þ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
Maryland
(State of incorporation) |
20-3552316
(I.R.S. employer identification no.) |
|
1000 East Hanes Mill Road
Winston-Salem, North Carolina (Address of principal executive office) |
27105
(Zip code) |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
| our ability to execute our consolidation and globalization strategy, including migrating our production and manufacturing operations to lower-cost locations around the world; | ||
| our ability to successfully manage social, political, economic and other conditions affecting our foreign operations and supply chain sources, such as disruption of markets, changes in import and export laws, currency restrictions and currency exchange rate fluctuations; | ||
| current economic conditions; | ||
| consumer spending levels; | ||
| the risk of inflation or deflation; | ||
| financial difficulties experienced by any of our top customers or groups of customers; | ||
| our debt and debt service requirements that restrict our operating and financial flexibility and impose interest and financing costs; | ||
| the financial ratios that our debt instruments require us to maintain; | ||
| future financial performance, including availability, terms and deployment of capital; | ||
| dramatic changes in the volatile market price of cotton, the primary material used in the manufacture of our products; | ||
| the impact of increases in prices of other materials used in our products, such as dyes and chemicals; | ||
| the impact of increases in prices of oil-related materials and other costs, such as energy and utility costs; | ||
| our ability to effectively manage our inventory and reduce inventory reserves; | ||
| loss of or reduction in sales to any of our top customers, especially Wal-Mart, or group of customers; | ||
| the highly competitive and evolving nature of the industry in which we compete; | ||
| our ability to keep pace with changing consumer preferences; | ||
| our ability to continue to effectively distribute our products through our distribution network as we continue to consolidate our distribution network; | ||
| our ability to comply with environmental and occupational health and safety laws and regulations; | ||
| costs and adverse publicity arising from violations of labor laws by us or any of our third-party manufacturers; |
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| our ability to attract and retain key personnel; | ||
| new litigation or developments in existing litigation; and | ||
| possible terrorist attacks and ongoing military action in the Middle East and other parts of the world. |
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Segment
Primary Products
Primary Brands
Intimate apparel, such as bras,
panties and bodywear
Hanes, Playtex, Bali, barely
there, Just My Size, Wonderbra,
Duofold
Mens underwear and kids underwear
Hanes, Champion, C9 by
Champion, Polo Ralph Lauren*
Socks
Hanes, Champion, C9 by Champion
Activewear, such as performance
t-shirts and shorts and fleece
Champion, C9 by Champion
Casualwear, such as t-shirts,
fleece and sport shirts
Hanes, Just My Size, Outer
Banks, Champion, Hanes Beefy-T
Activewear, mens underwear, kids
underwear, intimate apparel,
socks, hosiery and casualwear
Hanes, Wonderbra,** Champion,
Stedman, Playtex,** Zorba,
Rinbros, Kendall,* Sol y Oro,
Ritmo, Bali
Hosiery
Leggs, Hanes, Donna Karan,*
DKNY,* Just My Size
Nonfinished products, including
fabric and certain other materials
Not applicable
*
Brand used under a license agreement.
**
As a result of the February 2006 sale of the European branded apparel business of Sara Lee
Corporation, or Sara Lee, we are not permitted to sell this brand in the member states of
the European Union, or the EU, several other European countries and South Africa.
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Hanes
no ride up panties, specially designed for a better fit that helps women stay
wedgie-free (2008).
Hanes Lay Flat Collar Undershirts
and
Hanes No Ride Up Boxer briefs
, the brands latest
innovation in product comfort and fit (2008).
Bali Concealers
bras, the first and only bra with revolutionary concealing petals for
complete modesty (2008).
Hanes
Comfort Soft
T-shirt (2007).
Bali Passion for Comfort
bra, designed to be the ultimate comfort bra, features a silky
smooth lining for a luxurious feel against the body (2007).
Hanes All-Over Comfort Bra
, which features stay-put straps that dont slip, cushioned
wires that dont poke and a tag-free back (2006).
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We launched new Look Who advertising in June featuring Michael Jordan and Charlie
Sheen to support our new
Hanes Lay Flat Collar Undershirts
and
Hanes No Ride Up Boxer briefs
. The
campaign includes television advertising as well as online and video game advertising.
We introduced our new
Hanes No Ride Up Panty
with television advertising featuring
Sarah Chalke in another new Look Who advertising campaign.
Building on the 10-year strategic alliance with The Walt Disney Company that we entered
into in October 2007, we introduced a line of apparel inspired by the
Champion
items worn
by characters in Walt Disney Pictures High School Musical 3: Senior Year to coincide
with the opening of that movie in October 2008.
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Our alliance with The Walt Disney Company includes a number of features.
Hanes
is the
presenting sponsor of the Rock n Roller Coaster Starring Aerosmith, one of the most
popular attractions at Disney-Hollywood Studios in Florida.
Hanes
has a customizable apparel
venue in Downtown Disney at Walt Disney World Resort that enables guests to design and
personalize their own custom t-shirts and other items.
Champion
has naming rights for the
stadium at Disneys Wide World of Sports Complex, the nations premier amateur sports
venue. In addition to
Champion
Stadium,
Champion
has brand placement and promotional
opportunities throughout the complex. We have in-store promotional and brand building
opportunities at eight ESPN Zone restaurants and stores located across the country.
Hanes
and
Champion
have category exclusivity for select apparel at Disneyland Resort in Anaheim,
Calif., Walt Disney World Resort and Disneys Wide World of Sports Complex Stadium, both
in Florida, and eight ESPN Zone stores. Our products, including t-shirts and tanks and
fleece sweatshirts, sweatpants, hoodies and other family fleece, including infant and
toddler items, are co-labeled, including
Disneyland Resort by Hanes
,
Walt Disney World by
Hanes
,
Disneys Wide World of Sports Complex by Champion
and
ESPN Zone by Champion.
We continued our How You Play national advertising campaign for
Champion
that we
launched in 2007. The campaign, which is the first campaign for our
Champion
brand since
2003, includes print, out-of-home and online components and is designed to capture the
everyday moments of fun and sport in a series of cool and hip lifestyle images.
We continued the Live Beautifully campaign for our
Bali
brand, launched in the Spring
of 2007. The print, television and online ad campaign features Bali bras and panties from
its
Passion for Comfort
,
Seductive Curve
and
Cotton Creations
lines.
We continued our innovative and expressive advertising and marketing campaign called
Girl Talk, launched in September 2007, in which confident, everyday women talk about
their breasts, in support of our
Playtex 18 Hour
and
Playtex Secrets
product lines.
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Strong Brands with Leading Market Positions.
According to NPD, our brands hold either
the number one or number two U.S. market position by sales value in most product categories
in which we compete, for the 12 month period ended November 30, 2008. According to NPD, our
largest brand,
Hanes
, is the top-selling apparel brand in the United States by units sold,
for the 12 month period ended November 30, 2008.
High-Volume, Core Essentials Focus.
We sell high-volume, frequently replenished apparel
essentials. The majority of our core styles continue from year to year, with variations only in color,
fabric or design details, and are frequently replenished by consumers. We believe that our
status as a high-volume seller of core apparel essentials creates a more stable and
predictable revenue base and reduces our exposure to dramatic fashion shifts often observed
in the general apparel industry.
Significant Scale of Operations.
According to NPD, we are the largest seller of apparel
essentials in the United States as measured by sales value for the 12 month period ended
November 30, 2008. Most of our products are sold to large retailers that have high-volume
demands. We believe that we are able to leverage
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our significant scale of operations to
provide us with greater manufacturing efficiencies, purchasing power and product design,
marketing and customer management resources than our smaller competitors.
Strong Customer Relationships.
We sell our products primarily through large,
high-volume retailers, including mass merchants, department stores and national chains. We
have strong, long-term relationships with our top customers, including relationships of
more than ten years with each of our top ten customers. We have aligned significant parts
of our organization with corresponding parts of our customers organizations. We also have
entered into customer-specific programs such as the
C9 by Champion
products marketed and
sold through Target stores.
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political instability and acts of war or terrorism or other international events
resulting in the disruption of trade;
other security risks;
disruptions in shipping and freight forwarding services;
increases in oil prices, which would increase the cost of shipping;
interruptions in the availability of basic services and infrastructure, including power
shortages;
fluctuations in foreign currency exchange rates resulting in uncertainty as to future
asset and liability values, cost of goods and results of operations that are denominated in
foreign currencies;
extraordinary weather conditions or natural disasters, such as hurricanes, earthquakes,
tsunamis, floods or fires; and
the occurrence of an epidemic, the spread of which may impact our ability to obtain
products on a timely basis.
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additional duties, taxes, tariffs and other charges on imports, including retaliatory
duties or other trade sanctions, which may or may not be based on WTO rules, and which
would increase the cost of products produced in such countries;
limitations on the quantity of goods which may be imported into the United States from a
particular country, including the imposition of further safeguard mechanisms by the U.S.
government or governments in other jurisdictions, limiting our ability to import goods from
particular countries, such as China;
changes in the classification of products that could result in higher duty rates than we
have historically paid;
modification of the trading status of certain countries;
requirements as to where products are manufactured;
creation of export licensing requirements, imposition of restrictions on export
quantities or specification of minimum export pricing; or
creation of other restrictions on imports.
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Name
Age
Positions
51
Chief Executive Officer and Chairman of the Board of Directors
49
President, Global Supply Chain and Asia Business Development
48
President, Chief Commercial Officer
48
Executive Vice President, General Counsel and Corporate Secretary
51
Executive Vice President, Human Resources
56
Executive Vice President, Chief Financial Officer
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Owned
Leased
Properties by Country (1)
Square Feet
Square Feet
Total
10,378,908
5,413,658
15,792,566
867,167
355,533
1,222,700
746,484
400,338
1,146,822
356,279
917,966
1,274,245
1,051,395
268,892
1,320,287
470,111
470,111
289,480
126,777
416,257
164,548
164,548
277,733
14,142
291,875
101,934
101,934
87,279
7,301
94,580
1,099,166
87,573
1,186,739
111,385
68,129
179,514
78,019
78,019
5,356,479
2,591,152
7,947,631
15,735,387
8,004,810
23,740,197
(1)
Excludes vacant land.
Owned
Leased
Properties by Country (1)
Square Feet
Square Feet
Total
5,149,083
3,984,565
9,133,648
4,601,476
1,223,013
5,824,489
452,014
837,960
1,289,974
1,143,897
39,000
1,182,897
11,346,470
6,084,538
17,431,008
(1)
Excludes vacant land, facilities no longer in operation intended for disposal, sourcing
offices not associated with a particular segment, and office buildings housing corporate
functions.
(2)
Our Other segment is comprised of sales of nonfinished products such as fabric and certain
other materials in the United States and Latin America that maintain asset utilization at
certain manufacturing facilities used by one or more of the Innerwear, Outerwear,
International or Hosiery segments and are expected to generate break even margins. No
facilities are used primarily by our Other segment.
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30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
E-1
E-2
E-3
E-4
E-5
E-6
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21
F-22
F-23
F-24
F-25
F-26
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34
F-35
F-36
F-37
F-38
F-39
F-40
F-41
F-42
F-43
F-44
F-45
F-46
F-47
F-48
F-49
F-50
F-51
F-52
F-53
F-54
F-55
F-56
F-57
F-58
F-59
F-60
F-61
F-62
F-63
F-64
F-65
F-66
High
Low
$
29.65
$
23.69
$
29.65
$
25.25
$
33.73
$
24.00
$
31.58
$
25.20
$
30.40
$
21.47
$
37.73
$
27.45
$
29.00
$
21.38
$
22.77
$
8.54
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Number of Securities to
Weighted Average
be Issued Upon Exercise
Exercise Price of
Number of Securities
of Outstanding Options,
Outstanding Options,
Remaining Available for
Plan Category
Warrants and Rights
Warrants and Rights
Future Issuance (1)
8,503,216
$
22.78
5,781,240
8,503,216
$
22.78
5,781,240
(1)
The amount appearing under Number of securities remaining available
for future issuance under equity compensation plans includes
3,546,505 shares available under the Hanesbrands Inc. Omnibus
Incentive Plan of 2006 and 2,234,735 shares available under the
Hanesbrands Inc. Employee Stock Purchase Plan of 2006.
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Six Months
Years Ended
Ended
Years Ended
January 3,
December 29,
December 30,
July 1,
July 2,
July 3,
2009
2007
2006
2006
2005
2004
(amounts in thousands, except per share data)
$
4,248,770
$
4,474,537
$
2,250,473
$
4,472,832
$
4,683,683
$
4,632,741
2,871,420
3,033,627
1,530,119
2,987,500
3,223,571
3,092,026
1,377,350
1,440,910
720,354
1,485,332
1,460,112
1,540,715
1,009,607
1,040,754
547,469
1,051,833
1,053,654
1,087,964
(32,144
)
(28,467
)
50,263
43,731
11,278
(101
)
46,978
27,466
317,480
388,569
190,074
433,600
359,480
425,285
(634
)
5,235
7,401
155,077
199,208
70,753
17,280
13,964
24,413
163,037
184,126
111,920
416,320
345,516
400,872
35,868
57,999
37,781
93,827
127,007
(48,680
)
$
127,169
$
126,127
$
74,139
$
322,493
$
218,509
$
449,552
$
1.35
$
1.31
$
0.77
$
3.35
$
2.27
$
4.67
$
1.34
$
1.30
$
0.77
$
3.35
$
2.27
$
4.67
94,171
95,936
96,309
96,306
96,306
96,306
95,164
96,741
96,620
96,306
96,306
96,306
January 3,
December 29,
December 30,
July 1,
July 2,
July 3,
2009
2007
2006
2006
2005
2004
(in thousands)
$
67,342
$
174,236
$
155,973
$
298,252
$
1,080,799
$
674,154
3,534,049
3,439,483
3,435,620
4,903,886
4,257,307
4,402,758
2,130,907
2,315,250
2,484,000
469,703
146,347
271,168
49,987
53,559
35,934
2,600,610
2,461,597
2,755,168
49,987
53,559
35,934
185,155
288,904
69,271
3,229,134
2,602,362
2,797,370
(1)
Prior to the spin off on September 5, 2006, the number of shares used
to compute basic and diluted earnings per share is 96,306, which was
the number of shares of our common stock outstanding on September 5,
2006.
(2)
Subsequent to the spin off on September 5, 2006, the number of shares
used to compute diluted earnings per share is based on the number of
shares of our common stock outstanding, plus the potential dilution
that could occur if restricted stock units and options granted under
our equity-based compensation arrangements were exercised or converted
into common stock.
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Overview.
This section provides a general description of our company and operating
segments, business and industry trends, our key business strategies, our consolidation and
globalization strategy, and background information on other matters discussed in this MD&A.
Components of Net Sales and Expense.
This section provides an overview of the
components of our net sales and expense that are key to an understanding of our results of
operations.
Highlights from the Year Ended January 3, 2009.
This section discusses some of the
highlights of our performance and activities during 2008.
Consolidated Results of Operations and Operating Results by Business Segment.
These
sections provide our analysis and outlook for the significant line items on our statements
of income, as well as other information that we deem meaningful to an understanding of our
results of operations on both a consolidated basis and a business segment basis.
Liquidity and Capital Resources.
This section provides an analysis of trends and
uncertainties affecting liquidity, cash requirements for our business, sources and uses of
our cash and our financing arrangements.
Critical Accounting Policies and Estimates.
This section discusses the accounting
policies that we consider important to the evaluation and reporting of our financial
condition and results of operations, and whose application requires significant judgments
or a complex estimation process.
Recently Issued Accounting Pronouncements.
This section provides a summary of the most
recent authoritative accounting pronouncements and guidance that we will be required to
adopt in a future period.
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Innerwear.
The Innerwear segment focuses on core apparel essentials, and consists of
products such as womens intimate apparel, mens underwear, kids underwear, socks,
thermals and sleepwear, marketed under well-known brands that are trusted by consumers. We
are an intimate apparel category leader in the United States with our
Hanes
,
Playtex
,
Bali
,
barely there
,
Just My Size
,
Wonderbra
and
Duofold
brands. We are also a leading
manufacturer and marketer of mens underwear and kids underwear under the
Hanes
,
Champion,
C9 by Champion
and
Polo Ralph Lauren
brand names. Our direct-to-consumer retail operations
are included within the Innerwear segment. The retail operations include our value-based
(outlet) stores, internet operations and catalogs which sell products from our portfolio
of leading brands. As of January 3, 2009 and December 29, 2007, we had 213 and 216 outlet
stores, respectively. Net sales for the year ended January 3, 2009 from our Innerwear
segment were $2.4 billion, representing approximately 56% of total segment net sales.
Outerwear.
We are a leader in the casualwear and activewear markets through our
Hanes
,
Champion
and
Just My Size
brands, where we offer products such as t-shirts and fleece. Our
casualwear lines offer a range of quality, comfortable clothing for men, women and children
marketed under the
Hanes
and
Just My Size
brands. The
Just My Size
brand offers casual
apparel designed exclusively to meet the needs of plus-size women. In addition to
activewear for men and women,
Champion
provides uniforms for athletic programs and includes
an apparel program,
C9 by Champion
, at Target stores. We also license our
Champion
name for
collegiate apparel and footwear. We also supply our t-shirts, sportshirts and fleece
products primarily to wholesalers, who then resell to screen printers and embellishers,
through brands such as
Hanes
,
Champion
,
Outer Banks
and
Hanes Beefy-T
. Net sales for the
year ended January 3, 2009 from our Outerwear segment were $1.2 billion, representing
approximately 28% of total segment net sales.
International.
International includes products that span across the Innerwear,
Outerwear and Hosiery reportable segments and are primarily marketed under the
Hanes,
Wonderbra, Champion, Stedman, Playtex, Zorba, Rinbros, Kendall, Sol y Oro, Ritmo and Bali
brands. Net sales for the year ended January 3, 2009 from our International segment were
$460 million, representing approximately 11% of total segment net sales and included sales
in Latin America, Asia, Canada and Europe. Canada, Europe, Japan and Mexico are our largest
international markets, and we also have sales offices in India and China.
Hosiery.
We are the leading marketer of womens sheer hosiery in the United States. We
compete in the hosiery market by striving to offer superior values and executing integrated
marketing activities, as well as focusing on the style of our hosiery products. We market
hosiery products under our
Leggs
,
Hanes
and
Just My Size
brands. Net sales for the year
ended January 3, 2009 from our Hosiery segment were $228 million, representing
approximately 5% of total segment net sales. We expect the trend of declining hosiery sales
to continue consistent with the overall decline in the industry and with shifts in consumer
preferences.
Other.
Our Other segment consists of sales of nonfinished products such as yarn and
certain other materials in the United States and Latin America that maintain asset
utilization at certain manufacturing facilities and are expected to generate break even
margins. Net sales for the year ended January 3, 2009 in our Other segment were $22
million, representing less than 1% of total segment net sales. Net sales from our Other
segment are expected to continue to decline and to ultimately become insignificant to us as
we complete the implementation of our consolidation and globalization efforts.
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Build big, strong brands in big core categories with innovative key items.
Our ability
to react to changing customer needs and industry trends is key to our success. Our design,
research and product development teams, in partnership with our marketing teams, drive our
efforts to bring innovations to market. We seek to leverage our insights into consumer
demand in the apparel essentials industry to develop new products within our existing lines
and to modify our existing core products in ways that make them more appealing, addressing
changing customer needs and industry trends. We also support our key brands with targeted,
effective advertising and marketing campaigns.
Foster strategic partnerships with key retailers via team selling.
We foster
relationships with key retailers by applying our extensive category and product knowledge,
leveraging our use of multi-functional customer management teams and developing new
customer-specific programs such as
C9 by Champion
for Target. Our goal is to strengthen and
deepen our existing strategic relationships with retailers and develop new strategic
relationships.
Use Kanban concepts to have the right products available in the right quantities at the
right time.
Through Kanban, a multi-initiative effort that determines production
quantities, and in doing so, facilitates just-in-time production and ordering systems, we
seek to ensure that products are available to meet customer demands while effectively
managing inventory levels.
Globalizing our supply chain by balancing across hemispheres into economic clusters
with fewer, larger facilities.
As a provider of high-volume products, we are continually
seeking to improve our cost-competitiveness and operating flexibility through supply chain
initiatives. Through our consolidation and globalization strategy, which is discussed in
more detail below, we will continue to transition additional parts of our supply chain to
lower-cost locations in Asia, Central America and the Caribbean Basin in an effort to
optimize our cost structure. As part of this process, we are using Kanban concepts to
optimize the way we manage demand, to increase manufacturing flexibility to better respond
to demand variability and to simplify our finished goods and the raw materials we use to
produce them. We expect that these changes in our supply chain will result in significant
cost efficiencies and increased asset utilization.
Leverage our global purchasing and manufacturing scale.
Historically, we have had a
decentralized operating structure with many distinct operating units. We are in the process
of consolidating purchasing, manufacturing and sourcing across all of our product
categories in the United States. We believe that these initiatives will streamline our
operations, improve our inventory management, reduce costs and standardize processes.
Optimizing our capital structure to take advantage of our business models strong and
consistent cash flows.
Maintaining appropriate debt leverage and utilizing excess cash to,
for example, pay down debt, invest in our own stock and selectively pursue strategic
acquisitions are keys to building a stronger business and generating additional value for
investors.
Continuing to improve turns for accounts receivables, inventory, accounts payable and
fixed assets.
Our ability to generate cash is enhanced through more efficient management of
accounts receivables, inventory, accounts payable and fixed assets.
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During the second quarter of 2008, we added three company-owned sewing plants in
Southeast Asia two in Vietnam and one in Thailand giving us four sewing plants in
Asia.
In October 2008, we acquired a 370-employee embroidery facility in Honduras. For the
past eight years, these operations have produced embroidered and screen-printed apparel for
us. This acquisition better positions us for long-term growth in these segments.
During the fourth quarter of 2008, we commenced production at our 500,000 square foot
socks manufacturing facility in El Salvador. This facility, co-located with textile
manufacturing operations that we acquired in 2007, provides a manufacturing base in Central
America from which to leverage our production scale at a lower cost location.
We continued construction of a textile production plant in Nanjing, China, which will be
our first company-owned textile production facility in Asia. We expect production to
commence in the fourth quarter of 2009. The Nanjing textile facility will enable us to
expand and leverage our production scale in Asia as we balance our supply chain across
hemispheres.
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changes in the mix of our earnings from the various jurisdictions in which we operate;
the tax characteristics of our earnings;
the timing and amount of earnings of foreign subsidiaries that we repatriate to the
United States, which may increase our tax expense and taxes paid; and
the timing and results of any reviews of our income tax filing positions in the
jurisdictions in which we transact business.
Diluted earnings per share were $1.34 in the year ended January 3, 2009, compared with
$1.30 in the year ended December 29, 2007.
Operating profit was $317 million in the year ended January 3, 2009, compared with $389
million in the year ended December 29, 2007.
Total net sales in the year ended January 3, 2009 was $4.25 billion, compared with $4.47
billion to the year ended December 29, 2007.
During the year ended January 3, 2009, we approved actions to close 11 manufacturing
facilities and three distribution centers in Mexico, the United
States, Costa Rica, Honduras and El Salvador. The production capacity represented by the manufacturing facilities
has been relocated to lower cost locations in Asia, Central America and the Caribbean
Basin. The distribution capacity has been relocated to our West Coast
distribution facility in California in order to expand capacity for goods we source from
Asia. In addition, we completed several such actions in the year ended January 3, 2009 that
were approved in 2008.
Gross capital expenditures were $187 million during the year ended January 3, 2009 as we
continued to build out our textile and sewing network in Asia, Central America and the
Caribbean Basin.
During the second quarter of 2008, we added three company-owned sewing plants in
Southeast Asia two in Vietnam and one in Thailand giving us four sewing plants in
Asia. In addition, during the fourth quarter of 2008, we acquired an embroidery facility in
Honduras.
Table of Contents
We repurchased $30 million of company stock during the year ended January 3, 2009.
We ended 2008 with $463 million of borrowing availability under our $500 million
revolving loan facility (the Revolving Loan Facility), $67 million in cash and cash
equivalents and $67 million of borrowing availability under our international loan
facilities, compared to $430 million, $174 million and $89 million, respectively, at the
end of 2007.
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
4,248,770
$
4,474,537
$
(225,767
)
(5.0
)%
2,871,420
3,033,627
(162,207
)
(5.3
)
1,377,350
1,440,910
(63,560
)
(4.4
)
1,009,607
1,040,754
(31,147
)
(3.0
)
(32,144
)
(32,144
)
NM
50,263
43,731
6,532
14.9
317,480
388,569
(71,089
)
(18.3
)
(634
)
5,235
(5,869
)
(112.1
)
155,077
199,208
(44,131
)
(22.2
)
163,037
184,126
(21,089
)
(11.5
)
35,868
57,999
(22,131
)
(38.2
)
$
127,169
$
126,127
$
1,042
0.8
%
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
4,248,770
$
4,474,537
$
(225,767
)
(5.0
)%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
1,377,350
$
1,440,910
$
(63,560
)
(4.4
)%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
1,009,607
$
1,040,754
$
(31,147
)
(3.0
)%
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
$
(32,144
)
$
(32,144
)
NM
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
50,263
$
43,731
$
6,532
14.9
%
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
317,480
$
388,569
$
(71,089
)
(18.3
)%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
(634
)
$
5,235
$
(5,869
)
(112.1
)%
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
155,077
$
199,208
$
(44,131
)
(22.2
)%
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
35,868
$
57,999
$
(22,131
)
(38.2
)%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
127,169
$
126,127
$
1,042
0.8
%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
2,402,831
$
2,556,906
$
(154,075
)
(6.0
)%
1,180,747
1,221,845
(41,098
)
(3.4
)
460,085
421,898
38,187
9.1
227,924
266,198
(38,274
)
(14.4
)
21,724
56,920
(35,196
)
(61.8
)
4,293,311
4,523,767
(230,456
)
(5.1
)
(44,541
)
(49,230
)
(4,689
)
(9.5
)
$
4,248,770
$
4,474,537
$
(225,767
)
(5.0
)
$
277,486
$
305,959
$
(28,473
)
(9.3
)
68,769
71,364
(2,595
)
(3.6
)
57,070
53,147
3,923
7.4
71,596
76,917
(5,321
)
(6.9
)
(472
)
(1,361
)
889
65.3
474,449
506,026
(31,577
)
(6.2
)
(52,143
)
(60,213
)
(8,070
)
(13.4
)
(12,019
)
(6,205
)
5,814
93.7
32,144
(32,144
)
NM
(50,263
)
(43,731
)
6,532
14.9
(18,696
)
18,696
NM
(23,862
)
(36,912
)
(13,050
)
(35.4
)
14
(2,540
)
(2,554
)
(100.6
)
317,480
388,569
(71,089
)
(18.3
)
634
(5,235
)
5,869
112.1
(155,077
)
(199,208
)
(44,131
)
(22.2
)
$
163,037
$
184,126
$
(21,089
)
(11.5
)%
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
2,402,831
$
2,556,906
$
(154,075
)
(6.0
)%
277,486
305,959
(28,473
)
(9.3
)
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
1,180,747
$
1,221,845
$
(41,098
)
(3.4
)%
68,769
71,364
(2,595
)
(3.6
)
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
460,085
$
421,898
$
38,187
9.1
%
57,070
53,147
3,923
7.4
Table of Contents
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
227,924
$
266,198
$
(38,274
)
(14.4
)%
71,596
76,917
(5,321
)
(6.9
)
Years Ended
January 3,
December 29,
Higher
Percent
2009
2007
(Lower)
Change
(dollars in thousands)
$
21,724
$
56,920
$
(35,196
)
(61.8
)%
(472
)
(1,361
)
889
65.3
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(unaudited)
(dollars in thousands)
$
4,474,537
$
4,403,466
$
71,071
1.6
%
3,033,627
2,960,759
72,868
2.5
1,440,910
1,442,707
(1,797
)
(0.1
)
1,040,754
1,093,436
(52,682
)
(4.8
)
(32,144
)
(28,467
)
3,677
12.9
43,731
11,516
32,215
279.7
388,569
366,222
22,347
6.1
5,235
7,401
(2,166
)
(29.3
)
199,208
79,621
119,587
150.2
184,126
279,200
(95,074
)
(34.1
)
57,999
71,184
(13,185
)
(18.5
)
$
126,127
$
208,016
$
(81,889
)
(39.4)
%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
4,474,537
$
4,403,466
$
71,071
1.6
%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
1,440,910
$
1,442,707
$
(1,797
)
(0.1
)%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
1,040,754
$
1,093,436
$
(52,682
)
(4.8
)%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
(32,144
)
$
(28,467
)
$
3,677
12.9
%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
43,731
$
11,516
$
32,215
279.7
%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
388,569
$
366,222
$
22,347
6.1
%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
5,235
$
7,401
$
(2,166
)
(29.3)
%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
199,208
$
79,621
$
119,587
150.2
%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
57,999
$
71,184
$
(13,185
)
(18.5
)%
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
126,127
$
208,016
$
(81,889
)
(39.4
)%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(unaudited)
(dollars in thousands)
$
2,556,906
$
2,574,967
$
(18,061
)
(0.7)
%
1,221,845
1,154,107
67,738
5.9
421,898
400,167
21,731
5.4
266,198
278,253
(12,055
)
(4.3
)
56,920
44,670
12,250
27.4
4,523,767
4,452,164
71,603
1.6
(49,230
)
(48,698
)
532
1.1
$
4,474,537
$
4,403,466
$
71,071
1.6
%
$
305,959
$
339,528
$
(33,569
)
(9.9)
%
71,364
57,310
14,054
24.5
53,147
37,799
15,348
40.6
76,917
49,281
27,636
56.1
(1,361
)
(931
)
(430
)
(46.2
)
506,026
482,987
23,039
4.8
(60,213
)
(104,065
)
(43,852
)
(42.1
)
(6,205
)
(8,452
)
(2,247
)
(26.6
)
32,144
28,467
3,677
12.9
(43,731
)
(11,516
)
32,215
279.7
(36,912
)
(21,199
)
15,713
74.1
(2,540
)
2,540
NM
388,569
366,222
22,347
6.1
(5,235
)
(7,401
)
(2,166
)
(29.3
)
(199,208
)
(79,621
)
119,587
150.2
$
184,126
$
279,200
$
(95,074
)
(34.1)
%
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
2,556,906
$
2,574,967
$
(18,061
)
(0.7
)%
305,959
339,528
(33,569
)
(9.9
)
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
1,221,845
$
1,154,107
$
67,738
5.9
%
71,364
57,310
14,054
24.5
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
421,898
$
400,167
$
21,731
5.4
%
53,147
37,799
15,348
40.6
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
266,198
$
278,253
$
(12,055
)
(4.3
)%
76,917
49,281
27,636
56.1
Table of Contents
Years Ended
December 29,
December 30,
Higher
Percent
2007
2006
(Lower)
Change
(dollars in thousands)
$
56,920
$
44,670
$
12,250
27.4
%
(1,361
)
(931
)
(430
)
(46.2
)
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
2,250,473
$
2,319,839
$
(69,366
)
(3.0
)%
1,530,119
1,556,860
(26,741
)
(1.7
)
720,354
762,979
(42,625
)
(5.6
)
547,469
505,866
41,603
8.2
(28,467
)
28,467
NM
11,278
(339
)
11,617
NM
190,074
257,452
(67,378
)
(26.2
)
7,401
7,401
NM
70,753
8,412
62,341
741.1
111,920
249,040
(137,120
)
(55.1
)
37,781
60,424
(22,643
)
(37.5
)
$
74,139
$
188,616
$
(114,477
)
(60.7)
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
2,250,473
$
2,319,839
$
(69,366
)
(3.0)
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
1,530,119
$
1,556,860
$
(26,741
)
(1.7)
%
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
720,354
$
762,979
$
(42,625
)
(5.6)
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
547,469
$
505,866
$
41,603
8.2
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
(28,467
)
$
$
28,467
NM
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
11,278
$
(339
)
$
11,617
NM
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
190,074
$
257,452
$
(67,378
)
(26.2)
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
7,401
$
$
7,401
NM
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
70,753
$
8,412
$
62,341
741.1
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
37,781
$
60,424
$
(22,643
)
(37.5)
%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(unaudited)
(dollars in thousands)
$
74,139
$
188,616
$
(114,477
)
(60.7)
%
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
1,295,868
$
1,347,582
$
(51,714
)
(3.8
)%
616,298
603,585
12,713
2.1
197,729
195,980
1,749
0.9
144,066
155,897
(11,831
)
(7.6
)
19,381
36,096
(16,715
)
(46.3
)
2,273,342
2,339,140
(65,798
)
(2.8
)
(22,869
)
(19,301
)
3,568
18.5
$
2,250,473
$
2,319,839
$
(69,366
)
(3.0
)%
$
172,008
$
192,449
$
(20,441
)
(10.6
)%
21,316
49,248
(27,932
)
(56.7
)
15,236
16,574
(1,338
)
(8.1
)
36,205
26,531
9,674
36.5
(288
)
1,202
(1,490
)
NM
244,477
286,004
(41,527
)
(14.5
)
(46,927
)
(24,846
)
22,081
88.9
(3,466
)
(4,045
)
(579
)
(14.3
)
28,467
28,467
NM
(11,278
)
339
11,617
NM
(21,199
)
21,199
NM
190,074
257,452
(67,378
)
(26.2
)
(7,401
)
7,401
NM
(70,753
)
(8,412
)
62,341
NM
$
111,920
$
249,040
$
(137,120
)
(55.1
)%
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
1,295,868
$
1,347,582
$
(51,714
)
(3.8
)%
172,008
192,449
(20,441
)
(10.6
)
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
616,298
$
603,585
$
12,713
2.1
%
21,316
49,248
(27,932
)
(56.7
)
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
197,729
$
195,980
$
1,749
0.9
%
15,236
16,574
(1,338
)
(8.1
)
Table of Contents
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
144,066
$
155,897
$
(11,831
)
(7.6
)%
36,205
26,531
9,674
36.5
Six Months Ended
December 30,
December 31,
Higher
Percent
2006
2005
(Lower)
Change
(dollars in thousands)
(unaudited)
$
19,381
$
36,096
$
(16,715
)
(46.3
)%
$
(288
)
$
1,202
(1,490
)
NM
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Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
4,472,832
$
4,683,683
$
(210,851
)
(4.5
)%
2,987,500
3,223,571
(236,071
)
(7.3
)
1,485,332
1,460,112
25,220
1.7
1,051,833
1,053,654
(1,821
)
(0.2
)
(101
)
46,978
(47,079
)
NM
433,600
359,480
74,120
20.6
17,280
13,964
3,316
23.7
416,320
345,516
70,804
20.5
93,827
127,007
(33,180
)
(26.1
)
$
322,493
$
218,509
$
103,984
47.6
%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
4,472,832
$
4,683,683
$
(210,851
)
(4.5
)%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
2,987,500
$
3,223,571
$
(236,071
)
(7.3
)%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
1,051,833
$
1,053,654
$
(1,821
)
(0.2
)%
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Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
(101
)
$
46,978
$
(47,079
)
NM
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
433,600
$
359,480
$
74,120
20.6
%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
17,280
$
13,964
$
3,316
23.7
%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
93,827
$
127,007
$
(33,180
)
(26.1
)%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
322,493
$
218,509
$
103,984
47.6
%
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Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
2,627,101
$
2,703,637
$
(76,536
)
(2.8
)%
1,140,703
1,198,286
(57,583
)
(4.8
)
398,157
399,989
(1,832
)
(0.5
)
290,125
338,468
(48,343
)
(14.3
)
62,809
88,859
(26,050
)
(29.3
)
4,518,895
4,729,239
(210,344
)
(4.4
)
(46,063
)
(45,556
)
507
1.1
$
4,472,832
$
4,683,683
$
(210,851
)
(4.5
)%
$
344,643
$
300,796
$
43,847
14.6
%
74,170
68,301
5,869
8.6
37,003
32,231
4,772
14.8
39,069
40,776
(1,707
)
(4.2
)
127
(174
)
301
NM
495,012
441,930
53,082
12.0
(52,482
)
(21,823
)
30,659
140.5
(9,031
)
(9,100
)
(69
)
(0.8
)
101
(46,978
)
(47,079
)
NM
(4,549
)
(4,549
)
NM
433,600
359,480
74,120
20.6
(17,280
)
(13,964
)
3,316
23.7
$
416,320
$
345,516
$
70,804
20.5
%
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
2,627,101
$
2,703,637
$
(76,536
)
(2.8
)%
344,643
300,796
43,847
14.6
Table of Contents
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
1,140,703
$
1,198,286
$
(57,583
)
(4.8
)%
74,170
68,301
5,869
8.6
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
398,157
$
399,989
$
(1,832
)
(0.5
)%
37,003
32,231
4,772
14.8
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
290,125
$
338,468
$
(48,343
)
(14.3
)%
39,069
40,776
(1,707
)
(4.2
)
Table of Contents
Years Ended
Higher
Percent
July 1, 2006
July 2, 2005
(Lower)
Change
(dollars in thousands)
$
62,809
$
88,859
$
(26,050
)
(29.3)
%
127
(174
)
301
NM
we have principal and interest obligations under our long-term debt;
we expect to continue to invest in efforts to improve operating efficiencies and lower
costs;
we expect to continue to add new manufacturing capacity in Asia, Central America and
the Caribbean Basin;
we anticipate that we will decrease the portion of the income of our foreign
subsidiaries that is expected to be remitted to the United States, which could
significantly decrease our effective income tax rate; and
we have the authority to repurchase up to 10 million shares of our stock in the open
market over the next few years, 2.8 million of which we have repurchased as of January 3,
2009 at a cost of $75 million. In light of the current economic recession, we may choose
not to repurchase any stock and focus more on the repayment of our debt in the next twelve
months.
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Payments Due by Period
At January 3,
Less Than
2009
1 Year
1 - 3 Years
3 - 5 Years
Thereafter
(in thousands)
$
2,176,547
$
45,640
$
276,602
$
910,625
$
943,680
61,734
61,734
575,778
121,479
224,966
200,063
29,270
226,633
43,488
71,840
41,639
69,666
626,919
507,373
41,149
27,076
51,321
76,856
29,460
19,712
14,334
13,350
$
3,744,467
$
809,174
$
634,269
$
1,193,737
$
1,107,287
Table of Contents
(1)
Interest obligations on floating rate debt instruments are calculated for future periods
using interest rates in effect at January 3, 2009.
(2)
Purchase obligations, as disclosed in the table, are obligations to purchase goods and
services in the ordinary course of business for production and inventory needs (such as raw
materials, supplies, packaging, and manufacturing arrangements), capital expenditures,
marketing services, royalty-bearing license agreement payments and other professional
services. This table only includes purchase obligations for which we have agreed upon a fixed
or minimum quantity to purchase, a fixed, minimum or variable pricing arrangement, and an
approximate delivery date. Actual cash expenditures relating to these obligations may vary
from the amounts shown in the table above. We enter into purchase obligations when terms or
conditions are favorable or when a long-term commitment is necessary. Many of these
arrangements are cancelable after a notice period without a significant penalty. This table
omits purchase obligations that did not exist as of January 3, 2009, as well as obligations
for accounts payable and accrued liabilities recorded on the Consolidated Balance Sheet.
(3)
Represents the projected payment for long-term liabilities recorded on the Consolidated
Balance Sheet for deferred compensation, severance, certain employee benefit claims, capital
leases and unrecognized tax benefits in accordance with FASB Interpretation 48,
Accounting for
Uncertainty in Income Taxes
(FIN 48).
Years Ended
January 3,
December 29,
2009
2007
(dollars in thousands)
$
177,397
$
359,040
(177,248
)
(101,085
)
(104,738
)
(243,379
)
(2,305
)
3,687
$
(106,894
)
$
18,263
174,236
155,973
$
67,342
$
174,236
Table of Contents
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the equity interests of substantially all of our direct and indirect U.S. subsidiaries
and 65% of the voting securities of certain foreign subsidiaries; and
substantially all present and future property and assets, real and personal, tangible
and intangible, of Hanesbrands and each guarantor, except for certain enumerated
interests, and all proceeds and products of such property and assets.
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Interest
Rate
Hedge
Amount
LIBOR
Spreads
Expiration Dates
$
400,000
3.50
%
0.75% to 3.75%
October 2009
493,680
4.26
%
3.38
%
December 2012
500,000
5.14% to 5.18%
0.75% to 3.75%
October 2009 October 2011
400,000
2.80
%
0.75% to 3.75%
October 2010
242,617
Not applicable
Not applicable
Not applicable
140,250
Not applicable
Not applicable
Not applicable
$
2,176,547
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In determining the discount rate, we utilized the Citigroup Pension Discount Curve
(rounded to the nearest 10 basis points) in order to determine a unique interest rate for
each plan and match the expected cash flows for each plan.
Salary increase assumptions were based on historical experience and anticipated future
management actions. The salary increase assumption applies to the Canadian plans and
portions of the Hanesbrands nonqualified retirement plans, as benefits under these plans
are not frozen.
In determining the long-term rate of return on plan assets we applied a proportionally
weighted blend between assuming the historical long-term compound growth rate of the plan
portfolio would predict the future returns of similar investments, and the utilization of
forward looking assumptions.
Retirement rates were based primarily on actual experience while standard actuarial
tables were used to estimate mortality.
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Market approach prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities.
Cost approach amount that would be required to replace the service capacity of an
asset or replacement cost.
Income approach techniques to convert future amounts to a single present amount based
on market expectations, including present value techniques, option-pricing and other
models.
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HANESBRANDS INC.
/s/ Richard A. Noll
Richard A. Noll
Chief Executive Officer
Signature
Capacity
Date
/s/ Richard A. Noll
Chief Executive Officer and
Chairman of the Board of Directors
(principal executive officer)
February 11, 2009
/s/ E. Lee Wyatt Jr.
Executive Vice President,
Chief Financial Officer
(principal financial officer)
February 11, 2009
/s/ Dale W. Boyles
Vice President,
Chief Accounting Officer and
Controller
(principal accounting
officer)
February 11, 2009
/s/ Lee A. Chaden
Director
February 11, 2009
Table of Contents
Signature
Capacity
Date
/s/ Bobby J. Griffin
Director
February 11, 2009
/s/ James C. Johnson
Director
February 11, 2009
/s/ Jessica T. Mathews
Director
February 11, 2009
/s/ J. Patrick Mulcahy
Director
February 11, 2009
/s/ Ronald L. Nelson
Director
February 11, 2009
/s/ Alice M. Peterson
Director
February 11, 2009
/s/ Andrew J. Schindler
Director
February 11, 2009
/s/ Ann E. Ziegler
Director
February 11, 2009
Table of Contents
Exhibit
Number
Description
Articles of Amendment and Restatement of
Hanesbrands Inc. (incorporated by reference
from Exhibit 3.1 to the Registrants Current
Report on Form 8-K filed with the Securities
and Exchange Commission on September 5, 2006).
Articles Supplementary (Junior Participating
Preferred Stock, Series A) (incorporated by
reference from Exhibit 3.2 to the Registrants
Current Report on Form 8-K filed with the
Securities and Exchange Commission on
September 5, 2006).
Amended and Restated Bylaws of Hanesbrands
Inc. (incorporated by reference from Exhibit
3.1 to the Registrants Current Report on Form
8-K filed with the Securities and Exchange
Commission on December 15, 2008).
Certificate of Formation of BA International,
L.L.C. (incorporated by reference from Exhibit
3.4 to the Registrants Registration Statement
on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Limited Liability Company Agreement of BA
International, L.L.C. (incorporated by
reference from Exhibit 3.5 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Certificate of Incorporation of Caribesock,
Inc., together with Certificate of Change of
Location of Registered Office and Registered
Agent (incorporated by reference from Exhibit
3.6 to the Registrants Registration Statement
on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Bylaws of Caribesock, Inc. (incorporated by
reference from Exhibit 3.7 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Certificate of Incorporation of Caribetex,
Inc., together with Certificate of Change of
Location of Registered Office and Registered
Agent (incorporated by reference from Exhibit
3.8 to the Registrants Registration Statement
on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Bylaws of Caribetex, Inc. (incorporated by
reference from Exhibit 3.9 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Certificate of Formation of CASA
International, LLC (incorporated by reference
from Exhibit 3.10 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Limited Liability Company Agreement of CASA
International, LLC (incorporated by reference
from Exhibit 3.11 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Certificate of Incorporation of Ceibena Del,
Inc., together with Certificate of Change of
Location of Registered Office and Registered
Agent (incorporated by reference from Exhibit
3.12 to the Registrants Registration
Statement on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
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Exhibit
Number
Description
Bylaws of Ceibena Del, Inc. (incorporated by
reference from Exhibit 3.13 to the
Registrants Registration Statement on Form
S-4 (Commission file number 333-142371) filed
with the Securities and Exchange Commission on
April 26, 2007).
Certificate of Formation of Hanes Menswear,
LLC, together with Certificate of Conversion
from a Corporation to a Limited Liability
Company Pursuant to Section 18-214 of the
Limited Liability Company Act and Certificate
of Change of Location of Registered Office and
Registered Agent (incorporated by reference
from Exhibit 3.14 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Limited Liability Company Agreement of Hanes
Menswear, LLC (incorporated by reference from
Exhibit 3.15 to the Registrants Registration
Statement on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Certificate of Incorporation of HPR, Inc.,
together with Certificate of Merger of Hanes
Puerto Rico, Inc. into HPR, Inc. (now known as
Hanes Puerto Rico, Inc.) (incorporated by
reference from Exhibit 3.16 to the
Registrants Registration Statement on Form
S-4 (Commission file number 333-142371) filed
with the Securities and Exchange Commission on
April 26, 2007).
Bylaws of Hanes Puerto Rico, Inc.
(incorporated by reference from Exhibit 3.17
to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371)
filed with the Securities and Exchange
Commission on April 26, 2007).
Articles of Organization of Sara Lee Direct,
LLC, together with Articles of Amendment
reflecting the change of the entitys name to
Hanesbrands Direct, LLC (incorporated by
reference from Exhibit 3.18 to the
Registrants Registration Statement on Form
S-4 (Commission file number 333-142371) filed
with the Securities and Exchange Commission on
April 26, 2007).
Limited Liability Company Agreement of Sara
Lee Direct, LLC (now known as Hanesbrands
Direct, LLC) (incorporated by reference from
Exhibit 3.19 to the Registrants Registration
Statement on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Certificate of Incorporation of Sara Lee
Distribution, Inc., together with Certificate
of Amendment of Certificate of Incorporation
of Sara Lee Distribution, Inc. reflecting the
change of the entitys name to Hanesbrands
Distribution, Inc. (incorporated by reference
from Exhibit 3.20 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Bylaws of Sara Lee Distribution, Inc. (now
known as Hanesbrands Distribution,
Inc.)(incorporated by reference from Exhibit
3.21 to the Registrants Registration
Statement on Form S-4 (Commission file number
333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Certificate of Formation of HBI Branded
Apparel Enterprises, LLC (incorporated by
reference from Exhibit 3.22 to the
Registrants Registration Statement on Form
S-4 (Commission file number 333-142371) filed
with the Securities and Exchange Commission on
April 26, 2007).
Operating Agreement of HBI Branded Apparel
Enterprises, LLC (incorporated by reference
from Exhibit 3.23 to the Registrants
Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the
Securities and Exchange Commission on April
26, 2007).
Certificate of Incorporation of HBI Branded
Apparel Limited, Inc. (incorporated by
reference from Exhibit 3.24 to the
Registrants Registration Statement on Form
S-4 (Commission file number 333-142371) filed
with the Securities and Exchange Commission on
April 26, 2007).
Bylaws of HBI Branded Apparel Limited, Inc.
(incorporated by reference from Exhibit 3.25
to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371)
filed with the Securities and Exchange
Commission on April 26, 2007).
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Exhibit
Number
Description
Certificate of Formation of HbI International, LLC
(incorporated by reference from Exhibit 3.26 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Limited Liability Company Agreement of HbI International, LLC
(incorporated by reference from Exhibit 3.27 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Certificate of Formation of SL Sourcing, LLC, together with
Certificate of Amendment to the Certificate of Formation of
SL Sourcing, LLC reflecting the change of the entitys name
to HBI Sourcing, LLC (incorporated by reference from Exhibit
3.28 to the Registrants Registration Statement on Form S-4
(Commission file number 333-142371) filed with the Securities
and Exchange Commission on April 26, 2007).
Limited Liability Company Agreement of SL Sourcing, LLC (now
known as HBI Sourcing, LLC) (incorporated by reference from
Exhibit 3.29 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the
Securities and Exchange Commission on April 26, 2007).
Certificate of Formation of Inner Self LLC (incorporated by
reference from Exhibit 3.30 to the Registrants Registration
Statement on Form S-4 (Commission file number 333-142371)
filed with the Securities and Exchange Commission on April
26, 2007).
Limited Liability Company Agreement of Inner Self LLC
(incorporated by reference from Exhibit 3.31 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Certificate of Formation of Jasper-Costa Rica, L.L.C.
(incorporated by reference from Exhibit 3.32 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Amended and Restated Limited Liability Company Agreement of
Jasper-Costa Rica, L.L.C. (incorporated by reference from
Exhibit 3.33 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the
Securities and Exchange Commission on April 26, 2007).
Certificate of Formation of Playtex Dorado, LLC, together
with Certificate of Conversion from a Corporation to a
Limited Liability Company Pursuant to Section 18-214 of the
Limited Liability Company Act (incorporated by reference from
Exhibit 3.36 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the
Securities and Exchange Commission on April 26, 2007).
Amended and Restated Limited Liability Company Agreement of
Playtex Dorado, LLC (incorporated by reference from Exhibit
3.37 to the Registrants Registration Statement on Form S-4
(Commission file number 333-142371) filed with the Securities
and Exchange Commission on April 26, 2007).
Certificate of Incorporation of Playtex Industries, Inc.
(incorporated by reference from Exhibit 3.38 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
Bylaws of Playtex Industries, Inc. (incorporated by reference
from Exhibit 3.39 to the Registrants Registration Statement
on Form S-4 (Commission file number 333-142371) filed with
the Securities and Exchange Commission on April 26, 2007).
Certificate of Formation of Seamless Textiles, LLC, together
with Certificate of Conversion from a Corporation to a
Limited Liability Company Pursuant to Section 18-214 of the
Limited Liability Company Act (incorporated by reference from
Exhibit 3.40 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the
Securities and Exchange Commission on April 26, 2007).
Limited Liability Company Agreement of Seamless Textiles, LLC
(incorporated by reference from Exhibit 3.41 to the
Registrants Registration Statement on Form S-4 (Commission
file number 333-142371) filed with the Securities and
Exchange Commission on April 26, 2007).
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Exhibit
Number
Description
Certificate of Incorporation of UPCR, Inc., together with Certificate of Change of Location of Registered
Office and Registered Agent (incorporated by reference from Exhibit 3.42 to the Registrants Registration
Statement on Form S-4 (Commission file number 333-142371) filed with the Securities and Exchange Commission on
April 26, 2007).
Bylaws of UPCR, Inc. (incorporated by reference from Exhibit 3.43 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the Securities and Exchange Commission on April 26,
2007).
Certificate of Incorporation of UPEL, Inc., together with Certificate of Change of Location of Registered
Office and Registered Agent (incorporated by reference from Exhibit 3.44 to the Registrants Registration
Statement on Form S-4 (Commission file number 333-142371) filed with the Securities and Exchange Commission on
April 26, 2007).
Bylaws of UPEL, Inc. (incorporated by reference from Exhibit 3.45 to the Registrants Registration Statement on
Form S-4 (Commission file number 333-142371) filed with the Securities and Exchange Commission on April 26,
2007).
Rights Agreement between Hanesbrands Inc. and Computershare Trust Company, N.A., Rights Agent. (incorporated by
reference from Exhibit 4.1 to the Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 5, 2006).
Form of Rights Certificate (incorporated by reference from Exhibit 4.2 to the Registrants Current Report on
Form 8-K filed with the Securities and Exchange Commission on September 5, 2006).
Placement Agreement, dated December 11, 2006, among Hanesbrands Inc., certain subsidiaries of Hanesbrands Inc.,
Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by
reference from Exhibit 4.1 to the Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 15, 2006).
Indenture, dated as of December 14, 2006, among Hanesbrands Inc., certain subsidiaries of Hanesbrands Inc., and
Branch Banking and Trust Company, as Trustee (incorporated by reference from Exhibit 4.1 to the Registrants
Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2006).
Registration Rights Agreement with respect to Floating Rate Senior Notes due 2014, dated as of December 14,
2006, among Hanesbrands Inc., certain subsidiaries of Hanesbrands Inc., and Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, ABN AMRO Incorporated, Barclays Capital Inc., Citigroup
Global Markets Inc., and HSBC Securities (USA) Inc. (incorporated by reference from Exhibit 4.2 to the
Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20,
2006).
Indenture, dated as of August 1, 2008, among the Registrant, certain subsidiaries of the Registrant, and Branch
Banking and Trust Company, as Trustee (incorporated by reference from Exhibit 4.3 to the Registrants
Registration Statement on Form S-3 (Commission file number 333-152733) filed with the Securities and Exchange
Commission on August 1, 2008).
Hanesbrands Inc. Omnibus Incentive Plan of 2006 (incorporated by reference from Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on September 5,
2006).*
Form of Stock Option Grant Notice and Agreement under the Hanesbrands Inc. Omnibus Incentive Plan of 2006
(incorporated by reference from Exhibit 10.3 to the Registrants Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 5, 2006).*
Form of Restricted Stock Unit Grant Notice and Agreement under the Hanesbrands Inc. Omnibus Incentive Plan of
2006. (incorporated by reference from Exhibit 10.4 to the Registrants Current Report on Form 8-K filed with
the Securities and Exchange Commission on September 5, 2006).*
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Exhibit
Number
Description
Form of Non-Employee Director Restricted Stock Unit Grant Notice and Agreement under the Hanesbrands Inc.
Omnibus Incentive Plan of 2006. *
Form of Non-Employee Director Stock Option Grant Notice and Agreement under the Hanesbrands Inc. Omnibus
Incentive Plan of 2006 (incorporated by reference from Exhibit 10.5 to the Registrants Transition Report on
Form 10-K filed with the Securities and Exchange Commission on February 22, 2007).*
Hanesbrands Inc. Retirement Savings Plan.*
Hanesbrands Inc. Supplemental Employee Retirement Plan *
Hanesbrands Inc. Performance-Based Annual Incentive Plan (incorporated by reference from Exhibit 10.7 to the
Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on September 5,
2006).*
Hanesbrands Inc. Executive Deferred Compensation Plan (incorporated by reference from Exhibit 10.3 to the
Registrants Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on October 31,
2008).*
Hanesbrands Inc. Executive Life Insurance Plan.*
Hanesbrands Inc. Executive Long-Term Disability Plan.*
Hanesbrands Inc. Employee Stock Purchase Plan of 2006 (incorporated by reference from Exhibit 10.11 to the
Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on September 5,
2006).*
Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan.*
Severance/Change in Control
Agreement dated December 18, 2008 between the Registrant and Richard A. Noll.*
Severance/Change in Control Agreement dated December 18, 2008 between the Registrant and Gerald W. Evans Jr.*
Severance/Change in Control Agreement dated December 18, 2008 between the Registrant and E. Lee Wyatt Jr.*
Severance/Change in Control
Agreement dated December 10, 2008 between the Registrant and Kevin W. Oliver.*
Severance/Change in Control
Agreement dated December 17, 2008 between the Registrant and Joia M. Johnson.*
Severance/Change in Control Agreement dated December 18, 2008 between the Registrant and William J. Nictakis.*
Master Separation Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation (incorporated
by reference from Exhibit 10.21 to the Registrants Annual Report on Form 10-K filed with the Securities and
Exchange Commission on September 28, 2006).
Tax Sharing Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation (incorporated by
reference from Exhibit 10.22 to the Registrants Annual Report on Form 10-K filed with the Securities and
Exchange Commission on September 28, 2006).
Employee Matters Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation (incorporated
by reference from Exhibit 10.23 to the Registrants Annual Report on Form 10-K filed with the Securities and
Exchange Commission on September 28, 2006).
Master Transition Services Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation
(incorporated by reference from Exhibit 10.24 to the Registrants Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 28, 2006).
Real Estate Matters Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation
(incorporated by reference from Exhibit 10.25 to the Registrants Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 28, 2006).
Table of Contents
Exhibit
Number
Description
Indemnification and Insurance Matters Agreement dated August 31, 2006 between the Registrant and Sara Lee
Corporation (incorporated by reference from Exhibit 10.26 to the Registrants Annual Report on Form 10-K filed
with the Securities and Exchange Commission on September 28, 2006).
Intellectual Property Matters Agreement dated August 31, 2006 between the Registrant and Sara Lee Corporation
(incorporated by reference from Exhibit 10.27 to the Registrants Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 28, 2006).
First Lien Credit Agreement dated September 5, 2006 (the Senior
Secured Credit Facility) among the Registrant the various financial
institutions and other persons from time to time party thereto, HSBC
Bank USA, National Association, LaSalle Bank National Association,
Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley Senior Funding, Inc., Citicorp USA, Inc. and Citibank,
N.A. (incorporated by reference from Exhibit 10.28 to the Registrants
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on September 28, 2006).
First Amendment dated February 22, 2007 to the Senior Secured Credit
Facility (incorporated by reference from Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 28, 2007).
Second Amendment dated August 21, 2008 to the Senior Secured Credit
Facility (incorporated by reference from Exhibit 10.1 to the
Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 27, 2008).
Second Lien Credit Agreement dated September 5, 2006 (the Second Lien
Credit Agreement) among HBI Branded Apparel Limited, Inc., Hanesbrands
Inc., the various financial institutions and other persons from time to
time party thereto, HSBC Bank USA, National Association, LaSalle Bank
National Association, Barclays Bank PLC, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Morgan Stanley Senior Funding, Inc., Citicorp
USA, Inc. and Citibank, N.A. (incorporated by reference from Exhibit
10.29 to the Registrants Annual Report on Form 10-K filed with the
Securities and Exchange Commission on September 28, 2006).
First Amendment dated August 21, 2008 to the Second Lien Credit
Agreement (incorporated by reference from Exhibit 10.2 to the
Registrants Current Report on Form 8-K filed with the Securities and
Exchange Commission on August 27, 2008).
Receivables Purchase Agreement dated as of November 27, 2007 among HBI
Receivables LLC and the Registrant, JPMorgan Chase Bank, N.A., HSBC
Bank USA, National Association, Falcon Asset Securitization Company
LLC, Bryant Park Funding LLC, and HSBC Securities (USA) Inc.
(incorporated by reference from Exhibit 10.34 to the Registrants
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on February 19, 2008).
Ratio of Earnings to Fixed Charges.
Subsidiaries of the Registrant.
Consent of PricewaterhouseCoopers LLP.
Powers of Attorney (included on the signature pages hereto).
Certification of Richard A. Noll, Chief Executive Officer.
Certification of E. Lee Wyatt Jr., Chief Financial Officer.
Section 1350 Certification of Richard A. Noll, Chief Executive Officer.
Section 1350 Certification of E. Lee Wyatt Jr., Chief Financial Officer.
*
Agreement relates to executive compensation.
Portions of this exhibit were redacted pursuant to a confidential treatment request filed
with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
Table of Contents
Page
F-2
F-3
F-4
F-5
F-6
F-7
F-8
Table of Contents
Table of Contents
Hanesbrands Inc.
Greensboro, North Carolina
February 11, 2009
Table of Contents
(in thousands, except per share amounts)
Years Ended
Six Months
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
4,248,770
$
4,474,537
$
2,250,473
$
4,472,832
2,871,420
3,033,627
1,530,119
2,987,500
1,377,350
1,440,910
720,354
1,485,332
1,009,607
1,040,754
547,469
1,051,833
(32,144
)
(28,467
)
50,263
43,731
11,278
(101
)
317,480
388,569
190,074
433,600
(634
)
5,235
7,401
155,077
199,208
70,753
17,280
163,037
184,126
111,920
416,320
35,868
57,999
37,781
93,827
$
127,169
$
126,127
$
74,139
$
322,493
$
1.35
$
1.31
$
0.77
$
3.35
$
1.34
$
1.30
$
0.77
$
3.35
94,171
95,936
96,309
96,306
95,164
96,741
96,620
96,306
Table of Contents
(in thousands, except share and per share amounts)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(in thousands)
Accumulated
Parent
Additional
Other
Companies
Common Stock
Paid-In
Retained
Comprehensive
Equity
Shares
Amount
Capital
Earnings
Loss
Investment
Total
$
$
$
$
(18,209
)
$
2,620,571
$
2,602,362
322,493
322,493
13,518
13,518
(3,693
)
(3,693
)
332,318
294,454
294,454
$
$
$
$
(8,384
)
$
3,237,518
$
3,229,134
41,115
41,115
33,024
33,024
(5,989
)
(5,989
)
(597
)
(597
)
(9,864
)
(9,864
)
57,689
(793,133
)
(793,133
)
(2,400,000
)
(2,400,000
)
96,306
963
84,537
(85,500
)
(53,813
)
(53,813
)
10,176
10,176
6
139
139
19,079
19,079
96,312
$
963
$
94,852
$
33,024
$
(59,568
)
$
$
69,271
126,127
126,127
20,114
20,114
(6,877
)
(6,877
)
(19,639
)
(19,639
)
37,052
37,052
156,777
33,185
33,185
533
7
3,428
3,435
(1,613
)
(16
)
(2,006
)
(42,451
)
(44,473
)
74,189
74,189
(4,629
)
(4,629
)
1,149
1,149
95,232
$
954
$
199,019
$
117,849
$
(28,918
)
$
$
288,904
127,169
127,169
(29,463
)
(29,463
)
(38,818
)
(38,818
)
(184,270
)
(184,270
)
(125,382
)
31,002
31,002
456
2
10,076
10,078
(1,224
)
(12
)
(2,767
)
(27,496
)
(30,275
)
(944
)
(9
)
10,837
10,828
93,520
$
935
$
248,167
$
217,522
$
(281,469
)
$
$
185,155
Table of Contents
(in thousands)
Six Months
Years Ended
Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
127,169
$
126,127
$
74,139
$
322,493
103,126
125,471
69,946
105,173
12,019
6,205
3,466
9,031
5,133
(3,446
)
(812
)
(4,220
)
(32,144
)
(28,467
)
1,332
5,235
7,401
(1,966
)
6,032
6,475
2,279
31,449
33,625
15,623
(1,445
)
28,069
3,485
(46,804
)
(1,616
)
(75
)
1,693
1,456
163,687
(81,396
)
22,004
59,403
(182,971
)
96,338
23,191
69,215
(49,256
)
19,212
(38,726
)
21,169
(5,048
)
34,046
67,038
17,546
(673
)
(69,342
)
(37,694
)
(36,689
)
(20,574
)
177,397
359,040
136,079
510,621
(186,957
)
(91,626
)
(29,764
)
(110,079
)
(14,655
)
(20,243
)
(6,666
)
(2,436
)
(5,000
)
25,008
16,573
12,949
5,520
(644
)
(789
)
450
(3,666
)
(177,248
)
(101,085
)
(23,031
)
(110,661
)
(892
)
(1,196
)
(3,088
)
(5,542
)
602,627
66,413
10,741
7,984
(560,066
)
(88,970
)
(3,508
)
(93,073
)
2,600,000
(69
)
(3,266
)
(50,248
)
(2,424,606
)
791,000
(791,000
)
(125,000
)
(428,125
)
(106,625
)
500,000
(4,354
)
(500,000
)
20,944
250,000
(28,327
)
2,191
6,189
139
(30,275
)
(44,473
)
18,000
483
883
(834
)
(274,551
)
275,385
143,898
193,255
(1,251,962
)
(195,381
)
(259,026
)
(104,738
)
(243,379
)
(253,872
)
(1,182,336
)
(2,305
)
3,687
(1,455
)
(171
)
(106,894
)
18,263
(142,279
)
(782,547
)
174,236
155,973
298,252
1,080,799
$
67,342
$
174,236
$
155,973
$
298,252
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
(1)
Background
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Six Months Ended
December 30, 2006
December 31, 2005
(unaudited)
$
2,250,473
$
2,319,839
1,530,119
1,556,860
720,354
762,979
547,469
505,866
(28,467
)
11,278
(339
)
190,074
257,452
7,401
70,753
8,412
111,920
249,040
37,781
60,424
$
74,139
$
188,616
$
0.77
$
1.96
$
0.77
$
1.96
96,309
96,306
96,620
96,306
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
January 3,
December 29,
December 30,
2009
2007
2006
94,171
95,936
96,309
100
278
31
882
527
280
11
95,164
96,741
96,620
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six
months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
January 3,
December 29,
December 30,
2009
2007
2006
1.68-2.64
%
3.24-4.92
%
4.52-4.59
%
28-37
%
26-28
%
30
%
3.8-6.0
2.5-4.5
2.5-4.5
Weighted-
Average
Weighted-
Remaining
Average
Aggregate
Contractual
Exercise
Intrinsic
Term
Shares
Price
Value
(Years)
$
$
2,955
22.37
(6
)
22.37
2,949
$
22.37
$
3,686
5.99
1,222
25.59
(277
)
22.37
(249
)
22.97
3,645
$
23.41
$
16,369
5.44
2,624
19.81
(98
)
22.50
(142
)
23.35
6,029
$
21.86
$
5.99
2,276
$
22.89
$
4.19
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Weighted-
Average
Weighted-
Remaining
Average
Aggregate
Contractual
Grant-Date
Intrinsic
Term
Shares
Fair Value
Value
(Years)
$
$
1,546
22.37
1,546
$
22.37
$
36,516
2.41
615
25.38
(440
)
22.37
(143
)
23.17
1,578
$
23.47
$
43,922
1.89
1,512
18.19
(583
)
23.28
(105
)
23.69
2,402
$
20.19
$
31,652
1.89
1,023
$
22.89
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
87,117
$
$
$
8,661
70,050
(2,698
)
13,128
33,289
(273
)
5
(812
)
(101
)
$
92,807
$
83,183
$
32,477
$
(101
)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
42,558
$
36,912
$
21,199
$
(14
)
2,540
50,263
43,731
11,278
(101
)
$
92,807
$
83,183
$
32,477
$
(101
)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
23,848
$
39,452
$
21,199
$
34,409
31,780
11,278
456
18,696
8,993
1,857
6,861
10,094
(557
)
$
92,807
$
83,183
$
32,477
$
(101
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
23,350
$
17,029
$
21,938
$
51,677
49,198
46,762
12,180
4,119
(41,185
)
(35,517
)
(16,172
)
(29,638
)
(9,570
)
(4,924
)
(917
)
(4,220
)
$
21,793
$
23,350
$
17,029
$
21,938
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Number of Employees
Total
1,958
1,909
1,710
1,193
150
84
7,004
5,932
1,072
7,004
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Number of Employees
Total
2,635
2,151
1,222
156
93
6,257
6,241
16
6,257
Number of Employees
Total
967
1,781
2,748
2,748
2,748
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
172,494
$
176,758
116,800
122,724
1,001,236
817,570
$
1,290,530
$
1,117,052
Allowance for
Allowance for
Chargebacks
Doubtful
and Other
Accounts
Deductions
Total
$
13,257
$
15,560
$
28,817
(39
)
24,083
24,044
(2,556
)
(22,596
)
(25,152
)
10,662
17,047
27,709
(363
)
45,966
45,603
(971
)
(40,699
)
(41,670
)
9,328
22,314
31,642
8,074
5,366
13,440
(4,847
)
(18,338
)
(23,185
)
$
12,555
$
9,342
$
21,897
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
29,633
$
37,969
413,375
412,326
952,301
1,014,112
106,043
33,746
3,794
12,262
1,505,146
1,510,415
916,957
976,129
$
588,189
$
534,286
Principal Amount
Interest Rate as of
January 3,
December 29,
January 3, 2009
2009
2007
7.38
%
$
28,730
$
4.35
%
15,472
1,338
5.36
%
8,203
6,334
16.50
%
5,300
6,245
7.31
%
4,029
5,660
$
61,734
$
19,577
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Principal Amount
Interest Rate
January 3,
December 29,
January 3, 2009
2009
2007
Maturity Date
5.02
%
$
139,000
$
139,000
September 2012
5.19
%
851,250
976,250
September 2013
3.75
%
September 2011
7.27
%
450,000
450,000
March 2014
5.70
%
493,680
500,000
December 2014
2.10
%
242,617
250,000
November 2010
$
2,176,547
$
2,315,250
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Net
Unrealized
Income
Accumulated
Cumulative
(Loss)
Pension
Other
Translation
on Cash Flow
and
Income
Comprehensive
Adjustment
Hedges
Postretirement
Taxes
Loss
$
(4,895
)
$
(5,576
)
$
$
2,087
$
(8,384
)
(5,989
)
(1,050
)
(72,412
)
28,267
(51,184
)
$
(10,884
)
$
(6,626
)
$
(72,412
)
$
30,354
$
(59,568
)
20,114
(11,268
)
28,245
(6,441
)
30,650
$
9,230
$
(17,894
)
$
(44,167
)
$
23,913
$
(28,918
)
(29,463
)
(63,501
)
(301,282
)
141,695
(252,551
)
$
(20,233
)
$
(81,395
)
$
(345,449
)
$
165,608
$
(281,469
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Accumulated
Net Book
Gross
Amortization
Value
$
192,857
$
72,766
$
120,091
55,556
28,204
27,352
$
248,413
$
100,970
$
147,443
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Accumulated
Net Book
Gross
Amortization
Value
$
188,300
$
63,157
$
125,143
51,893
25,770
26,123
$
240,193
$
88,927
$
151,266
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Innerwear
Outerwear
International
Hosiery
Total
$
201,533
$
45,243
$
13,047
$
21,702
$
281,525
9,931
17,468
1,517
28,916
(16
)
(16
)
211,464
62,711
13,031
23,219
310,425
8,520
1,103
1,954
11,577
$
219,984
$
63,814
$
13,031
$
25,173
$
322,002
Notional
Interest Rates
Interest Rate Swaps
Amount
Receive
Pay
$
200,000
3-month LIBOR
5.18
%
100,000
3-month LIBOR
5.14
%
200,000
3-month LIBOR
5.15
%
493,680
6-month LIBOR
4.26
%
200,000
3-month LIBOR
2.80
%
200,000
3-month LIBOR
2.80
%
Notional
Interest Rates
Interest Rate Caps
Amount
Receive
Pay
$
200,000
3-month LIBOR
3.50
%
200,000
3-month LIBOR
3.50
%
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
(29,430
)
$
(20,577
)
40,537
(7,839
)
(19,931
)
(25,749
)
5,347
(11,310
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
(83,011
)
$
(16,590
)
2,615
196
46
304
266
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Market approach prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities.
Cost approach amount that would be required to replace the service capacity of an
asset or replacement cost.
Income approach techniques to convert future amounts to a single present amount based
on market expectations, including present value techniques, option-pricing and other
models.
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Assets (Liabilities) at Fair Value as of January 3, 2009
Quoted Prices
In Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
(Level 1)
(Level 2)
(Level 3)
$
$
(80,350
)
$
$
$
(80,350
)
$
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Prior to AML
AML
Post AML,
SFAS 158
Post AML,
and SFAS 158
Adjustment
Pre SFAS 158
Adjustment
Post SFAS 158
$
$
$
$
1,356
$
1,356
90,491
48,100
138,591
61,566
200,157
436
436
(436
)
(63,677
)
(63,677
)
(2,854
)
(66,531
)
40,541
40,541
1,238
41,779
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
$
$
725
$
30,835
(10,993
)
(2,924
)
2,182
(289
)
(127
)
(30
)
(234
)
(519
)
(339
)
(425
)
(1,059
)
$
(11,801
)
$
(3,390
)
$
2,452
$
29,542
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
1,136
$
1,446
$
384
$
51,412
49,494
17,848
5,291
(64,549
)
(55,588
)
(17,011
)
(6,584
)
(1,867
)
345
(98
)
39
43
(1
)
161
2,737
605
$
(11,801
)
$
(3,390
)
$
1,727
$
(1,293
)
Years Ended
January 3,
December 29,
2009
2007
$
300,127
$
(61,162
)
(140
)
299,987
(61,162
)
$
288,186
$
(64,552
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
837,416
$
885,531
1,136
1,445
51,412
49,494
(54,318
)
(53,576
)
1,123
(428
)
(1,485
)
(4,367
)
4,526
22,012
(48,091
)
854,414
837,416
834,214
686,730
(213,491
)
69,343
73,833
3,702
54,355
(54,319
)
(53,576
)
(761
)
(5,401
)
4,290
564,705
834,214
$
(289,709
)
$
(3,202
)
January 3,
December 29,
2009
2007
$
854,414
$
837,416
$
854,414
$
139,363
564,705
103,818
January 3,
December 29,
2009
2007
$
$
32,342
(2,919
)
(2,775
)
(286,790
)
(32,769
)
(344,343
)
(44,358
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
191
$
(332
)
344,152
(44,026
)
$
344,343
$
(44,358
)
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
6.34
%
5.80
%
5.77
%
5.60
%
8.03
7.59
7.57
7.76
3.63
3.63
3.60
4.00
6.11
%
6.34
%
5.77
%
5.80
%
3.38
3.63
3.60
4.00
(1)
The compensation increase assumption applies to the non domestic plans and portions of the
Hanesbrands nonqualified retirement plans, as benefits under these plans are not frozen at
January 3, 2009, December 29, 2007, December 30, 2006, and July 1, 2006.
January 3,
December 29,
2009
2007
53
%
65
%
41
29
6
6
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
SFAS 158
Pre-SFAS 158
Adjustment
Post SFAS 158
$
44,358
$
(35,897
)
$
8,461
21,933
21,933
13,964
13,964
Table of Contents
Notes to Consolidated Financial Statements (Continued)
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
386
$
(5,410
)
$
237
$
214
6,188
$
386
$
(5,410
)
$
451
$
6,188
January 3,
December 29,
2009
2007
$
$
256
393
835
(7
)
(7
)
(62
)
(7,380
)
948
$
386
$
(5,410
)
$
1,298
$
(191
)
(32,144
)
1,298
(32,335
)
$
1,684
$
(37,745
)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3, 2009
December 29, 2007
$
6,598
$
8,647
256
393
836
(175
)
(2,261
)
1,133
(903
)
23
7,949
6,598
173
186
(173
)
(13
)
166
2,261
(166
)
(2,261
)
173
$
(7,949
)
$
(6,425
)
$
(645
)
$
(351
)
(7,304
)
(6,074
)
$
(7,949
)
$
(6,425
)
(1,106
)
191
$
(1,106
)
$
191
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
6.20
%
6.20
%
5.58
%
%
3.70
3.70
3.70
6.30
%
6.20
%
5.58
%
%
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
0.6
%
6.0
%
30.4
%
23.4
%
99.4
94.0
69.6
76.6
100.0
%
100.0
%
100.0
%
100.0
%
35.0
%
35.0
%
35.0
%
35.0
%
(0.2
)
8.9
8.1
3.3
(16.3
)
(15.3
)
(11.6
)
(8.3
)
(4.5
)
2.1
1.8
(0.2
)
0.4
1.4
1.1
2.5
(3.4
)
22.0
%
31.5
%
33.8
%
22.5
%
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Current
Deferred
Total
$
13,531
$
(3,672
)
$
9,859
20,285
4,264
24,549
3,497
(2,037
)
1,460
$
37,313
$
(1,445
)
$
35,868
$
452
$
22,327
$
22,779
23,471
4,780
28,251
6,007
962
6,969
$
29,930
$
28,069
$
57,999
$
17,918
$
5,848
$
23,766
14,711
(3,511
)
11,200
1,667
1,148
2,815
$
34,296
$
3,485
$
37,781
$
119,598
$
(27,103
)
$
92,495
18,069
(1,911
)
16,158
2,964
(17,790
)
(14,826
)
$
140,631
$
(46,804
)
$
93,827
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
32,767
$
20,562
$
18,687
$
14,035
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
January 3,
December 29,
2009
2007
$
15,269
$
9,884
94,803
84,916
7,076
5,710
155,248
165,792
12,439
13,937
20,507
41,735
166,120
88,568
1,903
9,309
21,527
13,137
31,614
6,931
2,796
9,539
529,302
449,458
(23,727
)
(15,992
)
505,575
433,466
3,443
8,188
3,443
8,188
$
502,132
$
425,278
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ending:
$
4,963
2,704
4,825
4,065
6,197
60,826
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
$
3,267
10,350
$
13,617
11,502
513
(450
)
$
25,182
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Master Separation Agreement.
This agreement governs the contribution of Sara Lees
branded apparel Americas/Asia business to the Company, the subsequent distribution of
shares of Hanesbrands common stock to Sara Lee stockholders and other matters related to
Sara Lees relationship with the Company. To effect the contribution, Sara Lee agreed to
transfer all of the assets of the branded apparel Americas/Asia business to the Company and
the Company agreed to assume, perform and fulfill all of the liabilities of the branded
apparel Americas/Asia division in accordance with their respective terms, except for
certain liabilities to be retained by Sara Lee.
Tax Sharing Agreement.
This agreement governs the allocation of U.S. federal, state,
local, and foreign tax liability between the Company and Sara Lee, provides for
restrictions and indemnities in connection with the tax treatment of the distribution, and
addresses other tax-related matters. This agreement also provides that the Company is
liable for taxes incurred by Sara Lee that arise as a result of the Company taking or
failing to take certain actions that result in the distribution failing to meet the
requirements of a tax-free distribution under Sections 355 and 368(a)(1)(D) of the Internal
Revenue Code. The Company therefore has generally agreed that, among other things, it will
not take any actions that would result in any tax being imposed on the spin off.
Employee Matters Agreement.
This agreement allocates responsibility for employee
benefit matters on the date of and after the spin off, including the treatment of existing
welfare benefit plans, savings plans, equity-based plans and deferred compensation plans as
well as the Companys establishment of new plans.
Master Transition Services Agreement.
Under this agreement, the Company and Sara Lee
agreed to provide each other, for varying periods of time, with specified support services
related to among others, human resources and financial shared services, tax-shared services
and information technology services. Each of these services is provided for a fee, which
differs depending upon the service.
Real Estate Matters Agreement.
This agreement governs the manner in which Sara Lee will
transfer to or share with the Company various leased and owned properties associated with
the branded apparel business.
Indemnification and Insurance Matters Agreement.
This agreement provides general
indemnification provisions pursuant to which the Company and Sara Lee have agreed to
indemnify each other and their respective affiliates, agents, successors and assigns from
certain liabilities. This agreement also contains provisions governing the recovery by and
payment to the Company of insurance proceeds related to its business and arising on or
prior to the date of the distribution and its insurance coverage.
Intellectual Property Matters Agreement.
This agreement provides for the license by
Sara Lee to the Company of certain software, and governs the wind-down of the Companys use
of certain of Sara Lees trademarks (other than those being transferred to the Company in
connection with the spin off).
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Six Months
Ended
Year Ended
December 30,
July 1,
2006
2006
$
5
$
1,630
2,026
1,554
7
4,449
7,878
23,036
4,926
5,807
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Innerwear sells basic branded products that are replenishment in nature under the
product categories of womens intimate apparel, mens underwear, kids underwear, socks,
thermals and sleepwear. Our direct-to-consumer retail operations are included within the
Innerwear segment.
Outerwear sells basic branded products that are seasonal in nature under the product
categories of casualwear and activewear.
International relates to the Latin America, Asia, Canada and Europe geographic locations
which sell products that span across the Innerwear, Outerwear and Hosiery reportable
segments.
Hosiery sells products in categories such as panty hose and knee highs.
Other is comprised of sales of nonfinished products such as yarn and certain other
materials in the United States and Latin America that maintain asset utilization at certain
manufacturing facilities and are expected to generate break even margins.
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
2,402,831
$
2,556,906
$
1,295,868
$
2,627,101
1,180,747
1,221,845
616,298
1,140,703
460,085
421,898
197,729
398,157
227,924
266,198
144,066
290,125
21,724
56,920
19,381
62,809
4,293,311
4,523,767
2,273,342
4,518,895
(44,541
)
(49,230
)
(22,869
)
(46,063
)
$
4,248,770
$
4,474,537
$
2,250,473
$
4,472,832
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
277,486
$
305,959
$
172,008
$
344,643
68,769
71,364
21,316
74,170
57,070
53,147
15,236
37,003
71,596
76,917
36,205
39,069
(472
)
(1,361
)
(288
)
127
474,449
506,026
244,477
495,012
(52,143
)
(60,213
)
(46,927
)
(52,482
)
(12,019
)
(6,205
)
(3,466
)
(9,031
)
32,144
28,467
(50,263
)
(43,731
)
(11,278
)
101
(18,696
)
(23,862
)
(36,912
)
(21,199
)
14
(2,540
)
317,480
388,569
190,074
433,600
634
(5,235
)
(7,401
)
(155,077
)
(199,208
)
(70,753
)
(17,280
)
$
163,037
$
184,126
$
111,920
$
416,320
January 3,
December 29,
2009
2007
$
1,310,416
$
1,247,441
813,803
754,178
192,741
232,142
88,042
97,804
9,118
16,807
2,414,120
2,348,372
1,119,929
1,091,111
$
3,534,049
$
3,439,483
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
43,970
$
41,700
$
26,335
$
59,787
24,904
25,553
13,821
26,693
2,257
4,306
1,678
3,735
5,788
10,144
5,461
13,322
811
1,700
1,089
2,157
77,730
83,403
48,384
105,694
37,415
48,273
25,028
8,510
$
115,145
$
131,676
$
73,412
$
114,204
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
81,221
$
38,758
$
12,764
$
43,820
85,178
26,881
7,775
52,230
2,789
1,997
1,025
6,210
765
2,029
1,749
5,500
47
693
147
609
170,000
70,358
23,460
108,369
16,957
26,268
6,304
1,710
$
186,957
$
96,626
$
29,764
$
110,079
(1)
Includes sales between segments. Such sales are at transfer prices that are at cost plus
markup or at prices equivalent to market value.
(2)
Intersegment sales included in the segments net sales are as follows:
Years Ended
Six Months Ended
Year Ended
January 3,
December 29,
December 30,
July 1,
2009
2007
2006
2006
$
7,093
$
6,529
$
2,287
$
5,293
24,348
23,154
9,671
16,062
1,121
2,757
1,355
3,406
11,979
16,790
9,575
21,302
(19
)
$
44,541
$
49,230
$
22,869
$
46,063
(3)
Principally cash and equivalents, certain fixed assets, net deferred tax assets, goodwill,
trademarks and other identifiable intangibles, and certain other noncurrent assets.
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Years Ended or at
Six Months Ended or at
Year Ended or at
January 3, 2009
December 29, 2007
December 30, 2006
July 1, 2006
Long-Lived
Long-Lived
Long-Lived
Long-Lived
Sales
Assets
Sales
Assets
Sales
Assets
Sales
Assets
$
3,748,382
$
657,735
$
4,013,738
$
776,113
$
2,058,506
$
718,489
$
4,105,168
$
862,280
68,453
20,254
73,427
12,844
38,920
19,194
77,516
35,376
13,550
269,837
26,851
255,319
23,793
185,371
3,185
120,161
98,251
1,391
83,606
1,116
43,707
16,302
85,898
4,979
139,971
4,961
124,500
8,902
57,898
6,008
118,798
6,828
93,560
966
70,364
954
21,797
752
49,374
661
9,397
73,043
6,561
11,863
2,028
252
1,680
158
77,206
39,530
75,490
13,035
3,824
29,204
29,583
1,597
4,248,770
$
1,067,717
4,474,537
$
1,080,146
2,250,473
$
975,572
4,471,202
$
1,032,040
1,630
$
4,248,770
$
4,474,537
$
2,250,473
$
4,472,832
First
Second
Third
Fourth
Total
$
987,847
$
1,072,171
$
1,153,635
$
1,035,117
$
4,248,770
344,964
380,956
341,784
309,646
1,377,350
36,024
57,344
15,920
17,881
127,169
0.38
0.61
0.17
0.19
1.35
0.38
0.60
0.17
0.19
1.34
$
1,039,894
$
1,121,907
$
1,153,606
$
1,159,130
$
4,474,537
339,679
380,357
361,019
359,855
1,440,910
12,004
25,434
38,896
49,793
126,127
0.12
0.26
0.41
0.52
1.31
0.12
0.26
0.40
0.52
1.30
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Consolidating Statement of Income Year Ended January 3, 2009
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidating
$
4,456,838
$
432,209
$
2,839,424
$
(3,479,701
)
$
4,248,770
3,520,096
169,115
2,537,883
(3,355,674
)
2,871,420
936,742
263,094
301,541
(124,027
)
1,377,350
839,023
76,139
94,281
164
1,009,607
34,313
375
15,575
50,263
63,406
186,580
191,685
(124,191
)
317,480
(634
)
(634
)
170,714
128,359
(299,073
)
103,919
33,462
17,696
155,077
130,835
281,477
173,989
(423,264
)
163,037
3,666
9,312
22,890
35,868
$
127,169
$
272,165
$
151,099
$
(423,264
)
$
127,169
Consolidating Statement of Income Year Ended December 29, 2007
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidating
$
4,421,464
$
875,358
$
2,532,886
$
(3,355,171
)
$
4,474,537
3,527,794
640,341
2,240,203
(3,374,711
)
3,033,627
893,670
235,017
292,683
19,540
1,440,910
923,127
4,096
112,332
1,199
1,040,754
(32,144
)
(32,144
)
39,625
72
4,034
43,731
(36,938
)
230,849
176,317
18,341
388,569
5,235
5,235
339,034
137,571
(476,605
)
154,367
42,299
2,544
(2
)
199,208
142,494
326,121
173,773
(458,262
)
184,126
16,367
13,380
28,252
57,999
$
126,127
$
312,741
$
145,521
$
(458,262
)
$
126,127
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Consolidating Statement of Income Six Months Ended December 30, 2006
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
2,239,788
$
298,380
$
1,197,146
$
(1,484,841
)
$
2,250,473
1,583,683
412,274
1,042,006
(1,507,844
)
1,530,119
656,105
(113,894
)
155,140
23,003
720,354
452,483
57,249
60,291
(22,554
)
547,469
(28,467
)
(28,467
)
2,970
2,036
6,272
11,278
229,119
(173,179
)
88,577
45,557
190,074
7,401
7,401
(62,193
)
87,559
(25,366
)
56,234
15,043
(524
)
70,753
103,291
(100,663
)
89,101
20,191
111,920
29,152
3,113
5,516
37,781
$
74,139
$
(103,776
)
$
83,585
$
20,191
$
74,139
Consolidating Statement of Income Year Ended July 1, 2006
Consolidating
Divisional
Guarantor
Non-Guarantor
Entries and
Entities
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
4,645,494
$
947,083
$
2,453,589
$
(3,573,334
)
$
4,472,832
3,687,964
791,992
2,075,249
(3,567,705
)
2,987,500
957,530
155,091
378,340
(5,629
)
1,485,332
774,972
162,128
113,508
1,225
1,051,833
701
(201
)
(601
)
(101
)
181,857
(6,836
)
265,433
(6,854
)
433,600
234,515
(234,515
)
1,605
8,820
6,855
17,280
180,252
218,859
258,578
(241,369
)
416,320
83,291
10,536
93,827
$
180,252
$
135,568
$
248,042
$
(241,369
)
$
322,493
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Balance Sheet
January 3, 2009
Non
Consolidating
Parent
Guarantor
Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
16,210
$
2,355
$
48,777
$
$
67,342
(4,956
)
6,096
406,305
(2,515
)
404,930
1,078,048
49,581
295,946
(133,045
)
1,290,530
288,208
10,158
49,734
(577
)
347,523
1,377,510
68,190
800,762
(136,137
)
2,110,325
208,844
13,914
365,431
588,189
27,199
114,630
5,614
147,443
232,882
16,934
72,186
322,002
545,866
649,513
(1,195,379
)
91,401
397,802
(37,980
)
(85,133
)
366,090
$
2,483,702
$
1,260,983
$
1,206,013
$
(1,416,649
)
$
3,534,049
$
161,734
$
3,980
$
74,157
$
85,647
$
325,518
229,631
30,875
57,555
(2,669
)
315,392
61,734
61,734
45,640
45,640
391,365
34,855
239,086
82,978
748,284
1,483,930
450,000
196,977
2,130,907
423,252
7,344
34,968
4,139
469,703
2,298,547
492,199
471,031
87,117
3,348,894
185,155
768,784
734,982
(1,503,766
)
185,155
$
2,483,702
$
1,260,983
$
1,206,013
$
(1,416,649
)
$
3,534,049
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Balance Sheet December 29, 2007
Non
Consolidating
Parent
Guarantor
Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
84,476
$
6,329
$
83,431
$
$
174,236
(13,135
)
4,389
586,327
(2,512
)
575,069
827,312
47,443
281,224
(38,927
)
1,117,052
196,451
3,888
30,013
(2,375
)
227,977
1,095,104
62,049
980,995
(43,814
)
2,094,334
286,081
6,979
241,226
534,286
25,955
119,682
5,629
151,266
232,882
16,934
60,609
310,425
424,746
585,168
(1,009,914
)
386,070
249,621
(232,117
)
(54,402
)
349,172
$
2,450,838
$
1,040,433
$
1,056,342
$
(1,108,130
)
$
3,439,483
$
127,887
$
4,344
$
71,288
$
85,647
$
289,166
299,078
22,537
61,294
(2,670
)
380,239
19,577
19,577
426,965
26,881
152,159
82,977
688,982
1,615,250
450,000
250,000
2,315,250
119,719
1,773
19,854
5,001
146,347
2,161,934
478,654
422,013
87,978
3,150,579
288,904
561,779
634,329
(1,196,108
)
288,904
$
2,450,838
$
1,040,433
$
1,056,342
$
(1,108,130
)
$
3,439,483
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Statement of Cash Flows
Year Ended January 3, 2009
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
18,786
$
139,463
$
319,393
$
(300,245
)
$
177,397
(32,129
)
(10,813
)
(144,015
)
(186,957
)
(14,655
)
(14,655
)
20,612
38
4,358
25,008
2,047
(91
)
(1,772
)
(828
)
(644
)
(9,470
)
(10,866
)
(156,084
)
(828
)
(177,248
)
(878
)
(14
)
(892
)
602,627
602,627
(560,066
)
(560,066
)
(48
)
(10
)
(11
)
(69
)
791,000
791,000
(791,000
)
(791,000
)
(125,000
)
(125,000
)
(4,354
)
(4,354
)
20,944
20,944
(28,327
)
(28,327
)
2,191
2,191
(30,275
)
(30,275
)
18,000
18,000
483
483
62,299
(132,561
)
(230,811
)
301,073
(77,582
)
(132,571
)
(195,658
)
301,073
(104,738
)
(2,305
)
(2,305
)
(68,266
)
(3,974
)
(34,654
)
(106,894
)
84,476
6,329
83,431
174,236
$
16,210
$
2,355
$
48,777
$
$
67,342
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Statement of Cash Flows
Year Ended December 29, 2007
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
1,021,014
$
138,162
$
(323,563
)
$
(476,573
)
$
359,040
(43,206
)
(9,588
)
(38,832
)
(91,626
)
(20,243
)
(20,243
)
(5,000
)
(5,000
)
9,180
5,396
1,997
16,573
(1,962
)
566
(541
)
1,148
(789
)
(35,988
)
(8,626
)
(57,619
)
1,148
(101,085
)
(1,170
)
(26
)
(1,196
)
66,413
66,413
(88,970
)
(88,970
)
(3,135
)
(131
)
(3,266
)
(428,125
)
(428,125
)
250,000
250,000
6,189
6,189
(44,473
)
(44,473
)
883
883
(834
)
(834
)
(491,679
)
(121,799
)
138,053
475,425
(961,510
)
(121,956
)
364,662
475,425
(243,379
)
3,687
3,687
23,516
7,580
(12,833
)
18,263
60,960
(1,251
)
96,264
155,973
$
84,476
$
6,329
$
83,431
$
$
174,236
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Statement of Cash Flows
Six Months Ended December 30, 2006
Consolidating
Parent
Guarantor
Non-Guarantor
Entries and
Company
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
275,160
$
(538,152
)
$
123,226
$
275,845
$
136,079
(14,077
)
(2,527
)
(13,160
)
(29,764
)
(6,666
)
(6,666
)
1,269
4,123
7,557
12,949
132,988
(114,692
)
(16,760
)
(1,086
)
450
120,180
(113,096
)
(29,029
)
(1,086
)
(23,031
)
(3,046
)
(42
)
(3,088
)
10,741
10,741
(3,508
)
(3,508
)
2,150,000
450,000
2,600,000
(41,958
)
(8,290
)
(50,248
)
(1,974,606
)
(450,000
)
(2,424,606
)
(106,625
)
(106,625
)
500,000
500,000
(500,000
)
(500,000
)
139
139
(275,385
)
834
(274,551
)
(771,890
)
1,523,794
(283,890
)
(274,759
)
193,255
152,551
(321,841
)
(26,091
)
(195,381
)
(595,435
)
918,236
(301,914
)
(274,759
)
(253,872
)
(1,455
)
(1,455
)
(200,095
)
266,988
(209,172
)
(142,279
)
261,055
(268,239
)
305,436
298,252
$
60,960
$
(1,251
)
$
96,264
$
$
155,973
Table of Contents
Years ended January 3, 2009 and December 29, 2007, six months ended December 30, 2006
and year ended July 1, 2006
(amounts in thousands, except per share data)
Condensed Consolidating Statement of Cash Flows
Year Ended July 1, 2006
Consolidating
Divisional
Guarantor
Non-Guarantor
Entries and
Entities
Subsidiaries
Subsidiaries
Eliminations
Consolidated
$
1,014,001
$
(312,762
)
$
427,471
$
(618,089
)
$
510,621
(60,878
)
(5,900
)
(43,301
)
(110,079
)
(2,436
)
(2,436
)
4,731
84
705
5,520
(4,433
)
(4,636
)
1,741
3,662
(3,666
)
(60,580
)
(12,888
)
(40,855
)
3,662
(110,661
)
(5,227
)
(315
)
(5,542
)
7,984
7,984
(93,073
)
(93,073
)
275,385
275,385
119,012
(1,205
)
26,091
143,898
(537,505
)
(1,192,887
)
(135,997
)
614,427
(1,251,962
)
(259,026
)
(259,026
)
(682,746
)
(919,022
)
(194,995
)
614,427
(1,182,336
)
(171
)
(171
)
270,675
(1,244,672
)
191,450
(782,547
)
(9,620
)
976,433
113,986
1,080,799
$
261,055
$
(268,239
)
$
305,436
$
$
298,252
2
3
PAGE | ||
SECTION 1
|
1 | |
1.01 Background; Purpose of Plan
|
1 | |
1.02 Effective Date; Plan Year
|
2 | |
1.03 Plan Administration
|
2 | |
1.04 Plan Supplements
|
2 | |
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 |
PAGE | ||
2.33 Excess Contribution
|
9 | |
2.34 Excess Deferral
|
9 | |
2.35 Excess Matching Contribution
|
9 | |
2.36 Fair Market Value
|
9 | |
2.37 Forfeiture
|
9 | |
2.38 Hanesbrands Stock
|
9 | |
2.39 Highly Compensated Employee
|
10 | |
2.40 Hour of Service
|
10 | |
2.41 Investment Committee
|
10 | |
2.42 Leased Employee
|
10 | |
2.43 Leave of Absence
|
10 | |
2.44 Limitation Year
|
11 | |
2.45 Matching Contributions
|
11 | |
2.46 Matching Contribution Account
|
11 | |
2.47 Maternity or Paternity Absence
|
11 | |
2.48 Normal Retirement Age
|
11 | |
2.49 One-Year Break in Service
|
11 | |
2.50 Participant
|
12 | |
2.51 Period of Service
|
12 | |
2.52 Plan
|
12 | |
2.53 Plan Year
|
13 | |
2.54 Predecessor Company
|
13 | |
2.55 Predecessor Company Account
|
13 | |
2.56 Predecessor Plan
|
13 | |
2.57 Required Commencement Date
|
13 | |
2.58 Rollover Contribution
|
13 | |
2.59 Rollover Contribution Account
|
13 | |
2.60 Sara Lee Plan
|
14 | |
2.61 Sara Lee Stock
|
14 | |
2.62 Separation Date
|
14 | |
2.63 Service
|
14 | |
2.64 Spin-Off, Spin-Off Date
|
14 | |
2.65 Totally Disabled or Total Disability
|
14 | |
2.66 Transferred Participants
|
14 | |
2.67 Trust Agreement
|
15 | |
2.68 Trust Fund
|
15 | |
2.69 Trustees
|
15 | |
2.70 Year of Service
|
15 | |
|
||
SECTION 3
|
17 | |
Participation
|
17 | |
3.01 Eligibility to Participate
|
17 | |
3.02 Covered Group
|
18 |
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PAGE | ||
3.03 Leave of Absence
|
18 | |
3.04 Leased Employees
|
18 | |
|
||
SECTION 4
|
20 | |
Before-Tax Contributions
|
20 | |
4.01 Before-Tax Contributions
|
20 | |
4.02 Catch-Up Contributions
|
21 | |
4.03 Change in Election
|
21 | |
4.04 Direct Transfers and Rollovers
|
21 | |
|
||
SECTION 5
|
23 | |
Employer Contributions
|
23 | |
5.01 Before-Tax Contributions
|
23 | |
5.02 Annual Company Contribution
|
23 | |
5.03 Matching Contributions
|
24 | |
5.04 Transition Contribution
|
24 | |
5.05 Allocation of Annual Company Contribution
|
25 | |
5.06 Payment of Matching Contributions
|
25 | |
5.07 Allocation of Matching Contributions
|
25 | |
5.08 Payment of Employer Contributions
|
25 | |
5.09 Limitations on Employer Contributions
|
25 | |
5.10 Verification of Employer Contributions
|
25 | |
|
||
SECTION 6
|
27 | |
Contribution Limits
|
27 | |
6.01 Actual Deferral Percentage Limitations
|
27 | |
6.02 Limitation on Matching Contributions
|
27 | |
6.03 Dollar Limitation
|
28 | |
6.04 Allocation of Earnings to Distributions of
Excess Deferrals, Excess Contributions and Excess Matching
Contributions
|
29 | |
6.05 Contribution Limitations
|
29 | |
|
||
SECTION 7
|
31 | |
Period of Participation
|
31 | |
7.01 Separation Date
|
31 | |
7.02 Restricted Participation
|
31 | |
|
||
SECTION 8
|
33 | |
Accounting
|
33 | |
8.01 Separate Accounts
|
33 | |
8.02 Adjustment of Participants Accounts
|
33 | |
8.03 Crediting of 401(k) Contributions
|
34 |
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PAGE | ||
8.04 Charging Distributions
|
35 | |
8.05 Statement of Account
|
35 | |
|
||
SECTION 9
|
36 | |
The Trust Fund and Investment of Trust Assets
|
36 | |
9.01 The Trust Fund
|
36 | |
9.02 The Investment Funds
|
36 | |
9.03 Investment of Contributions
|
36 | |
9.04 Change in Investment of Contributions
|
36 | |
9.05 Elections to Transfer Balances Between Accounts; Diversification
|
37 | |
9.06 Voting of Stock; Tender Offers
|
37 | |
9.07 Confidentiality of Participant Instructions
|
38 | |
|
||
SECTION 10
|
39 | |
Payment of Account Balances
|
39 | |
10.01 Payments to Participants
|
39 | |
10.02 Distributions in Shares
|
42 | |
10.03 Beneficiary
|
42 | |
10.04 Missing Participants and Beneficiaries
|
44 | |
10.05 Rollovers
|
44 | |
10.06 Forfeitures
|
45 | |
10.07 Recovery of Benefits
|
45 | |
10.08 Dividend Pass-Through Election
|
46 | |
10.09 Minimum Distributions
|
46 | |
|
||
SECTION 11
|
50 | |
11.01 Loans to Participants
|
50 | |
11.02 After-Tax Withdrawals
|
52 | |
11.03 Hardship Withdrawals
|
52 | |
11.04 Age 59-
1
/
2
Withdrawals
|
54 | |
11.05 Additional Rules for Withdrawals
|
54 | |
|
||
SECTION 12
|
56 | |
Reemployment
|
56 | |
12.01 Reemployed Participants
|
56 | |
12.02 Calculation of Service Upon Reemployment
|
56 | |
|
||
SECTION 13
|
59 | |
Special Rules for Top-Heavy Plans
|
59 | |
13.01 Purpose and Effect
|
59 | |
13.02 Top Heavy Plan
|
59 | |
13.03 Key Employee
|
59 |
-iv-
PAGE | ||
13.04 Minimum Employer Contribution
|
60 | |
13.05 Aggregation of Plans
|
60 | |
13.06 No Duplication of Benefits
|
60 | |
13.07 Compensation
|
60 | |
|
||
SECTION 14
|
61 | |
General Provisions
|
61 | |
14.01 Committees 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 Committees 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 | |
|
||
SECTION 15
|
65 | |
No Interest in Employers
|
65 | |
|
||
SECTION 16
|
66 | |
Amendment or Termination
|
66 | |
16.01 Amendment
|
66 | |
16.02 Termination
|
66 | |
16.03 Effect of Termination
|
66 | |
16.04 Notice of Amendment or Termination
|
66 | |
16.05 Plan Merger, Consolidation, Etc.
|
67 | |
|
||
SECTION 17
|
68 | |
Relating to the Plan Administrator and Committees
|
68 | |
17.01 The Employee Benefits Administrative Committee
|
68 | |
17.02 The ERISA Appeal Committee
|
69 | |
17.03 Secretary of the Committee
|
70 | |
17.04 Manner of Action
|
70 |
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PAGE | ||
17.05 Interested Party
|
71 | |
17.06 Reliance on Data
|
71 | |
17.07 Committee Decisions
|
71 | |
|
||
SECTION 18
|
72 | |
Adoption of Plan by Controlled Group Members
|
72 | |
|
||
SECTION 19
|
73 | |
Supplements to the Plan
|
73 | |
|
||
EXHIBIT A
|
74 | |
Accounts Transferred from the Sara Lee Plan
|
74 | |
|
||
SUPPLEMENT A
|
||
Provisions Relating to the Merger of the National Textiles,
L.L.C. 401(k) Plan into the
Hanesbrands Inc. Retirement Savings Plan
|
||
|
||
SUPPLEMENT B
|
||
Special Participation Provisions
|
-vi-
1
2
3
4
(a) | Including (i) elective contributions made on behalf of the Employee pursuant to the Employees 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 (2) 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. |
6
(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 Distributees Eligible Rollover Distribution. |
(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 Distributees designated beneficiary, or for a specified period of ten (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) | Annual Company Contributions; | ||
(b) | Matching Contributions; | ||
(c) | Transition Contributions; and | ||
(d) | Any contributions that are made by an Employer in lieu of the contributions described in Subparagraphs (a), (b) or (c) above. |
8
9
10
11
(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. |
12
13
(a) | Results in such Participants entitlement to and receipt of monthly disability insurance benefits under the Federal Social Security Act; or | ||
(b) | Results in such Participants 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 Participants Employer. |
(a) | any participant who has an account in the Sara Lee Plan and is employed by Hanesbrands Inc. or a Sara Lee Corporation division listed on Exhibit A on the Effective Date; |
14
(b) | any participant who (i) has an account in the Sara Lee Plan on the Effective Date, and (ii) after the Effective Date but before the Spin-Off Date is 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 the Effective Date 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. |
(a) | A period of concurrent Service with two (2) 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 |
15
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 the Effective Date 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 individuals service with the prior 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 employers plans and the Plan. |
(d) | The foregoing provisions of this Subsection shall not be applied so as to allow an Employee to become a Participant in the Plan prior to the Employees actual employment by an Employer and his or her becoming a member of a Covered Group of Employees. |
16
(a) | Eligible Participants . |
(i) | Each Transferred Participant shall become a Participant on the Effective Date or, if later, on the date of a transfer of employment described in Subparagraph 2.66(b), subject to the terms and conditions of the Plan. Each other Eligible Employee hired prior to January 1, 2008 shall become a Participant on the first date of the first payroll period following the date he or she attains age twenty-one (21) or on January 1, 2008, if earlier; except that Eligible Employees hired prior to January 1, 2008 and described in Supplement B to the Plan shall become Participants on their dates of hire without regard to their then attained age. Notwithstanding the foregoing, each Eligible Employee hired prior to January 1, 2008 must have attained age twenty-one (21) before becoming eligible for Annual Company Contributions provided under Subsection 5.02. An Eligible Employee may become a Participant only if he or she is a member of a Covered Group. | ||
(ii) | 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, 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 twenty-one (21), if later; |
in each case, provided the Eligible Employee is then a member of a Covered Group. |
(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 transferred amounts or 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 |
17
may not make Before-Tax 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. | ||
(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. |
18
19
(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 (1%) not to exceed fifty percent (50%)) 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 (b) 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 Code Section 415 and Treasury Regulations Section 1.415(c)-2. | ||
(b) | Automatic Deferral Election . Notwithstanding Subparagraph (a) above, each Participant as of January 1, 2008 who has not previously made an affirmative election under the Plan and each individual who becomes an Eligible Employee on or after January 1, 2008 will be deemed to have automatically elected to have four percent (4%) of his or her Compensation contributed to the Plan as Before-Tax Contributions beginning on January 1, 2008 or as soon as administratively possible after the Eligible Employee becomes a Participant under Subparagraph 3.01(a), if later. Each such Participants deferral percentage shall increase automatically by one percent (1%) each Plan Year thereafter, up to six percent (6%) 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 Employees 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. | ||
(c) | Reduction of Compensation . Before-Tax Contributions shall be made by a reduction of such items of the Participants 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 |
20
from the Participants Compensation and contributed to the Plan on the Participants behalf by the Participants Employer in accordance with Subsection 5.01. |
(a) | From a trustee or insurance company a direct transfer (or an Eligible Rollover Distribution) of a Participants benefit (or portion thereof) under any other Eligible Retirement Plan; | ||
(b) | From a Participant as a 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; |
21
provided, however, that any such Rollover Contribution made by a Participant shall be in cash only and comply with the provisions of the Code and the rules and regulations thereunder applicable to tax-free rollovers and shall be exclusive of after-tax employee contributions. If after a 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 received. Any amount so 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 Participants 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. |
22
(a) | For Participants who are exempt and non-exempt salaried employees, an amount determined by the Company each year in its discretion, which amount shall not be in excess of four percent (4%) of such Participants 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 Participants who are hourly, non-union employees or are New York-based sample department union Employees, an amount determined by the Company each year in its discretion, which amount shall not be in excess of two percent (2%) of such Participants Compensation for that portion of the Plan Year during which he or she was an hourly employee and a Participant in the Plan. |
23
(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 one hundred percent (100%) of the Participants Before-Tax Contributions (including Catch-Up Contributions) made since the last Employer Matching Contribution that do not exceed four percent (4%) of the Participants Compensation. | ||
(b) | As of the end of each Plan Year, a true up Matching Contribution for each Participant who did not receive the full Matching Contribution under Subparagraph (a) for the Plan Year based on the amount of his or her Before-Tax Contributions (including Catch-Up Contributions) for such Plan Year. 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 under Subparagraph (a), and the full Matching Contribution that the Participant would have been entitled to receive under Subparagraph (a) for the Plan Year if such Matching Contributions were determined as of the end of the Plan Year instead of on a quarterly (or more frequent) basis. | ||
(c) | Matching Contributions for Plan Years beginning in 2009 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 Participants current investment election. |
(a) | Was an exempt or non-exempt salaried employee of Sara Lee Corporations Branded Apparel division; and | ||
(b) | Had attained age fifty (50) and completed ten (10) Years of Service; and |
24
25
26
(a) | Actual Deferral Percentage of all other Eligible Employees for the Plan Year multiplied by 1.25; or | ||
(b) | Actual Deferral Percentage of all other Eligible Employees for the Plan Year multiplied by 2.0; provided that the Actual Deferral Percentage of the Highly Compensated Employees does not exceed that of all other Eligible Employees by more than two (2) percentage points. |
(a) | Contribution Percentage of all other Eligible Employees for the Plan Year multiplied by 1.25; or |
27
(b) | Contribution Percentage of all other Eligible Employees for the Plan Year multiplied by two (2.0); provided that the Contribution Percentage of such Highly Compensated Employees does not exceed that of all other Participants by more than two (2) percentage points. |
28
6.04 | Allocation of Earnings to Distributions of Excess Deferrals, Excess Contributions and Excess Matching Contributions |
(a) | Compensation shall include elective amounts that are not includible in the gross income of the Participant by reason of Code Sections 125, 132(f) and 402(g)(3). | ||
(b) | Compensation for a Limitation Year shall include compensation paid by the later of 2-1/2 months after a Participants severance from employment with the Employers or the end of the Limitation Year that includes the date of the Participants severance from employment with the Employers, if: |
29
(i) | The payment is regular compensation for services during the Participants regular working hours, or compensation for services outside the Participants 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 | ||
(ii) | The payment is for unused accrued bona fide sick, vacation or other leave that the Participant would have been able to use if employment had continued. |
(c) | A Participants compensation for a Limitation Year shall not include compensation in excess of the limitation under Code Section 401(a)(17) in effect for the Limitation Year. |
30
(a) | He or she will not make any Before-Tax Contributions, and his or her Employer will not make any Employer Contributions on his or her behalf, for any period beginning after his or her Separation Date occurs or for any subsequent Plan Year unless he or she is reemployed and again becomes a Participant in the Plan; provided, however, that his or her Employer shall contribute: |
(i) | His or her Before-Tax Contributions, as provided in Subsection 5.01, with respect to Compensation paid through his or her Separation Date; and | ||
(ii) | If applicable, an Annual Company Contribution and/or a Transition Contribution for the Plan Year in which his or her Separation Date occurs, based on his or her Compensation paid during that portion of the Plan Year in which he or she was a Participant eligible for such contributions. |
(b) | He or she will not make any Before-Tax Contributions, and his or her Employer will not make any Employer Contributions on his or her behalf, for any period in which he or she is in the employ of an Employer but is not an Eligible Employee. | ||
(c) | He or she will not make any Before-Tax Contributions, and his or her Employer will not make any Employer Contributions on his or her behalf, for any period in |
31
which he or she is employed by a Controlled Group Member that is not an Employer under the Plan. | |||
(d) | The Participant may not apply for loans under Subsection 11.01. | ||
(e) | A Participant whose Separation Date occurs, or a Beneficiary or Alternate Payee of a Participant, may not apply for a withdrawal under Section 11. |
32
(a) | A Before-Tax Contribution Account, which will reflect his or her Before-Tax Contributions, if any, made under the Plan, and the income, losses, appreciation and depreciation attributable thereto. This Account shall include a Current Year Before-Tax Contribution Subaccount, which will reflect only the Before-Tax Contributions made by the Participant during the current Plan Year. | ||
(b) | A Matching Contribution Account, which will reflect his or her share of Matching Contributions, if any, made under the Plan, and the income, losses, appreciation and depreciation attributable thereto. This Account shall include a Current Year Matching Contribution Subaccount, which will reflect only the Matching Contributions allocated to the Participant during the current Plan Year. | ||
(c) | An Annual Company Contribution Account, which will reflect his or her share of the Annual Company Contributions under the Plan, and the income, losses, appreciation and depreciation attributable thereto. This Account shall include a Current Year Annual Company Contribution Subaccount, which will reflect only the Annual Company Contributions allocated to the Participant during the current Plan Year. | ||
(d) | An After-Tax Account, which will reflect his or her after-tax contributions, and the income, losses, appreciation and depreciation attributable to all after-tax contributions made to the Plan or a Predecessor Plan. | ||
(e) | A Rollover Contribution Account, which will reflect his or her Rollover Contributions to the Plan, and the income, losses, appreciation and depreciation attributable thereto. | ||
(f) | A Predecessor Company Account, which will reflect the contributions made by a Participant, or on his or her behalf, under a Predecessor Plan, and the income, losses, appreciation and depreciation attributable thereto. |
(a) | Transfers, if any, made between Investment Funds; |
33
(b) | Before-Tax Contributions, Employer Contributions and Rollover Contributions, if any, and payments of principal and interest on any loans made from a Participants Account; | ||
(c) | Distributions and withdrawals that have been made but not previously charged to the Participants Account; and | ||
(d) | Changes in the Adjusted Net Worth of the Investment Funds in which such Account is invested. |
34
35
36
37
38
(i) | Before-Tax Contribution, After-Tax, and Rollover Contribution Accounts . A Participant shall at all times be fully vested in and have a nonforfeitable right to the balance in his or her Before-Tax Contribution Account and his or her After-Tax and Rollover Contribution Accounts, if any. | ||
(ii) | Annual Company Contribution and Transition Contribution Account . If a Participants Separation Date occurs on or after his or her Normal Retirement Age, on the date he or she dies, or on or after the date he or she becomes Totally Disabled, then the Participant shall be fully vested in his or her Annual Company Contribution Account and Transition Contribution Account. If a Participants Separation Date occurs under any other circumstances, the balances in his or her Annual Company Contribution Account and Transition Contribution Account shall be calculated in accordance with the vesting schedule outlined below: |
If the Participants | The Vested Percentage of | |
Number of Years of | His or Her Applicable | |
Service is: | Accounts will be: | |
Less than 1 year | 0% | |
1 year but less than 2 years | 20% | |
2 years but less than 3 years | 40% | |
3 years but less than 4 years | 60% | |
4 years but less than 5 years | 80% | |
5 years or more | 100% |
The resulting balance in his or her Annual Company Contribution Account and Transition Contribution Account will be distributable to him or her, or, in the event of his or her death, to his or her Beneficiary, in accordance with this Subsection and Subsection 10.02. | |||
(iii) | Matching Contribution Account . If a Participants Separation Date occurs on or after his or her Normal Retirement Age, on the date he or she dies, or on or after the date he or she becomes Totally Disabled, then the |
39
Participant shall be fully vested in his or her Matching Contribution Account . If a Participants Separation Date occurs under any other circumstances on or after January 1, 2008, the Participant shall be fully vested in his or her Matching Contribution Account balance provided he or she has completed at least two Years of Service. Notwithstanding the foregoing, if the Participant is an active employee and has a Matching Contribution Account balance on December 31, 2007, he or she shall be fully vested in his or her Matching Contribution Account (including future contributions thereto) on and after January 1, 2008. If a Participants Separation Date occurs prior to January 1, 2008, he or she shall be vested in his or her Matching Contribution Account balance to the same extent that he or she was vested at his or her Separation Date, subject to the provisions of Subparagraph 12.02(a)(i). The balance in the Participants Matching Contribution Account after application of the foregoing vesting rules will be distributable to him or her, or, in the event of his or her death, to his or her Beneficiary, in accordance with this Subsection and Subsection 10.02 | |||
(iv) | Special Provisions to Certain Participants . In addition, a Participant who was subject to special vesting rules under the Sara Lee Plan shall be fully vested in his or her Accounts to the extent provided in the Sara Lee Plan. |
(b) | Time of Payment . Except as provided in Subsection 10.03 below, payment of a Participants benefits will be made or commence within the time determined by the Committee after his or her Separation Date, but not later than sixty (60) days after (i) the end of the Plan Year in which his or her Separation Date occurs, or (ii) such later date on which the amount of the payment can be ascertained by the Committee. In the event a Participant receives a lump sum distribution of his or her entire vested Accounts and additional contributions are subsequently credited to his or her Accounts, his or her entire remaining vested Account balance shall be distributed in an immediate lump sum to the extent such vested Account balance does not exceed $1,000 as of the date of such distribution. Except as provided in the preceding sentence or in Subparagraph 10.01(f) below, distributions may not be made to the Participant before his or her Normal Retirement Age without his or her consent. | ||
(c) | Method of Distribution . A Participants vested Accounts will be distributed to him or her (or, in the event of his or her death, to his or her Beneficiary) in a lump sum unless the Participant (or, in the event of his or her death, the Participants Beneficiary) elects, in accordance with procedures established by the Committee, to receive such distribution by any one or more of the following methods, if applicable: |
(i) | Partial Distributions . A Participant (or, in the event of his or her death, his or her Beneficiary) may elect to receive a partial distribution of the vested |
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Account balance (but not less than the lesser of his or her total Account balance or $250.00) as of any Accounting Date after the Participants Separation Date. All partial distributions under this Subparagraph shall be made in cash only. Notwithstanding any Plan provision to the contrary, a partial distribution under this Subparagraph shall not be available once a Participant or his or her surviving spouse has begun to receive installments under Subparagraph (ii) below. | |||
(ii) | Installments . If the vested portion of a Participants Accounts exceeds $5,000, the Participant (or, in the event of his or her death, his or her surviving spouse) may elect to receive substantially equal installments over a period not to exceed five (5) Plan Years, commencing in any year designated but no later than the applicable Required Commencement Date, with final distribution of all vested Accounts by the fifth year. All installment distributions shall be made in cash. A Participant or his or her surviving spouse who is receiving installments may subsequently elect to receive a lump sum distribution of all remaining installment payments. No Beneficiary other than a Participants surviving spouse may elect to receive installments. | ||
(iii) | Special Distribution Provisions for Certain Participants . Notwithstanding the foregoing, a Participant who had an account balance in a Predecessor Plan may elect distribution under any other method available to such Participant to the extent provided in the Sara Lee Plan. | ||
(iv) | Order of Accounts . Distributions under this Subparagraph shall be charged to the Participants vested Accounts (if applicable) in such order as shall be determined by the Committee and applied uniformly. | ||
(v) | Special Provisions Applicable to Dividends . Notwithstanding Subparagraph (a)(ii), dividends attributable to Sara Lee Stock or Hanesbrands Stock in a Participants Accounts shall be one hundred percent (100%) vested. |
(d) | Fees . The Committee may, on an annual or more frequent basis, charge the Accounts of any Alternate Payee, any Beneficiary, or any Participant whose Separation Date has occurred for a reason other than Retirement, for reasonable and necessary administrative fees incurred in the ongoing maintenance of such Accounts in the Plan, in accordance with uniform rules and procedures applicable to all Participants similarly situated. Retirement means Separation from Service on or after the earlier of: (i) the attainment of age fifty-five (55) and ten (10) Years of Service, or (ii) Normal Retirement Age. | ||
(e) | No Payments Due to Spin-Off . Notwithstanding any Plan provision to the contrary, no Separation Date shall have occurred and no distribution of Accounts shall be made to a Participant solely on account of the Spin-Off. |
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(f) | Vested Accounts Not in Excess of $1,000 . Notwithstanding any Plan provision to the contrary, if the Participants vested Accounts equal $1,000 or less on or after the Participants Separation Date, the method of distribution as to that Participant shall be as a lump sum cash distribution of the Participants vested Accounts. Such distribution shall be made as soon as practicable following the Participants Separation Date. If the Participants vested benefit under the Plan is zero, the Participant shall be deemed to have received a distribution of such vested benefit. | ||
(g) | Special Distribution Rules for Certain Military Service Leaves . Notwithstanding the foregoing, in accordance with Section 414(u)(12) of the Code, a Participant receiving a differential wage payment (as defined in Section 3401(h)(2) of the Code) shall be treated as having been severed from employment with the employer for purposes of taking a distribution of his pre-tax compensation deferral contributions account during any period the Participant performs service in the uniformed services while on active duty for a period of more than 30 days. If a Participant elects to receive a distribution pursuant to the preceding sentence, such Participant shall not be permitted to make pre-tax compensation deferral contributions under Section 3 of the Plan during the six-month period beginning on the date of the distribution. |
(a) | Designation of Beneficiary . Each Participant from time to time, in accordance with procedures established by the Committee, may name or designate a Beneficiary. A Beneficiary designation will be effective only when properly provided to the Committee in accordance with its procedures while the Participant is alive and, when effective, will cancel all earlier Beneficiary designations made by the Participant. Notwithstanding the foregoing, a deceased Participants surviving spouse will be his or her sole, primary Beneficiary unless: (i) the spouse had consented in writing to the Participants election to designate another person or persons as a primary Beneficiary or Beneficiaries, (ii) such election designates a Beneficiary which may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the Participant without any further consent by the spouse) and (iii) the spouses consent acknowledges the effect of such election and is witnessed by a notary public. | ||
(b) | No Beneficiary Designation at Death . If a deceased Participant failed to name or designate a Beneficiary, if the Participants Beneficiary designation is ineffective for any reason, or if all of the Participants Beneficiaries die before the |
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Participant, the Committee will direct the Trustee to pay the Participants Account balance in accordance with the following: |
(i) | To the Participants surviving spouse; | ||
(ii) | If the Participant does not have a surviving spouse, to the Participants beneficiary or beneficiaries (if any) designated by the Participant under the Hanesbrands Inc. Life Insurance Plan; | ||
(iii) | If the Participant does not have a surviving spouse and failed to designate a beneficiary under the Hanesbrands Inc. Life Insurance Plan, to or for the benefit of the legal representative or representatives of the Participants estate; and | ||
(iv) | If the appropriate payee is not identified pursuant to Subparagraphs (i) through (iii) above, then to or for the benefit of one or more of the Participants relatives by blood, adoption or marriage in such proportions as the Committee (or its delegate) determines. |
(c) | Death of Beneficiary Prior to Participants Death . In the event that the Participant has named multiple Beneficiaries, and one of the Beneficiaries dies before the Participant, the remaining Beneficiaries shall be entitled to the deceased Beneficiarys share, pro rata in accordance with their share of the Account balance as of the date of the Participants death (or such other date as the Committee may determine is administratively practicable), subject to the Participants right to change his or her beneficiary designation at any time in accordance with Subparagraph (a). The Committee reserves the right, on a uniform basis for similarly situated Beneficiaries, to make distribution of a Beneficiarys Account balance in whole or in part at any time notwithstanding any election to the contrary by the Beneficiary. | ||
(d) | Death of Beneficiary After Participants Death . Each Beneficiary, in accordance with procedures established by the Committee, may name or designate an individual to receive the Beneficiarys share of the Account balance (a Recipient) any time after the Participants death. In the event a Beneficiary dies before complete payment of his or her share of the Account balance, such Beneficiarys share shall be paid to the Recipient designated by the Beneficiary. If a deceased Beneficiary failed to name or designate a Recipient, if the Beneficiarys designation is ineffective for any reason, or if the Recipient dies before the Beneficiary or before complete payment of the Beneficiarys share of the Account balance, the Committee will direct the Trustee to pay the Beneficiarys share in accordance with the following: |
(i) | To the Beneficiarys surviving spouse; |
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(ii) | If the Beneficiary does not have a surviving spouse, to or for the benefit of the legal representative or representatives of the Beneficiarys estate; | ||
(iii) | If the Beneficiary does not have a surviving spouse and an estate is not opened on behalf of the Beneficiary, to or for the benefit of one or more of the Beneficiarys relatives by blood, adoption or marriage in such proportions as the Committee (or its delegate) determines. |
(a) | General Rule . Notwithstanding any Plan provision to the contrary, a Distributee under the Plan who receives an Eligible Rollover Distribution may elect, at the time and in the manner prescribed by the Committee, to have any portion of the distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. | ||
(b) | Non-Spouse Beneficiary Rollovers . To the extent permitted under Code Section 402(c)(11) and related regulations and guidance, if a direct trustee-to-trustee transfer is made to an individual retirement plan described in Code Section 402(c)(8)(B)(i) or (ii), which individual retirement plan is established for the purposes of receiving a distribution on behalf of a non-spouse beneficiary (as defined by Code Section 401(a)(9)(E)), the transfer shall be treated as an Eligible Rollover Distribution for purposes of the Plan and Code Section 402(c). |
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(c) | Qualified Rollover Contributions to Roth IRAs . Effective as of January 1, 2008, solely to the extent permitted in Code Sections 408A(c)(3)(B), (d)(3) and (e) and the regulations and other guidance issued thereunder, an eligible Distributee may elect to roll over any portion of an Eligible Rollover Distribution to a Roth IRA (as defined by Code Section 408A) in a qualified rollover contribution (as defined in Code Section 408A(e)), provided that the requirements of Code Section 402(c) are met. Notwithstanding any provisions of the Plan to the contrary, a Distributee under the Plan who receives an Eligible Rollover Distribution may elect, at the time and in the manner prescribed by the Committee, to have any portion of the distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. |
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(a) | The Participants Accounts will be distributed, or begin to be distributed, to the Participant no later than the Participants Required Commencement Date. If the Participant dies before distributions begin, the Participants Accounts will be distributed, or begin to be distributed, no later than as follows: |
(i) | If the Participants surviving spouse is the Participants sole Designated Beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age seventy and one-half (70- 1 / 2 ), if later; | ||
(ii) | If the Participants surviving spouse is not the Participants sole Designated Beneficiary, then distributions to the Designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died; | ||
(iii) | If there is no Designated Beneficiary as of September 30 of the year following the year of the Participants death, the Participants entire |
46
interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participants death; or | |||
(iv) | If the Participants surviving spouse is the Participants sole Designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse have begun, this Subparagraph (a), other than Subparagraph (a)(i), will apply as if the surviving spouse were the Participant. |
For purposes of this Subparagraph (a) and Subparagraph (c), unless Subparagraph (a)(iv) applies, distributions will be considered to have begun on the Participants Required Commencement Date. If Subparagraph (a)(iv) applies, distributions will be considered to have begun on the date distributions are required to begin to the surviving spouse under Subparagraph (a)(i). Unless the Participants interest is distributed in a single sum on or before the Required Commencement Date, distributions will be made as of the first Distribution Calendar Year in accordance with Subparagraphs (b) and (c) below. | |||
(b) | Required Minimum Distributions During Participants Lifetime . During the Participants lifetime, the minimum amount that will be distributed for each Distribution Calendar Year is the lesser of: (i) the quotient obtained by dividing the Participants Account Balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participants age as of the Participants birthday in the Distribution Calendar Year; or (ii) if the Participants sole Designated Beneficiary for the Distribution Calendar Year is the Participants spouse, the quotient obtained by dividing the Participants Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the Participants and spouses attained ages as of the Participants and spouses birthdays in the Distribution Calendar Year. Required minimum distributions will be determined under this Subparagraph (b) beginning with the first Distribution Calendar Year and up to and including the Distribution Calendar Year that includes the Participants date of death. | ||
(c) | Required Minimum Distributions After Participants Death . |
(i) | Death on or After Date Distributions Begin . If the Participant dies on or after the date distributions have begun and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participants death is the quotient obtained by dividing the Participants Account Balance by the longer of the remaining Life Expectancy of the Participant or the remaining Life Expectancy of the Participants Designated Beneficiary, determined as follows: |
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(A) | The Participants remaining Life Expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year; | ||
(B) | The Participants surviving spouse is the Participants sole Designated Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated for each Distribution Calendar Year after the year of the Participants death using the surviving spouses age as of the spouses birthday in that year. For Distribution Calendar Years after the year of the surviving spouses death, the remaining Life Expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouses birthday in the calendar year of the spouses death, reduced by one for each subsequent calendar year; and | ||
(C) | The Participants surviving spouse is not the Participants sole Designated Beneficiary, the Designated Beneficiarys remaining Life Expectancy is calculated using the age of the beneficiary in the year following the year of the Participants death, reduced by one for each subsequent year. | ||
If the Participant dies on or after the date distributions begin and there is no Designated Beneficiary as of September 30 of the year after the year of the Participants death, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participants death is the quotient obtained by dividing the Participants Account Balance by the Participants remaining Life Expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. |
(ii) | Death Before Date Distributions Begin . If the Participant dies before the date distributions have begun and there is a Designated Beneficiary, the minimum amount that will be distributed for each Distribution Calendar Year after the year of the Participants death is the quotient obtained by dividing the Participants Account Balance by the remaining Life Expectancy of the Participants Designated Beneficiary, determined as provided in Subparagraph (c)(i). If the Participant dies before the date distributions have begun and there is no Designated Beneficiary as of September 30 of the year following the year of the Participants death, distribution of the Participants entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participants death. If the Participant dies before the date distributions have begun, the Participants surviving spouse is the Participants sole Designated Beneficiary, and the surviving spouse dies before distributions are required to have begun to the surviving spouse under Subparagraph |
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(a)(i), this Subparagraph will apply as if the surviving spouse were the Participant. |
(d) | Definitions . For purposes of this Subsection, the following definitions shall apply: |
(i) | Designated Beneficiary means the Participants Beneficiary who is the designated beneficiary for purposes of Code Section 401(a)(9). | ||
(ii) | Distribution Calendar Year means a calendar year for which a minimum distribution is required. For distributions beginning before the Participants death, the first Distribution Calendar Year is the calendar year immediately preceding the calendar year that contains the Participants Required Commencement Date. For distributions beginning after the Participants death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin under Subparagraph (a). The required minimum distribution for the Participants first Distribution Calendar Year will be made on or before the Participants Required Commencement Date. The required minimum distribution for other Distribution Calendar Years, including the required minimum distribution for the Distribution Calendar Year in which the Participants Required Commencement Date occurs, will be made on or before December 31 of that Distribution Calendar Year. | ||
(iii) | Life Expectancy means life expectancy as computed by use of the Single Life Table in Treasury Regulation Section 1.401(a)(9)-9. | ||
(iv) | Participants Account Balance means the balance of the Participants Accounts as of the Valuation Calendar Year, increased by the amount of any contributions made and allocated to the Participants Accounts as of dates in the Valuation Calendar Year after the valuation date and decreased by distributions made in the Valuation Calendar Year after the valuation date. The balance of the Participants Accounts for the Valuation Calendar Year includes any amounts rolled over or transferred to the Plan either in the Valuation Calendar Year or in the Distribution Calendar Year if distributed or transferred in the Valuation Calendar Year. | ||
(v) | Valuation Calendar Year means the last valuation date in the calendar year immediately preceding the Distribution Calendar Year. |
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(a) | Amount of loans . The principal amount of any loan made to a Participant shall not be less than $500 and, when added to the outstanding balance of all other loans made to the Participant from all qualified plans maintained by the Employers, shall not exceed the lesser of: |
(i) | $50,000, reduced by the excess (if any) of the highest outstanding balance under the Plan and all other qualified employer plans during the one (1) year period ending on the day before the date of the loan, over the outstanding balance on the date of the loan; or | ||
(ii) | One-half (1/2) of the Participants vested Account balances under the Plan. |
(b) | Terms and conditions of loans . Each loan must be evidenced by a written note in a form approved by the Committee, shall bear interest at a reasonable fixed rate, and shall require substantially level amortization (with payments at least quarterly) over the term of the loan. Interest rates shall be determined monthly and shall be based on the prevailing prime rate as published in The Wall Street Journal ; provided, however, that the rate shall not exceed six percent (6%) during any period that the Participant is on military leave, in accordance with the Service Members Civil Relief Act (SCRA) if the service member provides notification that he or she will be entering military service as required under SCRA. | ||
(c) | Repayment of loans . Each loan for a purpose other than to purchase a principal residence (a General Purpose Loan) shall specify a repayment period of not less than six (6) months nor more than five (5) years, unless the proceeds of the loan are used to purchase the Participants principal place of residence (a Principal Residence Loan), in which case such loan must be repaid within ten (10) years after the date the loan is made. | ||
(d) | Loans to Participants shall be made as soon as administratively feasible after the Committee has received the Participants loan request and such information and |
50
documents from the Participant as the Committee shall deem necessary. A Participants Accounts may be charged a fee for processing each loan request. The Participants loan request shall be made in such manner and in accordance with such rules as the Committee determines. If the Committee determines in its discretion that loan requests under this Subparagraph shall be made in a manner other than in writing, any Participant who makes a request pursuant to such method may receive written confirmation of such request; further, any such request and confirmation shall be the equivalent of a writing for all purposes. | |||
(e) | Each loan shall be secured by a pledge of the Participants Accounts (with the exception of the Participants Annual Company Contribution Account, Transition Contribution Account, and Matching Contribution Account). A Participants Annual Company Contribution Account, Transition Contribution Account and Matching Contribution Account shall be taken into account for purposes of determining the amount of the loan available under Subparagraphs 11.01(a)(i) and 11.01(a)(ii), but shall not be available for liquidation and conversion to cash as described in Subparagraph 11.01(f) below. | ||
(f) | A loan granted under this Subsection to a Participant from any Account maintained in his or her name shall be made by liquidating and converting to cash his or her appropriate Accounts, with the exception of his or her Annual Company Contribution Account, Transition Contribution Account and Matching Contribution Account (and the appropriate subaccounts, pro rata, in the various Investment Funds), in such order as shall be determined by the Committee and applied uniformly. | ||
(g) | A Participant may have only two (2) loans outstanding at a time; provided that a Participant may not have two (2) loans of the same type (Principal Residence or General Purpose) outstanding at any given time. A Participant shall not be entitled to take a second loan if the Participant is in default on a prior loan of the same type and has not repaid the defaulted amount to the Plan. | ||
(h) | If, in connection with the granting of a loan to a Participant, a portion or all of any of his or her Accounts has been liquidated, the Committee shall establish temporary Counterpart Loan Accounts (not subject to adjustment under Subsection 8.02) corresponding to each such liquidated or partially liquidated Account to reflect the current investment of that Before-Tax Contribution Account or Rollover Contribution Account, for example, in such loan. In general, the initial credit balance in any such Counterpart Loan Account shall be the amount by which the corresponding Account was liquidated in order to make the loan. Interest accruing on such a loan shall be allocated among and credited to the Participants Counterpart Loan Accounts established in connection with the loan, in proportion to the then net credit balances in such Counterpart Loan Accounts, as such interest accrues. Each repayment of principal and interest shall be allocated among and charged to such Counterpart Loan Accounts, and shall be |
51
allocated among and credited to the corresponding Accounts, on the same proportionate basis; provided that all such repayments shall be credited in accordance with the investment elections in effect on the date each repayment is credited. The Committee may adopt rules and procedures for loan accounting and repayment which differ from the foregoing provisions of this Subparagraph (h), but which are consistent with the general principle that a loan to a Participant under this Subsection constitutes an investment of his or her Accounts rather than a general investment of the Trust Fund. Repayments shall be required to be invested during the month in which received or within such longer period as the Committee may reasonably determine, but in any event within the time required by Subsection 5.01. Any such repayment shall be made by payroll deduction unless otherwise permitted by the Committee. | |||
(i) | The Committee may establish uniform rules to apply where Participants fail to repay any portion of loans made to them pursuant to this Subsection and accrued interest thereon in accordance with the terms of the loans, or where any portion of any loan and accrued interest thereon remains unpaid on a Participants Separation Date. To the extent consistent with Internal Revenue Service rules and regulations, such rules may include charging unpaid amounts against a Participants Accounts (in such order as the Committee decides), and treating the amounts so charged as a payment to the Participant for purposes of SECTION 10. The Committee may charge a Participants Account for reasonable and necessary administrative fees incurred in administering any loan under this Subsection in accordance with uniform rules and procedures applicable to all Participants similarly situated. Loan repayments will be suspended under the Plan as permitted under Section 414(u)(4) of the Code. | ||
(j) | Any loan which was being administered under a Predecessor Plan and which was transferred to this Plan shall be governed by the applicable terms of this Plan on and after the transfer date. |
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(a) | Immediate and Heavy Need . A hardship shall be deemed on account of immediate and heavy financial need only if the withdrawal is on account of: |
(i) | Tuition, related educational fees, and room and board expenses, for up to the next twelve (12) months of post-secondary education for the Participant or his or her spouse, children or dependents (determined under Code Section 152 without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); | ||
(ii) | Costs directly related to the purchase of a primary residence for the Participant (not including mortgage payments); | ||
(iii) | Unreimbursed medical expenses that would be deductible by the Participant for federal income tax purposes pursuant to Code Section 213, and that are incurred by the Participant, the Participants spouse or any dependent (as defined in Code Section 152 without regard to the change in the definition under the Working Families Tax Relief Act of 2004) including any non-custodial child who is subject to the special rule of Code Section 152(e); or amounts necessary to obtain medical care or medically necessary equipment or services for the Participant, the Participants spouse or a dependent described in this Subparagraph (iii); | ||
(iv) | The need to prevent eviction of the Participant from his or her primary residence or foreclosure on the mortgage of the Participants principal residence; | ||
(v) | Payment for burial or funeral expenses for the Participants deceased parent, spouse, children or dependents (as defined in Code Section 152 without regard to Section 152(d)(1)(B)); or | ||
(vi) | Expenses for the repair of damage to the Participants principal residence that would qualify for the casualty deduction under Code Section 165 (determined without regard to whether the loss exceeds 10% of adjusted gross income). |
(b) | Necessary amount . A determination of whether the requirement that the withdrawal not exceed the amount required to meet the immediate financial need created by the serious financial hardship is satisfied shall be made on the basis of all relevant facts and circumstances in a consistent and nondiscriminatory manner; provided, however, that the Participant must provide the Committee with a statement on which the Committee may reasonably rely, unless it has actual knowledge to the contrary, certifying that the Participants financial need cannot be relieved by all of the following means: |
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(i) | Through reimbursement or compensation by insurance or otherwise, | ||
(ii) | By reasonable liquidation of the Participants assets, to the extent such liquidation would not itself cause an immediate and heavy financial need, | ||
(iii) | By cessation of elective contributions under this Plan, or other distributions from this Plan, and | ||
(iv) | By other distributions, such as the distribution of dividends which are currently available to the Participant, or nontaxable (at the time of the loan) loans from Plans maintained by the Employer or by any other employer, or by borrowing from commercial sources on reasonable commercial terms. |
For purposes of this Subsection, the Participants resources shall be deemed to include those assets of his or her spouse and minor children that are reasonably available to the Participant. Property owned by the Participant and the Participants spouse, whether as community property, joint tenants, tenants by the entirety, or tenants in common, will be deemed a resource of the Participant. However, property held for the Participants child under an irrevocable trust or under the Uniform Gifts to Minors Act will not be treated as a resource of the Participant. | |||
(c) | A Participant may not request more than two (2) withdrawals per calendar year under this Subsection. | ||
(d) | To obtain a hardship withdrawal, a Participant must submit his withdrawal request in accordance with procedures and within such time periods as may be determined by the Committee. Hardship withdrawals shall be made as soon as administratively feasible after the Committee has received the Participants withdrawal request and such information and documents from the Participant as the Committee shall deem necessary. |
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55
(a) | Reemployment with Vested Interest in Plan Accounts . If at the time the Participant terminated employment, he or she had either (A) a vested interest in his or her Before-Tax Contribution Account, Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account or Predecessor Company Account, or (B) amounts credited to his or her Before-Tax Contribution Account, the following rules shall apply: |
(i) | If the Participant is reemployed by a Controlled Group Member before he or she incurs five (5) consecutive One-Year Breaks In Service, the Participant may repay to the Trustee, within five (5) years of his or her Reemployment Date, the total amount previously distributed to him or her from his or her Plan Accounts subject to vesting as a result of his or her earlier termination of employment. If a Participant makes such a repayment to the Trustee, both the amount of the repayment and the Forfeiture that resulted from the previous termination of employment shall be credited to his or her Accounts as of the Accounting Date coincident with or next following the date of repayment and he or she shall continue to vest in such amounts in accordance with the vesting schedule in effect at the Participants reemployment. | ||
(ii) | If a Participant is reemployed by a Controlled Group Member on or after he or she incurs five (5) consecutive One-Year Breaks in Service, his or her pre-break Service shall count as Service for purposes of vesting in amounts credited to his or her Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account or Predecessor Company Account, as applicable, on or after such reemployment. However, pre-break Forfeitures will not be restored to such Participants Accounts and such Participants post-break Service shall be disregarded for purposes of vesting in his or her pre-break Annual |
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Company Contribution Account, Transition Contribution Account, Matching Contribution Account or Predecessor Company Account, as applicable. |
(b) | Reemployment with No Vested Interest in Plan Accounts . If at the time the Participant terminated employment, he or she did not have either (A) a vested interest in his or her Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account, or Predecessor Company Account, or (B) amounts credited to his or her Before-Tax Contribution Account, the following rules shall apply: |
(i) | If the Participant is reemployed by a Controlled Group Member before he or she incurs five (5) consecutive One-Year Breaks In Service, the amount of the Forfeiture that resulted from the previous termination of employment shall be credited to his or her Accounts as of the Accounting Date coincident with or next following the date of his or her reemployment or as soon as administrative feasible thereafter and he or she shall continue to vest in such amounts. | ||
(ii) | If the Participant is reemployed by a Controlled Group Member before he or she incurs five (5) consecutive One-Year Breaks In Service, pre-break Forfeitures shall not be restored to his or her Accounts. In addition, if the Participants number of consecutive One-Year Breaks In Service exceeds the greater of five (5) of the aggregate number of such Participants pre-break Service, such pre-break Service shall be disregarded for purposes of vesting in amounts credited to his or her Employer Contribution Accounts after such employment. |
(c) | Forfeitures . Forfeitures that are credited to a Participants Accounts under this Subsection shall be allocated from amounts forfeited under Subsection 10.01 or the applicable Supplement or, in the absence of such amounts, shall reduce income and gains of the Fund to be credited under Subsection 8.02. | ||
(d) | Transferred Participants . Notwithstanding any Plan provision to the contrary, all service of a Transferred Participant that was recognized under the Sara Lee Plan as of the Effective Date (or as of a subsequent transfer of employment described in Subparagraph 2.66(b), if applicable) 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 the provisions of this Section and any applicable break in service rules under this Plan and the Sara Lee Plan. | ||
(e) | Former NTX and Sara Lee Employees . If an individual (i) was previously employed by the Sara Lee Corporation (referred to as the prior employers for purposes of this Subparagraph), and (ii) subsequently becomes an Employee of an Employer or a Controlled Group Member; all of the individuals service with the prior employers shall be recognized and taken into account under the Plan to the |
57
same extent as of such service had been completed under the Plan, subject to the provisions of this Section and any applicable break in service rules under the applicable prior employers plans. |
58
(a) | A Participants Account balance shall be increased by the aggregate distributions, if any, made with respect to the Participant during the one (1) year period ending on the Determination Date (including distributions under a terminated plan which, had it not been terminated, would have been aggregated with this Plan under Section 416(g)(2)(A)(i) of the Code). In the case of a distribution made for a reason other than separation from service, death or Total Disability, the one (1) year period shall be replaced with a five (5) year period. | ||
(b) | The Account balance of, and distributions to, a Participant who was previously a Key Employee, but who is no longer a Key Employee, shall be disregarded. | ||
(c) | The Account of a Beneficiary of a Participant shall be considered the Account of a Participant. | ||
(d) | The Account balances of a Participant who did not perform any services for the Employers during the one (1) year period ending on the Determination Date shall be disregarded. |
(a) | An officer of an Employer receiving annual Compensation greater than $140,000 (as adjusted under Section 416(i)(l) of the Code); | ||
(b) | A five percent (5%) owner of an Employer; or |
59
(c) | A one percent (1%) owner of an Employer receiving annual Compensation from any of the Employers and the Controlled Group Members of more than $150,000. |
60
61
62
63
64
(a) | The Internal Revenue Service initially determines that the Plan does not meet the requirements of Section 401(a) of the Code, in which event the assets of the Trust Fund attributable to the contributions made to the Plan by the Employer or Employers with respect to whom such determination is made shall be returned to them; or | ||
(b) | 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 | ||
(c) | 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. |
65
(a) | The date it is terminated by that Employer, by resolution of its Board of Directors in accordance with Subsection 14.18, if advance written notice of the termination is given to the Company and the Trustee; | ||
(b) | The date the Employer permanently discontinues its contributions under the Plan; and | ||
(c) | The dissolution, merger, consolidation or reorganization of that Employer, or the sale by that Employer of all or substantially all of its assets; provided, however, that upon the occurrence of any of the foregoing events, arrangements may be made whereby the Plan will be continued by a successor to such Employer, in which case the successor will be substituted for such Employer under the Plan. |
66
67
(a) | To approve the appointment and removal of the members of the Appeal Committee, who shall have such powers, rights and duties as are specifically provided elsewhere in the Plan in addition to those delegated by the Committee. | ||
(b) | To act as Plan Administrator of the Plan, and to adopt such regulations and rules of procedure as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan and Trust Agreement. The Committee shall be the fiduciary responsible for ensuring that procedures safeguarding the confidentiality of all Participant decisions and directions relating to purchase, sale, tendering and voting (as described in Subsection 9.06) of shares of Sara Lee Stock and Hanesbrands credited to such Participants Accounts are sufficient and are being followed. | ||
(c) | To determine all questions arising under the Plan other than those determinations that have been delegated to the Appeal Committee or the Investment Committee, including the power to determine the rights or eligibility of Employees or Participants and any other persons, and the amounts of their benefits under the Plan , and to remedy ambiguities, inconsistencies or omissions , and to make factual findings; such determinations shall be binding on all parties. Benefits under this Plan will be paid only if the Committee decides in its discretion that the applicant is entitled to them. |
68
(d) | To enforce the Plan in accordance with its terms and the terms of the Trust Agreement and in accordance with the rules and regulations adopted by the Committee. | ||
(e) | To construe and interpret the Plan and Trust Agreement, to reconcile and correct any errors or inconsistencies and to make adjustments for any mistakes or errors made in the administration of the Plan. | ||
(f) | To furnish the Employers with such information as may be required by them for tax or other purposes. | ||
(g) | To employ agents, attorneys, accountants, actuaries or other organizations or persons (who also may be employed by the Employers) and allocate or delegate to them any of the powers, rights and duties of the Committee as the Committee may consider necessary or advisable to properly administer the Plan. To the extent that the Committee delegates to any person or entity the discretionary authority to manage and control the administration of the Plan, such person or entity shall be a fiduciary as defined in ERISA. As appropriate, references to the Committee herein with respect to any delegated powers, rights and duties shall be considered references to the applicable delegate. |
(a) | To adopt such regulations and rules of procedure as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan and Trust Agreement. | ||
(b) | To have final review of appeals of decisions by the Committee or its delegates denying benefits under the Plan, and to have final review of decisions by the Committee or its delegates denying requests for hardship withdrawals under Subsection 11.03 of the Plan, including the power to determine the rights or eligibility of Employees or Participants and any other persons, and to remedy ambiguities, inconsistencies or omissions. |
69
(c) | To enforce the Plan in accordance with its terms and the terms of the Trust Agreement, and in accordance with the rules and regulations adopted by the Committee. | ||
(d) | To construe the Plan and Trust Agreement, to reconcile and correct any errors or inconsistencies and to make adjustments for any mistakes or errors made in the administration of the Plan. |
(a) | A member of the Committee or the Appeal Committee, as applicable, by writing may delegate any or all of such members rights and duties to any other member, with the consent of the latter. | ||
(b) | The Committee or the Appeal Committee, as applicable may act by meeting or by writing signed without meeting, and may sign any document by signing one document or concurrent documents. | ||
(c) | An action or a decision of a majority of the members of the Committee or the Appeal Committee, as the case may be, as to a matter shall be effective as if taken or made by all members of the Committee or the Appeal Committee, as applicable. | ||
(d) | If, because of the number qualified to act, there is an even division of opinion among the members of the Committee or the Appeal Committee, as the case may be, as to a matter, a disinterested party selected by the Committee or the Appeal Committee, as applicable, may decide the matter and such partys decision shall control. | ||
(e) | The certificate of the secretary of the Committee or the Appeal Committee, as applicable, of a majority of the members that the Committee or the Appeal Committee, as the case may be, has taken or authorized any action shall be conclusive in favor of any person relying on the certificate. |
70
71
72
HANESBRANDS INC. | ||||||
|
||||||
|
By: | /s/ Kevin W. Oliver | ||||
|
||||||
|
Its : | Senior Vice President, Human Resources |
73
Business /Division | Division Code | |
Champion Athleticwear
|
7800 | |
Champion Jogbra
|
9501 | |
Champion Jogbra (Vermont)
|
9500 | |
Eden Yarn
|
9225 | |
Harwood
|
9260 | |
Hanes Printables
|
9250 | |
Henson Kicknerick
|
9300 | |
J. E. Morgan
|
9265 | |
OuterBanks
|
9266 | |
Playtex Apparel-Hourly
|
9401 | |
Playtex Apparel-Salary
|
9400 | |
Sara Lee Activewear/Hourly
|
9221 | |
Sara Lee Business Services
|
9273
|
|
|
(except process level 12702) | |
Sara Lee Casualwear
|
9220
|
|
|
(except process level 19901 (Courtalds)) | |
Sara Lee Direct
|
9271 | |
Sara Lee Hosiery
|
9210 | |
Sara Lee Intimate Apparel
|
9200
|
|
|
(except process level 19901 (Courtalds)) | |
Sara Lee Sock Company (previously
known as Adams-Millis
Corporation)
|
7995 | |
Sara Lee Underwear
|
9240 | |
Sara Lee Underwear Weston
|
9260 | |
Scotch Maid
|
7975 | |
Socks Galore
|
9272 | |
Spring City Knitting
|
9230 |
74
1. | 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. |
75
1
NTX Account
|
HBI Account | |
Tax-Deferred 401(k) Contribution Account
|
Before-Tax Contribution Account | |
After-Tax Account
|
After-Tax Account | |
Rollover Account
|
Rollover Contribution Account | |
Prior ESOP Account
|
Predecessor Company Account | |
Matching Contribution Account
|
Predecessor Company Account | |
Prior Company Account
|
Predecessor Company Account |
2
3
EMPLOYEE ID | BIRTHDATE | STATUS DATE | ||
150720
|
2/26/1989 | 10/2/2007 | ||
150703
|
6/28/1987 | 9/30/2007 | ||
150710
|
11/12/1987 | 10/2/2007 | ||
150712
|
6/4/1988 | 10/2/2007 | ||
150575
|
9/10/1988 | 9/19/2007 | ||
150627
|
1/16/1987 | 9/23/2007 | ||
150574
|
10/21/1987 | 9/19/2007 | ||
150578
|
12/26/1988 | 9/19/2007 | ||
150637
|
10/24/1987 | 9/24/2007 | ||
150462
|
8/22/1987 | 9/11/2007 | ||
150401
|
9/17/1987 | 9/4/2007 | ||
150436
|
12/5/1987 | 9/11/2007 | ||
150468
|
5/26/1989 | 9/5/2007 | ||
150125
|
4/12/1989 | 8/28/2007 | ||
149971
|
6/17/1988 | 8/17/2007 | ||
149981
|
11/17/1987 | 8/19/2007 | ||
149953
|
11/10/1987 | 8/14/2007 | ||
150453
|
5/13/1989 | 9/10/2007 | ||
149540
|
5/18/1988 | 7/10/2007 | ||
149571
|
2/20/1988 | 7/9/2007 | ||
149337
|
3/15/1988 | 6/15/2007 | ||
149265
|
4/29/1988 | 6/11/2007 | ||
149263
|
8/12/1987 | 6/11/2007 | ||
149194
|
5/2/1987 | 5/31/2007 | ||
148964
|
4/29/1988 | 517/2007 | ||
148879
|
9/2/1987 | 4/30/2007 | ||
148830
|
10/14/1988 | 4/24/2007 | ||
148666
|
8/12/1988 | 12/27/2007 | ||
148669
|
3/12/1988 | 3/30/2007 | ||
148461
|
11/20/1988 | 2/27/2007 | ||
148508
|
5/29/1988 | 3/7/2007 | ||
148461
|
11/20/1988 | 2/27/2007 |
A-1
PAGE | ||||||
SECTION 1
|
1 | |||||
Introduction
|
1 | |||||
1.1
|
Purpose | 1 | ||||
1.2
|
Effective Date and Plan Year | 1 | ||||
1.3
|
Employers | 2 | ||||
1.4
|
Plan Administration | 2 | ||||
1.5
|
Plan Supplements | 2 | ||||
1.6
|
Plan Benefits for Participants who Terminated Employment | 2 | ||||
SECTION 2
|
3 | |||||
Definitions
|
3 | |||||
2.1
|
2008 Special Election | 3 | ||||
2.2
|
A&B Level Transition Credit | 3 | ||||
2.3
|
Account | 4 | ||||
2.4
|
Annual Company Credit | 4 | ||||
2.5
|
Beneficiary | 4 | ||||
2.6
|
Code | 5 | ||||
2.7
|
Committee | 5 | ||||
2.8
|
Controlled Group Member | 5 | ||||
2.9
|
Corporation | 5 | ||||
2.10
|
[RESERVED.] | 5 | ||||
2.11
|
Deferred Vested Participant | 5 | ||||
2.12
|
[RESERVED.] | 5 | ||||
2.13
|
Effective Date | 5 | ||||
2.14
|
[RESERVED.] | 6 | ||||
2.15
|
Employee | 6 | ||||
2.16
|
Employer | 6 | ||||
2.17
|
ERISA | 6 | ||||
2.18
|
Matching Credit | 6 | ||||
2.19
|
Normal Retirement Date | 6 | ||||
2.20
|
Participant | 6 |
PAGE | ||||||
2.21
|
Pension Plan | 7 | ||||
2.22
|
Pension SERP Benefit | 7 | ||||
2.23
|
Pension SERP Interest Rate | 7 | ||||
2.24
|
Plan | 7 | ||||
2.25
|
Plan Year | 7 | ||||
2.26
|
Plan Year RSSERP Credit | 7 | ||||
2.27
|
Present Value | 7 | ||||
2.28
|
Residual Credit | 8 | ||||
2.29
|
Retired Participant | 8 | ||||
2.30
|
Retirement Savings Plan | 8 | ||||
2.31
|
RSSERP Benefit | 8 | ||||
2.32
|
Salaried Employee Transition Credit | 9 | ||||
2.33
|
Sara Lee SERP | 9 | ||||
2.34
|
Separation from Service | 9 | ||||
2.35
|
SERP Benefit | 9 | ||||
2.36
|
Specified Employee | 9 | ||||
2.37
|
Supplemental Compensation | 10 | ||||
2.38
|
Transferred Participant | 10 | ||||
2.39
|
Total Disability | 10 | ||||
2.40
|
Other Definitions | 11 | ||||
SECTION 3
|
12 | |||||
Participation
|
12 | |||||
3.1
|
Eligibility | 12 | ||||
3.2
|
Period of Participation | 12 | ||||
3.3
|
Reemployed Participants | 12 | ||||
SECTION 4
|
14 | |||||
SERP Benefits
|
14 | |||||
4.1
|
RSSERP Benefit | 14 | ||||
4.2
|
Pension SERP Benefit | 16 | ||||
4.3
|
Vesting of Benefits | 16 |
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PAGE | ||||||
4.4
|
Payment of Benefits | 17 | ||||
4.5
|
Payments Upon Death | 23 | ||||
4.6
|
Payment of FICA Tax on Pension SERP Benefit | 24 | ||||
4.7
|
Benefits Provided by Employers | 25 | ||||
4.8
|
Other Employment | 25 | ||||
SECTION 5
|
26 | |||||
General
|
26 | |||||
5.1
|
Committee | 26 | ||||
5.2
|
Interests Not Transferable | 26 | ||||
5.3
|
Facility of Payment | 27 | ||||
5.4
|
Gender and Number | 27 | ||||
5.5
|
Controlling Law | 27 | ||||
5.6
|
Successors | 27 | ||||
5.7
|
Rights Not Conferred by the Plan | 27 | ||||
5.8
|
Litigation by Participants | 28 | ||||
5.9
|
Uniform Rules | 28 | ||||
5.10
|
Action by Employers | 28 | ||||
5.11
|
Tax Effects | 28 | ||||
SECTION 6
|
29 | |||||
Amendment and Termination
|
29 | |||||
SUPPLEMENT A
|
||||||
Provisions Relating to Transferred Participants Previously
Participating in the Earthgrains Company
Supplemental Executive Retirement Plan
|
-iii-
-2-
Credit | ||
Age Plus Years of A&B Level Service | (as a percentage of the Participants | |
(as of 1/1/06) | Supplemental Compensation) | |
50 to 54
|
4% | |
55 to 59
|
8% | |
60 to 64
|
12% | |
65 to 69
|
14% | |
70 or more
|
15% |
-3-
(a) | To the Participants surviving spouse; | ||
(b) | If the Participant does not have a surviving spouse, to or for the benefit of the legal representative or representatives of the Participants estate; | ||
(c) | If the Participant does not have a surviving spouse and an estate is not opened on behalf of the Participant, to or for the benefit of one or more of the Participants relatives by blood, adoption or marriage in such proportions as the Committee (or its delegate) determines. |
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-5-
-6-
-7-
-8-
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(a) | Any amounts that cannot be recognized as compensation in the Retirement Savings Plan due to the dollar limitation contained in Code Sections 401(a)(17) of the Code; | ||
(b) | Deferrals of base salary and bonus compensation for the Plan Year in which deferred; and | ||
(c) | Any compensation required to be included as Supplemental Compensation pursuant to an employment, severance or other written agreement with an Employer; provided, however, that severance payments to Specified Employees that are delayed six months in compliance with Code Section 409A shall be attributable to the year in which such amounts were earned rather than the year in which they are paid. |
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(i) | By operation of Code Section 415; | ||
(ii) | Because Supplemental Compensation is not taken into account under the Retirement Savings Plan; or | ||
(iii) | Because a period required to be included as service pursuant to an employment, severance or other written agreement with an Employer is not taken into account under the Retirement Savings Plan. |
(a) | In the event a Participant who terminated employment with the Corporation and all Controlled Group Members prior to January 1, 2005 is reemployed by the Controlled Group Members on or after the Effective Date, the following rules shall apply: |
-12-
(i) | The Participants SERP Benefits that were earned and vested as of December 31, 2004 and that have been distributed or are in distribution status as of his or her reemployment date shall continue to be distributed in accordance with the terms of the Sara Lee SERP as in effect on his or her earlier Separation from Service and shall not be subject to the requirements of Code Section 409A; and |
(ii) | The Participants SERP Benefits that either (i) were earned and vested as of December 31, 2004 and (A) have not been distributed, or (B) are not in distribution status, or (ii) were not earned and vested as of December 31, 2004, shall be subject to the applicable terms of this Plan document and the requirements of Code Section 409A. |
(b) | In the event a Participant who Separated from Service with the Corporation and all Controlled Group Members on or after January 1, 2005 is reemployed by the Controlled Group Members on or after the Effective Date, the SERP Benefits determined as of the Participants initial Separation from Service shall be subject to the applicable terms of this Plan document and the requirements of Code Section 409A and distribution of those amounts shall not be impacted by the Participants reemployment. |
-13-
(a) | Pre-Effective Date Benefit. A Participants Account under the Plan shall be credited with the amount of the Participants Sara Lee 401(k) SERP Benefit determined under the Sara Lee SERP, if any, determined as of the date immediately preceding the Effective Date. | ||
(b) | Plan Year RSSERP Credits. A Participants Account under the Plan shall be credited with the Plan Year RSSERP Credit equal to (i) plus (ii) plus (iii) below, if any, as of the last day of each Plan Year: |
(i) | Annual Company Credit. The amount equal to (A) minus (B) below: |
(A) | The annual company contribution that would have been made on behalf of the Participant (if any) under the Retirement Savings Plan (or, in 2006, under the Sara Lee 401(k) Plan) for the applicable Plan Year based on the Participants Supplemental Compensation and without regard to Code Section 415; minus | ||
(B) | The annual company contribution actually made on behalf of the Participant under the Retirement Savings Plan (or, in 2006, under the Sara Lee 401(k) Plan) for such Plan Year. |
(ii) | Matching Credit. The amount equal to the Matching Credit that would have been made on behalf of the Participant under the Retirement Savings |
-14-
Plan for the Plan Year based on his or her Supplemental Compensation less any matching contributions received (or deemed received as described below) by the Participant under the Retirement Savings Plan for that Plan Year; provided, however, that for purposes of determining the Matching Credit under this Plan, the Participant will be deemed to (A) have made 401(k) contributions (excluding catch-up contributions) of 4% of the Participants Supplemental Compensation, and (B) have received the appropriate matching contribution under the Retirement Savings Plan based upon such deemed 401(k) contribution (regardless of the Participants actual contribution rate). |
(iii) | The A&B Level Transition Credit, if any. | ||
(iv) | The Salaried Employee Transition Credit, if any. |
(c) | Forfeited Retirement Savings Plan Benefit. To the extent that service under a separation agreement is included in SERP vesting service, a Participants Account under the Plan shall be credited with any amount of the Participants Retirement Savings Plan benefit that would be vested under the Retirement Savings Plan recognizing SERP vesting service but that is forfeited due to his or her Separation from Service with the Controlled Group Members prior to becoming fully vested under the Retirement Savings Plan. | ||
(d) | Adjustment of Account. The Account maintained on behalf of a Participant under the Plan shall be adjusted from time to time to reflect a hypothetical investment in the Hanesbrands Inc. Common Stock Fund under the Retirement Savings Plan; provided, however, that for as long as the Corporation is a Controlled Group Member of Sara Lee Corporation, the Account maintained on behalf of a Participant under the Plan shall be adjusted from time to time to reflect a hypothetical investment in the Sara Lee Corporation Common Stock Fund under the Sara Lee Corporation 401(k) Plan. The Committee may establish such rules and procedures relating to the maintenance, adjustment, and liquidation of |
-15-
Participants Accounts, the crediting of credits and the notional income, losses, expenses, appreciation, and depreciation attributable thereto, as are considered necessary or advisable. In addition to the Account described above, the Committee may maintain such other Accounts as the Committee considers necessary or desirable. |
(a) | RSSERP Benefit. A Participants Annual Company Credits and Matching Credits shall become nonforfeitable on the same basis and at the same time as his or her annual company contributions and matching contributions, respectively, become |
-16-
nonforfeitable under the Retirement Savings Plan. A Participants A&B Level Transition Credits or Salaried Employee Transition Credit, if any, shall be nonforfeitable at all times. |
(b) | Pension SERP Benefit. A Participants Pension SERP Benefit shall become nonforfeitable on the same basis and at the same time as his or her benefit under the Pension Plan. |
(a) | RSSERP Benefit. |
(i) | Balances Under $50,000 . If the value of the Participants vested RSSERP Benefit (determined without regard to any Residual Credit) is less than $50,000 as of the Participants Separation from Service, then any election made by the Participant under Subparagraph (iii) or (iv) below shall be void, and the Participants vested RSSERP Benefit shall be paid in a lump sum in the seventh month following the Participants Separation from Service. | ||
(ii) | Balances of $50,000 or More . If the value of the Participants vested RSSERP Benefit (determined without regard to any Residual Credit) is $50,000 or more on the Participants Separation from Service, the Participants vested RSSERP Benefit shall be paid in a lump sum in the seventh month following the Participants Separation from Service, unless the Participant made a valid election under Subparagraph (iii) or (iv) |
-17-
below, in which case the Participants RSSERP Benefit shall be paid in accordance with the applicable election. |
(iii) | Participant Elections . An active Participant may elect during the 2008 Special Election period to receive his or her vested RSSERP Benefit as follows: |
(A) | In a lump sum to be paid at the later of the seventh month following the Participants Separation from Service or on a specified date that is not later than the Participants 70th birthday; or | ||
(B) | In annual installments over a period of five or ten years (I) commencing as of the first day of the seventh month following the Participants Separation from Service, or (II) commencing at the later of the seventh month following the Participants Separation from Service or a specified date that is not later than the Participants 70th birthday. |
Any election under this Subparagraph shall be irrevocable, subject to the provisions of Subparagraph (iv) below. | |||
(iv) | Changes in Participant Elections . After 2008, a Participant may make a one-time, irrevocable election to delay commencement of his or her RSSERP Benefit to a date not later than his or her 70th birthday, or to change the form of payment of his or her RSSERP Benefit to one of the forms specified in Subparagraph (iii) above, provided that no such election shall be effective unless (A) the Committee receives the election not later than 12 months prior to the previously scheduled distribution date, and (B) payment of the Participants RSSERP Benefit is made not earlier than the fifth anniversary of the previously scheduled distribution date. |
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(v) | Payment of Residual Credits . Notwithstanding any Plan provision to the contrary, any Residual Credit to the Participants Account after his or her Separation from Service shall be paid as follows: |
(A) | If the Participant receives payment of his or her RSSERP Account in a lump sum, any Residual Credit to the Participants Account shall be paid in a lump sum as soon as practicable but in no event later than the end of the calendar year in which such amount is credited; provided, however, that if the Participant has elected to receive his or her lump sum payment later than seven months following Separation from Service, any Residual Credit shall be paid on the date elected by the Participant for payment of his or her lump sum benefit. | ||
(B) | If the Participant elects to receive payment of his or her RSSERP Account in installments, any Residual Credit shall be added to the Participants RSSERP Account and shall be paid in installments over the remaining installment period. |
(vi) | 2009/2010 Lump Sum Cashout . Notwithstanding the foregoing, an active Participant may elect to receive distribution of his or her RSSERP Benefit determined as of December 31, 2008, with such amount paid to the Participant in a lump sum in 2009 or 2010, as elected by the Participant. For this purpose, a Participants RSSERP Benefit as of December 31, 2008 shall include his or her RSSERP Credits for the 2008 Plan Year; the lump sum paid in 2009 shall include gains/losses credited to the Participants RSSERP Account through February 28, 2009; and the lump sum paid in 2010 shall include gains/losses credited to the Participants RSSERP Account through December 31, 2009. If a Participant makes an election under this Subparagraph and is not fully |
-19-
vested as of the specified payment date, then the Participant shall receive payment of his or her vested December 31, 2008 RSSERP Benefit on the specified payment date, and his or her remaining December 31, 2008 RSSERP Benefit (as adjusted pursuant to Subparagraph 4.1(d)) shall be distributed as it becomes vested, with payment of each vested portion made by no later than 2-1/2 months after the end of the Plan Year in which it vests. |
(vii) | Post-2008 RSSERP Credits . Notwithstanding any Plan provision to the contrary, a Participants RSSERP Credits for 2009 and each subsequent Plan Year shall be paid immediately to the Participant, to the extent vested, with payment made by the end of the applicable Plan Year in which such amount would otherwise be credited to the Participants Account. If any portion of a Participants RSSERP Credit for a Plan Year is not then vested, such portion (as adjusted pursuant to Subparagraph 4.1(d)) shall be distributable upon vesting, with payment made of each newly vested portion by no later than 2-1/2 months after the end of the Plan Year in which it vests. |
(b) | Pension SERP Benefit . |
(i) | General Payment Rule . If (A) the Present Value of a Participants vested Pension SERP Benefit is less than $50,000 as of the Participants Separation from Service, or (B) the Present Value of the Participants vested Pension SERP Benefit is $50,000 or more but the Participant is not a Retired Participant, then any 2008 Special Election or other election made by the Participant under Subparagraph (v) below shall be void, and the Present Value of the Participants vested Pension SERP Benefit shall be paid in a lump sum in the seventh month following the Participants Separation from Service. |
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(ii) | Retired Participants with Benefits of $50,000 or More . If the Present Value of a Participants vested Pension SERP Benefit is $50,000 or more at the Participants Separation from Service and the Participant qualifies as a Retired Participant, then the Present Value shall be paid in a lump sum in the seventh month following the Participants Separation from Service, unless the Participant made a 2008 Special Election or an election under Subparagraph (v) below, in which case the Present Value of the Participants Pension SERP benefit shall be paid in accordance with the applicable election. | ||
(iii) | Totally Disabled Participants . Notwithstanding Subparagraph (i) above, if a Participant qualifies as a Totally Disabled Participant, then the Present Value of the Participants vested Pension SERP Benefit (determined as if the Participant were a Retired Participant) shall be paid in a lump sum on the Totally Disabled Participants 65th birthday. However, if the Present Value of the Participants Pension SERP Benefit is $50,000 or more and the Participant made a 2008 Special Election or an election under Subparagraph (v) below, the Present Value of the Participants Pension SERP Benefit shall be paid in accordance with the applicable election. | ||
(iv) | 2008 Special Elections . During the 2008 Special Election period, an active Participant may elect to receive the Present Value of his or her Pension SERP Benefit as follows: |
(A) | In a lump sum to be paid at the later of the seventh month following the Participants Separation from Service or on a specified date that is not later than the Participants 70th birthday; or | ||
(B) | In monthly installments over a period of five or ten years (I) commencing as of the first day of the seventh month following the Participants Separation from Service, or (II) |
-21-
commencing at the later of the seventh month following the Participants Separation from Service or a specified date that is not later than the Participants 70th birthday. |
(v) | Changes in Participant Elections . After 2008, a Participant may make a one-time, irrevocable election to delay commencement of his or her Pension SERP Benefit to a date not later than his or her 70th birthday, or to change the form of payment of his or her Pension SERP Benefit to one of the forms specified in Subparagraph (iv) above, provided that no such election shall be effective unless (A) the Committee receives the election not later than 12 months prior to the previously scheduled distribution date, and (B) payment of the Participants Pension SERP Benefit is made not earlier than the fifth anniversary of the previously scheduled distribution date. | ||
(vi) | 2009/2010 Lump Sum Cashout . Notwithstanding the foregoing, an active Participant may elect to receive the Present Value of his or her vested Pension SERP Benefit in a lump sum in January 2009 or January 2010, as elected by the Participant. For purposes of this Subparagraph 4.4(b)(vi), Present Value shall be based on the Participants age at January 1 of the selected distribution year, the Participants Pension SERP Benefit payable at age 65, and an interest rate of 5.25%; provided that any lump sum cashout paid under this Subparagraph after a Participants Separation from Service shall include any early retirement subsidy to which the Participant is entitled as of his or her Separation from Service. If a Participant receives a payment under this Subparagraph, then the Participant shall not be entitled to any Pension SERP Benefits upon his or her subsequent Separation from Service. |
(c) | Pre-2009 Distribution Rules . Notwithstanding the foregoing, a Participant who Separates from Service prior to 2009 shall receive payment of his or her RSSERP |
-22-
and Pension SERP Benefits, if any, pursuant to payment elections made and filed with the Committee in accordance with applicable procedures established by the Committee, and in accordance with applicable provisions of Code Section 409A and guidance issued thereunder. |
(d) | All elections under this Subsection 4.4 shall be made in accordance with rules and procedures and within the time period specified by the Committee. |
(a) | RSSERP Benefit . If the Participant dies before complete payment of his or her vested RSSERP Benefit under Subparagraph 4.4(a), payment of his or her remaining RSSERP Benefit shall be made to his or her RSSERP Beneficiary in a lump sum in the fourth month following the Participants death. | ||
(b) | Pension SERP Benefit. |
(i) | Death Before Commencement . |
(A) | If a Participant Separates from Service before qualifying as a Retired Participant and dies before commencement of his or her Pension SERP Benefit, the Present Value of the Participants vested Pension SERP Benefit shall be paid to the Participants Pension SERP Beneficiary in a lump sum in the fourth month following the Participants death, or if earlier, the date determined pursuant to Subparagraph 4.4(b)(i). | ||
(B) | If a Retired Participant dies before commencement of his or her Pension SERP Benefit, the Present Value of the |
-23-
Participants Pension SERP Benefit shall be paid to the Participants Pension SERP Beneficiary in a lump sum in the fourth month following the Participants death, or if earlier, the date determined pursuant to Subparagraphs 4.4(b)(i) or (ii). |
(C) | Death while Active. If a Participant dies while actively employed by the Corporation, the Present Value of the Participants Pension SERP Benefit attributable to the active death benefit, as determined under the Pension Plan, shall be paid to the Participants Pension SERP Beneficiary in a lump sum in the fourth month following the Participants death. If such benefit is payable to the Participants surviving spouse, the Present Value shall be determined based on the surviving spouses age on the date of the Participants death. If such benefit is payable to a Pension SERP Beneficiary other than the Participants surviving spouse, the Present Value shall be determined as if such amount were payable to a spouse the same age as the Participant. |
(ii) | Death After Commencement . If the Participant dies after commencement of his or her Pension SERP Benefit payments, the Present Value of any unpaid portion of his or her Pension SERP Benefit shall be paid to his or her Pension SERP Beneficiary in a lump sum in the fourth month following the Participants death. |
-24-
-25-
-26-
-27-
-28-
-29-
(a) | Amount of Supplement A Pension SERP Benefit . Subject to the requirements set forth below, each Supplement A Participant who retires or terminates employment with all Controlled Group Members shall be entitled to a benefit equal to the following: |
(i) | The benefit which would be payable to the Supplement A Participant under the Earthgrains supplement to the Pension Plan, determined (A) without regard to the limitation of Code Section 401(a)(17), and (B) using |
A-1
the definition of Earthgrains Formula Compensation (as defined in the Sara Lee SERP); minus | |||
(ii) | The Supplement A Participants actual accrued benefit under the Earthgrains supplement of the Pension Plan. |
(b) | Form of Payment . |
(i) | The benefit payable to a Supplement A Participant (the Participants Supplement A SERP Benefit) shall be paid as follows: |
(A) | Subject to Subparagraphs (B) through (D) below, if the Participant did not make a valid 2008 Supplement A Special Election (as defined below), the Participants vested Supplement A SERP Benefit shall be paid in a lump sum in the seventh month following the Participants Separation from Service. | ||
(B) | If the Supplement A Participant made a valid 2008 Supplement A Special Election, the Participants vested Supplement A Benefit shall be paid in accordance with such election. A 2008 Supplement A Special Election means a Supplement A Participants valid election, made prior to December 31, 2008 in accordance with rules and procedures established by the Committee, to receive his or her Supplement A Benefit in actuarially equivalent quarterly installments, semi-annual installments or annual installments (as elected) for a period not to exceed five years, commencing in the seventh month after such Supplement A Participants Separation from Service or commencing at the later of the seventh month following the Supplement A Participants Separation from Service or a |
A-2
specified date that is not later than the Supplement A Participants 70th birthday. | |||
(C) | After 2008, a Participant may make an irrevocable election to receive his or her vested Supplement A Benefit in actuarially equivalent quarterly installments, semi-annual installments or annual installments (as elected) for a period not to exceed five years, commencing at least five years after the later of (I) the Participants Separation from Service, or (II) the date the Participant otherwise would have commenced payment of his or her Supplement A Benefit under Subparagraphs (A) or (B) above, as applicable; provided, however that an election under this Subparagraph (C) must be made in accordance with rules and procedures established by the Committee and must be received by the Committee at least one year before the Participants previously scheduled distribution date. | ||
(D) | Notwithstanding the foregoing, a Participant may elect to receive his or her vested Supplement A Benefit attributable to his or her post-2002 service in a lump sum in January 2009 or January 2010, as elected by the Participant. For purposes of this Subparagraph (D), the lump sum Present Value of the post-2002 Supplement A Benefit will be based on the Participants age at January 1 of the selected distribution year, the Participants Supplement A Benefit payable at age 65, and an interest rate of 5.25%; provided that this lump sum benefit shall include any applicable early retirement subsidy if the Participant has a Separation from Service before the lump sum benefit is paid. The Participant may also elect to receive that portion of his or |
A-3
her Supplement A Benefit attributable to his or her pre-2003 service; if the Participant makes such an election, the pre-2003 benefit shall be paid in a lump sum on the date such benefit becomes vested, with a reduction in the benefit to reflect the Participants then current age based on the early retirement factors specified in Paragraph A-2(c)(ii) below. All elections under this Subparagraph shall be made in accordance with rules and procedures and within the time period specified by the Committee. |
(c) | Actuarial Factors . The following actuarial factors shall apply for purposes of this Paragraph A-2: |
(i) | Present Value . Present value shall be determined using the factors set forth in the Pension Plan on December 31, 2007. | ||
(ii) | Early Retirement Reduction . The Supplement A SERP Benefit shall be reduced 4/12% per month for each of the first 60 months and 5/12% per month for each of the next 60 months that payment commences before Normal Retirement Date; provided, however, that no reduction shall apply if the Supplement A Participant retires after attaining age 62 with 20 Years of Service. | ||
(iii) | Installment Payments . The actuarial factors for determining installment payments shall be determined using the factors set forth in the Pension Plan on December 31, 2007. |
A-4
PAGE | ||||
SECTION 1
|
1 | |||
Introduction and Definitions
|
1 | |||
1.1 Introduction
|
1 | |||
1.2 Definitions
|
1 | |||
SECTION 2
|
5 | |||
Eligibility and Benefits
|
5 | |||
2.1 Eligibility for Participation
|
5 | |||
2.2 Acquisition of Insurance
|
5 | |||
2.3 Additional Life Insurance Coverage
|
5 | |||
2.4 Companys Payment of Premiums Prior to Retirement, Termination of
Employment, Disability or Death
|
6 | |||
2.5 Companys Payment of Premiums after Retirement
|
6 | |||
2.6 Companys Payment of Premiums after Disability
|
6 | |||
2.7 Companys Payment of Premiums During Authorized Absences from Employment
|
7 | |||
2.8 Cessation of Premium Payments
|
7 | |||
2.9 Optional Premium Payments by Participants
|
7 | |||
2.10 Loss of Benefits
|
8 | |||
2.11 Tax Withholding
|
8 | |||
SECTION 3
|
9 | |||
Administration
|
9 | |||
3.1 Administration
|
9 | |||
3.2 Decisions and Actions of the Committee
|
9 | |||
3.3 Rules and Records of the Committee
|
9 | |||
3.4 Employment of Agents
|
9 | |||
3.5 Plan Expenses
|
9 | |||
3.6 Indemnification
|
10 | |||
SECTION 4
|
11 | |||
Claims Procedures
|
11 | |||
4.1 Presentation of Claim
|
11 | |||
4.2 Notification of Decision
|
11 | |||
4.3 Review of a Denied Claim
|
12 | |||
4.4 Decision on Review
|
12 | |||
4.5 Legal Action
|
12 | |||
4.6 Disability Determinations
|
13 | |||
SECTION 5
|
14 | |||
Miscellaneous
|
14 | |||
5.1 Binding Effect
|
14 | |||
5.2 No Guarantee of Employment
|
14 |
i
PAGE | ||||
5.3 Applicable Law
|
14 | |||
5.4 Non-Transferability
|
14 | |||
5.5 Named Fiduciary
|
14 | |||
5.6 Gender and Number
|
14 | |||
5.7 Non-Assignability and Facility of Payment
|
14 | |||
5.8 Mistake of Fact
|
15 | |||
5.9 Information to be Furnished by Covered Employees
|
15 | |||
5.10 Company and Committee Decision Final
|
15 | |||
5.11 Action by Company or Employer
|
15 | |||
5.12 Waiver of Notice
|
15 | |||
5.13 Recovery of Benefits
|
15 | |||
5.14 Additional Employers
|
16 | |||
5.15 Uniform Rules
|
16 | |||
5.16 Evidence
|
16 | |||
SECTION 6
|
17 | |||
Amendment and Termination
|
17 | |||
6.1 Amendment
|
17 | |||
6.2 Termination
|
17 | |||
6.3 Mergers and Acquisitions
|
17 |
ii
(a) | Base Salary means the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Participants gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of the Company and shall be calculated to include amounts not otherwise included in the Participants gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Company; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Participant. | ||
For purposes of determining a Participants Base Salary for premium purposes pursuant to Section 2 for any Policy Year, up to and including the Policy Year in which the Participant Retires, becomes Disabled, or experiences a Termination of Employment, the Participants Base Salary shall be measured and annualized as of the March 31 preceding the date on which such Participant Retires, becomes Disabled or experiences a Termination of Employment. If a Participants Base Salary increases after the Committee has determined the amount of such |
1
Participants Base Salary for premium purposes for a particular Policy Year, the amount of the Participants increased Base Salary shall not be considered for purposes of this Plan until the next Policy Year. For purposes of determining a Participants Base Salary for premium purposes pursuant to Section 2 after the Policy Year in which the Participant Retires, becomes Disabled, or experiences a Termination of Employment, the Participants Base Salary shall be measured and annualized as of the March 31 preceding the date on which such Participant Retired, became Disabled, or experienced a Termination of Employment. | |||
(b) | Board means the Board of Directors of the Company. | ||
(c) | Code means the Internal Revenue Code of 1986, as amended. | ||
(d) | Committee means the Hanesbrands Inc. Employee Benefits Administrative Committee appointed by the Board of Directors of the Company to administer the Plan, which committee shall be a named fiduciary of the Plan, as defined in Section 402 of ERISA. | ||
(e) | Company means Hanesbrands Inc., a Maryland corporation, and any successor thereto, including any corporation that is a successor to all or substantially all of the Companys assets or business. | ||
(f) | Disability or Disabled means a determination by the Committee, or its delegate, in its sole discretion, that a Participant is disabled in accordance with the terms of the Hanesbrands Inc. Long Term Disability Plan. Upon request by the Committee, or its delegate, the Participant must timely submit proof of continued disability. | ||
(g) | Employee means a person who is an active full-time employee of the Company who is in Salary Bands one through five and the Chief Executive Officer and Chairman of the Board. Individuals classified by the Company as independent contractors, consultants, leased employees or similar types of non-employee positions are specifically excluded from the Plan, even if retroactively classified as an employee by a court, the Internal Revenue Service or another governmental agency. | ||
(h) | Effective Date means January 1, 2006, the effective date of this Plan document. | ||
(i) | Insurance Company means the applicable insurance company that has issued the Policy(ies) providing benefits under the Plan for a Participant. | ||
(j) | Participant means an Employee of the Company who is selected to participate in the Plan and who has satisfied the conditions for Plan participation as set forth in Section 2. | ||
(k) | Plan means this Hanesbrands Inc. Executive Life Insurance Plan, effective as of January 1, 2006, as it may be amended from time to time. |
2
(l) | Plan Agreement means a written agreement, as may be amended from time to time, which is entered into by and between the Company and a Participant. Each Plan Agreement executed by a Participant and the Company shall provide for the entire benefit to which such Participant is entitled under the Plan; should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Company shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant, and any Plan Agreement may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan; provided, however, that any such additional benefits or benefit limitations must be agreed to by both the Company and the Participant. | ||
(m) | Plan Year means the consecutive twelve (12) month period commencing on January 1 of each year and ending on the next following December 31. | ||
(n) | Policy means the life insurance policy (or life insurance policies if more than one is required because of death benefit amounts or otherwise) purchased on a Participants life that is subject to the terms and conditions of this Plan. | ||
(o) | Policy Year means the twelve (12) month period commencing on the date the Policy is issued by the insurer, and every twelve (12) month period commencing thereafter. | ||
(p) | Projected Premium Payment Period means the number of Policy Years projected to occur between the Policy issue date and the later of the Participants (i) Projected Retirement Date, (ii) attainment of age sixty (60), or (iii) attainment of ten (10) Years of Plan Participation. For executives age sixty (60) and over as of November 1, 2008, the Projected Premium Payment Period is projected to be 10 years. | ||
(q) | Projected Retirement Date means the date on which the Committee assumes the Participant will retire, solely for purposes of this Plan; provided, however, the Committee may use its discretion to revise this assumption as necessary at any time during the Participants participation in the Plan. | ||
(r) | Retirement, Retire(s) or Retired means severance from employment from the Company for any reason other than a leave of absence, death or Disability on or after the date on which the Participant is eligible for a retirement benefit under the Hanesbrands Inc. Pension Plan, as determined by the Committee in its sole discretion. | ||
(s) | Termination of Employment means the severing of employment with the Company, voluntarily or involuntarily, for any reason other than Retirement, Disability, death or an authorized leave of absence. A Participants Termination of Employment will be deemed to occur when the Participant ceases to be a full-time employee of the Company, even though the Participant may continue to serve as a director of the Company, or as a consultant or independent contractor. |
3
(t) | Years of Plan Participation means the total number of full Plan Years a Participant has been a Participant in the Plan prior to his or her Termination of Employment. Any partial year shall not be counted for purposes of the Plan. |
4
(a) | Has been designated in writing by the Company, in its sole and absolute discretion, as a Participant; | ||
(b) | Completes and returns to the Committee, no later than thirty (30) days after he or she receives written notice of such designation, a Plan Agreement, and such administrative and other forms as the Committee may require for participation; | ||
(c) | Completes such insurance forms, exams and questions as the Committee may designate from time to time; | ||
(d) | Timely completes any other participation conditions as may be prescribed by the Committee from time to time; and | ||
(e) | Is insurable. |
5
6
7
8
9
10
(a) | that the Claimants requested determination has been made, and that the claim has been allowed in full; or that the Committee has reached a conclusion contrary, in whole or in part, to the Claimants requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant: | ||
(b) | the specific reason(s) for the denial of the claim, or any part of it; | ||
(c) | specific reference(s) to pertinent provisions of the Plan upon which such denial was based; |
(i) | a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; | ||
(ii) | an explanation of the claim review procedure; and | ||
(iii) | a statement of the Claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
11
(a) | may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits; | ||
(b) | may submit written comments or other documents; and/or | ||
(c) | may request a hearing, which the Committee , in its sole discretion, may grant. |
(a) | specific reasons for the decision; | ||
(b) | specific reference(s) to the pertinent Plan provisions upon which the decision was based; | ||
(c) | a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimants claim for benefits; and | ||
(d) | a statement of the Claimants right to bring a civil action under ERISA Section 502(a). |
12
13
14
15
(a) | Filing with the Company a written instrument to that effect, and | ||
(b) | Filing with the Committee a statement consenting to such action signed by the President or any Vice President of the Company on its behalf. |
16
17
PAGE | ||||
SECTION 1
|
1 | |||
Introduction and Definitions
|
1 | |||
1.1 Introduction
|
1 | |||
1.2 Definitions
|
1 | |||
SECTION 2
|
4 | |||
Eligibility and Benefits
|
4 | |||
2.1 Eligibility to Participate
|
4 | |||
2.2 Effective Date of Participation
|
4 | |||
2.3 Termination of Participation
|
4 | |||
2.4 Payment of Benefits
|
4 | |||
2.5 Successive Periods of Disability
|
5 | |||
2.6 Total Disability
|
5 | |||
2.7 Entitlement to Benefits
|
6 | |||
2.8 Disability for Which Benefits Are Not Payable
|
7 | |||
2.9 Amount of Monthly Benefits
|
8 | |||
2.10 Minimum Amount of Monthly Benefits
|
9 | |||
2.11 Amount of Benefits for a Part of a Month
|
9 | |||
2.12 Compensation
|
9 | |||
2.13 Monthly Benefits for Periods of Disability Commencing Before the Effective Date
|
9 | |||
2.14 Source of Benefits
|
9 | |||
SECTION 3
|
10 | |||
Administration
|
10 | |||
3.1 Administration
|
10 | |||
3.2 Decisions and Actions of the Committee
|
10 | |||
3.3 Rules and Records of the Committee
|
10 | |||
3.4 Employment of Agents
|
10 | |||
3.5 Plan Expenses
|
10 | |||
3.6 Indemnification
|
11 | |||
SECTION 4
|
12 | |||
Claims Procedures
|
12 | |||
4.1 Presentation of Claim
|
12 | |||
4.2 Notification of Decision
|
12 | |||
4.3 Review of a Denied Claim
|
13 | |||
4.4 Decision on Review
|
13 | |||
4.5 Legal Action
|
14 |
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PAGE | ||||
SECTION 5
|
15 | |||
Miscellaneous
|
15 | |||
5.1 Gender and Number
|
15 | |||
5.2 Non-Assignability and Facility of Payment
|
15 | |||
5.3 Mistake of Fact
|
15 | |||
5.4 Applicable Law
|
15 | |||
5.5 No Guarantee of Employment
|
15 | |||
5.6 Information to be Furnished by Covered Employees
|
15 | |||
5.7 Company and Committee Decision Final
|
15 | |||
5.8 Action by Company or Employer
|
16 | |||
5.9 Waiver of Notice
|
16 | |||
5.10 Recovery of Benefits
|
16 | |||
5.11 Additional Employers
|
16 | |||
5.12 Uniform Rules
|
16 | |||
5.13 Evidence
|
17 | |||
5.14 Investigation of Claims
|
17 | |||
SECTION 6
|
18 | |||
Amendment and Termination
|
18 | |||
6.1 Amendment
|
18 | |||
6.2 Termination
|
18 | |||
6.3 Mergers and Acquisitions
|
18 |
-ii-
(a) | Benefit or Benefits means the disability benefit or benefits for Executives of the Employers under this Plan. | ||
(b) | Committee means the Hanesbrands Inc. Employee Benefits Administrative Committee appointed by the Board of Directors of the Company, to administer the Plan, which committee shall be a named fiduciary of the Plan as defined in Section 402 of ERISA. | ||
(c) | Company means Hanesbrands Inc., a Maryland corporation and any successor thereto, including any corporation that is a successor to all or substantially all of the Companys assets or business. | ||
(d) | Conclusive Medical Evidence means a specific diagnosis made by a Physician and supported by objective medical documentation. | ||
(e) | Covered Employee means an Executive who is participating in the Plan in accordance with subsection 2.2 and whose participation has not terminated in accordance with subsection 2.3. For purposes of the Plan, a Covered Employee is considered an employee only if specifically treated or classified as an employee for purposes of withholding federal employment and income taxes. If classified by an Employer as an independent contractor, consultant, leased employee or similar position, an individual is specifically excluded from Plan participation, even if a court, the Internal Revenue Service, or any other third party finds that an individual should be treated as a common-law employee of an Employer. |
(f) | Disability Accommodation means the Employers reasonable accommodation of the Covered Employees Total Disability to assist the Covered Employee to return to active employment with the Covered Employer in either the Covered Employees prior position or a position in the Covered Employees regular occupation. | ||
(g) | Effective Date means January 1, 2006, the effective date of this Plan document. | ||
(h) | Elimination Period means a continuous period of 180 days commencing with the day following an employees last day of active employment or work prior to commencement of an absence on account of disability during which the employee is continuously Totally Disabled, as defined in subsection 2.6. Successive periods of absence on account of disability due to the same or related cause or causes shall be considered a single period of absence unless separated by a return to active employment or work with the Employer of at least thirty (30) consecutive work days. For purposes of this thirty (30) consecutive work days provision, a Covered Employee shall be considered to have worked one work day if the Covered Employee performs any duties for the Employer during any portion of a work day. | ||
(i) | Employer means the Company, its divisions and any Subsidiary of the Company designated a Covered Employer under the Plan, which Employer adopts the Plan, as provided in the Plan or as set forth in a Schedule to the Plan. | ||
(j) | Executive means an employee in Salary Bands one (1) through five (5) and the Chief Executive Officer and Chairman of the Board. | ||
(k) | Physician or Doctor means a person legally licensed to practice medicine, psychiatry, psychology or psychotherapy, who is neither a Covered Employee nor a member of a Covered Employees immediate family. A licensed medical practitioner is a doctor as applicable state law requires that such practitioner be recognized for purposes of certification of disability, and the treatment provided by the practitioner is within the scope of his or her license. | ||
(l) | Plan means the Hanesbrands Inc. Executive Long Term Disability Plan, effective as of January 1, 2006, including any supplements or schedules thereto. | ||
(m) | Plan Year means the consecutive twelve-month period commencing each January 1 and ending on the next following December 31. | ||
(n) | Subsidiary or Subsidiaries means any corporation more than fifty percent of the voting stock of which is owned, directly or indirectly, by the Company. |
(o) | Vocational Rehabilitation Services means such services as the Committee determines in its discretion will assist the Covered Employee in returning to an occupation for wage or profit that he or she is reasonably qualified to do by education, training or experience or that he or she may become reasonably qualified to do by education, training or experience. Vocational Rehabilitation Services may include job modification, job retraining, and job placement services. |
(a) | The date he or she ceases to be employed by an Employer as an Executive. | ||
(b) | The date of his or her retirement from his or her employment with all Employers, or the last day worked, whichever is later. | ||
(c) | The date of his or her termination of employment with all Employers, or the last day worked, whichever is later. | ||
(d) | The date he or she is no longer actively at work due to an unpaid leave of absence. Notwithstanding the foregoing, an unpaid leave qualifying as a leave under the Family and Medical Leave Act of 1993 (FMLA) or the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended (USERRA) shall be administered in accordance with the benefits requirements of the FMLA and USERRA and the regulations thereunder. |
(a) | if such disability first occurs at or before the Covered Employees attainment of age sixty (60) years, the date he or she attains age sixty-five (65) years; or | ||
(b) | if such disability first occurs after the Covered Employees attainment of age sixty (60) years, upon the fifth anniversary of the date he or she first qualified for monthly disability benefits. |
(a) | A Covered Employee must support his initial entitlement to Benefits by submitting, on a form provided by the Committee, written proof of claim (including conclusive medical evidence) covering the occurrence, character and extent of disability, which proof of claim must be filed with the Committee not later than one year measured from the last day the Covered Employee worked for the Employer prior to incurring the alleged disability. Thereafter, as requested by the Committee from time to time, the Covered Employee may be required to submit Conclusive Medical Evidence of the continuance of his or her disability. As a condition to a Covered Employees entitlement to disability benefits, the Committee shall have the right to direct such employee to submit, from time to time, to an independent medical examination by a Physician designated by the Committee. | ||
(b) | A Covered Employee must be under the continuous care of a Physician who with respect to the Covered Employees disability is practicing within the scope of his or her license, and must be under a defined course of treatment appropriate for the Covered Employees disability. If a Covered Employees disability is a mental or nervous disorder, his or her treatment must include care by a board certified, licensed Physician who specializes in psychiatric medicine. | ||
(c) | No later than the expiration of a continuous period of ninety (90) days during which a Covered Employee is disabled, the employee must apply for initial disability benefits under the Social Security Act. He or she must appeal initial and reconsideration level denials of such Social Security benefits within the 60-day appeal period, and he or she must supply the Committee with proof of application for, and any denial of, disability benefits under the Social Security Act and of any such appeal or award letters. As a pre-condition to receiving benefits under the Plan, the Covered Employee must execute a reimbursement agreement in which the Covered Employee agrees in writing to reimburse his or her Employer an amount equal to any overpayment of Benefits under the Plan due to a retroactive award of Federal Social Security benefits (Disability or Retirement). Any such overpayment shall be reimbursed to the Employer by the participant in a lump sum within thirty (30) days of the date the Covered Employee is notified in writing of the amount of such overpayment. If a Covered Employee fails to reimburse the Employer in a lump sum as required above, the Committee, in its |
sole discretion, may cause his or her disability benefits to be reduced or eliminated until the amount of such overpayment has been recovered by the Employer. | |||
(d) | A Covered Employee must accept a Disability Accommodation, if applicable. | ||
(e) | A Covered Employee must participate in Vocational Rehabilitation Services, if applicable. | ||
(f) | A Covered Employee must accept an offer of employment related to Vocational Rehabilitation Services, if applicable. |
(a) | Amounts initially awarded as a monthly primary and dependent benefit(s) under the Federal Social Security Act (Disability or Retirement). Future increases awarded by Social Security will not be offset from the monthly benefit. | ||
(b) | Amounts paid or payable under any workers compensation, occupational disease or similar law (other than lump sum payments or awards made under any such law for loss or partial loss, or loss or partial loss of use of, a bodily member). | ||
(c) | Amounts paid or payable under any state compulsory disability benefit law. | ||
(d) | Amounts paid or payable under any other plan of the Employer, providing benefits for disability or retirement (other than amounts paid or payable from any other defined contribution plan maintained by an Employer). |
(a) | that the Claimants requested determination has been made, and that the claim has been allowed in full; or that the Committee has reached a conclusion contrary, in whole or in part, to the Claimants requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant: | ||
(b) | the specific reason(s) for the denial of the claim, or any part of it; | ||
(c) | specific reference(s) to pertinent provisions of the Plan upon which such denial was based; | ||
(d) | a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; | ||
(e) | an explanation of the claim review procedure; and | ||
(f) | a statement of the Claimants right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
(a) | may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits; | ||
(b) | may submit written comments or other documents; and/or | ||
(c) | may request a hearing, which the Committee , in its sole discretion, may grant. |
(a) | specific reasons for the decision; | ||
(b) | specific reference(s) to the pertinent Plan provisions upon which the decision was based; | ||
(c) | a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimants claim for benefits; | ||
(d) | any internal rule, guideline, protocol or other similar criterion relied on in the denial, or a statement that a copy of such rule, guideline, protocol or other similar criterion will be provided free of charge on request; and | ||
(e) | a statement of the Claimants right to bring a civil action under ERISA Section 502(a). |
(a) | Filing with the Company a written instrument to that effect, and | ||
(b) | Filing with the Committee a statement consenting to such action signed by the President or any Vice President of the Company on its behalf. |
(a) | Balance Calculation Date means the date a Non-Employee Directors Deferral Account is valued for purposes of making a distribution from such Non-Employee Directors 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; except that, for distributions payable due to a Non-Employee Directors earlier Separation from Service or pursuant to sections 10 and 17, the Balance Calculation Date is the last business day of the month in which the applicable distribution event occurs. | ||
(b) | Board means the Board of Directors of the Corporation . | ||
(c) | Cash Retainer means the annual cash retainer fee payable by the Corporation to a Non-Employee Director for services as a director of the Corporation , as such amount may be changed from time to time. The Cash Retainer shall include Committee Fees except as otherwise provided herein. | ||
(d) | Change in Control means Change in Control as defined under the terms of the Stock Plan. | ||
(e) | Code means the Internal Revenue Code of 1986, as amended. | ||
(f) | Committee means the Compensation Committee of the Board . |
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(g) | Committee Fees means the annual fees payable by the Corporation to a Non-Employee Director for services as a member or chair of a Board committee, as such amounts may be changed from time to time. | ||
(h) | Corporation means Hanesbrands Inc. and any successor thereto. | ||
(i) | Deferral means an amount deferred pursuant to a Deferral Election and any automatic deferral of restricted stock units as described in section 5 below . | ||
(j) | Deferral Account means a bookkeeping account in the name of a Non-Employee Director to hold the Non-Employee Directors Deferrals . | ||
(k) | Deferral Crediting Date means the last business day of each calendar quarter. | ||
(l) | Deferral Elections means irrevocable elections to defer receipt of a Cash Retainer or an Equity Retainer . | ||
(m) | Distribution Date means the specified date on which a Deferral will be paid or begin to be paid, pursuant to either a Deferral Election or the applicable provisions of the Plan or the award agreement. | ||
(n) | Equity Retainer means any annual equity retainer fee payable by the Corporation to a Non-Employee Director for services as a director of the Corporation , as such amount may be determined from time to time, that is not required to be deferred by its terms as described in section 5. | ||
(o) | Fair Market Value means the average of the high and low quotes of Stock on the applicable day on the New York Stock Exchange Composite Transaction Tape; provided, however, that effective as of January 1, 2008, the Fair Market Value of Stock shall be the closing price on the applicable day on the New York Stock Exchange Composite Transaction Tape. | ||
(p) | Interest Account means the default alternative from among the two investment alternatives (the other being a Stock Equivalent Account ) in which a Non-Employee Director may elect to invest a Deferral as described in sections 7 and 8 below . | ||
(q) | Non-Employee Director means a director of the Corporation who is not an employee of the Corporation or any subsidiary of the Corporation . | ||
(r) | Plan means this Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan. | ||
(s) | Plan Year means the calendar year. | ||
(t) | Re-Deferral Election means a Non-Employee Directors irrevocable election to extend a Distribution Date . |
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(u) | Separation from Service means the date of a Non-Employee Directors termination of service on the Board , which date shall be determined in a manner that is consistent with the requirements of Treasury regulations section 1.409A-1(h). | ||
(v) | Stock means a share of the common stock of the Corporation that, by its terms, may be voted on all matters submitted to stockholders of the Corporation generally. | ||
(w) | Stock Equivalent Account means one of two investment alternatives (the other being an Interest Account ) in which a Non-Employee Director may elect to invest a Deferral as described in sections 7 and 8 below . | ||
(x) | Stock Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006 or any successor thereto that provides for the issuance of Stock to Non-Employee Directors. |
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(a) | A Non-Employee Director shall be eligible to make a Deferral Election only if he is an active member of the Board , or has been elected to the Board on the date such election is made. | ||
(b) | For the 2007 Plan Year, a Non-Employee Director may defer all or any portion not less than 25 percent of his Cash Retainer, and may make a separate election to defer all or any portion not less than 25 percent of his Committee Fees. Effective January 1, 2008, a Non-Employee Director may elect to defer not less than 100% percent of his Cash Retainer, his Equity Retainer, or both. | ||
(c) | All Deferral Elections must be made pursuant to such rules as the Committee may prescribe and must be received by the Committee no later than the date specified by the Committee . In no event will the date specified by the Committee with respect to a Deferral Election be later than the end of the Plan Year preceding the Plan Year in which the Cash Retainer or Equity Retainer would otherwise be paid. In the case of the first year in which the Non-Employee Director becomes eligible to participate, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date the Non-Employee Director becomes eligible to participate. | ||
(d) | As part of each Deferral Election for the 2007 Plan Year , the Non-Employee Director must specify the Distribution Date on which the Deferral will be paid or commence. For 2008 and subsequent Plan Years , the Distribution Date with respect to a Deferral shall be the earlier of the fifth anniversary of the applicable Deferral Crediting Date or the Non-Employee Directors Separation from Service. A Non-Employee Director may make a different Deferral Election for each separate Deferral under the Plan. Except as provided in subsection (e) below, an election under this subsection (d) is irrevocable and shall apply only to that portion of the Non-Employee Directors Deferral Account which is attributable to the Deferral . | ||
(e) | A Non-Employee Director 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 shall be the earlier of the Non-Employee Directors Separation from Service and a date that is not earlier than the fifth anniversary of the prior Distribution Date . If a Non-Employee Director makes a Re-Deferral Election with respect to a Deferral for the 2007 Plan Year , the Deferral shall become payable upon the earlier of the fifth anniversary of the prior Distribution Date and the Non-Employee Directors Separation from Service. All Re-Deferral Elections must be made pursuant to such rules as the Committee may prescribe. The Committee , in its complete discretion, may modify the general rules set forth |
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above as permitted by IRS Notice 2005-1, applicable regulations and other guidance issued under Code Section 409A. | |||
(f) | As part of each Deferral Election for the 2007 Plan Year , a Non-Employee Director must elect the form in which the Deferral will be paid in accordance with section 9. Except as provided in section 9, a Non-Employee Directors election as to the form of payment shall be irrevocable. | ||
(g) | As part of each Deferral Election , a Non-Employee Director must elect the investment alternatives that shall apply to the Deferral of a Cash Retainer in accordance with sections 7 and 8 below. | ||
(h) | Deferrals and Deferral Elections shall be irrevocable. |
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(a) | Stock Equivalent Account . |
(i) | Under the Stock Equivalent Account , the value of the Non-Employee Directors Deferral shall be determined as if the Deferral were invested in Stock as of the Deferral Crediting Date . If a payment of Stock is deferred, then the number of Stock equivalents to be credited to the Non-Employee Directors Deferral Account and appropriate subaccounts on each Deferral Crediting Date shall equal the number of shares deferred. If a payment of cash is deferred, then the number of Stock equivalents to be credited to the Non-Employee Directors Deferral Account and appropriate subaccounts on each Deferral Crediting Date shall be determined by dividing the Deferral to be invested on that date by the Fair Market Value of Stock on that date. Fractional Stock equivalents will be computed to six decimal places. | ||
(ii) | An amount equal to the number of Stock equivalents as of the record date multiplied by the dividend paid on a share of Stock on each dividend payment date shall be credited to the Non-Employee Directors Deferral Account and appropriate subaccount as of the Deferral Crediting Date coincident with or next following the dividend payment date and invested in additional Stock equivalents as though such dividend credits were a Deferral . | ||
(iii) | The Corporation may, but is not required to, match any amounts that a Non-Employee Director elects to invest in the Stock Equivalent Account . | ||
(iv) | In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders of Stock other than a regular cash dividend, the number of Stock equivalents in the Stock Equivalent Account under the Plan shall be equitably adjusted by the Committee . |
(b) | Interest Account . Under the Interest Account , prior to 2008, interest accrues daily and is credited to the Non-Employee Directors Deferral Account on a monthly basis. Effective January 1, 2008, interest accrues and is credited daily. The rate of interest to be credited shall equal the 5-year constant maturity Treasury note interest rate as published by the Federal Reserve in effect on the first business day of the applicable calendar year. If installment payments are elected, the amount to be paid to the Non-Employee Director as of a Distribution Date shall be determined by dividing the Non-Employee Directors Deferral Account balance as of the applicable Balance Calculation Date by the number of remaining installment payments. |
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(a) | With respect to Cash Retainer payments, if the Non-Employee Director fails to make an investment election with respect to a Deferral , the Deferral shall be deemed to be invested in the Interest Account . | ||
(b) | All Equity Retainer payments that are deferred at the election of the Non-Employee Director and all awards that are deferred automatically as described in section 5 above shall be invested in the Stock Equivalent Account. | ||
(c) | All investments in the Stock Equivalent Account shall be irrevocable. | ||
(d) | As of the last business day of any calendar quarter, a Non-Employee Director may elect to transfer amounts invested in the Interest Account to the Stock Equivalent Account by filing an investment change election during the time period specified by the Committee . Any such election shall be effective as of the first business day of the following calendar quarter. The number of Stock equivalents to be credited to the Non-Employee Directors Deferral Account and appropriate subaccounts as of the effective date of the Non-Employee Directors election shall be determined by dividing the amount to be transferred by the Fair Market Value of Stock on the last business day of the calendar quarter preceding the effective date of the Non-Employee Directors election. Notwithstanding the foregoing, effective January 1, 2008, a Non-Employee Director may elect to transfer amounts from the Interest Account to the Stock Equivalent Account as of any business day; any such transfer shall be made in accordance with procedures established by the Committee . |
(a) | Payment of a Non-Employee Directors Deferral shall be made in a single lump sum; provided that, for a Cash Retainer deferred for the 2007 Plan Year , the Non-Employee Director may elect to receive payment in substantially equal annual installments over a period not exceeding ten years, as elected by the Non-Employee Director in the Deferral Election . | ||
(b) | If a Non-Employee Director makes a Re-Deferral Election with respect to a Deferral for the 2007 Plan Year, any prior election of annual installments shall be null and void and the Non-Employee Directors Deferral shall become payable in a single lump sum. Installment payments shall be treated as a single payment for purposes of a Re-Deferral Election , and the first scheduled installment will be the measuring standard for purposes of determining whether a Re-Deferral Election complies with the requirements of subsection 4(e) above. | ||
(c) | If a Non-Employee Directors Deferral is payable in a single lump sum, the payment shall be made within the 60-day period following the Balance Calculation Date, as determined in the sole discretion of the Committee . If a Non-Employee Directors Deferral is payable in installment payments, then the Non-Employee Directors Deferral shall be paid in substantially equal annual |
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installments commencing in the month following the initial Balance Calculation Date, with the remaining installment payments made as of each subsequent January 1st (based on the preceding December 31st Deferral balance) over the period elected by the Non-Employee Director in the Deferral Election. |
(a) | the Non-Employee Directors spouse; | ||
(b) | the Non-Employee Directors children (including adopted children), per stirpes; or | ||
(c) | the Non-Employee Directors estate. |
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates his or her employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if his employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, " Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan" ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with his consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive his Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by three; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to his Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). In this Agreement, Short Year means an incentive period of less than 12 months duration occurring immediately subsequent to the Companys exit from the Sara Lee Corporations controlled group of corporations (within the meaning of Section 1563(a) of the Code)). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of his service prior to his Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant |
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to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . | |||
(ii) | Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated |
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senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary |
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Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for |
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Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from his or her office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of his or her rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of his or her rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the |
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Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or |
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indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and | |||
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation |
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by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to three times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs (including for this purpose any annual incentive received from Sara Lee Corporation); and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. |
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(ii) | For a period of 36 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
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(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan" ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans; | ||
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive his Base Salary through the Termination Date , at which time his benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of his retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . |
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(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executives termination. | ||
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event |
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Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section |
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3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; and | |||
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to him by such tax authority for the period he held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing his rights under this section 3. |
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Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company. | |||
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE
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HANESBRANDS INC. | |||||||
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/s/ Richard A. Noll
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By: |
/s/ Kevin W. Oliver
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Title: Executive Vice President, Human Resources |
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(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of |
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1990, as amended, and the North Carolina Equal Employment Practices Act, as amended. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. | |||
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement. In addition, nothing herein shall be construed to prevent Executive from enforcing |
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any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended. | |||
(d) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. | ||
(e) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
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EXECUTIVE
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HANESBRANDS INC. | |||||||
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By: | |||||||
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Title:
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates his or her employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if his employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with his consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive his Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to his Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). In this Agreement, Short Year means an incentive period of less than 12 months duration occurring immediately subsequent to the Companys exit from the Sara Lee Corporations controlled group of corporations (within the meaning of Section 1563(a) of the Code)). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of his service prior to his Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant |
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to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . |
(ii) | Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated |
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senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary |
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Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for |
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Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from his or her office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of his or her rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of his or her rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the |
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Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or |
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indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and | |||
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation |
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by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to two times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs (including for this purpose any annual incentive received from Sara Lee Corporation); and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. |
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(ii) | For a period of 24 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
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(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans; | ||
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive his Base Salary through the Termination Date , at which time his benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of his retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . |
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(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executives termination. | ||
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event |
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Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section |
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3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; and | |||
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to him by such tax authority for the period he held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing his rights under this section 3. |
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Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company. | |||
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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/s/ Gerald W. Evans, Jr. | By: | /s/ Richard A. Noll | ||||||
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Title: | Chief Executive Officer |
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(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of |
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1990, as amended, and the North Carolina Equal Employment Practices Act, as amended. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. | |||
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement. In addition, nothing herein shall be construed to prevent Executive from enforcing |
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any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended. | |||
(d) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. | ||
(e) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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By: | |||||||
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Title: |
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates his or her employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if his employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with his consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive his Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to his Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). In this Agreement, Short Year means an incentive period of less than 12 months duration occurring immediately subsequent to the Companys exit from the Sara Lee Corporations controlled group of corporations (within the meaning of Section 1563(a) of the Code)). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of his service prior to his Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant |
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to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . |
(ii) | Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated |
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senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary |
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Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for |
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Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from his or her office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of his or her rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of his or her rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the |
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Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or |
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indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and | |||
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation |
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by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to two times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs (including for this purpose any annual incentive received from Sara Lee Corporation); and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. |
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(ii) | For a period of 24 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
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(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans; | ||
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive his Base Salary through the Termination Date , at which time his benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of his retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . |
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(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executives termination. | ||
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event |
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Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section |
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3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; and | |||
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to him by such tax authority for the period he held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing his rights under this section 3. |
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Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company. | |||
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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/s/ E. Lee Wyatt, Jr. | By: | /s/ Richard A. Noll | ||||||
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Title: | Chief Executive Officer |
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(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of |
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1990, as amended, and the North Carolina Equal Employment Practices Act, as amended. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. | |||
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement. In addition, nothing herein shall be construed to prevent Executive from enforcing |
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any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended. | |||
(d) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. | ||
(e) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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By: | ||||||||
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Title: |
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates his or her employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if his employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with his consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive his Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to his Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). In this Agreement, Short Year means an incentive period of less than 12 months duration occurring immediately subsequent to the Companys exit from the Sara Lee Corporations controlled group of corporations (within the meaning of Section 1563(a) of the Code)). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of his service prior to his Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant |
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to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . |
(ii) | Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated |
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senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary |
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Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for |
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Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from his or her office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of his or her rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of his or her rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the |
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Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or |
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indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and |
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation |
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by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to two times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs (including for this purpose any annual incentive received from Sara Lee Corporation); and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. |
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(ii) | For a period of 24 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
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(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans; | ||
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive his Base Salary through the Termination Date , at which time his benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of his retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . |
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(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executives termination. | ||
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event |
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Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section |
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3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; and | |||
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to him by such tax authority for the period he held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing his rights under this section 3. |
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Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company. | |||
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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/s/ Kevin W. Oliver | By: | /s/ Richard A. Noll | ||||||
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Title: | /s/ Chief Executive Officer |
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(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of |
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1990, as amended, and the North Carolina Equal Employment Practices Act, as amended. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. | |||
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement. In addition, nothing herein shall be construed to prevent Executive from enforcing |
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any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended. | |||
(d) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. | ||
(e) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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By: | |||||||
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Title: |
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if her employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates her employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if her employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with her consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive her Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to her Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). In this Agreement, Short Year means an incentive period of less than 12 months duration occurring immediately subsequent to the Companys exit from the Sara Lee Corporations controlled group of corporations (within the meaning of Section 1563(a) of the Code)). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of her service prior to her Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant |
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to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . |
(ii) | Beginning on her Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless she elects such coverage within thirty (30) days following her Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated |
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senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to her annual salary on her Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary |
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Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for |
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Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates her employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from her office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of her rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of her rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating her employment for Good Reason unless she delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the |
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Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or |
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indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and |
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation |
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by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to two times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs (including for this purpose any annual incentive received from Sara Lee Corporation); and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. |
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(ii) | For a period of 24 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on her Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, she shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless she elects such coverage within thirty (30) days following her Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
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(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits she would have received had she been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date she would otherwise be eligible to begin receiving benefits under such plans; | ||
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive her Base Salary through the Termination Date , at which time her benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of her retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive her full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . |
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(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executives termination. | ||
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event |
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Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section |
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3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date she remits the additional taxes as a result of such adjustment; and |
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to her by such tax authority for the period she held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing her rights under this section 3. |
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Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if she acts in bad faith or pursues a claim without merit, or if she fails to prevail in any action instituted by him or Company. |
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of her employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and her beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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/s/ Joia M. Johnson | By: | /s/ Richard A. Noll | ||||||
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Title: | Chief Executive Officer |
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(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of |
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1990, as amended, and the North Carolina Equal Employment Practices Act, as amended. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. | |||
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement. In addition, nothing herein shall be construed to prevent Executive from enforcing |
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any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended. |
(d) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. | ||
(e) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
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EXECUTIVE | HANESBRANDS INC. | |||||||
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By: | |||||||
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Title: |
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(a) | Eligibility for Severance. |
(i) | Eligible Terminations . Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances: |
(A) | Executives employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or | ||
(B) | Executive terminates his employment at the request of Company . |
(ii) | Ineligible Terminations . Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under this section 2 if his employment terminates under any of the following circumstances: |
(A) | A termination for Cause . For purposes of this Agreement, Cause means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company ; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company ; | ||
(B) | A termination as the result of Disability. For purposes of this Agreement Disability shall mean a determination under Companys disability plan covering Executive that Executive is disabled; | ||
(C) | A termination due to death; | ||
(D) | A termination due to Retirement. For purposes of this Agreement Retirement shall mean Executives voluntary termination of employment on or after Executives attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the Retirement Plan ); | ||
(E) | A voluntary termination of employment other than at the request of Company ; | ||
(F) | A termination following which Executive is immediately offered and accepts new employment with Company , or becomes a non-executive member of the Board; | ||
(G) | The transfer of Executives employment to a subsidiary or affiliate of Company with his consent; | ||
(H) | A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control ; or | ||
(I) | Any other termination of employment under circumstances not described in subparagraph 2(a)(i). |
(iii) | Characterization of Termination . The characterization of Executives termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding. | ||
(iv) | Termination Date . For purposes of this section 2, Executives Termination Date shall mean the date specified in the separation and release agreement described under section 2(e) below. |
(b) | Severance Benefits Payable . If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then |
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in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply: |
(i) | Executive shall be entitled to receive his Base Salary (the Salary Portion of Severance ) during the Severance Period, payable as provided in section 2(c). The Severance Period shall mean the number of months determined by multiplying the number of Executives full years of employment with Company or any subsidiary or affiliate of Company by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months. Base Salary shall mean the annual salary in effect for Executive immediately prior to his Termination Date. At the discretion of the Committee , Executive may receive an additional salary portion in an amount equal to as much as 100% of Executives target bonus under the Annual Incentive Plan. | ||
Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Companys current fiscal year to Executives Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of: |
(A) | The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year in which the Termination Date occurs based on actual fiscal year performance (the Annual Incentive Portion of Severance ). Annual Incentive Plan means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date ; and | ||
(B) | The long-term incentive payable under the Omnibus Plan in effect on Executives Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executives Termination Date and which relates to the period of his service prior to his Termination Date . The Omnibus Plan means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans. The long-term incentive described in this section ( Long-Term Cash Incentive Plan ) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards. |
Such amounts shall be payable as provided in section 2(c). Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period . |
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(ii) | Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the S everance Period ; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. E xecutives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage; | ||
(iii) | Except as otherwise provided herein or in the applicable plan , participation in all other Company plans available to similarly situated senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, |
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shall cease on Executives Termination Date . During the Severance Period, Company shall continue to maintain life insurance covering Executive under Companys Executive Life Insurance Plan in accordance with its terms. If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period , then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date . |
(c) | Payment of Severance . |
(i) | Salary Portion. The Salary Portion of Severance shall be paid as follows: |
(A) | That portion of the Salary Portion of Severance that exceeds the S eparation Pay Limit, if any , shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. The Separation Pay Limit shall mean two (2) times the lesser of (1) the sum of Executives annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs. The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(B) | The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Companys payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment. Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the termination of Executives employment. Notwithstanding the foregoing, in no event shall such remaining portion of the Salary Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executives Termination Date occurs. The payments(s) to be made to Executive pursuant to this subparagraph (B) are intended to be |
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exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(9)(iii) for separation pay plans (i.e., the so-called two times pay exemption). |
(ii) | Incentive Portion. The Annual Incentive Portion of Severance , if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid. The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid. | ||
(iii) | Withholding. All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company ) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment. |
(d) | Termination of Benefits . Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(e) | Separation and Release Agreement . No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement. | ||
(f) | Death of Executive . In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination , payments of such benefits shall cease on the date of Executives death. |
(a) | Eligibility for Change in Control Benefits . |
(i) | Eligible Terminations . If (A) within three (3) months preceding a Change in Control , the Executives employment is terminated by the Company at the request of a third party in contemplation of a Change in Control , (B) within twenty-four (24) months following a Change in Control, Executive s employment is terminated by Company other than on account of Executives death, disability or retirement and other than for Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below. |
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(ii) | Good Reason . For purposes of this section 3, Good Reason means the occurrence of any one or more of the following (without Executives written consent after a Change in Control ): |
(A) | A material adverse change in Executives duties or responsibilities; | ||
(B) | A reduction in Executives annual base salary except any reduction of not more than ten (10) percent; | ||
(C) | A material reduction in Executives level of participation in any of Companys short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives; | ||
(D) | The failure of any successor to Company to assume and agree to perform this Agreement ; or | ||
(E) | Companys requiring Executive to be based at an office location which is at least fifty (50) miles from his office location at the time of the Change in Control . |
The existence of Good Reason shall not be affected by Executives temporary incapacity due to physical or mental illness not constituting a Disability . Executives retirement shall constitute a waiver of his rights with respect to any circumstance constituting Good Reason . Executives continued employment shall not constitute a waiver of his rights with respect to any circumstances which may constitute Good Reason ; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination . | |||
(iii) | Change in Control. For purposes of this Agreement , a Change in Control will occur: |
(A) | Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the Exchange Act)), of beneficial ownership (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally ( Voting Stock ); |
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provided, however, that the following acquisitions shall not constitute a Change in Control : |
1) | Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company ); | ||
2) | Any acquisition by Company ; | ||
3) | Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ; or | ||
4) | Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company , if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company ) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company , and (ii) such Person shall, after such acquisition by Company , become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control ; or |
(B) | Upon the consummation of a reorganization, merger or consolidation of Company , or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company ; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: |
1) | All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity |
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resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company s property or assets, directly or indirectly) (the Resulting Entity ) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and |
2) | No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Companys then outstanding securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity ; and | ||
3) | At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the Board ) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or |
(C) | Upon the consummation of a plan of complete liquidation or dissolution of Company ; or | ||
(D) | When the Initial Directors cease for any reason to constitute at least a majority of the Board . For this purpose, an Initial Director shall mean those individuals serving as the directors of Company immediately after Company ceased to be wholly-owned by Sara Lee Corporation; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Companys stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board , if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director ; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation by a Person (other than the Board ) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened |
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solicitation of proxies or consents by or on behalf of any Person (other than the Board ). |
(iv) | Termination Date. For purposes of this section 3, Termination Date shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executives termination were first met. |
(b) | Change in Control Benefits . In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply: |
(i) | In consideration of Executives covenant in section 4 below, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j): |
(A) | A lump sum payment equal to the unpaid portion of Executives annual Base Salary and vacation accrued through the Termination Date ; | ||
(B) | A lump sum payment equal to Executives prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above); | ||
(C) | A lump sum payment equal to Executives prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and | ||
(D) | A lump sum payment equal to two times the sum of (1) Executives annual Base Salary ; and (2) the greater of (i) Executives target annual incentive (as defined in the Annual Incentive Plan ) for the year in which the Change in Control occurs and (ii) Executives average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs; and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%). |
Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executives award agreement(s). Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below. | |||
(ii) | For a period of 24 months following Executives Termination Date (the CIC Severance Period ), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance |
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coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date , Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives. If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC S everance Period ; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time. Such reimbursement shall be made to Executive on the 20 th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter. The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year. In addition, Executives right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit. Executives right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph. The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executives expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable). Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period. Executives COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Companys group medical and dental plans. If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executives Termination Date ; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date . The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; |
(iii) | If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be |
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provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the Supplemental Plan ). In addition, for purposes of determining Executives benefits under the Supplemental Plan and Executives right to post-retirement medical benefits under Companys retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included. However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans; |
(iv) | Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company , shall cease on Executives Termination Date . |
(c) | Termination for Disability . If Executives employment is terminated due to Disability following a Change in Control , Executive shall receive his Base Salary through the Termination Date , at which time his benefits shall be determined in accordance with Companys disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(d) | Termination for Retirement or Death . If Executives employment is terminated by reason of his retirement or death following a Change in Control , Executives benefits shall be determined in accordance with Companys retirement, survivors benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement . | ||
(e) | Termination for Cause, or Other Than for Good Reason or Retirement . If Executives employment is terminated either by Company for Cause , or voluntarily by Executive (other than for Retirement or Good Reason ) following a Change in Control , Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date , at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company , at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement . | ||
(f) | Separation and Release Agreement . No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a Separation and Release Agreement (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement . | ||
(g) | Deferred Compensation . All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall |
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be paid in accordance with the terms of such plan following Executives termination. |
(h) | Notice of Termination . Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executives employment under the provision so indicated (a Notice of Termination) . | ||
(i) | Termination of Benefits . All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates. | ||
(j) | Form and Timing of Benefits . Subject to the provisions of this section 3, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date , but in no event later than the fifteenth day of the third month after the date of the Executives termination of employment. The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. | ||
(k) | Excise Tax Equalization Payment. Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the Total Payments ), if all or any part of the Total Payments will be subject to the tax (the Excise Tax ) imposed by Code Section 4999 (or any similar tax that may hereafter be imposed), Company shall pay to Executive in cash an additional amount (the Gross-Up Payment ) such that the net amount retained by Executive after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax, penalties, interest and Excise Tax upon the Gross-Up Payment provided for by this section 3 (including FICA and FUTA), shall be equal to the Total Payments . Any such payment shall be made by Company to Executive as soon as practical following the Termination Date , but in no event beyond twenty (20) days from such date. Such payment is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals. Executive shall only be entitled to a Gross-Up Payment under this section 3 if Executives parachute payments (as such term is defined in Code Section 280G) exceed three hundred thirty percent (330%) (the Threshold ) of Executives base amount (as determined under Code Section 280G(b)). In the event Executives parachute payments do not exceed the Threshold , the benefits provided to such Executive under this Agreement that are classified as parachute payments shall be reduced such that the value of the Total Payments that Executive is entitled to receive shall be one dollar ($1) less than the maximum |
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amount which such Executive may receive without becoming subject to the tax imposed by Code Section 4999, or which Company may pay without loss of deduction under Code Section 280G(a). For purposes of determining whether any of the Total Payments will be subject to the Excise Tax , the amounts of such Excise Tax and the amount of any Gross Up Payment, the following shall apply: |
(i) | Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executives termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company , or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Person s) shall be treated as parachute payments within the meaning of Code Section 280G(b)(2), and all excess parachute payments within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax , unless in the opinion of Companys tax counsel as supported by Companys independent auditors and acceptable to Executive , such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax ; | ||
(ii) | The amount of the Total Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments ; or (B) the amount of excess parachute payments within the meaning of Code Section 280G(b)(1) (after applying the provisions of this section 3(i) above); | ||
(iii) | The value of any noncash benefits or any deferred payment or benefit shall be determined by Companys independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); | ||
(iv) | Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executives residence on the Termination Date , net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; | ||
(v) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive did not receive the full net benefit intended under the provisions of this section 3(j), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee. Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately |
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following Executives termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; and |
(vi) | In the event the Internal Revenue Service adjusts any item included in Companys computations under this section 3(j) so that Executive is not required to pay the full amount of the excise tax assumed to have been owing in the determination of the Gross-Up Payment hereunder (or receives a refund of all or a portion of such excise tax), Executive shall repay to Company within twenty (20) days of the date the actual refund or credit of such portion has been made to Executive such portion of the Gross-Up Payment as shall exceed the amount of federal, state and local taxes actually determined to be owed together with such interest received or credited to him by such tax authority for the period he held such portion. |
(l) | Companys Payment Obligation. Subject to the provisions of section 4, Companys obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else. All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4. | ||
(m) | Other Employment . Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Companys obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement . | ||
(n) | Payment of Legal Fees and Expenses. To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Companys refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executives termination) between Executive and Company ; provided that the conflict or dispute is resolved in Executives favor and Executive acts in good faith in pursuing his rights under this section 3. Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive , of the conflict or dispute giving rise to such fees and expenses. In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or |
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pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company. |
(o) | Arbitration for Change in Control Benefits . Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company . Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The costs and expenses of both parties, including, without limitation, attorneys fees shall be borne by Company . Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3. |
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EXECUTIVE | HANESBRANDS INC. | |||||||||
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/s/ William J. Nictakis | By: | /s/ Richard A. Noll | ||||||||
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Title: | Chief Executive Officer |
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A-2
(a) | Executive on behalf of Executive, Executives heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and all current and former parents, subsidiaries, related companies, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the Released Parties) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executives employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executives heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement. Nothing in this Agreement releases any claims that the law does not permit Executive to release, including claims for vested pension benefits accrued by Executive under any tax-qualified pension plan of the Corporation. Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release. By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under |
A-3
the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, and the North Carolina Equal Employment Practices Act, as amended [ADD ANY ADDITIONAL STATE LAW REFERENCES]. Nothing herein shall release any party from any obligation under this Agreement. Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid. Executive understands and acknowledges the significance and consequences of this release and this Agreement. |
(b) | EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (ADEA). EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVES WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVES WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVES EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT. | ||
(c) | Executive represents and warrants that: (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executives behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are |
A-4
released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement. |
(d) | The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties. Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys fees incurred by or on behalf of Executive. |
A-5
EXECUTIVE |
HANESBRANDS INC.
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By: | |||||
Title: |
A-6
Six Months | ||||||||||||||||||||||||
Years Ended | Ended | Years Ended | ||||||||||||||||||||||
January 3,
2009 |
December 29,
2007 |
December 30,
2006 |
July 1,
2006 |
July 2,
2005 |
July 3,
2004 |
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Earnings, as defined:
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Income from continuing operations before income
tax expense, minority interest and income/loss
from equity investees
|
$ | 163,195 | $ | 185,321 | $ | 112,830 | $ | 417,543 | $ | 343,099 | $ | 397,512 | ||||||||||||
Fixed charges
|
179,003 | 223,395 | 90,168 | 44,366 | 52,596 | 52,743 | ||||||||||||||||||
Amortization of capitalized interest
|
3,632 | 3,676 | 2,024 | 4,227 | 5,000 | 6,438 | ||||||||||||||||||
Distributed income of equity investees
|
| | | | 3,030 | 3,943 | ||||||||||||||||||
Interest capitalized
|
(4,047 | ) | (2,184 | ) | (1,904 | ) | (4,656 | ) | (1,694 | ) | (1,353 | ) | ||||||||||||
Minority interest in pre-tax income
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(158 | ) | (1,195 | ) | (910 | ) | (1,224 | ) | (55 | ) | 100 | |||||||||||||
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Total earnings, as defined
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$ | 341,625 | $ | 409,013 | $ | 202,208 | $ | 460,256 | $ | 401,976 | $ | 459,383 | ||||||||||||
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Fixed charges, as defined:
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Interest expense
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$ | 155,280 | $ | 201,131 | $ | 78,692 | $ | 26,075 | $ | 35,244 | $ | 37,411 | ||||||||||||
Amortized premiums, discounts and capitalized
expenses related to indebtedness
|
6,032 | 6,475 | 2,279 | | | | ||||||||||||||||||
Interest factor in rental expenses
|
17,691 | 15,789 | 9,197 | 18,291 | 17,352 | 15,332 | ||||||||||||||||||
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Total fixed charges, as defined
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$ | 179,003 | $ | 223,395 | $ | 90,168 | $ | 44,366 | $ | 52,596 | $ | 52,743 | ||||||||||||
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Ratio of earnings to fixed charges
|
1.91 | 1.83 | 2.24 | 10.37 | 7.64 | 8.71 |
Note: | The Ratio of Earnings to Fixed Charges should be read in conjunction with the Consolidated Financial Statements and Managements Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K. The interest expense included in the fixed charges calculation above excludes interest expense relating to the Companys uncertain tax positions. The percentage of rent included in the calculation is a reasonable approximation of the interest factor. |
Name of Subsidiary | Jurisdiction of Formation | |
BA International, L.L.C.
|
Delaware | |
Caribesock, Inc.
|
Delaware | |
Caribetex, Inc.
|
Delaware | |
CASA International, LLC
|
Delaware | |
Ceibena Del, Inc.
|
Delaware | |
Hanes Menswear, LLC
|
Delaware | |
Hanes Puerto Rico, Inc.
|
Delaware | |
Hanesbrands Direct, LLC
|
Colorado | |
Hanesbrands Distribution, Inc.
|
Delaware | |
HBI Branded Apparel Limited, Inc.
|
Delaware | |
HBI Branded Apparel Enterprises, LLC
|
Delaware | |
HBI Playtex BATH LLC
|
Delaware | |
HbI International, LLC
|
Delaware | |
HBI Receivables LLC
|
Delaware | |
HBI Sourcing, LLC
|
Delaware | |
Inner Self LLC
|
Delaware | |
Jasper-Costa Rica, L.L.C.
|
Delaware | |
Playtex Dorado, LLC
|
Delaware | |
Playtex Industries, Inc.
|
Delaware | |
Playtex Marketing Corporation (50%) owned)
|
Delaware | |
Seamless Textiles, LLC
|
Delaware | |
UPCR, Inc.
|
Delaware | |
UPEL, Inc.
|
Delaware |
Name of Subsidiary | Jurisdiction of Formation | |
Bali Dominicana, Inc.
|
Panama/DR | |
Bali Dominicana Textiles, S.A.
|
Panama/DR | |
Bal-Mex S. de R.L. de C.V.
|
Mexico | |
Bordados Industriales, S. A. de C.V.
|
Honduras | |
Canadelle Limited Partnership
|
Canada | |
Canadelle Holding Corporation Limited
|
Canada | |
Cartex Manufacturera S. de R. L.
|
Costa Rica | |
CASA International, LLC Holdings S.C.S.
|
Luxembourg | |
Caysock, Inc.
|
Cayman Islands | |
Caytex, Inc.
|
Cayman Islands | |
Caywear, Inc.
|
Cayman Islands | |
Ceiba Industrial, S. De R.L.
|
Honduras | |
Champion Products S. de R.L. de C.V.
|
Mexico | |
Choloma, Inc.
|
Cayman Islands | |
Confecciones Atlantida S. de R.L.
|
Honduras | |
Confecciones de Nueva Rosita S. de R.L. de C.V.
|
Mexico | |
Confecciones El Pedregal Inc.
|
Cayman Islands | |
Confecciones El Pedregal S.A. de C.V.
|
El Salvador |
Honduras
El Salvador
Cayman Islands
El Salvador
El Salvador
Hong Kong
Cayman Islands
Costa Rica
Cayman Islands
Honduras
Colombia
Guatemala
El Salvador
Honduras
Cayman Islands
Puerto Rico
Panama
India
Argentina
Brazil
Canada
Cayman Islands
Cayman Islands
Cayman Islands
El Salvador
Germany
Mauritius
China
Japan
China
Philippines
India
Hong Kong
Thailand
Cayman Islands
Vietnam
Cayman Islands
El Salvador
Luxembourg
Mexico
Thailand
Bermuda
Costa Rica
Honduras
Hong Kong
Israel
Argentina
Costa Rica
Mexico
El Salvador
Honduras
Honduras
Honduras
Mexico
Honduras
El Salvador
Costa Rica
Honduras
Mexico
Puerto Rico
Indonesia
Cayman Islands
Mexico
Puerto Rico
Costa Rica
Dominican Republic
El Salvador
Honduras
Nicaragua
Date:
February 11, 2009
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|
/s/ Richard A. Noll | |
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Richard A. Noll
Chief Executive Officer |
Date:
February 11, 2009
|
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|
/s/ E. Lee Wyatt Jr. | |
|
||
|
E. Lee Wyatt Jr.
Executive Vice President, Chief Financial Officer |
Date:
February 11, 2009
|
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|
||
|
/s/ Richard A. Noll | |
|
||
|
Richard A. Noll
Chief Executive Officer |
Date:
February 11, 2009
|
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|
/s/ E. Lee Wyatt Jr. | |
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|
E. Lee Wyatt Jr.
Executive Vice President, Chief Financial Officer |