), to read as set forth below:
(e)(1) Performance adjustments effected with respect to Plan benefits described in Section 3(c) above shall be determined pursuant to paragraph 2 below, except to the extent that the Committee offers, and the Eligible Employee elects, alternative measurement standards pursuant to paragraph 3 below.
(2) The performance adjustment pursuant to this paragraph 2 shall be interest, computed monthly, at a rate determined by the Committee to be equivalent to the reference rate charged for commercial loans by the Bank of America N.T. & S.A. on the last day of each such month.
(3) The Committee may but is not required to, offer one or more measurement standards in addition to the standard described in paragraph 2. Such alternative measurement standards offered by the Committee may include standards which have different potential for risk and return and could result in reductions in value of the Plan benefits of an Eligible Employee who elects such standards. The determination of such standards, terms and conditions for electing such standards and receiving credits for gains and losses attributable to such standards, shall be in the sole discretion of the Committee.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on _________, 1994.
LEVI STRAUSS & CO.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Levi Strauss & Co. Excess Benefit Restoration Plan (the "Excess BRP") and the Levi Strauss & Co. Supplemental Benefit Restoration Plan (the "Supplemental BRP" (collectively referred to as the "BRPs").
WHEREAS, the Company desires to amend the BRPs, effective November 30, 1998, to provide a method of paying benefits under the 1999 Enhanced Early Retirement Program for Laid Off Employees (the "1999 Enhancement") to certain Members who could not receive the benefit under the applicable tax-qualified plan due to nondiscrimination rules under the Internal Revenue Code;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the BRPs and to delegate to certain other officers of the Company the authority to adopt certain amendments to the BRPs;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the BRPs, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW THEREFORE, effective November 30, 1998, the BRPs are hereby amended as follows:
1. Current paragraphs (c) and (d) of Section III of the Excess BRP are hereby redesignated as paragraphs (e) and (f).
2. Section 3 of the Excess BRP is amended by adding a new paragraph (c) to read as follows:
"(c) The amount of benefits which would have been payable to or in respect of the Eligible Employee under Section 3(d) of the Supplemental BRP
but for the application of the Benefit Limitation to the amount payable thereunder,"
3. The first sentence of the second paragraph of the Preamble to the Supplemental BRP is hereby amended in its entirety to read as follows:
"The Plan is intended to supplement benefits under the Revised Home Office Pension Plan of Levi Strauss & Co., the Levi Strauss & Co. Retirement Plan for Over-the-Road Truck Drivers and Dispatchers and the Levi Strauss & Co. Revised Employee Retirement Plan (the "Qualified Plans") maintained by Levi Strauss & Co. (the "Company,") to the extent such benefits are reduced due to the limits of section 401(a)(17) of the Code, to permit the deferral of compensation and the restoration of matching contributions that are reduced under the Qualified Plans due to the limits of sections 401(a)(17) and 401(m) of the Code, and to provide benefits pursuant to the 1999 Enhancement that cannot be paid under the Qualified Plans due to nondiscrimination rules under the Code."
4. Paragraph (c) of Section I of the Supplemental BRP is hereby amended in its entirety to read as follows:
"(c) 'Eligible Employee' means each employee of the Company or any of its subsidiaries who is eligible for benefits under one of the Qualified Plans who has compensation (as defined therein) of $125,000 or more during the prior fiscal year or who is eligible for the 1999 Enhancement but who could not receive payment (for the 1999 Enhancement) under the applicable Qualified Plan due to nondiscrimination rules under the Code; provided, however, that the Company may further restrict participation in the Plan to the extent it deems necessary in order for the Plan to be considered a Top Hat Plan.
5. Section II of the Supplemental BRP is hereby amended in its entirety to read as follows:
"Each employee whose benefits or allocations of contributions under the Qualified Plans are reduced as a result of the limitations on benefits and contributions imposed by sections 401(a)(17), 401(m) of the Code, or as a result of the application of the nondiscrimination rules under the Code to benefits under the 1999 Enhancement shall participate in the Plan unless he shall elect not to participate in the Plan by written notice to the Committee whereby he waives all present and future rights to benefits under the Plan. "
6. The first sentence of Section III of the Supplemental BRP is hereby amended in its entirely to read as follows:
"Subject to paragraph (e) below, the amount of the benefit payable to or in respect of an Eligible Employee hereunder shall be the sum of the amounts described in paragraphs (a), (b), (c) and (d):"
7. Current paragraphs (d) and (e) of Section III of the Supplemental BRP are hereby redesignated as paragraphs (e) and (f).
8. Section III of the Supplemental BRP is hereby amended by adding the following new paragraph (d) to read as follows:
"(d) The difference between (i) and (ii) below, where (i) is the
amount of benefits which would have been payable to or in respect of the
Eligible Employee under the applicable Qualified Plan that is a defined
benefit plan if such Eligible Employee would have been eligible to receive
payment of the 1999 Enhancement under such Qualified Plan but for
applicable nondiscrimination rules under the Code, and (ii) is the amount
of benefits payable to or in respect of the Eligible Employee under the
applicable Qualified Plan but without regard to any limits imposed under
Section 415 of the Code;"
9. The first sentence of paragraph (a)(1) of Section IV of the Supplemental BRP is hereby amended in its entirety to read as follows:
"(1) A benefit described in Section 3(a) or 3(b) shall be paid to the Eligible Employee, his surviving spouse or his beneficiary at the same time or times, in the same form and subject to the same adjustments as his benefit under the Qualified Plans that are defined benefit plans. The benefit described in Section 3(d) shall be paid to the Eligible Employee, his surviving spouse or his beneficiary commencing on the early retirement date as specified in the Acceptance Notice under the 1999 Enhancement and in the form of payment specified in that Notice. "
10. The Supplemental BRP is further amended by the addition of Addendums I, II and III attached hereto.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this _____ day of November, 1998.
LEVI STRAUSS & CO.
Donna J. Goya
Senior Vice President
ADDENDUM I TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1 of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above).
ADDENDUM II TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
deemed complete if it includes a retirement date that occurs not earlier than December 1, 1998, and not later than December 1, 1999.
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1 (b) of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above); or
iii. If the Participating Member's total attained age plus Years of Service equals or exceeds 80, or would have equaled or exceeded 80 as of November 29,1999, if not for being Laid Off; 100% of his or her Retirement Benefit.
ADDENDUM III TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 8.1 (b) of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above); or
iii. If the Participating Member's total attained age plus Years of Service equals or exceeds 80, or would have equaled or exceeded 80 as of November 29,1999, if not for being Laid Off; 100% of his or her Retirement Benefit.
retire under the 1999 Enhancement unless such Employee is Laid Off and eligible to participate within the period set forth in Section 3 above.
EXHIBIT 10.28
The Supplemental Benefit Restoration Plan (the "Plan") is established effective as of November 27, 1989, to read as set forth herein.
The Plan is intended to supplement benefits under the tax-qualified employee retirement benefit plans (the "Qualified Plans") maintained by Levi Strauss Associates, Inc. (the "Company") to the extent such benefits are reduced due to the limits of section 401(a)(17) of the Code and to permit the deferral of compensation and the restoration of matching contributions that are reduced under the Qualified Plans due to the limits of sections 401(a)(17) and 401(m) of the Code. The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees (a "Top Hat Plan"), as described in section 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
As used herein, the following terms shall have the following meanings:
(a) Words and phrases defined in the Qualified Plans shall have the same meanings when used herein unless expressly provided to the contrary herein.
(b) "Committee" means the Administrative Committee of the Retirement Plans.
(c) "Eligible Employee" means each employee of the Company or any of its subsidiaries who is eligible for the Levi Strauss Associates, Inc. Management Incentive Program; provided, however, that the Company may further restrict participation in the Plan to the extent it deems necessary in order for the Plan to be considered a Top Hat Plan.
Each employee whose benefits or allocations of contributions under the Qualified Plans are reduced as a result of the limitations on benefits and contributions imposed by section 401(a)(17) or 401(m) of the Code shall participate in the Plan unless he shall elect not to participate in the Plan by written notice to the Committee whereby he waives all present and future rights to benefits under the Plan.
Subject to paragraph (d) below, the amount of the benefit payable to or in respect of an Eligible Employee hereunder shall be the sum of the amounts described in paragraphs (a), (b) and (c):
(a) The difference between the amount of benefits which would have been payable to or in respect of the Eligible Employee under the Qualified Plans that are defined
benefit plans without regard to the limitation imposed by section 401(a)(17) of the Code and the amount of benefits actually. payable to or in respect of the Eligible Employee thereunder; plus
(b) The difference between the amount of benefits which would have been payable to or in respect of the Eligible Employee under the Qualified Plans that are defined benefit plans if compensation that is reduced and credited to a bookkeeping account pursuant to (c) below had been recognized as "Compensation" under the Qualified Plans and the amount of benefits actually payable to or in respect of the Eligible Employee thereunder; plus
(c) An amount determined as follows: (1) If any Eligible Employee's contributions to the Qualified Plans for a fiscal year are limited by section 401(a)(17) or 401(m) of the Code and the Eligible Employee executes a salary reduction agreement in a form suitable to the Committee, the Eligible Employee's compensation for the remainder of such fiscal year shall be reduced by an amount equal to the contributions that the Eligible Employee cannot make to the Qualified Plans, and such amount shall be credited to a bookkeeping account under the Plan. The bookkeeping account also shall be credited with an amount equal to any profit sharing contribution or nonelective contribution that would have been made with respect to such Employee under the Qualified Plans, plus interest on all amounts credited to such account at a rate determined by the Committee to be equivalent to the prime or reference rate charged for commercial loans by the Bank of America N. T. & S.A. on the last day of each month during any such period. For purposes of determining interest hereunder, amounts payable pursuant to this Section 3(c) shall be deemed to be earning interest as of the date such amounts would have been
allocated under the Qualified Plan if not for the limitations pursuant to section 401(a)(17) and 401(m) of the Code.
(2) At any time that participants under a Qualified Plan invest
amounts contributed on their behalf to such Plan in a fund which invests
primarily in the common stock of the Company (the "Stock Fund"), the Eligible
Employee shall be permitted to elect to have amounts credited to the bookkeeping
account deemed to be invested in the Stock Fund, provided that such amounts
would have been available for investment in the Stock Fund at such time if not
for the limitations imposed by sections 401(a)(17) and 401(m) of the Code. In
addition, amounts credited with respect to nonelective contributions which would
have been made to the Qualified Plans shall be deemed to be invested in the
Stock Fund. If the Eligible Employee elects to have such amounts deemed to be
invested in the Stock Fund, the bookkeeping account also shall be credited with
the amount equal to any employer matching contribution which would have been
made to the Qualified Plan if such investment had been made in the Stock Fund,
and such amount also shall be deemed to be invested in the Stock Fund. With
respect to amounts deemed to be invested in the Stock Fund pursuant to this
Section 3(c)(2), the bookkeeping account, in lieu of interest pursuant to the
immediately preceding paragraph, shall be credited with gains and losses as if
such amounts were invested in the Stock Fund. The election permitted under this
paragraph generally shall be subject to the same limitations which are
applicable to similar elections under the relevant Qualified Plan, except as
provided otherwise by the Committee.
(d) The benefits described above shall be vested only to the extent that such benefits would have been vested pursuant to the terms of the Qualified Plans.
(a) Except as provided in Section 4(b) below, vested benefits shall be paid hereunder as follows:
(1) A benefit described in Section 3(a) or 3(b) shall be paid to the Eligible Employee, his surviving spouse or his beneficiary at the same time or times, in the same form and subject to the same adjustments as his benefit under the Qualified Plans that are defined benefit plans. If such benefit consists of two or more components derived from two or more such Qualified Plans, then the recipient and the time and form of payment shall be determined separately for each of such components. The foregoing notwithstanding, a benefit described in this Section 4(a)(1) shall not be paid in the form of a single lump sum without the Committee's express consent. If the Committee does not consent to a lump sum distribution, the Eligible Employee may elect to have the benefit paid in any other form available under the applicable Qualified Plan.
(2) A benefit described in Section 3(c) shall be paid to the Eligible Employee or his beneficiary at the same time or times and in the same form as his benefit under the Qualified Plans that are defined contribution plans. If such benefit consists of two or more components derived from two or more such Qualified Plans, then the recipient and the time and form of payment shall be determined separately for each of such components. The foregoing notwithstanding, a benefit described in this Section 4(a)(2) shall not be paid in the form of a single lump sum without the Committee's express, consent. If the Committee does not consent to
a lump sum distribution, the Eligible Employee may elect to have the benefit paid in any other form available under the applicable Qualified Plan.
(b) If an Eligible Employee's employment is terminated for any reason other than retirement from the Company or one of its subsidiaries with the right to receive an immediate benefit under a Qualified Plan which is a defined benefit plan and such Eligible Employee's aggregate vested benefit under this Plan and the Excess Benefit Restoration Plan is $50,000 or less, the Committee shall pay the present value of such Eligible Employee's vested benefit under this Plan in a lump sum, and such payment shall extinguish the Eligible Employee's right to a benefit under this Plan with respect to employment prior to the date of such payment. For purposes of this Section 4(b), the present value of the benefit of any Eligible Employee shall be determined by the Committee in a uniform and undiscriminatory manner.
With respect to any component of a benefit payable under the Plan, an Eligible Employee's beneficiary shall be the person or persons designated in writing by the Eligible Employee or, if no such person is so designated, the Eligible Employee's estate.
All payments of benefits hereunder shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established or other segregation of assets
made to assure such payments; provided, however, that the Company may establish a bookkeeping reserve to meet its obligations hereunder. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company or the Committee and any employee or other person. If any employee or other person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.
The Plan shall be administered by the Committee, which shall have full power, discretion and authority to interpret, construe and administer the Plan and any part thereof, and the Committee's interpretation and construction thereof, and actions thereunder, shall be binding and conclusive on all persons for all purposes; provided, however, that no member of the Committee shall participate in any determination in respect of the benefit of such member or the benefit of a member of such member's family.
The Plan may be amended, suspended or terminated, in whole or in part, by the Board of Directors of the Company, but no such action shall retroactively impair or otherwise adversely affect the rights of any person to benefits under the Plan which have accrued prior to the date of such action, as determined by the Committee.
(a) The right of any Eligible Employee or other person to the payment
of benefits under the Plan may not be assigned, transferred, pledged or
encumbered, either voluntarily or by operation of law, except as provided in
Section 5 above with respect to determination of beneficiaries or as provided
below. If any person shall attempt to, or shall, assign, transfer, pledge or
encumber any amount payable hereunder, or if by reason of his bankruptcy or
other event happening at any time any such payment would be made subject to his
debts or liabilities or would otherwise devolve upon anyone else and not be
enjoyed by him or his beneficiary, the Committee may, in its sole discretion,
terminate his interest in any such payment and direct that the same be held and
applied to or for the benefit of such person, his spouse, children or other
dependents, or any other persons deemed to be the natural objects of his bounty,
or any of them, in such manner as the Committee may deem proper.
(b) If the Committee shall find that any person to whom any payment is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, then any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to his spouse, a child, a parent, or sibling, or any other person deemed by the Committee to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Committee may determine. Any such payment shall be a complete discharge of the liabilities of the Company under the Plan.
(c) The Committee, shall make appropriate arrangements for satisfaction of any federal or state payroll withholding tax required upon the accrual or payment of any Plan benefits.
(d) Neither the Plan nor any action taken hereunder shall be construed as giving to any employee the right to be retained in the employ of the Company or any of its subsidiaries or as affecting the right of the Company or any of its subsidiaries to dismiss any employee.
(e) The captions preceding the sections hereof have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions hereof.
(f) The Plan and all rights thereunder shall be governed by the construed in accordance with the laws of the State of California.
(g) Whenever used in the Plan, the masculine gender includes the feminine.
LEVI STRAUSS ASSOCIATES INC.
BENEFIT RESTORATION PLANS
Pursuant to the authority delegated to me by the Board of Directors of Levi Strauss Associates Inc., I hereby approve the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan, each in the form attached hereto, effective November 27, 1989.
__________________________ ___________________________
Date Donna J. Goya
Senior Vice President
|
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP", respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs in order to assist certain persons associated with the Company in avoiding transactions which could result in liability under Section 16(b) of the Securities Exchange Act of 1934, as amended;
WHEREAS, by resolutions duly adopted on June 22, 1989 and June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on October 20, 1989, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. Section 4 of the Excess BRP is amended by the addition of a new subsection (c), to read as set forth below:
(c) Any contrary provision of the Plan notwithstanding, to the extent that any portion of the benefit hereunder of an Eligible Employee who is an Insider is attributable to amounts deemed to have been invested in the Stock Fund pursuant to the second paragraph of Section 3(b), such portion shall not be payable prior to the earlier of the termination of employment, death, retirement or disability of such Eligible Employee. For purposes of this
Section 4(c), (i) the term "Insider" shall mean an Eligible Employee who is subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, and (ii) the phrases or terms "termination of employment", "retirement" and "disability" shall have the meaning that such phrases or terms, or the equivalent phrases or terms, have under the Qualified Plan which maintain such Stock Fund.
2. Section 4 of the Supplemental BRP is amended by the addition of a new subsection (c), to read as set forth below:
(c) Any contrary provision of the Plan notwithstanding, to the extent that any portion of the benefit hereunder of an Eligible Employee who is an Insider is attributable to amounts deemed to have been invested in the Stock Fund pursuant to Section 3(c)(2), such portion shall not be payable prior to the earlier of the termination of employment, death, retirement or disability of such Eligible Employee. For purposes of this Section 4(c), (i) the term "Insider" shall mean an Eligible Employee who is subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, and (ii) the phrases or terms "termination of employment", "retirement" and "disability" shall have the meaning that such phrases or terms, or the equivalent phrases or terms, have under the Qualified Plan which maintains such Stock Fund.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on February 9, 1993.
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP," respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs to provide for an orderly and systematic division of interests under the BRPs pursuant to an appropriate domestic relations order;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. The Excess BRP is amended by the addition of a new Section 10 to read as set forth below:
Section 10
Any other provision of this Plan notwithstanding, an Eligible Employee's benefit under the Plan shall be payable to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in a domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section 414(p) of the Code. Determinations under this Section 10, including but not limited to determination of
whether an order would constitute a qualified domestic relations order, shall be made by the Committee, or its designee, in its sole discretion. The rights of any alternate payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the Committee may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
2. The Supplemental BRP is amended by the addition of a new Section X to read as set forth below:
Section X
Any other provision of this plan notwithstanding, an Eligible Employee's benefit under the Plan shall be payable to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in a domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section 414(p) of the Code. Determinations under this Section 10, including but not limited to determination of whether an order would constitute a qualified domestic relations order, shall be made by the Committee, or its designee, in its sole discretion. The rights of any alternate payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the Committee may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
LEVI STRAUSS ASSOCIATES INC.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS ASSOCIATES INC.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP", respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs to permit the expansion of options for crediting certain bookkeeping accounts maintained under the BRPs;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof,
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. Section 3(b) of the Excess BRP is amended in its entirety to read as set forth below:
(b) The difference between the aggregate amount of contributions which would have been allocated for plan years beginning before November 26, 1990 in respect of the Eligible Employee under the Qualified Plans that are defined contribution plans without regard to the Benefit Limitation and the aggregate amount of contributions actually allocated in respect of such Eligible Employee thereunder, adjusted to reflect the performance of any measurement standard selected pursuant to Section 3(d) ("performance adjustments"); provided, however, that to the extent that such amount would have consisted of pre-tax or post-tax employee contributions, such amount will be credited hereunder only to the extent that the Eligible Employee executes a salary reduction agreement in a form suitable to the Committee. For purposes of determining performance adjustments hereunder, amounts payable pursuant to this Section 3(b) shall be
deemed to be subject to the applicable performance standard as of the date such amounts would have been allocated under the Qualified Plan if not for the Benefit Limitation.
At any time that participants under a Qualified Plan invest amounts contributed on their behalf to such Plan in a fund which invests primarily in the common stock of the Company (the "Stock Fund"), the Eligible Employee shall be permitted to elect whether any portion of the amount described in the immediately preceding paragraph shall be deemed to be invested in the Stock Fund, provided that such amount would have been available for investment in the Stock Fund at such time if not for the Benefit Limitation. If the Eligible Employee elects to have such amount deemed to be invested in the Stock Fund, the Eligible Employee's benefit under this Section 3(b) shall include (i) an amount equal to any employer matching contribution which would have been made to the Qualified Plan had such investment been made in the Stock Fund, and (ii) in lieu of performance adjustments as described in the immediately preceding paragraph, gains or losses in respect of the deemed contributions to the Stock Fund to reflect the gains or losses in the Stock Fund during the same period. In addition, any amounts credited to an Eligible Employee pursuant to the first paragraph of this Section 3(b) with respect to Nonelective Contributions which, by reason of the Benefit Limitation, could not be made to a Qualified Plan shall be deemed to be invested in the Stock Fund as of the next purchase of common stock of the Company by the Stock Fund which occurs after such amounts are credited under this Plan, and, thereafter, such amounts shall, in lieu of performance adjustments, reflect gains and losses in the manner prescribed in clause "(ii)" of the immediately preceding sentence. The election permitted under this paragraph generally shall be subject to the same limitations as are applicable to similar elections under the relevant Qualified Plan, except as provided otherwise by the Committee.
2. Section 3 of the Excess BRP is amended by the addition of a new subsection (d), to read as set forth below:
(d)(1) Performance adjustments effected with respect to Plan benefits described in Section 3(b) above shall be determined pursuant to paragraph 2 below, except to the extent that the Committee offers, and the Eligible Employee elects, alternative measurement standards pursuant to paragraph 3 below.
(2) The performance adjustment pursuant to this paragraph 2 shall be interest, computed monthly, at a rate determined by the Committee to be equivalent to the reference rate charged for commercial loans by the Bank of America N.T. & S.A. on the last day of each such month.
(3) The Committee may, but is not required to, offer one or more measurement standards in addition to the standard described in paragraph 2. Such alternative measurement standards offered by the Committee may include standards which have different potential for risk and return and could result in reductions in value of the Plan benefits of an Eligible Employee who elects such standards. The determination of such standards, terms and conditions for electing such standards and receiving credits for gains and losses attributable to such standards, shall be in the sole discretion of the Committee.
3. Section 3(c) of the Supplemental BRP is amended in its entirety to read as set forth below:
(c) An amount determined as follows: (1) If any Eligible Employee's contributions to the Qualified Plans for a fiscal year are limited by section 401(a)(17) or 401(m) of the Code and the Eligible Employee executes a salary reduction agreement in a form suitable to the Committee, the Eligible Employee's compensation for the remainder of such fiscal year shall be reduced by an amount equal to the contributions that the Eligible Employee cannot make to the Qualified Plans, and such amount shall be credited to a bookkeeping account under the Plan. The bookkeeping account also shall be credited with an amount equal to any profit sharing contribution or nonelective contribution that would have been made with respect to such Employee under the Qualified Plans, adjusted to reflect the performance of any measurement standard selected pursuant to Section 3(e) ("performance adjustments"). For purposes of determining performance adjustments hereunder, amounts payable pursuant to this Section 3(c) shall be deemed to be subject to the applicable performance standard as of the date such amounts would have been allocated under the Qualified Plan if not for the limitations pursuant to section 401(a)(17) and 401(m) of the Code.
(2) At any time that participants under a Qualified Plan invest amounts contributed on their behalf to such Plan in a fund winch invests primarily in the common stock of the Company (the "Stock Fund"), the Eligible Employee shall be permitted to elect to have amounts credited to the bookkeeping account deemed to be invested in the Stock Fund, provided that such amounts would have been available for investment in the Stock Fund at such time if not for the limitations imposed by sections 401(a)(17) and 401(m) of the Code. In addition, amounts credited with respect to nonelective contributions which would have been made to the Qualified Plans shall be deemed to be invested in the Stock Fund. If the Eligible Employee elects to have such amounts deemed to be invested in the Stock Fund, the bookkeeping account also shall be credited with the amount equal to any employer matching contribution which would have been made to the Qualified Plan if such investment had been made in the Stock Fund, and such amount also shall be deemed to be invested in the Stock Fund. With respect to amounts deemed to be invested in the Stock Fund pursuant to this
Section 3(c)(2), the bookkeeping account, in lieu of performance adjustments pursuant to the immediately preceding paragraph, shall be credited with gains and losses as if such amounts were invested in the Stock Fund. The election permitted under this paragraph generally shall be subject to the same limitations which are applicable to similar elections under the relevant Qualified Plan, except as provided otherwise by the Committee.
4. Section 3 of the Supplemental BRP is amended by the addition of a new subsection (e), to read as set forth below:
(e)(1) Performance adjustments effected with respect to Plan benefits described in Section 3(c) above shall be determined pursuant to paragraph 2 below, except to the extent that the Committee offers, and the Eligible Employee elects, alternative measurement standards pursuant to paragraph 3 below.
(2) The performance adjustment pursuant to this paragraph 2 shall be interest, computed monthly, at a rate determined by the Committee to be equivalent to the reference rate charged for commercial loans by the Bank of America N.T. & S.A. on the last day of each such month.
(3) The Committee may but is not required to, offer one or more measurement standards in addition to the standard described in paragraph 2. Such alternative measurement standards offered by the Committee may include standards which have different potential for risk and return and could result in reductions in value of the Plan benefits of an Eligible Employee who elects such standards. The determination of such standards, terms and conditions for electing such standards and receiving credits for gains and losses attributable to such standards, shall be in the sole discretion of the Committee.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on ________, 1994.
AMENDMENTS
WHEREAS, Levi Strauss Associates, Inc. (the "Company") has established the Levi Strauss Associates, Inc. Excess Benefit Restoration Plan and the Levi Strauss Associates, Inc. Supplemental Benefit Restoration Plan (individually, the "Excess BRP" and the "Supplemental BRP," respectively, collectively, the "BRPs");
WHEREAS, the Company desires to amend the BRPs to provide participants with increased flexibility with respect to distributions from the BRPs;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to certain other officers of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on May 2, 1996, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the employee benefit plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends the BRPs as set forth below:
1. Section 4(a) of the Excess BRP is amended by the addition of a new paragraph (3) to read as set forth below:
(3) The foregoing provisions of this Section 4(a) notwithstanding, the Committee may allow an Eligible Employee to elect that his benefit described in Section 3(b) be paid in any form permitted by the Committee, provided that such election is (I) made in writing, (ii) irrevocable and (iii) submitted to the Committee at least 12 months before the Eligible Employee's benefit under the Company's Qualified Plans which are defined contribution plans commences. In the event that the Eligible Employee's benefit under the such defined contribution plans commences sooner than 12 months after the eligible Employee's election described in the prior sentence for reasons other than the Eligible Employee's death, such benefit shall be payable pursuant to the provisions of Section 4(a)(2), above.
2. Section 4(a) of the Supplemental BRP is amended by the addition of a new paragraph (3) to read as set forth below:
(3) The foregoing provisions of this Section 4(a) notwithstanding, the Committee may allow an Eligible Employee to elect that this benefit described in Section 3(c) be paid in any form permitted by the Committee, provided that such election is (i) made in writing, (ii) irrevocable and (iii) submitted to the Committee at least 12 months before the Eligible Employee's benefit under the Company's Qualified Plans which are defined contribution plans commences. In the event that the Eligible Employee's benefit under the such defined contribution plans commences sooner than 12 months after the Eligible Employee's election described in the prior sentence for reasons other than the Eligible Employee's death, such benefit shall be payable pursuant to the provisions of Section 4(a)(2), above.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
LEVI STRAUSS & CO.
EXCESS BENEFIT RESTORATION PLAN
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
AMENDMENT
WHEREAS, LEVI STRAUSS & CO. (the "Company") has adopted the Levi Strauss & Co. Excess Benefit Restoration Plan (the "Excess BRP") and the Levi Strauss & Co. Supplemental Benefit Restoration Plan (the "Supplemental BRP" (collectively referred to as the "BRPs");
WHEREAS, the Company desires to amend the BRPs, effective November 30, 1998, to provide a method of paying benefits under the 1999 Enhanced Early Retirement Program for Laid Off Employees (the "1999 Enhancement") to certain Members who could not receive the benefit under the applicable tax-qualified plan due to nondiscrimination rules under the Internal Revenue Code;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the BRPs and to delegate to certain other officers of the Company the authority to adopt certain amendments to the BRPs;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the BRPs, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendment herein is within such limits to the delegated authority of Donna J. Goya;
NOW THEREFORE, effective November 30, 1998, the BRPs are hereby amended as follows:
1. Current paragraphs (c) and (d) of Section III of the Excess BRP are hereby redesignated as paragraphs (e) and (f).
2. Section 3 of the Excess BRP is amended by adding a new paragraph (c) to read as follows:
"(c) The amount of benefits which would have been payable to or in respect of the Eligible Employee under Section 3(d) of the Supplemental BRP but for the application of the Benefit Limitation to the amount payable thereunder,"
3. The first sentence of the second paragraph of the Preamble to the Supplemental BRP is hereby amended in its entirety to read as follows:
"The Plan is intended to supplement benefits under the Revised Home Office Pension Plan of Levi Strauss & Co., the Levi Strauss & Co. Retirement Plan for Over-the-Road Truck Drivers and Dispatchers and the Levi Strauss & Co. Revised Employee Retirement Plan (the "Qualified Plans") maintained by Levi Strauss & Co. (the "Company,") to the extent such benefits are reduced due to the limits of section 401(a)(17) of the Code, to permit the deferral of compensation and the restoration of matching contributions that are reduced under the Qualified Plans due to the limits of sections 401(a)(17) and 401(m) of the Code, and to provide benefits pursuant to the 1999 Enhancement that cannot be paid under the Qualified Plans due to nondiscrimination rules under the Code."
4. Paragraph (c) of Section I of the Supplemental BRP is hereby amended in its entirety to read as follows:
"(c) 'Eligible Employee' means each employee of the Company or any of its subsidiaries who is eligible for benefits under one of the Qualified Plans who has compensation (as defined therein) of $125,000 or more during the prior fiscal year or who is eligible for the 1999 Enhancement but who could not receive payment (for the 1999 Enhancement) under the applicable Qualified Plan due to nondiscrimination rules under the Code; provided, however, that the Company may further restrict participation in the Plan to the extent it deems necessary in order for the Plan to be considered a Top Hat Plan.
5. Section II of the Supplemental BRP is hereby amended in its entirety to read as follows:
"Each employee whose benefits or allocations of contributions under the Qualified Plans are reduced as a result of the limitations on benefits and contributions imposed by sections 401(a)(17), 401(m) of the Code, or as a result of the application of the nondiscrimination rules under the Code to benefits under the 1999 Enhancement shall participate in the Plan unless he shall elect not to participate in the Plan by written notice to the Committee whereby he waives all present and future rights to benefits under the Plan. "
6. The first sentence of Section III of the Supplemental BRP is hereby amended in its entirely to read as follows:
"Subject to paragraph (e) below, the amount of the benefit payable to or in respect of an Eligible Employee hereunder shall be the sum of the amounts described in paragraphs (a), (b), (c) and (d):"
7. Current paragraphs (d) and (e) of Section III of the Supplemental BRP are hereby redesignated as paragraphs (e) and (f).
8. Section III of the Supplemental BRP is hereby amended by adding the following new paragraph (d) to read as follows:
"(d) The difference between (i) and (ii) below, where (i) is the
amount of benefits which would have been payable to or in respect of the
Eligible Employee under the applicable Qualified Plan that is a defined
benefit plan if such Eligible Employee would have been eligible to receive
payment of the 1999 Enhancement under such Qualified Plan but for
applicable nondiscrimination rules under the Code, and (ii) is the amount
of benefits payable to or in respect of the Eligible Employee under the
applicable Qualified Plan but without regard to any limits imposed under
Section 415 of the Code;"
9. The first sentence of paragraph (a)(1) of Section IV of the Supplemental BRP is hereby amended in its entirety to read as follows:
"(1) A benefit described in Section 3(a) or 3(b) shall be paid to the Eligible Employee, his surviving spouse or his beneficiary at the same time or times, in the same form and subject to the same adjustments as his benefit under the Qualified Plans that are defined benefit plans. The benefit described in Section 3(d) shall be paid to the Eligible Employee, his surviving spouse or his beneficiary commencing on the early retirement date as specified in the Acceptance Notice under the 1999 Enhancement and in the form of payment specified in that Notice."
10. The Supplemental BRP is further amended by the addition of Addendums I, II and III attached hereto.
* * * * *
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed this __ day of November, 1998.
LEVI STRAUSS & CO.
By:_________________________________
Donna J. Goya
Senior Vice President
ADDENDUM I TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
described in Section 3 above and such retirement date shall be deemed to be an Early Retirement Date for purposes of the Pension Plan.
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1 of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above).
ADDENDUM II TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
an
immediate benefit under the 1999 Enhancement as of the retirement date described in Section 3 above and such retirement date shall be deemed to be an Early Retirement Date for purposes of the Pension Plan.
b. Amount. The benefit under the 1999 Enhancement is the greater of the following which is applicable:
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 7.1(b) of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above); or
iii. If the Participating Member's total attained age plus Years of Service equals or exceeds 80, or would have equaled or exceeded 80 as of November 29,1999, if not for being Laid Off; 100% of his or her Retirement Benefit.
ADDENDUM III TO THE
LEVI STRAUSS & CO.
SUPPLEMENTAL BENEFIT RESTORATION PLAN
FISCAL 1999 ENHANCED EARLY RETIREMENT PROGRAM
FOR LAID OFF EMPLOYEES
a. Such Member is Laid Off (as defined herein) by the Company and terminates employment between November 30, 1998 and November 29, 1999;
b. Such Member has at least 15 Years of Service at the time of termination of employment or would have had 15 Years of Service as of November 29, 1999, if not for being Laid Off by the Company; and
c. Such Member is at least age 50, or will attain age 50 on or before November 29, 1999.
described in Section 3 above and such retirement date shall be deemed to be an Early Retirement Date for purposes of the Pension Plan.
i. 70% of the Participating Member's Retirement Benefit under the Pension Plan; or
ii. If applicable to the Participating Member, the Benefit based on the application of the Percentage Factor provided in Table A of Section 8.1(b) of the Pension Plan opposite the Participating Member's actual age (as of the retirement date approved pursuant to Section 3 above); or
iii. If the Participating Member's total attained age plus Years of Service equals or exceeds 80, or would have equaled or exceeded 80 as of November 29,1999, if not for being Laid Off; 100% of his or her Retirement Benefit.
EXHIBIT 10.29
LEADERSHIP SHARES PLAN
OF
LEVI STRAUSS & CO.
--CONFIDENTIAL--
This document describes how the Leadership Shares Plan works. It explains:
. The purpose of the Plan; 1
. Who is eligible to receive an Award Payment under the Plan; 1
. How individual Awards are determined; 2
. What a Leadership Share is and how it works; 3
. When and in what form Awards are paid; 5
. What happens in the event of employment termination; and 6
. Who administers the Plan 9
This is the official Plan document, which contains the exclusive and complete description of the terms of this Plan. The Company reserves the right to amend the Plan from time to time or to terminate the Plan.
Throughout this document, certain terms are capitalized (for example, "Plan" or "Company"). Capitalization indicates that the term is defined in the document with the definition listed in the Glossary at the end of the document.
The Leadership Shares Plan of Levi Strauss & Co. (Plan) is a component of the Company's Partners in Performance cash compensation program. It is designed to provide Eligible Employees worldwide with the opportunity to share in the Company's financial success by providing cash payments to them when the Company achieves its long-term financial objectives on a consolidated basis, as measured by Leadership Value Added.
PURPOSE OF THE PLAN
. Serve as a single Plan covering Eligible Employees worldwide;
. Align Eligible Employee and shareholder interests;
. Provide a financial incentive for meeting long-term financial objectives and increasing shareholder value;
. Recognize and reward Eligible Employees who make substantial contributions to the Company;
. Tie incentive opportunity to external competitive pay practices and internally to the Company's total compensation objectives; and
EFFECTIVE DATE
. The Plan starts on the first day of the Company's 1999 fiscal year.
ELIGIBILITY AND PARTICIPATION
. All employees in U.S. salary grade 7 and above (or the non-U.S. equivalent, as determined by the Committee) worldwide are automatically eligible to participate, and are Eligible Employees, in the Plan.
. Participation in this Plan does not require any sign-up, decision making, investment or contribution of money on the part of an Eligible Employee who receives Leadership Shares (a Participant).
GRANT CYCLE
. Each Grant Cycle consists of a five-year Performance Period. The Performance Period of the Leadership Shares for an individual Participant may be affected by the Participant's
employment termination, or by his or her job status change as discussed in this Plan.
. A new Grant Cycle begins each fiscal year with a new grant and Performance/Award Schedule, which will be used (as described below) to calculate any payments with respect to the Leadership Shares granted in that Grant Cycle.
. Each Grant Cycle is identified by its first fiscal year.
DETERMINATION OF LEADERSHIP SHARE GRANTS
. Leadership Share grants for Participants are set for each Grant Cycle at the beginning of that Grant Cycle.
. The Committee will establish the permissible range of Leadership Share grants for Participants at each Organization Level for the Grant Cycle.
. The number of Leadership Shares, if any, granted to each Participant for the Grant Cycle will be within the range for his or her Organization Level as of the first day of the Grant Cycle and will be effective only after it is reviewed and approved by at least two levels of management, the Participant's manager and one level above. An Eligible Employee is not required to receive Leadership Shares for a Grant Cycle.
. In the event of a job status change during the first year of a Grant Cycle, such as a new hire or promotion, Leadership Shares (or additional Leadership Shares) may be granted to the Eligible Employee or Participant.
FINANCIAL MEASURE, OBJECTIVES, AND LEADERSHIP SHARE VALUES
. At the beginning of each Grant Cycle, the Committee will establish the relationship between Leadership Share Value and the Company's possible performance against financial objectives. LVA will be the financial performance measure used to assess the Company's performance. Such relationship shall be incorporated into a Performance Award/Schedule for such Grant Cycle.
. There is no maximum value for a Leadership Share.
. LVA and Leadership Share Value are expressed in U.S. dollars.
VESTING OF LEADERSHIP SHARES
. The Leadership Shares granted in each Grant Cycle vest starting on the last day of the third fiscal year of the Grant Cycle. Vesting is in 33 1/3% increments effective on the last
day of the third, fourth and fifth fiscal years of the Grant Cycle (each, a "Vesting Date"), respectively, except as otherwise described under the "Termination of Employment . . ." sections below. The chart below summarizes the Leadership Share vesting schedule:
Cumulative
Last Day of Fiscal Year Percent Vested
----------------------- --------------
1 0%
2 0%
3 33 1/3%
4 66 2/3%
5 100%
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. For each Participant, the total number of vested Leadership Shares for each Grant Cycle is equal to the total number of Leadership Shares granted to the Participant for that Grant Cycle multiplied by the Cumulative Percent Vested.
AWARD PAYMENT
. Within a reasonable period of time after each Vesting Date, the Company will make an Award Payment with respect to each Grant Cycle. The Award Payment is the cash payable to a Participant under the Plan. It is determined as follows:
- first, the Vested Award as of the Vesting Date is calculated by multiplying the number of vested Leadership Shares by the Leadership Share Value.
- second, the sum of any prior Award Payments already made from the same Grant Cycle will be subtracted from the Vested Award value
. Award Payments are calculated and automatically paid to Participants as soon as administratively possible, unless deferred by Participants who are eligible to participate in the (US) Deferred Compensation Plan for Executives.
. If Vested Awards should ever be less than the sum of previous Award Payments in a Grant Cycle, those Award Payment are not subject to repayment back to the Company.
TERMINATION OF EMPLOYMENT DUE TO RETIREMENT
. If a Participant Retires on or after the first Vesting Date of a Grant Cycle, the Participant will be eligible to continue vesting and receive Award Payments at the applicable Payment Dates of the Grant Cycle for any outstanding Leadership Shares attributable to that Grant Cycle.
TERMINATION OF EMPLOYMENT DUE TO DEATH
. If a Participant dies on or after the first Vesting Date of a Grant Cycle, the Participant's Leadership Shares attributable to that Grant Cycle will become fully vested on the date of death.
. The beneficiary of a Participant who terminates employment due to death will receive a final Award Payment of the Participant's vested Leadership Shares as soon as administratively possible. The Leadership Share Value as of the vesting date preceding the death will be used if death occurs within the first 6 months of the fiscal year. If death occurs in the last 6 months of the fiscal year, the value as of the vesting date following death will be used.
TERMINATION OF PARTICIPATION DUE TO LONG-TERM DISABILITY
. If a Participant terminates active plan participation due to an authorized Long-term Disability on or after the first Vesting Date of a Grant Cycle, the Participant will be eligible to continue vesting and receive Award Payments at the applicable Payment Dates of the Grant Cycle for any outstanding Leadership Shares attributable to that Grant Cycle.
. Notwithstanding the preceding provision of the Plan, a Participant who terminates active plan participation due to Long-term Disability may apply at any time, because of hardship, to the Administrator for an acceleration of vesting for any outstanding Leadership Share grants in which a Participant has already begun to vest and Award Payment of such vested Leadership Shares. The Administrator, at its sole discretion, may grant or deny the application.
. If the Administrator approves an accelerated vesting and Award Payment application before the Participant would otherwise be eligible for vesting and Award Payment, the Award Payment will be made as soon as administratively possible after the application is approved using the most recent Leadership ShareValue.
TERMINATION OF EMPLOYMENT BY VOLUNTARY RESIGNATION
. A Participant who terminates employment by voluntary resignation will not be eligible for additional Award Payments after the effective termination date.
. Notwithstanding the prior statement, if the effective termination date for a Participant who terminates employment by voluntary resignation occurs after a Vesting Date, but prior to the related Award Payment, the Participant is entitled to receive the related Award Payment.
INVOLUNTARY TERMINATION OF EMPLOYMENT DUE TO LAYOFF
. If a Participant terminates employment due to Layoff on or after the first Vesting Date of a Grant Cycle, the Participant will be eligible to receive Award Payments at the applicable Payment Dates of the Grant Cycle for any outstanding Leadership Shares attributable to that Grant Cycle.
INVOLUNTARY TERMINATION OF EMPLOYMENT FOR UNSATISFACTORY PERFORMANCE OR MISCONDUCT
. If a Participant's employment is terminated for unsatisfactory performance or misconduct, the Participant will forfeit all Leadership Shares, vested or otherwise, and any other rights under the Plan, and will not, on or after the effective termination date, be entitled to any Award Payment under the Plan.
BENEFICIARY DESIGNATION
. Each Participant will name a person or persons as the beneficiary who is to receive any Award Payments under the Plan in the event of the Participant's death. The most recently designated beneficiary will apply to all Award Payments, unless otherwise specified by the Participant. No consent of any beneficiary or other person other than the Participant is necessary in connection with the designation of a beneficiary. In the event that no beneficiary has been properly designated, or if no properly designated beneficiary survives the Participant, the Participant's estate will be the Participant's beneficiary.
TAX WITHHOLDING
. The Company, or appropriate Subsidiary, will deduct from all Award Payments under the Plan any and all applicable taxes (e.g., federal, state, local or other taxes of any kind) required by law to be withheld with respect to such Award Payments.
NO TAX, FINANCIAL, LEGAL OR OTHER ADVICE
. The Company or any Subsidiary has not provided and will not provide any tax, financial, legal, or other advice related to participation in the Plan, including, but not limited to, tax or financial consequences of participating in the Plan. No provision of the Plan, or any document or presentation about the Plan given to Participants, will be interpreted as reflecting such advice.
OTHER BENEFITS
. No creation of interests, or payment of cash, under this Plan will be taken into account in determining any benefits under any compensation, pension, retirement, savings, profit sharing, group insurance, welfare or other employee benefit plan of the Company or any Subsidiary, except as provided under the (US) Deferred Compensation Plan for Executives in the event a Participant elects to defer receipt of Award Payment under this Plan.
UNFUNDED STATUS
. The Plan is unfunded. A Participant's right to receive Award Payments under the Plan is an unsecured claim against the general assets of the Company. Although the Company may establish a bookkeeping reserve to meet its obligations, any rights acquired by any Participant are no greater than the right of any unsecured general creditor of the Company. References to LVA Award Pools do not refer to or represent actual, segregated assets of the Company.
. The Company is not required to segregate any assets that may at any time be represented by cash, and neither the Company, Board of Directors, Committee or the Administrator is deemed to be a trustee of any cash or Leadership Shares to be paid or granted under this Plan. Any liability of the Company to any Participant under this Plan is based solely upon any contractual obligations that may be created by this Plan. No provision of the Plan, under any circumstances, gives a Participant or other person any interest in any particular property or assets of the Company or its Subsidiaries. No such obligation of the Company is deemed to be secured by any pledge of, or other encumbrance or security interest in, any property of the Company, or any Subsidiary. Neither the Company, the Board of Directors, the Committee, nor the Administrator is required to give any security or bond for the performance of any obligation that may be created under this Plan.
NOT STOCK; NO STOCKHOLDER RIGHTS
. The term "Shares" is used in the Plan and the name "Leadership Shares" to connote "sharing" and not to suggest or imply "stock" or equity interest. Leadership Shares are not stock, stock options, stock appreciation rights, or similar rights or instruments. The awards granted under the Plan are not equity or other interests in the Company or its Subsidiaries and Participants will have no equity interest in the Company or its Subsidiaries by virtue of their participation in the Plan. Participants have no stockholder rights, such as voting or dividend rights, or similar rights, or rights to financial or other information concerning the Company or its Subsidiaries by reason of participation in the Plan, the grant of Leadership Shares or otherwise.
NO LIMIT ON CAPITAL STRUCTURE CHANGES
. The establishment and operation of this Plan, including the grant of Leadership Shares under this Plan, will not limit the ability of the Company or of any Subsidiary to reclassify, recapitalize, or otherwise change its capital or debt structure; to merge, consolidate, convey any or all of its assets, dissolve, liquidate, windup, or otherwise reorganize; to pay dividends or make other distributions to stockholders; to repurchase stock or to issue stock; or to take any action in respect of its manufacturing, marketing, distribution, merchandising, operations, management, or any other aspect of its business, regardless of the impact on Leadership Value Added, determination of Threshold Cumulative LVA, or otherwise.
. Participants under the Plan are not entitled to anything (other than as may be reflected through LVA performance and calculated Leadership Share Value) if the Company completes any transaction or takes any action contemplated by the preceding paragraph.
. Notwithstanding the above, the Committee may, in its discretion, adjust the manner in which Leadership Share Value is calculated at any time or from time to time to take account of changes in the Company's business that the Committee believes affect the relationship between the Company's performance and such value.
NON ASSIGNABILITY
. No Leadership Shares or other rights granted under or provided by this Plan are assignable or transferable by a Participant during the Participant's lifetime, or otherwise subject to levy, attachment, or execution of a judgment of any kind, except as provided for by a Participant's will or by the laws of descent and distribution.
NO EMPLOYMENT RIGHTS
. No provision of the Plan gives any Participant or anyone else the right to remain employed with the Company or its Subsidiary. The Company, and each Subsidiary, reserves the right to terminate any Participant's employment at any time, with or without cause and with or without notice regardless of the Participant's receipt of Leadership Shares, or the impact of such termination on such Shares.
PLAN ADMINISTRATION
. The Plan is administered under the direction of the Committee with the assistance of such other person or persons (the Administrator) as the Committee designates from time to time. In administering the Plan, the Committee or the Administrator may, at its option,
employ compensation consultants, accountants and counsel and other persons to assist or render advice and other services, all at the expense of the Company.
. The Committee has the power, in its sole discretion, to interpret the Plan and to adopt rules and procedures it deems appropriate for the administration and implementation of the Plan. Such rules and procedures include, without limitation:
- Procedures for making required calculations and applying formulas including the definition and amount of cumulative LVA;
- Applicable LVA Percentage Rate; and
- Total number of Leadership Shares authorized for grant in a specific Grant Cycle.
. Notwithstanding any other provision of this Plan, the Committee or the Administrator may, in its sole discretion, accelerate the vesting schedule and Award Payment for any Participant at the applicable Leadership Share Value, regardless of the tax, financial, or other consequence to the Participant of such acceleration or Award Payment.
. All determinations and interpretations under the Plan, whether made by the Committee, or the Administrator for all matters including, without limitation, determination of the Performance/Award Schedules, Leadership Share Value and Award Payments due under the Plan, are conclusive and binding on all affected individuals.
AMENDMENT, MODIFICATION, OR TERMINATION OF PLAN
. The Committee can modify, amend, or terminate any and all provisions of the Plan, and establish rules and procedures for its administration, at its discretion and without notice.
. Notwithstanding the provision above, the Administrator can amend and modify the Plan to comply with or conform to local law, regulation or custom. Such amendments and modifications can have limited application to a specific Subsidiary, division, or jurisdiction and need not apply to all Participants. Each such amendment or modification will be in writing and attached to this Plan.
SEVERABILITY
. If any provision of this Plan is held illegal or invalid for any reason, the illegality or invalidity shall not effect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision were not part of the Plan.
NO WAIVER
. Failure of the Company to enforce at any time any provision of this Plan shall in no way be construed to be a waiver of such provision or any other provision of the Plan.
GOVERNING LAW
. The Plan and all individual Incentive Target Updates hereunder will be governed by the laws of the State of California. In applying the laws of the State of California, its rules on choice of law will be disregarded.
All Provisions
. This official Plan document represents the exclusive and complete statement of the terms of the Plan, and supersedes any and all prior or contemporaneous understandings, representations, documents, and communications between the Company or any Subsidiary and any Participant, whether oral or written, relating to its subject matters. In the event of any conflict between the provisions of this official Plan document, as amended from time to time and any other document or presentation describing or otherwise relating to the Plan, this official document shall control.
Adoption
To record the adoption of the Leadership Share Plan, the Company has caused its duly authorized officer to execute this document.
LEVI STRAUSS & CO.
By
Date:
EXHIBIT 10.30
PARTNERS IN PERFORMANCE
ANNUAL INCENTIVE PLAN
Levi Strauss Associates Inc. and Subsidiaries
This document describes how the Annual Incentive Plan works. It explains:
. Purpose of the Plan;
. Who administers the Plan;
. Who is eligible to receive incentives;
. How incentive targets are set;
. How funds for incentives are generated;
. How the amount of a Participant's incentive is determined;
. When incentives are paid; and
. What happens in the event of termination of employment.
For more specific information on how the Plan works, refer to the Partners in Performance Compensation Guidelines. This material also refers to other compensation and human resources programs. While it may be used as a stand alone reference document, a broader understanding of all the Company compensation programs and the Performance Management Process will provide important perspective.
Page
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Annual Incentive Plan 1
Appendix One: Glossary of Terms 9
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The Annual Incentive Plan rewards individual and team contributions to the Company's objectives during the year. The amount of incentive earned depends on the financial performance of the Company and the performance of each individual Participant.
. Serve as a single plan covering salaried employees worldwide.
. Align employee and shareholder interests.
. Provide a financial incentive for meeting annual corporate and individual objectives.
. Encourage and reward team performance.
. Provide managers the ability to recognize and reward key contributors and reinforce the Performance Management Process.
. Tie the incentive opportunity to external competitive practices, and internally to the Company's total compensation objectives.
. The Plan starts on the first day of the 1995 fiscal year.
. The Plan is administered under the direction of the Personnel Committee of the Board of Directors (the Committee). The Committee's determinations and interpretations shall be binding on all Participants. Responsibilities include approving:
-- Design and interpretation of the Plan;
-- Incentive participation rates;
-- Financial performance measures;
-- Incentive pool funding sources and weights;
-- Company financial objectives;
-- Final incentive pool; and
-- Other terms and conditions that may be recommended by the Chief Executive Officer or Chief Operating Officer.
. During any period of time in which the Company and its officers and directors are subject to the requirements imposed by Section 16 of the Securities Exchnage Act of 1934 (the "Act") and the Plan is considered a plan subject to Rule 16b-3 under the Act, the Committee shall be composed of "disinterested persons" as defined in Rule 16b-3. The Committee may delegate administrative responsibilities to Company employees and may delegate to Company management the authority to approve amendments to the Plan. It may not do so if it would result in the Plan not being administered by "disinterested persons" at a time when it is required to be so administered.
. All salaried employees worldwide who meet the participation criteria are Participants in the Plan. Specific participation criteria is determined on a country-by-country basis.
. At the start of each year, an incentive agreement is created for each participant that documents the terms, conditions, and rights as determined by the Committee. Terms include such factors as the target incentive amount, timing and form of payments, termination events, and at-will employment.
. The Plan operates on a twelve month cycle which coincides with the Company's fiscal year.
. Incentive Target Amounts are set near the beginning of each fiscal year for each Participant. The annual Target Amount for each Participant is determined by multiplying the Participant's annual base salary in effect for the Plan's fiscal year by a participation rate. The Participation Rate is based on the Participant's salary grade and is expressed as a percent of annual base salary. The participation rates are:
-------------------------------------------------------------------------------------------
INCENTIVE PARTICIPATION RATE
(% OF BASE SALARY)
-------------------------------------------------------------------------------------------
Chairman/CEO 60%
President/COO 60%
LSNA/LSI Presidents 55%
GLT 45%
Grades 13/14 40%
Grade 12 35%
Grade 11/35 30%
Grade 10/33/34 25%
Grade 9/32 20%
Grade 30 20%
Chain NAM* 20%
Grades 7/8 15%
NAM* 15%
Grades 4/5/6 7%
TM, AM, AE** 7%
Grades 1/2/3 5%
Grades 20 - 26 5%
-------------------------------------------------------------------------------------------
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* National Account Manager **Territory Manager, Account Manager, Account Executive Note: Sales titles and grades are reflective of the pre-CSSC organization.
. Target Amounts are calculated in local currency.
. Incentive Participation Rates will be reviewed by Human Resources on a periodic basis and may be adjusted to keep pay opportunities competitive.
. The Target Amount is comprised of two parts: a team component and an individual component.
-- The team component is 80% of the Participant's annual incentive Target Amount.
-- The individual component is 20% of the Participant's annual incentive Target Amount.
. The method for calculating incentive Target Amounts for Territory Managers, Account Managers, and Account Executives is different than the method used for other employees. The calculation for sales employees is the Participation Rate times the sales income plan, or the Participation Rate times the maximum of certain salary grade levels, whichever is less. Target incentives are limited to the maximum of salary grade 5 for Territory Managers, the maximum of salary grade 6 for Account Managers, and the maximum of a salary grade 7 for Account Executives.
For purposes of determining the Funded Amount, actual income from the sales compensation plan (base and sales incentive) or the maximum of the appropriate grade level, whichever is less, is used.
. The source of funds for Business Unit Incentive Pools is based on the actual financial performance of one or more of the following levels:
-- Corporate
-- Group (LSNA or LSI)
-- Division
-- Affiliate
. Senior management reviews the funding sources and their relative weights before the start of each fiscal year. Any changes (for example, those resulting from internal reorganizations) are approved by the Committee.
. Following are three Business Unit examples with possible weights for each funding source:
------------------------------------------------------------------------------------------
EXAMPLES OF INCENTIVE POOL FUNDING WEIGHTS
------------------------------------------------------------------------------------------
POOL FUNDING CORPORATE DIVISION AFFILIATE
SOURCE STAFF
------------------------------------------------------------------------------------------
Corporate 100% 25% 10%
------------------------------------------------------------------------------------------
Group 25%
------------------------------------------------------------------------------------------
Division 50% 30%
------------------------------------------------------------------------------------------
Affiliate 60%
------------------------------------------------------------------------------------------
Total 100% 100% 100%
------------------------------------------------------------------------------------------
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. The Committee establishes the financial measures that are used to plan the objectives and assess the performance of each funding source.
. Performance is measured based on Management Earnings (ME) and Return on Investment (ROI).
. The ME and ROI financial performance objectives are set by the Committee before the fiscal year begins.
. For purposes of determining the final incentive pool, the actual performance of each funding source is expressed as a percent of financial target achieved. This percentage is known as the Performance Factor.
. After the end of the fiscal year a Performance Factor is determined for each funding source. The Performance Factor is a percentage based on the financial performance of each funding source against its financial target. The performance factor is between 0% and 200%.
. Financial performance that exceeds the minimum objectives at each funding source generates a Performance Factor starting at 1%. The Performance Factor increases to 100% when 100% of the financial performance objective is achieved.
. Performance that exceeds 100% of objectives generates a Performance Factor from 100% up to 200% if the maximum objectives are achieved or exceeded.
. If performance at all funding sources is below minimum objectives, the Performance Factor is 0% and therefore a final incentive pool is not generated.
. For Business Units with more than one funding source, a weighted average of the Performance Factors at each funding source is calculated. The weighted average is based on the funding weights established at the beginning of the year.
. After the end of the fiscal year, a Funded Amount is determined for each Participant. The Funded Amount is determined by multiplying the weighted average performance factor by the Participant's Target Amount.
. A final incentive pool for each Business Unit is determined after the end of the fiscal year. A Business Unit's final incentive pool is the sum of the Funded Amounts for each Participant within the Business Unit.
. After the final incentive pools have been determined, members of the Global Leadership Team (GLT), North America Management Council (NAMC), or LSI Management Association (LSI MA) may redistribute funds from one pool to another. Participants are notified prior to the start of the performance period that redistribution is possible.
. Any redistribution of funds results in a proportional change to both the team and individual components of each affected Participant's Funded Amount.
. The CEO and COO recommend for Committee approval the final incentive pool after the end of the fiscal year.
. Incentive allocations to Participants in the Plan are determined by the head of the Participant's work group, based on team performance and individual contributions.
. If a Participant meets performance expectations (as determined in the Performance Management Process), he or she will receive the team component and be eligible to receive an individual incentive allocation.
. If a Participant does not meet performance expectations (as determined in the Performance Management Process), no incentive is paid. Any money budgeted for those incentives is added back to the individual component of the Business Unit's Final Incentive Pool making it available for other Participants in the Business Unit.
TEAM COMPONENT ALLOCATION
-- The team component allocation is up to 80% of the Participant's incentive target amount, depending on the Business Unit's Final Incentive Pool.
-- If the Business Unit's Final Incentive Pool is less than 100% of the target Incentive Pool, the Participant's team component is adjusted proportionately lower than 80% of the Participant's Target Amount.
-- If the Business Unit's Final Incentive Pool is more than 100% of the Incentive Pool, the individual's team component is no more than 80% of the Participant's incentive Target Amount.
INDIVIDUAL INCENTIVE ALLOCATION
-- Incentive funds generated by the individual component are allocated to a Participant, by the Participant's manager, based on individual performance and performance compared to other Participants in the Business Unit using the following criteria:
- Annual objectives (job responsibilities/business objectives, strategic objectives, Aspirations, and continuous improvement)
- Contributions to special projects
- Personal leadership and initiative
-- Individual incentive allocations are reviewed and approved by at least two management levels, the Participant's manager and one level above.
-- The limit to individual incentives is the limit of the Business Unit's Final Incentive Pool.
. The total funds allocated to a Participant is the Final Incentive Amount.
. Incentives payments are made as soon as practical after the February Board meeting following the close of the fiscal year. The Committee approves the fiscal year-end results which fund the Plan and the final incentive pool.
. In the case of termination due to death, retirement, reduction in force, or long-term disability the incentive target amount is prorated for the length of time worked during the fiscal year. Any earned incentive is paid in cash as soon as practical after the February Board meeting following the close of the fiscal year.
. In the case of termination due to voluntary resignation or involuntary discharge all rights to incentive payments from the Annual Incentive Plan are forfeited.
. As part of the incentive agreement, each Participant shall name a person or persons as the Beneficiary who is to receive any distribution payable under the Plan in the event of the Participant's death. In the event that no Beneficiary has been properly designated, or if no properly designated Beneficiary survives the Participant, the Participant's estate, or other person entitled under applicable law, shall be the Participant's Beneficiary.
. Plan payments are considered for pension plan credit for Participants who participate in a Company pension plan. Eligibility and Plan rules are defined in the applicable pension plan document.
. Neither this document nor the existence of the Plan is intended to or does imply any promise of continued employment by LS&CO. or any subsidiary of LS&CO. Employment may be terminated with or without cause, and with or without notice, at any time, at the option of the employer or the employee. No one other than the Chief Executive Officer, President or a Senior Vice President of LS&CO. may approve an agreement with an employee that guarantees his or her employment. Such an agreement must be in writing and be signed by such an officer.
. A Participant who has committed an act of gross misconduct while an employee may lose all of his or her interest, including any right, under the Plan and may not be entitled to receive any payment under the Plan.
. The Plan is unfunded. A Participant's right to receive payments under the Plan is an unsecured claim against the general assets of the Company. Although the Company may establish a bookkeeping reserve to meet its obligations, any rights acquired by any Participant are no greater than the right of any unsecured general creditor of the Company. References to "Funded Amounts", "Incentive Pools", and the like do not refer to or represent actual, segregated assets of the Company.
. The Committee or its designee(s) may modify, amend, or terminate the Plan and establish rules and procedures for its administration, at its discretion and without notice.
To record the adoption of the Annual Incentive Plan, the Company has caused its duly authorized officer to execute this document.
Levi Strauss Associates, Inc.
By ____________________________________________
Date ____________________________________________
which Participants belong and is the basis for AIP funding. . Company is Levi Strauss Associates Inc. (LSAI) and its subsidiaries. ------- . Final Incentive Amount is the approved payout, including both team and ---------------------- individual components, to a Participant. . Financial Performance Measures are the business objectives set for each ------------------------------ Funding Source for the purpose of determining the final Incentive Pool. The Committee identifies which measures are to be used and establishes the specific objectives to be used each year. . Funded Amount is an amount generated to pay incentives based on the ------------- Participant's Target Amount and a forecast of business performance. The Funded Amount is calculated by multiplying a Participant's Target Amount by the Performance Factor. |
EXHIBIT 10.31
PARTNERS IN PERFORMANCE
LONG-TERM INCENTIVE PLAN
Levi Strauss Associates Inc. and Subsidiaries
This document describes how the Long-Term Incentive Plan works. It explains:
. Purpose of the Plan;
. Who administers the Plan;
. Who is eligible to receive incentives;
. How incentive target amounts are set;
. What type of incentive is granted under the Plan;
. How individual incentive grants are determined;
. What a Performance Unit is and how it works;
. When incentives are earned and paid; and
. What happens in the event of termination of employment.
For more specific information on how the Plan works, refer to the Partners in Performance Compensation Guidelines. This material also refers to other compensation and human resources programs. While it may be used as a stand alone document, a broader understanding of all Company compensation programs and the Performance Management Process will provide important perspective.
Page
Long-Term Incentive Plan 1
Appendix One: Performance Units 10
Appendix Two: Glossary of Terms 13
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The Long-Term Incentive Plan rewards employees for making contributions, over time, to the Company's success. Incentive grants are based on achieving long-term Company financial performance objectives and the performance of each individual Participant.
. Serve as a single plan covering salaried employees worldwide.
. Align employee and shareholder interests.
. Provide a financial incentive for meeting long-term corporate objectives and increasing shareholder value.
. Encourage and reward team performance.
. Provide managers the ability to recognize and reward key contributors to long-term results and reinforce the Performance Management Process.
. Foster a long-term employee orientation to business activities that reflect the Company's Business Vision, Mission and Aspirations.
. Tie incentive opportunity to external competitive pay practices and internally to the Company's total compensation objectives.
. The Plan starts on the first day of the 1995 fiscal year.
. The Plan is administered under the direction of the Personnel Committee of the Board of Directors (the Committee). The Committee's determinations and interpretations shall be binding on all Participants. Responsibilities include approving:
-- Design and interpretation of the Plan;
-- Incentive participation rates;
-- Financial performance measures and objectives;
-- Final performance unit values;
-- Final incentive payments; and
-- Other terms and conditions that may be recommended by the Chief Executive Officer and Chief Operating Officer.
. During any period of time in which the Company and its officers and directors are subject to the requirements imposed by Section 16 of the Securities Exchnage Act of 1934 (the "Act") and the Plan is considered a plan subject to Rule 16b-3 under the Act, the Committee shall be composed of "disinterested persons" as defined in Rule 16b-3. The Committee may delegate administrative responsibilities to Company employees and may delegate to Company management the authority to approve amendments to the Plan. It may not do so if it would result in the Plan not being administered by "disinterested persons" at a time when it is required to be so administered.
the size of the grant, vesting schedules, timing and form of payments, at- will employment, and rights at termination.
The participation rates are:
LONG-TERM INCENTIVE PARTICIPATION RATE
(% OF BASE SALARY)
Chairman/CEO 130%
President/COO 110%
GLT 75%
Grades 13/14 65%
Grade 12 45%
Grades 11/35 35%
Grades 10/33/34 30%
Grades 9/32 25%
Grade 30 15%
Chain NAM* 15%
Grades 7/8 15%
NAM* 15%
TM, AM, AE** 5%
Grades 1 - 6 5%
Grades 20 - 26 5%
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* National Account Manager
**Territory Manager, Account Manager, Account Executive
Note: The sales titles and grades are reflective of the pre-CSSC organization.
. LTIP targets are not prorated to reflect the number of months a Participant was actively employed.
. Participation Rates will be reviewed on a periodic basis by Human Resources and may be adjusted to keep pay opportunities competitive.
. The long-term Target Amount is comprised of two parts: a team component and an individual component.
-- The team component is 20% of the Participant's long-term incentive Target Amount.
-- The individual component is 80% of the Participant's long-term incentive Target Amount.
. Target Amounts are calculated in local currency.
. The method for calculating incentive Target Amounts for Territory Managers, Account Managers, and Account Executives is different than the method used for other employees. The calculation for sales employees is the Participation Rate times the sales income plan, or the Participation Rate times the maximum of certain salary grade levels, whichever is less. Target incentives are limited to the maximum of salary grade 5 for Territory Managers, the maximum of salary grade 6 for Account Managers, and the maximum of a salary grade 7 for Account Executives.
For purposes of determining the Final Incentive Pool, actual fiscal year earnings (base and sales incentive) or the maximum of the appropriate salary grade level, whichever is less, is used.
. An Incentive Pool for each Business Unit is determined near the end of each fiscal year. A Business Unit Incentive Pool is the sum of the Target Amounts for each Participant within the Business Unit. If personnel status changes in the Business Unit occur during the year, the Target Amounts on the last day of the fiscal year are used to determine the Incentive Pool.
. The Company long-term Incentive Pool is the total of all the Business Unit Incentive Pools.
. The CEO and COO recommend for Committee approval the Incentive Pool after the end of the fiscal year.
. Incentive allocations from the Incentive Pool are made annually after the end of the fiscal year.
. Incentive allocations to Participants in the Plan are determined by the head of the individual's work group, based on team performance and individual contributions.
. If a Participant meets expectations (as determined in the Performance Management Process), he or she will receive the team component and be eligible to receive an individual incentive allocation.
. If a Participant's performance does not meet expectations (as determined in the Performance Management Process), no incentive is granted. Any money budgeted for those grants is added back to the individual component of the Business Unit's Incentive Pool making it available for other Participants in the Business Unit.
-- The team component allocation is 20% of the Participant's long-term incentive Target Amount.
INDIVIDUAL INCENTIVE ALLOCATION
-- Incentive funds generated by the individual component are allocated to a Participant by the Participant's manager based on performance compared to other Participants in the Business Unit using the following criteria.
- The participant's trend of performance over time
- Current contribution to future success
- Relative contribution within the team to future team success
- Absolute level of contribution (performance against objectives)
- Initiative
- Continuous learning
- Long-term strategic thinking
-- Individual incentive allocations must be reviewed and approved by at least two levels of management, the Participant's manager and one level above.
TYPES OF GRANTS
. After the individual incentive allocations are made, the Final Incentive Amounts are converted into United States dollars.
. The dollar value is then used as a basis to grant Performance Units (Units).
. The dollar value of a Unit for grant purposes is $100.
. A detailed description of Performance Units is in Appendix I.
. The Plan is unfunded. A Participant's right to receive payments under the Plan is an unsecured claim against the general assets of the Company. Although the Company may establish a bookkeeping reserve to meet its obligations, any rights acquired by any Participant are no greater than the right of any unsecured general creditor of the Company. References to "Incentive Pools" do not refer to or represent actual, segregated assets of the Company.
. The Committee may accelerate the vesting schedule and settle all or any individual Participant's long-term performance units.
. Performance unit grants and payments in respect to those performance units will not be considered as covered compensation when determining any other Company-sponsored benefits (e.g., pension benefits, stock plans).
In the case of termination of LTIP participation due to death, retirement, reduction in force, and long-term disability the following apply:
. A Participant becomes 100% vested in any portion of any grant that has already begun to vest. Performance Units which have not begun to vest are forfeited.
. Vested Performance Units are paid out as soon as practical after termination.
. No new grants are made.
In the case of termination of LTIP participation due to voluntary resignation or involuntary discharge the following apply:
. Performance Units which are not vested are forfeited.
. If an employee resigns or is discharged between the vesting date and payout date, vested Performance Units are payable at the time of regular payout.
. As part of the incentive agreement, each Participant shall name a person or persons as the Beneficiary who is to receive any distribution payable under the Plan in the event of the Participant's death. The most recently designated beneficiary will apply to all distributions unless otherwise specified by the Participant. In the event that no Beneficiary has been properly designated, or if no properly designated Beneficiary survives the Participant, the Participant's estate, or other person entitled under applicable law, shall be the Participant's Beneficiary.
. No Units or other rights granted under or provided by this Plan are assignable or otherwise transferable by holders or Participants, except by will or by the laws of descent and distribution.
. No provision of the Plan gives anyone the right to remain employed with the Company or to continue to receive future incentive grants. The Company reserves the right to terminate any employee's service at any time, with or without cause.
. A Participant who has committed an act of gross misconduct while an employee of the Company, shall lose all of his or her interest, including any right, under the Plan and shall not be entitled to receive any payment under the Plan.
. The Committee or its designee(s) may modify, amend, or terminate any or all provisions of the Plan, and establish rules and procedures for its administration, at its discretion and without notice. Any modification made may not cancel out previously granted units.
To record the adoption of the Long-Term Incentive Plan, the Company has caused its duly authorized officer to execute this document.
Levi Strauss Associates, Inc.
By ____________________________________________
Date ____________________________________________
A Participant receives a grant of Performance Units (Units) based on his or her final long-term incentive amount. The Participant has the right to receive portions of the monetary value of these units beginning in the fourth year after the grant. The value of each Unit is a fixed United States dollar amount. The unit value is based on the Company's achievement of preset, long-term financial performance objectives.
. The Grant Date is the date on which the grant cycle begins. The date Units are actually granted to Participants may be earlier, later, or the same date as the Grant Date.
. The grant cycle has two parts. The first three years of the cycle is the Company performance period. The next two and one-half years is the vesting and payout period.
. Each grant cycle is known by the year in which the cycle begins. For example, a grant made in 1995 is known as the 1995 Grant.
. Company performance is measured over a three-year period for each grant. A new cycle begins each year with each new grant.
. After the Company performance period ends, the Committee declares a final unit value.
. The initial grant value is determined by converting the final incentive amount into United States dollars. The dollar amount is divided by the initial unit value ($100). The result which is rounded to the nearest whole number is the number of performance units granted.
. Performance Units are valued in United States dollars.
. The initial value of each Unit is $100. This value is used to determine the number of Units to grant to participants for each grant cycle.
. During a grant cycle units have a forecasted value which may change over time. A final unit value is determined at the end of the performance cycle based on the Company's financial performance against internal financial measures (ROI) and external measures (relative total shareholder return).
. Final unit values begin as low as zero for below-minimum financial performance. Unit values for above-minimum performance start at $1 and increase with higher levels of financial performance. The maximum unit value is $400. All unit values are subject to Committee approval.
. The Committee establishes the financial measures that are used to set the Company's financial objectives and assess performance against these objectives.
. These financial performance objectives are set for each grant cycle before the grant date.
. The final unit value is based on the Company's financial performance against objectives measured at the end of the three-year performance cycle.
. Financial measures and objectives are reviewed on a periodic basis and may be modified with the Committee's approval. (The measures and objectives are described in the Financial Performance Measurement Specifications.)
. The final grant value is determined by multiplying the number of Units granted in the grant cycle by the final unit value.
. This entire grant is converted into the Participant's local currency just prior to payment of the first third.
. Vesting for the final grant value occurs in three equal installments on the June 1 following the third, fourth, and fifth anniversary of the grant date.
. Incentive payments are made as soon as practical after the June 1 vesting. For example, the first portion of the payments from the 1995 grant will be made in June 1998, the second portion in June 1999, and the third portion in June 2000. The second and third portions are credited with interest. The interest is based on the local prime rate of the area where the grant was originally made.
PARTNERS IN PERFORMANCE
LONG-TERM INCENTIVE PLAN
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Partners in Performance Long-Term Incentive Plan (the "LTIP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company desires to amend the LTIP to clarify the disposition of units in the event of a Participant's disability or leave of absence;
WHEREAS, the LTIP provides that the Personnel Committee of the Board of Directors of the Company may amend the LTIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of the date hereof, the Company amends the LTIP as set forth below:
1. The section of the LTIP entitled "Termination of Employment" is amended in its entirety to read as set forth below:
. The individual shall cease to be a Participant in the LTIP;
. No further grants shall be made to the individual;
. The individual shall become 100 % vested in any Performance Units which have begun to vest;
. Vested Performance Units shall be paid out as soon as practical after termination of employment; and
. Performance Units which have not begun to vest shall be forfeited.
In the case of termination of the employment of an individual who is a Participant in the LTIP due to voluntary resignation or involuntary discharge other than layoff,
. The individual shall cease to be a Participant;
. Performance Units which are not vested shall be forfeited, except as restored pursuant to "Leaves of Absence and Layoff," below; and
. The date for payment of vested Performance Units shall not be accelerated or otherwise affected by the termination.
2. A new section is added after the section entitled "Termination of Employment" to read as set forth below:
. If the employment of a Participant is involuntarily terminated by reason of a layoff and the Participant is rehired by the Company or a Subsidiary within six months of such layoff, then (i) the Performance Units of such Participant which were forfeited pursuant to the "Termination of Employment" section of the LTIP shall be restored and (ii) the employment of the Participant shall be deemed to have continued during
the period between the Participant's layoff and the Participant's reemployment by the Company or its Subsidiary.
3. The definition of "Long-Term Disability" contained in Appendix Two of the LTIP is amended in its entirety to read as set forth below:
- The Participant, in the opinion of the Committee or its delegate, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death, or can be expected to last for a continuous period of not less than 12 months.
4. The definition of "Reduction in Force" contained in Appendix Two of the LTIP is amended in its entirety to read as set forth below:
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
PARTNERS IN PERFORMANCE
LONG-TERM INCENTIVE PLAN
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Partners in Performance Long-Term Incentive Plan (the "LTIP");
WHEREAS, the Company desires to amend the LTIP to provide for additional grants pursuant to the direction of the Personnel Committee of the Board of Directors of the Company (the "Committee");
WHEREAS, the LTIP provides that the Committee may amend the LTIP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of the beginning of the fiscal year of the Company ending in 1997, the Company amends the LTIP by the addition of a new Appendix Three, to read as set forth below:
Introduction
This Appendix Three provides for the award of special grants under the Plan in certain circumstances in addition to the grants otherwise provided for under the Plan.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
EXHIBIT 10.32
LEVI STRAUSS ASSOCIATES INC.
LONG-TERM PERFORMANCE PLAN
(AS AMENDED AND RESTATED THROUGH AUGUST 1, 1988)
The Company adopted the Plan effective as of June 20, 1986 and the Plan was last amended and restated an August __, 1988. The purpose of the Plan is to provide selected key Employees with long-term incentive compensation and a material inducement to advance the Company's growth as well as providing the Company with a valuable tool for the recruitment and retention of key Employees of outstanding ability. To this end, the Plan provides for the issuance of Rights which may entitle the holder to receive certain cash amounts.
The Plan shall be administered by the Committee, which has been authorized to act on behalf of each Participating Company. The Committee shall determine the meaning and application of the provisions of the Plan. The act of a majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by a majority of all Committee members, shall be valid acts of the Committee. Subject to the terms of the Plan, the Committee shall have the exclusive authority and absolute discretion to act on the following matters:
a. The selection of the Employees who are to become Participants;
b. The determination of the number of Rights to be granted to each Participant;
c. Any waiver of the Plan's forfeiture conditions;
d. The adoption, amendment or rescission of rules, procedures and forms relating to the Plan;
e. The determination of Performance Unit Value; and
f. Any other actions the Committee deems necessary or advisable for the administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be final and binding on all Participants and all persons deriving their rights from a Participant. No member of the Committee shall be liable for any action he or she has taken, or has failed to take, in good faith with respect to the Plan or any Right.
The Participants shall be selected by the Committee from those key Employees who, in the opinion of the Committee, are in a position to contribute materially to the Participating
Company's continued growth, development and long-term financial success. Participation may be based on the recommendations of the Company's Chief Executive Officer, subject to the Committee's approval.
Payment shall be made to the Participant (or his or her Beneficiary) in a single lump sum in cash as soon as reasonably practicable after the Participant ceased to be an Employee, unless the Participant has elected a valid deferral under Article 5 of this Plan.
Such interest shall be credited to the account of each Participant on the books of the employing Participating Company as of December 31 of such calendar year.
Except as provided in subsection 5.5(f), all Deferred Accounts under the Plan shall be payable as follows:
retirement, voluntary termination, bona fide job elimination or for
any other reason other than his death or other involuntary discharge,
the amount of his Deferred Account shall be paid to him over a ten
(10) year period in one hundred twenty (120) ratable monthly
installments commencing on the first day of the calendar month
following the later of the Participant's attainment of age seventy and
one-half (70-1/2) or the date of the Participation's termination of
employment. A Participant may, however, at the time he notifies the
Committee of his election to have a portion of his total compensation
for a given calendar year payable as a Deferred Account under the
Plan.
(i) Specify a date for a lump sum payment or begin monthly payments
for a period longer than five (5) year, but not to exceed ten
(10) years, over which his Deferred Account for such year shall
be paid; and/or
(ii) Specify that such monthly installments commence on other than the date of retirement but not later than his attainment of age seventy and one-half (70-1/2).
a period to commence not later than the Participant's attainment of age seventy and one-half (70-1/2) or actual retirement, whichever is later, and not to end later than one hundred and twenty (120) months after the Participant would attain age seventy and one-half (70-1/2).
f. Notwithstanding the aforesaid, the President and Chief Executive Officer of the Company may determine in his or her sole discretion that one or more of the payment options in Subsections 5.5 (a), (b) and (d) above shall not be available with respect to any amounts payable under the Long-Term Performance Plan by so notifying the affected Participant or Participants at least 30 days prior to the time for filing the deferral election for which such options shall not be available.
Upon commencement of participation, each Participant shall, by filing the prescribed form with the Committee, name a person or persons as the Beneficiary who will receive any distribution payable under the Plan in the event of the Participant's death. If the Participant has not named a Beneficiary or if none of the named Beneficiaries is living when any payment is to be made, then (a) the spouse of the deceased Participant shall be the Beneficiary, or (b) if the Participant has no spouse living at the time of such payment, the then living children of the deceased Participant shall be the Beneficiaries in equal shares, or (c) if the Participant has neither spouse nor children living at the time of such payment, the estate of the Participant shall be the Beneficiary. The Participant may change the designation of a Beneficiary from time to time in
accordance with procedures established by the Committee. Any designation of a Beneficiary (or an amendment or revocation thereof) shall be effective only if it is made in writing on the prescribed form and is received by the Committee prior to the Participant's death.
7.1 A Participant's Interest under the Plan and a Participant's right to receive payments from his Deferred Account (if any) under the Long-Term Performance Plan shall be an unsecured claim against the general assets of the awarding Participating Company, and no special or separate fund shall be established or other segregation of assets made to assure such payments; provided, however, that the Participating Company may establish a bookkeeping reserve to meet its obligations hereunder. Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Participating Company or the Committee and any Participant or other person. To the extent that any person acquires a right to receive payments from a Participating Company under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Participating Company.
7.2 A participant who has committed an act of Material Misconduct while an employee of a Participating Company, shall lose all of his or her interest, including any Right, under the Plan and shall not be entitled to receive any payment with respect to any Right nor any payment from his Deferred Account (if any) under the Plan.
No provision of the Plan, nor any Right granted under the Plan, shall be construed to give any person any right to remain an Employee. The Participating Companies reserve the right to terminate any person's service at any time, with or without cause.
The Company may amend, suspend or terminate the Plan at any time and for any reason. No Rights shall be issued after the termination of the Plan. Neither an amendment of the Plan or the termination thereof shall affect any Right which has previously become vested. The Committee may cancel a Right at any time before such Right vests under Section 4.2.
The Plan and all Rights shall be construed in accordance with the governed by the laws of the State of California.
11.10 "Participant" means an Employee who holds one or more Rights.
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11.11 "Participating Company" means (a) the Company, Levi Strauss & Co, and
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Levi Strauss International and (k) other subsidiary of the Company which has been designated as a Participating Company by the Committee. A Participating Company shall cease to become a Participating Company upon the sale of its stock or the sale of all or substantially all of its assets or at such other time as designated by the Committee.
To record the restatement of the Plan, the following duly authorized officer of the Company pursuant to delegated authority has executed this document.
LEVI STRAUSS ASSOCIATES INC.
LEVI STRAUSS ASSOCIATES, INC.
LONG-TERM PERFORMANCE PLAN
AMENDMENTS
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established the Levi Strauss Associates Inc. Long-Term Performance Plan (the "LTPP");
WHEREAS, the Company desires to amend the LTPP to provide for an orderly and systematic division of interests under the LTPP pursuant to an appropriate domestic relations order;
WHEREAS, by resolutions duly adopted on June 18, 1992, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the employee benefit plans of the Company and to delegate to any other officer of the Company the authority to adopt certain amendments to such plans (the "Delegation"); and
WHEREAS, on June 1, 1993, pursuant to the Delegation, Robert D. Haas delegated to Donna J. Goya, Senior Vice President, the authority to amend the employee benefits plans of the Company subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof;
NOW, THEREFORE, effective as of the date hereof, the Company amends Section 4.8 of the LTPP by the addition of the following new paragraph after the existing paragraph:
The foregoing provisions notwithstanding, any Right or entitlement to payment with respect to any Right under the Plan may be transferred to any "alternate payee," as such person is defined in section 414(p)(8) of the Code, as provided in any domestic relations order with respect to the Plan which would constitute a qualified domestic relations order within the meaning of section 414(p)(1)(A) of the Code if the Plan were subject to section 414(p) of the Code. Determinations under this paragraph, including but not limited to determination of whether an order would constitute a qualified domestic relations order, shall be made by the Committee in its sole discretion. The rights of any alternate payee hereunder are subject to the provisions of the Plan as administered with respect to alternate payees, and the committee may require an alternate payee to acknowledge that his or her rights are subject to such provisions.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
LEVI STRAUSS ASSOCIATES INC.
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
LEVI STRAUSS ASSOCIATES INC.
DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS
LEVI STRAUSS ASSOCIATES INC.
LONG-TERM PERFORMANCE PLAN
WHEREAS, Levi Strauss Associates Inc. ("LSAI") maintains the Levi Strauss Associates Inc. Deferred Compensation Plan for Executives ("DCPE"), the Levi Strauss Associates Inc. Deferred Compensation Plan for Outside Directors ("DCPOD") and the Levi Strauss Associates Inc. Long-Term Performance Plan ("LTPP") for the benefit of persons eligible thereunder;
WHEREAS, the DCPOD provides certain benefits to outside directors of LSAI;
WHEREAS, the DCPE and LTPP are, in certain respects, administered by the Personnel Committee of the Board of Directors of LSAI, which Committee is comprised of outside directors of LSAI;
WHEREAS, the stock of LSAI has been acquired by LSAI Holding Corp. ("Holdings"), and LSAI has become a subsidiary of Holdings (the "Transaction");
WHEREAS, subsequent to the Transaction, the Board of Directors of Holdings includes outside directors, but the Board of Directors of LSAI includes no outside directors;
WHEREAS, by resolution adopted by the Board of Directors of Holdings and LSAI on April 23, 1996, Holdings has assumed the DCPOD and the undersigned has been authorized to amend the DCPE, DCPOD and LTPP as necessary to accommodate the changes in board of director composition discussed above;
NOW THEREFORE, effective as of April 23, 1996:
1. The DCPE is hereby amended as set forth below:
a. Section 6(d) shall be amended by the addition of a new clause
(iii) to read as set forth below:
(iii) A request filed by an Eligible Employee or an Eligible
Employee's surviving spouse or Beneficiary under Section 6(d)(i) or
(ii) shall be filed with the Personnel Committee (the "Committee") of
the Board of Directors of LSAI Holding Corp. ("Holdings"), and the
disposition of such a request shall be determined by the Committee, or
its delegate, in its sole discretion.
(b) The final sentence of Article 9 shall be amended to read as follows:
The Administrator's interpretations and constructions of the Plan
and actions thereunder, except as otherwise determined by the
Board of Directors of Holdings, the Committee or the
Administrative Committee (for the purposes referenced in Section
6(f)), shall be binding and conclusive on all persons for all
purposes.
(c) Article 10 shall be amended in its entirety to read as follows:
The Plan may be amended, suspended or terminated, in whole or in part, by the Board of Directors of Holdings or the Committee, or the delegate of either, but no such action shall retroactively impair or otherwise adversely affect the rights of any person to Deferred Compensation under the Plan which has accrued prior to the date of such action, as determined by the Administrator.
2. The DCPOD is hereby amended as set forth below:
a. The name of the DCPOD, wherever it appears other than in Section 1, shall be changed to the "LSAI Holding Corp. Deferred Compensation Plan for Outside Directors."
b. The parenthetical phrase which appears immediately below the title of the DCPOD on page 1 shall be deleted.
c. Section 1 shall be amended in its entirety to read as follows:
The Levi Strauss Associates Inc. Deferred Compensation Plan for Outside Directors, which has been renamed the LSAI Holding Corp. Deferred Compensation Plan for Outside Directors (hereinafter the "Plan"), became effective upon approval by the Executive Committee of the Board of Directors of Levi Strauss & Co. on January 17, 1977, was amended and restated on July 19, 1988 and was amended from time to time thereafter by the Board of Directors of Levi Strauss Associates Inc. ("LSAI") or a delegate thereof. In connection with a transaction in which LSAI became a subsidiary of LSAI Holding Corp. (the "Company"), the Company assumed the Plan effective April 23, 1996.
d. Section 2 shall be amended in its entirety to read as follows:
The persons eligible to participate in this Plan shall be those members of the Board of Directors of the Company (the "Board of Directors") who are not otherwise employed by the Company or any of its direct or indirect
subsidiaries as an executive or in any other capacity. These persons are generally referred to by the Company as "outside directors."
3. The LTPP is hereby amended as set forth below:
a. The first sentence of Article 9 shall be amended in its entirety to read as follows:
The Board of Directors of Holdings or the Committee may amend, suspend or terminate the Plan at any time and for any reason.
b. Section 11.2 is amended to read as follows:
c. A new Section 11.7A is added to read as follows:
d. Section 11.9 is hereby amended to read as follows:
IN WITNESS WHEREOF, the undersigned has set his hand hereunto as of July ___, 1996.
LEVI STRAUSS ASSOCIATES, INC.
LONG-TERM PERFORMANCE PLAN
AMENDMENTS
WHEREAS, Levi Strauss & Co. (the "Company") maintains the Levi Strauss Associates Inc. Long-Term Performance Plan (the "LTPP") as the successor to Levi Strauss Associates Inc.;
WHEREAS, the Company desires to amend the LTPP to clarify the disposition of Rights in the event of a Participant's disability or leave of absence and to limit deferrals of amounts payable to provide for required tax payments;
WHEREAS, Article 9 of the LTPP provides that the Company may amend the LTPP at any time and for any reason;
WHEREAS, by resolutions duly adopted on April 23, 1996, the Board of Directors of the Company authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the Plan and to delegate to certain other officers of the Company the authority to adopt certain amendments to the Plan;
WHEREAS, on May 2, 1996, Robert D. Haas delegated to Donna J. Goya, Senior Vice President for Global Human Resources, the authority to amend the Plan, subject to specified limits, and such delegation has not been amended, rescinded or superseded as of the date hereof; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Donna J. Goya;
NOW, THEREFORE, effective as of the date hereof, the Company amends the LTPP as set forth below:
1. Section 4.5 is amended in its entirety to read as follows:
2. Section 4.6 is amended in its entirety to read as follows:
a. For purposes of the Plan, employment shall be deemed to continue while the Participant is on a Company approved leave of absence for up to 12 months (unless a longer period is approved in writing by the Committee or its delegate). However, in no event shall employment be deemed to continue after the date as of which (i) the Company terminates the Participant's leave of absence or (ii) the Participant is determined to have a Disability.
b. If the employment of a Participant is involuntarily terminated by reason of a layoff and the Participant is rehired by a Participating Company within six months of such layoff, then (i) the Rights of such Participant which were forfeited pursuant to Section 4.5 shall be restored and (ii) the employment of the Participant shall be deemed to have continued during the period between the Participant's layoff and the Participant's reemployment by a Participating Company.
3. Section 5.1 shall be amended by the addition of the following sentence immediately after the second sentence thereof;
Effective for payments with respect to Rights awarded in 1994 and thereafter, the maximum amount that may be deferred is ninety-five percent (95%) of each Right.
4. Section 11.6 shall be amended in its entirety to read as follows:
a. The Participant is disabled within the meaning of, and eligible for benefits under, a long-term disability program maintained by the Company; or
b. The Participant, in the opinion of the Committee or its delegate, is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death, or can be expected to last for a continuous period of not less than 12 months.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date set forth below.
Date Donna J. Goya
LEVI STRAUSS & CO.
DEFERRED COMPENSATION PLAN FOR EXECUTIVES
AND
LONG-TERM PERFORMANCE PLAN
AMENDMENTS
WHEREAS, Levi Strauss & Co, (the "Company") maintains the Deferred Compensation Plan for Executives ("DCPE") and the Long-Term Performance Plan ("LTPP") for the benefit of eligible employees,
WHEREAS, pursuant to Article 10 of the DCPE, the DCPE may be amended by the company;
WHEREAS, pursuant to Article 9 of the LTPP, the LTPP may be amended by the Company;
WHEREAS, in recognition of the potential impact of unexpected changes in the business of the Company and the applicable income tax laws, the Company desires to amend the DCPE and the LTPP to provide participants a limited window during which participants may amend their elections with respect to distributions under the plans;
WHEREAS, the Board of Directors of the Company has authorized Robert D. Haas, Chairman of the Board and Chief Executive Officer, to adopt certain amendments to the DCPE and the LTPP and to delegate to other officers of the Company the authority to adopt certain amendments to the DCPE and LTPP;
WHEREAS, Robert D. Haas has delegated to Donna J, Goya, Senior Vice President, the authority to amend the DCPE and the LTPP, subject to specified limits; and
WHEREAS, the amendments herein are within such limits to the delegated authority of Dona J. Goya;
NOW, THEREFORE, effective January 1, 1998, the DCPE and the LTPP are amended as set forth below:
1. The DCPE is amended by the addition of the attached "January 1998 Appendix" to the DCPE; and
2. The LTPP is amended by the addition of the attached "January 1998 Appendix" to the LTPP.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the date indicated below.
January __, 1998
LEVI STRAUSS & CO.
LONG-TERM PERFORMANCE PLAN
JANUARY 1998 APPENDIX
During the period from January 1, 1998 through February 13, 1998, any individual with a Deferred Account under the Plan may revoke and/or change any previous election made under Section 5.9 of the Plan regarding the payment of the Participant's Deferred Account and file a new election (such actions are collectively referred to in this Appendix as a "revised election"). However, any revised election must satisfy the following conditions:
1. The effective date for a revised election shall be twelve months after the date on which it is received by the Committee;
2. No revised election shall require payments to be made as of any date prior to the effective date of the revised election nor prevent any payment otherwise scheduled to be made as of any date prior to the effective date of the revised election;
3. A revised election must be in form prescribed by the Committee; and
4. A revised election must be received by the Committee before February 14, 1998.
Any distribution election made under the provisions of the Plan other than a revised election made under the Appendix shall be effective except to the extent that such election is superseded by a revised election under this Appendix.
LEVI STRAUSS & CO.
LONG-TERM PERFORMANCE PLAN
JANUARY 1998 APPENDIX
During the period from January 1, 1998 through February 13, 1998, any individual with a Deferred Account under the Plan may revoke and/or change any previous election made under Section 5.9 of the Plan regarding the payment of the Participant's Deferred Account and file a new election (such actions are collectively referred to in this Appendix as a "revised election"). However, any revised election must satisfy the following conditions:
1. The effective date for a revised election shall be twelve months after the date on which it is received by the Committee;
2. No revised election shall require payments to be made as of any date prior to the effective date of the revised election nor prevent any payment otherwise scheduled to be made as of any date prior to the effective date of the revised election;
3. A revised election must be in form prescribed by the Committee; and
4. A revised election must be received by the Committee before February 14, 1998.
Any distribution election made under the provisions of the Plan other than a revised election made under the Appendix shall be effective except to the extent that such election is superseded by a revised election under this Appendix.
MEMORANDUM UNDER ARTICLE 5
LEVI STRAUSS ASSOCIATES INC. LONG-TERM PERFORMANCE PLAN
With respect to Rights granted in 1986 only, the last
time for a filing deferral election shall be August 31,
1988.
MEMORANDUM UNDER ARTICLE 5
LEVI STRAUSS ASSOCIATES INC. LONG-TERM PERFORMANCE PLAN
With respect to Rights granted in 1986 only, the last
time for filing a deferral election shall be August 31,
1988.
EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 30" day of September, 1999, by and between Levi Strauss & Co., a Delaware corporation ("Company"), and Philip A. Marineau ("Executive").
WITNESSETH THAT:
WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed by the Company, in accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the Company and the Executive hereby agree as follows:
In consideration of the mutual covenants set forth herein, the Company and the Executive hereby agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and the Executive agrees to serve the Company in accordance with the terms and conditions of this Agreement.
2. PERIOD OF EMPLOYMENT. The term "Period of Employment" shall mean the period which commences on the date hereof (the "Effective Date") and, unless earlier terminated pursuant to Section 6, ends on September 30, 2002; provided, however, that the Period of Employment shall automatically be extended on a day by day basis effective on and after September 30, 2002 until such date as either the Company or the Executive shall have terminated such automatic extension provision by giving written notice to the other pursuant to Section 6(e).
3. DUTIES AND RESPONSIBILITIES DURING THE PERIOD OF EMPLOYMENT. During the Period of Employment, the Executive shall be employed as the President and Chief Executive Officer of the Company and shall report to the Company's Board of Directors (the "Board"). It is also understood that the Executive will be elected a member of the Board. During the Period of Employment, and excluding any periods of vacation, sick leave or other Company-approved leave of absence to which the Executive is entitled, the Executive shall devote his full time, energy and skill to the business and affairs of the Company. Executive may (i) serve on corporate, civic or charitable boards or committees (subject to approval of the Board, which approval shall not be unreasonably withheld), (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, or (iii) manage personal investments, so long as such activities under clauses (i), (ii) and (iii) do not interfere, in any respect, with the Executive's responsibilities hereunder.
4. COMPENSATION AND OTHER PAYMENTS.
(A) SALARY. The Company shall pay the Executive a base salary of at least $1,000,000 per year (the "Base Salary") during the Period of Employment in accordance with the Company's executive salary policy.
(B) ANNUAL BONUS. Subject to the terms of the Annual Incentive Plan (the "AIP"), the Executive will be eligible to receive a target annual bonus of 90% of his Base Salary (the "Target Amount") with a maximum annual bonus of 180% of his Base Salary.
(C) TRANSITION BONUS. The Company will pay Executive a cash payment of three million dollars ($3,000,000) on or before January 2000. If the Executive's employment shall be terminated by the Company for Cause (as defined under Section 6(b)) or by the Executive other than for Good Reason (as defined in Section 6(c)) within 12 months of the Effective Date, Executive shall repay to the Company an amount equal to $3,000,000 multiplied by a fraction, the numerator of which is 12 minus the number of full months of employment with the Company and the denominator of which is 12.
(D) ANNUAL LONG-TERM INCENTIVE GRANT. Each February, the Company will award a Leadership Shares grant under the Leadership Shares Plan of the Company based on the performance of the Executive. In February 2000, the Company will grant to the Executive 170,000 Leadership Shares (using a base year Leadership Value Added ("LVA") equal to 1999 actual LVA).
(E) SPECIAL LONG-TERM INCENTIVE GRANT. In February 2000, the Company will grant to the Executive 810,000 Leadership Shares (using a base year LVA equal to the 1999 actual LVA), which shall be subject to all of the terms and conditions of the Leadership Shares Plan, except as otherwise provided herein.
(F) REIMBURSEMENT OF PROFESSIONAL FEES. Subject to reasonable and appropriate substantiation presented by the Executive, the Company shall pay on the Executive's behalf all statements for reasonable expenses incurred in connection with the negotiation and execution of this Agreement.
(G) RELOCATION EXPENSES. The Company shall pay the Executive's reasonable expenses related to the relocation of his primary residence to the San Francisco metropolitan area in accordance with the Company's relocation policy, but with the following additions and modifications:
(i) The Company shall reimburse the Executive for temporary living accommodations for the Executive and his family in the San Francisco metropolitan area for a period not to exceed one year from the Effective
Date;
(ii) At the election of the Executive, the Company shall purchase the Executive's current primary residence under the Company's relocation policy subject to a minimum buy-out of $3.6 million; and
(iii) The Company shall reimburse the Executive for all taxes payable by the Executive because of relocation-related payments by the Company, including tax reimbursement payments, but excluding taxes attributable to capital gains from the sale of his primary residence.
5. OTHER EXECUTIVE BENEFITS.
(a) SUPPLEMENTAL PENSION BENEFIT. The Company shall provide the Executive with the following supplemental pension benefit.
(i) Subject to paragraph (iii) below, the Executive will be entitled to receive a supplemental pension benefit, in the form and at the time described below, equal to the excess of the Pension Amount (defined below) over the offsets described in (ii) below. For such purposes, the Pension Amount and each such offset as of any date shall be the actuarial equivalent of such Pension Amount or offset determined as if it were payable in the form of a straight life annuity commencing as of the Executive's normal retirement date under the Company's Revised Home Office Pension Plan ("HOPP"), and using the actuarial assumptions set forth in the HOPP, as in effect on the Effective Date. For these purposes, the Pension Amount shall equal the normal retirement benefit to which the Executive would be entitled under the terms of HOPP as in effect on the Effective Date if (A) his Benefit Service (as defined in the HOPP on the Effective Date) were equal to his actual years of Benefit Service plus 18 years and (B) his Final Average Compensation (as defined in the HOPP on the Effective Date) were equal to the greater of his actual Final Average Compensation or the sum of his initial Base Salary and Target Amount described in Section 4(a) and (b), respectively without regard to any dollar limitation on compensation contained in the HOPP.
(ii) The offsets shall be (A) the benefits provided to Executive under any qualified or non-qualified defined benefit plans of the Company (including, if applicable, any cash balance pension plan), (B) the benefits owed to Executive under any qualified or non- qualified defined benefit plans maintained by any prior employer of the Executive, and (C) the projected unreduced Social Security benefit of the Executive assuming constant earnings from the date of termination to his normal retirement age.
(iii) Except as otherwise provided below, the supplemental pension benefit will vest 1/36th for each month of the Executive's Service (as defined in the HOPP on the Effective Date) with the Company after the Effective Date. Notwithstanding the foregoing, the Executive will forfeit all rights to the
supplemental pension benefit if, prior to September 30, 2002, the
Company terminates the Executive's employment for Cause or if the
Executive terminates employment with the Company other than for Good
Reason. In the event the Company terminates the Executive's employment
or the Executive shall resign for Good Reason within 12 months after a
Change in Control (defined below), the supplemental pension benefit
will fully vest and will be determined as set forth in paragraph
(a)(i) above (A) using the years of Benefit Service and age Executive
would have attained as of the last day of the Period of Employment
(determined without regard to termination of employment) and (B)
taking into account for purposes of determining Final Average
Compensation, the salary and bonus-based termination benefits payable
under this Agreement though the last day of the Period of Employment.
(iv) The Executive may elect to receive the supplemental pension benefit at any time and in any form available under the HOPP or any non-qualified defined benefit plan of the Company as in effect on the Effective Date, or as may be available under any qualified or non-qualified defined benefit plan of the Company hereafter. For commencement of benefits prior to age 65, the supplemental pension benefit will be subject to reduction pursuant to the early retirement benefit provisions of the HOPP and non-qualified defined benefit plan as in effect on the Effective Date and shall be Determined as if the Executive is early retirement eligible (regardless of his attained age or years of Benefit Service at the time of termination of employment).
(v) If the Executive dies after the Effective Date but before the supplemental pension benefit becomes payable, his wife will receive a supplemental survivor annuity for her life in an amount equal to 50% of the supplemental benefit that would have been payable to the Executive hereunder as if (i) he had terminated his employment immediately before his death, (ii) he was eligible for early retirement (regardless of his attained age or years of Benefit Service at the time of death), (iii) he was fully vested in the supplemental pension benefit as of such date, and (iv) he elected to receive the benefit in the form of a Qualified Joint and Survivor Annuity (as defined in the HOPP).
(B) REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall promptly reimburse the Executive for all expenses and disbursements reasonably incurred by the Executive in the performance of his duties hereunder during the Period of Employment and to the extent consistent with the applicable Company policies. In addition, the Company shall reimburse the Executive for reasonable expenses incurred to obtain any amounts owed to the Executive under Section 5(a)(ii)(B) above.
(C) BENEFIT PLANS. The Executive and his eligible family members shall be entitled to participate immediately, on terms no less favorable to the Executive and his eligible family members than the terms generally offered to senior executives of the Company, in any employee benefit plan or arrangement or other fringe benefits of the Company, automobile
allowance, club memberships and dues, and similar programs (collectively referred to as the "Benefits"). In the event that any health programs or insurance policies applicable to the Benefits provided hereunder contain a preexisting conditions clause, or in the event that the Executive does not qualify for disability insurance under the appropriate plan, the Company shall either obtain a waiver from such provision with respect to the Executive and/or his eligible family members or self-insure the Executive and/or his eligible family members with respect to such conditions.
6. TERMINATION.
(A) DEATH OR DISABILITY. This Agreement and the Period of Employment shall terminate automatically upon the Executive's death. The Company may also terminate this Agreement in the event of a Disability. In such event, the Executive's employment with the Company shall terminate effective 30 days after receipt by the Executive of notice given any time after a period of 120 consecutive days of Disability or a period of 180 days of Disability within any 12 consecutive months, and, in either case, while such Disability is continuing ("Disability Effective Date"). "Disability" means the Executive's inability to substantially perform his duties hereunder, with or without reasonable accommodation, as evidenced by a certificate signed by a physician mutually acceptable to the Company and the Executive.
(B) BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment for Cause. For purposes of this Agreement, " Cause" shall
mean that (i) the Executive has plead "guilty" or "no contest" to or has been
convicted of an act which is defined as a felony under federal or state law,
(ii) engaged in conduct that constitutes willful neglect or willful misconduct
with respect to employment duties under this Agreement, resulting, in either
case, in material economic harm to the Company or substantial damage to the
Company's reputation, or (iii) willful disobedience by the Executive of lawful
directions received from or policies established by the Chairman of the Board of
Directors of the Company or the Board of Directors, which continues for more
than 30 days after the Company notifies the Executive of its intention to
terminate his employment on account of such disobedience. Notwithstanding the
foregoing, the Board may not terminate the Executive's employment for Cause
unless the Executive is given at least 30 days written notice of the Board
meeting called to make such determination, and the Executive is given the
opportunity to address such meeting, with the assistance of counsel if so
desired.
(C) BY EXECUTIVE FOR GOOD REASON. During the Period of Employment, the Executive may terminate his employment within 90 days of any event that constitutes Good Reason, provided that he has given not less than 30 days advance notice to the Company. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties materially inconsistent with the Executive's position as President and Chief Executive Officer of the Company and that result in a significant diminution of responsibility;
(ii) any material failure by the Company to comply with the provisions of this Agreement;
(iii) any removal of the Executive from his position as the President and Chief Executive Officer of the Company, unless in any such instance the Company shall have reason to terminate the Executive's employment hereunder for Cause; and
(iv) the Company's requiring the Executive to be based in any office or location other than in the San Francisco metropolitan area, and other than on travel reasonably required to carry out the Executive's obligations under this Agreement.
(D) OTHER THAN FOR CAUSE OR GOOD REASON. The Company or the Executive may terminate this Agreement for any reason other than for Cause or Good Reason, respectively, upon not less than 30 days written notice to the Company or Executive, as the case may be.
(E) NOTICE OF TERMINATION. Any termination by the Company for Cause or other than for Cause, or by the Executive for Good Reason or for other than Good Reason, shall be communicated by notice of termination to the other party not less than 30 days prior to the termination effective date. For purposes of this Agreement, "Date of Termination" means the date specified in the Notice of Termination; provided, however, that if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(A) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If the Company shall terminate the Executive's employment (other than for Cause, Disability or death) or if, during the Period of Employment, the Executive shall terminate his employment within 90 days of an event that constitutes Good Reason, the Company shall pay to the Executive the aggregate of the following amounts with respect to items (i) and (ii) and will cause the Executive to receive the benefits described in (iii) and (iv):
(i) three times the sum of (1) the Executive's Base Salary as of the Date of Termination plus (2) the Executive's most recent target bonus, or if greater, most recent annual bonus payment, payable in a lump sum within 30 days following the Date of Termination;
(ii) any obligations accrued or earned by (and, except as provided under (iii) below, to the extent vested) the Executive under the terms of any plan, contract or arrangement of the Company on the Date of Termination (hereinafter referred to as "Accrued Obligations");
(iii) Leadership Shares in the Special Long-Term Incentive Grant under Section 4(e) in an amount equal to the greater of (i) the number of such Leadership Shares vested under the terms of the Leadership Shares Plan of the Company on the Date of
Termination, or (ii) the number of such shares determined by multiplying 13,500 by the number of months of Service (as defined in the HOPP on the Effective Date) of the Executive on the Date of Termination, which Leadership Shares shall remain outstanding through the end of their original term; and
(iv) if the Executive has not yet attained age 55 as of the Date of Termination, the Company shall continue medical benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with Section 5(c) of this Agreement if the Executive's employment had not been terminated, and thereafter the Executive shall be treated as a retired senior executive of the Company for purposes of medical benefits provided by the Company to such retirees.
(B) CHANGE IN CONTROL. If the Company shall terminate the Executive's employment for any reason other than for Cause or the Executive shall resign for Good Reason within 12 months after a Change in Control, the Company shall provide the Executive with the aggregate of the following amounts and benefits:
(i) each of the benefits provided under Section 7(a) above;
(ii) full and immediate vesting in the supplemental pension benefit under Section 5(a);
(iii) full and immediate vesting in each Annual Long-Term Incentive Grant under Section 4(d) and in each Special Long-Term Incentive Grant under Section 4(e) to the' extent yet vested-as of the Date of Termination, which Grants shall remain outstanding~though the end of their respective original terms; and
(iv) if the Executive has not yet attained age 55 as of the Date of Termination, the Company shall continue medical benefits to the Executive and/or the Executive's family at least equal to those which would have been provided to them in accordance with Section 5(c) of this Agreement if the Executive's employment had not been terminated, and thereafter the Executive shall be treated as a retired senior executive of the Company for purposes of medical benefits provided by the Company to such retirees.
For purposes of this Agreement, a "Change in Control" shall be deemed to have occurred when any person (as that term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, but excluding the Company, or any of its "controlled group members" (as defined under Section 1563 of the Internal Revenue Code of 1986, as amended), or any employee benefit plan of the Company or any controlled group member, or any person organized, appointed or established by the Company or any controlled group member for or pursuant to the terms of any such plan, or any person who is affiliated through ownership or familial relations with any holder of the Company's outstanding securities as of the Effective Date), has acquired, directly or indirectly, beneficial ownership of securities representing 51 percent or more of the
total votes THAT COULD BE CAST BY THE holders of all of the Company's outstanding securities entitled to vote in elections of Directors.
(C) CAUSE; OTHER THAN GOOD REASON. If the Executive's employment shall be terminated by the Company for Cause or by the Executive other than for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than Accrued Obligations (which do not include any target bonus that is not payable as of the Date of Termination and/or any Leadership Shares that have not vested as of the Date of Termination).
(D) DISABILITY. If the Executive's employment is terminated by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive, other than Accrued Obligations.
(E) DEATH. If the Executive's employment is terminated by reason of
the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement other
than Accrued Obligations and supplemental pension amounts, as provided under
Section 5(a).
8. INDEMNIFICATION. The Company shall maintain, for the benefit of tile Executive, director and officer liability insurance in form at least as comprehensive as, and in an amount that is at least equal to, that maintained by the Company on August 1, 1999.
9. CONFIDENTIAL INFORMATION, NON-COMPETITION, NON-SOLICITATION. The following provisions shall apply to the extent permissible under applicable law:
(A) The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret -or confidential information, knowledge or data relating to the Company, including any of its subsidiaries and affiliates. The Company shall be entitled to injunctive relief to prevent any breach or threatened breach of this Section.
(B) For at least one year after the Period of Employment, the Executive shall not, without the prior written consent of the Company, utilize any confidential information of the Company to own, manage, operate, join, control, be employed by (in an executive or managerial capacity), consult with or participate in any business that competes, directly or indirectly, with the Company, which may result in harm (economic or to reputation) to the Company; provided, however, that the ownership by the Executive after his Date of Termination of not more than two percent of the voting stock of any publicly held corporation shall not be a violation of this Section 9(b).
(C) For at least one year after the Period of Employment, the Executive shall not (i) interfere with or harm, or attempt to interfere with or harm, the relationship of the Company with any person who at any time was an employee, customer or supplier of the Company or otherwise had a business relationship with the Company; (ii) solicit for employment or hire any person who is or was during the prior year an employee of the Company, or (iii) solicit similar business from any customer of the Company.
10. TAXES.
(A) In the event that the aggregate of payments or benefits provided to the Executive under Section 7(b) above constitute a Parachute Payment, as defined in Section 280G(b)(2) of the Internal Revenue Code, the Company shall pay to the Executive an additional amount which is equal to the applicable excise tax on the Executive, plus any taxes on reimbursement payments made to the Executive under this Section 10.
(B) Notwithstanding paragraph (a) above, if the After-Tax Amount (as defined below) of the payment of benefits under Section 7(b) and the gross-up payment do not exceed 110 percent of the After-Tax Floor Amount (as defined below), then no gross-up payment shall be made to the Executive and the amount of benefits under Section 7(b) shall be reduced (but not below the Floor Amount) to the largest amount which would both (i) not cause any excise tax to the executive, and (ii) not cause any nondeductibility by the Company. "After-Tax Amount" is the amount that remains after payment of all federal, state and local or other taxes. "Floor Amount" means the greatest pre-tax amount of benefits that could be paid to the Executive without causing the Executive to be subject to any excise taxes. "After-Tax Floor Amount" means the after-tax amount of the Floor Amount.
11. SUCCESSORS. This Agreement is personal to the Executive and shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's heirs and legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.
12. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflicts of laws.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by overnight courier, or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
Philip A. Marineau
435 E. 52.d St.
Apt. 11 B
New York, NY 10022
with a copy to:
Robert J. Stucker, Esq.
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
26th Floor
Chicago, IL 60601
If to the Company:
Albert F. Moreno
Senior Vice President and General Counsel
Levi Strauss & Co.
1155 Battery Street
San Francisco, CA 94111
or to such other address as any of the parties shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(C) None of the provisions of this Agreement shall be deemed to be a penalty.
(D) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(E) Either party's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision hereof.
(F) This Agreement (which includes the agreements referenced herein)
supersedes any prior employment agreement or understandings, written or verbal
between the Company and the Executive and contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof.
(G) This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS HEREOF, the parties have executed this Agreement all as of the day and year first above written.
PHILIP A. MARINEAU LEVI STRAUSS & CO.
_________________________ By:____________________________
Robert D. Haas
Chairman and Chief Executive Officer
Date:____________________ Date:__________________________
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EXHIBIT 10.34
LEVI STRAUSS & CO.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
WITH GORDON SHANK
TABLE OF CONTENTS
Page No.
ARTICLE I - RECITAL; AGREEMENT 1
ARTICLE II - DEFINITIONS 1
2.1 "Actuarial Equivalent" 1
2.2 "Administrator" 1
2.3 "Agreement" 1
2.4 "Board" 1
2.5 "Canadian Plan" 1
2.6 "Committee" 1
2.7 "Disability" 1
2.8 "LSA" 1
2.9 "Qualified Plan" 2
2.10 "Retirement Date" 2
2.11 "Shank" 2
2.12 "Supplemental Benefits" 2
2.13 "Supplement Death Benefits" 2
2.14 "Supplement Retirement Benefit" 2
ARTICLE III - SUPPLEMENTAL BENEFITS 2
3.1 Eligibility and Vesting 2
3.2 Retirement Benefit 2
3.3 Death Prior to Termination of Employment 3
ARTICLE IV - RULES OF PAYMENT 3
4.1 Withholding; Taxes 3
4.2 Payment of Guardian 3
ARTICLE V - BENEFICIARY DESIGNATION 3
5.1 Beneficiary Designation 3
5.2 Amendments 3
5.3 No Beneficiary Designation 3
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ARTICLE VI - ADMINISTRATION 4
6.1 Committee Duties 4
6.2 Administrator 4
6.3 Agents 4
6.4 Binding Effect on Decisions 4
6.5 Indemnity of Committee 4
ARTICLE VII - CLAIMS PROCEDURE 4
7.1 Claim 4
7.2 Denial of Claim 5
7.3 Review of Claim 5
7.4 Final Decision 5
ARTICLE VIII - FORFEITURE 5
ARTICLE IX - MISCELLANEOUS 5
9.1 Termination, Suspension or Amendment of Agreement 5
9.2 Funding 5
9.3 Unsecured General Creditor 6
9.4 Nonassignability 6
9.5 Not a Contract of Employment 6
9.6 Protective Provisions 6
9.7 Captions 6
9.8 Governing Law 6
9.9 Validity 7
9.10 Notice 7
9.11 Successors 7
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Dated as of January 1, 1998
LEVI STRAUSS & CO.
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
WITH GORDON SHANK
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RECITAL; AGREEMENT
WHEREAS, Gordon Shank, the Chief Marketing Officer of LS&CO., has provided and will continue to provide valuable service to LS&CO. and its related companies; in consideration of the foregoing, Shank and LS&CO. agree as follows:
DEFINITIONS
For purposes of this Agreement, capitalized terms not defined herein shall have the same meaning as in the Qualified Plan. In addition, the following terms shall have the meanings indicated, unless the context clearly indicates otherwise:
3.1 Eligibility and Vesting. Shank shall be eligible to receive benefits under the Agreement, if at all, pursuant to the terms hereof. Subject to Article VIII, Shank shall be entitled to receive a Supplemental Retirement Benefit pursuant to Section 3.2 if he is employed by LS&CO. or an Affiliated Company until his Retirement Date, or if such employment earlier terminates because of his Disability.
3.2 Retirement Benefit. Shank's Supplemental Retirement Benefit shall be payable at the same time and in the same manner as his benefit under the Qualified Plan in an amount equal to the excess of
(i) the retirement benefit (payable at the time and in the manner described above) to which he would have been entitled if all periods of his employment with LS&CO. and any Affiliated Company were considered in the calculation of Benefit Service and all of his compensation from LS&CO. and any Affiliated Company were considered in the calculation of Final Average Compensation for purposes of his benefit under the Qualified Plan, and if such benefit were, calculated without application of Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986 as amended, but subject to all other provisions, conditions, restrictions and limitations contained in the definitions of "Benefit Service" and "Final Average Compensation" under the Qualified Plan; over
(ii) the sum of the actual benefit payable to him under the Qualified Plan (as such time and in such manner) and the Actuarial Equivalent of the actual benefit payable to him (calculated as if it were paid at such time and in such manner) under the Canadian Plan.
(a) Shank's Surviving Spouse;
(b) Shank's children, except that if any of the children predecease Shank but leave issue surviving,.then such issue shall take by right of representation the share their parent would have taken if living;
(c) Shank's estate.
ruling under the Agreement, or requesting information under the Agreement shall present the request in writing to the Administrator, which shall respond in writing within 30 days.
(a) The reason for denial, with specific reference to the Agreement provisions on which the denial is based.
(b) A description of any additional material or information required and an explanation of why it is necessary.
(c) An explanation of the claim review procedure.
The Supplemental Benefit payable to or with respect to Shank hereunder shall be forfeited if Shank's employment with LS&CO. or an Affiliated Company is terminated due to misconduct as that term is defined in Section 2.42 of the Qualified Plan.
1974, as amended ("ERISA"), and the Internal Revenue Code of 1986, as amended, and is maintained primarily to provide deferred compensation benefits for a member of a select group of management or highly compensated employees for purposes of ERISA. Neither Shank, nor his Surviving Spouse or beneficiary or any other person shall have any interest in any particular assets of LS&CO. by reason of the right to receive a benefit under the Agreement.
IN WITNESS WHEREOF, this instrument has been executed by Shank and a duly authorized officer of LS&CO. effective as of January 1, 1998.
LEVI STRAUSS & CO.
GORDON SHANK
First Amendment to Levi Strauss & Co. Supplemental Executive Retirement Agreement With Gordon Shank
WHEREAS, Gordon Shank ("Shank") and Levi Strauss & Co. ("LS&CO.") have entered into an Agreement, effective as of January 1, 1998 (the "Agreement"), for the purpose of providing supplemental retirement benefits to Shank if certain conditions are satisfied; and
WHEREAS, it was the intention of Shank and LS&CO. that benefits under the Agreement be offset by all other retirement benefits provided to Shank under arrangements of LS&CO. or any affiliated company, and the Agreement failed to provide for an offset of benefits under one such arrangement;
NOW, THEREFORE, in consideration of the foregoing, which consideration Shank and LS&CO. deem to be sufficient, Shank and LS&CO. agree to amend the Agreement, effective January 1, 1998, as follows:
1. A new Section 2.13 is added to the Plan (and succeeding Sections of Article II are renumbered accordingly) and shall read as follows:
2.13 "'SUPPLEMENTAL CANADIAN PLAN' means the Levi Strauss & Co. (Canada Inc. Supplementary Executive Retirement Plan."
2. Section 3(ii) is amended to read as follows:
"(ii) the sum of the actual benefit payable to him under the Qualified Plan (at such time and in such manner) and the Actuarial Equivalent of the actual benefit payable to him (calculated as if it were paid at such time and in such manner) under the Canadian Plan and the Supplemental Canadian Plan."
3. In all other respects, the provisions of the Agreement shall remain in full force and effect.
Signed this day of , 1998.
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GORDON SHANK LEVI STRAUSS & CO.
By:
------------------------- --------------------------------
Peter A. Jacobi, President
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INDEMNIFICATION AGREEMENT (the "Agreement") between Levi Strauss Associates Inc., a Delaware corporation (the "Company"), and [NAME], a director of the Company (the "Indemnitee"), dated as of November 30, 1995.
WHEREAS, the Indemnitee has agreed to serve on a special committee of the Company's Board of Directors (the "Special Committee") to be formed on November 30, 1995 for the purpose of evaluating an acquisition proposal from certain shareholders of the company.
WHEREAS, the By-Laws of the Company provide for certain indemnification of the officers and directors of the Company;
NOW THEREFORE, in consideration of the Indemnitee's agreement to serve on the Special Committee and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company has agreed to the covenants set forth herein for the purpose of further securing to the Indemnitee the indemnification provided by the By-Laws of the Company:
Section 2. If a claim under Section 1 of this Agreement is not paid in full by the Company within sixty days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit or in a suit brought by the Company seeking to recover an advancement of expenses, the Indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (I) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit by the Company to recover an advancement of expenses pursuant to the terms of an undertaking, the Company shall be entitled to recover such expenses upon a final adjudication that the Indemnitee has not met the applicable standard of conduct set forth in the DGCL. Neither the failure of the Company (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard if conduct set forth in the DGCL, nor an actual determination by the Company (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall be a defense to the suit or create a presumption that the Indemnitee has not met the applicable standard of conduct.
Section 3. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Agreement shall not be exclusive of any other right which the Indemnitee may have or hereafter acquire under any statute, provision of the Company's Restated Certificate of Incorporation or By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. In the event that the Company maintains insurance to protect itself and any director or officer of the Company against any expense, liability or loss, such as insurance shall cover the Indemnitee to at least the same extent as any other director or officer of the Company.
Section 5. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Agreement is a contractual right and shall not be altered or abrogated in any manner adverse to the Indemnitee by virtue of amendments to the Company's Restated Certificate of Incorporation or By-Laws, or applicable law.
IN WITNESS WHEREOF, the Company and the Indemnitee have executed this Indemnification Agreement I duplicate on the day and year first above written.
LEVI STRAUSS ASSOCIATES INC.
By: __________________________
Name: Robert D. Haas
Title: Chairman and
Chief Executive Officer
(Indemnitee)
EXHIBIT 12
Ratio of Earnings to Fixed Charges
For Fiscal Years Ended 1995 - 1999 and
For Three Months Ended 2/27/00 and 2/28/99
(000's)
Fiscal Year Ended Three Months Ended
11/28/1999 11/29/1998 11/30/1997 11/24/1996 11/26/1995 2/27/2000 2/28/1999
--------------------------------------------------------------------------------
Fixed Charges:
Interest:
Interest expense (includes amortization
of debt discount and costs) $182,978 $178,035 $212,358 $145,234 $ 15,659 $ 56,782 $ 43,157
Capitalized debt costs 15,729 27,447 25,221 33,941 0 33,694 35,486
Interest factor in rental expense 28,700 26,733 32,600 29,733 31,000 5,994 6,377
---------------------------------------------------------------------------------
Total fixed charges 227,407 232,215 270,179 208,908 46,659 96,470 85,020
---------------------------------------------------------------------------------
Earnings:
Income (loss) before income taxes 8,499 162,700 184,281 619,906 1,034,837 100,243 (376,571)
Add: Fixed charges 227,407 232,215 270,179 208,908 46,659 96,470 85,020
Subtract: Capitalized debt costs (15,729) (27,447) (25,221) (33,941) 0 (33,694) (35,486)
----------------------------------------------------------------------------------
Total Earnings 220,177 367,468 429,239 794,873 1,081,496 163,019 (327,037)
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Ratio of Earnings to Fixed Charges 1.0 1.6 1.6 3.8 23.2 1.7 -
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In computing the ratio of earnings to fixed charges: (1) earnings have been based on income from continuing operations before income taxes and fixed charges (exclusive of capitalized debt costs) and (2) fixed charges consist of interest and debt discount and cost expenses (including amounts capitalized) and the estimated interest portion of rents.
For the three months ended February 28, 1999, earnings were insufficient to
cover total fixed changes.
EXHIBIT 21
LEVI STRAUSS & CO.
SUBSIDIARIES AS OF MARCH 28, 2000
Battery Street Enterprises, Inc.
LS Reconveyance Corporation
Levi Strauss (Geneva) S.A.
Levi Strauss (Hong Kong) Limited
Levi Strauss (India) Private Limited
Levi Strauss Brasil Representacoes Ltda
Levi Strauss Dominicana S.A.
Levi Strauss Eximco (Asia) Pte Ltd
Levi Strauss Eximco Chile Limitada
Levi Strauss Eximco de Columbia Limitada
Levi Strauss Financial Center Corporation
Levi Strauss Funding Corp.
Levi Strauss Foreign Sales Corporation
Levi Strauss Global Fulfillment Services, Inc.
Levi Strauss International
Caliman Company Limited
Levi Strauss & Co. (Canada) Inc.
Levi Strauss & Co. Europe S.A.
Casualwear Direct B.V.
Levi Strauss & Co. Financial Services
Levi Strauss (Asia), Ltd.
Levi Strauss (Australia) Pty. Ltd.
Levi Strauss (Far East) Ltd.
Levi Strauss do Brasil Industria e Comercio Ltda
PT Levi Strauss Indonesia
Levi Strauss (Malaysia) Sdn. Bhd.
Levi Strauss (New Zealand) Ltd.
Levi Strauss (Phil.) Inc. II
Levi Strauss (Philippines) Inc.
Levi Strauss (Suisse) S.A.
Levi Strauss (U.K.) Limited
Farvista Limited
Levi Strauss Pension Trustee Ltd.
Middlebrook Ltd.
Retailindex Limited
Levi Strauss Asia Pacific Division Pte Ltd
Levi Strauss Belgium, S.A.
Levi Strauss Chile Limitada
Levi Strauss Continental S.A.
Paris - O.L.S.S.A.R.L.
Levi Strauss de Espana S.A.
Levi Strauss de Mexico, S.A. de C.V.
Levi Strauss France, S.A.
Levi Strauss Germany GmbH
Levi Strauss Global Operations, Inc.
Levi Strauss Nederland B.V.
Dockers Europe BV
Casual Wear Co. A/S
Dockers Portugal Clothing, Lda
Levi Strauss Hellas S.A.
Levi Strauss Polska Sp.zo.o.
Levi Strauss Praha, Spol.Sro. (Levi Strauss Prague, Ltd)
Levi Strauss South Africa (Pty.) Ltd.
Levi Strauss Hungary Trading Ltd.
Levi Strauss Instanbul Konfeksiyon Sanayi ve Ticaret A.S.
Levi Strauss Italia, Srl
Flagstore Srl
Levi Strauss Korea Ltd.
Levi Strauss Latin America, Inc.
Levi Strauss Latin America, Inc. & CIA
Levi Strauss Norway, A/S
Buksehjornet A/S (Joint Stock Company)
Levi Strauss, U.S.A., LLC
Levi Strauss-Argentina, LLC
Saddleman South America, Inc.
Suomen Levi Strauss OY
Levi Strauss Japan K.K.
Levi's Only Stores, Inc.
LDJV, Inc.
Majestic Insurance International Ltd.
Miratrix, S.A.
NF Industries, Inc.
Levi Strauss Funding, LLC
EXHIBIT 23.1
As independent public accountants, we hereby consent to the use of our report (and to all references to our Firm) included in or made a part of this Registration Statement.
Arthur Andersen LLP
San Francisco, California
May 3, 2000
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | 12 MOS |
| FISCAL YEAR END | NOV 28 1999 |
| PERIOD END | NOV 28 1999 |
| CASH | 192,816 |
| SECURITIES | 0 |
| RECEIVABLES | 789,290 |
| ALLOWANCES | 30,017 |
| INVENTORY | 671,487 |
| CURRENT ASSETS | 2,166,743 |
| PP&E | 1,233,463 |
| DEPRECIATION | 548,437 |
| TOTAL ASSETS | 3,665,517 |
| CURRENT LIABILITIES | 1,367,116 |
| BONDS | 2,430,617 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 373 |
| OTHER SE | (1,288,935) |
| TOTAL LIABILITY AND EQUITY | 3,665,517 |
| SALES | 5,139,458 |
| TOTAL REVENUES | 5,139,458 |
| CGS | 3,180,845 |
| TOTAL COSTS | 1,778,259 |
| OTHER EXPENSES | (16,519) |
| LOSS PROVISION | 5,396 |
| INTEREST EXPENSE | 182,978 |
| INCOME PRETAX | 8,499 |
| INCOME TAX | 3,144 |
| INCOME CONTINUING | 5,355 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 5,355 |
| EPS BASIC | 0.14 |
| EPS DILUTED | 0.14 |
| ARTICLE 5 |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | 3 MOS |
| FISCAL YEAR END | FEB 27 2000 |
| PERIOD END | FEB 27 2000 |
| CASH | 105,959 |
| SECURITIES | 0 |
| RECEIVABLES | 662,795 |
| ALLOWANCES | 29,264 |
| INVENTORY | 629,494 |
| CURRENT ASSETS | 1,875,170 |
| PP&E | 1,135,238 |
| DEPRECIATION | 521,866 |
| TOTAL ASSETS | 3,303,383 |
| CURRENT LIABILITIES | 1,209,160 |
| BONDS | 2,173,337 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 373 |
| OTHER SE | (1,219,945) |
| TOTAL LIABILITY AND EQUITY | 3,303,383 |
| SALES | 1,082,437 |
| TOTAL REVENUES | 1,082,437 |
| CGS | 632,442 |
| TOTAL COSTS | 320,897 |
| OTHER EXPENSES | (29,141) |
| LOSS PROVISION | 1,214 |
| INTEREST EXPENSE | 56,782 |
| INCOME PRETAX | 100,243 |
| INCOME TAX | 35,084 |
| INCOME CONTINUING | 65,159 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 65,159 |
| EPS BASIC | 1.75 |
| EPS DILUTED | (6.36) |