EXHIBIT 10.5
FIRST AMENDMENT
REVISED HOME OFFICE PENSION PLAN OF
LEVI STRAUSS & CO.
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WHEREAS, LEVI STRAUSS & CO. (the "Company") maintains the Revised Home
Office Pension Plan of Levi Strauss & Co. (the "HOPP"); and
WHEREAS, pursuant to Section 17.1 of the HOPP, the Board of Directors
of the Company is authorized to amend the HOPP at any time and for any reason;
and
WHEREAS, the Job Creation and Worker Assistance Act of 2002 ("JCWAA")
provides temporary funding relief for plan years beginning in calendar years
2002 and 2003; and
WHEREAS, the Company desires to take immediate advantage of the
temporary funding relief granted under the JCWAA effective as of June 1, 2002;
and
WHEREAS, in order to take immediate advantage of the temporary funding
relief granted under the JCWAA effective as of June 1, 2002, the Company desires
to amend the HOPP, effective as of May 31, 2002, by changing the Plan Year from
the annual period corresponding to the Company's fiscal year for federal income
tax purposes to the twelve-consecutive month period beginning June 1 and ending
the following May 31; and
WHEREAS, by resolutions duly adopted on June 22, 2000, the Board of
Directors of the Company authorized Philip A. Marineau, President and Chief
Executive Officer, to take certain actions with respect to the HOPP and to
further delegate to certain officers of the Company the authority to take
certain actions with respect to the HOPP; and
WHEREAS, on June 22, 2000, Philip A. Marineau delegated to any Senior
Vice President, Human Resources, including Fred D. Paulenich, Senior Vice
President of Worldwide Human Resources, the authority to take certain actions
with respect to the HOPP and such delegation has not been amended, rescinded or
superseded as of the date hereof; and
WHEREAS, the amendment herein is within the delegated authority of Fred
D. Paulenich; and
NOW THEREFORE, effective as of May 31, 2002, the HOPP is hereby amended
as follows:
1. Section 2.16 is hereby amended in its entirety to read as follows:
"2.16 "Compensation" means, effective December 1, 1997, a
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Member's wages within the meaning of section 3401(a) of the Code (for
purposes of income tax withholding at the source, but determined
without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed) paid during a Fiscal Year by the Company for services
rendered while an Eligible Employee and a Member during that Fiscal
Year, including salary, wages, fees, commissions, bonuses and incentive
compensation (except as excluded under subparagraph (b)(iv) or (b)(v),
below), and overtime pay.
(a) In addition to the foregoing, "Compensation"
shall also include:
(i) Effective as of December 1, 1997, any
elective deferrals, as defined in section 402(g)(3) of the
Code, contributed to any plan maintained by the
Company, any amount that is contributed or deferred by the
Company at the Election of the Employee and which is not
includible in the gross income of the Employee by reason of
section 125 of the Code, or effective for Fiscal Years
beginning on or after January 1, 2001, any amount that is
contributed or deferred by the Company at the election of the
Employee and which is not includible in gross income of the
Employee by reason of section 132(f)(4) of the Code;
(ii) Back pay for the Fiscal Year in which
the back pay is made and the amount to be included will be
limited to the amount attributable to that Plan Year,
regardless of mitigation of damages; and
(iii) 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 payroll
of the Company, the amount that would have been paid to the
Member had he or she been on a domestic payroll of the
Company, as determined by the Administrative Committee.
(b) Except as provided under paragraph (a),
above, "Compensation" shall not include:
(i) 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,
but not limited to, contributions to a nonqualified deferred
compensation plan and any matching contribution made under the
Company's Capital Accumulation Plan;
(ii) Fringe benefits, including, but 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;
(iii) Relocation expenses;
(iv) 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;
(v) Compensation paid by the Company
or an Affiliated Company as a nonrecurring or special bonus,
or tax reimbursement or award;
(vi) Payments under the Company's
Long-Term Performance Plan, Long-Term Incentive Plan, and
Leadership Shares Plan;
(vii) Severance payments or pay in lieu of
notice;
(viii) Payments under the Company's
Long-Term Disability Plan; or
(ix) The amount of income recognized by a
Member who receives Company paid life insurance in excess of
fifty thousand dollars ($50,000.00) and such other amounts the
Administrative Committee determines to be imputed income under
the Code.
For Plan Years beginning on or after January 1, 1989, and
before January 1, 1994, the Compensation of each Member for any Fiscal
Year shall not exceed two-hundred thousand dollars ($200,000.00), as
adjusted in accordance with section 401(a)(17) of the Code. For Plan
Years beginning on or after January 1, 1994 and before January 1, 2002,
the Compensation of
each Member for any Fiscal Year shall not exceed one-hundred fifty
thousand dollars ($150,000.00), as adjusted in accordance with section
401(a)(17) of the Code. For Plan Years beginning on or after January 1,
2002, the Compensation of each Member for any Fiscal Year shall not
exceed two-hundred thousand dollars ($200,000.00) or any successor
limitation under section 401(a)(17) of the Code, as adjusted for the
cost-of-living in accordance with section 401(a)(17); provided that
effective for Plan Years beginning on or after June 1, 2002, the annual
compensation limit under section 401(a)(17) of the Code applies to
Compensation for each Fiscal Year based on the annual compensation
limit in effect for the respective calendar year in which each Fiscal
Year begins.
For Plan Years beginning before January 1, 1997, in
determining the Compensation of a Member, the family aggregation rules
of section 414(q)(6) of the Code shall apply, except that in applying
such rules, the term "family" will include only the spouse of the
Member and any lineal descendants of the Member who have not reached
age nineteen (19) before the close of the Plan Year. If as a result of
the application of such rules the applicable Code section 401(a)(17)
limitation is exceeded, such limitation will be prorated among the
affected individuals in proportion to each such individual's
Compensation as determined under this Section 2.16 prior to the
application of the family aggregation rules.
Notwithstanding the foregoing, a Member's Compensation
effective before December 1, 1997 shall be determined in accordance
with the provisions of the Prior Plan.
A Member's Compensation will be determined by the Administrative
Committee and such determination will be conclusive and binding on all
persons."
2. Section 2.31 is amended in its entirety to read as follows:
"2.31 'Final Average Compensation' means a Member's highest
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average annual Compensation for the five (5) consecutive Fiscal Years
out of the ten (10) consecutive Fiscal Years immediately preceding the
Member's Retirement Date or, if earlier, the date such Member
terminates Service. For purposes of determining a Member's five (5)
consecutive Fiscal Years, any Fiscal Year in which a Member (1) does
not receive a full Year of Benefit Service, and (2) is not an Employee
as of the last working day of such Fiscal Year, shall be disregarded,
including for purposes of determining such Member's consecutive Fiscal
Years. If the Member has been employed with the Company or an
Affiliated Company as of his or her Retirement Date or termination of
Service, as applicable, for less than ten (10) consecutive Fiscal
Years, such Member's Final Average Compensation will be computed based
on the consecutive Fiscal Years (not in excess of five (5) Fiscal
Years), subject to the limitation described above, in which his or her
average annual Compensation was highest.
In the event a Member's "Final Average Compensation," as
computed under the preceding paragraph, would equal zero dollars
($0.00), then such Member's "Final Average Compensation" means twelve
(12) times his or her highest average monthly Compensation for the
sixty (60) consecutive months out of the ten (10) consecutive Fiscal
Years immediately preceding the Member's Retirement Date or, if
earlier, the date such Member terminates Service. For purposes of
determining a Member's sixty (60) consecutive months, any month in
which he or she does not receive one-twelfth (1/12) of a Year of
Benefit Service shall be disregarded, including for purposes of
determining such Member's consecutive months. If the Member has been
employed with the Company or an Affiliated Company as of his or her
Retirement Date or termination of Service, as applicable, for less than
ten (10) consecutive Fiscal Years, such Member's Final Average
Compensation will be computed based on the consecutive months (not
in excess of sixty (60) months), subject to the limitation described
above, in which his or her average monthly Compensation was highest."
3. A new Section 2.31.1 is hereby added to read as follows:
"2.31.1 'Fiscal Year' means the annual period corresponding to
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LS&CO.'s corporate tax year for Federal income tax purposes, which ends
on the last Sunday of each November."
4. Section 2.33 is hereby amended in its entirety to read as follows:
"2.33 'High-3 Year Average Compensation' means the Member's
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average annual 'compensation' from the Company or an Affiliated Company
for the three (3) consecutive Limitation Years during which his or her
compensation was highest. If the Member has been employed with the
Company or an Affiliated Company for less than three (3) consecutive
Limitation Years, the term 'High-3 Average Compensation' means the
Member's average annual compensation for the actual number of
consecutive Limitation Years during which his or her compensation was
highest.
For purposes of this Section 2.33, 'compensation' means the
amount for a Plan Year or Limitation Year, as appropriate, which would
have been shown in Box 1 of IRS Form W-2, plus the following amount,
which was excluded from Box 1 of IRS Form W-2 effective for Plan Years
and Limitation Years beginning on or after January 1, 1998, any
elective deferrals, as defined in section 402(g)(3) of the Code,
contributed to any plan maintained by the Company or an Affiliated
Company, and any amount that is contributed or deferred by the Company
or an Affiliated Company at the election of the Employee and is not
includible in the gross income of the Employee by reason of section 125
of the Code; and effective for Plan Years and Limitation Years
beginning on or after January 1, 2001, any amount that is contributed
or deferred by the Company or an Affiliated Company at the election of
the Employee and which is not includible in the gross income of the
Employee by reason of section 132(f)(4) of the Code."
5. Subparagraph (a)(ii) of Section 2.34 is hereby amended in its entirety
to read as follows:
"(ii) For the preceding Plan Year received
'compensation,' as defined in Section 2.33, from the Company or an
Affiliated Company in excess of eighty thousand dollars ($80,000.00),
as adjusted from time to time under the Code; provided that (A) the
look-back year calculation for the short Plan Year beginning November
26, 2001 and ending May 31, 2002 is made on the basis of the twelve
(12)-month period preceding such short Plan Year, and (B) the look-back
year calculation for the Plan Year beginning June 1, 2002 shall be made
by multiplying the applicable dollar amount described in this
subparagraph (b)(ii) by a fraction: the numerator of which is six (6)
and the denominator of which is twelve (12)."
6. A new Section 2.42.1 is hereby added to read as follows:
"2.42.1 'Limitation Year' means the Fiscal Year."
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7. Section 2.45 is hereby amended in its entirety to read as follows:
"2.45 'Membership Date' means June 1 and December 1 of each
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Fiscal Year.'
8. Section 2.65 is hereby amended in its entirety to read as follows:
"2.58 'Plan Year' means the Fiscal Year, except that effective
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as of May 31, 2002, 'Plan Year' shall mean the twelve (12)-consecutive
month period beginning on June 1 and ending on the following May 31."
9. Paragraph (a) of Section 12.1 is hereby amended in its entirety to read
as follows:
"(a) The ninety thousand dollar ($90,000.00) or any
successor limitation (one-hundred sixty thousand dollars ($160,000.00)
effective for Limitation Years ending after December 31, 2001) in
effect under section 415(b)(1)(A) of the Code, as adjusted from time to
time under section 415(d) of the Code (the 'Defined Benefit Dollar
Limitation'); or"
10. Subparagraph (e)(i) of Section 12.2 is hereby amended in its entirety
to read as follows:
"(i) The retirement benefits payable to such Member
under the Plan and under all other defined benefit plans (regardless of
whether terminated) ever maintained by the Company or an Affiliated
Company do not exceed one thousand dollars ($1,000.00) multiplied by
the Member's Years of Service (including fractional years), by taking
in account a maximum of ten (10) Years of Service, for the Limitation
Year or any prior Limitation Year, and"
11. Paragraph (b) of Section 12.3 is hereby amended in its entirety to read
as follows:
"(b) This Subsection 12.3(b) shall apply for
Limitation Years beginning before January 1, 2000. If the Company or an
Affiliated Company maintains, or at any time maintained, one or more
qualified defined contribution plans covering any Member, a welfare
benefit fund, as defined in section 419(e) of the Code, an individual
medical account, as defined in section 415(l)(2) of the Code, or a
simplified employee pension, as defined in section 408(k) of the Code,
the sum of the Member's "defined benefit fraction," as defined in
section 415(e)(2) of the Code, and "defined contribution fraction," as
defined in section 415(e)(3) of the Code, will not exceed one (1) in
any Limitation Year. If the sum of the Member's defined benefit
fraction and defined contribution fraction exceed one (1), the Member's
Retirement Benefit payable under this Plan will be reduced to the
extent necessary to prevent such combined fraction from exceeding one
(1) before any annual additions to the defined contribution plan
maintained by the Company or an Affiliated Company are reduced."
12. Current paragraphs (a) through (g) of Section 19.2 (and any
cross-references thereto) are hereby re-designated as paragraphs (b)
through (h).
13. Re-designated paragraph (b) of Section 19.2 is hereby amended in its
entirety to read as follows:
"(b) For purposes of calculating a single sum payment
made during the period beginning November 30, 1998 and ending May 31,
2002, under Section 9.5, the interest rate used during a Plan Year 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 pursuant to the
Enhanced Early Retirement Program For Employees Laid Off as a Result of
LS&CO.'s Shift From Manufacturing, as incorporated into the Plan by
reference under Sections 5.3 and 6.3, the interest rate used during a
Plan Year will equal whichever of the rate described in subparagraph
(i) or (ii), below, that produces the greater single sum benefit:"
14. Section 19.2 is hereby amended by adding a new paragraph (a) to read as
follows:
"(a) For purposes of calculating a single sum payment
made on or after June 1, 2002, under Section 9.5, the interest rate
used during a calendar year will equal the rate of interest on 30-year
U.S. Treasury securities as in effect in the October preceding the
calendar year in which such distribution is to commence; except that,
for purposes of calculating a single sum payment with an Annuity
Starting Date occurring between June 1, 2002 through May 31, 2003, such
single sum payment shall be calculated by using the applicable interest
rate determined as of the date described in this paragraph (a) or
paragraph (b) below (determined as though the Plan Year remained the
Fiscal Year), whichever results in a larger single sum benefit."
15. Paragraphs (b) and (c) of Section 20.1 are hereby amended in their
entirety to read as follows:
"(a) 'Annual Compensation' means compensation, as
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defined in Section 2.33, received during a Limitation Year, as limited
by section 401(a)(17) of the Code.
(b) 'Average Annual Compensation' means the average
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rate of Annual Compensation in effect for a Member during the five (5)
consecutive Limitation Years in which the Member's Annual Compensation
is the greatest, excluding Plan Years ending before January 1, 1984,
and Plan Years for which the Plan was not deemed to be a Top Heavy
Plan."
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IN WITNESS WHEREOF, the undersigned has caused this Amendment to be
executed this ______ day of ________________________, 2002.
LEVI STRAUSS & CO.
By: _______________________________________________
Fred D. Paulenich
Senior Vice President of Worldwide Human Resources