Rabbi Trust Agreement

Exhibit 10.65


RABBI TRUST AGREEMENT


by and between


LEVI STRAUSS & CO.


and


BOSTON SAFE DEPOSIT AND TRUST COMPANY


TABLE OF CONTENTS


SECTION PAGE - ------- ---- 1. ESTABLISHMENT OF TRUST ......................................................................... 1


2. TRUST FUNDING REQUIREMENT ...................................................................... 2


3. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES .......................................... 3


4. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT ....... 4


5. PAYMENTS TO COMPANY ............................................................................ 5


6. INVESTMENT AND ADMINISTRATIVE AUTHORITY ........................................................ 6


7. CONTRACTUAL SETTLEMENT AND INCOME; MARKET PRACTICE SETTLEMENTS ................................. 8


8. DISPOSITION OF INCOME .......................................................................... 9


9. ACCOUNTING BY TRUSTEE .......................................................................... 9


10. RESPONSIBILITY OF TRUSTEE ...................................................................... 9


11. COMPENSATION AND EXPENSES OF TRUSTEE ........................................................... 11


12. CHANGE OF CONTROL .............................................................................. 12


13. RESIGNATION AND REMOVAL OF TRUSTEE ............................................................. 12


14. APPOINTMENT OF SUCCESSOR ....................................................................... 13


15. AMENDMENT OR TERMINATION ....................................................................... 13


16. MISCELLANEOUS .................................................................................. 14


17. RELIANCE OF REPRESENTATIONS .................................................................... 15


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Exhibit 10.65


RABBI TRUST AGREEMENT


THIS RABBI TRUST AGREEMENT is effective this 1st day of January 1, 2003, by and between LEVI STRAUSS & CO. ("Company") and BOSTON SAFE DEPOSIT AND TRUST COMPANY ("Trustee").


WHEREAS, the Company has adopted the nonqualified deferred compensation Plan listed in Appendix A (the "Plan" or, if additional plans are added, collectively referred to as the "Plan");


WHEREAS, the Company has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan (individually a "Participant" and collectively the "Participants");


WHEREAS, the Company wishes to establish a trust (the "Trust") and to contribute to the Trust the assets that shall be held therein, subject to the claims of the Company's creditors in the event of the Company's Insolvency, as defined in Section 4, until paid to Participants and their beneficiaries in such manner and at such times as specified in the Plan and this Rabbi Trust Agreement;


WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") and benefits under an excess benefit plan as that term is defined in Section 3(36) of ERISA to certain employees in excess of the limitations on contributions and benefits imposed by ss.415 of the Internal Revenue Code of 1986, as amended,; and;


WHEREAS, it is the intention of the Company to make contributions to the Trust to provide a source of funds to meet its liabilities under the Plan.


NOW THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:


Section 1. Establishment of Trust.


(a) The Company hereby establishes the Trust with the Trustee,
consisting of such sums of money and other property acceptable to
the Trustee as from time to time shall be paid and delivered to
and accepted by the Trustee from the Company (the "Trust Fund").
The Trustee shall have no duty to determine or collect
contributions under the Plan and shall have no responsibility for
any property until it is received and accepted by the Trustee.
The Company shall have the sole duty and responsibility for the
determination of the accuracy or sufficiency of the contributions
to be made under the Plan.


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All such money and other property paid or delivered to and
accepted by the Trustee shall become the principal of the Trust
to be held, administered and disposed of by the Trustee as
provided in this Rabbi Trust Agreement.


(b) The Trust hereby established shall be irrevocable;
notwithstanding the fact that the Trust is irrevocable, the
Company may terminate the Plan (or any of them) at any time.


(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code
of 1986, as amended, and shall be construed accordingly. The
Company represents and warrants to the Trustee that: (i) the Plan
for which benefits are or may become payable under this Trust is
not subject to Part 4 of Title I of ERISA; and (ii) the Plan
covers, and will cover, only (x) a select group of management or
highly compensated employees as contemplated by Section 401(a) of
ERISA and interpretations, opinions, and rulings of the
Department of Labor thereunder or (y) participants in an excess
benefit plan as defined in Section 3(36) of ERISA.


(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and shall
be used exclusively for the purposes of paying Participants under
the Plan, expenses of the Trust and, in the event of Insolvency,
obligations of the Company to its general creditors as herein set
forth. The Participants and their beneficiaries shall have no
preferred claim on, nor any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Plan and this
Rabbi Trust Agreement shall be unsecured contractual rights of
the Participants and their beneficiaries against the Company. Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 4(a) herein.


(e) In addition to the contributions necessary to meet the Trust
Funding Requirement (as defined in Section 2), the Company, in
its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and
disposed of by the Trustee as provided in this Rabbi Trust
Agreement. Neither the Trustee nor any Participant or beneficiary
shall have any right to compel such additional deposits.


Section 2. Trust Funding Requirement


From time to time but in no event less than annually, the Company
shall determine the amount that would be needed to pay
Participants and their beneficiaries the benefit which they have
accrued pursuant to the terms of the Plan (as certified to the
Trustee by the Company) as of the date of the valuation. For


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purposes of this valuation, the Company shall disregard the total
amount credited to the LS&CO. Performance Tracking Vehicle Fund
(as defined in the Plan) as of such valuation date. The remaining
amount is referred to herein as the "Trust Funding Requirement."
In the event that the fair market value of the Trust assets as of
any valuation date before a Change of Control is less than 90% of
the Trust Funding Requirement on such date , the Company shall
make an additional contribution to the Trust in an amount
sufficient to bring the fair market value of the assets in the
Trust up to 90% of the Trust Funding Requirement as of the
valuation date. Further, the Company shall establish the Trust
Funding Requirement as of the date of any Change of Control. If
the fair market value of the Trust Fund as of the valuation date
is less than the Trust Funding Requirement on such date, the
Company shall make an additional contribution so the value of
trust assets equals the Trust Funding Requirement as of the
valuation date. After a Change of Control, the Company shall
establish the Trust Funding Requirement on a semi-annual basis
and make additional contributions as necessary to bring the value
of the Trust Fund up to the Trust Funding Requirement as of the
valuation date. Contributions under this Section 2, if any, shall
be made as soon as reasonably practicable after the Trust Funding
Requirement is established for a valuation date.


When computing the Trust Funding Requirement, the Company may
exclude the benefits attributable to any participant if
contributions to the Trust Fund on behalf of the participant
could cause the participant to incur income tax liability on
account of the contribution.


Section 3. Payments to Plan Participants and Their Beneficiaries.


(a) The Company shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each
Participant (and his or her beneficiaries), and that provides a
formula or other instructions acceptable to the Trustee for
determining the amounts so payable, the form in which such amount
is to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. The Company
shall be responsible for notifying the Trustee of any change in
the information on the Payment Schedule. Except as otherwise
provided herein, the Trustee shall make payments to the
Participants and their beneficiaries in accordance with such
Payment Schedule.


It is the intent of the Company and the Trustee that the Company
shall be responsible for determining and effecting all federal,
state and local tax aspects of the Plan and the Trust Fund,
including without limitation income taxes payable on the Trust
Fund's income, if any, any required withholding of income or
other payroll taxes in connection with the payment of benefits
from the Trust Fund pursuant to the Plan, and all reporting
required in connection with any such taxes. To the extent that
the Company is required by applicable law to pay or withhold such
taxes or to file such reports, such obligation shall be a
responsibility


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allocated to the Company, as the case may be, hereunder. To the
extent the Trustee is required by applicable law to pay or
withhold such taxes or to file such reports, the Company shall
inform the Trustee of such obligation, shall direct the Trustee
with respect to the performance of such obligations and shall
provide the Trustee with all information required by the Trustee
to meet such obligations. Notwithstanding the foregoing, the
Company may elect to pay any applicable taxes directly. In the
event the Company pays taxes directly, such amounts may be
reimbursed from Trust assets by the Trustee, provided that the
Company certifies the amount of taxes paid directly and instructs
the Trustee to remit a reimbursement of such taxes to the
Company.


(b) The entitlement of a Participant or his or her beneficiaries to
benefits under the Plan shall be determined by the Company or
such party as it shall designate under the Plan, and any claim
for such benefits shall be considered and reviewed under the
procedures set out in the Plan. The Company shall notify the
Trustee of such determination and shall direct commencement of
payments of such benefits.


(c) The Company may make payment of benefits directly to the
Participants or their beneficiaries as they become due under the
terms of the Plan. The Company shall notify the Trustee of its
decision to make payment of benefits directly prior to the time
amounts are payable to Participants or their beneficiaries. If
requested by the Company, the Trustee shall reimburse the Company
for any benefits under the Plan and Trust which are paid by the
Company or otherwise satisfied. In addition, if the principal of
the Trust, together with any earnings thereon, are not sufficient
to make payment of benefits in accordance with the terms of the
Plan, the Company shall immediately make up the balance of each
such payment as it falls due. The Trustee shall notify the
Company when principal and earnings are not sufficient.


Section 4. Trustee Responsibility regarding Payments to Trust Beneficiary
When Company Is or Is Alleged to Be Insolvent.


(a) The Trustee shall cease payment of benefits to the Participants
and their beneficiaries if the Company is Insolvent. The Company
shall be considered "Insolvent" for purposes of this Rabbi Trust
Agreement if (i) the Company is unable to pay its debts as they
become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code. A
determination of Insolvency under the terms of this Rabbi Trust
Agreement does not constitute an admission of insolvency by the
Company for any other purpose.


(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall
be subject to claims of general creditors of the Company under
federal and state law as set forth below.


(1) The Board of Directors and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing
of the Company's


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Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company
has become Insolvent, the Trustee shall determine whether the
Company is Insolvent and, pending such determination, the
Trustee shall discontinue payment of benefits to the
Participants or their beneficiaries. In all cases, the
Trustee shall be entitled to conclusively rely upon the
written certification of the Board of Directors or the Chief
Executive Officer of the Company when determining whether the
Company is Insolvent.


(2) Unless the Trustee has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether
the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be
furnished to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning the
Company's solvency.


(3) If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to the
Participants or their beneficiaries and shall hold the assets
of the Trust for the benefit of the Company's general
creditors except that the Trustee's fees and expenses may
continue to be paid pursuant to Section 11 subject to any
applicable bankruptcy rules. Nothing in this Rabbi Trust
Agreement shall in any way diminish any rights of the
Participants or their beneficiaries to pursue their right ...