<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 26, 1995.
------------------
Commission file number 33-762
------
LEVI STRAUSS ASSOCIATES INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2973849
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1155 Battery Street, San Francisco, California 94111
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 544-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock April 1, 1995
--------------------- ---------------
Class E Common, $.10 par value 1,419,298 shares
Class L Common, $.10 par value 51,755,908 shares<PAGE>
FORM 10-Q
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income (Loss). . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . 12
SIGNATURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
- ----------------------------------------------------------------------------
The following financial statements have been prepared by Levi Strauss
Associates Inc. (the "Company"), without audit, and reflect all adjustments
which are, in the opinion of the Company, necessary for a fair statement of
the results for the interim periods. The statements omit certain information
and footnote disclosures necessary to present the statements in accordance
with generally accepted accounting principles.
The following financial statements should be read in conjunction with the
financial statements and notes included in the Company's Form 10-K for the
year ended November 27, 1994. The Company believes that along with the
following information, the disclosures are adequate to make the information
presented herein not misleading.
All percentage changes in this report are based on unrounded amounts.<PAGE>
<TABLE>
LEVI STRAUSS ASSOCIATES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in Thousands Except Per Share Data)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
February 26, February 27,
1995 1994
------------ --------------
<S> <C> <C>
Net sales $ 1,505,211 $ 1,338,637
Cost of goods sold 906,634 810,957
------------ --------------
Gross profit 598,577 527,680
Marketing, general and administrative expenses 372,348 329,494
Other operating (income) expense, net (4,649) 1,264
------------ --------------
Operating income 230,878 196,922
Interest expense 3,608 5,422
Other expense, net 638 603
------------ --------------
Income before taxes and cumulative effects of changes
in accounting principles 226,632 190,897
Provision for taxes 88,386 80,177
------------ --------------
Income before cumulative effects of changes in
accounting principles 138,246 110,720
Cumulative effects of changes in accounting principles:
Postretirement benefits other than pensions
(SFAS 106), net of applicable income tax benefits
of $153,885 -- 248,429
Income taxes (SFAS 109) -- (11,912)
------------ --------------
Net income (loss) $ 138,246 $ (125,797)
============ ==============
Income (loss) per common share:
Income before cumulative effects of changes in
accounting principles $ 2.62 $ 2.10
Postretirement benefits other than pensions
(SFAS 106) -- 4.72
Income taxes (SFAS 109) -- (0.23)
------------ --------------
Net income (loss) $ 2.62 $ (2.39)
============ ==============
Average common shares outstanding 52,672,467 52,635,132
============ ==============
</TABLE>
<PAGE>
<TABLE>
Page 1 of 2
LEVI STRAUSS ASSOCIATES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<CAPTION>
February 26, November 27,
1995 1994
------------ --------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,031,052 $ 813,320
Trade receivables (less allowance for doubtful accounts:
1995 - $30,177; 1994 - $28,066) 810,075 908,690
Inventories:
Raw materials 112,556 122,947
Work-in-process 160,247 165,180
Finished goods 522,072 494,636
------------ --------------
Total inventories 794,875 782,763
Deferred tax assets 59,520 66,160
Other current assets 113,976 95,005
------------ --------------
Total current assets 2,809,498 2,665,938
Property, plant and equipment (less accumulated depreciation:
1995 - $469,053; 1994 - $454,376) 717,490 669,606
Goodwill and other intangibles (less accumulated amortization:
1995 - $185,698; 1994 - $180,920) 335,104 341,355
Noncurrent deferred tax assets 205,200 204,574
Other assets 52,243 43,836
------------ --------------
$ 4,119,535 $ 3,925,309
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt and capital lease
obligations $ 5,337 $ 25,974
Short-term borrowings 27,239 23,701
Accounts payable 253,233 286,675
Accrued liabilities 397,921 339,395
Salaries, wages and employee benefits 245,826 279,038
Taxes payable 164,599 142,348
Dividends payable 46,750 1,266
------------ --------------
Total current liabilities 1,140,905 1,098,397
------------ --------------
</TABLE>
<PAGE>
<TABLE>
Page 2 of 2
LEVI STRAUSS ASSOCIATES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<CAPTION>
February 26, November 27,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (continued)
Long-term debt and capital lease obligations -
Less current maturities 16,573 16,720
------------ -------------
Long-term employee related benefits 776,445 720,168
------------ -------------
Long-term tax liability 393,360 393,360
------------ -------------
Minority Interest 29,763 36,837
------------ --------------
Common Stock - Employee Stock Purchase and Award Plan
and Management Liquidity Program:
Class E common stock - $.10 par value; issued:
1995 - 471,782 shares; 1994 - 431,123 shares
(Redemption value $63,219) 47 43
Class L common stock - $.10 par value; issued:
1995 - 476,689 shares; 1994 - 547,531 shares
(Redemption value $129,094) 48 55
Additional paid-in capital, common 184,154 188,144
------------ --------------
Total common stock - Employee Stock Purchase
and Award Plan and Management Liquidity Program 184,249 188,242
------------ --------------
Stockholders' Equity:
Class E common stock - $.10 par value; authorized
100,000,000 shares; issued and outstanding:
1995 - 953,058 shares; 1994 - 939,747 shares 95 94
Class L common stock - $.10 par value; authorized
170,000,000 shares; issued: 1995 and 1994 -
51,279,219 shares 5,128 5,128
Additional paid-in capital, common 189,151 187,369
Retained earnings 1,326,647 1,227,897
Translation adjustment 76,951 71,623
Pension liability (701) (701)
Treasury stock, at cost - Class E: 1995 - 3,917
shares; 1994 - 10,221 shares; Class L: 1995 and
1994 - 499,749 shares (19,031) (19,825)
------------ --------------
Total stockholders' equity 1,578,240 1,471,585
------------ --------------
$ 4,119,535 $ 3,925,309
============ ==============
</TABLE>
<PAGE>
<TABLE>
LEVI STRAUSS ASSOCIATES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Three Months Three Months
Ended Ended
February 26, February 27,
1995 1994
------------ --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by operating activities $ 309,856 $ 234,071
------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (67,951) (18,168)
Investment in joint venture (5,026) --
Increase of net investment hedge -- 5,089
Other, net 446 2,411
------------ --------------
Net cash used for investing activities (72,531) (10,668)
------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (20,725) (68,048)
Purchase of management Class L common stock (9,493) (9,570)
Proceeds from sale of common stock to employee plans 7,283 8,353
Net increase in short-term borrowings 3,798 15,258
Dividends paid (958) (739)
Other, net 789 (802)
------------ --------------
Net cash used for financing activities (19,306) (55,548)
------------ --------------
Effect of exchange rate changes on cash (287) 3,005
------------ --------------
Net increase in cash and cash equivalents 217,732 170,860
Beginning cash and cash equivalents 813,320 252,673
------------ --------------
Ending cash and cash equivalents $ 1,031,052 $ 423,533
============ ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 6,080 $ 2,029
Income taxes 60,121 39,963
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Summary
Record first quarter 1995 net income of $138.2 million increased
$264.0 million from the 1994 first quarter loss substantially due to the
effects of adopting Statement of Financial Accounting Standards (SFAS)
No. 106 "Employers' Accounting for Postretirement Benefits Other Than
Pensions" in 1994. The increase in net income was also due to record first
quarter 1995 sales and a lower effective tax rate, partially offset by the
positive effect of adopting SFAS No. 109 "Accounting for Income Taxes" in
1994. Excluding the effects of adopting both SFAS Nos. 106 and 109 in 1994,
the Company's net income would have increased 25 percent over 1994.
Full year 1995 net income is expected to be higher than 1994 mostly due to
the negative effect of adopting SFAS No. 106 in 1994. However, the Company
expects net income to be negatively impacted by planned costs in the second
half of 1995 associated with the Company's global initiatives on customer
service.
Net Sales
Record first quarter 1995 dollar sales increased 12 percent over the
comparable quarter of 1994 due to a 7 percent increase in unit sales coupled
with a 5 percent increase in average unit selling prices. These results were
attributable to record dollar and unit sales performances by the Europe
division and the U.S. Levi's(R) brand product lines along with higher dollar
sales by the men's Dockers(R) brand product line.
Record first quarter 1995 U.S. dollar sales of $858.5 million increased
14 percent over the prior year period due to higher unit sales and average
unit selling prices. The record results by the men's and women's U.S.
Levi's(R) brand product lines were attributable to increased sales for
Orange Tab(TM) and Red Tab(TM) products. The men's Dockers(R) brand product
line overcame the finishing capacity limitations experienced in the early
part of 1994 and recorded a 26 percent increase in first quarter 1995 dollar
sales over the prior year period.
Record dollar sales outside the U.S. of $646.7 million for the first quarter
of 1995 increased 11 percent over the comparable period of 1994 mostly due to
record dollar and unit sales in the Europe division (principally the
Company's affiliates in Italy, France and Germany). The results in Europe
reflect the continuing demand for the Company's basic denim products, mainly
the 501(R) family of products and other Red Tab(TM) products.
Total Company dollar and unit sales for 1995 are expected to increase from
1994, due to projected increases in dollar and unit sales for the U.S.
Levi's(R) women's brand, U.S. Dockers(R) men's brand and Europe division.
Gross Profit
As a percent of sales, gross profit for the first quarter of 1995 increased
slightly compared to 1994. In dollars, current quarter gross profit
increased 13 percent over the comparable 1994 period mostly due to higher
overall average unit selling prices and unit sales, and lower U.S. production
costs.
U.S. production costs for the current quarter were lower than the prior year
due to lower 1995 workers' health and safety costs, and 1994 excess
production capacity costs at certain U.S. owned and operated facilities (as
a result of lower first quarter 1994 planned U.S. production requirements).
Changes in state workers' compensation legislation in Texas and the Company's
safety programs had a positive effect on lowering workers' health and safety
costs. Additionally, the Company's overall efforts directed at cost
effectiveness have contributed to the lower production costs in the current
year.
The businesses outside the U.S. continue to record higher gross profit as a
percent of sales than businesses in the U.S., mostly due to higher overall
average unit selling prices. Additionally, compared to the U.S., the
non-U.S. businesses sell a greater proportion of higher margin denim bottoms
(predominately 501(R) and Red Tab(TM) products). The businesses outside the
U.S. represented 61 percent of the Company's 1995 first quarter profit
contribution before corporate expenses and taxes, compared to 70 percent in
1994. The lower first quarter 1995 percentage was primarily due to higher
U.S. sales volume in the first quarter of 1995 compared to 1994.
The Company expects gross profit to be impacted by higher fabric costs as a
result of rising cotton prices during the second half of 1995.
Marketing, General and Administrative Expenses
As a percentage of sales, marketing, general and administrative expenses of
25 percent for the current quarter was unchanged from the first quarter of
1994. Marketing, general and administrative expenses, in dollars, for the
1995 first quarter increased 13 percent over the comparable 1994 period.
This increase was mostly due to higher administrative, advertising and
selling expenses.
Administrative expense for the first quarter of 1995 increased 18 percent
from the prior year period primarily due to higher earnings-related
compensation costs and expenses in connection with the Company's customer
service initiatives. First quarter 1995 advertising expense was 15 percent
higher than 1994 primarily due to increased cinema, television, print and
billboard advertising in Europe and Asia Pacific. Selling expense for the
current quarter increased 13 percent from the 1994 first quarter and was in
line with the increase in 1995 first quarter sales.
Other Operating (Income) Expense, Net
Other operating income, net for the first quarter of 1995 increased
$5.9 million from the prior year period primarily due to the 1994 recognition
of costs associated with environmental-related soil remediation of a facility
previously owned by the Company and higher 1995 licensee income. This
increase was partially offset by start-up costs associated with U.S.
Company-owned retail and outlet stores.
Interest Expense
Interest expense for the current quarter decreased 33 percent from the
comparable period of 1994 primarily due to lower average debt balances. Debt
reductions after the first quarter of 1994 included the repayment and
cancellation of dividend notes payable to Class L stockholders. The debt was
repaid using cash flows from operations.
The Company expects 1995 interest expense related to borrowings to be lower
than 1994 due to anticipated lower 1995 average debt levels. The low levels
of debt are marginally affected by high interest markets of non-U.S.
countries where most of the Company's debt resides.
Other Expense, Net
Current quarter other expense, net was relatively unchanged from the prior
year period mostly due to greater net foreign currency transaction losses
offset by higher interest income on investments. The 1995 net foreign
currency transaction losses were mostly due to the weakening of the U.S.
dollar compared to European currencies and the Japanese Yen during the first
three months of 1995. The 1995 net foreign currency losses included realized
transaction gains of $8.9 million and unrealized transaction losses of
$15.2 million relating to the Company's forward currency contracts.
Provision for Taxes
The increase in the first quarter 1995 provision for taxes compared to 1994
was due to higher first quarter 1995 earnings. The effective tax rate for
the current quarter was 39 percent, while the rate for the first quarter of
1994 was 42 percent. The decrease of three percentage points was due to a
change in the mix of U.S. and non-U.S. earnings and a decrease in taxes on
the undistributed earnings of non-U.S. subsidiaries.
FINANCIAL CONDITION AND LIQUIDITY
Trade Receivables
Trade receivables of $810.1 million decreased 11 percent from year-end 1994
due to lower first quarter 1995 sales volume compared to the fourth quarter
of 1994. As a percent of sales, current quarter trade receivables was
slightly higher than the fourth quarter of 1994. The allowance for doubtful
accounts increased 8 percent from year-end 1994 mostly due to lower than
expected write-offs coupled with bad debt recoveries during the first quarter
of 1995.
Inventories
Inventories of $794.9 million at first quarter 1995 were 2 percent higher
than the level at year-end 1994. This increase reflected a 5 percent
increase in U.S. inventories that was partially offset by a 3 percent
decrease in non-U.S. inventories. The U.S. inventories increased to meet
anticipated demand for women's jeans (predominately Red Tab(TM) and
Orange Tab(TM) products) and men's wrinkle resistant products. The Levi's(R)
men's brand inventories were relatively flat with year-end 1994; inventory of
men's 501(R) products are expected to increase to meet anticipated demand
levels by the third quarter of 1995. The Company is continually focusing its
efforts to create the optimal balance between the cost of maintaining current
inventory levels with customer service.
Outside the U.S., inventories decreased in the Europe division primarily due
to higher first quarter 1995 sales volume compared to the fourth quarter of
1994 in Europe. Inventories in Japan decreased slightly from year-end 1994.
The Company's Japanese affiliate is continuing to shift some of its product
mix to lower cost denim/rayon blend products in response to a change in
consumers' preferences from basic denim products to lighter-weight products.
As a result of this shift, inventory markdowns for basic denim products were
recorded in Japan during the first quarter of 1995. The Company is
continuing to monitor inventory levels in Japan for 1995.
Property, Plant and Equipment
Property, plant and equipment, net increased 7 percent from year-end 1994 to
$717.5 million. The increase in property, plant and equipment was primarily
due to capital expenditures in the U.S. that were partially offset by
depreciation expense during the period.
Most of the capital expenditures in the U.S. were related to the Company's
U.S. customer service initiative. These expenditures included construction
costs and equipment purchases for the Company's customer service centers and
the purchase of desk-top computer system hardware.
Actual spending on projects during 1995 is expected to be $353 million,
including over $200 million related to the Company's U.S. customer service
initiative.
Working Capital
Working capital of $1.7 billion at the end of the first quarter of 1995
increased $101.1 million from year-end 1994. In addition, the current ratio
increased to 2.5 from 2.4. The increase in working capital was primarily due
to higher cash and cash equivalents generated from operations, lower accounts
payable and lower salaries, wages and employee benefits. This increase was
partially offset by lower trade receivables, higher accrued liabilities and
higher dividends payable. The increase in accrued liabilities included
higher U.S. and non-U.S. advertising accruals.
Liquidity and Capital Resources
The increase of $217.7 million in cash and cash equivalents from year-end
1994 was mostly due to cash provided by operations. Cash provided by
operations was partially used for purchases of property, plant and equipment,
the net repayment of debt and repurchase of management Class L common stock.
Remaining cash balances were invested in money market interest bearing
investments maturing under one year. The Company anticipates utilizing a
portion of this cash in 1995 to fund costs relating to its global initiatives
on customer service, other capital expenditure projects and dividends
payable.
During the 1995 first quarter, the Company used cash from operations to repay
its fourth and final series of dividend notes payable to Class L stockholders
totaling $20.6 million, plus accrued interest of $1.9 million. At
February 26, 1995, the Company's total outstanding debt balance was
$49.1 million, 26 percent lower than year-end 1994.
Subsequent to the first quarter of 1995, the Company extended its revolving
line of credit for another year.
Commitments
The Company has forward currency contracts to buy the aggregate equivalent of
$186.4 million of various European currencies to hedge currency exposures
resulting from intercompany transactions. The Company has forward currency
contracts to sell the aggregate equivalent of $497.4 million of numerous
European currencies, Japanese Yen and Canadian Dollars. These contracts
hedge currency exposures resulting from sourcing operations as well as net
investment positions, intercompany royalties and dividend payments. In
addition, the Company has Belgian Franc forward currency contracts to sell
the aggregate equivalent of $231.6 million of various European currencies.
These contracts hedge currency exposures resulting from intercompany
receivables and payables.
Additionally, the Company has the right to sell Belgian Francs and Japanese
Yen totaling $130.0 million to hedge intercompany royalties and the Company's
net investment in its Japanese affiliate.
These contracts are at various exchange rates and expire at various dates
through 1996.
Repurchase of Management Class L Common Stock
During the first quarter of 1995, the Company repurchased and subsequently
retired 70,842 shares of management Class L common stock, pursuant to the
Management Liquidity Program, at the current appraised stock value of $134
per share totaling $9.5 million. During the first quarter of 1994, the
Company purchased 83,949 shares of Class L common stock, for a total of
$9.6 million, held by certain management stockholders that have left the
employment of the Company. The purchase price of $114 per share was the
appraised value as determined by a valuation obtained in November 1993 from
an independent investment banking firm for the Company's employee stock
plans.
Sale of Class E Common Stock to Employee Investment Plans
In January 1995, the employee investment plans, collectively, purchased
35,471 shares of Class E common stock from the Company at $134 per share as
determined by the valuation of an independent investment banking firm. In
addition, the Company contributed 28,877 matching shares to these plans.
Declaration and Payment of Dividends
In February 1995, the Board of Directors declared a dividend of $.75 per
share (totaling $39.5 million), which was paid on March 15, 1995 to Class E
and Class L stockholders of record on March 1, 1995. In November 1994, the
Board of Directors declared a Class E dividend of $.65 per share, which was
paid on December 15, 1994 to Class E stockholders of record on December 1,
1994.<PAGE>
PART II. OTHER INFORMATION
LEVI STRAUSS ASSOCIATES INC. AND SUBSIDIARIES
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
10a Amendment dated December 31, 1994 to the Deferred Compensation
Plan for Outside Directors.
10b Amendment dated January 24, 1995 to the Revised Employee
Retirement Plan.
(b) There were no reports on Form 8-K filed with the Commission during the
first quarter of 1995.<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEVI STRAUSS ASSOCIATES INC.
----------------------------
(Registrant)
Date: April 10, 1995
By /s/Richard D. Murphy
-------------------------------------
(Richard D. Murphy)
Vice President and Corporate Controller<PAGE>
<PAGE>
EXHIBIT INDEX
10a Amendment dated December 31, 1994 to the Deferred Compensation Plan
for Outside Directors. 15
10b Amendment dated January 24, 1995 to the Revised Employee Retirement
Plan. 18<PAGE>
<PAGE>
Exhibit 10a
-----------
LEVI STRAUSS ASSOCIATES INC.
DEFERRED COMPENSATION PLAN
FOR
OUTSIDE DIRECTORS
----------
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:
6. Additional Credits With Respect to Deferred Compensation
--------------------------------------------------------
a. In General
----------
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 of 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.
b(i) Interest Measurement Standard
-----------------------------
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.
(ii) Alternative Measurement Standard
--------------------------------
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.
(iii) Election of Standard
--------------------
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
December 31, 1994.
/s/Donna J. Goya
--------------------------------------
Donna J. Goya
Senior Vice President<PAGE>
<PAGE>
Exhibit 10b
-----------
LEVI STRAUSS ASSOCIATES INC.
REVISED EMPLOYEE RETIREMENT
PLAN
WHEREAS, Levi Strauss Associates Inc. (the "Company") has established
the Levi Strauss Associates Inc. Revised Employee Retirement Plan (the
"ERP");
WHEREAS, the ERP permits an "Affiliated Company," as defined in the ERP,
to adopt the ERP and any related trust, and thereby to become a
"Participating Company" in the ERP, with the consent of the Board of
Directors of the Company,
WHEREAS, Levi's Only Store, Inc. ("LOS"), which is an Affiliated Company
within the meaning of the ERP, desires to adopt the ERP and any related trust
and the Company desires to consent to such adoption;
WHEREAS, the Board of Directors of the Company has authorized Robert D.
Haas, Chairman of the Board and Chief Executive Officer, to take certain
actions with respect to the Company's employee benefit plans and to further
delegate the authority to take certain actions with respect to such plans;
WHEREAS, Robert D. Haas has delegated to Donna J. Goya, Senior Vice
President, the authority to take certain actions with respect to the
Company's employee benefit plans; and
WHEREAS, the consent effected herein is within the delegated authority
of Donna J. Goya;
NOW, THEREFORE, the Company hereby consents to the adoption of the ERP
and any related trust by LOS, effective November 28, 1994.
IN WITNESS WHEREOF, the undersigned has set her hand hereunto on 24
January, 1995.
/s/Donna J. Goya
--------------------------------------
Donna J. Goya
Senior Vice President<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF LEVI STRAUSS ASSOCIATES INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-26-1995
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184,249
0
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