(a) | Balance Calculation Date means the date a Non-Employee Director’s Deferral Account is valued for purposes of making a distribution from such Non-Employee Director’s Deferral Account. For a distribution payable on a Distribution Date, the Balance Calculation Date is the last business day of the month preceding the Distribution Date; except that, for distributions payable due to a Non-Employee Director’s 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 Director’s 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 Director’s irrevocable election to extend a Distribution Date. |
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(u) | Separation from Service means the date of a Non-Employee Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s Deferral Account and appropriate subaccounts as of the effective date of the Non-Employee Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s 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 Director’s Deferral is payable in installment payments, then the Non-Employee Director’s 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 Director’s spouse; | ||
(b) | the Non-Employee Director’s children (including adopted children), per stirpes; or | ||
(c) | the Non-Employee Director’s estate. |
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