Exhibit 10.5

HANESBRANDS INC.

RETIREMENT SAVINGS PLAN

(Effective July 24, 2006)

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

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    4    2.06    Alternate Payee    4    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
   5    2.12    Before-Tax Contribution Account    5    2.13    Beneficiary    5
   2.14    Catch-Up Contribution    5    2.15    Code    5    2.16    Committee
   5    2.17    Company    6    2.18    Compensation    6    2.19   
Contribution Percentage    7    2.20    Controlled Group Member    7    2.21   
Covered Group    7    2.22    Direct Rollover    8    2.23    Distributee    8
   2.24    Effective Date    8    2.25    Elective Deferral    8    2.26   
Eligible Employee    8    2.27    Eligible Retirement Plan    8    2.28   
Eligible Rollover Distribution    9    2.29    Employee    10    2.30   
Employer    10    2.31    Employer Contributions    10    2.32    ERISA    11   
2.33    Excess Contribution    11

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

              

PAGE

   2.34    Excess Deferral    11    2.35    Excess Matching Contribution    11
   2.36    Fair Market Value    11    2.37    Forfeiture    12    2.38   
Hanesbrands Stock    12    2.39    Highly Compensated Employee    12    2.40   
Hour of Service    13    2.41    Investment Committee    13    2.42    Leased
Employee    13    2.43    Leave of Absence    14    2.44    Limitation Year   
14    2.45    Matching Contributions    14    2.46    Matching Contribution
Account    14    2.47    Maternity or Paternity Absence    14    2.48    Normal
Retirement Age    15    2.49    One-Year Break in Service    15    2.50   
Participant    15    2.51    Period of Service    15    2.52    Plan    16   
2.53    Plan Year    16    2.54    Predecessor Company    17    2.55   
Predecessor Company Account    17    2.56    Predecessor Plan    17    2.57   
Required Commencement Date    17    2.58    Rollover Contribution    17    2.59
   Rollover Contribution Account    18    2.60    Sara Lee Plan    18    2.61   
Sara Lee Stock    18    2.62    Separation Date    18    2.63    Service    18
   2.64    Spin-Off, Spin-Off Date    18    2.65    Transferred Participants   
18    2.66    Totally Disabled or Total Disability    19    2.67    Trust
Agreement    20    2.68    Trust Fund    20    2.69    Trustees    20    2.70   
Year of Service    20 SECTION 3    22

Participation

      22    3.01    Eligibility to Participate    22    3.02    Covered Group   
23    3.03    Leave of Absence    23

 

-ii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

               

PAGE

   3.04    Leased Employees    23 SECTION 4       25

Before-Tax Contributions

   25    4.01    Before-Tax Contributions    25    4.02    Catch-Up
Contributions    26    4.03    Change in Election    26    4.04    Direct
Transfers and Rollovers    27 SECTION 5       29

Employer Contributions

   29    5.01    Before-Tax Contributions    29    5.02    Annual Company
Contribution    29    5.03    Matching Contributions    30    5.04    Transition
Contribution    31    5.05    Allocation of Annual Company Contribution    31   
5.06    Payment of Matching Contributions    32    5.07    Allocation of
Matching Contributions    32    5.08    Payment of Employer Contributions    32
   5.09    Limitations on Employer Contributions    32    5.10    Verification
of Employer Contributions    33 SECTION 6       34

Contribution Limits

   34    6.01    Actual Deferral Percentage Limitations    34    6.02   
Limitation on Matching Contributions    35    6.03    Dollar Limitation    35   
6.04    Allocation of Earnings to Distributions of Excess Deferrals, Excess
Contributions and Excess Matching Contributions    37    6.05    Contribution
Limitations    37 SECTION 7       39

Period of Participation

   39    7.01    Separation Date    39    7.02    Restricted Participation    39
SECTION 8       41

Accounting

   41    8.01    Separate Accounts    41    8.02    Adjustment of Participants’
Accounts    42    8.03    Crediting of 401(k) Contributions    43    8.04   
Charging Distributions    43

 

-iii-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

               

PAGE

   8.05    Statement of Account    44 SECTION 9       45

The Trust Fund and Investment of Trust Assets

   45    9.01    The Trust Fund    45    9.02    The Investment Funds    45   
9.03    Investment of Contributions    47    9.04    Change in Investment of
Contributions    48    9.05    Elections to Transfer Balances Between Accounts;
Diversification    48    9.06    Voting of Stock; Tender Offers    49    9.07   
Confidentiality of Participant Instructions    50 SECTION 10       51

Payment of Account Balances

   51    10.01    Payments to Participants    51    10.02    Distributions in
Shares    55    10.03    Beneficiary    56    10.04    Missing Participants and
Beneficiaries    58    10.05    Direct Rollover of Eligible Rollover
Distributions    59    10.06    Forfeitures    59    10.07    Recovery of
Benefits    60    10.08    Dividend Pass-Through Election    60    10.09   
Minimum Distributions    60 SECTION 11       67    11.01    Loans to
Participants    67    11.02    After-Tax Withdrawals    71    11.03    Hardship
Withdrawals    71    11.04    Age 59- 1/2 Withdrawals    74    11.05   
Additional Rules for Withdrawals    74 SECTION 12       76

Reemployment

   76    12.01    Reemployed Participants    76    12.02    Calculation of
Service Upon Reemployment    76 SECTION 13       79

Special Rules for Top-Heavy Plans

   79    13.01    Purpose and Effect    79    13.02    Top Heavy Plan    79   
13.03    Key Employee    80    13.04    Minimum Employer Contribution    80

 

-iv-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

               

PAGE

     13.05    Aggregation of Plans    80    13.06    No Duplication of Benefits
   81 SECTION 14       82

General Provisions

   82    14.01    Committee’s Records    82    14.02    Information Furnished by
Participants    82    14.03    Interests Not Transferable    82    14.04   
Domestic Relations Orders    82    14.05    Facility of Payment    84    14.06
   No Guaranty of Interests    84    14.07    Rights Not Conferred by the Plan
   84    14.08    Gender and Number    84    14.09    Committee’s Decisions
Final    84    14.10    Litigation by Participants    85    14.11    Evidence   
85    14.12    Uniform Rules    85    14.13    Law That Applies    85    14.14
   Waiver of Notice    85    14.15    Successor to Employer    85    14.16   
Application for Benefits    86    14.17    Claims Procedure    86    14.18   
Action by Employers    86 SECTION 15       87

No Interest in Employers

   87 SECTION 16       88 Amendment or Termination    88    16.01    Amendment
   88    16.02    Termination    88    16.03    Effect of Termination    89   
16.04    Notice of Amendment or Termination    89    16.05    Plan Merger,
Consolidation, Etc.    89 SECTION 17       90

Relating to the Plan Administrator and Committees

   90    17.01    The Employee Benefits Administrative Committee    90    17.02
   The ERISA Appeal Committee    92    17.03    Secretary of the Committee    93
   17.04    Manner of Action    93    17.05    Interested Party    94    17.06
   Reliance on Data    94

 

-v-

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

               PAGE    17.07    Committee Decisions    94 SECTION 18       95

Adoption of Plan by Controlled Group Members

   95 SECTION 19       96

Supplements to the Plan

   96 EXHIBIT A      

Accounts Transferred from the Sara Lee Plan

  

 

-vi-

--------------------------------------------------------------------------------

HANESBRANDS INC.

RETIREMENT SAVINGS PLAN

(Effective as of July 24, 2006)

SECTION 1

1.01 Background; Purpose of Plan

The purpose of the Plan is to permit Eligible Employees of Hanesbrands Inc. (the
“Company”) and the other Employers to accumulate their retirement savings on a
tax-favored basis. A portion of the Plan (that portion of the Plan invested in
the Sara Lee Corporation Common Stock Fund prior to the Spin-Off date and that
portion of the Plan invested in the Hanesbrands Inc. Common Stock Fund
thereafter) is designed to invest primarily in qualifying employer securities
and is intended to satisfy the requirements of an employee stock ownership plan
(as defined in Section 4975(e)(7) of the Code) (the ESOP component); up to 100%
of Plan assets may be invested in qualifying employer securities. The remaining
portion of the Plan is a profit sharing plan intended to satisfy all
requirements of Section 401(a) of the Code and includes a cash or deferred
arrangement intended to satisfy the requirements of Section 401(k) of the Code
(the 401(k) component).

As of the Effective Date, the benefits of each Transferred Participant shall be
transferred from the Sara Lee Plan, and continued in the form of, the Plan. As
soon as administratively practicable on or after the Effective Date,
(i) liabilities equal to the aggregate Account balances, as adjusted through the
Effective Date, of each Transferred Participant shall be transferred from the
Sara Lee Plan to the Plan and credited to the appropriate Plan accounts of each
Transferred Participant and subject to the terms and conditions of the Plan, and
(ii) the assets of the trust funding the Sara Lee Plan attributable to Transfer
Participants’ benefits shall be transferred (in kind) to the Trustee of the
Trust. The transfer of the Transferred Participants’ benefits from the Sara Lee
Plan into the Plan and the transfer of assets to the Trust shall comply with
Sections 401(a)(12), 411(d)(6), and 414(l) of the Code and the regulations
thereunder

 

1

--------------------------------------------------------------------------------

1.02 Effective Date; Plan Year

Except as otherwise required to comply with applicable law or as specifically
provided herein, the Plan is effective July 24, 2006 (the “Effective Date”). The
first “Plan Year” is a short plan year beginning as of July 24, 2006 and ending
December 31, 2006. Thereafter, the “Plan Year” shall be the twelve month period
from each January 1 through December 31.

1.03 Plan Administration

As described in Subsection 17.01, the Committee shall be the administrator (as
that term is defined in Section 3(16)(A) of ERISA) of the Plan and shall be
responsible for the administration of the Plan; provided, however, that the
Committee may delegate all or any part of its powers, rights, and duties under
the Plan to such person or persons as it may deem advisable.

1.04 Plan Supplements

The provisions of the Plan may be modified by Supplements to the Plan. The terms
and provisions of each Supplement are a part of the Plan and supersede the other
provisions of the Plan to the extent necessary to eliminate inconsistencies
between such other Plan provisions and such Supplement.

1.05 Trustee; Trust

Amounts contributed under the Plan are held and invested, until distributed, by
the Trustee. The Trustee acts in accordance with the terms of the Trust, which
implements and forms a part of the Plan. The provisions of and benefits under
the Plan are subject to the terms and provisions of the Trust.

 

2

--------------------------------------------------------------------------------

SECTION 2

Definitions

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

2.01 Account

Except as may be stated elsewhere in the Plan, “Account” and “Accounts” mean all
accounts and subaccounts maintained for a Participant (or for a Beneficiary
after a Participant’s death or for an Alternate Payee).

2.02 Accounting Date

“Accounting Date” means each day the value of an Investment Fund is adjusted for
contributions, withdrawals, distributions, earnings, gains, losses or expenses,
any date designated by the Committee as an Accounting Date, and an Accounting
Date occurring under SECTION 8. It is anticipated that each Investment Fund will
be valued as of each day on which the New York Stock Exchange is open for
trading and the Trustee is open for business.

2.03 Actual Deferral Percentage

“Actual Deferral Percentage” for a group of Eligible Employees for a Plan Year
means the average of the deferral ratios (determined separately for each
Eligible Employee in such group) of: (a) the Eligible Employee’s Before-Tax
Contributions for the Plan Year; to (b) the Eligible Employee’s compensation
(determined in accordance with Code Section 414(s)) for such Plan Year.

2.04 Adjusted Net Worth

“Adjusted Net Worth” of an Investment Fund as of any Accounting Date means the
then net worth of that Investment Fund as determined by the Trustee in
accordance with the provisions of the Trust Agreement.

 

3

--------------------------------------------------------------------------------

2.05 After-Tax Account

“After-Tax Account” means an Account maintained pursuant to Subparagraph
8.01(d).

2.06 Alternate Payee

“Alternate Payee” means a spouse, former spouse, child or other dependent of a
Participant entitled to receive payment of a portion of the Participant’s vested
Plan benefits under a qualified domestic relations order, as defined in
Section 414(p) of the Code.

2.07 Annual Addition

“Annual Addition” for any Limitation Year means the sum of the Employer
Contributions (including Before-Tax Contributions and Matching Contributions but
excluding Participant Catch-Up Contributions and contributions made pursuant to
Code Section 414(u) by reason of an Eligible Employee’s qualified military
service), Forfeitures, and any After-Tax Contributions credited to a
Participant’s Accounts for that Limitation Year.

2.08 Annual Company Contribution

“Annual Company Contribution” means a contribution made by an Employer on behalf
of each Annual Company Contribution Participant pursuant to Subsection 5.02.

2.09 Annual Company Contribution Account

“Annual Company Contribution Account” means an Account maintained pursuant to
Subparagraph 8.01(c).

2.10 Appeal Committee

“Appeal Committee” means an ERISA Appeal Committee as described in Subsection
17.02 of the Plan.

 

4

--------------------------------------------------------------------------------

2.11 Before-Tax Contribution

“Before-Tax Contribution” means the compensation deferrals under Code
Section 401(k) a Participant elects to make pursuant to Subsection 4.01.
Notwithstanding the foregoing, for purposes of implementing the required
limitations of Code Sections 401(k), 402(g), and 415 contained in Subsections
6.01, 6.03 and 6.05, Before-Tax Contributions shall not include Catch-Up
Contributions or deferrals made pursuant to Code Section 414(u) by reason of an
Eligible Employee’s qualified military service.

2.12 Before-Tax Contribution Account

“Before-Tax Contribution Account” means the Account maintained by the Committee
pursuant to Subparagraph 8.01(a).

2.13 Beneficiary

“Beneficiary” means any person or persons (who may be designated contingently,
concurrently or successively) to whom a Participant’s Account balances are to be
paid if the Participant dies before he or she receives his or her entire vested
Account.

2.14 Catch-Up Contribution

“Catch-Up Contribution” means the deferrals of Compensation under Code
Section 414(v) an eligible Participant elects to make pursuant to Subsection
4.02.

2.15 Code

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

2.16 Committee

“Committee” means the Committee appointed by the Company to administer the Plan
as described in SECTION 17 of the Plan.

 

5

--------------------------------------------------------------------------------

2.17 Company

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

2.18 Compensation

“Compensation” for a Plan Year means the total wages (as defined in
Section 3401(a) of the Code) paid to an individual by an Employer for the period
in question for services rendered as an Employee of an Employer, which are
subject to income tax withholding at the source, determined without regard to
any exceptions to the withholding rules that limit the remuneration included in
such wages and that are based on the nature or location of the employment or the
services performed, determined in accordance with the following:

 

  (a) Including elective contributions made on behalf of the Employee pursuant
to the Employee’s salary reduction agreement under Sections 401(k), 132(f)(4),
and 125 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;

 

6

--------------------------------------------------------------------------------

  (viii) Welfare benefits; and

 

  (ix) Compensation in excess of $220,000 for any Plan Year, as adjusted from
time to time pursuant to Section 401(a)(17) of the Code.

 

  (c) With respect to each Employee who is compensated by commission payments
and who does not receive separate reimbursement for expenses incurred by the
Employer, 20 percent of such commission shall be deemed to constitute
reimbursement for expenses and shall be excluded from such Employee’s
Compensation for purposes of allocating the Annual Company Contribution and the
Transition Contribution.

2.19 Contribution Percentage

“Contribution Percentage” of a group of Eligible Employees for a Plan Year means
the average of the ratios (determined separately for each Eligible Employee in
such group) of: (a) the Matching Contributions made on behalf of such Eligible
Employee for such Plan Year; to (b) the Eligible Employee’s compensation
(determined in accordance with Code Section 414(s)) for such Plan Year.

2.20 Controlled Group Member

“Controlled Group Member” means the Company and any affiliated or related
corporation that is a member of a controlled group of corporations (within the
meaning of Section 1563(a) of the Code) that includes the Company or any trade
or business (whether or not incorporated) which is under the common control of
the Company (within the meaning of Section 414(b), (c) or (m) of the Code).

2.21 Covered Group

“Covered Group” means a group or class of Employees to which the Plan has been
and continues to be extended by an Employer pursuant to Subsection 3.02. A
listing of the Covered Groups under the Plan is included in Exhibit A to the
Plan.

 

7

--------------------------------------------------------------------------------

2.22 Direct Rollover

“Direct Rollover” means a payment by the Plan to an Eligible Retirement Plan
specified by the Distributee.

2.23 Distributee

“Distributee” means a Participant (including a Participant described in
Subsection 7.02 of the Plan) or Beneficiary. In addition, the Participant’s
surviving spouse and the Participant’s spouse or former spouse who is an
Alternate Payee are Distributees with regard to the interest of the spouse or
former spouse.

2.24 Effective Date

“Effective Date” of the Plan means July 24, 2006 as defined in Subsection 1.02.

2.25 Elective Deferral

“Elective Deferral” means, with respect to any calendar year, each elective
deferral as defined in Code Section 402(g).

2.26 Eligible Employee

“Eligible Employee” means an Employee who is a member of a Covered Group and is
otherwise eligible to participate in the Plan pursuant to either Subsection 3.01
or Subsection 12.01.

2.27 Eligible Retirement Plan

“Eligible Retirement Plan” means the following:

 

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

 

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

 

8

--------------------------------------------------------------------------------

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

 

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

 

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

 

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

2.28 Eligible Rollover Distribution

“Eligible Rollover Distribution” means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include the following:

 

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

 

  (d) Any distribution excluded from the definition of “Eligible Rollover
Distribution” under the Code or applicable Treasury Regulations.

In the case of an Eligible Rollover Distribution, a portion of a distribution
shall not fail to be an Eligible Rollover Distribution merely because the
portion includes After-Tax Contributions that

 

9

--------------------------------------------------------------------------------

are not includible in gross income; provided, however, such portion may be
transferred only to an individual retirement account or annuity described in
Section 408(a) or (b) of the Code or a qualified defined contribution plan
described in Section 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred.

2.29 Employee

“Employee” means any person employed by one or more of the Employers who is on
the regular payroll of an Employer and whose wages from the Employer are
reported for Federal income tax purposes on Internal Revenue Service Form W-2
(or successor or equivalent form). Notwithstanding any provision of the Plan to
the contrary, an individual who performs services for a Controlled Group Member
but who is paid by an Employer under a common paymaster arrangement with such
Controlled Group Member shall not be considered an Employee for purposes of the
Plan. An Employer’s classification as to whether an individual constitutes an
Employee shall be determinative for purposes of an individual’s eligibility
under the Plan. An individual who is classified as an independent contractor (or
other non-employee classification) shall not be considered an Employee and shall
not be eligible for participation in the Plan, regardless of any subsequent
reclassification of such individual as an Employee or employee of an Employer by
an Employer, any government agency, court, or other third-party. Any such
reclassification shall not have a retroactive effect for purposes of the Plan.
Notwithstanding any other provision of the Plan to the contrary, nonresident
alien individuals receiving no U.S.-source income from any Employer are not
considered Employees under the Plan.

2.30 Employer

“Employer” means the Company and each Controlled Group Member that adopts the
Plan in accordance with SECTION 18.

2.31 Employer Contributions

“Employer Contributions” means the following contributions made by an Employer
on behalf of a Participant:

 

  (a) Annual Company Contributions;

 

10

--------------------------------------------------------------------------------

  (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.

2.32 ERISA

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

2.33 Excess Contribution

“Excess Contribution” means the amount by which Before-Tax Contributions
(determined without regard to the Participant’s Catch-Up Contributions) for a
Plan Year made by Highly Compensated Employees exceed the limitations of
Subsection 6.01, as determined in accordance with Treasury Regulation
Section 1.401(k)-2(b).

2.34 Excess Deferral

“Excess Deferral” means the amount by which a Participant’s Before-Tax
Contributions (determined without regard to the Participant’s Catch-Up
Contributions) exceed the limitations of Code Section 402(g)(4), as provided in
Subsection 6.03.

2.35 Excess Matching Contribution

“Excess Matching Contribution” means the amount by which Matching Contributions
for a Plan Year made by or on behalf of Highly Compensated Employees exceed the
limitations of Subsection 6.02, as determined in accordance with Treasury
Regulation Section 1.401(m)-2(b).

2.36 Fair Market Value

“Fair Market Value” means (a) with respect to Sara Lee Stock or Hanesbrands
Stock held in the Plan, the closing price per share on the New York Stock
Exchange as of any date or (b) in

 

11

--------------------------------------------------------------------------------

the case of any other stock for which there is no generally recognized market,
the value determined as of a particular date in accordance with Treasury
Regulation Section 54.4975-11(d)(5) and based upon an evaluation by an
independent appraiser meeting the requirements of the regulations prescribed
under Section 401(a)(28)(C) of the Code or, in the absence of such regulations,
requirements similar to the requirements of the regulations prescribed under
Section 170(a)(1) of the Code and having expertise in rendering such
evaluations.

2.37 Forfeiture

“Forfeiture” means the amount by which a Participant’s Annual Company
Contribution Account, Transition Contribution Account, Matching Contribution
Account and Predecessor Company Account (or other Employer Contribution Account
under any applicable Supplement to the Plan) is reduced under Subsections 6.01,
6.02, 6.03, 10.01 or any applicable Supplement.

2.38 Hanesbrands Stock

“Hanesbrands Stock” means shares of common stock of Hanesbrands Inc.; provided,
however, that, after the Spin-Off Date, such term shall include only such shares
as constitute both “employer securities” as defined in Section 409(l) of the
Code and “qualifying employer securities” as defined in Section 407(d)(5) of
ERISA.

2.39 Highly Compensated Employee

“Highly Compensated Employee” means a highly compensated employee as defined in
Code Section 414(q) and the regulations thereunder. Generally, a Highly
Compensated Employee means any Employee who: (a) during the immediately
preceding Plan Year received annual compensation from the Employers (determined
in accordance with Code Section 415(c)(3)) of more than $95,000 (or such greater
amount as may be determined by the Commissioner of Internal Revenue) and, at the
Company’s discretion for such preceding year, was in the top-paid twenty percent
(20%) of the Employees for that year; or (b) was a five percent (5%) owner of an
Employer during the current Plan Year or the immediately preceding Plan Year.

 

12

--------------------------------------------------------------------------------

A former Participant shall be treated as a Highly Compensated Employee if such
Participant was a Highly Compensated Employee when such Participant separated
from service from a Controlled Group Member or such Participant was a Highly
Compensated Employee at any time after attaining age fifty-five (55) years.

2.40 Hour of Service

“Hour of Service” means any hour for which an Employee is compensated by an
Employer, directly or indirectly, or is entitled to compensation from an
Employer for the performance of duties and for reasons other than the
performance of duties, and each previously uncredited hour for which back pay
has been awarded or agreed to by an Employer, irrespective of mitigation of
damages. Hours of Service shall be credited to the period for which duties are
performed (or for which payment is made if no duties were performed), except
that Hours of Service for which back pay is awarded or agreed to by an Employer
shall be credited to the period to which the back pay award or agreement
pertains. The rules for crediting Hours of Service set forth in
Section 2530.200b-2 of Department of Labor regulations are incorporated by
reference. References in this Subsection to an Employer shall include any
Controlled Group Member.

2.41 Investment Committee

“Investment Committee” means the committee appointed by the Company to manage
the assets of the Plan and Trust.

2.42 Leased Employee

“Leased Employee” means any person who is not an Employee of an Employer, but
who has provided services to an Employer under the primary direction or control
of the Employer, on a substantially full-time basis for a period of at least one
year, pursuant to an agreement between the Employer and a leasing organization.

 

13

--------------------------------------------------------------------------------

2.43 Leave of Absence

“Leave of Absence” for Plan purposes means an absence from work which is not
treated by the Participant’s Employer as a termination of employment or which is
required by law to be treated as a Leave of Absence. A Totally Disabled Employee
shall not be considered to be on a Leave of Absence for purposes of the Plan.

2.44 Limitation Year

“Limitation Year” means the Plan Year.

2.45 Matching Contributions

“Matching Contribution” means the amount of a Participant’s Before-Tax
Contributions for which a Matching Contribution is payable pursuant to
Subsection 5.03. Notwithstanding the foregoing, for purposes of implementing the
required limitations of Code Sections 401(m) and 415 contained in Subsections
6.02 and 6.05, Matching Contributions shall not include employer contributions
made pursuant to Code Section 414(u) by reason of an Eligible Employee’s
qualified military service.

2.46 Matching Contribution Account

“Matching Contribution Account” means an Account maintained pursuant to
Subparagraph 8.01(b).

2.47 Maternity or Paternity Absence

“Maternity or Paternity Absence” means an Employee’s absence from work because
of the pregnancy of the Employee or birth of a child of the Employee, the
placement of a child with the Employee, or for purposes of caring for the child
immediately following such birth or placement. The Committee may require the
Employee to furnish such information as the Committee considers necessary to
establish that the Employee’s absence was for one of the reasons specified
above.

 

14

--------------------------------------------------------------------------------

2.48 Normal Retirement Age

“Normal Retirement Age” means the date upon which a Participant attains age
sixty-five (65) years.

2.49 One-Year Break in Service

“One-Year Break in Service” means each twelve (12) consecutive month period
commencing on an Employee’s or Participant’s Separation Date and on each
anniversary of such date during which the Employee or Participant does not
perform an Hour of Service. In the case of a Maternity or Paternity Absence, the
twelve (12) consecutive month periods beginning on the first day of such absence
and the first anniversary thereof shall not constitute a One-Year Break in
Service.

2.50 Participant

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

2.51 Period of Service

“Period of Service” means a period beginning on the date an Employee enters
Service (or reenters Service) and ending on his or her Separation Date with
respect to such period, subject to the following special rules:

 

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

 

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

 

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

 

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

 

15

--------------------------------------------------------------------------------

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

 

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

 

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

2.52 Plan

“Plan” means the Hanesbrands Inc. Retirement Savings Plan, as amended from time
to time.

2.53 Plan Year

The first “Plan Year” is a short plan year beginning as of July 24, 2006 and
ending December 31,2006. Thereafter, the “Plan Year” shall be the twelve
(12) month period beginning each January 1 and ending on the next following
December 31 as defined in Subsection 1.02.

 

16

--------------------------------------------------------------------------------

2.54 Predecessor Company

“Predecessor Company” means any corporation or other entity (other than Sara Lee
Corporation), the stock, assets or business of which was acquired by an Employer
or another Controlled Group Member prior to the Effective Date, or is acquired
by an Employer or another Controlled Group Member on or after the Effective
Date, whether by merger, consolidation, purchase of assets or otherwise, and any
predecessor thereto designated by the Plan or by the Committee.

2.55 Predecessor Company Account

“Predecessor Company Account” means an Account maintained pursuant to
Subparagraph 8.01(f).

2.56 Predecessor Plan

“Predecessor Plan” means a plan formerly maintained by a Controlled Group Member
or a Predecessor Company (other than the Sara Lee Plan) that has been merged
into and continued in the form of this Plan.

2.57 Required Commencement Date

“Required Commencement Date” means the April 1 of the calendar year next
following the later of the calendar year in which the Participant attains age
seventy and one-half (70 1/2) or the calendar year in which his or her
Separation Date occurs; provided, however, that the Required Commencement Date
of a Participant who is a five percent (5%) owner (as defined in Code
Section 416) of an Employer or a Controlled Group Member with respect to the
Plan Year ending in the calendar year in which he or she attains age seventy and
one-half (70 1/2) shall be April 1 of the next following calendar year.

2.58 Rollover Contribution

“Rollover Contribution” means a Participant’s contribution pursuant to
Subsection 4.04.

 

17

--------------------------------------------------------------------------------

2.59 Rollover Contribution Account

“Rollover Contribution Account” means the Account maintained pursuant to
Subparagraph 8.01(e).

2.60 Sara Lee Plan

“Sara Lee Plan” means the Sara Lee Corporation 401(k) Plan.

2.61 Sara Lee Stock

“Sara Lee Stock” means shares of common stock of Sara Lee Corporation.

2.62 Separation Date

“Separation Date” means the earlier of (a) the date on which an Employee or
Participant is no longer employed by an Employer or a Controlled Group Member
because he or she quits, retires, is discharged or dies; or (b) the first
anniversary of the first day of any period during which an Employee or
Participant remains absent from service with all Controlled Group Members for
any reason other than quit, retirement, discharge or death.

2.63 Service

“Service” means the number of completed calendar years and months during a
Participant’s Periods of Service.

2.64 Spin-Off, Spin-Off Date

Spin-Off means Sara Lee Corporation’s distribution of all of its interest in
Hanesbrands Inc. The actual date of the Spin-Off shall be known as the “Spin-Off
Date.”

2.65 Transferred Participants

“Transferred Participants” means:

 

  (a) any participant in the Sara Lee Plan employed by Hanesbrands Inc. or a
Sara Lee Corporation division listed on Exhibit A on the Effective Date; and

 

18

--------------------------------------------------------------------------------

  (b) 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 Appendix A.

2.66 Totally Disabled or Total Disability

“Totally Disabled” or “Totally Disability” when used in reference to a
Participant means that condition of the Participant resulting from injury or
illness which:

 

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

 

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

 

  (c) Is determined by the Committee, in its sole discretion, to prevent such
Participant during the first one hundred and eighty (180) days of any period of
absence on account of such disability and during the twenty-four (24) month
period thereafter from performing each and all of the duties of such
Participant’s occupation with the Employer and following such twenty-four
(24) month period to prevent such Participant from performing each and every
occupation for wage or profit for which such Participant is reasonably qualified
by education, training or experience.

 

19

--------------------------------------------------------------------------------

2.67 Trust Agreement

“Trust Agreement” means the Hanesbrands Inc. Retirement Savings Plan Trust,
which implements and forms a part of the Plan.

2.68 Trust Fund

“Trust Fund” means all assets held or acquired by the Trustee in accordance with
the Plan and the Trust.

2.69 Trustees

“Trustees” mean the person or persons appointed to act as Trustees under the
Trust Agreement.

2.70 Year of Service

“Year of Service” means an Employee’s continuous employment by one or more of
the Employers or other Controlled Group Members for the twelve (12) month period
beginning on the Employee’s date of hire or on any anniversary of that date,
subject to the provisions of Subsection 12.01 and the following:

 

  (a) A period of concurrent Service with two (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 Company prior to the date of coverage hereunder shall be included in
determining Years of Service.

 

20

--------------------------------------------------------------------------------

  (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 Employee’s
actual employment by an Employer and his or her becoming a member of a Covered
Group of Employees.

 

21

--------------------------------------------------------------------------------

SECTION 3

Participation

3.01 Eligibility to Participate

 

  (a) Eligible Participants. Each Transferred Participant shall become a
Participant on the Effective Date, subject to the terms and conditions of the
Plan. Each other Eligible Employee shall become a Participant, subject to the
terms and conditions of the Plan, on the first date of the first payroll period
following the date he or she attains age twenty-one (21) and is 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” 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

 

22

--------------------------------------------------------------------------------

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

3.02 Covered Group

Designation of a Covered Group when made by the Company shall be effected by
action of the Committee or by a person or persons authorized by said Committee.
Designation of a Covered Group when made by any other Employer shall be effected
by action of that Employer’s Board of Directors or a person or persons so
authorized by that Board. Notwithstanding the foregoing, Employees who are or
who become members of a group or class of Employees included in a collective
bargaining unit covered by a collective bargaining agreement between an Employer
and the collective bargaining representative of such Employees and who, as a
consequence of good faith bargaining between the Employer and such
representative, are excluded from participation in the Plan shall not be
considered as belonging to a Covered Group.

3.03 Leave of Absence

A Leave of Absence will not interrupt continuity of participation in the Plan.
Leaves of Absence will be granted under an Employer’s rules applied uniformly to
all Participants similarly situated. Notwithstanding any provision of the Plan
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. In any case where a Participant is on a Leave of Absence or is a
Totally Disabled Participant and his or her employment with an Employer and its
Subsidiaries is terminated for any other reason, then his or her employment with
the Employers for purposes of the Plan will be considered terminated on the same
date and for the same reason.

3.04 Leased Employees

A Leased Employee shall not be eligible to participate in the Plan. The period
during which a Leased Employee performs services for an Employer shall be taken
into account for purposes of Subsection 10.01 of the Plan, unless (a) such
Leased Employee is a participant in a

 

23

--------------------------------------------------------------------------------

money purchase pension plan maintained by the leasing organization which
provides a non-integrated employer contribution rate of at least 10 percent
(10%) of compensation, immediate participation for all employees and full and
immediate vesting, and (b) Leased Employees do not constitute more than 20
percent (20%) of the Employers’ nonhighly compensated workforce.

 

24

--------------------------------------------------------------------------------

SECTION 4

Before-Tax Contributions

4.01 Before-Tax Contributions

 

  (a) Before-Tax Contribution Election. Subject to the provisions of Subsection
6.01, 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 (for any payroll period
of such Plan Year during which he or she is eligible to participate in this
Plan) withheld from his or her Compensation and contributed to the Plan on his
or her behalf by his or her Employer as Before-Tax Contributions.
Notwithstanding the foregoing, the maximum percentage of Compensation a
Participant who is a Highly Compensated Employee may elect to defer and
contribute to the Plan for each payroll period is five percent (5%).

 

  (b) Automatic Deferral Election. Except as otherwise provided in any
Supplement, each individual who becomes an Eligible Employee on and after the
Effective Date shall be deemed to have elected to have four percent (4%) of his
or her Compensation withheld and contributed to the Plan as Before-Tax
Contributions effective as of the first payroll period beginning ninety
(90) days after the third party record-keeper forwards Plan enrollment materials
to such Eligible Employee, unless prior to that time such Eligible Employee has
made an alternate election. Prior to the date an automatic deferral election is
effective, the Committee shall provide the Eligible Employee with a notice that
explains the automatic deferral feature, the Eligible Employee’s right to elect
not to have his or her Compensation automatically reduced and contributed to the
Plan or to have another percentage contributed, and the procedure for making an

 

25

--------------------------------------------------------------------------------

       alternate election. An automatic deferral election shall be treated for
all purposes of the Plan as a voluntary deferral election. Notwithstanding the
foregoing, the automatic deferred election shall not apply to any Eligible
Employee who is covered by a collective bargaining agreement (except full-time
Collective Bargaining Employees operating in New York) or who is a regular,
temporary or seasonal employee of Sara Lee Direct employed on a part-time basis
(i.e., scheduled to work thirty (30) hours per week or less).

 

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

4.02 Catch-Up Contributions

A Participant who has attained age fifty (50) years (or will attain age fifty
(50) years by the end of the Plan Year) may elect to defer an additional amount
of Compensation as Before-Tax Contributions for such Plan Year in accordance
with and subject to the limitations of Section 414(v) of the Code (“Catch-Up
Contributions”). Before-Tax Contributions shall not include Catch-Up
Contributions for purposes of implementing the required limitations of Code
Sections 401(k), 402(g), and 415 contained in Subsections 6.01, 6.03, and 6.05,
respectively.

4.03 Change in Election

Each Participant who has made an election for any Plan Year pursuant to
Subsection 4.01 or 4.02 (if applicable) may subsequently make an election to
discontinue the deferral of his or her Compensation (but not retroactively) as
of the beginning of any payroll period. If a

 

26

--------------------------------------------------------------------------------

Participant discontinues his or her deferrals, he or she may subsequently elect
under Subsection 4.01 or 4.02 (if applicable) to have a deferral resumed as of
any subsequent payroll period. A Participant also may elect to change (but not
retroactively) the rate of his or her Tax-Deferred Contributions and the amount
of his or her Catch-Up Contributions (if applicable) as of the beginning of any
payroll period, within the limits specified in Subsection 4.01 and 4.02 (if
applicable). Elections under this Subsection shall be made in such manner and in
accordance with such rules as the Committee determines. If the Committee in its
discretion determines that elections under this Subsection shall be made in a
manner other than in writing, any Participant who makes an election pursuant to
such method may receive written confirmation of such election; further, any such
election and confirmation will be the equivalent of a writing for all purposes.

4.04 Direct Transfers and Rollovers

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

 

  (a) From a trustee or insurance company a direct transfer (or an Eligible
Rollover Distribution) of a Participant’s account balance (or portion thereof)
maintained 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;

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

 

27

--------------------------------------------------------------------------------

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 Participant’s benefits under the Plan is
attributable to amounts which were transferred to the Plan, directly or
indirectly (but not in a direct rollover as defined in Section 401(a)(31) of the
Code), from a Plan which is subject to the requirements of Section 401(a)(11) of
the Code, then the provisions of said Section 401(a)(11) shall apply to the
benefits of such Participant. The Committee in its discretion may direct the
Trustee to transfer Account balances of a group or class of Participants, by
means of a trust-to-trust transfer, to the trustee (or insurance company) of any
other individual account, profit sharing or stock bonus plan intended to meet
the requirements of Section 401(a) of the Code.

 

28

--------------------------------------------------------------------------------

SECTION 5

Employer Contributions

5.01 Before-Tax Contributions

Subject to the limitations of this SECTION 5, the Employers will contribute to
the Trustee on behalf of each Participant the amount of such Participant’s
Before-Tax Contributions under Subsection 4.01. Such Before-Tax Contributions
shall be paid to the Trustee as soon as practicable after being withheld, but no
later than the fifteenth (15th) business day of the next following month, and
allocated to Participants’ Current Year Before-Tax Contribution Subaccounts.

5.02 Annual Company Contribution

For each Plan Year ending after the Effective Date, the Employers shall
contribute to the Plan as follows:

 

  (i) For Participants who are exempt and non-exempt salaried employees, an
amount equal to 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.

 

  (ii) 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 Participant’s Compensation for that portion of the Plan Year during
which he or she was an hourly employee and a Participant in the Plan.
Notwithstanding the foregoing, and subject to the conditions and limitations of
the Plan, for that portion of the first Plan Year ending December 31, 2006 that
precedes the Spin-Off Date , the Annual Company Contribution under this
Subparagraph 5.02(b) shall be equal to two percent (2%) of each such eligible
Participant’s Compensation for that portion of such Plan Year.

 

29

--------------------------------------------------------------------------------

The Annual Company Contributions under this Subsection 5.02 will be funded in
cash and shall be invested in accordance with a Participant’s investment
elections. Notwithstanding the foregoing, Participants shall be eligible to
receive a contribution under this Subsection only if they are employed with the
Employer on the last day of the Plan Year, or if their employment ended during
the plan year as a result of retirement (Separation Date after age fifty-five
(55) with ten (10) Years of Service, or after age sixty-five (65)), death or
Total Disability.

5.03 Matching Contributions

 

  (a) For each payroll period commencing on or after the Effective Date (or such
other period as the Committee may establish), the Employers will make a monthly
Matching Contribution to the Trustee for each pay date on behalf of each
Participant equal to one hundred percent (100%) of such Participant’s Before-Tax
Contributions (excluding Catch-Up Contributions) made during such period or that
could have been made during such period (based on the Participant’s deferral
election in place during such period but for the limitations of Subsection 4.01)
that do not exceed four percent (4%) of such Participant’s 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), as applicable, for the Plan Year based on the amount of his or
her Before-Tax Contributions (excluding 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), as applicable, and the full Matching
Contribution that the Participant would have been entitled to receive under
Subparagraph (a), as applicable, for the Plan Year if such Matching
Contributions were determined as of the end of the Plan Year (instead of each
payroll period).

 

30

--------------------------------------------------------------------------------

Matching Contributions shall be made in cash and will be invested in accordance
with each Participant’s current investment election.

5.04 Transition Contribution

Subject to the conditions and limitations of the Plan, solely for the Plan Year
ending on December 31, 2006, for any Participant who, on January 1, 2006:

 

  (i) Was an exempt or non-exempt salaried employee of Sara Lee Corporation; and

 

  (ii) Had attained age fifty (50) and completed ten (10) Years of Service; and

who is not eligible for a transition credit allocation under the Hanesbrands
Inc. Supplemental Employee Retirement Plan; the Employers shall contribute, in
cash, to the Annual Company Contribution Account of such Participant an amount
equal to ten percent (10%) of such eligible Participant’s Compensation for
calendar year 2006 (including Compensation paid prior to the Effective Date);
provided, however, that Participants shall be eligible to receive a contribution
under this Subsection only if they are employed on the last day of the Plan
Year, or if their employment ended during the Plan Year as a result of
retirement (Separation Date after age fifty-five (55) with ten (10) Years of
Service, or after age sixty-five (65)), death or Total Disability.

5.05 Allocation of Annual Company Contribution

The amount of the contribution made by the Employers for each Plan Year pursuant
to Subsection 5.02 for each eligible Participant in the amounts specified in
Subparagraph 5.02(a) or 5.02(b) as the case may be, shall be allocated to each
such Participant’s Annual Company Contribution Account as of the last day of the
Plan Year.

 

31

--------------------------------------------------------------------------------

5.06 Payment of Matching Contributions

Matching Contributions under Subparagraph 5.03(a) of the Plan for any Plan Year
shall be made each calendar month based on the Matchable Before-Tax
Contributions that have been posted to the Participant’s Accounts for each
payroll period. Matching Contributions under Subparagraph 5.03(b) of the Plan
for any Plan Year shall be made as soon as practicable after the end of the Plan
Year.

5.07 Allocation of Matching Contributions

Subject to Subsections 6.02 and 6.05, as of the end of each calendar month (or
as soon as administratively practicable thereafter), the Matching Contribution
under Subparagraph 5.03(a) for each payroll period shall be allocated and
credited to the Current Year Matching Contribution Subaccounts of those
Participants entitled to share in such Matching Contributions, pro rata,
according to the Matchable Before-Tax Contributions made by them, respectively,
during that period and posted to the Participants’ Current Year Before-Tax
Contribution Subaccount as of such Accounting Date. Matching Contributions under
Subparagraph 5.03(b) of the Plan for any Plan Year shall be similarly allocated
and credited as soon as practicable after the end of the Plan Year.

5.08 Payment of Employer Contributions

In no event shall any Employer Contribution required to be made to the Plan for
any Plan Year under this SECTION 5 be contributed later than the time prescribed
by law for filing the Employer’s federal income tax return for such year,
including extensions thereof.

5.09 Limitations on Employer Contributions

The Employers’ total contribution for a Plan Year is conditioned on its
deductibility under Section 404 of the Code in that year, and shall comply with
the contribution limitations set forth in Subsection 6.05 and the allocation
limitations contained in Subsections 6.01 and 5.05 of the Plan, and shall not
exceed an amount equal to the maximum amount deductible on account thereof by
the Employers for that year for purposes of federal taxes on income.

 

32

--------------------------------------------------------------------------------

5.10 Verification of Employer Contributions

If for any reason the Employer decides to verify the correctness of any amount
or calculation relating to its contribution for any Plan Year, the certificate
of an independent accountant selected by the Employer as to the correctness of
any such amount or calculation shall be conclusive on all persons.

 

33

--------------------------------------------------------------------------------

SECTION 6

Contribution Limits

6.01 Actual Deferral Percentage Limitations

In no event shall the Actual Deferral Percentage of the Highly Compensated
Employees for any Plan Year exceed the greater of the:

 

  (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.

From time to time during the Plan Year, the Committee shall determine whether
the limitation of this Subsection will be satisfied and, to the extent necessary
to ensure compliance with such limitation, may limit the Before-Tax
Contributions to be withheld on behalf of Highly Compensated Employees or may
refund Before-Tax Contributions previously withheld. If, at the end of the Plan
Year, the limitation of this Subsection is not satisfied, the Committee shall
refund Before-Tax Contributions previously withheld on behalf of Highly
Compensated Employees. If Before-Tax Contributions made on behalf of Highly
Compensated Employees must be refunded to satisfy the limitation of this
Subsection, the Committee shall determine the amount of Excess Contributions and
shall refund such amount on the basis of the Highly Compensated Employees’
contribution amounts, beginning with the highest such contribution amounts.
Excess Contributions previously withheld (and any income allocable thereto
determined in accordance with Subsection 6.04) may be distributed within two and
one-half (2 1/2) months after the close of the Plan Year to which such Excess
Contributions relate, but in any event no later than the end of the Plan Year
following the Plan Year in which such Excess Contributions were made. Matching
Contributions attributable to Excess Contributions shall be treated as
Forfeitures under Subsection 10.06.

 

34

--------------------------------------------------------------------------------

6.02 Limitation on Matching Contributions

In no event shall the Contribution Percentage of the Highly Compensated
Employees for any Plan Year exceed the greater of the:

 

  (a) Contribution Percentage of all other Eligible Employees for the Plan Year
multiplied by 1.25; or

 

  (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.

From time to time during the Plan Year, the Committee shall determine whether
the limitation of this Subsection will be satisfied and, to the extent necessary
to ensure compliance with such limitation, shall refund a portion of the
Matching Contributions previously credited to Highly Compensated Employees. If
Matching Contributions made on behalf of Highly Compensated Employees must be
refunded to satisfy the limitation of this Subsection, the Committee shall
determine the amount of Excess Matching Contributions and shall refund such
amount on the basis of the Highly Compensated Employees’ contribution amounts,
beginning with the highest such contribution amounts. At the Committee’s
discretion, if the Excess Matching Contributions are attributable to non-vested
Matching Contributions, such Excess Matching Contributions may be forfeited in
accordance with Subsection 10.06 and applied in the same manner as any other
Forfeiture under the Plan. Excess Matching Contributions previously credited
(and any income allocable thereto determined in accordance with Subsection 6.04)
may be distributed or forfeited within twelve (12) months after the close of the
Plan Year to which such Excess Matching Contributions relate, but in any event
no later than the end of the Plan Year following the Plan Year in which such
Excess Matching Contributions were made.

6.03 Dollar Limitation

Notwithstanding the provisions of Subsection 6.01, no Participant shall make a
Before-Tax Contribution election which will result in his or her Elective
Deferrals for any calendar year

 

35

--------------------------------------------------------------------------------

exceeding $15,000 (or such greater amount as may be prescribed by the Secretary
of Treasury to take into account cost-of-living increases pursuant to Code
Section 402(g)), except to the extent permitted with respect to Catch-Up
Contributions, if applicable. If a Participant’s total Elective Deferrals under
this Plan and any other plan of another employer for any calendar year exceed
the annual dollar limit prescribed above, the Participant may notify the
Committee, in writing on or before March 1 of the next following calendar year,
of his or her election to have all or a portion of such Excess Deferrals (and
the income allocable thereto determined in accordance with Subsection 6.04)
allocated under this Plan and distributed in accordance with this Subsection. In
such event, or in the event that the Committee otherwise becomes aware of any
Excess Deferrals, the Committee shall, without regard to any other provision of
the Plan, direct the Trustee to distribute to the Participant by the following
April 15 the Participant’s Excess Deferrals (and any income attributable thereto
determined in accordance with Subsection 6.04) so allocated under the Plan.
Distributions to be made in accordance with the preceding sentence shall be made
as soon as is practicable following receipt by the Committee of written
notification of Excess Deferrals, and the Committee shall make every effort to
meet the April 15 distribution deadline for all written notifications received
by the preceding March 1.

The amount of such Excess Deferrals distributed to a Participant in accordance
with this Subsection shall be treated as a contribution for purposes of the
limitations referred to under Subsection 6.05, and shall continue to be treated
as Before-Tax Contributions for purposes of the Actual Deferral Percentage test
described in Subsection 6.01; however, Excess Deferrals by non-Highly
Compensated Employees shall not be taken into account under Subsection 6.01 to
the extent such Excess Deferrals are made under this Plan or any other plan
maintained by an Employer or Controlled Group Member. In addition, any Matching
Contributions attributable to amounts distributed under this Subsection (and any
income allocable thereto determined in accordance with Subsection 6.04) shall be
forfeited in accordance with Subsection 10.06.

 

36

--------------------------------------------------------------------------------

6.04 Allocation of Earnings to Distributions of Excess Deferrals, Excess
Contributions and Excess Matching Contributions

The earnings allocable to distributions of Excess Deferrals under Subsection
6.03, Excess Contributions under Subsection 6.01, and Excess Matching
Contributions under Subsection 6.02 shall be determined by multiplying the
earnings attributable to the applicable excess amounts (for the calendar and/or
Plan Year, whichever is applicable) by a fraction, the numerator of which is the
applicable excess amount, and the denominator of which is the balance
attributable to such contributions in the Participant’s Account or Accounts, as
of the beginning of such year, plus the contributions allocated to the
applicable account for such year. Gap period income (i.e., income allocable to
Excess Contributions and Excess Matching Contributions for the period after the
close of the Plan Year and prior to the distribution) shall be allocated as
described in Treasury Regulation Sections 1.401(k)-2(b)(2)(iv) and
1.401(m)-2(b)(iv). Gap period income (i.e., income allocable to Excess
Deferrals, Excess Contributions and Excess Matching Contributions for the period
after the close of the Plan Year and prior to the distribution) shall be
allocated as described in Treasury Regulation Sections 1.402(g)-1(e)(5),
1.401(k)-2(b)(2)(iv) and 1.401(m)-2(b)(2)(iv), respectively.

6.05 Contribution Limitations

For each Limitation Year, the Annual Addition to a Participant’s Accounts under
the Plan and under any other defined contribution plan maintained by any
Employer shall not exceed the lesser of $44,000 (as adjusted from time to time
pursuant to Code Section 415(d)) or one hundred percent (100%) of the
Participant’s Compensation (within the meaning of Code Section 415(c)(3)) during
that Limitation Year. The compensation limit referred to in the preceding
sentence shall not apply to any contribution for medical benefits after
separation from service (within the meaning of Code Section 401(h) or Code
Section 419A(f)(2)) that is otherwise treated as an Annual Addition. Direct
transfers and Rollover Contributions accepted by the Trustee pursuant to
Subsection 4.04 shall not be considered as part of any Annual Addition. If, for
any Limitation Year, the amount that would otherwise be credited to a
Participant’s Account exceeds the foregoing limitations, the Committee may elect
that (a) all or a portion of the

 

37

--------------------------------------------------------------------------------

Participant’s Before-Tax Contributions for that Limitation Year, and any
earnings attributable to such contributions, may be returned to the Participant;
(b) such excess amounts may be held in a suspense account under the Plan and
credited to the Participant’s Account in subsequent years; or (c) any other
correction method permitted under Treasury Regulation Section 1.415-6(b)(6) may
be utilized to eliminate the excess amount; provided that the Committee shall
make such election in a consistent and nondiscriminatory manner in any
Limitation Year.

 

38

--------------------------------------------------------------------------------

SECTION 7

Period of Participation

7.01 Separation Date

If a Participant is transferred from employment with an Employer to employment
with a Controlled Group Member (other than an Employer), then, for the purpose
of determining when his or her Separation Date occurs under this Subsection, his
or her employment with such Controlled Group Member (or any Controlled Group
Member to which he or she is subsequently transferred) shall be considered as
employment with the Employers. If a Participant who was an Eligible Employee of
an Employer becomes a Leased Employee of an Employer, then his or her change in
status shall not be considered a termination of employment for purposes of
determining when his or her Separation Date occurs under this Subsection. A
Participant’s termination of employment with all of the Employers at any age
while Totally Disabled shall be deemed a termination on account of Total
Disability.

7.02 Restricted Participation

When payment of all of a Participant’s Account balances is not made at his or
her Separation Date, or if a Participant transfers to the employ of a Controlled
Group Member which is not an Employer or continues in the employ of an Employer
but ceases to be employed in a Covered Group, the Participant or his or her
Beneficiary will continue to be considered as a Participant for all purposes of
the Plan, except as follows:

 

  (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:

 

39

--------------------------------------------------------------------------------

  (i) His or her Before-Tax Contributions as provided in Subsection 5.01; and

 

  (ii) If applicable, an Annual Company Contribution and/or an Transition
Contribution for the Plan Year in which his or her Separation Date occurs, based
on his or her Compensation for the 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 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.

 

40

--------------------------------------------------------------------------------

SECTION 8

Accounting

8.01 Separate Accounts

The Committee will maintain the following Accounts in the name of each
Participant:

 

  (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.

 

41

--------------------------------------------------------------------------------

  (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.

8.02 Adjustment of Participants’ Accounts

As of each Accounting Date, the Accounts of Participants shall be adjusted to
reflect the following:

 

  (a) Transfers, if any, made between Investment Funds;

 

  (b) Before-Tax Contributions, Employer Contributions and Rollover
Contributions, if any, and payments of principal and interest on any loans made
from a Participant’s Account;

 

  (c) Distributions and withdrawals that have been made but not previously
charged to the Participant’s Account; and

 

  (d) Changes in the Adjusted Net Worth of the Investment Funds in which such
Account is invested.

As of each Accounting Date, the Committee shall establish the value of each
Participant’s Account, which value shall reflect the transactions posted to the
Participant’s Account as they occurred during the preceding calendar month. As
of the first day of each Plan Year, the balance in each Participant’s Current
Year Before-Tax Contribution Subaccount, Current Year Matching Contribution
Subaccount, Current Year Annual Company Contribution Subaccount, Current Year
Transition Contribution Subaccount, if any, shall be reflected in the
Participant’s Before-Tax Contribution Account, Matching Contribution Account,
Annual Company Contribution Account, Transition Contribution Account, and
After-Tax Account, respectively and the

 

42

--------------------------------------------------------------------------------

balances of such Current Year Before-Tax Contribution Subaccount, Current Year
Matching Contribution Subaccount, Current Year Annual Company Contribution
Subaccount and Current Year Transition Contribution Subaccount shall be reduced
to zero. If a Special Accounting Date occurs, the accounting rules set forth
above in this Subsection and elsewhere in this SECTION 8 shall be appropriately
adjusted to reflect the resulting shorter accounting period ending on that
Special Accounting Date.

Notwithstanding the foregoing, the Committee may establish separate rules to be
applied on a uniform basis in adjusting any portion of Participants’ Accounts
that is invested in the Sara Lee Corporation Common Stock Fund or the
Hanesbrands Inc. Common Stock Fund for such accounting period, including the
treatment of any dividends or stock splits with respect to the securities held
in such funds. Such rules may include provisions for (i) allocating earnings
from short-term investments during an accounting period to the Subaccounts of
Participants; (ii) allocating dividends or stock splits to Participants’
Subaccounts invested in the applicable Fund (or to a separate Account or
Subaccount, as applicable); (iii) allocating shares of Sara Lee Stock or
Hanesbrands Stock to Participants’ Subaccounts based on the average purchase
price per share purchased by the Trustee during such accounting period; and
(iv) allocating shares of stock (or other securities) to Participants’
Subaccounts based on the applicable stock split or stock dividend factor or
other similar basis.

8.03 Crediting of 401(k) Contributions

Subject to the provisions of SECTION 4, each Participant’s Before-Tax
Contributions will be credited to his or her Current Year Before-Tax
Contribution Subaccount no later than the Accounting Date which ends the
accounting period of the Plan during which such contributions were received by
the Trustee.

8.04 Charging Distributions

All payments made to a Participant or his or her Beneficiary during the
accounting period ending on each Accounting Date will be charged to the proper
Accounts of the Participant in accordance with Subsection 8.02.

 

43

--------------------------------------------------------------------------------

8.05 Statement of Account

At such times during each Plan Year as the Committee may determine, each
Participant will be furnished with a statement reflecting the condition of his
or her Account in the Trust Fund as of the most recent Accounting Date. No
Participant shall have the right to inspect the records reflecting the Accounts
of any other Participant.

 

44

--------------------------------------------------------------------------------

SECTION 9

The Trust Fund and Investment of Trust Assets

9.01 The Trust Fund

The Trust Fund will consist of all money, stocks, bonds, securities and other
property of any kind held and acquired by the Trustees in accordance with the
Plan and the Trust Agreement.

9.02 The Investment Funds

The following Investment Funds shall be maintained within the Trust Fund:

 

  (a) Interest Income Fund. An “Interest Income Fund,” the assets of which are
primarily invested in fixed interest instruments (including guaranteed
investment contracts between the Trustee and a legal reserve life insurance
company, commercial bank, savings and loan association or other financial
institution or corporation) intended to provide for safety of principal and a
positive rate of return.

 

  (b) Bond Fund. A “Bond Fund,” the assets of which are primarily invested in a
large sampling of bonds intended to provide a high level of interest income.

 

  (c) Balanced Fund. A “Balanced Fund,” the assets of which are primarily
invested in a diversified portfolio of stocks and investment grade bonds,
intended to provide current income and a potential for long-term growth of
income and capital, and a greater rate of return than the Diversified Equity
Fund, but entailing a risk of loss of principal.

 

  (d) Diversified Equity Fund. A “Diversified Equity Fund,” the assets of which
are primarily invested in a diversified pool of a large number of stocks (or
mutual fund shares) intended to provide a greater rate of return than the
Interest Income Fund, but entailing a risk of loss of principal.

 

45

--------------------------------------------------------------------------------

  (e) Small Stock Fund. A “Small Stock Fund,” the assets of which are primarily
invested aggressively in a portfolio of growth-oriented stocks (or mutual fund
shares), intended to provide a greater rate of return than the Diversified
Equity Fund, but entailing a greater risk of loss of principal.

 

  (f) Extended Market Fund. An “Extended Market Fund,” the assets of which are
primarily invested in mid- and small-capitalization companies, intended to
provide long-term growth of capital.

 

  (g) Growth Equity Fund. A “Growth Equity Fund,” the assets of which are
primarily invested in stocks, intended to provide long-term growth of capital.

 

  (h) Value Equity Fund. A “Value Equity Fund,” the assets of which are
primarily invested in stocks, intended to provide a high level of dividend
income and moderate levels of long-term capital appreciation.

 

  (i) International Equity Fund. An “International Equity Fund,” the assets of
which are primarily invested in securities representing interests in companies
located outside of the United States, intended to provide long-term growth of
capital, and a greater rate of return than the Balanced Fund, but entailing a
risk of loss of principal.

 

  (j) Hanesbrands Inc. Common Stock Fund. A “Hanesbrands Inc. Common Stock
Fund,” the assets of which are primarily invested in Hanesbrands Stock. The
Hanesbrands Inc. Common Stock Fund shall be created effective as of the Spin-Off
Date.

  (k) Sara Lee Corporation Common Stock Fund. A “Sara Lee Corporation Common
Stock Fund,” the assets of which are primarily invested in Sara Lee Stock. No
new contributions shall be permitted in the Sara Lee Corporation Common Stock
Fund on or after the Effective Date. Effective as of the Spin-Off Date, each
Participant’s interest in the Sara Lee

 

46

--------------------------------------------------------------------------------

Corporation Common Stock Fund shall be liquidated and reinvested in accordance
with the Participant’s current investment elections for new contributions to the
Plan unless the Participant affirmatively elects (in accordance with rules
established by the Committee) to continue his or her investment in the Sara Lee
Corporation Common Stock Fund. The Sara Lee Corporation Common Stock Fund is
required to be removed from the Plan on the one year anniversary of the Spin-Off
Date; any amounts held in the fund at that time shall be reinvested in
accordance with the respective Participants’ then current investment elections
for new contributions to the Plan (or for any Participant without such a valid
election, in a default investment fund identified by the Committee).

 

  (l) Target Retirement Funds. The “Target Retirement Funds,” the assets of
which are primarily invested in mutual funds based on an asset allocation
strategy designed for investors planning to retire on or around a stated year,
with such asset allocation strategy changing over time to reflect typical
investment risk and return objectives for people with similar retirement goals.

The Interest Income Fund, Bond Fund, Balanced Fund, Diversified Equity Fund,
Small Stock Fund, Extended Market Fund, Growth Equity Fund, Value Equity Fund,
International Equity Fund, Sara Lee Corporation Common Stock Fund, Hanesbrands
Inc. Common Stock Fund and Target Retirement Funds are sometimes referred to
individually as an “Investment Fund” and collectively as the “Investment Funds.”
A portion of each Investment Fund may be invested from time to time in the
short-term investment fund (STIF) of a custodian bank.

9.03 Investment of Contributions

In accordance with rules established by the Committee, a Participant may elect
to have contributions to his or her Accounts invested in one or more of the
Investment Funds in even multiples of one percent (1%).. A Participant may elect
to have any other Contributions to his or her Accounts invested in one or more
Investment Funds (excluding the Sara Lee Corporation

 

47

--------------------------------------------------------------------------------

Common Stock Fund), and if a Participant does not make such an election within
such reasonable period as may be determined by the Committee, he or she shall be
deemed to have elected that all eligible contributions to his or her Accounts be
invested in the Target Retirement Fund that most closely corresponds to the year
in which he or she will attain age sixty-five (65), as determined in accordance
with rules and procedures established by the Committee.

Elections under this Subsection and Subsections 9.04 and 9.05 shall be made in
such manner and in accordance with such rules as the Committee determines. If
the Committee determines in its discretion that elections under this Subsection
and Subsections 9.04 and 9.05 shall be made in a manner other than in writing,
any Participant who makes an election pursuant to such method may receive
written confirmation of such request; further, any such request and confirmation
shall be the equivalent of a writing for all purposes.

9.04 Change in Investment of Contributions

Effective as of any payroll period, a Participant may elect to change his or her
investment election under Subsection 9.03. Such change shall apply only with
respect to contributions made by or on behalf of the Participant that are
received by the Trustee after the effective date of the change.

9.05 Elections to Transfer Balances Between Accounts; Diversification

On any Accounting Date, a Participant may elect to transfer or reallocate, in
even multiples of one percent (1%), the balances in his or her Accounts in an
Investment Fund from that Fund to one or more other Investment Funds, subject to
the trading restrictions of the Investment Fund. The Participant’s Accounts for
the Investment Fund from which such fund transfer or reallocation is made will
be charged, and his or her Accounts for the Investment Fund to which such fund
transfer or reallocation is made will be credited, with the amount so
reallocated in accordance with rules established by the Committee. Such
transfers of balances in Subaccounts between Investment Funds shall be made on
the same Accounting Date as notice is received by the Committee provided the
notice conforms with the procedures of the Committee. The foregoing provisions
of this Subsection are contingent upon the availability of fund transfers

 

48

--------------------------------------------------------------------------------

and reallocations between Investment Funds under the terms of the investments
made by each Investment Fund. A Participant’s Account may be charged a
redemption fee for frequent transfers into and out of an Investment Fund within
a restricted time period established by the Investment Fund. Additionally,
Participants may be restricted from initiating fund transfers or reallocations
into or out of an Investment Fund if the Committee or an Investment Fund
determines that the Participant’s transfer activity would be detrimental to that
Investment Fund.

9.06 Voting of Stock; Tender Offers

With respect to Hanesbrands Stock (and Sara Lee Stock for as long as it is held
in the Plan), the Committee shall notify Participants of each meeting of the
shareholders of Sara Lee Corporation or Hanesbrands Inc. and shall furnish to
them copies of the proxy statements and other communications distributed to
shareholders in connection with any such meeting. The Committee also shall
notify the Participants that they are entitled to give the Trustee voting
instructions as to Sara Lee Stock or Hanesbrands Stock credited to their
Accounts. If a Participant furnishes timely instructions to the Trustee, the
Trustee (in person or by proxy) shall vote the Sara Lee Stock or Hanesbrands
Stock (including fractional shares) credited to the Participant’s Accounts in
accordance with the directions of the Participant. The Trustee shall vote the
Sara Lee Stock or Hanesbrands Stock for which it has not received timely
direction, in the same proportion as directed shares are voted.

Similarly, the Committee shall notify Participants of any tender offer for,
exchange of, or a request or invitation for tenders of Sara Lee Stock or
Hanesbrands Stock and shall request from each Participant instructions for the
Trustee as to the tendering of Sara Lee Stock or Hanesbrands Stock credited to
his or her Accounts. The Trustee shall tender or exchange such Sara Lee Stock or
Hanesbrands Stock as to which it receives (within the time specified in the
notification) instructions to tender or exchange. Any Sara Lee Stock or
Hanesbrands Stock credited to the Accounts of Participants as to which
instructions not to tender or exchange are received and as to which no
instructions are received shall not be tendered or exchanged.

 

49

--------------------------------------------------------------------------------

9.07 Confidentiality of Participant Instructions

The instructions received by the Trustee from Participants or Beneficiaries with
respect to purchase, sale, voting or tender of Sara Lee Stock or Hanesbrands
Stock credited to such Participants’ or Beneficiaries’ Accounts shall be held in
confidence and shall not be divulged or released to any person, including the
Committee, officers or Employees of the Company or any Controlled Group Member.

 

50

--------------------------------------------------------------------------------

SECTION 10

Payment of Account Balances

10.01 Payments to Participants

 

  (a) Vesting.

 

  (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, Transition Contribution, Matching
Contribution Accounts. If a Participant’s Separation Date occurs on or after his
or her Normal Retirement Age, the date he or she dies or becomes Totally
Disabled, he or she shall be fully vested in his or her Annual Company
Contribution Account, Transition Contribution Account, Matching Contribution
Account. If a Participant’s Separation Date occurs under any other
circumstances, the balances in his or her Annual Company Contribution Account,
Transition Contribution Account, Matching Contribution Account, as applicable,
will be reduced to an amount computed in accordance with the following schedule:

 

51

--------------------------------------------------------------------------------

If the Participant’s Number of Years of Service is:

   The Vested Percentage of
His or Her Applicable
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,
Transition Contribution Account and Matching 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) Special Provisions Applicable to Certain Participants. Notwithstanding
the foregoing, a Participant who had an account balance in a Predecessor Plan
shall be vested in his or her Accounts to the extent provided in the Sara Lee
Plan. 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.

 

  (b) Time of Payment. Except as provided in Subsection 10.03 below, payment of
a Participant’s 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

 

52

--------------------------------------------------------------------------------

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, 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 Participant’s 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 Participant’s 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 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 Participant’s
Separation Date. All partial distributions under this Subparagraph shall be made
in cash only.

 

  (ii) Installments. If the vested portion of the applicable vested Account
balance exceeds $5,000, a 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 Accounts by the fifth year. No Beneficiary other than
a Participant’s surviving spouse may elect to receive installments.

 

53

--------------------------------------------------------------------------------

  (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; provided, however, that
Participants who participated in a Predecessor Plan that was subject to
Section 401(a)(11) and Section 417 of the Code or which provided special
distribution rules may no longer elect payment of their Account Balances in any
form other than a lump sum or partial lump sum distribution, notwithstanding any
provision in this Plan or any prior or current Supplement thereto to the
contrary.

 

  (iv) Order of Accounts. Distributions under this Subparagraph shall be charged
to the Participant’s vested Accounts (if applicable) in the following order:
(A) After-Tax Account; (B) Rollover Contribution Account; (C) Before-Tax
Contribution Account; (D) Predecessor Company Account; (E) Matching Contribution
Account (classified as company match); (F) Matching Contribution Account
(classified as monthly company contributions); (G) Matching Contribution Account
attributable to Matching Contributions made pursuant to a collective bargaining
agreement; (H) Annual Company Contribution Account; and (I) Transition
Contribution Account.

 

  (v) Special Provisions Applicable to Dividends. Notwithstanding Subparagraph
(ii), dividends attributable to Sara Lee Stock or Hanesbrands Stock in a
Participant’s Accounts that are subject to the election in Subsection 10.08
shall be one hundred percent (100%) vested.

 

54

--------------------------------------------------------------------------------

  (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.

10.02 Distributions in Shares

Distributions of amounts invested in the Hanesbrands Inc. Common Stock Fund (or
the Sara Lee Corporation Common Stock Fund while such fund is maintained under
the Plan) may be made in cash or in shares, as elected by the Participant,
provided such shares are distributed at their Fair Market Value, as determined
by the Trustee. Each Participant who elects distribution of amounts invested in
Hanesbrands Inc. Common Stock Fund in the form of stock who subsequently has
additional contributions credited to his or her Accounts shall receive such
additional contributions in shares of Hanesbrands stock in accordance with
Subsection 10.01. If an election is made by the Participant to direct the
Trustee to distribute the balance of his or her Accounts invested in the Sara
Lee Corporation Common Stock Fund or the Hanesbrands Inc. Common Stock Fund in
cash, the Participant shall receive cash equal to the Fair Market Value of the
balance of his or her Accounts. For purposes of this Subsection, the rights
extended to a Participant hereunder shall also apply to any Beneficiary or
Alternate Payee of such Participant. All other distributions shall be made in
cash.

 

55

--------------------------------------------------------------------------------

10.03 Beneficiary

 

  (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
Participant’s surviving spouse will be his or her sole, primary Beneficiary
unless: (i) the spouse had consented in writing to the Participant’s 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
spouse’s 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 Participant’s Beneficiary designation is
ineffective for any reason, or if all of the Participant’s Beneficiaries die
before the Participant, the Committee will direct the Trustee to pay the
Participant’s Account balance in accordance with the following:

 

  (i) To the Participant’s surviving spouse;

 

  (ii) If the Participant does not have a surviving spouse, to or for the
benefit of the legal representative or representatives of the Participant’s
estate;

 

56

--------------------------------------------------------------------------------

  (iii) 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
Participant’s relatives by blood, adoption or marriage in such proportions as
the Committee (or its delegate) determines.

 

  (c) Death of Beneficiary Prior to Participant’s 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 Beneficiary’s share, pro rata in accordance with their share of the
Account balance as of the date of the Participant’s death (or such other date as
the Committee may determine is administratively practicable), subject to the
Participant’s 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
Beneficiary’s Account balance in whole or in part at any time notwithstanding
any election to the contrary by the Beneficiary.

 

  (d) Death of Beneficiary After Participant’s Death. Each Beneficiary, in
accordance with procedures established by the Committee, may name or designate
an individual to receive the Beneficiary’s share of the Account balance (a
‘Recipient’) any time after the Participant’s death. In the event a Beneficiary
dies before complete payment of his or her share of the Account balance, such
Beneficiary’s share shall be paid to the Recipient designated by the
Beneficiary. If a deceased Beneficiary failed to name or designate a Recipient,
if the Beneficiary’s designation is ineffective for any reason, or if the
Recipient dies before the Beneficiary or before complete payment of the
Beneficiary’s share of the Account balance, the Committee will direct the
Trustee to pay the Beneficiary’s share in accordance with the following:

 

  (i) To the Beneficiary’s surviving spouse;

 

57

--------------------------------------------------------------------------------

  (ii) If the Beneficiary does not have a surviving spouse, to or for the
benefit of the legal representative or representatives of the Beneficiary’s
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
Beneficiary’s relatives by blood, adoption or marriage in such proportions as
the Committee (or its delegate) determines.

Notwithstanding anything contained herein to the contrary, all payments under
this Subparagraph shall comply with the requirements of Code Section 401(a)(9).

10.04 Missing Participants and Beneficiaries

While a Participant is alive, he or she must file with the Committee from time
to time his or her own and each of his or her named Beneficiaries’ post office
addresses and each change of post office address. After the Participant’s death,
the Participant’s Beneficiary or Beneficiaries shall be responsible for filing
such information with the Committee. A communication, statement or notice
addressed to a Participant or Beneficiary at his or her last post office address
filed with the Committee, or if no address is filed with the Committee, then at
his or her last post office address as shown on the Employer’s records, will be
binding on the Participant and his or her Beneficiary for all purposes of the
Plan. Neither the Trustee nor any of the Employers is required to search for or
locate a Participant or Beneficiary. If the Committee notifies a Participant or
Beneficiary that he or she is entitled to a payment and also notifies him or her
of the effect of this Subsection, and the Participant or Beneficiary fails to
claim his or her Account balances or make his or her whereabouts known to the
Committee within three (3) years after the notification, the Account balances of
the Participant or Beneficiary may be disposed of in an equitable manner
permitted by law under rules adopted by the Committee, including the Forfeiture
of such balances, if the value of the Account is equal to or less than the
administrative fees, if any, applicable to the Participant’s or Beneficiary’s
Account balance pursuant to Subsection 10.01.

 

58

--------------------------------------------------------------------------------

10.05 Direct Rollover of Eligible Rollover Distributions

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.

10.06 Forfeitures

A Forfeiture shall be treated as a separate Account (which is not subject to
adjustment under Subsection 8.02) until the next following Accounting Date on
which Forfeitures will be allocated. On that date, all Forfeitures arising
during the period preceding the Accounting Date which have not been previously
allocated shall be allocated among and credited to the Accounts of Participants
reemployed to the extent required under Subsection 12.01, shall be used to
reduce Employer Matching Contributions required by Subsection 5.03 or any
applicable Supplement to the Plan for the current Plan Year or succeeding Plan
Years, or shall be used to reduce administrative expenses of the Plan, as
determined by the Committee.

The portion of a Participant’s Annual Company Contribution, Transition
Contribution and Matching Contribution Accounts that is not distributable by
reason of the provisions of Subsection 10.01 shall be credited to a Forfeiture
Account established and caused to be maintained by the Trustee in the
Participant’s name as of the Accounting Date coincident with or next following
his Separation Date (before adjustments then required under the Plan have been
made). If the Participant does not return to employment with an Employer or a
related Company prior to incurring a One Year Break in Service, the balance in
his Forfeiture Account, determined as of the Accounting Date coincident with or
next following the date on which he incurs such One Year Break in Service (after
all adjustments then required under the Plan have been made) will be a
Forfeiture and will be used to reduce administrative expenses of the Plan.

If a Participant returns to employment with an Employer or a related Company
after incurring a One Year Break in Service but before incurring five
consecutive One Year Breaks in Service, the amount forfeited from his Forfeiture
Account by reason of such One Year Break in

 

59

--------------------------------------------------------------------------------

Service will be restored to his Forfeiture Account, first, out of Forfeitures
occurring in the year of restoration, second, out of Trust Fund earnings, third,
out of Employer Contributions, and fourth, out of a restoration contribution
made by the Employer for restoration purposes only.

10.07 Recovery of Benefits

In the event a Participant or Beneficiary receives a benefit payment under the
Plan which is in excess of the benefit payment which should have been made, the
Committee shall have the right to recover the amount of such excess from such
Participant or Beneficiary on behalf of the Plan, or from the person that
received such benefit payments. The Committee may, however, at its option,
deduct the amount of such excess from any subsequent benefits payable to, or
for, the Participant or Beneficiary.

10.08 Dividend Pass-Through Election

With respect to a Participant’s interest in the ESOP component of the Plan (as
defined in Subsection 1.01 from time to time) , each Participant has the right
to elect either (a) to have dividends paid on such shares reinvested in shares
of Sara Lee Stock or Hanesbrands Stock (as applicable), or (b) to receive a
distribution in cash of such dividends in accordance with procedures established
by the Committee. To the extent such dividends are reinvested, they shall be one
hundred percent (100%) vested. Such distributions shall be made as soon as
administratively practicable following each March 31, June 30, September 30 and
December 31 Plan Year quarter, and shall not constitute Eligible Rollover
Distributions; provided, however, that on and after the Spin-Off Date, dividends
attributable to Sara Lee Stock are required to be reinvested in the Sara Lee
Common Stock Fund.

10.09 Minimum Distributions

Distribution of a Participant’s benefits shall be made or commence by his or her
Required Commencement Date. Notwithstanding the foregoing, the Committee may
establish procedures to begin minimum distribution payments in the calendar year
in which the Participant attains age seventy and one-half (70 1/2).
Distributions to a Participant after his or her Required Commencement Date shall
be made in installment payments equal to the minimum amount

 

60

--------------------------------------------------------------------------------

necessary to meet the requirements of Section 401(a)(9) of the Code. All
distributions under the Plan shall comply with the requirements of
Section 401(a)(9) of the Code and the regulations thereunder, and shall further
comply with the rules described below:

 

  (a) The Participant’s Accounts will be distributed, or begin to be
distributed, to the Participant no later than the Participant’s Required
Commencement Date. If the Participant dies before distributions begin, the
Participant’s Accounts will be distributed, or begin to be distributed, no later
than as follows:

 

  (i) If the Participant’s surviving spouse is the Participant’s 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 Participant’s surviving spouse is not the Participant’s 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 Participant’s death, the Participant’s entire interest
will be distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant’s death; or

 

  (iv) If the Participant’s surviving spouse is the Participant’s 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.

 

61

--------------------------------------------------------------------------------

For purposes of this Subparagraph (a) and Subparagraph (c), unless Subparagraph
(a)(iv) applies, distributions will be considered to have begun on the
Participant’s 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
Participant’s 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 Participant’s Lifetime. During the
Participant’s lifetime, the minimum amount that will be distributed for each
Distribution Calendar Year is the quotient obtained by dividing the
Participant’s 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
Participant’s age as of the Participant’s birthday 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 Participant’s date of death.

 

  (c) Required Minimum Distributions After Participant’s 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 Participant’s death is the quotient obtained by dividing
the Participant’s Account Balance by the longer of the remaining Life Expectancy
of the Participant or the remaining Life Expectancy of the Participant’s
Designated Beneficiary, determined as follows:

 

  (A) The Participant’s remaining Life Expectancy is calculated using the age of
the Participant in the year of death, reduced by one for each subsequent year;

 

62

--------------------------------------------------------------------------------

  (B) The Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, the remaining Life Expectancy of the surviving spouse is calculated
for each Distribution Calendar Year after the year of the Participant’s death
using the surviving spouse’s age as of the spouse’s birthday in that year. For
Distribution Calendar Years after the year of the surviving spouse’s death, the
remaining Life Expectancy of the surviving spouse is calculated using the age of
the surviving spouse as of the spouse’s birthday in the calendar year of the
spouse’s death, reduced by one for each subsequent calendar year; and

 

  (C) The Participant’s surviving spouse is not the Participant’s sole
Designated Beneficiary, the Designated Beneficiary’s remaining Life Expectancy
is calculated using the age of the beneficiary in the year following the year of
the Participant’s 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

 

63

--------------------------------------------------------------------------------

after the year of the Participant’s death, the minimum amount that will be
distributed for each Distribution Calendar Year after the year of the
Participant’s death is the quotient obtained by dividing the Participant’s
Account Balance by the Participant’s 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 Participant’s death is the quotient obtained by dividing the
Participant’s Account Balance by the remaining Life Expectancy of the
Participant’s 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 Participant’s death, distribution of the Participant’s entire
interest will be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death. If the Participant dies before the
date distributions have begun, the Participant’s surviving spouse is the
Participant’s sole Designated Beneficiary, and the surviving spouse dies before
distributions are required to have begun to the surviving spouse under
Subparagraph (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 Participant’s Beneficiary who is the
designated beneficiary for purposes of Code Section 401(a)(9).

 

64

--------------------------------------------------------------------------------

  (ii) “Distribution Calendar Year” means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant’s
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year that contains the Participant’s Required
Commencement Date. For distributions beginning after the Participant’s 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 Participant’s first Distribution Calendar Year will be made on or before
the Participant’s 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 Participant’s
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) “Participant’s Account Balance” means the balance of the Participant’s
Accounts as of the Valuation Calendar Year, increased by the amount of any
contributions made and allocated to the Participant’s 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

 

65

--------------------------------------------------------------------------------

balance of the Participant’s 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.

 

66

--------------------------------------------------------------------------------

SECTION 11

11.01 Loans to Participants

While the primary purpose of the Plan is to allow Participants to accumulate
funds for retirement, it is recognized that under some circumstances it is in
the best interests of Participants to permit loans to be made to them while they
continue in the active service of the Employers. Accordingly, the Committee,
pursuant to such rules as it may from time to time establish, and upon
application by a Participant supported by such evidence as the Committee
requests, may direct the Trustee to make a loan from the Participant’s Accounts
under the Trust Fund (with the exception of the Participant’s Matching
Contribution Account, Annual Company Contribution Account and Transition
Contributions Account) to a Participant who is actively at work in the employ of
an Employer subject to the following:

 

  (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 Participant’s 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 and equivalent to $10.00 per week) 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

 

67

--------------------------------------------------------------------------------

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 and requests a reduction in the applicable interest rate.

 

  (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 Participant’s 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 Participant’s loan request and such
information and documents from the Participant as the Committee shall deem
necessary. A Participant’s Accounts may be charged a fee for processing each
loan request. The Participant’s 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 Participant’s Accounts (with
the exception of the Participant’s Annual Company Contribution Account,
Transition Contribution Account, and Matching Contribution Account). A
Participant’s Annual Company Contribution Account, Transition

 

68

--------------------------------------------------------------------------------

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

 

69

--------------------------------------------------------------------------------

Participant’s 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
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 not 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
Participant’s Separation Date. To the extent consistent with Internal Revenue
Service rules and regulations, such rules may include charging unpaid amounts
against a Participant’s 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 Participant’s 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.

 

70

--------------------------------------------------------------------------------

  (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.

11.02 After-Tax Withdrawals

A Participant may withdraw all or a portion of his or her After-Tax Account, if
any. The timing of such withdrawals shall be established by the Committee.

11.03 Hardship Withdrawals

In the event a Participant suffers a serious financial hardship, such
Participant may withdraw a portion of the vested balance in his or her Accounts
(excluding his or her Annual Company Contribution Account, his or her Transition
Contribution Account, any portion of his or her Before-Tax Contribution Account
attributable to qualified non-elective contributions (if applicable), and any
earnings credited to his or her Before-Tax Contribution Account on or after
January 1, 1989) provided that the amount of the withdrawal is at least $250.00
and does not exceed the amount required to meet the immediate financial need
created by the serious financial hardship.

 

  (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 dependants (determined under Code Section 152
without regard to Section 152(b)(1), (b)(2) and (d)(1)(B));

 

71

--------------------------------------------------------------------------------

  (ii) A down payment and closing costs for the purchase of a primary residence;

 

  (iii) Medical expenses incurred by the Participant, the Participant’s spouse
or any dependents of the Participant;

 

  (iv) The need to prevent eviction of the Participant from his or her primary
residence or foreclosure on the mortgage of the Participant’s principal
residence;

 

  (v) Payment for burial or funeral expenses for the Participant’s deceased
parent, spouse, children or dependants (as defined in Code Section 152 without
regard to the change in definition under Section 152(d)(1)(B));

 

  (vi) Payment of expenses for the repair of damage to the Participant’s
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).

To establish that the amount to be withdrawn is not reasonably available from
other resources, the Participant shall be required to elect to receive a cash
distribution of the dividends paid pursuant to Subsection 10.08 of the Plan
attributable to his or her proportionate interest in the Sara Lee Corporation
Common Stock Fund or Hanesbrands Inc. Common Stock Fund after the Spin-Off Date
and to obtain all other in-service withdrawals, distributions and nontaxable
loans available under this Plan and any other plan maintained by the Employer.

 

  (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

 

72

--------------------------------------------------------------------------------

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 Participant’s financial need cannot be relieved by all of the following
means:

 

  (i) Through reimbursement or compensation by insurance or otherwise,

 

  (ii) By reasonable liquidation of the Participant’s 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 Participant’s 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
Participant’s 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 Participant’s 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.

 

73

--------------------------------------------------------------------------------

  (d) Hardship withdrawals shall be made as soon as administratively feasible
after the Committee has received the Participant’s withdrawal election and such
information and documents from the Participant as the Committee shall deem
necessary.

11.04 Age 59 1/2 Withdrawals

Upon making an application to the Committee, a Participant who has attained the
age of fifty-nine and one-half (59 1/2) may withdraw part or all of his or her
vested Account balances (excluding his or her Annual Company Contribution
Account and his or her Transition Contribution Account). The form and timing of
such applications and withdrawals shall be established by the Committee.

11.05 Additional Rules for Withdrawals

Withdrawals made pursuant to Subsections 11.02, 11.03 and 11.04 shall be charged
to the Participant’s vested Accounts (if applicable) in the following order:

 

  (a) After-Tax Account;

 

  (b) Rollover Contribution Account;

 

  (c) Before-Tax Contribution Account;

 

  (d) Predecessor Company Account;

 

  (e) If applicable, Matching Contribution Account (classified as company
match);

 

  (f) If applicable, Matching Contribution Account (classified as monthly
company contributions);

 

  (g) If applicable, Matching Contribution Account attributable to Matching
Contributions made pursuant to a collective bargaining agreement.

 

74

--------------------------------------------------------------------------------

All withdrawals shall be paid in cash. Requests for a withdrawal shall be made
in such manner and in accordance with such rules as the Committee determines. If
the Committee determines in its discretion that a withdrawal under this
Subsection 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. Participants in this Plan who participated in a
Predecessor Plan that was subject to Section 401(a)(11) and Section 417 of the
Code may no longer elect payment of their Account Balances in any form other
than a lump sum or partial lump sum distribution, notwithstanding any provision
of this Plan or any Supplement thereto to the contrary; and no consent of such
Participants’ spouses shall be required for withdrawals made under Subsections
11.02, 11.03 or 11.04 after such date.

 

75

--------------------------------------------------------------------------------

SECTION 12

Reemployment

12.01 Reemployed Participants

Except as provided below, if a Participant is reemployed by an Employer
following a termination of employment, such Participant shall resume
participation in the Plan for all purposes on the first day of the first payroll
period following his rehire date that he is a member of a Covered Group. If a
former Employee or Eligible Employee is reemployed by an Employer, Service he or
she had accrued prior to his or her termination of employment will be reinstated
for purposes of determining his or her eligibility to participate in the Plan,
and he or she shall become eligible to participate in the Plan in accordance
with the provisions of Subsection 3.01.

12.02 Calculation of Service Upon Reemployment

 

  (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

 

76

--------------------------------------------------------------------------------

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.

 

  (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 Participant’s Accounts and such
Participant’s post-break Service shall be disregarded for purposes of vesting in
his or her pre-break Annual 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:

 

84

--------------------------------------------------------------------------------

  (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
Participant’s number of consecutive One-Year Breaks In Service exceeds the
greater of five (5) of the aggregate number of such Participant’s 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 Participant’s 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.

 

78

--------------------------------------------------------------------------------

SECTION 13

Special Rules for Top-Heavy Plans

13.01 Purpose and Effect

The purpose of this SECTION 13 is to comply with the requirements of Code
Section 416. The provisions of this SECTION 13 shall be effective for each Plan
Year in which the Plan is a “Top-Heavy Plan” within the meaning of Code
Section 416(g).

13.02 Top Heavy Plan

In general, the Plan will be a Top-Heavy Plan for any Plan Year if, as of the
last day of the preceding Plan Year (the “Determination Date”), the aggregate
Account balances of Participants in this Plan who are Key Employees (as defined
in Section 416(i)(1) of the Code) exceed sixty percent (60%) of the aggregate
Account balances of all Participants in the Plan. In making the foregoing
determination, the following special rules shall apply:

 

  (a) A Participant’s 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.

 

79

--------------------------------------------------------------------------------

  (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.

13.03 Key Employee

In general, a “Key Employee” is an Employee who, at any time during the Plan
Year that includes the Determination Date was:

 

  (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

 

  (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.

13.04 Minimum Employer Contribution

For any Plan Year in which the Plan is a Top-Heavy Plan, an Employer’s
contribution, if any, credited to each Participant who is not a Key Employee
shall not be less than three percent (3%) of such Participant’s Compensation for
that year. For purposes of the foregoing, contributions under Subsection 5.01
shall not be considered Employer contributions. In no event, however, shall an
Employer contribution credited in any year to a Participant who is not a Key
Employee (expressed as a percentage of such Participant’s Compensation) exceed
the maximum Employer contribution credited in that year to a Key Employee
(expressed as a percentage of such Key Employee’s Compensation).

13.05 Aggregation of Plans

Each other defined contribution plan and defined benefit plan maintained by the
Employers that covers a “Key Employee” as a Participant or that is maintained by
the Employers in order for a Plan covering a Key Employee to qualify under
Section 401(a)(4) and 410 of the

 

80

--------------------------------------------------------------------------------

Code shall be aggregated with this Plan in determining whether this Plan is
Top-Heavy. In addition, any other defined contribution or defined benefit plan
of the Employers may be included if all such plans which are included when
aggregated will continue to qualify under Section 401(a)(4) and 410 of the Code.

13.06 No Duplication of Benefits

If an Employer maintains more than one plan, the minimum Employer contribution
otherwise required under Subsection 13.04 above may be reduced in accordance
with regulations of the Secretary of the Treasury to prevent inappropriate
duplications of minimum contributions or benefits.

 

81

--------------------------------------------------------------------------------

SECTION 14

General Provisions

14.01 Committee’s Records

The records of the Committee as to an Employee’s age, Separation Date, Leave of
Absence, reemployment and Compensation will be conclusive on all persons unless
determined to the Committee’s satisfaction to be incorrect.

14.02 Information Furnished by Participants

Participants and their Beneficiaries must furnish to the Committee such
evidence, data or information as the Committee considers desirable to carry out
the Plan. The benefits of the Plan for each person are on the condition that he
or she furnish promptly true and complete evidence, data and information
requested by the Committee.

14.03 Interests Not Transferable

Except as otherwise provided in Subsection 14.04 and as may be required by
application of the tax withholding provisions of the Code or of a state’s income
tax act, benefits under the Plan are not in any way subject to the debts or
other obligations of the persons entitled to such benefits and may not be
voluntarily or involuntarily sold, transferred, alienated, assigned, or
encumbered.

14.04 Domestic Relations Orders

If the Committee receives a domestic relations order issued by a court pursuant
to a state’s domestic relations law, the Committee will direct the Trustee to
make such payment of the Participant’s vested benefits to an Alternate Payee or
Payees as such order specifies, provided the Committee first determines that
such order is a qualified domestic relations order (“QDRO”) within the meaning
of Section 414(p) of the Code. The Committee will establish reasonable
procedures for determining whether or not a domestic relations order is a QDRO.
Upon receiving a domestic relations order, the Committee shall promptly notify
the Participant

 

82

--------------------------------------------------------------------------------

and any Alternate Payee named in the order that the Committee has received the
order and any procedures for determining whether the order is a QDRO. If, within
eighteen (18) months after receiving the order, the Committee makes a
determination that the order is a QDRO, any direction to the Trustee to pay the
benefits to an Alternate Payee as specified in the QDRO will include a direction
to pay any amounts that were to be paid during the period prior to the date the
Committee determines that the order is a QDRO. If during the eighteen (18) month
period the Committee determines that the order is not a QDRO or no determination
is made with respect to whether the order is a QDRO, the Committee will direct
the Trustee to pay the amounts that would have been paid to the Alternate Payee
pursuant to the terms of the order to the Participant if such amounts otherwise
would have been payable to the Participant under the terms of the Plan. The
Committee in its discretion may maintain an Account for an Alternate Payee to
which any amount that is to be paid to such Alternate Payee from a Participant’s
Accounts will be credited. The Alternate Payee for whom such Account is
maintained may exercise the same elections with respect to the fund or funds in
which the Account will be invested as would be permissible for a Participant in
the Plan. Further, the Alternate Payee may name a Beneficiary, in the manner
provided in Subsection 10.03 to whom the balance in the Account is to be paid in
the event the Alternate Payee should die before complete payment of the Account
has been made. Distribution of the Alternate Payee’s Account shall be made in
accordance with Subsections 10.01 and 10.02, and the Alternate Payee may
exercise the same elections with respect to requesting a distribution or partial
distribution of his or her Account as would be permissible for a Participant in
the Plan; provided that the Alternate Payee’s Required Commencement Date shall
be the date on which the Participant attains (or, in the event of the
Participant’s death, would have attained) the Participant’s Required
Commencement Date. The Committee may direct the Trustee to distribute benefits
to an Alternate Payee on the earliest date specified in a QDRO, without regard
to whether such distribution is made or commences prior to the Participant’s
earliest retirement age (as defined in Section 414(p)(4)(B) of the Code) or the
earliest date that the Participant could commence receiving benefits under the
Plan.

 

83

--------------------------------------------------------------------------------

14.05 Facility of Payment

When, in the Committee’s opinion, a Participant or Beneficiary is under a legal
disability or is incapacitated in any way so as to be unable to manage his or
her financial affairs, the Committee may direct the Trustee to make payments to
his or her legal representative, or to a relative or friend of the Participant
or Beneficiary for his or her benefit, or the Committee may direct the Trustee
to apply the payment for the benefit of the Participant or Beneficiary in any
way the Committee considers advisable.

14.06 No Guaranty of Interests

Neither the Trustee nor the Employers in any way guarantee the Trust Fund from
loss or depreciation. The Employers do not guarantee any payment to any person.
The liability of the Trustee and the Employers to make any payment is limited to
the available assets of the Trust Fund.

14.07 Rights Not Conferred by the Plan

The Plan is not a contract of employment, and participation in the Plan will not
give any Employee the right to be retained in an Employer’s employ, nor any
right or claim to any benefit under the Plan, unless the right or claim has
specifically accrued under the Plan.

14.08 Gender and Number

Where the context admits, words denoting men include women, the plural includes
the singular and vice versa.

14.09 Committee’s Decisions Final

An interpretation of the Plan and a decision on any matter within the
Committee’s discretion made by it in good faith is binding on all persons. A
misstatement or other mistake of fact shall be corrected when it becomes known,
and the Committee shall make such adjustment as it considers equitable and
practicable.

 

84

--------------------------------------------------------------------------------

14.10 Litigation by Participants

If a legal action begun against the Trustee, the Committee or any of the
Employers by or on behalf of any person results adversely to that person, or if
a legal action arises because of conflicting claims to a Participant’s or
Beneficiary’s benefits, the cost to the Trustee, the Committee or any of the
Employers of defending the action will be charged to such extent as possible to
the sums, if any, involved in the action or payable to the Participant or
Beneficiary concerned.

14.11 Evidence

Evidence required of anyone under the Plan may be by certificate, affidavit,
document or other information which the person acting on it considers pertinent
and reliable, and signed, made or presented by the proper party or parties.

14.12 Uniform Rules

In managing the Plan, the Committee will apply uniform rules to all Participants
similarly situated.

14.13 Law That Applies

Except to the extent superseded by laws of the United States, the laws of North
Carolina (without regard to any state’s conflict of laws principles) shall be
controlling in all matters relating to the Plan.

14.14 Waiver of Notice

Any notice required under the Plan may be waived by the person entitled to such
notice.

14.15 Successor to Employer

The term “Employer” includes any entity that agrees to continue the Plan under
Subparagraph 16.02(c).

 

85

--------------------------------------------------------------------------------

14.16 Application for Benefits

Each Participant or Beneficiary eligible for benefits under the Plan shall apply
for such benefits according to procedures and deadlines established by the
Committee. In the event of denial of any application for benefits, the procedure
set forth in Subsection 14.17 shall apply.

14.17 Claims Procedure

Claims for benefits under the Plan shall be made in such manner as the Committee
shall prescribe. Claims for benefits and the appeal of denied claims under the
Plan shall be administered in accordance with Section 503 of ERISA, the
regulations thereunder (and any other law that amends, supplements or supersedes
said Section of ERISA), and the claims and appeals procedures adopted by the
Committee and/or the Appeal Committee, as appropriate, for that purpose. The
Plan shall provide adequate notice to any claimant whose claim for benefits
under the Plan has been denied, setting forth the reasons for such denial, and
shall afford a reasonable opportunity to such claimant for a full and fair
review by the Appeal Committee of the decision denying the claim. No action at
law or in equity shall be brought to recover benefits under the Plan until the
appeal rights described in this Subsection have been exercised and the Plan
benefits requested in such appeal have been denied in whole or in part. Any
legal action subsequent to a denial of a benefit appeal taken by a Participant
against the Plan or its fiduciaries must be filed in a court of law no later
than ninety (90) days after the Appeal Committee’s final decision on review of
an appealed claim. All decisions and communications relating to claims by
Participants, denials of claims or claims appeals under this SECTION 14 shall be
held strictly confidential by the Participant, the Committees and the Employers
during and at all times after the Participant’s claim has been submitted in
accordance with this Section.

14.18 Action by Employers

Any action required or permitted under the Plan of an Employer shall be by
resolution of its Board of Directors or by a duly authorized Committee of its
Board of Directors, or by a person or persons authorized by resolution of its
Board of Directors or such Committee.

 

86

--------------------------------------------------------------------------------

SECTION 15

No Interest in Employers

The Employers shall have no right, title or interest in the Trust Fund, nor will
any part of the Trust Fund at any time revert or be repaid to an Employer,
unless:

 

  (a) 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.

The amount of any contribution that may be returned to an Employer pursuant to
Subparagraph (b) or (c) above must be reduced by any portion thereof previously
distributed from the Trust Fund to Participants or their Beneficiaries and by
any losses of the Trust Fund allocable thereto, and in no event may the return
of such amount cause any Participant’s Account balance to be less than the
amount that such balance would have been had the contribution not been made
under the Plan.

 

87

--------------------------------------------------------------------------------

SECTION 16

Amendment or Termination

16.01 Amendment

While the Employers expect to continue the Plan, the Company reserves the right,
subject to SECTION 15, to amend the Plan from time to time, by resolution of the
Board of Directors in accordance with Subsection 14.18, or by resolution of a
committee authorized to amend the Plan by resolution of the Board of Directors
of the Company. Notwithstanding the foregoing, no amendment will reduce a
Participant’s Account balance to less than an amount he or she would be entitled
to receive if he or she had terminated his or her association with the Employers
on the day of the amendment.

16.02 Termination

The Plan will terminate as to all Employers on any date specified by the
Company, by resolution of the Board of Directors in accordance with Subsection
14.18, if advance written notice of the termination is given to the Trustee and
the other Employers. The Plan will terminate as to an individual Employer on the
first to occur of the following:

 

  (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.

 

88

--------------------------------------------------------------------------------

16.03 Effect of Termination

On termination or partial termination of the Plan, the date of termination will
be an Accounting Date, and, after all adjustments then required have been made,
each Participant’s Account balance will be vested in him or her and distributed
to him or her by one or more of the methods described in Subsection 10.01 as the
Committee decides. All appropriate accounting provisions of the Plan will
continue to apply until the Account balances of all Participants have been
distributed under the Plan.

16.04 Notice of Amendment or Termination

Participants will be notified of an amendment or termination within a reasonable
time.

16.05 Plan Merger, Consolidation, Etc.

In the case of any merger or consolidation with, or transfer of assets or
liabilities to, any other Plan, each Participant’s benefits if the Plan
terminated immediately after such merger, consolidation or transfer shall be
equal to or greater than the benefits he or she would have been entitled to
receive if the Plan had terminated immediately before the merger, consolidation
or transfer.

 

89

--------------------------------------------------------------------------------

SECTION 17

Relating to the Plan Administrator and Committees

17.01 The Employee Benefits Administrative Committee

The Board of Directors of the Company has appointed the Committee, consisting of
three (3) or more individuals, to consolidate the powers and duties of
administration of the employee benefit plans and programs maintained by the
Company. Each appointee to the Committee shall serve for as long as is mutually
agreeable to the Company and to the appointee. A majority of the members of the
Committee have the power to act on behalf of the Committee. The Committee may
delegate any of its responsibilities hereunder, by designating in writing other
persons to advise it with regard to any such responsibilities. Any person to
whom the Committee has delegated any of its responsibilities also may delegate
any of its responsibilities hereunder, subject to the approval of the Committee,
by designating in writing other persons to carry out its responsibilities under
the Plan, and may retain other persons to advise it with regard to any of such
responsibilities. The Committee and any delegate of the Committee hereunder may
serve in more than one fiduciary capacity. The Committee and its delegates may
allocate fiduciary responsibilities among themselves in any reasonable and
appropriate fashion, subject to the approval of the Committee. Except as
otherwise specifically provided and in addition to the powers, rights and duties
specifically given to the Committee elsewhere in the Plan and the Trust
Agreement, the Committee shall have the following powers, rights and duties:

 

  (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

 

90

--------------------------------------------------------------------------------

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 to remedy ambiguities,
inconsistencies or omissions. Benefits under this Plan will be paid only if the
Committee decides in its discretion that the applicant is entitled to them.

 

  (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 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.

 

91

--------------------------------------------------------------------------------

17.02 The ERISA Appeal Committee

The Committee has appointed the Appeal Committee primarily for the purpose of
reviewing decisions denying benefits under the Plan and reviewing requests for
hardship withdrawals under Subsection 11.03 of the Plan. The Appeal Committee
shall consist of five (5) or more individuals, and each such appointee shall
serve for as long as is mutually agreeable to the Committee and to the
appointee. A majority of the members of the Appeal Committee will have the power
to act on behalf of the Appeal Committee. Except as otherwise specifically
provided and in addition to the powers, rights and duties specifically given to
the Appeal Committee elsewhere in the Plan and the Trust Agreement, the Appeal
Committee shall have the following powers, rights and duties:

 

  (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.

 

  (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.

 

92

--------------------------------------------------------------------------------

  (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.

The Committee and the Appeal Committee are sometimes referred to herein
collectively as the “Committees.”

17.03 Secretary of the Committee

Each of the Committees may appoint a secretary to act upon routine matters
connected with the administration of the Plan, to whom the Committee or the
Appeal Committee, as the case may be, may delegate such authorities and duties
as it deems expedient.

17.04 Manner of Action

During any period in which two (2) or more members of any of the committees are
acting, the following provisions apply where the context admits:

 

  (a) A member of the Committee or the Appeal Committee, as applicable, by
writing may delegate any or all of such member’s 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 party’s decision
shall control.

 

93

--------------------------------------------------------------------------------

  (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.

17.05 Interested Party

If any member of the Committee or the Appeal Committee, as applicable also is a
Participant in the Plan, such individual may not decide or determine any matter
or question concerning payments to be made to such individual unless such
decision or determination could be made by such individual under the Plan if
such individual were not a member of the applicable committees.

17.06 Reliance on Data

The Committee or the Appeal Committee, as applicable may rely upon data
furnished by authorized officers of any Employer as to the age, Service and
Compensation of any Employee of such Employer and as to any other information
pertinent to any calculations or determinations to be made under the provisions
of the Plan, and the Committees shall have no duty to inquire into the
correctness thereof.

17.07 Committee Decisions

Subject to applicable law, any interpretation of the provisions of the Plan and
any decisions on any matter within the discretion of the Committee or the Appeal
Committee, as applicable made by such party in good faith shall be binding on
all persons. A misstatement or other mistake of fact shall be corrected when it
becomes known, and the Committee or the Appeal Committee, as applicable shall
make such adjustments on account thereof as they consider equitable and
practicable.

 

94

--------------------------------------------------------------------------------

SECTION 18

Adoption of Plan by Controlled Group Members

With the consent of the Company, any Controlled Group Member of the Company may
adopt the Plan and become an Employer hereunder. The adoption of the Plan by any
such Controlled Group Member shall be effected by resolution of its Board of
Directors, and the Company’s consent thereto shall be effected by resolution of
the Committee.

 

95

--------------------------------------------------------------------------------

SECTION 19

Supplements to the Plan

From time to time, the Company or the Committee may adopt Supplements to the
Plan for the purpose of modifying the provisions of the Plan as they apply to
certain or all Participants in a Covered Group or for the purpose of preserving
benefits derived from another plan maintained by an Employer or a Predecessor
Company to an Employer. Such Supplements will form a part of the Plan as applied
to the Participants affected or covered thereby.

*        *        *

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by the
undersigned officer this 26th day of July, 2006.

 

HANESBRANDS INC. By:  

/s/ Kevin Oliver

Its:   Senior Vice President, Human Resources

 

96

--------------------------------------------------------------------------------

EXHIBIT A

Accounts Transferred from the Sara Lee Plan

The assets and liabilities of the Sara Lee Plan attributable to participants
employed by the following businesses/divisions were transferred from the Sara
Lee Plan to the Plan as of the Effective Date:

 

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))

 

97

--------------------------------------------------------------------------------

Business /Division

  

Division Code

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

Covered Groups

The following lists the Covered Groups under the Plan as of the Effective Date

1. Employees of Hanesbrands, Inc. other than (a) part-time employee employees
employed in the Sara Lee Direct retail stores, (b) employees employed in Puerto
Rico, and (c) 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.

 

98