HANESBRANDS INC. RETIREMENT SAVINGS PLAN
Employee Benefits Plan Agreement
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HANESBRANDS INC. RETIREMENT SAVINGS PLAN
Employee Benefits Plan Agreement
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RETIREMENT SAVINGS PLAN
(As Amended and Restated Effective as of January 1, 2010)
(conformed through First Amendment))
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
TABLE OF CONTENTS
(As Amended and Restated Effective as of January 1, 2010)
1.01 Background; Purpose of Plan
Effective July 24, 2006, Hanesbrands Inc. (the “Company”) established the Plan, to permit Eligible Employees of the Company and the other Employers to accumulate their retirement savings on a tax-favored basis. In connection with the spin-off of the Company from the Sara Lee Corporation, the Accounts of Transferred Participants were spun off from the Sara Lee Plan and transferred to this Plan. A portion of the Plan (that portion invested in the Hanesbrands Inc. Common Stock Fund) is designed to invest primarily in qualifying employer securities and is intended to satisfy the requirements of an employee stock ownership plan (as defined in Section 4975(e)(7) of the Code) (the ESOP component); up to 100 percent of Plan assets may be invested in qualifying employer securities. The remaining portion of the Plan is a profit sharing plan intended to satisfy all requirements of Section 401(a) of the Code and includes a cash or deferred arrangement intended to satisfy the requirements of Section 401(k) of the Code (the 401(k) component). For each Plan Year, the 401(k) component shall include all of a Participant’s Before-Tax Contributions, Roth Contributions, the Employers’ Matching Contributions, and the Annual Company Contribution allocable to the Participant with respect to that Plan Year for all purposes of the Plan. Effective as of January 1, 2010, the Plan is amended and restated in its entirety as set forth below.
1.02 Effective Date; Plan Year
The effective date of the Plan as set forth herein is January 1, 2010. The “Plan Year” is the twelve month period beginning each January 1 and ending on the next following December 31.
1.03 Plan Administration
As described in Subsection 16.01, the Committee shall be the administrator (as that term is defined in Section 3(16)(A) of ERISA) of the Plan and shall be responsible for the administration of the Plan; provided, however, that the Committee may delegate all or any part of its powers, rights, and duties under the Plan to such person or persons as it may deem advisable.
1.04 Plan Supplements
From time to time, the Company or the Committee may adopt Supplements to the Plan for the purpose of modifying the provisions of the Plan as they apply to certain or all Participants in a Covered Group or for the purpose of preserving benefits derived from another plan maintained by an Employer or a Predecessor Company to an Employer. The terms and
provisions of each Supplement are a part of the Plan and supersede the other provisions of the Plan to the extent necessary to eliminate inconsistencies between such other Plan provisions and such Supplement.
1.05 Trustee; Trust
Amounts contributed under the Plan are held and invested, until distributed, by the Trustee. The Trustee acts in accordance with the terms of the Trust, which implements and forms a part of the Plan. The provisions of and benefits under the Plan are subject to the terms and provisions of the Trust.
The following terms, when used herein, unless the context clearly indicates otherwise, shall have the following respective meanings:
Except as may be stated elsewhere in the Plan, “Account” and “Accounts” mean all accounts and subaccounts maintained for a Participant (or for a Beneficiary after a Participant’s death or for an Alternate Payee).
2.02 Accounting Date
“Accounting Date” means each day the value of an Investment Fund is adjusted for contributions, withdrawals, distributions, earnings, gains, losses or expenses, any date designated by the Committee as an Accounting Date, and an Accounting Date occurring under SECTION 8. It is anticipated that each Investment Fund will be valued as of each day on which the New York Stock Exchange is open for trading and the Trustee is open for business.
2.03 Actual Deferral Percentage
“Actual Deferral Percentage” for a group of Eligible Employees for a Plan Year means the average of the deferral ratios (determined separately for each Eligible Employee in such group) of: (a) the Eligible Employee’s Before-Tax Contributions for the Plan Year; to (b) the Eligible Employee’s compensation (determined in accordance with Section 414(s) of the Code) for such Plan Year.
2.04 Adjusted Net Worth
“Adjusted Net Worth” of an Investment Fund as of any Accounting Date means the then net worth of that Investment Fund as determined by the Trustee in accordance with the provisions of the Trust Agreement.
2.05 After-Tax Account
“After-Tax Account” means an Account maintained pursuant to Subparagraph 8.01(d).
2.06 Alternate Payee
“Alternate Payee” means a spouse, former spouse, child or other dependent of a Participant entitled to receive payment of a portion of the Participant’s vested Plan benefits under a qualified domestic relations order, as defined in Section 414(p) of the Code.
2.07 Annual Addition
“Annual Addition” for any Limitation Year means the sum of annual additions to a Participant’s Account for the Limitation Year. Notwithstanding any Plan provision to the contrary, a Participant’s Annual Addition shall be determined in accordance with Section 415 of the Code and applicable Treasury regulations issued thereunder, the provisions of which are incorporated by reference.
2.08 Annual Company Contribution
“Annual Company Contribution” means a contribution made by an Employer on behalf of each Annual Company Contribution Participant pursuant to Subsection 5.02.
2.09 Annual Company Contribution Account
“Annual Company Contribution Account” means an Account maintained pursuant to Subparagraph 8.01(c).
2.10 Appeal Committee
“Appeal Committee” means an ERISA Appeal Committee as described in Subsection 16.02 of the Plan.
2.11 Before-Tax Contribution
“Before-Tax Contribution” means the compensation deferrals under Section 401(k) of the Code a Participant elects to make pursuant to Subsection 4.01. Notwithstanding the foregoing, for purposes of implementing the required limitations of Sections 402(g) and 415 of the Code contained in Subsections 6.03 and 6.05, Before-Tax Contributions shall not include Catch-Up Contributions or deferrals made pursuant to Section 414(u) of the Code by reason of an Eligible Employee’s qualified military service.
2.12 Before-Tax Contribution Account
“Before-Tax Contribution Account” means the Account maintained by the Committee pursuant to Subparagraph 8.01(a).
“Beneficiary” means any person or persons (who may be designated contingently, concurrently or successively) to whom a Participant’s Account balances are to be paid if the Participant dies before he or she receives his or her entire vested Account.
2.14 Catch-Up Contribution
“Catch-Up Contribution” means the deferrals of Compensation under Section 414(v) of the Code an eligible Participant elects to make pursuant to Subsection 4.02.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the Committee appointed by the Company to administer the Plan as described in SECTION 16 of the Plan.
“Company” means Hanesbrands Inc. or any successor organization or entity that assumes the Plan.
“Compensation” for a Plan Year means the total wages (as defined in Section 3401(a) of the Code) paid to an individual by an Employer for the period in question for services rendered as an Employee of an Employer, which are subject to income tax withholding at the source, determined without regard to any exceptions to the withholding rules that limit the remuneration included in such wages and that are based on the nature or location of the employment or the services performed, determined in accordance with the following:
For purposes of determining and allocating contributions under Subsections 4.02, 5.02, 5.03 and 5.04 and applying the maximum percentage limitation specified in Subsection 4.01, the annual Compensation taken into account under the Plan for any Participant for a Plan Year shall not exceed $245,000 (as adjusted by the Secretary of the Treasury pursuant to Section 401(a)(17)(B) of the Code).
2.19 Contribution Percentage
“Contribution Percentage” of a group of Eligible Employees for a Plan Year means the average of the ratios (determined separately for each Eligible Employee in such group) of: (a) the Matching Contributions made on behalf of such Eligible Employee for such Plan Year; to (b) the Eligible Employee’s compensation (determined in accordance with Section 414(s) of the Code) for such Plan Year.
2.20 Controlled Group Member
“Controlled Group Member” means the Company and any affiliated or related corporation that is a member of a controlled group of corporations (within the meaning of Section 1563(a) of the Code) that includes the Company or any trade or business (whether or not incorporated) which is under the common control of the Company (within the meaning of Section 414(b), (c) or (m) of the Code).
2.21 Covered Group
“Covered Group” means a group or class of Employees to which the Plan has been and continues to be extended by an Employer pursuant to Subsection 3.02. A listing of the Covered Groups under the Plan is included in Exhibit A to the Plan.
2.22 Direct Rollover
“Direct Rollover” means a payment by the Plan to an Eligible Retirement Plan specified by the Distributee.
“Distributee” means a Participant (including a Participant described in Subsection 7.02 of the Plan) or Beneficiary. In addition, the Participant’s surviving spouse and the Participant’s spouse or former spouse who is an Alternate Payee are Distributees with regard to the interest of the spouse or former spouse.
2.24 Effective Date
“Effective Date” of the Plan as set forth herein means January 1, 2010 as defined in Subsection 1.02.
2.25 Elective Deferral
“Elective Deferral” means, with respect to any calendar year, each elective deferral as defined in Section 402(g) of the Code and each designated Roth contribution as described in Section 402A of the Code.
2.26 Eligible Employee
“Eligible Employee” means an Employee who is a member of a Covered Group and is otherwise eligible to participate in the Plan pursuant to either Subsection 3.01 or Subsection 12.01.
2.27 Eligible Retirement Plan
“Eligible Retirement Plan” means the following:
2.28 Eligible Rollover Distribution
“Eligible Rollover Distribution” means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include the following:
A portion of a distribution shall not fail to be an Eligible Rollover Distribution merely because the portion includes After-Tax Contributions that are not includible in gross income; provided, however, such portion may be transferred only to an individual retirement account or annuity described in Section 408(a) or (b) of the Code, a qualified retirement plan (either a defined contribution plan or a defined benefit plan) described in Section 401(a) or 403(a) of the Code, or an annuity contract described in Section 403(b) of the Code that agrees to separately account for amounts so transferred.
“Employee” means any person employed by one or more of the Employers who is on the regular payroll of an Employer and whose wages from the Employer are reported for Federal income tax purposes on Internal Revenue Service Form W-2 (or successor or equivalent form). Notwithstanding any provision of the Plan to the contrary, an individual who performs services for a Controlled Group Member but who is paid by an Employer under a common paymaster arrangement with such Controlled Group Member shall not be considered an Employee for purposes of the Plan. An Employer’s classification as to whether an individual constitutes an Employee shall be determinative for purposes of an individual’s eligibility under the Plan. An individual who is classified as an independent contractor (or other non-employee classification) shall not be considered an Employee and shall not be eligible for participation in the Plan, regardless of any subsequent reclassification of such individual as an Employee or employee of an Employer by an Employer, any government agency, court, or other third-party. Any such reclassification shall not have a retroactive effect for purposes of the Plan. Notwithstanding any other provision of the Plan to the contrary, nonresident alien individuals receiving no U.S.-source income from any Employer are not considered Employees under the Plan.
“Employer” means the Company and each Controlled Group Member that adopts the Plan in accordance with Subsection 14.19.
2.31 Employer Contributions
“Employer Contributions” means the following contributions made by an Employer on behalf of a Participant:
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
2.33 Excess Deferral
“Excess Deferral” means the amount by which a Participant’s Before-Tax Contributions and Roth Contributions (determined without regard to the Participant’s Catch-Up Contributions and Roth Catch-Up Contributions) exceed the limitations of Section 402(g)(4) of the Code, as provided in Subsection 6.03.
2.34 Fair Market Value
“Fair Market Value” means (a) with respect to Hanesbrands Stock held in the Plan, the closing price per share on the New York Stock Exchange as of any date or (b) in the case of any other stock for which there is no generally recognized market, the value determined as of a particular date in accordance with Section 54.4975-11(d)(5) of the Treasury Regulations and based upon an evaluation by an independent appraiser meeting the requirements of the regulations prescribed under Section 401(a)(28)(C) of the Code or, in the absence of such regulations, requirements similar to the requirements of the regulations prescribed under Section 170(a)(1) of the Code and having expertise in rendering such evaluations.
“Forfeiture” means the amount by which a Participant’s Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account and Predecessor Company Account (or other Employer Contribution Account under any applicable Supplement to the Plan) is reduced under Subsections 6.03, 10.01 or any applicable Supplement.
2.36 Hanesbrands Stock
“Hanesbrands Stock” shall mean common stock issued by the Company that is readily tradable on an established securities market; provided, however, if the Company’s common stock is not readily tradable on an established securities market, the term “Hanesbrands Stock” shall mean common stock issued by the Company having a combination of voting power and dividend rates equal to or in excess of: (a) that class of common stock of the Company having the greatest voting power and (b) that class of common stock of the Company having the greatest dividend rights. Non-callable preferred stock shall be treated as Hanesbrands Stock for purposes of the Plan if such stock is convertible at any time into stock that is readily tradable on an established securities market (or, if applicable, that meets the requirements of (a) or (b) above) and if such conversion is at a conversion price that, as of the date of the acquisition by the Plan, is reasonable. Hanesbrands Stock shall be held under the Trust only if such stock satisfies the requirements of Section 407(d)(5) of ERISA.
2.37 Highly Compensated Employee
“Highly Compensated Employee” means a highly compensated employee as defined in Section 414(q) of the Code and the regulations thereunder. Generally, a Highly Compensated Employee means any Employee who: (a) during the immediately preceding Plan Year received annual compensation from the Employers (determined in accordance with Subsection 6.05 of the Plan) of more than $110,000 (or such greater amount as may be determined by the Commissioner of Internal Revenue) and, at the Company’s discretion for such preceding year, was in the top-paid 20 percent of the Employees for that year; or (b) was a five percent owner of an Employer during the current Plan Year or the immediately preceding Plan Year.
A former Participant shall be treated as a Highly Compensated Employee if such Participant was a Highly Compensated Employee when such Participant separated from service from a Controlled Group Member or such Participant was a Highly Compensated Employee at any time after attaining age 55 years.
2.38 Hour of Service
“Hour of Service” means any hour for which an Employee is compensated by an Employer, directly or indirectly, or is entitled to compensation from an Employer for the performance of duties and for reasons other than the performance of duties, and each previously uncredited hour for which back pay has been awarded or agreed to by an Employer, irrespective of mitigation of damages. Hours of Service shall be credited to the period for which duties are performed (or for which payment is made if no duties were performed), except that Hours of Service for which back pay is awarded or agreed to by an Employer shall be credited to the period to which the back pay award or agreement pertains. The rules for crediting Hours of Service set forth in Section 2530.200b-2 of Department of Labor regulations are incorporated by reference. References in this Subsection 2.38 to an Employer shall include any Controlled Group Member.
2.39 Investment Committee
“Investment Committee” means the committee appointed by the Company to manage the assets of the Plan and Trust.
2.40 Leased Employee
“Leased Employee” means any person who is not an Employee of an Employer, but who has provided services to an Employer under the primary direction or control of the Employer, on a substantially full-time basis for a period of at least one year, pursuant to an agreement between the Employer and a leasing organization.
2.41 Leave of Absence
“Leave of Absence” for Plan purposes means an absence from work which is not treated by the Participant’s Employer as a termination of employment or which is required by law to be
treated as a Leave of Absence. A Totally Disabled Employee shall not be considered to be on a Leave of Absence for purposes of the Plan.
2.42 Limitation Year
“Limitation Year” means the Plan Year.
2.43 Matching Contributions
“Matching Contribution” means the amount of a Participant’s Before-Tax Contributions and Roth Contributions for which a Matching Contribution is payable pursuant to Subsection 5.03. Notwithstanding the foregoing, for purposes of implementing the required limitations of Section 415 of the Code contained in Subsection 6.05, Matching Contributions shall not include employer contributions made pursuant to Section 414(u) of the Code by reason of an Eligible Employee’s qualified military service.
2.44 Matching Contribution Account
“Matching Contribution Account” means an Account maintained pursuant to Subparagraph 8.01(b).
2.45 Maternity or Paternity Absence
“Maternity or Paternity Absence” means an Employee’s absence from work because of the pregnancy of the Employee or birth of a child of the Employee, the placement of a child with the Employee, or for purposes of caring for the child immediately following such birth or placement. The Committee may require the Employee to furnish such information as the Committee considers necessary to establish that the Employee’s absence was for one of the reasons specified above.
2.46 Normal Retirement Age
“Normal Retirement Age” means the date upon which a Participant attains age 65 years.
2.47 One-Year Period of Severance
“One-Year Period of Severance” means each 12 consecutive month period commencing on an Employee’s or Participant’s Separation Date and on each anniversary of such date during which the Employee or Participant does not perform an Hour of Service. In the case of a Maternity or Paternity Absence, the 12 consecutive month periods beginning on the first day of such absence and the first anniversary thereof shall not constitute a One-Year Period of Severance.
“Participant” means each Eligible Employee who satisfies the requirements of Subsection 3.01 or 12.01, as applicable.
2.49 Period of Service
“Period of Service” means a period beginning on the date an Employee enters Service (or reenters Service) and ending on his or her Separation Date with respect to such period, subject to the following special rules:
“Plan” means the Hanesbrands Inc. Retirement Savings Plan, as amended from time to time.
2.51 Plan Year
“Plan Year” means the 12 month period beginning each January 1 and ending on the next following December 31 as defined in Subsection 1.02.
2.52 Predecessor Company
“Predecessor Company” means any corporation or other entity (other than Sara Lee Corporation), the stock, assets or business of which was acquired by an Employer or another Controlled Group Member prior to July 24, 2006, or is acquired by an Employer or another Controlled Group Member on or after July 24, 2006, whether by merger, consolidation, purchase of assets or otherwise, and any predecessor thereto designated by the Plan or by the Committee. .
2.53 Predecessor Company Account
“Predecessor Company Account” means an Account maintained pursuant to Subparagraph 8.01(f).
2.54 Predecessor Plan
“Predecessor Plan” means a plan formerly maintained by a Controlled Group Member or a Predecessor Company (other than the Sara Lee Plan) that has been merged into and continued in the form of this Plan.
2.55 Required Commencement Date
“Required Commencement Date” means the April 1 of the calendar year next following the later of the calendar year in which the Participant attains age 70- 1 / 2 or the calendar year in which his or her Separation Date occurs; provided, however, that the Required Commencement Date of a Participant who is a five percent owner (as defined in Section 416 of the Code) of an Employer or a Controlled Group Member with respect to the Plan Year ending in the calendar year in which he or she attains age 70- 1 / 2 shall be April 1 of the next following calendar year.
2.56 Rollover Contribution
“Rollover Contribution” means a Participant’s contribution pursuant to Subsection 4.04.
2.57 Rollover Contribution Account
“Rollover Contribution Account” means the Account maintained pursuant to Subparagraph 8.01(e).
2.57A Roth Catch-Up Contribution
“Roth Catch-Up Contribution” means a Participant’s contribution pursuant to Subsection 4.02.
2.57B Roth Contribution
“Roth Contribution” means a Participant’s contribution pursuant to Subsection 4.01.
2.57C Roth Contribution Account
“Roth Contribution Account” means the Account maintained by the Committee pursuant to Subparagraph 8.01(g).
2.57D Roth Rollover Contribution
“Roth Rollover Contribution” means a Participant’s contribution pursuant to Subsection 4.04.
2.57E Roth Rollover Contribution Account
“Roth Rollover Contribution Account” means the Account maintained by the Committee pursuant to Subparagraph 8.01(h).
2.58 Sara Lee Plan
“Sara Lee Plan” means the Sara Lee Corporation 401(k) Plan.
2.59 Separation Date
“Separation Date” means the earlier of (a) the date on which an Employee or Participant is no longer employed by an Employer or a Controlled Group Member because he or she quits, retires, is discharged or dies; or (b) the first anniversary of the first day of any period during
which an Employee or Participant remains absent from service with all Controlled Group Members for any reason other than quit, retirement, discharge or death.
“Service” means the number of completed calendar years and months during a Participant’s Periods of Service.
2.61 Spin-Off, Spin-Off Date
“Spin-Off” means Sara Lee Corporation’s distribution of all its interests in Hanesbrands Inc. The actual date of the Spin-Off shall be known as the “Spin-Off Date.”
2.62 Totally Disabled or Total Disability
“Totally Disabled” or “Total Disability” when used in reference to a Participant means that condition of the Participant resulting from injury or illness which:
2.63 Transferred Participants
“Transferred Participant” means:
2.64 Trust Agreement
“Trust Agreement” means the Hanesbrands Inc. Retirement Savings Plan Trust, which implements and forms a part of the Plan.
2.65 Trust Fund
“Trust Fund” means all assets held or acquired by the Trustee in accordance with the Plan and the Trust.
“Trustees” mean the person or persons appointed to act as Trustees under the Trust Agreement.
2.67 Year of Service
“Year of Service” means an Employee’s continuous employment by one or more of the Employers or other Controlled Group Members for the 12 month period beginning on the Employee’s date of hire or on any anniversary of that date, subject to the provisions of Subsection 12.01 and the following:
3.01 Eligibility to Participate
3.02 Covered Group
Covered Groups under the Plan include Employees of Hanesbrands Inc. other than (a) Employees employed in Puerto Rico, and (b) Employees covered by a collective bargaining agreement which agreement does not provide for participation in the Plan; provided that participation in the Plan was the subject of good faith bargaining. Designation of a Covered Group when made by the Company shall be effected by action of the Committee or by a person or persons authorized by said Committee. Designation of a Covered Group when made by any other Employer shall be effected by action of that Employer’s Board of Directors or a person or persons so authorized by that Board.
3.03 Leave of Absence
A Leave of Absence will not interrupt continuity of participation in the Plan. Leaves of Absence will be granted under an Employer’s rules applied uniformly to all Participants similarly situated. Notwithstanding any provision of the Plan to the contrary, (i) contributions, benefits, and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code, and (ii) in the case of a Participant who dies while performing qualified military service (as defined in Section 414(u) of the Code) on or after January 1, 2007, the survivors of the Participant will be entitled to any benefits (other than benefit accruals relating to the period of qualified military service) provided under the Plan had the Participant resumed and then terminated employment on account of death. In any case where a Participant is on a Leave of Absence or is a Totally Disabled Participant and his or her employment with an Employer and its Subsidiaries is terminated for any other reason, then his or her employment with the Employers for purposes of the Plan will be considered terminated on the same date and for the same reason.
3.04 Leased Employees
A Leased Employee shall not be eligible to participate in the Plan. The period during which a Leased Employee performs services for an Employer shall be taken into account for purposes of Subsection 10.01 of the Plan, unless (a) such Leased Employee is a participant in a money purchase pension plan maintained by the leasing organization which provides a non-integrated employer contribution rate of at least 10 percent of compensation, immediate participation for all employees and full and immediate vesting, and (b) Leased Employees do not constitute more than 20 percent of the Employers’ nonhighly compensated workforce.
4.01 Before-Tax Contributions and Roth Contributions
4.02 Catch-Up Contributions and Roth Catch-Up Contributions
A Participant who has attained age 50 years (or will attain age 50 years by the end of the Plan Year) may elect to defer an additional amount of Compensation as Before-Tax Contributions for such Plan Year in accordance with and subject to the limitations of Section 414(v) of the Code (“Catch-Up Contributions”). Beginning July 1, 2010, such Participant shall be eligible to make Roth Catch-Up Contributions under the Plan in lieu of all or a portion of the Catch-Up Contributions the Participant is otherwise eligible to make under the Plan. Roth Catch-Up Contributions are treated by the Employer as includible in the Participant’s gross income at the time the Participant would have received such amounts in cash if the Participant had not contributed such amounts to the Plan. Unless otherwise provided, Roth Catch-Up Contributions shall be treated as Catch-Up Contributions for all purposes under the Plan. Catch-Up Contributions and Roth Catch-Up Contributions shall not be taken into account for purposes of implementing the required limitations of Sections 402(g) and 415 of the Code contained in Subsections 6.03 and 6.05, respectively.
4.03 Change in Election
As of the beginning of any payroll period (but not retroactively), a Participant may elect to change the rate of his or her Before-Tax Contributions and Roth Contributions and the amount of his or her Catch-Up Contributions and Roth Catch-Up Contributions (if applicable), or to discontinue such contributions entirely. If a Participant discontinues his or her contributions, he or she may subsequently elect under Subsection 4.01 or 4.02 (if applicable) to have contributions resumed as of any subsequent payroll period. Elections under this Subsection shall be made in such manner and in accordance with such rules as the Committee determines. If the Committee in its discretion determines that elections under this Subsection shall be made in a manner other than in writing, any Participant who makes an election pursuant to such method may receive written confirmation of such election; further, any such election and confirmation will be the equivalent of a writing for all purposes.
4.04 Direct Transfers and Rollovers
The Committee in its discretion may direct the Trustee to accept:
provided, however, that any Rollover Contribution or Roth Rollover Contribution shall be in cash only, shall comply with the provisions of the Code, and, except for a Roth Rollover Contribution, shall be exclusive of after-tax employee contributions; and further provided that the Committee shall accept a direct transfer or rollover from a designated Roth account only as permitted under Section 402(c) of the Code. If after a Rollover Contribution or Roth Rollover Contribution has been made the Committee learns that such contribution did not meet those provisions, the Committee may direct the Trustee to make a distribution to the Participant of the entire amount of the Rollover Contribution or Roth Rollover Contribution received. Any amount transferred or contributed to the Trustee will be credited to the Account of the Participant as determined by the Committee. If any portion of a Participant’s benefits under the Plan is attributable to amounts which were transferred to the Plan, directly or indirectly (but not in a direct rollover as defined in Section 401(a)(31) of the Code), from a Plan which is subject to the requirements of Section 401(a)(11) of the Code, then the provisions of said Section 401(a)(11) shall apply to the benefits of such Participant. The Committee in its discretion may direct the Trustee to transfer Account balances of a group or class of Participants, by means of a trust-to-trust transfer, to the trustee (or insurance company) of any other individual account, profit sharing or stock bonus plan intended to meet the requirements of Section 401(a) of the Code.
5.01 Before-Tax Contributions and Roth Contributions
Subject to the limitations of this SECTION 5, the Employers will contribute to the Trustee on behalf of each Participant the amount of such Participant’s Before-Tax Contributions and Roth Contributions under Subsection 4.01. Such Before-Tax Contributions and Roth Contributions shall be paid to the Trustee as soon as practicable after being withheld, but no later than the 15th business day of the next following month, and allocated to Participants’ Current Year Before-Tax Contribution Subaccounts and Current Year Roth Contribution Subaccounts, respectively.
5.02 Annual Company Contribution
For each Plan Year, the Employers shall contribute to the Plan as follows:
Annual Company Contributions under this Subsection 5.02 shall be funded in either cash or shares of Hanesbrands Stock (which may be shares purchased in the open market or authorized-but-unissued shares), as determined by the Committee. If shares of Hanesbrands Stock are contributed, they shall be valued for allocation purposes at their Fair Market Value as of the date of allocation. The Annual Company Contributions under this Subsection 5.02 shall be immediately invested in accordance with the Participant’s current investment election. Notwithstanding the foregoing, Participants shall be eligible to receive a contribution under this Subsection only if they are employed with the Employer on the last day of the Plan Year (and for this purpose, any Participant who is employed on the last business day of the Plan Year shall be considered to be employed on the last day of the Plan Year), or if their employment ended during the Plan Year as a result of retirement (Separation Date after age 55 with 10 Years of Service, or after age 65), death or Total Disability.
5.03 Matching Contributions
5.04 Transition Contribution
Subject to the conditions and limitations of the Plan, solely for the Plan Year ending on December 31, 2006, for any Participant who, on January 1, 2006:
who is not eligible for a transition credit allocation under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the “SERP”) (other than the salaried employee transition credit set forth in Subsection 2.32 of the SERP); the Employers shall contribute, in cash, to the Annual Company Contribution Account of such Participant an amount equal to ten percent of such eligible Participant’s Compensation for calendar year 2006 (including Compensation paid prior to July 24, 2006); provided, however, that Participants shall be eligible to receive a contribution under this Subsection only if they are employed on the last business day of the Plan Year (and for this purpose, any Participant who is employed on the last business day of the Plan Year shall be considered to be employed on the last day of the Plan Year), or if their employment ended during the Plan Year as a result of retirement (Separation Date after age 55 with 10 Years of Service, or after age 65), death or Total Disability.
5.05 Allocation of Annual Company Contribution
The amount of the contribution made by the Employers for each Plan Year pursuant to Subsection 5.02 for each eligible Participant in the amounts specified in Subparagraph 5.02(a) or 5.02(b) as the case may be, shall be allocated to each such Participant’s Annual Company Contribution Account as of the last day of the Plan Year.
5.06 Payment of Matching Contributions
Matching Contributions under Subparagraph 5.03(a) of the Plan shall be made each calendar quarter (or on a more frequent basis as determined by the Employers). Matching Contributions under Subparagraph 5.03(b) of the Plan shall be made as soon as practicable after each true up allocation date.
5.07 Allocation of Matching Contributions
Subject to Subsection 6.05, the Matching Contribution under Subparagraph 5.03(a) shall be allocated and credited to the Current Year Matching Contribution Subaccounts of those Participants entitled to share in such Matching Contributions as of such Accounting Date. Matching Contributions under Subparagraph 5.03(b) of the Plan shall be allocated and credited as soon as practicable after each true up allocation date.
5.08 Limitations on Employer Contributions
The Employers’ total contribution for a Plan Year is conditioned on its deductibility under Section 404 of the Code in that year, and shall comply with the contribution limitations set forth in Subsection 6.05 and the allocation limitations contained in Subsections 5.02 and 5.04 of the Plan, and shall not exceed an amount equal to the maximum amount deductible on account thereof by the Employers for that year for purposes of federal taxes on income.
5.09 Verification of Employer Contributions
If for any reason the Employer decides to verify the correctness of any amount or calculation relating to its contribution for any Plan Year, the certificate of an independent accountant selected by the Employer as to the correctness of any such amount or calculation shall be conclusive on all persons.
5.10 Corrective Contributions/Reallocations
If, with respect to any Plan Year, an administrative error results in a Participant’s Account not being properly credited with his or her Before-Tax Contributions, Rollover Contributions, Roth Contributions, Roth Rollover Contributions, or Employer Contributions, or earnings on any such amounts, corrective Employer Contributions or account reallocations may be made in accordance with this
Subsection. Solely for the purpose of placing any affected Participant’s Account in the position that the Account would have been in had no error been made:
In addition, with respect to any Plan Year, if an administrative error results in an amount being credited to an Account for a Participant or any other individual who is not otherwise entitled to such amount, corrective action may be taken by the Committee, including, but not limited to, a direction to forfeit amounts erroneously credited (with such forfeitures to be used to reduce future Employer Contributions or other contributions to the Plan), reallocate such erroneously credited amounts to other Participants’ Accounts, or take such other corrective action as necessary under the circumstances. Any Plan administration error may be corrected using any appropriate correction method permitted under the Employee Plans Compliance Resolution System (or any successor procedure), as determined by the Committee in its discretion.
5.11 No Interest in Employers
The Employers shall have no right, title or interest in the Trust Fund, nor will any part of the Trust Fund at any time revert or be repaid to an Employer, unless:
The amount of any contribution that may be returned to an Employer pursuant to Subparagraph (a) or (b) above must be reduced by any portion thereof previously distributed from the Trust Fund to Participants or their Beneficiaries and by any losses of the Trust Fund allocable thereto, and in no event may the return of such amount cause any Participant’s Account balance to be less than the amount that such balance would have been had the contribution not been made under the Plan.
6.01 Limitation on Before-Tax Contributions
The Plan satisfies the nondiscrimination requirements of Section 401(k) of the Code in accordance with the safe harbor method based on Matching Contributions, as described in Section 401(k)(13)(D) of the Code.
6.02 Limitation on Matching Contributions
The Plan satisfies the nondiscrimination requirements of Section 401(m) of the Code in accordance with the safe harbor method based on Matching Contributions, as described in Section 401(m)(12) of the Code.
6.03 Dollar Limitation
No Participant shall make Before-Tax Contribution and Roth Contribution elections which will result in his or her Elective Deferrals for any calendar year exceeding $16,500 (or such greater amount as may be prescribed by the Secretary of Treasury to take into account cost-of-living increases pursuant to Section 402(g) of the Code), except to the extent permitted with respect to Catch-Up Contributions and Roth Catch-Up Contributions, if applicable. If a Participant’s total Elective Deferrals under this Plan and any other plan of another employer for any calendar year exceed the annual dollar limit prescribed above, the Participant may notify the Committee, in writing on or before March 1 of the next following calendar year, of his or her election to have all or a portion of such Excess Deferrals (and the income allocable thereto determined in accordance with Subsection 6.04) allocated under this Plan and distributed in accordance with this Subsection. In such event, or in the event that the Committee otherwise becomes aware of any Excess Deferrals, the Committee shall, without regard to any other provision of the Plan, direct the Trustee to distribute to the Participant by the following April 15 the Participant’s Excess Deferrals (and any income attributable thereto determined in accordance with Subsection 6.04) so allocated under the Plan. The Committee shall direct the Trustee to distribute Before-Tax Contributions first and Roth Contributions second, to the extent necessary to meet the applicable limitations; provided however, that in the event Excess Deferrals involve amounts deferred under a plan maintained by an unrelated employer, the Participant shall be permitted to designate which type of contributions will be distributed first.
Distributions to be made in accordance with this Subsection shall be made as soon as is practicable following receipt by the Committee of written notification of Excess Deferrals, and the Committee shall make every effort to meet the April 15 distribution deadline for all written notifications received by the preceding March 1. The amount of such Excess Deferrals distributed to a Participant in accordance with this Subsection shall be treated as a contribution for purposes of the limitations referred to under Subsection 6.05. In addition, any Matching Contributions attributable to amounts distributed under this Subsection (and any income allocable thereto determined in accordance with Subsection 6.04) shall be forfeited in accordance with Subsection 10.06. Contribution adjustments under this Subsection shall comply with the requirements of Section 1.401(k)-2 of the Treasury Regulations, the provisions of which are hereby incorporated by reference.
6.04 Allocation of Earnings to Distributions of Excess Deferrals
The earnings allocable to distributions of Excess Deferrals under Subsection 6.03 shall be determined by multiplying the earnings attributable to the applicable excess amounts (for the calendar and/or Plan Year, whichever is applicable) by a fraction, the numerator of which is the applicable excess amount, and the denominator of which is the balance attributable to such contributions in the Participant’s Account or Accounts, as of the beginning of such year, plus the contributions allocated to the applicable account for such year. Notwithstanding the foregoing, no income shall be allocated to Excess Deferrals for the period between the end of the Plan Year and prior to the distribution of such amounts.
6.05 Contribution Limitations
For each Limitation Year, the Annual Addition to a Participant’s Accounts under the Plan and under any other defined contribution plan maintained by any Employer shall not exceed the lesser of $49,000 (as adjusted for cost-of-living increases under Section 415(d) of the Code) or 100 percent of the Participant’s compensation for the Limitation Year. For purposes of this Subsection 6.05, “compensation” for a Limitation Year means a Participant’s compensation within the meaning of Section 415(c)(3) of the Code and Section 1.415(c)-2(b) and (c) of the Treasury Regulations that is actually paid or made available during the Limitation Year, subject to the following: