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HANESBRANDS INC. RETIREMENT SAVINGS PLAN

Employee Benefits Plan Agreement

HANESBRANDS INC. RETIREMENT SAVINGS PLAN | Document Parties: HANESBRANDS INC. | Annual Company | Hanesbrands Inc | Sara Lee Corporation You are currently viewing:
This Employee Benefits Plan Agreement involves

HANESBRANDS INC. | Annual Company | Hanesbrands Inc | Sara Lee Corporation

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Title: HANESBRANDS INC. RETIREMENT SAVINGS PLAN
Date: 10/28/2010
Industry: Apparel/Accessories     Sector: Consumer Cyclical

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Exhibit 10.1

HANESBRANDS INC.

RETIREMENT SAVINGS PLAN

(As Amended and Restated Effective as of January 1, 2010)

(conformed through First Amendment))

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

 

PAGE

SECTION 1

 

 

1

 

1.01 Background; Purpose of Plan

 

 

1

 

1.02 Effective Date; Plan Year

 

 

1

 

1.03 Plan Administration

 

 

1

 

1.04 Plan Supplements

 

 

1

 

1.05 Trustee; Trust

 

 

2

 

 

 

 

 

 

SECTION 2

 

 

3

 

Definitions

 

 

3

 

2.01 Account

 

 

3

 

2.02 Accounting Date

 

 

3

 

2.03 Actual Deferral Percentage

 

 

3

 

2.04 Adjusted Net Worth

 

 

3

 

2.05 After-Tax Account

 

 

3

 

2.06 Alternate Payee

 

 

3

 

2.07 Annual Addition

 

 

4

 

2.08 Annual Company Contribution

 

 

4

 

2.09 Annual Company Contribution Account

 

 

4

 

2.10 Appeal Committee

 

 

4

 

2.11 Before-Tax Contribution

 

 

4

 

2.12 Before-Tax Contribution Account

 

 

4

 

2.13 Beneficiary

 

 

4

 

2.14 Catch-Up Contribution

 

 

4

 

2.15 Code

 

 

5

 

2.16 Committee

 

 

5

 

2.17 Company

 

 

5

 

2.18 Compensation

 

 

5

 

2.19 Contribution Percentage

 

 

6

 

2.20 Controlled Group Member

 

 

6

 

2.21 Covered Group

 

 

6

 

2.22 Direct Rollover

 

 

6

 

2.23 Distributee

 

 

6

 

2.24 Effective Date

 

 

6

 

2.25 Elective Deferral

 

 

7

 

2.26 Eligible Employee

 

 

7

 

2.27 Eligible Retirement Plan

 

 

7

 

2.28 Eligible Rollover Distribution

 

 

7

 

2.29 Employee

 

 

8

 

2.30 Employer

 

 

8

 

2.31 Employer Contributions

 

 

8

 

2.32 ERISA

 

 

9

 

 


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

PAGE

2.33 Excess Deferral

 

 

9

 

2.34 Fair Market Value

 

 

9

 

2.35 Forfeiture

 

 

9

 

2.36 Hanesbrands Stock

 

 

9

 

2.37 Highly Compensated Employee

 

 

10

 

2.38 Hour of Service

 

 

10

 

2.39 Investment Committee

 

 

10

 

2.40 Leased Employee

 

 

10

 

2.41 Leave of Absence

 

 

10

 

2.42 Limitation Year

 

 

11

 

2.43 Matching Contributions

 

 

11

 

2.44 Matching Contribution Account

 

 

11

 

2.45 Maternity or Paternity Absence

 

 

11

 

2.46 Normal Retirement Age

 

 

11

 

2.47 One-Year Period of Severance

 

 

11

 

2.48 Participant

 

 

11

 

2.49 Period of Service

 

 

12

 

2.50 Plan

 

 

12

 

2.51 Plan Year

 

 

12

 

2.52 Predecessor Company

 

 

13

 

2.53 Predecessor Company Account

 

 

13

 

2.54 Predecessor Plan

 

 

13

 

2.55 Required Commencement Date

 

 

13

 

2.56 Rollover Contribution

 

 

13

 

2.57 Rollover Contribution Account

 

 

13

 

2.58 Sara Lee Plan

 

 

13

 

2.59 Separation Date

 

 

13

 

2.60 Service

 

 

14

 

2.61 Spin-Off, Spin-Off Date

 

 

14

 

2.62 Totally Disabled or Total Disability

 

 

14

 

2.63 Transferred Participants

 

 

14

 

2.64 Trust Agreement

 

 

15

 

2.65 Trust Fund

 

 

15

 

2.66 Trustees

 

 

15

 

2.67 Year of Service

 

 

15

 

 

 

 

 

 

SECTION 3

 

 

17

 

Participation

 

 

17

 

3.01 Eligibility to Participate

 

 

17

 

3.02 Covered Group

 

 

18

 

3.03 Leave of Absence

 

 

18

 

3.04 Leased Employees

 

 

18

 

-ii-


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

PAGE

SECTION 4

 

 

19

 

Before-Tax Contributions

 

 

19

 

4.01 Before-Tax Contributions

 

 

19

 

4.02 Catch-Up Contributions

 

 

20

 

4.03 Change in Election

 

 

20

 

4.04 Direct Transfers and Rollovers

 

 

20

 

 

 

 

 

 

SECTION 5

 

 

22

 

Employer Contributions

 

 

22

 

5.01 Before-Tax Contributions

 

 

22

 

5.02 Annual Company Contribution

 

 

22

 

5.03 Matching Contributions

 

 

22

 

5.04 Transition Contribution

 

 

23

 

5.05 Allocation of Annual Company Contribution

 

 

24

 

5.06 Payment of Matching Contributions

 

 

24

 

5.07 Allocation of Matching Contributions

 

 

24

 

5.08 Limitations on Employer Contributions

 

 

24

 

5.09 Verification of Employer Contributions

 

 

24

 

5.10 Corrective Contributions/Reallocations

 

 

24

 

5.11 No Interest in Employers

 

 

25

 

 

 

 

 

 

SECTION 6

 

 

26

 

Contribution Limits

 

 

26

 

6.01 Limitation on Before-Tax Contributions

 

 

26

 

6.02 Limitation on Matching Contributions

 

 

26

 

6.03 Dollar Limitation

 

 

26

 

6.04 Allocation of Earnings to Distributions of Excess Deferrals

 

 

27

 

6.05 Contribution Limitations

 

 

27

 

 

 

 

 

 

SECTION 7

 

 

29

 

Period of Participation

 

 

29

 

7.01 Separation Date

 

 

29

 

7.02 Restricted Participation

 

 

29

 

 

 

 

 

 

SECTION 8

 

 

31

 

Accounting

 

 

31

 

8.01 Separate Accounts

 

 

31

 

8.02 Adjustment of Participants’ Accounts

 

 

31

 

8.03 Crediting of 401(k) Contributions

 

 

32

 

8.04 Charging Distributions

 

 

33

 

8.05 Statement of Account

 

 

33

 

-iii-


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

PAGE

SECTION 9

 

 

34

 

The Trust Fund and Investment of Trust Assets

 

 

34

 

9.01 The Trust Fund

 

 

34

 

9.02 The Investment Funds

 

 

34

 

9.03 Investment of Contributions

 

 

34

 

9.04 Change in Investment of Contributions

 

 

34

 

9.05 Elections to Transfer Balances Between Accounts; Diversification

 

 

35

 

9.06 Voting of Stock; Tender Offers

 

 

35

 

9.07 Confidentiality of Participant Instructions

 

 

36

 

 

 

 

 

 

SECTION 10

 

 

37

 

Payment of Account Balances

 

 

37

 

10.01 Payments to Participants

 

 

37

 

10.02 Distributions in Shares

 

 

40

 

10.03 Beneficiary

 

 

41

 

10.04 Missing Participants and Beneficiaries

 

 

42

 

10.05 Rollovers

 

 

43

 

10.06 Forfeitures

 

 

43

 

10.07 Recovery of Benefits

 

 

44

 

10.08 Dividend Pass-Through Election

 

 

44

 

10.09 Minimum Distributions

 

 

44

 

 

 

 

 

 

SECTION 11

 

 

49

 

Loans and Withdrawals

 

 

49

 

11.01 Loans to Participants

 

 

49

 

11.02 After-Tax Withdrawals

 

 

51

 

11.03 Hardship Withdrawals

 

 

51

 

11.04 Age 59- 1 / 2 Withdrawals

 

 

53

 

11.05 Additional Rules for Withdrawals

 

 

53

 

 

 

 

 

 

SECTION 12

 

 

55

 

Reemployment

 

 

55

 

12.01 Reemployed Participants

 

 

55

 

12.02 Calculation of Service Upon Reemployment

 

 

55

 

 

 

 

 

 

SECTION 13

 

 

58

 

Top-Heavy Rules

 

 

58

 

13.01 Purpose and Effect

 

 

58

 

13.02 Top Heavy Plan

 

 

58

 

13.03 Key Employee

 

 

58

 

13.04 Minimum Employer Contribution

 

 

59

 

-iv-


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

PAGE

13.05 Aggregation of Plans

 

 

59

 

13.06 No Duplication of Benefits

 

 

59

 

13.07 Compensation

 

 

60

 

 

 

 

 

 

SECTION 14

 

 

61

 

General Provisions

 

 

61

 

14.01 Committee’s Records

 

 

61

 

14.02 Information Furnished by Participants

 

 

61

 

14.03 Interests Not Transferable

 

 

61

 

14.04 Domestic Relations Orders

 

 

61

 

14.05 Facility of Payment

 

 

62

 

14.06 No Guaranty of Interests

 

 

62

 

14.07 Rights Not Conferred by the Plan

 

 

62

 

14.08 Gender and Number

 

 

62

 

14.09 Committee’s Decisions Final

 

 

63

 

14.10 Litigation by Participants

 

 

63

 

14.11 Evidence

 

 

63

 

14.12 Uniform Rules

 

 

63

 

14.13 Law That Applies

 

 

63

 

14.14 Waiver of Notice

 

 

63

 

14.15 Successor to Employer

 

 

63

 

14.16 Application for Benefits

 

 

63

 

14.17 Claims Procedure

 

 

64

 

14.18 Action by Employers

 

 

64

 

14.19 Adoption of Plan by Controlled Group Members

 

 

64

 

 

 

 

 

 

SECTION 15

 

 

65

 

Amendment or Termination

 

 

65

 

15.01 Amendment

 

 

65

 

15.02 Termination

 

 

65

 

15.03 Effect of Termination

 

 

65

 

15.04 Notice of Amendment or Termination

 

 

65

 

15.05 Plan Merger, Consolidation, Etc.

 

 

66

 

 

 

 

 

 

SECTION 16

 

 

67

 

Relating to the Plan Administrator and Committees

 

 

67

 

16.01 The Employee Benefits Administrative Committee

 

 

67

 

16.02 The ERISA Appeal Committee

 

 

68

 

16.03 Secretary of the Committee

 

 

69

 

16.04 Manner of Action

 

 

69

 

16.05 Interested Party

 

 

69

 

16.06 Reliance on Data

 

 

69

 

-v-


 

TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

PAGE

16.07 Committee Decisions

 

 

70

 

 

 

 

 

 

EXHIBIT A

 

 

A-1

 

Accounts Transferred from the Sara Lee Plan

 

 

A-1

 

-vi-


 

HANESBRANDS INC.
RETIREMENT SAVINGS PLAN

(As Amended and Restated Effective as of January 1, 2010)

SECTION 1

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

1


 

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.

2


 

SECTION 2

Definitions

     The following terms, when used herein, unless the context clearly indicates otherwise, shall have the following respective meanings:

2.01 Account

     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.

3


 

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).

2.13 Beneficiary

     “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.

4


 

2.15 Code

     “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.16 Committee

     “Committee” means the Committee appointed by the Company to administer the Plan as described in SECTION 16 of the Plan.

2.17 Company

     “Company” means Hanesbrands Inc. or any successor organization or entity that assumes the Plan.

2.18 Compensation

     “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:

 

(a)

 

Including (i) elective contributions made on behalf of the Employee pursuant to the Employee’s salary reduction agreement under Sections 125, 401(k), and 132(f)(4) of the Code; and (ii) any differential wage payment (as defined in Section 3401(h)(2) of the Code).

 

 

(b)

 

Excluding the following:

 

(i)

 

Nonqualified stock option exercise income;

 

 

(ii)

 

Stock awards;

 

 

(iii)

 

Gains attributable to the sale of stock within the two-year period beginning on the date of grant under an employee stock purchase plan as described in Section 423 of the Code;

 

 

(iv)

 

Reimbursements or other expense allowances;

 

 

(v)

 

Fringe benefits (cash and non-cash);

 

 

(vi)

 

Moving expenses;

 

 

(vii)

 

Deferred compensation when earned or paid;

 

 

(viii)

 

Welfare benefits; and

5


 

 

(ix)

 

Severance pay and pay in lieu of notice under the Worker Adjustment and Retraining Notification Act.

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.

2.23 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.

6


 

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:

 

(a)

 

An individual retirement account described in Section 408(a) of the Code;

 

 

(b)

 

An annuity contract described in Section 403(b) of the Code;

 

 

(c)

 

An eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state or an agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred to such plan from this Plan;

 

 

(d)

 

An individual retirement annuity described in Section 408(b) of the Code;

 

 

(e)

 

An annuity plan described in Section 403(a) of the Code; or

 

 

(f)

 

A qualified trust described in Section 401(a) of the Code that accepts the Distributee’s Eligible Rollover Distribution.

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)

 

Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of 10 years or more;

 

 

(b)

 

Any distribution to the extent such distribution is required under Section 401(a)(9) of the Code;

 

 

(c)

 

Hardship withdrawals; and

7


 

 

(d)

 

Any distribution excluded from the definition of “Eligible Rollover Distribution” under the Code or applicable Treasury regulations.

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.

2.29 Employee

     “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.

2.30 Employer

     “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:

 

(a)

 

Annual Company Contributions;

 

 

(b)

 

Matching Contributions;

 

 

(c)

 

Transition Contributions; and

8


 

 

(d)

 

Any contributions that are made by an Employer in lieu of the contributions described in Subparagraphs (a), (b) or (c) above.

2.32 ERISA

     “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.

2.35 Forfeiture

     “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.

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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

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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.

2.48 Participant

     “Participant” means each Eligible Employee who satisfies the requirements of Subsection 3.01 or 12.01, as applicable.

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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:

 

(a)

 

An Employee shall be deemed to enter Service on the date he or she first completes an Hour of Service.

 

 

(b)

 

An Employee shall be deemed to reenter Service on the date following a Separation Date when he or she again completes an Hour of Service.

 

 

(c)

 

An Employee shall be deemed to have continued in Service (and thus not to have incurred a Separation Date) for the following periods:

 

(i)

 

Any period for which he or she is required to be given credit for Service under any laws of the United States; and

 

 

(ii)

 

The period (referred to herein as “Medical Leave”) prior to his or her Separation Date during which he or she is unable, by reason of physical or mental infirmity, or both, to perform satisfactorily the duties then assigned to him or her or which an Employer or Controlled Group Member is willing to assign to him or her, as determined by the Committee pursuant to a medical examination by a medical doctor selected or approved by the Committee. Such period shall end with the earlier of his or her Separation Date, or the date of cessation of such inability.

 

 

(d)

 

Subject to the rehire rules of Subsection 12.02, all periods of Service of an Employee shall be aggregated in determining his or her Service.

 

 

(e)

 

If an Employee is absent from work because he or she quits, is discharged or retires, and he or she reenters Service before the first anniversary of the date of such absence, such date shall not constitute a Separation Date and the period of such absence shall be included as Service.

2.50 Plan

     “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.

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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

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which an Employee or Participant remains absent from service with all Controlled Group Members for any reason other than quit, retirement, discharge or death.

2.60 Service

     “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:

 

(a)

 

Results in such Participant’s entitlement to and receipt of monthly disability insurance benefits under the Federal Social Security Act; or

 

 

(b)

 

Results in such Participant’s entitlement to and receipt of (or would result in receipt of but for any applicable benefit waiting period) long-term disability benefits under a long-term disability income plan maintained or adopted by such Participant’s Employer.

2.63 Transferred Participants

     “Transferred Participant” means:

 

(a)

 

any participant who had an account in the Sara Lee Plan and was employed by Hanesbrands Inc. or a Sara Lee Corporation division listed on Exhibit A on July 24, 2006;

 

 

(b)

 

any participant who (i) had an account in the Sara Lee Plan on July 24, 2006, and (ii) after July 24, 2006 but before the Spin-Off Date was transferred from employment with Sara Lee Corporation (or a subsidiary) to employment as an Eligible Employee of Hanesbrands Inc. or of a Sara Lee Corporation division listed on Exhibit A; and

 

 

(c)

 

any participant in the Sara Lee Plan who was not employed by any controlled group member of Sara Lee Corporation on July 24, 2006 but who was last employed by Hanesbrands Inc., the Sara Lee Branded Apparel division of Sara Lee Corporation, or a Sara Lee Corporation division listed in Exhibit A.

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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.

2.66 Trustees

     “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:

 

(a)

 

A period of concurrent Service with two or more of the Employers and the other Controlled Group Members will be considered as employment with only one of them during that period.

 

 

(b)

 

If an Employee is on a Leave of Absence authorized by his or her Employer, his or her period of continuous employment shall include such Leave of Absence, except for any portion thereof for which he or she is not granted rights as to reemployment by an Employer or a Controlled Group Member under any applicable statute.

 

 

(c)

 

If and to the extent the Committee so provides, part or all of the last continuous period of employment of an Employee with an Employer or any Predecessor Company prior to the date of coverage hereunder shall be included in determining Years of Service; except that:

 

(i)

 

All service of a Transferred Participant that was recognized under the Sara Lee Plan as of July 24, 2006 shall be recognized and taken into account under the Plan to the same extent as if such service had been completed under the Plan, subject to any applicable break in service rules under the Sara Lee Plan and the Plan.

 

 

(ii)

 

If an individual (A) was previously employed by the Sara Lee Corporation (referred to as the “prior employers” for purposes of this Subparagraph), and (B) subsequently becomes an Employee of an Employer or a Controlled Group Member; all of the individual’s service with the prior

15


 

 

 

 

employers shall be recognized and taken into account under the Plan to the same extent as if such service had been completed under the Plan, subject to any applicable break in service rules under the applicable prior employer’s plans and the Plan.

 

(d)

 

The foregoing provisions of this Subsection 2.67 shall not be applied so as to allow an Employee to become a Participant in the Plan prior to the Employee’s actual employment by an Employer and his or her becoming a member of a Covered Group of Employees.

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SECTION 3

Participation

3.01 Eligibility to Participate

 

(a)

 

Eligible Participants .

 

(i)

 

Each Eligible Employee hired on or after January 1, 2008 shall become a Participant as follows:

 

 

(A)

 

With respect to Before-Tax Contributions, Catch-Up Contributions, Roth Contributions, Roth Catch-Up Contributions, and Matching Contributions, immediately following the date the Eligible Employee has completed at least 30 days of Service; and

 

 

(B)

 

With respect to Annual Company Contributions, upon his or her date of hire as an Eligible Employee or the date he or she attains age 21, if later;

 

 

 

in each case, provided the Eligible Employee is then a member of a Covered Group.

 

 

(ii)

 

Notwithstanding the foregoing, Eligible Employees hired before January 1, 2008 shall become Participants in accordance with the terms of the Plan in effect immediately prior to the Effective Date.

 

 

(b)

 

Special Participation Rules . Notwithstanding any provision of the Plan to the contrary, the following special participation rules shall apply:

 

(i)

 

Participants” only for purposes of Subsection 4.04 . For purposes of amounts transferred or Rollover Contributions or Roth Rollover Contributions made pursuant to Subsection 4.04, the term “Participant” shall include an Employee of an Employer who is not yet a Participant in the Plan, but such Participant may not make Before-Tax Contributions or Roth Contributions or receive any Employer Contributions before satisfying the requirements of this Section.

 

 

(ii)

 

Transfer Between Covered Groups . In the event an Employee or Participant transfers employment from one Covered Group to a different Covered Group that is not eligible for the same contributions and benefits under the Plan, such individual shall be treated as terminating employment and simultaneously being reemployed under Subsection 12.01 solely for purposes of determining his or her eligibility for contributions and benefits under the Plan during his or her employment with the new Covered Group.

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(iii)

 

Inactive Transferred Participants . Transferred Participants who are not actively employed by an Employer in a Covered Group shall be treated as terminated or restricted participants under Subsection 7.02 of the Plan.

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.

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SECTION 4

Employee Contributions

4.01 Before-Tax Contributions and Roth Contributions

 

(a)

 

Before-Tax Contribution Election . Each full-time and part-time, exempt and non-exempt salaried or hourly Participant may elect to defer a portion of his or her Compensation for any Plan Year by electing to have a percentage (in multiples of one percent not to exceed 50 percent) of his or her Compensation contributed to the Plan on his or her behalf by his or her Employer as Before-Tax Contributions. A Participant may elect to make such Before-Tax Contributions beginning as soon as administratively possible following the date he or she becomes a Participant, subject to Subparagraph (c) below. Notwithstanding any Plan provision to the contrary, a Participant may make a Before-Tax Contribution election only with respect to amounts that are compensation within the meaning of Section 415 of the Code and Section 1.415(c)-2 of the Treasury Regulations.

 

 

(b)

 

Roth Contribution Election . Subject to the conditions and limitations of the Plan and the Committee’s rules and procedures, beginning July 1, 2010, each full-time and part-time, exempt and non-exempt salaried or hourly Participant may elect to make Roth Contributions under the Plan in lieu of all or a portion of the Before-Tax Contributions that the Participant is otherwise eligible to make under the Plan. Roth 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 made or been deemed to have made an election to defer such amounts. Unless specifically provided otherwise, Roth Contributions shall be treated as Before-Tax Contributions for all purposes under the Plan.

 

 

(c)

 

Automatic Deferral Election . Notwithstanding Subparagraphs (a) and (b) above, each individual who becomes an Eligible Employee on or after January 1, 2008 will be deemed to have automatically elected to have four percent of his or her Compensation contributed to the Plan as Before-Tax Contributions beginning as soon as administratively possible after the Eligible Employee becomes a Participant hereunder. In addition, each Participant as of January 1, 2008 who had not previously made an affirmative election under the Plan was automatically enrolled at the four percent contribution level effective January 1, 2008. Each Participant who is automatically enrolled under this Subparagraph shall have his or her deferral percentage increased automatically by one percent each Plan Year thereafter, up to six percent of Compensation; provided, however, that the automatic deferral percentage for an Eligible Employee who becomes a Participant during the last three months of a Plan Year shall not increase until the beginning of the second Plan Year following his or her participation date; and further provided that automatic increases under this Subparagraph shall not apply once a Participant has made an affirmative election to change his or her deferral percentage, including an affirmative election to cease all deferrals. Prior to the date an automatic deferral election is effective, the Committee shall provide the Eligible Employee with a notice that explains the automatic deferral feature, the Eligible Employee’s right to elect not to have his or her Compensation automatically reduced and contributed to the Plan or to have another percentage contributed, and the procedure for making an alternate election. An automatic deferral election shall be treated for all purposes of the Plan as a voluntary deferral election.

 

 

(d)

 

Reduction of Compensation . Before-Tax Contributions and Roth Contributions shall be made by a reduction of such items of the Participant’s Compensation as each Employer shall determine (on a uniform basis) for each payroll period by the applicable percentage (not to exceed the maximum percentage determined by the Committee for any payroll period). The amount deferred by a Participant will be withheld from the Participant’s Compensation and contributed to the Plan on the Participant’s behalf by the Participant’s Employer in accordance with Subsection 5.01.

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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.

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4.04 Direct Transfers and Rollovers

     The Committee in its discretion may direct the Trustee to accept:

 

(a)

 

From a trustee or insurance company a direct transfer (or an Eligible Rollover Distribution) of a Participant’s benefit (or portion thereof) under any other Eligible Retirement Plan;

 

 

(b)

 

From a Participant as a Rollover Contribution or Roth Rollover Contribution an amount (or portion thereof) received by the Participant as an Eligible Rollover Distribution from another Eligible Retirement Plan; or

 

 

(c)

 

From a Participant as a Rollover Contribution the entire amount received by the Participant as a distribution from an individual retirement account or an individual retirement annuity where such amount is attributable to a rollover contribution of a qualified total distribution pursuant to Section 408(d)(3)(A) of the Code;

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.

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SECTION 5

Employer Contributions

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:

 

(a)

 

For each Participant who is an exempt or non-exempt salaried employee, an amount determined by the Company each year in its discretion, which amount shall not be in excess of four percent of such Participant’s Compensation for that portion of the Plan Year during which he or she was a salaried employee and a Participant in the Plan.

 

 

(b)

 

For each Participant who is an hourly, non-union employee or a New York-based sample department union Employee, an amount determined by the Company each year in its discretion, which amount shall not be in excess of two percent of such Participant’s Compensation for that portion of the Plan Year during which he or she was an hourly employee and a Participant in the Plan.

     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

 

(a)

 

As of the end of each quarter (or on a more frequent basis as determined by the Employers), the Employers will make a Matching Contribution on behalf of each Participant equal to 100 percent of the sum of the Participant’s Before-Tax Contributions (including Catch-Up Contributions) and Roth Contributions (including Roth Catch-Up Contributions)

22


 

 

 

 

made since the last Employer Matching Contribution that do not exceed four percent of the Participant’s Compensation.

 

(b)

 

As of the end of each calendar quarter (a “true up allocation date”), a “true up” Matching Contribution for each Participant who, as of the applicable true up allocation date, did not receive the full Matching Contribution provided under Subparagraph (a) and this Subparagraph (b), if applicable, based on the amount of his or her Before-Tax Contributions (including Catch-Up Contributions) and Roth Contributions (including Roth Catch-Up Contributions) for the Plan Year as of the applicable true up allocation date. Such true up Matching Contribution will be equal to the difference between the Matching Contribution actually made on behalf of such Participant for the Plan Year as of the true up allocation date, and the full Matching Contribution that the Participant would have been entitled to receive for the Plan Year as of the true up allocation date if such Matching Contributions were determined as of the true up allocation date instead of on a quarterly basis.

 

 

(c)

 

Matching Contributions shall be made 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 Matching Contributions under this Subsection 5.03 shall be immediately invested in accordance with the Participant’s current investment election.

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:

 

(a)

 

Was an exempt or non-exempt salaried employee of Sara Lee Corporation’s Branded Apparel division; and

 

 

(b)

 

Had attained age 50 and completed 10 Years of Service; and

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.

23


 

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

24


 

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:

 

(a)

 

an Employer may make additional contributions to such Participant’s Accounts; or

 

 

(b)

 

the Committee may reallocate existing contributions among the Accounts of affected Participants.

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:

 

(a)

 

Any portion of a contribution is made by an Employer by mistake of fact and such portion is returned to the Employer within one year after payment to the Trustee; or

 

 

(b)

 

A contribution conditioned on the deductibility thereof is disallowed as an expense for federal income tax purposes and such contribution (to the extent disallowed) is returned to the Employer within one year after the disallowance of the deduction.

     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.

25


 

SECTION 6

Contribution Limits

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.

26


 

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:

 

(a)

 

Compensation shall include elective amounts that are not includible in the gross income of the Participant by reason of Sections 125, 132(f) and 402(g)(3) of the Code.

 

 

(b)

 

Compensation for a Limitation Year shall include compensation paid by the later of 2-1/2 months after a Participant’s severance from employment with the Employers or the end of the Limitation Year that includes the date of the Participant’s severance from employment with the Employers, if:

 

(i)

 

The payment is regular compensation for services during the Participant’s regular working hours, or compensation for services outside the Participant’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments, and absent a severance from employment, the payments would have been paid to the Participant while the Participant continued in employment with the Employers; or

 

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