Document:

<PAGE>

                                                                   EXHIBIT 10.30

                            PARTNERS IN PERFORMANCE
                             ANNUAL INCENTIVE PLAN

                 Levi Strauss Associates Inc. and Subsidiaries

                                  CONFIDENTIAL
                                  ------------
<PAGE>

ABOUT THIS MATERIAL
--------------------------------------------------------------------------------

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>

CONTENTS
--------------------------------------------------------------------------------

                                                                       Page
                                                                       ----

Annual Incentive Plan                                                    1

Appendix One:  Glossary of Terms                                         9

<PAGE>

ANNUAL INCENTIVE PLAN
--------------------------------------------------------------------------------

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.

PURPOSE OF PLAN
---------------

 .  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.

EFFECTIVE DATE
--------------

 .  The Plan starts on the first day of the 1995 fiscal year.

PLAN ADMINISTRATION
-------------------

 .  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;

                                      -1-
<PAGE>

   -- 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.

ELIGIBILITY
-----------

 .  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.

ANNUAL INCENTIVE AGREEMENT
--------------------------

 .  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.

                                      -2-
<PAGE>

PERFORMANCE PERIOD
------------------

 .  The Plan operates on a twelve month cycle which coincides with the Company's
   fiscal year.

TARGET AMOUNTS FOR PARTICIPANTS
-------------------------------

 .  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:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                                                       INCENTIVE PARTICIPATION RATE
                                                            (% OF BASE SALARY)
-------------------------------------------------------------------------------------------
<S>                                                    <C>
   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%
-------------------------------------------------------------------------------------------
</TABLE>

   * 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.

                                      -3-
<PAGE>

 .  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.

SALES EMPLOYEES
---------------

 .  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.

INCENTIVE POOL FUNDING SOURCES
------------------------------

 .  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

                                      -4-
<PAGE>

 .  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:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
                              EXAMPLES OF INCENTIVE POOL FUNDING WEIGHTS
------------------------------------------------------------------------------------------
POOL FUNDING               CORPORATE               DIVISION                 AFFILIATE
  SOURCE                     STAFF
------------------------------------------------------------------------------------------
<S>                    <C>                 <C>                        <C>
Corporate                    100%                     25%                     10%
------------------------------------------------------------------------------------------
Group                                                 25%
------------------------------------------------------------------------------------------
Division                                              50%                     30%
------------------------------------------------------------------------------------------
Affiliate                                                                     60%
------------------------------------------------------------------------------------------
Total                        100%                    100%                    100%
------------------------------------------------------------------------------------------
</TABLE>

FINANCIAL PERFORMANCE MEASUREMENT
---------------------------------

 .  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.

INCENTIVE POOLS
---------------

 .  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%.

                                      -5-
<PAGE>

 .  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.

REDISTRIBUTION OF FINAL INCENTIVE POOLS
---------------------------------------

 .  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.

INCENTIVE POOL APPROVAL
-----------------------

 .  The CEO and COO recommend for Committee approval the final incentive pool
   after the end of the fiscal year.

                                      -6-
<PAGE>

PARTICIPANT INCENTIVE ALLOCATIONS
---------------------------------

 .  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)

                                      -7-
<PAGE>

       -  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
-------------------

 .  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.

TERMINATION OF EMPLOYMENT
-------------------------

 .  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.

BENEFICIARY DESIGNATION
-----------------------

 .  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.

                                      -8-
<PAGE>

PENSION CREDIT
--------------

 .  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.

EMPLOYMENT RIGHTS
-----------------

 .  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.

UNFUNDED STATUS
---------------

 .  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.

AMENDMENT, MODIFICATION, OR TERMINATION OF PLAN
-----------------------------------------------

 .  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.

                                      -9-
<PAGE>

ADOPTION
--------

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 ____________________________________________

                                     -10-
<PAGE>

APPENDIX ONE:  GLOSSARY OF TERMS
-------------------------------------------------------------------------------

 .  Allocation is the process of distributing funds from the final AIP pool to
   ----------
   Participants.

 .  Business Unit is an organizational unit (Corporate/Global, LSNA, LSI etc.) to
   -------------
   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.

 .  Funding Source:  the organizational unit(s) used to set and measure financial
   ---------------
   objectives for purposes of determining the size of the final AIP allocation
   pools (e.g. Corporate, LSNA/LSI, Division, Affiliate).

 .  Incentive Pool :  the sum of the Funded Amounts for each Participant within
   ----------------
   the Work Group, determined after the close of the fiscal year,.

 .  Involuntary Discharge is an involuntary termination of employment due to
   ---------------------
   violation of policy, misconduct, unsatisfactory job performance or any other
   reason deemed by the Company to warrant a discharge.

 .  Long-Term Disability is an authorized leave of absence for an extended period
   --------------------
   of time following a short-term disability of five consecutive months due to
   personal illness, injury or disability.

 .  Participant is an employee who meets the participation criteria of the Plan.
   -----------
   Participation criteria is determined on a country-by-country basis.

                                     -11-
<PAGE>

 .  Participation Rate is the percentage used to determine a Participant's
   ------------------
   incentive Target Amount.  A Participation Rate is set for each salary grade
   level.

 .  Performance Factor is the percentage used to describe the degree to which
   ------------------
   actual financial performance has met, exceeded, or fallen short of
   objectives.  The Performance Factor is used to determine the final AIP pool.

 .  Performance Management Process is the program in which performance objectives
   ------------------------------
   are set and measured for individual employees.

 .  Reduction in Force or layoff is an involuntary termination of employment
   ------------------
   which in the opinion of the Committee, results from the lack of appropriate
   work for the Participant and is not for the reasons of unacceptable
   performance or misconduct.

 .  Retirement is a voluntary termination of employment by an employee who meets
   ----------
   the age and service requirement as defined and determined under the pension
   plan applicable to the Participant.

 .  Target Amount is set near the beginning of the fiscal year.  It is calculated
   -------------
   by multiplying the annual base salary by the Participation Rate.

 .  Team Component :  The portion of the AIP funded amount which is automatically
   ----------------
   allocated if the employee receives a YES decision.

 .  Term Employee is an employee hired on a full-time or part-time basis for a
   -------------
   specific period of time only.  Both the starting and ending dates of
   employment are defined at the time of hire.

                                     -12-<PAGE>

                                                                   EXHIBIT 10.31

                             PARTNERS IN PERFORMANCE

                            LONG-TERM INCENTIVE PLAN

                  Levi Strauss Associates Inc. and Subsidiaries

                                  CONFIDENTIAL
                                  ------------
<PAGE>

ABOUT THIS MATERIAL
--------------------------------------------------------------------------------

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>

CONTENTS
--------------------------------------------------------------------------------

                                                                           Page

Long-Term Incentive Plan                                                    1

Appendix One: Performance Units                                             10

Appendix Two: Glossary of Terms                                             13
<PAGE>

LONG-TERM INCENTIVE PLAN
--------------------------------------------------------------------------------

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.

PURPOSE OF PLAN
---------------

 .     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.

EFFECTIVE DATE
--------------

 .     The Plan starts on the first day of the 1995 fiscal year.

PLAN ADMINISTRATION
-------------------

                                      -1-
<PAGE>

 .     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.

ELIGIBILITY
-----------
 .     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.

LONG-TERM INCENTIVE AGREEMENT
-----------------------------
 .     At each incentive grant, an incentive agreement is created for each
      Participant that documents the terms, conditions, and rights as determined
      by the Committee. Terms include

                                      -2-
<PAGE>

      the size of the grant, vesting schedules, timing and form of payments, at-
      will employment, and rights at termination.

TARGET AMOUNTS FOR PARTICIPANTS
-------------------------------
 .     Incentive Target Amounts are set near the beginning of each fiscal year
      for each Participant using the new base salary and participation rate. The
      long-term Target Amount for each Participant is determined by multiplying
      the Participant's annual base salary by a Participation Rate. At year-end
      targets are adjusted to reflect any salary or participation rate changes
      that have occurred during the year. The Participation Rate is based on the
      Participant's salary grade and is expressed as a percent of base salary.

      The participation rates are:

<TABLE>
<CAPTION>
                                                                  LONG-TERM INCENTIVE PARTICIPATION RATE
                                                                            (% OF BASE SALARY)
<S>                                                                                <C>
         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%
</TABLE>

      *  National Account Manager

                                      -3-
<PAGE>

      **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.

                                 SALES EMPLOYEES
                                 ---------------

      .     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.

                                 INCENTIVE POOL
                                 --------------

                                      -4-

<PAGE>

      .     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.

                             INCENTIVE POOL APPROVAL
                             -----------------------

      .     The CEO and COO recommend for Committee approval the Incentive Pool
            after the end of the fiscal year.

                        PARTICIPANT INCENTIVE ALLOCATIONS
                        ---------------------------------

      .     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.

                            TEAM COMPONENT ALLOCATION
                            -------------------------

            --    The team component allocation is 20% of the Participant's
                  long-term incentive Target Amount.

                                      -5-

<PAGE>

                         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.

                                      -6-

<PAGE>

                                 UNFUNDED STATUS
                                 ---------------

      .      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.

                            ACCELERATION OF PAYMENTS
                            ------------------------

      .      The Committee may accelerate the vesting schedule and settle all or
             any individual Participant's long-term performance units.

                                 OTHER BENEFITS
                                 --------------

      .      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).

                           TERMINATION OF EMPLOYMENT:
                           -------------------------

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:

                                      -7-

<PAGE>

      .     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.

                                      -8-
<PAGE>

                             BENEFICIARY DESIGNATION
                             -----------------------

      .     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.

                                NONASSIGNABILITY
                                ----------------

      .     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.

                                EMPLOYMENT RIGHTS
                                -----------------

      .     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.

                 AMENDMENT, MODIFICATION, OR TERMINATION OF 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.

                                      -9-
<PAGE>

                                    ADOPTION
                                    --------

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 ____________________________________________

                                     -10-
<PAGE>

APPENDIX ONE:  PERFORMANCE UNITS
-------------------------------------------------------------------------------

                                    OVERVIEW
                                    --------

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.

                                   GRANT DATE
                                   ----------

 .    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.

                                   GRANT CYCLE
                                   -----------

 .    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 PERIOD
                           --------------------------

 .    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.

                                     -11-
<PAGE>

                               INITIAL GRANT 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 UNIT DOLLAR VALUE
                          -----------------------------

 .    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.

                  FINANCIAL PERFORMANCE MEASURES AND OBJECTIVES
                  ---------------------------------------------

 .    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.)

                                     -12-
<PAGE>

                                FINAL GRANT VALUE
                                -----------------

 .    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
                                     -------

 .    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.

                                    PAYMENTS
                                    --------

 .    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.

                                     -13-
<PAGE>

APPENDIX TWO:  GLOSSARY OF TERMS
-------------------------------------------------------------------------------

 .    Allocation is the process of distributing Final Incentive Amounts from the
     ----------
     Incentive Pool to Participants.

 .    Business Unit: an organizational unit (Corporate/Global, LSNA, LSI etc.)
     -------------
     to 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 total, including both team and
     ----------------------
     individual components, which is converted into a Performance Unit grant for
     a Participant.

 .    Financial Performance Measures are the business objectives set for the
     ------------------------------
     Company purpose of determining unit values. The Committee identifies which
     measures are to be used and establishes the specific objectives to be used
     for each performance cycle.

 .    Grant is the conversion of Final Incentive Amounts into Performance Units.
     -----

 .    Incentive Pool is the sum of the target amounts of the Participants within
     --------------
     a Work Group, determined after the close of the fiscal year.

 .    Involuntary Discharge is an involuntary termination of employment with the
     ---------------------
     Company due to violation of policy, misconduct, unsatisfactory job
     performance or any other reason deemed by the Company to warrant a
     discharge.

 .    Long-Term Disability is an authorized leave of absence for an extended
     --------------------
     period of time following a short-term disability of five consecutive months
     due to personal illness, injury or disability.

 .    Participant is an employee who meets the participation criteria of the
     -----------
     Plan. Participation criteria is determined on a country-by-country basis.

 .    Participation Rate is the percentage used to determine a Participant's
     ------------------
     target amount. A Participation Rate is set for each salary grade level.

                                     -14-
<PAGE>

 .    Performance Management Process is the program in which performance
     ------------------------------
     objectives are set and measured for individual employees.

 .    Performance Unit (Unit) is a non-monetary grant with an initial value of
     -----------------------
     $100, whose value may go up or down over time based on the Company's
     achievement of preset, long-term financial performance objectives.

 .    Reduction in Force or layoff is an involuntary termination of employment
     ------------------
     which in the opinion of the Committee, results from the lack of appropriate
     work for the Participant and is not for the reasons of unacceptable
     performance or misconduct.

 .    Retirement is a voluntary termination of employment by an employee who
     ----------
     meets the age and service requirement as defined and determined under the
     pension plan applicable to the Participant.

 .    Target Amount is set near the beginning of the fiscal year. It is
     -------------
     calculated by multiplying the annual base salary by the Participation Rate.

 .    Team Component: The portion of the LTIP target which is automatically
     --------------
     allocated if the employee receives a YES decision.

 .    Vesting: Owning the right to the value of Long-term Performance Units that
     -------
     were granted. Vesting occurs in thirds on June 1st following the 3rd, 4th
     and 5th anniversaries of the grant date. Upon each June 1st vesting date,
     the participant owns the right to the value of that one third portion of
     the performance units.

                                     -15-
<PAGE>

                             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:

                  TERMINATION OF EMPLOYMENT
                  -------------------------
                  In the case of termination of the employment of an individual
                  who is a Participant in the LTIP by reason of death,
                  retirement, reduction in force and long-term disability,

                  .        The individual shall cease to be a Participant in the
                           LTIP;

                                      -1-
<PAGE>

                  .        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:

                  LEAVES OF ABSENCE AND LAYOFF
                  ----------------------------
                  .        For purposes of the LTIP, 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 long-term
                           disability.

                  .        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

                                      -2-
<PAGE>

                           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:

                   .       LONG-TERM DISABILITY occurs when
                           --------------------
                           -        The Participant is disabled within the
                                    meaning of, and eligible for benefits under,
                                    a long-term disability program maintained by
                                    the Company or a Subsidiary; or

                           -        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:

                   .        REDUCTION IN FORCE or LAYOFF, is an involuntary
                            ------------------    ------
                            termination of employment which in the opinion of
                            the Committee or its delegate results from the lack
                            of appropriate work for the Participant and is not
                            for the reasons of unacceptable performance or
                            misconduct.

         IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the
date set forth below.

-----------------                            -----------------------------------
Date                                         Donna J. Goya

                                      -3-
<PAGE>

                             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:

                         APPENDIX THREE: SPECIAL GRANTS
                         ------------------------------

         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.

                                      -4-
<PAGE>

         AWARD OF SPECIAL GRANTS
         -----------------------
         This Appendix Three does not specifically grant special awards.
         However, special grants may be made by the Global Leadership Team (or
         successor entity) under this Appendix Three to the extent authorized by
         the Committee. Accordingly, the Global Leadership Team shall determine
         the size of such grant, the identity of the recipient of such grant and
         all other terms and conditions of such grant, subject to the terms of
         the relevant Committee authorization.

         APPLICABLE RULES
         ----------------
         Any special grant shall be subject to the general terms of the Plan and
         shall be interpreted consistent with such terms, except to the extent
         otherwise provided in the authorization of a special grant by the
         Committee.

         IN WITNESS WHEREOF, the undersigned has set her hand hereunto as of the
date set forth below.

-----------------                            -----------------------------------
Date                                         Donna J. Goya

                                      -5-

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