HANESBRANDS INC. OMNIBUS INCENTIVE PLAN
(As Amended and Restated)
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1.
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Purpose
. The purposes of the
Plan
are (a) to promote the interests of the
Company
and its
Subsidiaries
and its stockholders by strengthening the ability of the
Company
and its
Subsidiaries
to attract and retain highly competent officers and other key employees, and (b) to provide a means to encourage
Stock
ownership and proprietary interest in the
Company
. The
Plan
is intended to provide
Plan Participants
with forms of long-term incentive compensation that are not subject to the deduction limitation rules prescribed under
Code
Section 162(m), and should be construed to the extent possible as providing for remuneration which is “performance-based compensation” within the meaning of
Code
Section 162(m) and the regulations promulgated thereunder.
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2.
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Definitions
. Where the context of the
Plan
permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:
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(a)
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Award
means the grant of incentive compensation under this
Plan
to a
Participant
.
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(b)
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Board
means the board of directors of the
Company
.
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(c)
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Cause
means the
Participant
has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation or financial impropriety; willfully engaged in misconduct resulting in material harm to the
Company
; willfully failed to perform duties after written notice; or is in willful violation of
Company
policies resulting in material harm to the
Company.
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(d)
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Change in Control
means:
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(i)
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upon the acquisition by any individual, entity or group, including any
Person
, of beneficial ownership (as defined in Rule 13d-3 promulgated under the
Exchange Act
), directly or indirectly, of 20% or more of the combined voting power of the then outstanding capital stock of the
Company
that by its terms may be voted on all matters submitted to stockholders of the
Company
generally (“
Voting Stock
”); provided, however, that the following acquisitions shall not constitute a
Change in Control
: (A) any acquisition directly from the
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 the
Company
); (B) any acquisition by the
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Company
; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the
Company
or any corporation controlled by the
Company
; or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving the
Company
, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (A), (B) and (C) of subsection (ii) below shall be satisfied; and provided further that, for purposes of clause (B) above, if (1) any
Person
(other than the
Company
or any employee benefit plan (or related trust) sponsored or maintained by the
Company
or any corporation controlled by the
Company
) shall become the beneficial owner of 20% or more of the
Voting Stock
by reason of an acquisition of
Voting Stock
by the
Company
, and (2) such
Person
shall, after such acquisition by the
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
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(ii)
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upon the consummation of a reorganization, merger or consolidation of the
Company
, or a sale, lease, exchange or other transfer of all or substantially all of the assets of the
Company
; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction: (A) all or substantially all of the beneficial owners of the
Voting Stock
of the
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 50% of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, the
Company
or an entity which as a result of such transaction owns the
Company
or all or substantially all of the
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 (B) 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 20% or more of the combined voting power of the
Company’s
then outstanding securities) beneficially owns, directly or indirectly, 20% or more of the combined voting power of the then outstanding securities of the
Resulting Entity
; and (C) at least a majority of the members of the board of directors of the entity resulting from such transaction were
Initial Directors
of the
Company
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
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(iii)
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upon the approval by stockholders of a plan of complete liquidation or dissolution of the
Company
; or
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(iv)
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when the
Initial Directors
cease for any reason to constitute at least a majority of the
Board
.
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(e)
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Code
means the Internal Revenue Code of 1986, as amended.
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(f)
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Committee
means the Compensation Committee of the
Board
.
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(g)
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Company
means Hanesbrands Inc., a Maryland corporation, or any successor thereto.
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(h)
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Covered Employees
means covered employees or employees who are reasonably expected to be covered employees within the meaning of
Code
Section 162(m).
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(i)
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Deferred Stock Unit
(“
DSU
”) means a vested unit granted pursuant to section 10 below providing a
Participant
with the right to receive
Stock
(or cash) in accordance with the terms of such grant.
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(j)
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Exchange Act
means the Securities Exchange Act of 1934, as amended.
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(k)
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Fair Market Value
means the fair market value of
Stock
determined at any time in such manner as the
Committee
may deem equitable, or as required by applicable law or regulation.
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(l)
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Incentive Stock Options
means a
Stock Option
designed to meet the requirements of
Code
Section 422 or any successor law.
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(m)
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Initial Directors
means those directors of the
Company
on the effective date of the
Plan
; provided, however, that any individual who becomes a director of the
Company
thereafter whose election or nomination for election by the
Company’s
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 or nominated as a director of the
Company
as a result of: (i) 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 (ii) any other actual or threatened solicitation of proxies or consents by or on behalf of any
Person
(other than the
Board
).
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(n)
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Nonqualified Stock Option
means a
Stock Option
that is not an
Incentive
Stock Option
.
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(o)
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Participant
means (i) an employee of the
Company
or its
Subsidiaries
; or (ii) a non-employee director of the
Company
designated by the
Committee
as eligible to receive an
Award
under the
Plan
.
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(p)
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Performance Cash Awards
means cash incentives subject to the satisfaction of
Performance Criteria
and granted pursuant to section 12 below.
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(q)
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Performance Criteria
means business criteria within the meaning of
Code
Section 162(m), including, but not limited to any of the following (or an equivalent metric): revenue; revenue growth; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share; operating income; pre- or after-tax income; net operating profit after taxes; economic value added; ratio of operating earnings to capital spending; cash flow (before or after dividends); cash flow per share (before or after dividends); net earnings; net sales; sales growth; share price performance; return on assets or net assets; return on equity; return on capital (including return on total capital or return on invested capital); cash flow return on investment; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels, gross profit margin, operating profit margin, net income margin and leverage ratio.
The
Committee
may select one or more
Performance Criteria
and may apply those
Performance Criteria
on a corporate-wide or division/business segment basis. Measurement of the attainment of
Performance Criteria
may exclude, if the
Committee
provides in an
Award
agreement, impact of charges for restructurings, discontinued operations, extraordinary items and other unusual or non-recurring items, and the cumulative effects of tax or accounting changes, each as identified in the financial statements, in the notes to the financial statements, in the Management’s Discussion and Analysis section of the financial statements, or in other Securities and Exchange Commission filings.
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(r)
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Performance Period
means the period as designated by the
Committee
which generally shall have a minimum of one year and a maximum of five years, except that the foregoing minimum performance period shall not apply to (i) substitute
Awards
for grants made under a plan of an acquired business entity; and (ii) special vesting provisions in limited cases of an intervening event related to death, disability, retirement or a
Change in Control
.
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(s)
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Performance Shares
means
Awards
subject to the satisfaction of
Performance Criteria
and granted pursuant to section 11 below.
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(t)
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Person
means any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act
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(u)
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Plan
means the Hanesbrands Inc. Omnibus Incentive Plan.
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(v)
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Restricted Stock
means
Stock
subject to a vesting condition specified by the
Committee
in an
Award
in accordance with section 9 below.
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(w)
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Resulting Entity
means the entity resulting from a transaction (including, without limitation, the
Company
or an entity which as a result of such transaction owns the
Company
or all or substantially all of the
Company’s
property or assets, directly or indirectly).
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(x)
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RSU
means a restricted stock unit providing a
Participant
with the right to receive
Stock
(or cash) at a date on or after vesting in accordance with the terms of such grant and/or upon the attainment of
Performance Criteria
specified by the
Committee
in the
Award
in accordance with section 9 below.
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(y)
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SAR
means a stock appreciation right granted pursuant to section 8 below.
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(z)
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Stock
means a share of common stock of the
Company
that, by its terms, may be voted on all matters submitted to stockholders of the
Company
generally.
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(aa)
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Stock Option
means the right to acquire shares of
Stock
at a certain price that is granted pursuant to section 7 below. The term
Stock Option
includes both
Incentive
Stock Options
and
Nonqualified
Stock Options
.
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(bb)
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Subsidiary
or
Subsidiaries
means any corporation or entity of which the
Company
owns directly or indirectly, at least 50% of the total voting power or in which it has at least a 50% economic interest.
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3.
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Administration
. The
Plan
will be administered by the
Committee
consisting of two or more directors of the
Company
as the
Board
may designate from time to time, each of whom shall satisfy such requirements as:
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(a)
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the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 or its successor under the
Exchange Act
;
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(b)
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the New York Stock Exchange may establish pursuant to its rule-making authority; and
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(c)
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the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under
Code
Section 162(m).
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The
Committee
shall have the discretionary authority to construe and interpret the
Plan
and any
Awards
granted thereunder, to establish and amend rules for
Plan
administration, to change the terms and conditions of
Awards
at or after grant (subject to the provisions of section 20 below), to correct any defect or supply any omission or reconcile any inconsistency in the
Plan
or in any
Award
granted under the
Plan
and to make all other determinations which it deems necessary or advisable for the administration of the
Plan
.
Awards
under the
Plan
to a
Covered Employee
may be made subject to the satisfaction of one or more
Performance Criteria
.
The
Committee
or the
Board
may authorize one or more officers of the
Company
to select employees to participate in the
Plan
and to determine the number and type of
Awards
to be granted to such
Participant
s, except with respect to
Awards
to officers subject to Section 16 of the
Exchange Act
, or to non-employee directors of the
Company
, or to officers who are, or who are reasonably expected to be,
Covered Employees
. Any reference in the
Plan
to the
Committee
shall include such officer or officers.
The determinations of the
Committee
shall be made in accordance with their judgment as to the best interests of the
Company
and its stockholders and in accordance with the purposes of the
Plan
. Any determination of the
Committee
under the
Plan
may be made without notice or meeting of the
Committee
, if in writing signed by all the
Committee
members.
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4.
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Participant
s
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Participant
s may consist of all employees of the
Company
and its
Subsidiaries
and all non-employee directors of the
Company
; provided, however, the following individuals shall be excluded from participation in the
Plan
: (a) contract labor; (b) employees whose base wage or base salary is not processed for payment by the payroll department of the
Company
or any
Subsidiary
; (c) any individual performing services under an independent contractor or consultant agreement, a purchase order, a supplier agreement or any other agreement that the
Company
enters into for service; and (d) any individual who is located in a country in which the
Company’s
Stock
or the
Plan
have not been registered in accordance with local requirements. Designation of a
Participant
in any year shall not require the
Committee
to designate that person to receive an
Award
in any other year or to receive the same type or amount of
Award
as granted to the
Participant
in any other year or as granted to any other
Participant
in any year. The
Committee
shall consider all factors that it deems relevant in selecting
Participant
s and in determining the type and amount of their respective
Awards
.
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5.
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Shares Available under the
Plan
.
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(a)
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Subject to adjustment as provided in section 15(a), there is hereby reserved for issuance under the
Plan
, as of the date of stockholder approval of the amended and restated
Plan
, (i) any shares of
Stock
from the original 13,105,000 shares of
Stock
reserved under the
Plan
that have not been issued or that are returned to the
Plan
as described below and (ii) an additional 2,700,000 shares of
Stock
.
Stock
covered by an
Award
shall be counted as used only if and when actually issued and delivered to a
Participant
. Accordingly, if there is (A) a lapse, expiration, termination or cancellation of any such
Stock Option
or other
Award
prior to the issuance of
Stock
thereunder or (B) a forfeiture of any such shares of
Restricted Stock
or
Stock
prior to vesting, then the
Stock
subject to these
Stock Options
or other
Awards
shall be added to the
Stock
available for
Awards
under the
Plan
. In addition, any such
Stock
covered by an
SAR
(including an
SAR
settled in
Stock
which the
Committee
, in its discretion, may substitute for an outstanding
Stock
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Option
) and any
Stock
covered by a
Stock Option
shall be counted as used only to the extent
Stock
is actually issued upon exercise of the right. Notwithstanding any
Plan
provision to the contrary, shares of
Stock
withheld or tendered for payment of the exercise price of an
Award
(including through a net exercise arrangement described in section 7), shares of
Stock
withheld or tendered to satisfy withholding taxes, shares of
Stock
not issued on the stock settlement of
SARs
and shares of
Stock
purchased on the open market with cash proceeds from the exercise of
Stock Options
shall not be added back to the number of shares available for the future grant of
Awards
. All such
Stock
issued under the
Plan
may be either authorized and unissued
Stock
or issued
Stock
reacquired by the
Company
.
Additionally, in the event that a corporation acquired by (or combined with) the
Company
or any
Subsidiary
has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for
Awards
under the
Plan
and shall not reduce the shares of
Stock
authorized for grant under the
Plan
; provided that
Awards
using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the
Company
or any
Subsidiary
prior to such acquisition or combination.
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(b)
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All of the available
Stock
may, but need not, be issued pursuant to the exercise of
Incentive Stock Options
; provided, however, notwithstanding a
Stock Option
’s designation, to the extent that
Incentive Stock Options
are exercisable for the first time by the
Participant
during any calendar year with respect to
Stock
whose aggregate
Fair Market Value
exceeds $100,000, such
Stock Options
shall be treated as
Nonqualified Stock Options
; provided further, that the value of any shares of
Stock
withheld or tendered to pay the exercise price of
Incentive Stock Options
or withheld or tendered to pay taxes on any
Incentive Stock Options
shall be taken into account for purposes of determining the aggregate
Fair Market Value
of
Stock
associated with a
Participant's Incentive Stock Options
.
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(c)
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For
Awards
intended to be performance-based compensation under Section 162(m), no
Participant
may be granted
Awards
with respect to any twelve month
Performance Period
relating to more than 2 million shares of
Stock
. In any fiscal year of the
Company
, no
Participant
who is a non-employee director of the
Company
may be granted
Awards
valued at more than $1,000,000 at the time of grant.
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(d)
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The
Stock
reserved for issuance and the other limitations set forth above shall be subject to adjustment in accordance with section 15 hereto.
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6.
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Types of
Awards
, Payments, and Limitations
.
Awards
under the
Plan
shall consist of
Stock Options
,
SARs
,
Restricted
Stock
,
RSUs
,
DSUs
,
Performance Shares
,
Performance Cash
Awards
and other
Stock
or cash
Awards
, all as described below. Payment of
Awards
may be in the form of cash,
Stock
, other
Awards
or combinations thereof as the
Committee
shall determine, and with the expectation that any
Award
of
Stock
shall be styled to preserve such restrictions as it may impose. The
Committee
, either at the time of grant or by subsequent amendment, and subject to the provisions of sections 20 and 21 hereto, may require or permit
Participant
s to elect to defer the issuance of
Stock
or the settlement of
Awards
in cash under such rules and procedures as the
Committee
may establish under the
Plan
.
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The
Committee
may provide that any
Awards
under the
Plan
earn dividends or dividend equivalents and interest on such dividends or dividend equivalents; provided, however, that the
Committee
shall require that any dividends or dividend equivalents paid on
Awards
subject to
Performance Criteria
be held in escrow or accumulated until the applicable restrictions have lapsed, except as prohibited by
Code
Section 409A. Any crediting of dividends or dividend equivalents may be subject to such restrictions and conditions as the
Committee
may establish, including reinvestment in additional
Stock
or
Stock
equivalents.
Awards
shall be evidenced by an agreement (in written or electronic form) that sets forth the terms, conditions and limitations of such
Award
. Such terms may include, but are not limited to, the term of the
Award
, the provisions applicable in the event the
Participant’s
employment terminates and the
Company’s
authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind any
Award
including without limitation the ability to amend such
Awards
to comply with changes in applicable law. An
Award
may also be subject to other provisions (whether or not applicable to similar
Awards
granted to other
Participant
s) as the
Committee
determines appropriate, including provisions intended to comply with federal or state securities laws and stock exchange requirements, understandings or conditions as to the
Participant’s
employment, requirements or inducements for continued ownership of
Stock
after exercise or vesting of
Awards
, or forfeiture of
Awards
in the event of termination of employment shortly after exercise or vesting, or breach of noncompetition or confidentiality agreements following termination of employment.
Any cash or equity-based incentive compensation paid to a
Participant
under the
Plan
shall be subject to policies established and amended from time to time by the
Company
regarding the recovery of erroneously-awarded compensation.
The
Committee
, in its sole discretion, may require a
Participant
to have amounts or
Stock
that otherwise would be paid or delivered to the
Participant
as a result of the exercise or settlement of an
Award
under the
Plan
credited to a deferred compensation or stock unit account established for the
Participant
by the
Committee
on the
Company’s
books of
account. In addition, the
Committee
may permit
Participant
s to defer the receipt of payments of
Awards
pursuant to such rules, procedures or programs as may be established for purposes of this
Plan
.
The
Committee
need not require the execution of any such agreement by a
Participant
. Acceptance of the
Award
by the respective
Participant
shall constitute agreement by the
Participant
to the terms of the
Award
.
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7.
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Stock Options
.
Stock Options
may be granted to
Participant
s at any time as determined by the
Committee
. The
Committee
shall determine the number of shares subject to each
Stock Option
and whether the
Stock Option
is an
Incentive
Stock Option
. The exercise price for each
Stock Option
shall be determined by the
Committee
but shall not be less than 100% of the
Fair Market Value
of the
Stock
on the date the
Stock Option
is granted unless the
Stock Option
is a substitute or assumed
Stock Option
granted pursuant to section 16 hereto. Each
Stock Option
shall expire at such time as the
Committee
shall determine at the time of grant; provided, however, that a
Stock Option
will be automatically exercised upon the expiration date of the
Stock Option
if the
Fair Market Value
of a share of
Stock
on the expiration date exceeds the exercise price for each
Stock Option
.
Stock Options
shall be exercisable at such time and subject to such terms and conditions as the
Committee
shall determine; provided, however, that no
Stock Option
shall be exercisable later than the tenth anniversary of its grant, and provided, further that
Awards
of
Stock Options
granted on or after December 1, 2010 shall not become 100% exercisable in less than three years following the date they are granted with vesting no faster than on a pro rata basis over the vesting period, except that the foregoing limitations shall not apply to (i) substitute
Awards
for grants made under a plan of an acquired business entity; and (ii) special exercise provisions in limited cases of an intervening event related to death, disability or a
Change in Control
. The exercise price, upon exercise of any
Stock Option
, shall be payable to the
Company
in full by: (a) cash payment or its equivalent (a “cash exercise”); (b) tendering previously acquired
Stock
having a
Fair Market Value
at the time of exercise equal to the exercise price (a “stock swap”) or certification of ownership of such previously-acquired
Stock
("attestation"); (c) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a broker to promptly deliver to the
Company
the amount of sale proceeds from the
Stock Option
shares or loan proceeds to pay the exercise price and to deliver to the
Participant
the net amount of shares (a “cashless exercise for
Stock
”) or cash (a "cashless exercise for cash"); (d) having the
Company
retain from the
Stock
otherwise issuable upon exercise of the
Stock Option
a number of shares of
Stock
having a value (determined pursuant to rules established by the
Committee
in its discretion
)
equal to the exercise price of the Stock Option (a “net exercise”); or (e) such other methods of payment as the
Committee
, in its discretion, deems appropriate.
In no event shall the
Committee,
without stockholder approval, cancel any outstanding
Stock Option
with an exercise price greater than the then current
Fair Market Value
of the
Stock
for the purpose of reissuing any other
Award
to the
Participant
at a lower exercise
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price, cancel any outstanding
Stock Option
with an exercise price greater than the then current
Fair Market Value
of the
Stock
for the purpose of cashing out a
Stock Option
unless such cash-out occurs in conjunction with a
Change in Control
, nor reduce the exercise price of an outstanding
Stock Option
. Reload options are not permitted.
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8.
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Stock Appreciation Rights
.
SARs
may be granted to
Participant
s at any time as determined by the
Committee
. Notwithstanding any other provision of the
Plan
, the
Committee
may, in its discretion, substitute
SARs
which can be settled only in
Stock
for outstanding
Stock Options
. The grant price of a substitute
SAR
shall be equal to the exercise price of the related
Stock Option
and the substitute
SAR
shall have substantive terms (
e.g.
, duration) that are equivalent to the related
Stock Option
. The grant price of any other
SAR
shall not be less than 100% of the
Fair Market Value
of the
Stock
on the date of its grant unless the
SAR
s are substitute or assumed
SARs
granted pursuant to section 16 hereto. An
SAR
may be exercised upon such terms and conditions and for the term the
Committee
in its sole discretion determines; provided, however, that the term shall not exceed the
Stock Option
term in the case of a substitute
SAR
or ten years in the case of any other
SAR
, and the terms and conditions applicable to a substitute
SAR
shall be substantially the same as those applicable to the
Stock Option
which it replaces, and provided, further that
Awards
of
SAR
s granted on or after December 1, 2010 shall not become 100% exercisable in less than three years following the date they are granted with vesting no faster than on a pro rata basis over the vesting period, except that the foregoing limitation shall not apply to (i) substitute
Awards
for grants made under a plan of an acquired business entity; and (ii) special exercise provisions in limited cases of an intervening event related to death, disability or a
Change in Control
. Upon the expiration date of an
SAR
, the
SAR
will be automatically exercised if the
Fair Market Value
of a share of
Stock
on the expiration date exceeds the grant price of the
SAR
. Upon exercise of an
SAR
, the
Participant
shall be entitled to receive payment from the
Company
in an amount determined by multiplying (a) the difference between the
Fair Market Value
of a share of
Stock
on the date of exercise and the grant price of the
SAR
by (b) the number of shares with respect to which the
SAR
is exercised. The payment may be made in cash or
Stock
, at the discretion of the
Committee
, except in the case of a substitute
SAR
payment which may be made only in
Stock
. In no event shall the
Committee,
without stockholder approval, cancel any outstanding
SAR
with an exercise price greater than the then current
Fair Market Value
of the
Stock
for the purpose of reissuing any other
Award
to the
Participant
at a lower grant price, cancel any outstanding
SAR
with an exercise price greater than the then current
Fair Market Value
of the
Stock
for the purpose of cashing out a
SAR
unless such cash-out occurs in conjunction with a
Change in Control
, nor reduce the grant price of an outstanding
SAR
.
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9.
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Restricted
Stock
and
RSUs
.
Restricted
Stock
and
RSUs
may be awarded or sold to
Participant
s under such terms and conditions as shall be established by the
Committee
.
Restricted
Stock
and
RSUs
shall be subject to such restrictions as the
Committee
determines, including, without limitation, any of the following:
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(a)
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a prohibition against sale, assignment, transfer, pledge, hypothecation or other encumbrance for a specified period;
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(b)
|
a requirement that the holder forfeit (or in the case of
Stock
or
RSUs
sold to the
Participant
, resell to the
Company
at cost) such
Stock
or
RSUs
in the event of termination of employment during the period of restriction; and
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(c)
|
the attainment of
Performance Criteria
.
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Restricted
Stock
and
RSU
Awards
that are subject to the attainment of
Performance Criteria
granted on or after December 1, 2010 shall be subject to a performance period of at least one year, and restrictions on time-based
Restricted
Stock
and
RSU
Awards
granted on or after December 1, 2010 shall not expire relative to 100% of any
Award
in less than three years following the date the
Award
is granted (although restrictions may lapse no faster than on a pro rata basis over the vesting period), except that the foregoing limitations shall not apply to (i) substitute
Awards
for grants made under a plan of an acquired business entity; and (ii) special vesting provisions in limited cases of an intervening event related to death, disability, retirement or a
Change in Control
. All restrictions shall otherwise expire at such times as the
Committee
shall specify.
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10.
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DSUs
.
DSUs
provide a
Participant
a vested right to receive
Stock
in lieu of other compensation at termination of employment or service or at a specific future designated date.
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11.
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Performance Shares
. The
Committee
shall designate the
Participant
s to whom
Performance Shares
are to be awarded and determine the number of shares, the length of the
Performance Period
and the other terms and conditions of each such
Award
. Each
Award
of
Performance Shares
shall entitle the
Participant
to a payment in the form of
Stock
(or cash) upon the attainment of
Performance Criteria
and other terms and conditions specified by the
Committee
.
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Notwithstanding satisfaction of any
Performance Criteria
, the number of shares issued under a
Performance Share
Award
may be adjusted by the
Committee
on the basis of such further consideration as the
Committee
in its sole discretion shall determine. The
Committee
may, in its discretion, make a cash payment equal to the
Fair Market Value
of
Stock
otherwise required to be issued to a
Participant
pursuant to a
Performance Share Award
.
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12.
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Performance Cash Awards
. The
Committee
shall designate the
Participant
s to whom
Performance Cash Awards
are to be awarded and determine the amount of the
Award
and the terms and conditions of each such
Award
. Each
Performance Cash
Award
shall entitle the
Participant
to a payment in cash upon the attainment of
Performance Criteria
and other terms and conditions specified by the
Committee
. For
Awards
intended to be performance-based compensation under Section 162(m), no
Participant
may be granted
Performance Cash Awards
with respect to any twelve month
Performance Period
in excess of $5,000,000; if a cash
Award
is earned in excess of $5,000,000, the amount of
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the
Award
in excess of this amount shall be deferred to the date the
Participant
ceases to be covered by
Code
Section 162(m) (or six months after that date if the
Participant
ceases to be covered by
Code
Section 162(m) because of
Participant’s
separation from service (as defined in
Code
Section 409A).
Notwithstanding the satisfaction of any
Performance Criteria
, the amount to be paid under a
Performance Cash
Award
may be adjusted by the
Committee
on the basis of such further consideration as the
Committee
in its sole discretion shall determine. The
Committee
may, in its discretion, substitute actual
Stock
for the cash payment otherwise required to be made to a
Participant
pursuant to a
Performance Cash
Award
.
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13.
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Other
Stock
or Cash
Awards
. In addition to the incentives described in sections 6 through 12 above, the
Committee
may grant other incentives payable in cash or in
Stock
under the
Plan
as it deems appropriate and subject to such other terms and conditions as it deems appropriate; provided an outright grant of
Stock
will not be made unless it is offered in exchange for cash compensation that has otherwise already been earned by the recipient including without limitation awards earned under the Hanesbrands Inc. Performance-Based Annual Incentive Plan (or any successor annual incentive plan of the
Company
) or under the Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan.
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14.
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Change in Control
. The vesting and payment terms applicable to an
Award
following a
Change in Control
shall be determined by the
Committee
at the time the
Award
is granted.
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15.
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Adjustment Provisions
.
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(a)
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In the event of any change affecting the number, class, market price or terms of the
Stock
by reason of share dividend, share split, recapitalization, reorganization, merger, consolidation, spin-off, disaffiliation of a
Subsidiary
, combination of
Stock
, exchange of
Stock
,
Stock
rights offering or other similar event, or any distribution to the holders of
Stock
other than a regular cash dividend, the
Committee
shall equitably substitute or adjust the number or class of
Stock
which may be issued under the
Plan
in the aggregate or to any one
Participant
in any calendar year and the number, class, price or terms of shares of
Stock
subject to outstanding
Awards
granted under the
Plan
.
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(b)
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In the event of any merger, consolidation or reorganization of the
Company
with or into another
Company
which results in the outstanding
Stock
of the
Company
being converted into or exchanged for different securities, cash or other property, or any combination thereof, there shall be substituted, on an equitable basis, for each share of
Stock
then subject to an
Award
granted under the
Plan
, the number and kind of shares of stock, other securities, cash or other property to which holders of
Stock
will be entitled pursuant to the transaction.
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16.
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Substitution and Assumption of
Awards
. The
Board
or the
Committee
may authorize the issuance of
Awards
under this
Plan
in connection with the assumption of, or substitution for, outstanding
Awards
previously granted to individuals who become employees of the
Company
or any
Subsidiary
as a result of any merger, consolidation, acquisition of property or stock or reorganization, upon such terms and conditions as the
Committee
may deem appropriate. Any substitute
Awards
granted under the
Plan
shall not count against the
Stock
limitations set forth in section 5 hereto, to the extent permitted by Section 303A.08 of the Corporate Governance Standards of the New York
Stock
Exchange.
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17.
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Nontransferability
. Each
Award
granted under the
Plan
shall not be transferable other than by will or the laws of descent and distribution, and each
Stock Option
and
SAR
shall be exercisable during the
Participant’s
lifetime only by the
Participant
or, in the event of disability, by the
Participant’s
personal representative. In the event of the death of a
Participant
, exercise of any
Award
or payment with respect to any
Award
shall be made only by or to the beneficiary, executor or administrator of the estate of the deceased
Participant
or the
Person
or
Persons
to whom the deceased
Participant’s
rights under the
Award
shall pass by will or the laws of descent and distribution. Subject to the approval of the
Committee
in its sole discretion,
Stock Options
may be transferable to members of the immediate family of the
Participant
and to one or more trusts for the benefit of such family members, partnerships in which such family members are the only partners, or corporations or other entities in which such family members are the only stockholders. Members of the immediate family means the
Participant’s
spouse, same-sex domestic partner (as
that term is defined in the Hanesbrands Inc. Employee Health Benefit Plan),
children, stepchildren, grandchildren, parents, grandparents, siblings (including half brothers and sisters) and individuals who are family members by adoption.
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18.
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Taxes
. The
Company
shall be entitled to withhold the amount of any tax attributable to any amounts payable or
Stock
deliverable under the
Plan
, after giving notice to the
Person
entitled to receive such payment or delivery, and the
Company
may defer making payment or delivery as to any
Award
, if any such tax is payable, until indemnified to its satisfaction. A
Participant
may pay all or a portion of any withholding limited to the minimum statutory amount arising in connection with the exercise of a
Stock Option
or
SAR
or the receipt or vesting of
Stock
hereunder by electing to have the
Company
withhold
Stock
having a
Fair Market Value
equal to the amount required to be withheld; and the
Company
will withhold for this purpose any fractional shares to be delivered.
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19.
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Duration of the
Plan
. No
Award
shall be made under the
Plan
more than ten years after the adoption of the amended and restated
Plan
by the
Board
; provided, however, that the terms and conditions applicable to any
Stock Option
granted on or before such date may thereafter be amended or modified by mutual agreement between the
Company
and the
Participant
, or such other
Person
as may then have an interest therein.
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20.
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Amendment and Termination
. The
Board
or the
Committee
may amend the
Plan
from time to time or terminate the
Plan
at any time. However, unless expressly provided in an
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Award
or the
Plan
, no such action shall reduce the amount of any existing
Award
or change the terms and conditions thereof without the
Participant’s
consent; provided, however, that the
Committee
may, in its discretion, substitute
SAR
s which can be settled only in
Stock
for outstanding
Stock Options
and may require an
Award
be deferred pursuant to section 6 hereto, without a
Participant’s
consent; and further provided that the
Committee
may amend or terminate an
Award
to comply with changes in law, including but not limited to tax law, without a
Participant’s
consent. Notwithstanding any provision of the
Plan
to the contrary, the provisions in each of section 7 and section 8 of the
Plan
(regarding the cancellation, reissuing at a relatively reduced price or cash-out of
Stock Options
and
SAR
s, respectively) shall not be amended without stockholder approval. Notwithstanding any provision of the
Plan
to the contrary, to the extent that
Awards
under the
Plan
are subject to the provisions of
Code
Section 409A, then the
Plan
as applied to those amounts shall be interpreted and administered so that it is consistent with such
Code
section. The
Company
shall obtain stockholder approval of any
Plan
amendment to the extent necessary to comply with applicable laws, regulations or stock exchange rules.
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(a)
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In the event any
Award
under this
Plan
is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the
Committee
may, in its sole discretion: (i) modify the provisions of the
Plan
as they pertain to such individuals to comply with applicable law, regulation or accounting rules consistent with the purposes of the
Plan
; and (ii) cause the
Company
to enter into an internal accounting transaction with any local branch or affiliate consistent with internal accounting/audit protocols and pursuant to which such
branch or affiliate will reimburse the
Company
for the cost of such equity incentives.
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(b)
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Neither the
Plan
nor any
Award
shall confer upon a
Participant
any right with respect to continuing the
Participant’s
employment with the
Company
; nor interfere in any way with the
Participant’s
right or the
Company’s
right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws and any enforceable agreement between the employee and the
Company
.
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(c)
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No fractional shares of
Stock
shall be issued or delivered pursuant to the
Plan
or any
Award
, and the
Committee
, in its discretion, shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional shares of
Stock
, or whether such fractional shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
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(d)
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In the event any provision of the
Plan
shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the
Plan
, and the
Plan
shall be construed and enforced as if such illegal or invalid provisions had never been contained in the
Plan
.
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(e)
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Payments and other benefits received by a
Participant
under an
Award
made pursuant to the
Plan
generally shall not be deemed a part of a
Participant’s
compensation for purposes of determining the
Participant’s
benefits under any other employee benefit plans or arrangements provided by the
Company
or a
Subsidiary
, unless the
Committee
expressly provides otherwise in writing or unless expressly provided under such plan. The
Committee
shall administer, construe, interpret and exercise discretion under the
Plan
and each
Award
in a manner that is consistent and in compliance with a reasonable, good faith interpretation of all applicable laws and that avoids (to the extent practicable) the classification of any
Award
as “deferred compensation” for purposes of
Code
Section 409A, as determined by the
Committee
.
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22.
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Governing Law
. The
Plan
and any actions taken in connection herewith shall be governed by and construed in accordance with the laws of the state of North Carolina without regard to any state’s conflict of laws principles. Any legal action related to this
Plan
shall be brought only in a federal or state court located in North Carolina.
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23.
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Stockholder Approval
.
This amendment and restatement of the
Plan
is effective as of January 29, 2013, subject to approval by the stockholders of the
Company
at the April 2013 stockholder meeting.
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HanesBrands
1000 East Hanes Mill Road
Winston-Salem, NC 27105
(336) 519-8080
news release
FOR IMMEDIATE RELEASE
News Media, contact: Matt Hall, (336) 519-3386
Analysts and Investors, contact: Charlie Stack, (336) 519-4710
HANESBRANDS INITIATES REGULAR QUARTERLY DIVIDEND
Company Also Announces Preliminary Financial Results for the First Quarter 2013 and Reaffirms 2013 Guidance in Advance of Investor Meeting Webcast Today
WINSTON-SALEM, N.C. (April 4, 2013) – HanesBrands (NYSE: HBI), a leading marketer of everyday branded basic apparel, today announced that its Board of Directors has initiated a quarterly dividend as part of the company’s cash deployment strategy to drive additional shareholder value.
The Board authorized the regular quarterly dividend of $0.20 per share to be paid June 3, 2013, for stockholders of record at the close of business on May 20, 2013. The quarterly dividend is the first for Hanes since its spinoff as an independent public company in 2006.
“Initiating a quarterly dividend is a substantial company milestone made possible by strong strategic execution, successful debt reduction and cash-flow generation, and margin-improvement prospects,” Hanes Chairman and Chief Executive Officer Richard A. Noll said. “With our successful track record and long-term outlook, the Board decided it was time to institute a regular quarterly dividend.”
In conjunction with the dividend authorization disclosure and in advance of today’s previously scheduled investor meeting, the company decided to announce preliminary financial results for the first quarter ended March 30, 2013, and reaffirm full-year guidance for net sales, operating profit, earnings per diluted share and free cash flow.
The company expects to report first-quarter net sales of approximately $945 million; operating profit of $82 million to $85 million; and EPS of $0.48 to $0.51. Hanes will release final first-quarter financial results at the close of trading on the New York Stock Exchange Tuesday, April 23, 2013.
Net sales for the first quarter were hampered by a sluggish retail environment as a result of delayed income tax returns and inclement weather compared with an early spring a year ago. However, the quarter’s operating profit margin will expand significantly, benefitting from the company’s Innovate-to-Elevate margin-enhancement initiatives built on strong brands, a low-cost supply chain, and innovation platforms.
HanesBrands Initiates Regular Quarterly Dividend – Page 2
For the full year, Hanes reaffirmed all of its 2013 guidance issued Feb. 5, 2013, including expectations for net sales of approximately $4.6 billion; operating profit of $500 million to $550 million; EPS of $3.25 to $3.40; and free cash flow of approximately $350 million to $450 million.
Investor Meeting Webcast Information
Later today, Hanes will provide a live webcast of its previously planned investor meeting to review business strategies and goals for registered participants in Las Vegas. The live Internet broadcast, which will include audio and slides, will begin at 3 p.m. PDT (6 p.m. EDT) and is expected to last up to approximately one hour. The live webcast and an archived replay may be accessed from the home page or the investors section of the HanesBrands corporate website, www.HanesBrands.com.
Note on Non-GAAP Terms and Definitions
Free cash flow is not a generally accepted accounting principle (GAAP) measure. Free cash flow is defined as net cash from operating activities less net capital expenditures. Free cash flow may not be representative of the amount of residual cash flow that is available to the company for discretionary expenditures since it may not include deductions for mandatory debt-service requirements and other nondiscretionary expenditures. The company believes, however, that free cash flow is a useful measure of the cash-generating ability of the business relative to capital expenditures and financial performance.
For 2013 guidance, net cash provided by operating activities is expected to be approximately $400 million to $500 million and net capital expenditures are expected to be approximately $50 million, resulting in expectations for non-GAAP free cash flow of approximately $350 million to $450 million.
Cautionary Statement Concerning Forward-Looking Statements
Statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including those regarding preliminary quarterly results as well as guidance as to future performance. These and other forward-looking statements are made only as of the date of this press release and are based on our current intent, beliefs, plans and expectations. They involve risks and uncertainties that could cause actual future results, performance or developments to differ materially from those described in or implied by such forward-looking statements. These risks and uncertainties include the following: current economic conditions, including consumer spending levels and the price elasticity of our products; the impact of significant fluctuations and volatility in various input costs, such as cotton and oil-related materials, utilities, freight and wages; the highly competitive and evolving nature of the industry in which we compete; financial difficulties experienced by, or loss of or reduction in sales to, any of our top customers or groups of customers; our ability to successfully manage social, political, economic, legal and other conditions affecting our domestic and foreign operations and supply-chain sources, such as political instability and acts of war or terrorism, natural disasters, disruption of markets,
HanesBrands Initiates Regular Quarterly Dividend – Page 3
operational disruptions, changes in import and export laws, currency restrictions and currency exchange rate fluctuations; the impact of the loss of one or more of our suppliers of finished goods or raw materials; our ability to effectively manage our inventory and reduce inventory reserves; our ability to optimize our global supply chain; our ability to continue to effectively distribute our products through our distribution network; the risk of significant fluctuations in foreign currency exchange rates; the impact of customers requiring products on an exclusive basis or other forms of economic support; our ability to accurately forecast demand for our products; increasing pressure on margins; our ability to keep pace with changing consumer preferences; the impact of any inadequacy, interruption or failure with respect to our information technology or any data security breach; our ability to protect our reputation and brand images; our ability to protect our trademarks, copyrights and patents; risks associated with our indebtedness, such as our debt service requirements, the financial ratios our debt instruments require us to maintain and restrictions on our operating and financial flexibility; market returns on the plan assets of our pension plans; the impact of a significant decline in the fair value of the intangible assets and goodwill on our balance sheet; unanticipated changes in our tax rates or exposure to additional income tax liabilities or a change in our ability to realize deferred tax benefits; our ability to comply with environmental and other laws and regulations; legal, regulatory, political and economic risks associated with our operations in international markets; costs and adverse publicity from violations of labor or environmental laws by us or our suppliers; our ability to attract and
retain key personnel; our ability to integrate and grow acquisitions successfully; anti-takeover provisions our charter and bylaws, as well as Maryland law and our stockholder rights agreement; and other risks identified from time to time in our most recent Securities and Exchange Commission reports, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, registration statements, press releases and other communications, as well as in the investors section of our corporate website at http://tiny.cc/HanesBrandsIR. Except as required by law, the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
HanesBrands
HanesBrands is a socially responsible leading marketer of everyday basic apparel under some of the world’s strongest apparel brands, including
Hanes
,
Champion
,
Playtex
,
Bali
,
JMS/Just My Size
,
barely there
,
Wonderbra
and
Gear for Sports
. The company sells T-shirts, bras, panties, men’s underwear, children’s underwear, socks, hosiery, casualwear and activewear produced in the company’s low-cost global supply chain. Ranked No. 512 on the Fortune 1000 list, Hanes has approximately 51,500 employees in more than 25 countries and takes pride in its strong reputation for ethical business practices. Hanes is a U.S. Environmental Protection Agency Energy Star 2013 and 2012 Sustained Excellence Award winner and 2010 and 2011 Partner of the Year. The company ranks No. 141 on Newsweek magazine’s list of Top 500 greenest U.S. companies. More information about the company and its corporate social responsibility initiatives, including environmental, social compliance and community improvement achievements, may be found on the Hanes corporate website at www.hanesbrands.com.
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