EXECUTIVE DEFERRED
COMPENSATION PLAN
Conformed through September 25,
2008
1.1 The Plan
and Its Effective Date . The Hanesbrands Inc. Executive
Deferred Compensation Plan was established as of January 1,
2006 and was subsequently amended. The Plan has now been
amended and restated, effective as of January 1,
2006.
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(a)
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The
Company has established this Plan to allow
Eligible Employee s to defer compensation as described
herein. The Plan is intended to be a top-hat plan described
in Section 201(2) of ERISA .
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(b)
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Amounts deferred under the
Plan on and after the Effective Date (and amounts
described in Paragraph 5 of Supplement I to the Plan )
are subject to the provisions of Section 409A of the
Code ; accordingly, as applied to those amounts, the
Plan shall at all times be interpreted and administered so
that it is consistent with such Code section notwithstanding
any provision of the Plan to the contrary.
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1.3
Administration . The Plan shall be administered by
the Committee . The Committee shall have the powers
set forth in the Plan and the complete discretionary power
to interpret its provisions. Any decisions of the Committee
shall be final and binding on all persons with regard to the
Plan . The Committee may delegate its authority
hereunder to the Executive Vice President, Human Resources of the
Company or to such other officers of the Company as
it may deem appropriate.
1.4 Plan
Year . The Plan shall be administered on the basis of
the Plan Year .
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2.1 “
Annual Base Salary ” means the regular rate of
compensation to be paid to the Eligible Employee for
services rendered during the Plan Year while an Eligible
Employee, excluding elective deferrals under Code
Section 125, severance or termination payments, commissions,
foreign service payments, payments for consulting services and such
other unusual or extraordinary payments as the Committee may
determine.
2.2 “
Annual Bonus ” means an Eligible Employee
’s bonus for a year due under an annual bonus plan or any
other short-term incentive plan of the Company or an
Employer .
2.3
“Balance Calculation Date” means the date a
Participant’s Deferral Account is valued for purposes
of making a distribution from such Participant’s Deferral
Account . For a distribution payable on a Distribution
Date , the Balance Calculation Date is the last business
day of the month preceding the Distribution Date ; for
distributions payable due to a Participant’s Separation
from Service or pursuant to Sections 5.2 and 5.3, the
Balance Calculation Date is the last business day of the
month in which the Participant has a Separation from
Service , is determined to be totally disabled or dies, as the
case may be.
2.4
“Beneficiary” means the individual(s) or entity
designated by a Participant to receive the balance of the
Participant’s Deferral Account in the event of the
Participant’s death prior to the payment of the
Participant’s entire Deferral Account . To be
effective, any beneficiary designation shall be filed in such
manner as prescribed by the Committee . A Participant
may revoke an existing beneficiary designation by filing another
Beneficiary designation in such manner as prescribed by the
Committee . The latest beneficiary designation received by
the Committee shall be controlling. If no Beneficiary
is named by a Participant or if he survives all of his named
Beneficiaries , the Deferral Account shall be paid in
the following order of precedence:
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(a)
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the
Participant’s spouse;
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(b)
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the
Participant’s children (including adopted children),
per stirpes;
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(c)
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the
Participant’s beneficiary as designated by the
Participant under the applicable life insurance plan
sponsored by the Company or the Employer ;
or
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(d)
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the
Participant’s estate.
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2.5 “
Code ” means the Internal Revenue Code of 1986,
as amended.
2.6 “
Committee ” means the Employee Benefits Administrative
Committee of the Sara Lee Corporation for as long as the
Company is a member of Sara Lee Corporation’s
controlled group of corporations (as defined in Section 414 of
the Code and the regulations thereunder). Thereafter,
“ Committee ” shall mean the Employee Benefits
Administrative Committee of the Company .
2.7 “
Company ” means Hanesbrands Inc.
2.8 “
Deferral ” means the amount deferred pursuant to a
Deferral Election and, as the context warrants, includes an
“ Employer Deferral. ”
2.9 “
Deferral Account ” means the bookkeeping account
established in the name of the Participant to hold all
amounts deferred pursuant to the Participant’s Deferral
Election s or pursuant to an Employer Deferral . As
described in Supplement I to this Plan , separate rules
apply to Transferred Participants’ Grandfathered
Deferrals .
2.10 “
Deferral Crediting Date ” means the date on which, in
the absence of a Deferral Election , the Participant
would otherwise have received the Deferral . If such date is
not a business day, then the Deferral Crediting Date shall
mean the next business day after the Participant would
otherwise have received the Deferral.
2.11
“Deferral Election” means a Participant’s
irrevocable election to defer receipt of a Long-Term Incentive
Payment , an Annual Bonus , and/or Annual Base
Salary for a Plan Year.
2.12
“Deferral Program” means the terms and
conditions, described herein, pursuant to which a Participant may
on or after January 1, 2006 make a Deferral Election
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2.13
“Distribution Date” means the specified date on
which an Eligible Employee elects to have a Deferral
paid or begin to be paid, pursuant to a Deferral Election
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2.14 “
Effective Date ” means the effective date of the
Plan , January 1, 2006.
2.15 “
Eligible Employee ” means each executive of the
Company or an Employer who is identified as eligible
by the Committee .
2.16 “
Employer ” means any subsidiary or affiliate of the
Company incorporated under the laws of any state in the
United States that has adopted the Plan with the consent of
the Committee .
2.17 “
Employer Deferral ” means an amount credited to a
Participant’s Deferral Account by an Employer
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2.18 “
ERISA ” means the Employee Retirement Income Security
Act of 1974, as amended.
2.19 “
Fixed Interest Account ” means the investment
alternative under which interest is credited to all or a portion of
a Participant’s Deferral Account at the rate of 9%
each Plan Year .
2.20 “
Interest Account ” means the investment alternative
(in addition to the Fixed Interest Account) under which
interest is credited to all or a portion of a
Participant’s Deferral Account each Plan Year
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2.21 “
Long-Term Incentive Payment ” means any payment due
with respect to restricted stock units granted under the terms of
the Stock Plan .
2.22 “
Market Value ” of common stock means the average of
the high and low quotes for the applicable common stock on the
applicable day on the New York Stock Exchange Composite Transaction
Tape; provided, however, that effective January 1, 2008, the
Market Value of common stock of the Company shall be
the closing price on the applicable day on the New York Stock
Exchange Composite Transaction Tape.
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2.23 “
Participant ” means any Eligible Employee who
makes a Deferral Election or has a Deferral Account
under the Plan .
2.24 “
Plan ” means the Hanesbrands Inc. Executive Deferred
Compensation Plan.
2.25 “
Plan Year ” means the calendar year.
2.26 “
Re-Deferral Election ” means a
Participant’s irrevocable election to extend a
Distribution Date .
2.27 “
Separation from Service ” means a
Participant’s termination of employment due to
retirement or otherwise, as defined in Treasury regulations section
1.409A-1(h).
2.28 “
Stock Equivalent Account ” means the investment
alternative under which all or a portion of a
Participant’s Deferral Account is treated as if it is
invested in common stock equivalents.
2.29
“Stock Plan” means the Hanesbrands Inc. Omnibus
Incentive Plan of 2006 (as amended from time to time) or any
successor thereto that provides for the issuance to
Participants of common stock of the Company
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2.30 “
Top-50 Employee ” means an employee of the
Company or an Employer who is a U.S. taxpayer or is
on the U.S. payroll and, at any time during the 12-month period
ending each December 31st is: (a) one of the 50 top-paid
employees of the Company or an Employer who is either
an officer or a director and has annual compensation greater than
$140,000 (as indexed); (b) a five-percent owner (as defined in
Code Section 416(i)(1)(B)) of the Company or an
Employer ; or (c) a one-percent owner (as defined in
Code Section 416(i)(1)(B)) of the Company or an
Employer with annual compensation of more than $150,000.
When identifying Top-50 Employees, the term “annual
compensation” shall mean compensation required to be reported
as taxable income on IRS Form W-2, plus elective deferrals under
Code sections 125(a), 132(f)(4) and 402(e)(3), but
disregarding the compensation of nonresident aliens who do not
participate in the Plan . If an employee is a Top-50
Employee as of any December 31st, he shall be treated as a
Top-50 Employee for the 12-month period beginning on the
March 1st following that December 31st. NOTE: Effective as of
January 1, 2009, the foregoing shall be replaced in its entirety
with the following: “ Top-50 Employee ” means an
employee described in the Company’s Procedures for
Determining Top-50 Employees under Code Section 409A,
as amended from time to time.
2.31 “
Trust ” means the grantor Trust or
Trusts , if any, that the Company or an
Employer may maintain to hold assets to be used for payment
of benefits under the Plan .
2.32 “
Unforeseeable Financial Emergency ” means a severe
financial hardship to the Participant resulting from
(a) an illness or accident of the Participant or of a
dependent of the Participant ; (b) loss of the
Participant’s property due to casualty; or
(c) such other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of
the Participant as determined by the Committee
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Participation and Deferral
Elections
3.1
Participation . Subject to the conditions and limitations of
the Plan , any Eligible Employee who makes a
Deferral Election as described in Section 3.2 shall
become a Participant in the Plan and shall remain a
Participant until the entire balance of his Deferral
Account is distributed to him.
3.2 Rules for
Deferral Elections . Any Eligible Employee may make a
Deferral Election for a Plan Year in accordance with
the rules set forth below.
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(a)
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Eligibility. An Eligible Employee shall be
eligible to make a Deferral Election only if he is an
active, regular, full-time employee on the date such election is
made.
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(b)
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Deferral Amounts.
Under the Deferral
Program , for each Plan Year , an Eligible
Employee may make no more than one Deferral Election for
each of the Eligible Employee ’s Long-Term
Incentive Payments , Annual Bonus , Annual Base
Salary and other payments in the amounts set forth
below:
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(i)
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All
or any portion of the Eligible Employee ’ s Annual
Base Salary .
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(ii)
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All
or any portion not less than 25 percent of the Eligible
Employee ’ s Annual Bonus .
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(iii)
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The
Eligible Employee’s Long-Term Incentive Payment in
such increments and subject to such limitations and restrictions as
the Committee may establish.
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(iv)
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With respect to any other bonuses
and incentive payments under any plan or arrangement established by
the Company or an Employer as the Committee
may designate as compensation
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eligible for deferral under this
Plan , in such increments and subject to such limitations
and restrictions as the Committee may establish.
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(c)
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Timing and Other Requirements for
Deferral Elections. All Deferral Elections must
be made in such form as the Committee may prescribe and must
be received by the Committee no later than the date
specified by the Committee . With respect to deferrals of
Annual Base Salary , the date specified by the
Committee generally may be no later than the end of the
calendar year preceding the calendar year in which the Annual
Base Salary is anticipated to be paid. With respect to the
deferral of an Annual Bonus , the date specified by the
Committee generally may be no later than the end of the
calendar year preceding the beginning of the measurement period for
such Annual Bonus ; provided, however, that if the
Committee determines that such Annual Bonus qualifies
as “performance-based compensation” (as defined in
Code Section 409A(4)(B)(iii) and the regulations
thereunder), such Deferral Election may be made no later
than 6 months before the end of the measurement period. With
respect to the initial deferral of a Long-Term Incentive
Payment , the date specified by the Committee generally
may be no later than the date that is 30 days after the date of
grant and no later than 12 months prior to the earliest date
on which such Long-Term Incentive Payment will become
vested; provided, however, that: (i) if an initial deferral of
a Long-Term Incentive Payment is not completed within the
time frames specified above, then a Re-Deferral Election may
be elected to the extent permitted by subsection 3.2(i) below, and
(ii) if the Committee determines that such Long-Term
Incentive Payment qualifies as “performance-based
compensation” (as defined above), then such Deferral
Election may be made no later than 6 months before the end
of the measurement period. The Committee , in its complete
discretion, may modify the general rules set forth above as
permitted by IRS Notice 2005-1, applicable regulations and other
guidance issued under Code Section 409A.
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(d)
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Special Rule for Newly Eligible
Employees. Notwithstanding anything in
paragraph (c) above to the contrary, in the first year in
which an Eligible Employee becomes eligible to participate
in the Plan , such Participant may make a Deferral
Election within 30 days after the date the
Participant first become eligible to participate; provided,
however, that such election may only apply to compensation with
respect to services to be performed subsequent to the election
(with Annual Bonuses and Long-Term Incentive Payments
prorated to the extent necessary to comply with regulations issued
under Code Section 409A).
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(e)
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Elections Generally
Irrevocable. Deferral Elections
shall be irrevocable;
provided, that if the Committee determines that a
Participant has an Unforeseeable Financial Emergency
, then the Participant’s Deferral Election s then in
effect shall be revoked for the balance of the Plan Year
with respect to all amounts not previously deferred; however, such
Participant may make a new Deferral Election for the
following Plan Year.
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(f)
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Investment Election.
As part of each
Deferral Election , an Eligible Employee must elect
the investment alternatives that shall apply to the Deferral
in accordance with Section 4.2.
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(g)
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Distribution Dates.
As part of each
Deferral Election , the Eligible Employee must
specify a Distribution Date , which cannot be prior to the
January 1 following the first anniversary of the date the
Deferral Election is made. For 2006 and later years, the
Eligible Employee may also specify that payment may be made
on the earlier of the Distribution Date or the Eligible
Employee’s Separation from Service. An Eligible
Employee may make a different Deferral Election for each
separate Deferral under the Plan . Except as provided
in subsection (i) below, an election under this subsection
(g) is irrevocable and shall apply only to that portion of the
Participant’s Deferral Account which is attributable
to the Deferral .
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(h)
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Distribution Form.
As part of each
Deferral Election , an Eligible Employee must elect
the form in which the Deferral will be paid in accordance
with Section 5.1. The distribution form specified may, but
need not, be the same for all distribution events. Except as
provided in Section 5.1, an Eligible Employee ’
s election as to the method of payment shall be
irrevocable.
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(i)
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Re-Deferrals.
A Participant may
make a Re-Deferral Election ; provided, that no
Re-Deferral Election shall be effective unless (i) the
Committee receives the election not later than
12 months prior to the Distribution Date to be changed,
and (ii) the new Distribution Date is not earlier than
the fifth anniversary of the prior Distribution Date . All
Re-Deferral Elections shall be irrevocable and shall be made
pursuant to such rules as the Committee may prescribe. If an
initial deferral of a Long-Term Incentive Payment is not
made within the time period specified in subsection 3.2(c), then a
Re-Deferral Election may be made under this subsection no
later than 12 months prior to the date on which such
Long-Term Incentive Payment becomes vested. Notwithstanding
any rules of the Plan to the contrary, the Committee
, in its complete discretion, may modify the general redeferral
rules set forth above as permitted by IRS Notice 2005-1, applicable
regulations and other guidance issued under Code
Section 409A. Pursuant to the preceding sentence, during 2005,
2006, 2007, and 2008, a Re-Deferral Election need not be
received by the Committee 12 months prior to the
Distribution Date to be changed, and the new Distribution
Date may be earlier than the fifth anniversary of the prior
Distribution Date ; provided that such a Re-Deferral
Election is completed by the date prescribed by the
Committee in the applicable year, and further provided that
a Re-Deferral Election made in 2006 may neither specify a
Distribution Date in 2006 nor defer amounts otherwise
payable in 2006, a Re-Deferral Election made in 2007 may
neither specify a Distribution Date in 2007 nor defer
amounts otherwise payable in 2007,
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and
a Re-Deferral Election made in 2008 may neither specify a
Distribution Date in 2008 nor defer amounts otherwise
payable in 2008.
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(j)
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Reduction for FICA and Income
Taxes. Notwithstanding a
Participant’s Deferral Election or any Plan
provision to the contrary, the Company or an Employer
may reduce a Participant’s Deferrals to the extent
necessary to pay applicable Social Security taxes, including the
Medicare portion of such taxes, or applicable state, local or
foreign income taxes, payable on Deferrals before they would
otherwise be paid or made available to the
Participant.
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(k)
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Change in Deferrals due to Change in
Election under Section 125 Plan. A change in a Participant’s
Deferrals under the Plan will not be treated as an
accelerated payment nor an impermissible Deferral Election,
to the extent the change results solely from a change in the
Participant’s election under a Code
Section 125 plan maintained by the Company or an
Employer.
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3.3
Transfers . With the consent of the Committee and
subject to such limits and in accordance with such rules as the
Committee may establish in its sole discretion, a
Participant who is employed by a subsidiary of the
Company may elect to transfer his entire Deferral
Account to a similar deferred compensation plan maintained by
such subsidiary; provided, that no portion of a
Participant’s Deferral Account that is attributable to
a Deferral , the Distribution Date for which has or
will have occurred before the scheduled transfer date, may be
transferred under this provision.
3.4 Employer
Deferrals . In addition to Deferrals made pursuant to a
Participant’s Deferral Election under this
Section 3, an Employer may credit an Employer
Deferral to a Participant’s Deferral Account . The
amount of any Employer Deferral shall be determined by the
Employer in its complete discretion. Prior to the beginning
of the period in which the related services are performed with
respect to an Employer Deferral , the Employer shall
specify the Distribution Date, any applicable vesting
requirements, and the form of payment for the Employer
Deferral . Once credited to the Participant’s Deferral
Account , the Employer Deferral shall be treated as any
other Deferral under the Plan .
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4.1 Deferral
Accounts . All amounts deferred pursuant to a
Participant’s Deferral Elections under the Plan
shall be allocated to the Participant’s Deferral
Account and the Committee shall maintain a separate
subaccount under a Participant’s Deferral Account for
each Deferral . Each Deferral shall be credited to
the Deferral Account as of the applicable Deferral
Crediting Date .
4.2 Investment
Alternatives . A Participant must make an investment
election at the time of each Deferral Election . The
investment election must be made pursuant to such rules as the
Committee may prescribe, subject to Section 4.3, and
shall designate the portion of the Deferral which is to be
treated as invested in each available investment alternative.
Subject to the Committee’s right to change the
investment alternatives in the future, the investment alternatives
are as follows:
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(a)
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Stock Equivalent Account
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(i)
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Under the Stock Equivalent
Account , the value of the Participant’s Deferral
shall be determined
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