Document:

Amendment No. 1 to the Credit Agreement

 Exhibit 10.58(a) 
  
 AMENDMENT NO. 1 TO THE 
 CREDIT AGREEMENT 
  
 AMENDMENT NO. 1 TO THE CREDIT AGREEMENT dated as of August 30, 2004 (this “Amendment”) among LEVI STRAUSS & CO., a Delaware corporation (the “Borrower”), the banks, financial institutions and
other institutional lenders party to the Credit Agreement referred to below (collectively, the “Lenders”) and BANK OF AMERICA, N.A., as administrative agent (the “Administrative Agent”) for the Lenders. 

 
 PRELIMINARY STATEMENTS: 
  
 (1) The Borrower, the Lenders and the Administrative Agent have entered into
a Credit Agreement dated as of September 29, 2003 (the “Credit Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement. 
  
 (2) The Borrower has proposed to sell its Dockers® and Slates® business worldwide (including, without limitation, all or any portion of the
Dockers® and Slates® receivables, inventory and intangible assets (including Dockers® and Slates® IP Rights)) (the “Transaction”) and has requested that the Required
Lenders agree to amend certain covenants contained in Article 7 of the Credit Agreement to permit the Transaction and to amend certain other provisions of the Credit Agreement, including to clarify Section 2.06(b), in each case as provided herein.

  
 (3) The Required Lenders are, on the terms and conditions
stated below, willing to grant the request of the Borrower and the Borrower and the Required Lenders have agreed to amend the Credit Agreement as hereinafter set forth. 
  
 Section 1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the date hereof and subject to
the satisfaction of the conditions precedent set forth in Section 2 of this Amendment, hereby amended as follows: 
  
 (a) Section 1.01 of the Credit Agreement is amended by: 
  
 (i) Adding to the definition of “Class”, immediately at the end thereof, “and, in the case of Loans outstanding on and
after the Amendment No. 1 Effective Date, whether such Loans are Tranche A-l Loans, Tranche A-2 Loans, Tranche B-l Loans or Tranche B-2 Loans.” 
  
 (ii) Deleting the definition of “Consolidated Fixed Charge Coverage Ratio”. 

 (iii) Replacing the definition of “Maturity Date” in its entirety with the
following definition: 
  
 “Maturity
Date” means (i) with respect to the Tranche A-l Loans and Tranche B-l Loans from and after the date (if any) on which the Dockers® Transaction is consummated, September 29, 2009, and (ii) with respect to the Tranche A-l Loans and Tranche B-l Loans so long as the Dockers® Transaction has not been consummated and with respect
to the Tranche A-2 Loans and Tranche B-2 Loans, September 29, 2009, provided that, in the case of this clause (ii), (A) if the 2006 Notes Refinancing Condition has not been met in accordance with the provisions set forth in Section 2.06(b),
the Maturity Date will be August 1, 2006 and (B) if the 2008 Notes Refinancing Condition has not been met in accordance with the provisions set forth in Section 2.06(b), the Maturity Date will be October 15, 2007. 
  
 (iv) Replacing the definition of “Tranche A Loans”
in its entirety with the following definition: 
  
 “Tranche A Loans” means the Tranche A-l Loans and the Tranche A-2 Loans. 
  
 (v) Replacing the definition of “Tranche B Loans” in its entirety with the following definition: 
  
 “Tranche B Loans” means the Tranche B-l
Loans and the Tranche B-2 Loans. 
  
 (vi) Adding
the following definitions, which shall be inserted in correct alphabetical order: 
  
 “Amendment No. 1” means Amendment No. 1 dated as of August 30, 2004 to this Agreement. 
  
 “Amendment No. 1 Effective Date” means the
effective date of Amendment No. 1. 
  
 “Applicable Prepayment Premium” means, with respect to any prepayment of Tranche A-l Loans or Tranche B-l Loans, a prepayment premium equal to: 
  
 (a) so long as the Dockers® Transaction has not been consummated, (i) if such prepayment is made during the period from and including the Amendment
No. 1 Effective Date to and including March 31, 2006, zero (it 
  

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 being understood that any prepayment during such period shall be subject to payment of the applicable
Make- Whole Premium), (ii) if such prepayment is made during the period from and including April 1, 2006 to and including September 30, 2006, an amount equal to 3% of the aggregate principal amount of such Loans prepaid, (iii) if such prepayment is
made during the period from and including October 1, 2006 to and including September 30, 2007, an amount equal to 2% of the aggregate principal amount of such Loans prepaid, and (iv) if such prepayment is made on or after October 1, 2007, zero; and

  
 (b) from and after the date (if any) on
which the Dockers® Transaction is consummated, (i)
if such prepayment is made during the period from and including the Amendment No. 1 Effective Date to and including March 31, 2007, zero (it being understood that any prepayment during such period shall be subject to payment of the applicable
Make-Whole Premium), (ii) if such prepayment is made during the period from and including April 1, 2007 to and including June 30, 2007, an amount equal to 8% of the aggregate principal amount of such Loans prepaid, (iii) if such prepayment is made
during the period from and including July 1, 2007 to and including September 30, 2007, an amount equal to 7% of the aggregate principal amount of such Loans prepaid, (iv) if such prepayment is made during the period from and including October 1,
2007 to and including March 31, 2008, an amount equal to 6% of the aggregate principal amount of such Loans prepaid, (v) if such prepayment is made during the period from and including April 1, 2008 to and including September 30, 2008, an amount
equal to 2% of the aggregate principal amount of such Loans prepaid, and (vi) if such prepayment is made on or after October 1, 2008, zero. 
  
 “Citigroup” means Citigroup Global Markets Inc. 
  
 “Comparable Treasury Issue” means, with respect to any Tranche B Loans to be prepaid, the
United States Treasury security selected by the Administrative Agent as having a maturity date comparable to the Make-Whole Termination Date then applicable to such Tranche B Loans and that would be utilized, at the time of selection and in
accordance with customary financial practice, in evaluating yields on new issues of corporate debt with a maturity date comparable to such Make-Whole Termination Date. 
  

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 “Consolidated Senior Secured Leverage Ratio” means, as of any date of
determination, the ratio of (a) the sum, without duplication, of (i) all Indebtedness of the Borrower and its Subsidiaries on a consolidated basis that would (or would be required to) appear as liabilities on a consolidated balance sheet
(“Balance Sheet Indebtedness”) of the Borrower and its Subsidiaries in accordance with GAAP as of such date and (ii) any Guarantees by the Borrower or any of its Subsidiaries of any Balance Sheet Indebtedness of another Person, in
the case of each of clause (i) and (ii), that is secured by a Lien on any property, assets or revenues of the Borrower or any of its Subsidiaries to (b) Pro Forma Consolidated EBITDA for the four Fiscal Quarters most recently ended for which the
Borrower is required to have delivered financial statements pursuant to Section 6.01 (a) or (b). 
  
 “Dockers® Proceeds” means cash payments (including any cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received by the Borrower or any of its Subsidiaries from the Dockers® Transaction, less (a) transaction costs, fees and expenses payable in connection with the Dockers® Transaction (including any fees paid in connection with any amendments to financing arrangements to give effect
thereto); and (b) income taxes reasonably estimated to be paid in cash as a result of any gain recognized in connection with the Dockers® Transaction. 
  
 “Dockers® Transaction” means the Disposition by the Borrower or any of its Subsidiaries in one or more transactions of all or any part of the
Dockers® and Slates® business worldwide (including, without limitation, the Disposition of all
Dockers® and Slates® receivables, inventory and intangible assets (including Dockers® and Slates® IP Rights) and the entry into and performance of a transition services agreement or
similar agreement). 
  
 “Make-Whole
Period” means, on any date, 
  
 (a) in
the case of the Tranche A-l Loans and the Tranche B-l Loans, (i) so long as the Dockers® Transaction has not been consummated, the period from and including the Amendment No. 1 Effective Date to and 
  

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 including (A) if the 2006 Notes Refinancing Condition has not been met in accordance with the provisions
in Section 2.06(b) on or prior to March 31, 2006, March 31, 2006, and (B) if the 2006 Notes Refinancing Condition has been met in accordance with the provisions in Section 2.06(b) on or prior to March 31, 2006, March 31, 2007 and (ii) from and after
the date (if any) on which the Dockers® Transaction
is consummated, the period from and including the Amendment No. 1 Effective Date to and including March 31, 2007; and 
  
 (b) in the case of the Tranche A-2 Loans and the Tranche B-2 Loans, (i) if at any time on or prior to March 31, 2006 the 2006 Notes
Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has not been met in accordance with Section 2.06(b), the period from and including the Amendment No. 1 Effective Date to and including March 31, 2006, (ii) if at any
time after March 31, 2006 the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has not been met in accordance with Section 2.06(b), the period from and including May 1, 2006 to but excluding the Maturity
Date with respect to the Tranche A-2 Loans and Tranche B-2 Loans and (iii) if at any time the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans has been met in accordance with Section 2.06(b), the period
from and including the date the 2006 Notes Refinancing Condition applicable to the Tranche A-2 Loans and the Tranche B-2 Loans is met in accordance with Section 2.06(b) to and including March 31, 2007. 
  
 For purposes of this definition, the 2006 Notes Refinancing Condition will
be deemed to have been met only upon receipt by the Administrative Agent of written notice from the Borrower of its effectiveness. 
  
 “Make-Whole Termination Date” means, with respect to any Loans on any date, the last day of the Make-Whole Period
applicable to such Loans on such date. 
  
 “Make-Whole Premium” means, with respect to any Loan on any date of prepayment, 
  

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 (x) in the case of a Tranche A Loan, the present value, as determined by the Borrower
and certified by a Responsible Officer of the Borrower to the Administrative Agent, of (A) all required interest payments due on such Tranche A Loan from the date of prepayment through and including the Make-Whole Termination Date applicable to such
Tranche A Loan on the date of prepayment (excluding accrued interest) (assuming that the interest rate applicable to all such interest payments is the sum of the Eurodollar Rate applicable to Tranche A Loans having an Interest Period of three months
commencing on the third Business Day prior to the date of such prepayment (the “Three-Month Eurodollar Rate”) plus 6.875%) plus (B) the Applicable Prepayment Premium (if any) that would be due if such prepayment were made on the day
after such Make-Whole Termination Date, in each case discounted to the date of prepayment on a quarterly basis (assuming a 360-day year and actual days elapsed) at a rate equal to the sum of the Three-Month Eurodollar Rate plus 0.50%, and

  
 (y) in the case of a Tranche B Loan, the
present value, as determined by the Borrower and certified by a Responsible Officer of the Borrower to the Administrative Agent, of (A) all required interest payments due on such Tranche B Loan from the date of prepayment through and including the
Make-Whole Termination Date applicable to such Tranche B Loan on the date of prepayment (excluding accrued interest), plus (B) the Applicable Prepayment Premium (if any) that would be due if such prepayment were made on the day after such Make-Whole
Termination Date, in each case discounted to the date of prepayment on a quarterly basis (assuming a 30-day month and actual days elapsed) at a rate equal to the sum of the Treasury Rate on the date of prepayment plus 0.50%. 
  
 “Net Dockers® Proceeds” means Dockers® Proceeds less an amount of cash as determined by the Borrower in its discretion not in
excess of $100,000,000. 
  
 “Net
Indebtedness” as of any date means the aggregate principal amount of Third Party Indebtedness on such date less the amount of cash and Cash Equivalents of the Borrower and its Subsidiaries on such date. 
  

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 “Pro Forma Consolidated EBITDA” means, for any period (a
“measurement period”), for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated Net Income for such period, plus (b) without duplication, the sum of the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes for such period, (iii) the amount of depreciation and amortization expense
for such period, (iv) all nonoperating expense (excluding nonoperating expense, if any, constituting Restructuring Charges (as defined below) of the Borrower and its Subsidiaries for such period minus all nonoperating income (excluding
nonoperating income, if any, constituting reversals of Restructuring Charges) of the Borrower and its Subsidiaries for such period, (v) all restructuring and restructuring related charges incurred by the Borrower and its Subsidiaries during such
period (“Restructuring Charges”) minus the aggregate amount of cash payments made during such period by the Borrower and its Subsidiaries in respect of Restructuring Charges (other than (x) cash payments made prior to May 31,
2004 in respect of Restructuring Charges and (y) an aggregate of up to $100,000,000 of Restructuring Charges incurred on or after May 31, 2004 to the extent paid in cash and which the Borrower has notified the Administrative Agent that it will
exclude for purposes of Section 7.18 in any Fiscal Quarter) and (vi) any loss and all expenses relating to the Dockers® Transaction for such period, minus (c) without duplication, any gain relating to the Dockers® Transaction for such period to the extent included in calculating such Consolidated Net
Income; provided that (i) from and after the consummation of the Dockers® Transaction, Pro Forma Consolidated EBITDA for any Fiscal Quarter included in such measurement period and ending prior to or immediately after such consummation shall be deemed to be 75% of Pro Forma Consolidated
EBITDA for purposes of any calculation of Pro Forma Consolidated EBITDA and (ii) for purposes of Section 7.19(d), if the Borrower shall have consummated a Merger or an Asset Sale (in each case as defined in Section 7.19) during any measurement
period, Pro Forma Consolidated EBITDA shall be determined on a pro forma basis as if such Merger or Asset Sale had occurred on the first day of such measurement period. 
  
 “Pro Forma Fixed Charges Coverage Ratio” means the “Consolidated Fixed Charges
Coverage Ratio” as defined in that certain U.S. Dollar Indenture dated as of January 18, 2001 between the Borrower and Wilmington Trust Company (as successor to Citibank, N.A.) as trustee. 
  

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 “Third Party Indebtedness” means Indebtedness of the Borrower or any of its Subsidiaries owed to any Person other than the Borrower or any of its Subsidiaries. 
  
 “Tranche A-1 Loans” means the Loans made by the Lenders to the Borrower pursuant to
Section 2.01(a) and with respect to which the Lender holding such Loans on the Amendment No. 1 Effective Date shall have executed Amendment No. 1. 
  
 “Tranche A-2 Loans” means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(a) and with respect to
which the Lender holding such Loans on the Amendment No. 1 Effective Date shall not have executed Amendment No. 1. 
  
 “Tranche B-1 Loans” means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(b) and with respect to
which the Lender holding such Loans on the Amendment No. 1 Effective Date shall have executed Amendment No. 1. 
  
 “Tranche B-2 Loans” means the Loans made by the Lenders to the Borrower pursuant to Section 2.01(b) and with respect to
which the Lender holding such Loans on the Amendment No. 1 Effective Date shall not have executed Amendment No. 1. 
  
 “Treasury Rate” means, with respect to any date of prepayment, a rate per annum equal to the quarterly equivalent yield
to maturity (assuming a 360-day year and actual days elapsed) of the Comparable Treasury Issue. 
  
 (b) Section 2.03 is amended by: 
  
 (i) deleting “without premium or penalty” in the first sentence of clause (a) thereof; 
  
 (ii) inserting “(x) in the case of any prepayment of a
Loan made during a Make-Whole Period, five Business Days prior to any date of prepayment and (y) in the case of any prepayment of a Loan that is not made during a Make-Whole Period,” after “9:00 a.m.” in the proviso at the end of
clause (a) thereof; 
  

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 (iii) replacing, in the second sentence of clause (a), the words “of the other
Class” with “of the other Classes”; 
  
 (iv) adding, immediately at the end of the last sentence of clause (a), “and (x) in the case of any prepayment of a Loan made during a Make-Whole Period, the Make-Whole Premium applicable to such Loan as of the date of such prepayment
and (y) in the case of any prepayment of a Tranche A-1 Loan or a Tranche B-1 Loan (other than any prepayment covered by the preceding clause (x)), the Applicable Prepayment Premium applicable to such Loan as of the date of such prepayment”;

  
 (v) replacing the first sentence of clause
(b) thereof in its entirety with the following sentence: 
  
 “Any voluntary prepayments of the Loans of any Class pursuant to this Section 2.03 shall be applied to prepay ratably the Loans of such Class (on the basis of the aggregate principal amount of Loans of such Class
then outstanding).” 
  
 (vi) replacing
clause (c) thereof in its entirety with “[Intentionally Omitted]”. 
  
 (c) Section 2.04 is amended by: 
  
 (i) adding the words “(other than the IP Collateral included in the Dispositions made in connection with the Dockers® Transaction in accordance with Section 7.05(p))” after the words “IP Collateral” in clause (a) thereof; and 
  
 (ii) replacing each reference to “Prepayment Blockage
Period” in clause (a) thereof and clause (d) thereof with “Make-Whole Period”. 
  
 (d) To clarify the circumstances in which each of the 2006 Notes Refinancing Condition and the 2008 Notes Refinancing Condition may be satisfied, (i) the first sentence of Section 2.06(b) is amended by adding “,
repaid” after the word “refinanced” therein and (ii) the last sentence of Section 2.06(b) is amended by adding “or irrevocably set aside to repay” after the word “repay” therein. 
  

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 (e) Section 2.09 is amended by (i) adding “(a)” at the beginning thereof and (ii) adding at the
end thereof a new clause (b) as follows: 
  
 “(b) (i) If prior to June 30, 2005 the Company publicly announces that it is no longer pursuing a sale of all or any substantial part of the Dockers® business, the Borrower shall, within three Business Days of such announcement, pay each Lender a fee in an amount equal
to 0.50% of the aggregate amount of the Loans of such Lender on the announcement date. (ii) If the Dockers® Transaction has not been consummated on or prior to June 30, 2005, the Borrower shall, on such date, pay each Lender a fee in an amount equal to (x) if the Company has paid a fee
pursuant to clause (b)(i) above, 0.50% or (y) otherwise, 1.00%, in each case of the aggregate amount of the Loans of such Lender on such date.” 
  
 (f) Article 6 is amended by adding at the end thereof a new Section 6.15 as follows: 
  
 “Section 6.15. Dockers® Proceeds, (a) The Borrower shall apply an amount equal to the Net Dockers® Proceeds to prepay, purchase, repay, redeem, repurchase or otherwise satisfy Third
Party Indebtedness, including without limitation as contemplated by Section 6.15(b).” 
  
 “(b) In the event that the Borrower irrevocably sets aside funds to repay the 2006 Notes or the 2008 Notes, as applicable, as
provided in Section 2.06(b), the Borrower shall thereafter apply such amount or amounts to such purchase, repurchase, redemption, repayment, prepayment or other satisfaction on or prior to the respective maturity date of some or all of the 2006
Notes and the 2008 Notes.” 
  
 “(c)
Until such time as any Net Dockers® Proceeds are
applied to prepay, purchase, repay, redeem, repurchase or otherwise satisfy Third Party Indebtedness pursuant to Section 6.15(a), the Net Dockers® Proceeds shall be either (i) held in cash collateral accounts that are subject to valid, perfected Liens of the Administrative Agent on behalf of the
Lenders, subject to no other Liens other than a Lien securing the ABL Credit Agreement, or (ii) irrevocably set aside to repay the 2006 Notes or the 2008 Notes, as applicable, as provided in and in accordance with Section 2.06(b).” 

 

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 (g) Section 7.01 of the Credit Agreement is amended by (i) deleting the word “and” at the end
of clause (t) thereof; (ii) deleting the period at the end of clause (u) thereof and substituting “; and” therefor and (iii) adding the following as new Section 7.01(v): 
  
 “(v) Liens on property of the Borrower or any Subsidiary at the time the Borrower acquired the property (or such
Subsidiary) by means of a merger, consolidation, amalgamation or other transaction permitted by Section 7.19; provided, however, that such Lien may not extend to any other property of the Borrower or such Subsidiary; provided, further,
however, that such Liens shall not have been incurred in anticipation of or in connection with any such merger, consolidation, amalgamation or other transaction.” 
  
 (h) Section 7.02 of the Credit Agreement is amended as follows: 
  
 (i) by adding at the end of subsection (f) thereof the
following: 
  
 “and extensions of credit to the purchaser or
purchasers of the Dockers® business in connection
with the Dockers® Transaction (i) that remain
outstanding for a period not to exceed 60 days from the closing date of the Dockers® Transaction or (ii) relating to the performance of any transition services agreement or similar agreement entered into with such purchaser or purchasers.” 
  
 (ii) by adding at the end of subsection (m) thereof before
the semicolon the following: 
  
 “or Section
7.05(p)” 
  
 (iii) by (A) deleting the word
“and” at the end of clause (r) thereof; (B) deleting the period at the end of clause (s) thereof and substituting “; and” therefor and (C) adding the following as new Section 7.02(t): 
  
 “(t) Investments held by the Borrower or any Subsidiary acquired as a
result of a merger, consolidation, amalgamation or other transaction permitted by Section 7.19; provided, however, that such Investments shall not have been acquired in anticipation of or in connection with such merger, consolidation,
amalgamation or other transaction.” 
  
 (i) Section 7.03(c)
of the Credit Agreement is amended by: 
  
 (i)
adding the following at the end of subsection (ii) thereof: 
  
 “provided that from and after the 60th day after the consummation (if any) of the Dockers® Transaction, the aggregate principal amount of
Indebtedness under the ABL Credit Agreement and all other Indebtedness secured by substantially the same types of assets securing the ABL Credit Agreement (excluding obligations 
  

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 arising under or in connection with Cash Management Services and Ordinary Course Swap Contracts permitted
to be secured by such assets under Section 7.01 (b)) shall not exceed the greater of (1) $450,000,000 and (2) 20% of the consolidated net sales in the United States of the Borrower and its Domestic Subsidiaries for the prior twelve-month period
(determined in the case of each such period during the first twelve months after consummation of the Dockers® Transaction on a pro forma basis after giving effect to the Dockers® Transaction as if the Dockers® Transaction had been consummated on the first day of such period);” 
  
 (ii) deleting the word “and” in subsection (xiv) thereof; 
  
 (iii) deleting the period at the end of subsection (xv)
thereof; and 
  
 (iv) adding the following as new
Sections 7.03(c)(xvi) and 7.03(c)(xvii): 
  
 “(xvi) Indebtedness of the Person or any Subsidiary thereof outstanding at the time of the merger, consolidation, amalgamation or other transaction permitted by Section 7.19 (and any refinancing thereof); provided, however, that
such Indebtedness shall not have been incurred in anticipation of or in connection with such merger, consolidation, amalgamation or other transaction; and” 
  
 “(xvii) Indebtedness of the Borrower or any its Subsidiaries owed to the Borrower or any of its
Subsidiaries (“Intercompany Indebtedness”) arising from the repurchase, refinancing, assumption or other extinguishment of other Intercompany Indebtedness in connection with the Dockers® Transaction.” 
  
 (j) Section 7.04 of the Credit Agreement is amended as follows: 
  
 (i) by (A) deleting the words “or (i)” at the end
of subsection (e) thereof; and (B) replacing those words with the following: 
  
 “, (i) or (p); and” 
  
 (ii) by (A) deleting the word “and” at the end of clause (c) thereof; and (B) adding the following as new Section 7.04(f): 
  
 “(f) the Borrower may merge, consolidate, amalgamate or Dispose of all or substantially all of its
Assets in a transaction permitted pursuant to Section 7.19.” 
  

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 (k) Section 7.05 of the Credit Agreement is amended by (i) deleting the word “and” at the end
of clause (n) thereof; (ii) deleting the period at the end of clause (o) thereof and (iii) adding the following as new Sections 7.05(p) and (q): 
  
 “(p) Dispositions in connection with the Dockers® Transaction, provided that (i) the Dockers® Transaction shall be consummated (if at all) on or prior to June 30, 2005, (ii) the Dockers® Proceeds shall not be less than 30% of Net Indebtedness on the date of consummation of
the Dockers® Transaction, (iii) the Dockers® Transaction shall be permitted under the ABL Credit
Agreement, (iv) the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer of the Borrower (A) setting forth calculations of the amounts of Dockers® Proceeds and Net Indebtedness and (B) certifying that the Dockers® Transaction is permitted under the ABL Credit
Agreement, and (v) immediately after giving pro forma effect to the Dockers® Transaction, no Default shall have occurred and be continuing; and” 
  
 “(q) Dispositions in connection with a merger, consolidation, amalgamation or other transaction permitted pursuant to Section 7.19.” 

 
 (1) The first sentence in the last paragraph in Section 7.05 of the Credit
Agreement is amended by (i) deleting the words “and (k)” at the end thereof and (ii) replacing those words with the following “, (k), (p) or (q).” 
  
 (m) Section 7.11 of the Credit Agreement is amended by adding at the end thereof: 
  
 “, and, in each case, leases on property of the Borrower or any
Subsidiary at the time the Borrower acquired the property (or such Subsidiary) by reason of a merger, consolidation, amalgamation or other transaction permitted pursuant to Section 7.19 (and any renewal thereof)” 
  
 (n) Section 7.13 of the Credit Agreement is amended by adding at the end of
the first sentence thereof: 
  
 “other than as a result of a
merger, consolidation, amalgamation or other transaction permitted pursuant to Section 7.19” 
  

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 (o) Section 7.14 of the Credit Agreement is amended by deleting subsection (c) thereof in its entirety
and replacing it with the following: 
  
 “(c) the
prepayment, redemption, purchase, repurchase or other satisfaction of (i) the 2006 Notes and the 2008 Notes prior to the scheduled maturity thereof in accordance with Section 2.06 and (ii) any Third Party Indebtedness (including without limitation
the 2006 Notes and the 2008 Notes) prior to the scheduled maturity thereof with all or any part of the Net Dockers® Proceeds or the Net Cash Proceeds of Dispositions of other assets other than in the ordinary course of business,” 
  
 (p) Section 7.15 of the Credit Agreement is amended by (i) deleting the word
“and” at the end of clause (f) thereof; (ii) deleting the period at the end of clause (g) thereof and substituting “; and” therefor and (iii) adding the following as new Section 7.15(h): 
  
 “(h) negative pledges with respect to any property of the Borrower or
any Subsidiary at the time the Borrower acquired the property (or such Subsidiary) by means of a merger, consolidation, amalgamation or other transaction permitted by Section 7.19; provided, however, that any such negative pledge may not
extend to any other property of the Borrower or such Subsidiary; provided, further, however, that such negative pledge shall not have been incurred in anticipation of or in connection with any such merger, consolidation, amalgamation or other
transaction.” 
  
 (q) Section 7.18 of the Credit Agreement is
deleted and replaced with the following: 
  
 “Section 7.18.
Financial Covenant. The Borrower shall not, directly or indirectly, permit the Consolidated Senior Secured Leverage Ratio as of the end of any Fiscal Quarter of the Borrower set forth below to be greater than the ratio set forth below
opposite such period: 
  

				
	 Fiscal Quarter

	  	Ratio

	 
	 Each Fiscal Quarter ending in or prior to August 2005
	  	3.50 to 1.00	 
	 Each Fiscal Quarter ending after August 2005 and in or prior to February 2007
	  	3.00 to 1.00	 
	 Each Fiscal Quarter ending after February 2007
	  	2.75 to 1.00	”

  

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 (r) Article 7 is amended by adding at the end thereof a new Section 7.19 as follows: 
  
 7.19 Merger or Transfer of Assets. The Borrower shall not merge,
consolidate or amalgamate (any such transaction, a “Merger”) with or into any other Person (other than a merger, consolidation or amalgamation permitted by Section 7.04(a) through (e)) or Dispose of all or substantially all its
assets in any one transaction or series of transactions (an “Asset Sale”) unless: 
  
 (a) the Borrower shall be the surviving Person (the “Surviving Person”) or the Surviving Person (if other than the
Borrower) formed by the Merger or to which that Asset Sale is made shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia; 
  
 (b) the Surviving Person (if other than the Borrower)
expressly assumes, by supplemental agreement in form satisfactory to the Administrative Agent, executed and delivered to the Administrative Agent by that Surviving Person, the due and punctual payment of the principal of and premium (if any) and
interest on the Loans, and all other Obligations hereunder, and the due and punctual performance and observance of all the covenants and conditions of this Agreement to be performed by the Borrower; 
  
 (c) in the case of an Asset Sale, the Assets subject to such
Asset Sale shall have been transferred as an entirety or virtually as an entirety to one Person; 
  
 (d) immediately before and after giving effect to the Merger or Asset Sale on a pro forma basis (and treating, for purposes of this clause
(d) and clause (e) below, any Indebtedness that becomes, or is anticipated to become, an obligation of the Surviving Person or any Subsidiary as a result of such Merger or Asset Sale as having been incurred by the Surviving Person or such Subsidiary
at the time of that transaction), no Default or Event of Default shall have occurred and be continuing; 
  
 (e) immediately after giving effect to the Merger or Asset Sale on a pro forma basis, the Pro Forma Fixed Charges Coverage Ratio would be
greater than (x) if any of the 2008 Notes will be outstanding after giving effect to the Merger or Asset Sale, 
  

 15 

 2.5 to 1.0 and (y) otherwise, 2.0 to 1.0, provided, however, that this clause (e) shall not be
applicable to the Borrower merging, consolidating or amalgamating with or into an Affiliate incorporated solely for the purpose of reincorporating the Borrower in another State of the United States so long as the amount of Indebtedness of the
Borrower and its Subsidiaries is not increased thereby; 
  
 (f) the security interest of the Administrative Agent (for the benefit of the Lenders) in the Collateral under the Collateral Documents shall not be adversely affected by the Merger or Asset Sale and the priority of
the respective Liens created thereunder will be maintained after giving effect to such Merger or Asset Sale and the Borrower, each other Loan Party party to the respective Collateral Documents and the Administrative Agent shall have entered into
amendments to the Collateral Documents giving effect thereto; 
  
 (g) the Borrower shall deliver, or cause to be delivered, to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, an officers’ certificate signed by a Responsible
Officer of the Borrower and an opinion of counsel reasonably acceptable to the Administrative Agent, each stating that the Merger or Asset Sale and the supplemental agreement, if any, in respect thereto comply with this Section 7.19 and that all
conditions precedent herein provided for relating to such Merger or Asset Sale have been satisfied; and 
  
 (h) the Borrower shall have delivered to the Administrative Agent a written opinion of legal counsel acceptable to the Administrative
Agent to the effect that the Lenders will not recognize income, gain or loss for federal income tax purposes as a result of the Merger or Asset Sale and will be subject to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if that Merger or Asset Sale had not occurred. 
  
 The Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of the Borrower under this
Agreement, but the predecessor Borrower in the case of (x) a sale, transfer, assignment, conveyance or other disposition (unless that sale, transfer, assignment, conveyance or other disposition is of all the assets of the Borrower as an entirety or
virtually as an entirety) or (y) a lease, shall not be released from any obligation to pay the principal of, premium (if any) and interest on the Loans. 
  

 16 

 (s) Section 9.11 of the Credit Agreement is amended by adding at the end thereof: 
  
 “The Administrative Agent is authorized and empowered (i) to execute
and deliver any documents or to take any other action that in its reasonable discretion is necessary or desirable to effect or evidence the release of any Liens pursuant to the Loan Documents on any assets that are Disposed of pursuant to Section
7.05(p) and (ii) to enter into all amendments necessary to the Collateral Documents as contemplated by Section 7.19(f).” 
  
 (t) Section 9.12 of the Credit Agreement is amended by adding “or any arranger of any amendment” after “or ‘sole lead
manager,’” in the first sentence thereof. 
  
 (u)
Section 10.05 of the Credit Agreement is amended by adding “, Citigroup” after “each Lender” in the third line thereof. 
  
 (v) Exhibit C to the Credit Agreement is amended to read in full as set forth in Exhibit A hereto. 
  
 (w) Exhibit D to the Credit Agreement is amended to read in full as set forth
in Exhibit B hereto. 
  
 Section 2. Conditions of
Effectiveness. This Amendment shall become effective as of the date hereof when, and only when (a) the Administrative Agent shall have received (i) counterparts of this Amendment executed by the Borrower, the Administrative Agent and the
Required Lenders or, as to any of the Lenders, advice satisfactory to the Administrative Agent that such Lender has executed this Amendment, (ii) favorable opinions of Shearman & Sterling LLP, special counsel to the Loan Parties, and Albert F.
Moreno, Esq., Senior Vice President and General Counsel of the Borrower, each in form and substance reasonably satisfactory to the Administrative Agent and addressed to the Administrative Agent and each Lender and (iii) a certificate signed by a
Responsible Officer of the Borrower certifying that (A) the representations and warranties of the Borrower contained in this Amendment are true and correct on and as of the effective date of this Amendment and (B) after giving effect to this
Amendment, no Default shall have occurred and be continuing as of such date, and (b) the Borrower shall have paid to the Administrative Agent for the account of each Lender that executed and delivered this Amendment on or before August 27, 2004 to
the Administrative Agent a non-refundable fee equal to 0.50% of the outstanding principal amount of the Loans of such Lender as of such date, and the Administrative Agent shall distribute to such Lender its respective fee no later than two Business
Days immediately succeeding the date of receipt thereof by the Administrative Agent. 
  

 17 

 This Amendment is subject to the provisions of Section 10.01 of the Credit Agreement. 
  
 Section 3. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows: 
  
 (a) The Borrower
is a corporation duly organized, validly existing and in good standing under the laws of Delaware. 
  
 (b) The execution, delivery and performance by the Borrower of this Amendment are within the Borrower’s corporate powers, have been duly authorized
by all necessary corporate action and do not (i) contravene the Borrower’s Organization Documents, (ii) violate any Law, or any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower is
subject, (iii) conflict with or result in the breach of, or constitute a default under, any Contractual Obligation of the Borrower or (iv) result in or require the creation or imposition of any Lien upon or with respect to any of the properties of
the Borrower. 
  
 (c) No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery or performance by the Borrower of this Amendment. 
  
 (d) This Amendment has been duly executed and delivered by the Borrower. This Amendment and the Credit Agreement, as amended hereby, are legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles. 
  
 (e) The net sales of the Borrower and its Subsidiaries for the Fiscal Year ended in November 2003 and for the two Fiscal Quarters ended in May 2004, in each case attributable to the Dockers® business worldwide (including Slates®), constituted 24% and 21%, respectively, of the net sales of the Borrower and its
Subsidiaries on a consolidated basis for such periods. 
  
 Section
4. Reference to and Effect on the Credit Agreement. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by this Amendment. 
  
 (b) The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing, the 
  

 18 

 Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all
Obligations of the Loan Parties under the Loan Documents, in each case as amended by this Amendment. 
  
 (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. 
  
 Section 5. Expenses. The Borrower agrees to pay on demand all reasonable costs and expenses of the Administrative Agent and Citigroup in connection
with the preparation, execution, delivery and administration, modification and amendment of this Amendment (including the reasonable fees and expenses of counsel for the Administrative Agent and Citigroup) in accordance with the terms of Section
10.04 of the Credit Agreement. 
  
 Section 6. Execution in
Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment. 
  
 Section 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York. 
  

 19 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective
officers thereunto duly authorized, as of the date first above written. 
  

			
	LEVI STRAUSS & CO.
		
	By:	 	 /s/ James P. Fogarty

	Name:	 	James P. Fogarty
	Title:	 	Chief Financial Officer
	
	 BANK OF AMERICA, N.A.,
 as Administrative
Agent

		
	By:	 	 /s/ Kathleen M. Carry

	Name:	 	Kathleen M. Carry
	Title:	 	Vice President

  

 20 

 SIGNATURE PAGE TO AMENDMENT NO. 1 TO CREDIT AGREEMENT 
  

			
	[ENTER LENDER NAME]
		
	By:	 	  

	Name:	 	 
	Title:	 	 

 Exhibit A to Amendment No. 1 
 (Exhibit C to Credit Agreement) 
  
 FORM OF COMPLIANCE CERTIFICATE 
  
 Financial Statement Date:             , 
  
 To: Bank of America, N.A., as Administrative Agent 
  
 Ladies and Gentlemen: 
  
 Reference is made to that certain Credit Agreement dated as of September 29, 2003 by and among Levi Strauss & Co., a Delaware corporation (the
“Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent for the Lenders (said Credit Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined).

  
 The undersigned Responsible Officer hereby certifies as of the
date hereof that he/she is the [             ] of the Borrower, and delivers this Certificate solely in his/her capacity as such, and that: 
  

	•	Attached hereto as Schedule 1 are the [year-end audited] [unaudited] financial statements required by Section 6.01[(a)][(b)] of the Credit Agreement for the Fiscal
[Year] [Quarter] of the Borrower ended as of the above date, [together with the report and opinion of an independent certified public accountant required by such section.] [Such financial statements fairly present the financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes]1. 

  

	•	I have made, or caused to be made under my supervision, an appropriate review of the transactions and condition of the Borrower and its Subsidiaries during the fiscal period covered
by the attached financial statements, which was sufficient to enable me to give this Certificate. This review did not disclose, and I do not know of, the existence of any Default or Event of 

	1	This representation is to be given when unaudited financial statements are delivered under Section 6.01(b) of the Credit Agreement. 

 Default as of the date of this Certificate [except as set forth below]2. [The following is a list of each Default or Event of Default and its nature and status:]2 
  

	•	Schedule 2 attached hereto sets forth the compliance with the financial limitations and covenants in Sections 7.01, 7.02, 7.03, 7.05 and 7.18 of the Credit Agreement.

  
 IN WITNESS WHEREOF, the
undersigned has executed this Certificate as of             ,         . 
  

			
	LEVI STRAUSS & CO.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	2	Delete if inapplicable and, if applicable, describe with particularity the provisions of the Credit Agreement or other Loan Documents breached and what action the
Borrower has taken and proposes to take with respect thereto. 

  

 2 

 Schedule 2 to the Compliance Certificate 
  
 All numbers shown below are as of or for the period ending
[            ], 200[    ]. 
  

						
	A.	  	 Liens (Section 7.01)
	  	 	 
			
	1.	  	 Liens on property of Foreign Subsidiaries or foreign branches:
	  	$	                    
			
	2.	  	 Maximum aggregate principal amount of Indebtedness permitted to be secured by Section 7.01(t):
	  	$	15,000,000
			
	3.	  	 Other Liens:
	  	$	                    
			
	4.	  	 Maximum aggregate principal amount of Indebtedness permitted to be secured by Section 7.01(u):
	  	$	75,000,000
			
	B.	  	 Investments (Section 7.02)
	  	 	 
			
	1.	  	 Other Investments:
	  	$	                    
			
	2.	  	 Maximum aggregate amount of such Investments permitted by Section 7.02(p):
	  	$	35,000,000
			
	C.	  	 Investments/Indebtedness/Dispositions (Sections 7.02, 7.03 and 7.05)
	  	 	 
			
	1.	  	Investments by the Borrower in its Subsidiaries and Investments by its Subsidiaries in the Borrower or in other Subsidiaries made after the Closing Date (Section 7.02(1)):	  	$	                    
			
	2.	  	Indebtedness of the Borrower to any of its Subsidiaries (other than LSFCC) and Indebtedness of any of its Subsidiaries (other than LSFCC) to the Borrower or any of its other Subsidiaries made
after the Closing Date (Section 7.03(c)(xi)):	  	$	                    
			
	3.	  	Dispositions by the Borrower to any of its Subsidiaries of property other than accounts receivable and inventory and Dispositions by any of its Subsidiaries to the Borrower or any of its
other Subsidiaries of property other than accounts receivable and inventory made after the Closing Date (Section 7.05(i)):	  	$	                    
			
	4.	  	Aggregate of such Investments, Indebtedness and Dispositions (C.1 + C.2 + C.3):	  	$	                    
			
	 	  	 a. Net cash transfer of C.4 from Loan Parties to non-Guarantors:
	  	$	                    

  

 3 

						
			
	 5.
	  	Maximum aggregate amount of such Investments, Indebtedness and Dispositions permitted by Sections 7.02(1), 7.03(c)(xi) and 7.05(i):	  	$	                    3
			
	 	  	a. Maximum net cash transfer in any Fiscal Year:	  	$	25,000,000
			
	 6.
	  	Investments in Subsidiaries of the Borrower that are not Solvent immediately prior to the making of such Investments:	  	$	                    
			
	 7.
	  	Maximum aggregate amount of such Investments permitted by Section 7.02(1) in any Fiscal Year:	  	$	10,000,000
			
	 D.
	  	 Indebtedness (Section 7.03)
	  	 	 
			
	 1.
	  	 Aggregate principal amount of Indebtedness secured by Liens permitted by Section 7.01(i):
	  	$	                    
			
	 2.
	  	 Maximum aggregate principal amount of such Indebtedness permitted by Section 7.03(c)(iii):
	  	$	100,000,000
			
	 3.
	  	Aggregate Swap Termination Value of all Ordinary Course Swap Contracts of the Borrower, LSIFCS, and each Material Domestic Subsidiary with third parties under which a payment is due on
termination thereof:	  	$	                    
			
	 4.
	  	Maximum aggregate Swap Termination Value of such Ordinary Course Swap Contracts permitted by Section 7.03(c)(iv):	  	$	75,000,000
			
	 5.
	  	Aggregate amount of Indebtedness in respect of the Borrower’s Cash Management Services:	  	$	                    
			
	 6.
	  	 Aggregate amount of such Indebtedness permitted by Section 7.03(c)(x)(B):
	  	$	160,000,000

	3	$50,000,000 during Fiscal Year 2003, and $100,000,000 in the aggregate during Fiscal Years 2003 and 2004 taken as a single period, or $150,000,000 in the aggregate
during Fiscal Years 2003, 2004 and 2005 taken as a single period, or $200,000,000 in the aggregate during Fiscal Years 2003, 2004, 2005 and 2006 taken as a single period, or $225,000,000 in the aggregate during Fiscal Years 2003, 2004, 2005, 2006
and 2007 taken as a single period, or $250,000,000 in the aggregate during Fiscal Years 2003, 2004, 2005, 2006, 2007 and 2008 taken as a single period, or $275,000,000 in the aggregate during Fiscal Years 2003, 2004, 2005, 2006, 2007, 2008 and 2009
taken as a single period. 

  

 4 

						
			
	 7.
	  	 Other Indebtedness of the Borrower and its Subsidiaries:
	  	$	                    
			
	 8.
	  	 Aggregate principal amount of such Indebtedness permitted by Section 7.03(c)(xv):
	  	$	150,000,000
			
	 E.
	  	 Dispositions (Section 7.05)
	  	 	 
			
	 1.
	  	Face amount of accounts receivable disposed of to collection agencies:	  	$	                    
			
	 2.
	  	Maximum aggregate face amount of such accounts receivable permitted to be disposed of by Section 7.05(c):	  	$	5,000,000
			
	 3.
	  	Non-cash consideration received for all other dispositions of property other than accounts receivable or inventory:	  	$	                    
			
	 4.
	  	Maximum aggregate non-cash consideration permitted by Section 7.05(j):	  	$	30,000,000
			
	 5.
	  	Fair market value of all other property disposed of other than accounts receivable or inventory:	  	$	                    
			
	 6.
	  	Maximum aggregate fair market value of property disposed of permitted by Section 7.05(j) in any Fiscal Year:	  	$	50,000,000
			
	 F.
	  	 Foreign Receivables Transactions
	  	 	 
			
	 1.
	  	Aggregate amount of Foreign Receivables transactions:	  	$	                    
			
	 2.
	  	Maximum aggregate amount of Permitted Foreign Receivables Transactions (pursuant to the definition thereof):	  	$	35,000,000
			
	 G.
	  	 Consolidated Senior Secured Leverage Ratio (Section 7.18)
	  	 	 
			
	 1.
	  	The sum, without duplication, of (i) Balance Sheet Indebtedness of the Borrower and its Subsidiaries and (ii) Guarantees by the Borrower or any of its Subsidiaries of any Balance Sheet
Indebtedness of another Person, in each case as of any date of determination and that is secured by a Lien on any property, assets or revenues of the Borrower or any of its Subsidiaries:	  	$	                    

  

 5 

								
			
	 2.
	  	Calculation of Pro Forma Consolidated EBITDA for the four Fiscal Quarters most recently ended for which the Borrower is required to have delivered financial statements by
Section 6.01(a) or (b) (the “Measurement Period”): 	  	 	 
			
	 	  	(a) Consolidated Net Income for the Measurement Period:	  	$	                    
			
	 	  	(b) The sum of the following, to the extent deducted in determining such Consolidated Net Income:	  	 	 
				
	 	  	 	  	(i) Consolidated Interest Charges for the Measurement Period:	  	$	                    
				
	 	  	 	  	(ii) The provision for federal, state, local and foreign income taxes for the Measurement Period:	  	$	                    
				
	 	  	 	  	(iii) The amount of depreciation and amortization expense:	  	$	                    
				
	 	  	 	  	(iv) All nonoperating expense of the Borrower and its Subsidiaries (excluding nonoperating expense, if any, constituting Restructuring Charges) minus all nonoperating income (excluding
nonoperating income, if any, constituting reversals of Restructuring Charges) of the Borrower and its Subsidiaries for the Measurement Period:	  	$	                    
				
	 	  	 	  	(v) All Restructuring Charges incurred by the Borrower and its Subsidiaries during the Measurement Period, minus the aggregate amount of cash payments made during such period by the
Borrower and its Subsidiaries in respect of Restructuring charges (other than (x) cash payments made prior to May 31, 2004 in respect of Restructuring Charges and (y) an aggregate of up to $100,000,000 of Restructuring Charges incurred on or after
May 31, 2004 to the extent paid in cash and which the Company has notified the Administrative Agent that it will exclude for purposes of Section 7.18 of the Credit Agreement in any Fiscal Quarter):	  	$	                    
				
	 	  	 	  	(vi) Any loss and all expenses relating to the Dockers® Transaction for the Measurement Period:	  	$	                    
				
	 	  	 	  	Sum of items 2(b)(i) through (vi):	  	$	                    

  

 6 

						
			
	 	  	(c) Any gain relating to the Dockers® Transaction for the Measurement Period, to the extent included in calculating such Consolidated Net Income:4	  	$	                    
			
	 	  	Pro Forma Consolidated EBITDA [2(a) + 2(b) - 2(c)]	  	$	                    
			
	 3.
	  	Consolidated Senior Secured Leverage Ratio [1 ÷ 2]:	  	 	         to 1.00
			
	 4.
	  	Maximum permitted Consolidated Senior Secured Leverage Ratio:	  	 	[3.50] [3.00] [2.75] to 1.00

	4	(i) From and after the consummation of the Dockers® Transaction, Pro Forma Consolidated EBITDA for any Fiscal Quarter included in the Measurement Period and ending prior to or immediately after such
consummation shall be deemed to be 75% of Pro Forma Consolidated EBITDA for purposes of any calculation of Pro Forma Consolidated EBITDA and (ii) for purposes of Section 7.19(d), if the Company shall have consummated a Merger or an Asset Sale (in
each case as defined in Section 7.19) during the Measurement Period, Pro Forma Consolidated EBITDA shall be determined on a pro forma basis as if such Merger or Asset Sale had occurred on the first day of the Measurement Period.

  

 7 

 Exhibit B to Amendment No. 1 
 (Exhibit D to Credit Agreement) 
  
 ASSIGNMENT AND ASSUMPTION 
  
 This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit
Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full. 
  
 For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes
from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any
Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 

					
			
	 1.
	  	Assignor:
                                        
            	  	 
			
	 2.
	  	Assignee:
                                        
                     [and is an Affiliate/ Approved Fund of [identify Lender]5]	  	 
			
	 3.
	  	Borrower: Levi Strauss & Co., a Delaware corporation	  	 
			
	 4.
	  	Administrative Agent: Bank of America, N.A., as administrative agent under the Credit Agreement	  	 
			
	 5.
	  	Credit Agreement: That certain Credit Agreement dated as of September 29, 2003 by and among Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative
Agent for the Lenders, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time.	  	 
			
	 6.
	  	Assigned Interest:	  	 

  

									
	 Facility Assigned

	  	 Aggregate
Amount of
Loans
 for all Lenders

	  	 Amount
 of Loans
 Assigned

	  	 Percentage
Assigned
 of Loans6

	 Tranche A-l Loan
	  	$	                    	  	$	                    	  	                     %
	 Tranche A-2 Loan
	  	$	                    	  	$	                    	  	                     %
	 Tranche B-l Loan
	  	$	                    	  	$	                    	  	                     %
	 Tranche B-2 Loan
	  	$	                    	  	$	                    	  	                     %

  

					
	 [7.
	  	 Trade Date:
                                 ]7
	  	 

  
 Effective Date:
                                 , 20     [TO BE
INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.] 
 The terms set forth in
this Assignment and Assumption are hereby agreed to: 

	5	Select as applicable. 

	6	Set forth, to at least 9 decimals, as a percentage of the Loans of all Lenders thereunder. 

	7	To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. 

  

 2 

			
	 ASSIGNOR

	 [NAME OF ASSIGNOR]

		
	 By:
	 	  

	 Title:
	 	 
	
	 ASSIGNEE

	 [NAME OF ASSIGNEE]

		
	 By:
	 	  

	 Title:
	 	 

  
 [Consented to and]8 Accepted: 
  

			
	BANK OF AMERICA, N.A., as
	    Administrative Agent
		
	By:	 	  

	Title:	 	 
	  
 [Consented to:]9
  

	LEVI STRAUSS & CO.
		
	By:	 	  

	Title:	 	 

	8	To be added only if the consent of the Administrative Agent is required by the terms of the
Credit Agreement. 

	9	To be added only if the consent of the Borrower is required by the terms of the Credit
Agreement. 

  

 3 

 ANNEX 1 TO ASSIGNMENT AND ASSUMPTION 
  
 STANDARD TERMS AND CONDITIONS FOR 
 ASSIGNMENT AND ASSUMPTION 
  
 1.
Representations and Warranties. 
  
 1.1. Assignor. The
Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and
has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in
or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document. 
  
 1.2. Assignee. The
Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender
under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such approvals as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached hereto is
any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in 
  

 4 

 taking or not taking action under the Loan Documents, (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a Lender and (iii) from and after the Effective Date, it shall be bound by the provisions of the Intercreditor Agreement. 
  
 2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to or on or after the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 
  
 3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. Terms defined in the Assignment and Assumption to which this Annex 1
is attached and not otherwise defined herein are used herein as therein defined. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York. 
  

 52001 Stock Plan

 Exhibit 10.1 
  
 MICROSOFT CORPORATION 
  
 2001 STOCK PLAN 
 (as amended and restated
August 24, 2004)* 
  
 1. Purpose of the Plan. The purposes
of this Stock Plan are to attract and retain the best available individuals for positions of substantial responsibility, to provide additional incentive to such individuals, and to promote the success of the Company’s business by aligning the
financial interests of Employees and Consultants providing personal services to the Company or to any Parent or Subsidiary of the Company with long-term shareholder value. 
  
 Awards granted hereunder may be Incentive Stock Options, Nonqualified Stock Options, Stock Awards, or SARs, at the
discretion of the Board and as reflected in the terms of the Award Agreement. 
  
 2. Definitions. As used herein, the following definitions shall apply: 
  
 (a) “Award” shall mean any award or benefits granted under the Plan, including Options, Stock Awards, and SARs. 
  
 (b) “Award Agreement” shall mean a written or electronic
agreement between the Company and the Awardee setting forth the terms of the Award. 
  
 (c) “Awardee” shall mean the holder of an outstanding Award. 
  
 (d) “Board” shall mean (i) the Board of Directors of the Company or (ii) both the Board and the Committee, if a Committee has been
appointed in accordance with Section 4(a) of the Plan. 
  
 (e)
“Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (f) “Committee” shall mean the Compensation Committee appointed by the Board of Directors in accordance with Section 4(a) of the Plan, if one is appointed; provided, however, if the Board of Directors
appoints more than one Committee pursuant to Section 4(a), then “Committee” shall refer to the appropriate Committee, as indicated by the context of the reference. 
  
 (g) “Common Shares” shall mean the common shares of Microsoft Corporation. 
  
 (h) “Company” shall mean Microsoft Corporation, a Washington
corporation and any successor thereto. 
  
 (i)
“Consultant” shall mean any person, except an Employee, engaged by the Company or any Parent or Subsidiary of the Company, to render personal services to such entity, including as an advisor. 

 (j) “Continuous Status as a Participant” shall mean (1) for Employees, the absence of
any interruption or termination of service as an Employee, and (2) for Consultants, the absence of any interruption, expiration, or termination of such person’s consulting or advisory relationship with the Company or the occurrence of any
termination event as set forth in such person’s Award Agreement. Continuous Status as a Participant shall not be considered interrupted (i) for an Employee in the case of sick leave, maternity leave, infant care leave, medical emergency leave,
military leave, or any other leave of absence for which Continuous Status is not considered interrupted in accordance with the Company’s policies on such matters, and (ii) for a Consultant, in the case of any temporary interruption in such
person’s availability to provide services to the Company which has been authorized in writing by a Vice President of the Company prior to its commencement. 
  

(k) “Conversion Options” shall mean the Options described in Section 6(c) of the Plan. 
  
 (l) “Employee” shall mean any person, including an officer,
who is a common law employee of, receives remuneration for personal services to, is reflected on the official human resources database as an employee of, and is on the payroll of the Company or any Parent or Subsidiary of the Company. A person is on
the payroll if he or she is paid from the payroll department of the Company, or any Parent or Subsidiary of the Company. Persons providing services to the Company, or to any Parent or Subsidiary of the Company, pursuant to an agreement with a staff
leasing organization, temporary workers engaged through or employed by temporary or leasing agencies, and workers who hold themselves out to the Company, Parent, or Subsidiary to which they are providing services as being independent contractors, or
as being employed by or engaged through another company while providing the services are not Employees for purposes of this Plan, whether or not such persons are, or may be reclassified by the courts, the Internal Revenue Service, the U. S.
Department of Labor, or other person or entity as, common law employees of the Company, Parent, or Subsidiary, either solely or jointly with another person or entity. 
  
 (m) “Effective Date” shall mean January 1, 2001. 
  
 (n) “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended. 
  
 (o) “Incentive Stock
Option” shall mean any Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. 
  
 (p) “Maximum Annual Participant Award” shall have the meaning set forth in Section 5(b). 
  
 (q) “Nonqualified Stock Option” shall mean an Option not
intended to qualify as an Incentive Stock Option. 
  
 (r)
“Option” shall mean a stock option granted pursuant to Section 6 of the Plan. 
  
 (s) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  

 2 

 (t) “Participant” shall mean an Employee or Consultant. 
  
 (u) “Plan” shall mean this 2001 Stock Plan, including any
amendments thereto. 
  
 (v) “Share” shall mean
one Common Share, as adjusted in accordance with Section 14 of the Plan. 
  
 (w) “SAR” shall mean a stock appreciation right awarded pursuant to Section 8 of the Plan. 
  
 (x) “Stock Award” shall mean a grant of Shares or of a right to receive Shares or their cash equivalent (or both) pursuant to Section 7
of the Plan. 
  
 (y) “Subsidiary” shall mean (i)
in the case of an Incentive Stock Option a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, and (ii) in the case of a Nonqualified Stock Option, a Stock Award or an SAR, in addition to
a subsidiary corporation as defined in (i), a limited liability company, partnership or other entity in which the Company controls 50 percent or more of the voting power or equity interests. 
  
 3. Shares Subject to the Plan. Subject to the provisions of Sections
14 and 16 of the Plan, the maximum aggregate number of Shares (increased, proportionately, in the event of any stock split, stock dividend or similar event with respect to the Shares) which may be awarded and delivered under the Plan shall not
exceed the sum of (a) any Shares available for future awards, as of the Effective Date, under the Microsoft Corporation 1991 Stock Option Plan, as amended (“1991 Stock Plan”) and (b) any Shares that are represented by awards under the 1991
Stock Plan which, after the Effective Date, are forfeited, expire, are cancelled without delivery of Shares, or otherwise result in the return of Shares to the Company, minus (c) 100,000,000 Shares (unadjusted for any stock split or stock dividend
with respect to the Shares). The Shares may be authorized, but unissued, or reacquired Common Shares. 
  
 Subject to the provisions of the following sentence, if an Award should expire or become unexercisable for any reason without having been exercised in
full, the undelivered Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future Awards under the Plan. Notwithstanding anything to the contrary contained herein, any Awards of Options that are
transferred to a third party pursuant to a program under which the holder of certain Options may transfer such Options to such third party in exchange for cash or other consideration, shall be removed from the Plan and the Shares subject to such
Awards shall not be available for regrant under the Plan regardless of whether the transferred Options are exercised or expire without exercise. 
  
 4. Administration of the Plan. 
  
 (a) Procedure. The Plan shall be administered by the Board of Directors of the Company. 
  
 (i) The Board of Directors may appoint one or more Committees each
consisting of not less than two members of the Board of Directors to administer the Plan on behalf of the Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, such Committees shall
continue to serve until otherwise directed by the Board of Directors. 
  

 3 

 (ii) From time to time the Board of Directors may increase the size of the Committee(s) and appoint
additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, or fill vacancies however caused. 
  
 (b) Powers of the Board. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options, Nonqualified Stock Options, Stock Awards, and SARs; (ii) to determine, in accordance with Section 11(b) of the Plan, the fair market value of the Shares; (iii) to determine, in accordance with Section 11(a) of the Plan, the exercise price
per share of Awards to be granted; (iv) to determine the Participants to whom, and the time or times at which, Awards shall be granted and the number of Shares to be represented by each Award; (v) to interpret the Plan; (vi) to prescribe, amend, and
rescind rules and regulations relating to the Plan; including the form of Award Agreement, and manner of acceptance of an Award, (vii) to determine the terms and provisions of each Award to be granted (which need not be identical) and, with the
consent of the Awardee, modify or amend each Award; (viii) to authorize conversion or substitution under the Plan of any or all Conversion Options; (ix) to accelerate or defer (with the consent of the Awardee) the exercise date of any Option; (x) to
authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted by the Board; and (xi) to make all other determinations deemed necessary or advisable for the administration of
the Plan. 
  
 The Board may, but need not, determine that an award shall vest or
be granted subject to the satisfaction of one or more performance goals. Performance goals for awards will be determined by the Compensation Committee of the Board and will be designed to support the business strategy, and align
executives’ interests with customer and shareholder interests. For awards that are intended to qualify as performance-based compensation under Section 162(m), performance goals will be based on one or more of the following business criteria:
sales or licensing volume, revenues, customer satisfaction, expenses, organizational health/productivity, earnings (which includes similar measurements such as net profits, operating profits and net income, and which may be calculated before or
after taxes, interest, depreciation, amortization or taxes), margins, cash flow, shareholder return, return on equity, return on assets or return on investments, working capital, product shipments or releases, brand or product recognition or
acceptance and/or stock price. These criteria may be measured: individually, alternatively or in any combination; with respect to the Company, a subsidiary, division, business unit, product line, product or any combination of the foregoing; on an
absolute basis, or relative to a target, to a designated comparison group, to results in other periods or to other external measures; and including or excluding items that could affect the measurement, such as extraordinary or unusual and
nonrecurring gains or losses, litigation or claim judgments or settlements, material changes in tax laws, acquisitions or divestitures, the cumulative effect of accounting changes, asset write-downs, restructuring charges, or the results of
discontinued operations. 
  
 (c) Effect of Board’s
Decision. All decisions, determinations, and interpretations of the Board shall be final and binding on all Participants and Awardees. 
  

 4 

 5. Eligibility. 
  
 (a) Awards may be granted to Participants and to persons to whom offers of employment as an Employee have been extended;
provided that Incentive Stock Options may only be granted to Employees. For avoidance of doubt, directors are not eligible to participate in the Plan unless they are Employees or Consultants. 
  
 (b) The maximum number of Shares with respect to which an Award or Awards may
be granted to any Participant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shall not exceed 20,000,000 Common Shares for Options or SARs, or 5,000,000 shares for Stock Awards (increased, in both cases
proportionately, in the event of any stock split, stock dividend or similar event with respect to the Shares). If an Option is in tandem with an SAR, such that the exercise of the Option or SAR with respect to a Share cancels the tandem SAR or
Option right, respectively, with respect to each Share, the tandem Option and SAR rights with respect to each Share shall be counted as covering but one Share for purposes of the Maximum Annual Participant Award. 
  
 6. Options. 
  
 (a) Each Option shall be designated in the written or electronic option
agreement as either an Incentive Stock Option or a Nonqualified Stock Option. However, notwithstanding such designations, to the extent that the aggregate fair market value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Nonqualified Stock Options. 
  
 (b) For purposes of Section 6(a), Options shall be taken into account in the
order in which they were granted, and the fair market value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  

(c) Options converted or substituted under the Plan for any or all outstanding stock options and stock appreciation rights held by employees,
consultants, advisors or other option holders granted by entities subsequently acquired by the Company or a subsidiary or affiliate of the Company (“Conversion Options”) shall be effective as of the close of the respective mergers and
acquisitions of such entities by the Company. The Conversion Options may be Incentive Stock Options or Nonqualified Stock Options, as determined by the Committee; provided, however, that stock appreciation rights in the acquired entity shall only be
converted to or substituted with Nonqualified Stock Options. The Conversion Options shall be options to purchase the number of Common Shares determined by multiplying the number of shares of the acquired entity’s common stock underlying each
such stock option or stock appreciation right immediately prior to the closing of such merger or acquisition by the number specified in the applicable merger or acquisition agreement for conversion of each share of such entity’s common stock to
a Common Share (the “Merger Ratio”). Such Conversion Options shall be exercisable at an exercise price per Common Share (increased to the nearest whole cent) equal to the exercise price per share of the acquired entity’s common stock
under each such stock option or stock appreciation right immediately prior to closing divided by the Merger Ratio. No fractional Common Shares will be issued upon exercise of Conversion Options. In lieu of such issuance, the Common Shares issued
pursuant to each such exercise shall be rounded to the closest whole Share. All other terms and conditions applicable to such stock options and stock appreciation rights prior to closing of the acquisition, including vesting, shall remain unchanged
under the Conversion Options. 
  

 5 

 7. Stock Awards. 
  
 (a) Stock Awards may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan. After
the Committee determines that it will offer a Stock Award, it will advise the Awardee in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions, including vesting, if any, related to the offer, including
the number of Shares that the Awardee shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the Awardee must accept the offer. The offer shall be accepted by execution of an Award Agreement
in the manner determined by the Committee. 
  
 (b) Unless the
Committee determines otherwise, the Award Agreement shall provide for the forfeiture of the non-vested Common Shares underlying such Stock Award upon the Awardee ceasing to be a Participant. To the extent that the Awardee purchased the Shares
granted under such Stock Award and any such Shares remain non-vested at the time the Awardee ceases to be a Participant, the cessation of Participant status shall cause an immediate sale of such non-vested Shares to the Company at the original price
per Common Share paid by the Awardee. 
  
 8. SARs.

  
 (a) The Committee shall have the full power and authority,
exercisable in its sole discretion, to grant SARs to selected Awardees. The Committee is authorized to grant both tandem stock appreciation rights (“Tandem SARs”) and stand-alone stock appreciation rights (“Stand-Alone SARs”) as
described below. 
  
 (b) Tandem SARs. 
  
 (i) Awardees may be granted a Tandem SAR, exercisable upon such terms and
conditions as the Committee shall establish, to elect between the exercise of the underlying Section 6 Option for Common Shares or the surrender of the Option in exchange for a distribution from the Company in an amount equal to the excess of (A)
the fair market value (on the Option surrender date) of the number of Shares in which the Awardee is at the time vested under the surrendered Option (or surrendered portion thereof) over (B) the aggregate exercise price payable for such vested
Shares. 
  
 (ii) No such Option surrender shall be effective
unless it is approved by the Committee, either at the time of the actual Option surrender or at any earlier time. If the surrender is so approved, then the distributions to which the Awardee shall become entitled under this Section 8(b) may be made
in Common Shares valued at fair market value on the Option surrender date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate. 
  

 6 

 (iii) If the surrender of an Option is not approved by the Committee, then the Awardee shall retain
whatever rights he or she had under the surrendered Option (or surrendered portion thereof) on the Option surrender date and may exercise such rights at any time prior to the later of (A) five (5) business days after the receipt of the rejection
notice or (B) the last day on which the Option is otherwise exercisable in accordance with the terms of the instrument evidencing such Option, but in no event may such rights be exercised more than ten (10) years after the date of the Option grant.

  
 (c) Stand-Alone SARs. 
  
 (i) An Awardee may be granted a Stand-Alone SAR not tied to any underlying
Option under Section 6 of the Plan. The Stand-Alone SAR shall cover a specified number of Common Shares and shall be exercisable upon such terms and conditions as the Committee shall establish. Upon exercise of the Stand-Alone SAR, the holder shall
be entitled to receive a distribution from the Company in an amount equal to the excess of (A) the aggregate fair market value (on the exercise date) of the Common Shares underlying the exercised right over (B) the aggregate base price in effect for
those Shares. 
  
 (ii) The number of Common Shares underlying
each Stand-Alone SAR and the base price in effect for those Shares shall be determined by the Committee at the time the Stand-Alone SAR is granted. In no event, however, may the base price per Share be less than the fair market value per underlying
Common Share on the grant date. 
  
 (iii) The distribution with
respect to an exercised Stand-Alone SAR may be made in Common Shares valued at fair market value on the exercise date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate. 
  
 (d) The Common Shares underlying any SARs exercised under this Section 8
shall not be available for subsequent issuance under the Plan. 
  
 9. Term of Plan. The Plan shall become effective as of the Effective Date. It shall continue in effect until terminated under Section 17 of the Plan. 
  
 10. Term of Award; Limitations on Vesting and Repricing. 
  
 (a) The term of each Award shall be no more than ten (10) years from the
date of grant. However, in the case of an Incentive Stock Option granted to a Participant who, at the time the Option is granted, owns Shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company or any
Parent or Subsidiary, the term of the Option shall be no more than five (5) years from the date of grant. 
  
 (b) Each award shall vest over a period of not less than three (3) years from the date of grant, provided that awards covering up to 50,000,000 shares
(increased, proportionately, in the event of any stock split, stock dividend or similar event) may be granted without regard to the 3-year vesting restriction; provided further, that Conversion Options and awards that are granted or vest based on
performance goals shall not count toward the limit of this Section 10(b). 
  

 7 

 (c) No Award may be repriced, replaced, regranted through cancellation, or modified without approval of
the shareholders of the Company (except in connection with an adjustment pursuant to Section 14) if the effect would be to reduce the exercise price for the Shares underlying such Award. 
  
 11. Exercise Price and Consideration. 
  
 (a) The per Share exercise price under each Award shall be such price as is determined by the Board, subject to the
following: 
  
 (i) In the case of an Incentive Stock Option

  
 (A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the fair market
value per Share on the date of grant. 
  
 (B) granted to any
other Employee, the per Share exercise price shall be no less than 100% of the fair market value per Share on the date of grant. 
  
 (ii) Except for Conversion Options under Section 6(c), the per Share exercise price under a Nonqualified Stock Option or SAR shall be no less than
seventy-five percent (75%) of the fair market value per Share on the date of grant. Notwithstanding the foregoing (or any other provision of the Plan), Options and SARs that are granted to Employees who are non-exempt for purposes of the FLSA, shall
satisfy the requirements for exclusion from regular rate of pay for purposes of the FLSA and shall have an exercise price that is at least eighty-five percent (85%) of the fair market value of the underlying Shares at the time of grant; furthermore,
such Options or SARs shall not be exercisable within the six (6) month period immediately following the date of grant, except, if so provided in the Award Agreement, in the event of the Awardee’s death, disability, or retirement, upon a change
in corporate control of the Company, or under such other circumstances as are permitted under the FLSA or rules and regulations thereunder. 
  
 (iii) The maximum aggregate number of Shares underlying all Nonqualified Stock Options and SARs with a per Share exercise price of less than fair market
value on any grant date that may be granted under this Plan is 50,000,000 Shares (increased, proportionately, in the event of any stock split, stock dividend or similar event with respect to the Shares); provided that Conversion Options shall not
count against the limit of this Section 11(a)(iii). 
  
 (b) The
fair market value per Share shall be the closing price per share of the Common Share on the Nasdaq Stock Market (“Nasdaq”) on the date of grant. If the Shares cease to be listed on Nasdaq, the Board shall designate an alternative method of
determining the fair market value of the Shares. 
  

 8 

 (c) The consideration to be paid for the Shares to be issued upon exercise of an Award, including the
method of payment, shall be determined by the Board at the time of grant and may consist of cash and/or check. Payment may also be made by delivering a properly executed exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds necessary to pay the exercise price. If the Awardee is an officer of the Company within the meaning of Section 16 of the Exchange Act, the officer may, in addition, be allowed to pay all or part of
the purchase price with Shares which, as of the exercise date, the officer has owned for six (6) months or more. If the Awardee is a participant in the 1998 Microsoft Corporation Stock Option Gain And Bonus Deferral Program, he may in addition be
allowed to pay all or part of the purchase price of any deferred Option with Shares. Shares used by officers to pay the exercise price shall be valued at their fair market value on the exercise date. 
  
 (d) Prior to issuance of the Shares upon exercise of an Award, the Awardee
shall pay any federal, state, and local income and employment tax withholding obligations applicable to such Award. If an Awardee is an officer of the Company within the meaning of Section 16 of the Exchange Act, he may elect to pay such withholding
tax obligations by having the Company withhold Shares having a value equal to the amount required to be withheld, and any Award under the Plan may permit or require that such withholding tax obligations be paid by having the Company withhold Shares
having a value equal to the amount required to be withheld. The value of the Shares to be withheld shall equal the fair market value of the Shares on the day the Award is exercised. The right of an officer to dispose of Shares to the Company in
satisfaction of withholding tax obligations shall be deemed to be approved as part of the initial grant of an Award, unless thereafter rescinded, and shall otherwise be made in compliance with Rule 16b-3 and other applicable regulations, and any
Award under the Plan may permit or require that such withholding tax obligations be paid by having the Company withhold Shares having a value equal to the amount required to be withheld. 
  
 12. Exercise of Award. 
  
 (a) Procedure for Exercise; Rights as a Shareholder. Any Award granted hereunder shall be exercisable at such times and under such conditions as
determined by the Board at the time of grant, and as shall be permissible under the terms of the Plan. 
  
 An Award may not be exercised for a fraction of a Share. 
  
 An Award shall be deemed to be exercised when written or electronic notice of such exercise has been given to the Company in accordance with the terms of
the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been received by the Company. Full payment may, as authorized by the Board, consist of any consideration and
method of payment allowable under Section 11(c) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the share certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares subject to the Award, notwithstanding the exercise of the Award. The Company shall issue (or cause to be issued) such share
certificate promptly upon exercise of the Award. In the event that the exercise of an Award is treated in part as the exercise of an Incentive Stock Option and in part as the exercise of a Nonqualified Stock Option pursuant to Section 6(a), the
Company shall issue a share certificate evidencing the Shares treated as acquired upon the exercise of an Incentive Stock Option and a separate share certificate evidencing the Shares treated as acquired upon the exercise of a Nonqualified Stock
Option, and shall identify each such certificate accordingly in its share transfer records. No adjustment will be made for a dividend or other right for which the record date is prior to the date the share certificate is issued, except as provided
in Section 14 of the Plan. 
  

 9 

 Exercise of an Award in any manner and delivery of the Shares subject to such Award shall result in a
decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Award, by the number of Shares as to which the Award is exercised. 
  
 (b) Termination of Status as a Participant. In the event of termination of an Awardee’s Continuous Status as a
Participant, such Awardee may exercise his or her rights under any outstanding Awards to the extent exercisable on the date of termination (but in no event later than the date of expiration of the term of such Award as set forth in the Award
Agreement). To the extent that the Awardee was not entitled to exercise his or her rights under such Awards at the date of such termination, or does not exercise such rights within the time specified in the individual Award Agreements, the Awards
shall terminate. 
  
 (c) Disability of Awardee.
Notwithstanding the provisions of Section 12(b) above, in the event of termination of an Awardee’s Continuous Status as a Participant as a result of total and permanent disability (i.e., the inability 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 which has lasted or can be expected to last for a continuous period of twelve (12) months), the Awardee will vest in the
Award, but only to the extent of the vesting that would have occurred had the Awardee remained in Continuous Status as a Participant for a period of twelve (12) months after the date on which the Participant ceased performing services as a result of
the total and permanent disability. An Option or SAR that is vested pursuant to this Section 12(c) must be exercised within eighteen (18) months (or such shorter time as is specified in the grant) from the date on which the Participant ceased
performing services as a result of the total and permanent disability (but in no event later than the date of expiration of the term of such Option or SAR as set forth in the Award Agreement). To the extent that the Awardee was not entitled to
exercise such Option or SAR within the time specified herein, the Award shall terminate. 
  
 (d) Death of Awardee. Notwithstanding the provisions of Section 12(b) above, in the event of the death of an Awardee: 
  
 (i) who is at the time of death a Participant, the Award will vest, but only to the extent of the vesting that would have occurred had the Awardee
continued living and remained in Continuous Status as a Participant twelve (12) months following the date of death, by the Awardee’s estate or by a person who acquired the right to exercise the Award by bequest or inheritance, or 
  
 (ii) whose Option or SAR has not yet expired but whose Continuous Status as
a Participant terminated prior to the date of death, the Option or SAR may be exercised, at any time within twelve (12) months following the date of death, by the Awardee’s estate or by a person who acquired the right to exercise the Option or
SAR by bequest or inheritance, but only to the extent of the right to exercise that had vested at the date of termination. 
  

 10 

 (e) Notwithstanding subsections (b), (c), and (d) of this Section 12, the Board shall have the authority
to extend the expiration date of any outstanding Option in circumstances in which it deems such action to be appropriate (provided that no such extension shall extend the term of an Award beyond the date on which the Award would have expired if no
termination of the Employee’s Continuous Status as a Participant had occurred). 
  
 13. Non-Transferability of Awards. An Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Awardee, only by the Awardee; provided that the Board may permit further transferability, on a general or specific basis, and may impose conditions and limitations on any permitted transferability. 

 
 14. Adjustments to Shares Subject to the Plan. 
  
 The number of Shares covered by each outstanding Award, the Maximum Annual
Employee Award and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price
per Share covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination, or reclassification of
the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding, and conclusive. Except as expressly provided herein, no issuance by the Company of shares
of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. 
  
 In the event of the proposed dissolution or liquidation of the Company, the
Award will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Award shall terminate as of a date
fixed by the Board and give each Awardee the right to exercise an Award as to all or any part of the Shares subject to an Award, including Shares as to which the Award would not otherwise be exercisable. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each Award shall be assumed or an equivalent award shall be substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless such successor corporation does not agree to assume the Award or to substitute an equivalent award, in which case the Board shall, in lieu of such assumption or substitution, provide for the Awardee to have the right to
exercise the Award as to all of the Shares subject to Awards, including Shares as to which the Award would not otherwise be exercisable. If the Board makes an Award fully exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Awardee that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Award will terminate upon the expiration of such period. 
  

 11 

 15. Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on
which the Company completes the corporate action relating to the grant of such Award and all conditions to the grant have been satisfied, provided that conditions to the grant, exercise or vesting of an Award shall not defer the date of grant.
Notice of a grant shall be given to each Participant to whom an Award is so granted within a reasonable time after the determination has been made. 
  
 16. Substitutions and Assumptions. The Board shall have the right to substitute or assume Awards in connection with mergers, reorganizations,
separations, or other transactions to which Section 424(a) of the Code applies, provided such substitutions and assumptions are permitted by Section 424 of the Code and the regulations promulgated thereunder. The number of Shares reserved pursuant
to Section 3 may be increased by the corresponding number of Awards assumed and, in the case of a substitution, by the net increase in the number of Shares subject to Awards before and after the substitution. 
  
 17. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable (including, but not limited to amendments which the Board deems appropriate to enhance the Company’s ability to claim deductions related to stock option exercises);
provided that any increase in the number of Shares subject to the Plan, other than in connection with an adjustment under Section 14 of the Plan, and any amendment described in Section 10(b) of the Plan, shall require approval of or ratification by
the shareholders of the Company. 
  
 (b) Participants in
Foreign Countries. The Board shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may
operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan. 
  
 (c) Effect of Amendment or Termination. Any such amendment or termination of the Plan shall not affect Awards already
granted and such Awards shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Awardee and the Board, which agreement must be in writing and signed by the Awardee and
the Company. 
  
 18. Conditions Upon Issuance of Shares.
Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance. 
  
 19.
Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  

 12 

 20. No Employment/Service Rights. Nothing in the Plan shall confer upon any Participant the right
to an Award or to continue in service as an Employee or Consultant for any period of specific duration, or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining such person), or
of any Participant or Awardee, which rights are hereby expressly reserved by each, to terminate such person’s services at any time for any reason, with or without cause. 
  
 21. Shareholder Approval. The Plan, as amended and restated, is subject to approval by the shareholders of the
Company. 
  

	*	As amended and restated as of August 24, 2004, excluding amendments made July 20, 2004 that will be effective only after approval by the shareholders at the 2004 Annual Meeting of
Shareholders. 

  
 All share numbers in the Plan reflect the 2-for-1
stock split effected February 2003. 
  

 13

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