Exhibit 10.7
HANESBRANDS INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
(Effective as of January 1, 2006)
(Conformed Through Third Amendment)

 

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TABLE OF CONTENTS

                      PAGE                
SECTION 1
    1  
Introduction
    1  
1.1
  Purpose     1  
1.2
  Effective Date and Plan Year     1  
1.3
  Employers     2  
1.4
  Plan Administration     2  
1.5
  Plan Supplements     2  
1.6
  Plan Benefits for Participants who Terminated Employment     2                
SECTION 2
    3  
Definitions
    3  
2.1
  2008 Special Election     3  
2.2
  A&B Level Transition Credit     3  
2.3
  Account     4  
2.4
  Annual Company Credit     4  
2.5
  Beneficiary     4  
2.6
  Code     5  
2.7
  Committee     5  
2.8
  Controlled Group Member     5  
2.9
  Corporation     5  
2.10
  [RESERVED.]     5  
2.11
  Deferred Vested Participant     5  
2.12
  [RESERVED.]     5  
2.13
  Effective Date     5  
2.14
  [RESERVED.]     6  
2.15
  Employee     6  
2.16
  Employer     6  
2.17
  ERISA     6  
2.18
  Matching Credit     6  
2.19
  Normal Retirement Date     6  
2.20
  Participant     6  

 

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TABLE OF CONTENTS
(continued)

                      PAGE                
2.21
  Pension Plan     7  
2.22
  Pension SERP Benefit     7  
2.23
  Pension SERP Interest Rate     7  
2.24
  Plan     7  
2.25
  Plan Year     7  
2.26
  Plan Year RSSERP Credit     7  
2.27
  Present Value     7  
2.28
  Residual Credit     8  
2.29
  Retired Participant     8  
2.30
  Retirement Savings Plan     8  
2.31
  RSSERP Benefit     8  
2.32
  Salaried Employee Transition Credit     9  
2.33
  Sara Lee SERP     9  
2.34
  Separation from Service     9  
2.35
  SERP Benefit     9  
2.36
  Specified Employee     9  
2.37
  Supplemental Compensation     10  
2.38
  Transferred Participant     10  
2.39
  Total Disability     10  
2.40
  Other Definitions     11                
SECTION 3
    12  
Participation
    12  
3.1
  Eligibility     12  
3.2
  Period of Participation     12  
3.3
  Reemployed Participants     12                
SECTION 4
    14  
SERP Benefits
    14  
4.1
  RSSERP Benefit     14  
4.2
  Pension SERP Benefit     16  
4.3
  Vesting of Benefits     16  

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TABLE OF CONTENTS
(continued)

                      PAGE                
4.4
  Payment of Benefits     17  
4.5
  Payments Upon Death     23  
4.6
  Payment of FICA Tax on Pension SERP Benefit     24  
4.7
  Benefits Provided by Employers     25  
4.8
  Other Employment     25                
SECTION 5
    26  
General
    26  
5.1
  Committee     26  
5.2
  Interests Not Transferable     26  
5.3
  Facility of Payment     27  
5.4
  Gender and Number     27  
5.5
  Controlling Law     27  
5.6
  Successors     27  
5.7
  Rights Not Conferred by the Plan     27  
5.8
  Litigation by Participants     28  
5.9
  Uniform Rules     28  
5.10
  Action by Employers     28  
5.11
  Tax Effects     28                
SECTION 6
    29  
Amendment and Termination
    29                
SUPPLEMENT A
     
Provisions Relating to Transferred Participants Previously Participating in the
Earthgrains Company Supplemental Executive Retirement Plan
       

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HANESBRANDS INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
(Effective as of January 1, 2006)
SECTION 1
Introduction
1.1 Purpose
     The Hanesbrands Inc. Supplemental Employee Retirement Plan (the “Plan”) is
maintained by the Corporation to provide retirement benefits that are otherwise
limited under the Retirement Savings Plan. In addition, the accrued benefits of
any Transferred Participant shall be transferred from the Sara Lee SERP to the
Plan as of the Effective Date. On and after the Effective Date, all benefits
previously accrued by Transferred Participants under the Sara Lee SERP shall be
provided under the Plan, and Transferred Participants shall accrue no additional
benefits under the Sara Lee SERP.
     The Plan shall constitute a top hat plan within the meaning of
Section 201(2) of ERISA. Notwithstanding any provision of the Plan to the
contrary, the Plan is subject to the provisions of Section 409A of the Code and
at all times shall be interpreted and administered so that it is consistent with
such Code section; provided, however, that the vested benefits of each
Transferred Participant who terminated employment with Sara Lee Corporation and
all of its Controlled Group Members prior to January 1, 2005 shall be determined
in accordance with Subsection 1.6 (and shall not be subject to Code
Section 409A), except as otherwise provided in Subsection 3.3.
1.2 Effective Date and Plan Year
     The Plan is effective as of January 1, 2006. The Plan is administered on
the basis of a Plan Year.

 

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1.3 Employers
     The Corporation and each other Controlled Group Member that is a
participating employer under the Retirement Savings Plan shall be deemed to have
adopted the Plan and shall be treated as an Employer hereunder.
1.4 Plan Administration
     As described in Subsection 5.1, the Committee shall be the administrator
(as defined in Section 3(16)(A) of ERISA) 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.
1.5 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.
1.6 Plan Benefits for Participants who Terminated Employment
     The benefits provided under the Plan with respect to any Participant whose
employment with the Employers has terminated shall, except as otherwise
specifically provided in the Plan, be governed in all respects by the terms of
the Plan in effect as of the date of the Participant’s termination of employment
(or in the case of a Transferred Participant who Separated from Service prior to
the Effective Date, pursuant to the Sara Lee SERP).

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SECTION 2
Definitions
2.1 2008 Special Election
     If the Committee, in its discretion, decides to offer a 2008 Special
Election, then the “2008 Special Election” shall mean a Participant’s valid
election, made prior to December 31, 2008 in accordance with rules and
procedures established by the Committee, to receive his or her RSSERP Benefit
and/or Pension SERP Benefit at a time and in a form specified in Subparagraphs
4.4(a)(iii) and 4.4(b)(iv), respectively.
2.2 A&B Level Transition Credit
     “A&B Level Transition Credit” means the annual credit, if any, made during
the 2006-2010 Plan Years to Participants who had (a) attained age 45 and
(b) completed five or more years of credited service as an A or B level
executive as of January 1, 2006; provided, however, that S. Babu, K. McAleer, K.
Oliver, and C. Yaroch shall be treated as eligible to receive the A&B Level
Transition Credit.. A&B Level Transition Credits will be calculated as follows:

          Credit Age Plus Years of A&B Level Service   (as a percentage of the
Participant’s (as of 1/1/06)   Supplemental Compensation)
50 to 54
  4%
55 to 59
  8%
60 to 64
  12%
65 to 69
  14%
70 or more
  15%

In order to receive the A&B Level Transition Credit for any Plan Year, any
Participant who meets the requirements described herein must be an active
Employee as of the last day of the Plan Year or have retired, died, or become a
Totally Disabled Participant during the Plan Year.

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2.3 Account
     “Account” means the notional accounts and subaccounts maintained for a
Participant under the Plan, as described in Subsection 4.1.
2.4 Annual Company Credit
     “Annual Company Credit” means the annual company contribution made on
behalf of a Participant as described in the Retirement Savings Plan.
2.5 Beneficiary
     “Beneficiary” means the person or persons designated by a Participant to
receive payment of his or her RSSERP Benefit (“RSSERP Beneficiary”) or Pension
SERP Benefit (“Pension SERP Beneficiary”) upon his or her death in accordance
with Subsection 4.5. A beneficiary designation shall be effective only when
properly provided to the Committee in accordance with its rules and procedures
while the Participant is alive and, when effective, will cancel all prior
beneficiary designations. If the Participant does not have an effective RSSERP
Beneficiary and/or Pension SERP Beneficiary designation on the date of his or
her death (because the Participant failed to designate a beneficiary or the
Participant’s named beneficiary died before the Participant), the Committee will
make the applicable payments described in Subsection 4.5 as follows:

  (a)   To the Participant’s surviving spouse;     (b)   If the Participant does
not have a surviving spouse, to or for the benefit of the legal representative
or representatives of the Participant’s estate;     (c)   If the Participant
does not have a surviving spouse and an estate is not opened on behalf of the
Participant, to or for the benefit of one or more of the Participant’s relatives
by blood, adoption or marriage in such proportions as the Committee (or its
delegate) determines.

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2.6 Code
     “Code” means the Internal Revenue Code of 1986, as amended.
2.7 Committee
     “Committee” means the Hanesbrands Inc. Employee Benefits Administrative
Committee appointed by the Corporation to administer the Plan.
2.8 Controlled Group Member
     “Controlled Group Member” means the Corporation and any affiliated or
related corporation which is a member of a controlled group of corporations
(within the meaning of Section 1563(a) of the Code) which includes the
Corporation or any trade or business (whether or not incorporated), which is
under common control with the Corporation (within the meaning of Section 414(c)
of the Code).
2.9 Corporation
     “Corporation” means Hanesbrands Inc., a Maryland corporation.
2.10 [RESERVED.]
2.11 Deferred Vested Participant
     “Deferred Vested Participant” means a Participant who has Separated from
Service, is not a Retired Participant, and is eligible for a monthly deferred
vested pension under the Pension Plan.
2.12 [RESERVED.]
2.13 Effective Date
     “Effective Date” means January 1, 2006, except as otherwise required to
comply with applicable law or as specifically provided herein.

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2.14 [RESERVED.]
2.15 Employee
     “Employee” means a person, including an officer of an Employer, who is in
the employ of an Employer. For all purposes of the Plan, an individual shall be
an “Employee” of or be “employed” by an Employer for any Plan Year only if such
individual is treated by the Employer for such Plan Year as its employee for
purposes of employment taxes and wage withholding for Federal income taxes,
regardless of any subsequent reclassification of such individual as an Employee
by an Employer, any governmental agency, court, or other third party. Any such
reclassification shall not have a retroactive effect for purposes of the Plan.
2.16 Employer
     “Employer” means the Corporation and each other Controlled Group Member
that is a participating employer under the Retirement Savings Plan.
2.17 ERISA
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
2.18 Matching Credit
     “Matching Credit” means the employer matching contribution made on behalf
of a Participant as described in the Retirement Savings Plan.
2.19 Normal Retirement Date
     “Normal Retirement Date” means the first day of the month coincident with
or next following the Participant’s attainment of age 65.
2.20 Participant
     “Participant” means an Employee who satisfies the requirements of
Subsection 3.1.

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2.21 Pension Plan
     “Pension Plan” means the Hanesbrands Inc. Pension and Retirement Plan, as
amended from time to time. No further benefits shall accrue under the Pension
Plan on or after the Effective Date.
2.22 Pension SERP Benefit
     “Pension SERP Benefit” means a Participant’s benefit described in
Subsection 4.2.
2.23 Pension SERP Interest Rate
     “Pension SERP Interest Rate” means an interest rate equal to 120% of the
annual rate on 30-year Treasury securities published for the month that is three
months prior to (i) the first day of the month following the Participant’s
Separation from Service, or (ii) the payment commencement date, as applicable,
rounded to the nearest 0.25%.
2.24 Plan
     “Plan” means the Hanesbrands Inc. Supplemental Employee Retirement Plan, as
amended from time to time.
2.25 Plan Year
     “Plan Year” means the 12-month period beginning each January 1 and ending
the next following December 31.
2.26 Plan Year RSSERP Credit
     “Plan Year RSSERP Credit” means the credit described in Subparagraph
4.1(b).
2.27 Present Value
     “Present Value” means the present value of a Participant’s Pension SERP
Benefit, calculated as if the Pension SERP Benefit were payable as an annuity
under the Pension Plan using the Pension Plan’s (a) early payment factors, as
applicable, (b) the mortality table provided

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under the Pension Plan as of December 31, 2007, and (c) the Pension SERP
Interest Rate. For a Retired Participant’s Present Value calculation, the
assumed commencement date shall be the date of the Participant’s retirement and
the Present Value will be accumulated with interest at the Pension SERP Interest
Rate to the actual payment commencement date. For a Deferred Vested
Participant’s Present Value calculation, the assumed commencement date shall be
the Participant’s Normal Retirement Date and the Present Value shall be
determined as of the date payment is to be made under Subparagraph 4.4(b).
2.28 Residual Credit
     “Residual Credit” means a credit to the Participant’s RSSERP Benefit made
after the Participant’s Separation from Service based on the Annual Company
Credit, A&B Level Transition Credit, and Salaried Employee Transition Credit.
2.29 Retired Participant
     “Retired Participant” means a Participant who has Separated from Service
after attaining age 55 and completing at least 10 years of vesting service (as
defined in the Pension Plan) or after age 65.
2.30 Retirement Savings Plan
     “Retirement Savings Plan” means the Hanesbrands Inc. Retirement Savings
Plan, as amended from time to time; provided, however, that for the period from
the Effective Date to the date the Retirement Savings Plan first becomes
effective, the term “Retirement Savings Plan” shall mean the Sara Lee
Corporation 401(k) Plan as applied to a Participant and Code limits referenced
herein shall be applied as if the Hanesbrands Inc. Retirement Savings Plan, and
the Sara Lee Corporation 401(k) Plan were a single plan for the first Plan Year.
2.31 RSSERP Benefit
     “RSSERP Benefit” means the Participant’s benefit described in Subsection
4.1.

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2.32 Salaried Employee Transition Credit
     In addition, a “Salaried Employee Transition Credit” will be made on behalf
of any employee who (a) had attained age 50; (b) had completed at least 10 years
of vesting service (as defined in the Pension Plan) with the Corporation as of
January 1, 2006; and (c) notwithstanding any provision of the Retirement Savings
Plan, did not receive a Transition Contribution in the Retirement Savings Plan
equal to 10% of the employee’s 2006 Supplemental Compensation. The Salaried
Employee Transition Credit shall be reduced by the amount of any Transition
Contribution the employee received in the Retirement Savings Plan for 2006.
2.33 Sara Lee SERP
     “Sara Lee SERP” means the Sara Lee Corporation Supplemental Executive
Retirement Plan.
2.34 Separation from Service
     “Separation from Service” occurs when a Participant’s terminates employment
with the Corporation and its Controlled Group Members by reason of a
resignation, discharge, retirement, or death. Separation from Service for
purposes of the Plan shall be interpreted consistent with the requirements of
Code Section 409A(a)(2)(A)(i) and any IRS guidance issued thereunder.
2.35 SERP Benefit
     “SERP Benefit” means the Participant’s RSSERP Benefit and/or Pension SERP
Benefit, as applicable.
2.36 Specified Employee
     “Specified Employee” means an employee described in the Corporation’s
“Procedures for Determining Top-50 Employees under Code Section 409A” as
adopted, and as amended from time to time, by the Committee.

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2.37 Supplemental Compensation
     For purposes of the RSSERP Benefit, a Participant’s “Supplemental
Compensation” means his or her compensation as defined in the Retirement Savings
Plan but including the following additional amounts:

  (a)   Any amounts that cannot be recognized as compensation in the Retirement
Savings Plan due to the dollar limitation contained in Code Sections 401(a)(17)
of the Code;     (b)   Deferrals of base salary and bonus compensation for the
Plan Year in which deferred; and     (c)   Any compensation required to be
included as Supplemental Compensation pursuant to an employment, severance or
other written agreement with an Employer; provided, however, that severance
payments to Specified Employees that are delayed six months in compliance with
Code Section 409A shall be attributable to the year in which such amounts were
earned rather than the year in which they are paid.

2.38 Transferred Participant
     “Transferred Participant” means any participant in the Sara Lee SERP who
was employed by the Corporation on December 31, 2005 or who was last employed by
the Corporation’s predecessor division of Sara Lee Corporation; provided,
however, that L. Chaden, D. Volz, and expatriate employees of the Corporation on
January 1, 2006 shall not be considered “Transferred Participants,” so that such
individuals’ benefits under the Sara Lee SERP shall remain payable exclusively
by Sara Lee Corporation under the Sara Lee SERP.
2.39 Total Disability
     “Total Disability” means total disability, as defined in the Pension Plan.
A “Totally Disabled Participant” means a Participant who is subject to a Total
Disability.

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2.40 Other Definitions
     Other defined terms used in the Plan shall have the meanings given such
terms elsewhere in the Plan, the Retirement Savings Plan and the Pension Plan.

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SECTION 3
Participation
3.1 Eligibility
     Transferred Participants shall be eligible to participate in the Plan on
the Effective Date. In addition, each other Employee of an Employer who is a
participant in the Retirement Savings Plan will become a Participant in the Plan
upon the date that the contributions that he or she would otherwise receive
under the Retirement Savings Plan are limited by one or more of the following:

  (i)   By operation of Code Section 415;     (ii)   Because Supplemental
Compensation is not taken into account under the Retirement Savings Plan; or    
(iii)   Because a period required to be included as service pursuant to an
employment, severance or other written agreement with an Employer is not taken
into account under the Retirement Savings Plan.

3.2 Period of Participation
     Each Employee who becomes a Participant in the Plan shall continue as a
Participant until the earlier of the date that all of his or her vested SERP
Benefits (if any) have been distributed or his or her death.
3.3 Reemployed Participants

  (a)   In the event a Participant who terminated employment with the
Corporation and all Controlled Group Members prior to January 1, 2005 is
reemployed by the Controlled Group Members on or after the Effective Date, the
following rules shall apply:

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  (i)   The Participant’s SERP Benefits that were earned and vested as of
December 31, 2004 and that have been distributed or are in distribution status
as of his or her reemployment date shall continue to be distributed in
accordance with the terms of the Sara Lee SERP as in effect on his or her
earlier Separation from Service and shall not be subject to the requirements of
Code Section 409A; and

  (ii)   The Participant’s SERP Benefits that either (i) were earned and vested
as of December 31, 2004 and (A) have not been distributed, or (B) are not in
distribution status, or (ii) were not earned and vested as of December 31, 2004,
shall be subject to the applicable terms of this Plan document and the
requirements of Code Section 409A.

  (b)   In the event a Participant who Separated from Service with the
Corporation and all Controlled Group Members on or after January 1, 2005 is
reemployed by the Controlled Group Members on or after the Effective Date, the
SERP Benefits determined as of the Participant’s initial Separation from Service
shall be subject to the applicable terms of this Plan document and the
requirements of Code Section 409A and distribution of those amounts shall not be
impacted by the Participant’s reemployment.

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SECTION 4
SERP Benefits
4.1 RSSERP Benefit
     Subject to Subsection 4.3, a Participant’s RSSERP Benefit shall be equal to
the balance in the Account maintained on behalf of the Participant under the
Plan, which Account balance shall be equal to the sum of (a) plus (b) plus
(c) below, and as adjusted pursuant to (d) below:

  (a)   Pre-Effective Date Benefit. A Participant’s Account under the Plan shall
be credited with the amount of the Participant’s Sara Lee 401(k) SERP Benefit
determined under the Sara Lee SERP, if any, determined as of the date
immediately preceding the Effective Date.     (b)   Plan Year RSSERP Credits. A
Participant’s Account under the Plan shall be credited with the Plan Year RSSERP
Credit equal to (i) plus (ii) plus (iii) below, if any, as of the last day of
each Plan Year:

  (i)   Annual Company Credit. The amount equal to (A) minus (B) below:

  (A)   The annual company contribution that would have been made on behalf of
the Participant (if any) under the Retirement Savings Plan (or, in 2006, under
the Sara Lee 401(k) Plan) for the applicable Plan Year based on the
Participant’s Supplemental Compensation and without regard to Code Section 415;
minus     (B)   The annual company contribution actually made on behalf of the
Participant under the Retirement Savings Plan (or, in 2006, under the Sara Lee
401(k) Plan) for such Plan Year.

  (ii)   Matching Credit. The amount equal to the Matching Credit that would
have been made on behalf of the Participant under the Retirement Savings

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      Plan for the Plan Year based on his or her Supplemental Compensation less
any matching contributions received (or deemed received as described below) by
the Participant under the Retirement Savings Plan for that Plan Year; provided,
however, that for purposes of determining the Matching Credit under this Plan,
the Participant will be deemed to (A) have made 401(k) contributions (excluding
catch-up contributions) of 4% of the Participant’s Supplemental Compensation,
and (B) have received the appropriate matching contribution under the Retirement
Savings Plan based upon such deemed 401(k) contribution (regardless of the
Participant’s actual contribution rate).

  (iii)   The A&B Level Transition Credit, if any.     (iv)   The Salaried
Employee Transition Credit, if any.

  (c)   Forfeited Retirement Savings Plan Benefit. To the extent that service
under a separation agreement is included in SERP vesting service, a
Participant’s Account under the Plan shall be credited with any amount of the
Participant’s Retirement Savings Plan benefit that would be vested under the
Retirement Savings Plan recognizing SERP vesting service but that is forfeited
due to his or her Separation from Service with the Controlled Group Members
prior to becoming fully vested under the Retirement Savings Plan.     (d)  
Adjustment of Account. The Account maintained on behalf of a Participant under
the Plan shall be adjusted from time to time to reflect a hypothetical
investment in the Hanesbrands Inc. Common Stock Fund under the Retirement
Savings Plan; provided, however, that for as long as the Corporation is a
Controlled Group Member of Sara Lee Corporation, the Account maintained on
behalf of a Participant under the Plan shall be adjusted from time to time to
reflect a hypothetical investment in the Sara Lee Corporation Common Stock Fund
under the Sara Lee Corporation 401(k) Plan. The Committee may establish such
rules and procedures relating to the maintenance, adjustment, and liquidation of

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      Participants’ Accounts, the crediting of credits and the notional income,
losses, expenses, appreciation, and depreciation attributable thereto, as are
considered necessary or advisable. In addition to the Account described above,
the Committee may maintain such other Accounts as the Committee considers
necessary or desirable.

4.2 Pension SERP Benefit
     Subject to Subsection 4.3, a Transferred Participant’s Pension SERP Benefit
shall be equal to the Transferred Participant’s Sara Lee Pension SERP Benefit
determined under the Sara Lee SERP, if any, determined as of the Effective Date.
     In the case of a Participant in compensation band 3, 4 or 5 who is entitled
to receive severance benefits under the Hanesbrands Inc. Severance Pay Plan
(previously known as the Sara Lee Corporation Severance Pay Plan for Employees
of Sara Lee Branded Apparel) , and who would satisfy the requirements for early
retirement under the Pension Plan if his/her severance period (as defined in the
separation agreement pursuant to which the severance benefits are paid) were a
period of actual employment under the Pension Plan, then to the extent provided
in the Participant’s separation agreement, the Participant’s SERP Benefit shall
be increased to reflect the difference between (i) the Pension Plan benefit that
would be payable if the years of severance period was recognized as years of
vesting service as defined in the Pension Plan; and (ii) the actual Pension Plan
benefit; provided, however, that such Participant’s severance period shall not
be considered as credited service for purposes of determining the amount of the
Participant’s accrued Pension SERP Benefit.
4.3 Vesting of Benefits
     A Participant shall have a nonforfeitable right to his or her SERP Benefit
as provided in Subparagraphs (a) and (b) below, as applicable.

  (a)   RSSERP Benefit. A Participant’s Annual Company Credits and Matching
Credits shall become nonforfeitable on the same basis and at the same time as
his or her annual company contributions and matching contributions,
respectively, become

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      nonforfeitable under the Retirement Savings Plan. A Participant’s A&B
Level Transition Credits or Salaried Employee Transition Credit, if any, shall
be nonforfeitable at all times.

  (b)   Pension SERP Benefit. A Participant’s Pension SERP Benefit shall become
nonforfeitable on the same basis and at the same time as his or her benefit
under the Pension Plan.

In determining whether a Participant is vested in his or her SERP Benefit, any
period required to be included as service pursuant to an employment, severance
or other written agreement with an Employer shall be considered service with an
Employer under the Plan.
4.4 Payment of Benefits
     A Participant’s SERP Benefit shall, subject to the further provisions of
this Plan, be payable to or on account of the Participant as follows:

  (a)   RSSERP Benefit.

  (i)   Balances Under $50,000. If the value of the Participant’s vested RSSERP
Benefit (determined without regard to any Residual Credit) is less than $50,000
as of the Participant’s Separation from Service, then any election made by the
Participant under Subparagraph (iii) or (iv) below shall be void, and the
Participant’s vested RSSERP Benefit shall be paid in a lump sum in the seventh
month following the Participant’s Separation from Service.     (ii)   Balances
of $50,000 or More. If the value of the Participant’s vested RSSERP Benefit
(determined without regard to any Residual Credit) is $50,000 or more on the
Participant’s Separation from Service, the Participant’s vested RSSERP Benefit
shall be paid in a lump sum in the seventh month following the Participant’s
Separation from Service, unless the Participant made a valid election under
Subparagraph (iii) or (iv)

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      below, in which case the Participant’s RSSERP Benefit shall be paid in
accordance with the applicable election.

  (iii)   Participant Elections. An active Participant may elect during the 2008
Special Election period to receive his or her vested RSSERP Benefit as follows:

  (A)   In a lump sum to be paid at the later of the seventh month following the
Participant’s Separation from Service or on a specified date that is not later
than the Participant’s 70th birthday; or     (B)   In annual installments over a
period of five or ten years (I) commencing as of the first day of the seventh
month following the Participant’s Separation from Service, or (II) commencing at
the later of the seventh month following the Participant’s Separation from
Service or a specified date that is not later than the Participant’s 70th
birthday.

      Any election under this Subparagraph shall be irrevocable, subject to the
provisions of Subparagraph (iv) below.     (iv)   Changes in Participant
Elections. After 2008, a Participant may make a one-time, irrevocable election
to delay commencement of his or her RSSERP Benefit to a date not later than his
or her 70th birthday, or to change the form of payment of his or her RSSERP
Benefit to one of the forms specified in Subparagraph (iii) above, provided that
no such election shall be effective unless (A) the Committee receives the
election not later than 12 months prior to the previously scheduled distribution
date, and (B) payment of the Participant’s RSSERP Benefit is made not earlier
than the fifth anniversary of the previously scheduled distribution date.

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  (v)   Payment of Residual Credits. Notwithstanding any Plan provision to the
contrary, any Residual Credit to the Participant’s Account after his or her
Separation from Service shall be paid as follows:

  (A)   If the Participant receives payment of his or her RSSERP Account in a
lump sum, any Residual Credit to the Participant’s Account shall be paid in a
lump sum as soon as practicable but in no event later than the end of the
calendar year in which such amount is credited; provided, however, that if the
Participant has elected to receive his or her lump sum payment later than seven
months following Separation from Service, any Residual Credit shall be paid on
the date elected by the Participant for payment of his or her lump sum benefit.
    (B)   If the Participant elects to receive payment of his or her RSSERP
Account in installments, any Residual Credit shall be added to the Participant’s
RSSERP Account and shall be paid in installments over the remaining installment
period.

  (vi)   2009/2010 Lump Sum Cashout. Notwithstanding the foregoing, an active
Participant may elect to receive distribution of his or her RSSERP Benefit
determined as of December 31, 2008, with such amount paid to the Participant in
a lump sum in 2009 or 2010, as elected by the Participant. For this purpose, a
Participant’s RSSERP Benefit as of December 31, 2008 shall include his or her
RSSERP Credits for the 2008 Plan Year; the lump sum paid in 2009 shall include
gains/losses credited to the Participant’s RSSERP Account through February 28,
2009; and the lump sum paid in 2010 shall include gains/losses credited to the
Participant’s RSSERP Account through December 31, 2009. If a Participant makes
an election under this Subparagraph and is not fully

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      vested as of the specified payment date, then the Participant shall
receive payment of his or her vested December 31, 2008 RSSERP Benefit on the
specified payment date, and his or her remaining December 31, 2008 RSSERP
Benefit (as adjusted pursuant to Subparagraph 4.1(d)) shall be distributed as it
becomes vested, with payment of each vested portion made by no later than
2-1/2 months after the end of the Plan Year in which it vests.

  (vii)   Post-2008 RSSERP Credits. Notwithstanding any Plan provision to the
contrary, a Participant’s RSSERP Credits for 2009 and each subsequent Plan Year
shall be paid immediately to the Participant, to the extent vested, with payment
made by the end of the applicable Plan Year in which such amount would otherwise
be credited to the Participant’s Account. If any portion of a Participant’s
RSSERP Credit for a Plan Year is not then vested, such portion (as adjusted
pursuant to Subparagraph 4.1(d)) shall be distributable upon vesting, with
payment made of each newly vested portion by no later than 2-1/2 months after
the end of the Plan Year in which it vests.

  (b)   Pension SERP Benefit.

  (i)   General Payment Rule. If (A) the Present Value of a Participant’s vested
Pension SERP Benefit is less than $50,000 as of the Participant’s Separation
from Service, or (B) the Present Value of the Participant’s vested Pension SERP
Benefit is $50,000 or more but the Participant is not a Retired Participant,
then any 2008 Special Election or other election made by the Participant under
Subparagraph (v) below shall be void, and the Present Value of the Participant’s
vested Pension SERP Benefit shall be paid in a lump sum in the seventh month
following the Participant’s Separation from Service.

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  (ii)   Retired Participants with Benefits of $50,000 or More. If the Present
Value of a Participant’s vested Pension SERP Benefit is $50,000 or more at the
Participant’s Separation from Service and the Participant qualifies as a Retired
Participant, then the Present Value shall be paid in a lump sum in the seventh
month following the Participant’s Separation from Service, unless the
Participant made a 2008 Special Election or an election under Subparagraph (v)
below, in which case the Present Value of the Participant’s Pension SERP benefit
shall be paid in accordance with the applicable election.     (iii)   Totally
Disabled Participants. Notwithstanding Subparagraph (i) above, if a Participant
qualifies as a Totally Disabled Participant, then the Present Value of the
Participant’s vested Pension SERP Benefit (determined as if the Participant were
a Retired Participant) shall be paid in a lump sum on the Totally Disabled
Participant’s 65th birthday. However, if the Present Value of the Participant’s
Pension SERP Benefit is $50,000 or more and the Participant made a 2008 Special
Election or an election under Subparagraph (v) below, the Present Value of the
Participant’s Pension SERP Benefit shall be paid in accordance with the
applicable election.     (iv)   2008 Special Elections. During the 2008 Special
Election period, an active Participant may elect to receive the Present Value of
his or her Pension SERP Benefit as follows:

  (A)   In a lump sum to be paid at the later of the seventh month following the
Participant’s Separation from Service or on a specified date that is not later
than the Participant’s 70th birthday; or     (B)   In monthly installments over
a period of five or ten years (I) commencing as of the first day of the seventh
month following the Participant’s Separation from Service, or (II)

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      commencing at the later of the seventh month following the Participant’s
Separation from Service or a specified date that is not later than the
Participant’s 70th birthday.

  (v)   Changes in Participant Elections. After 2008, a Participant may make a
one-time, irrevocable election to delay commencement of his or her Pension SERP
Benefit to a date not later than his or her 70th birthday, or to change the form
of payment of his or her Pension SERP Benefit to one of the forms specified in
Subparagraph (iv) above, provided that no such election shall be effective
unless (A) the Committee receives the election not later than 12 months prior to
the previously scheduled distribution date, and (B) payment of the Participant’s
Pension SERP Benefit is made not earlier than the fifth anniversary of the
previously scheduled distribution date.     (vi)   2009/2010 Lump Sum Cashout.
Notwithstanding the foregoing, an active Participant may elect to receive the
Present Value of his or her vested Pension SERP Benefit in a lump sum in
January 2009 or January 2010, as elected by the Participant. For purposes of
this Subparagraph 4.4(b)(vi), Present Value shall be based on the Participant’s
age at January 1 of the selected distribution year, the Participant’s Pension
SERP Benefit payable at age 65, and an interest rate of 5.25%; provided that any
lump sum cashout paid under this Subparagraph after a Participant’s Separation
from Service shall include any early retirement subsidy to which the Participant
is entitled as of his or her Separation from Service. If a Participant receives
a payment under this Subparagraph, then the Participant shall not be entitled to
any Pension SERP Benefits upon his or her subsequent Separation from Service.

  (c)   Pre-2009 Distribution Rules. Notwithstanding the foregoing, a
Participant who Separates from Service prior to 2009 shall receive payment of
his or her RSSERP

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      and Pension SERP Benefits, if any, pursuant to payment elections made and
filed with the Committee in accordance with applicable procedures established by
the Committee, and in accordance with applicable provisions of Code Section 409A
and guidance issued thereunder.

  (d)   All elections under this Subsection 4.4 shall be made in accordance with
rules and procedures and within the time period specified by the Committee.

4.5 Payments Upon Death
     Notwithstanding any provision of Subsection 4.4 to the contrary, the
following rules shall apply upon a Participant’s death:

  (a)   RSSERP Benefit. If the Participant dies before complete payment of his
or her vested RSSERP Benefit under Subparagraph 4.4(a), payment of his or her
remaining RSSERP Benefit shall be made to his or her RSSERP Beneficiary in a
lump sum in the fourth month following the Participant’s death.     (b)  
Pension SERP Benefit.

  (i)   Death Before Commencement.

  (A)   If a Participant Separates from Service before qualifying as a Retired
Participant and dies before commencement of his or her Pension SERP Benefit, the
Present Value of the Participant’s vested Pension SERP Benefit shall be paid to
the Participant’s Pension SERP Beneficiary in a lump sum in the fourth month
following the Participant’s death, or if earlier, the date determined pursuant
to Subparagraph 4.4(b)(i).     (B)   If a Retired Participant dies before
commencement of his or her Pension SERP Benefit, the Present Value of the

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      Participant’s Pension SERP Benefit shall be paid to the Participant’s
Pension SERP Beneficiary in a lump sum in the fourth month following the
Participant’s death, or if earlier, the date determined pursuant to
Subparagraphs 4.4(b)(i) or (ii).

  (C)   Death while Active. If a Participant dies while actively employed by the
Corporation, the Present Value of the Participant’s Pension SERP Benefit
attributable to the active death benefit, as determined under the Pension Plan,
shall be paid to the Participant’s Pension SERP Beneficiary in a lump sum in the
fourth month following the Participant’s death. If such benefit is payable to
the Participant’s surviving spouse, the Present Value shall be determined based
on the surviving spouse’s age on the date of the Participant’s death. If such
benefit is payable to a Pension SERP Beneficiary other than the Participant’s
surviving spouse, the Present Value shall be determined as if such amount were
payable to a spouse the same age as the Participant.

  (ii)   Death After Commencement. If the Participant dies after commencement of
his or her Pension SERP Benefit payments, the Present Value of any unpaid
portion of his or her Pension SERP Benefit shall be paid to his or her Pension
SERP Beneficiary in a lump sum in the fourth month following the Participant’s
death.

4.6 Payment of FICA Tax on Pension SERP Benefit
     Notwithstanding anything contained in the Plan to the contrary, an initial
Pension SERP Benefit payment may, in the discretion of the Committee, be made on
behalf of the Participant in the amount of the Federal Insurance Contributions
Act (“FICA”) tax due from the Participant on

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his or her Pension SERP Benefit, determined as of the date such FICA tax is due.
If such initial Pension SERP Benefit payment is made, then all later
calculations and payments related to the Participant’s Pension SERP Benefit
shall be adjusted to reflect the initial payment.
4.7 Benefits Provided by Employers
     Benefits payable under this Plan to a Participant or his or her surviving
spouse, beneficiary or estate shall be paid directly by the Participant’s
Employer. No Employer shall be required to segregate any assets to be applied
for the payment of benefits under this Plan.
4.8 Other Employment
     A Participant or his or her surviving spouse or beneficiary who is
receiving SERP Benefits hereunder will continue to be entitled thereto
regardless of other employment or self-employment.

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SECTION 5
General
5.1 Committee
     This Plan will be administered by the Committee appointed by the Board of
Directors of the Corporation or a committee thereof. The Committee may delegate
any of its authority hereunder to a committee or to one or more individuals
provided such delegation is in writing. Any such delegation is incorporated
herein by this reference. The Committee, and to the extent applicable its
delegates, shall have the discretionary authority to determine factual issues
and eligibility for Plan coverage and benefits, to interpret the provisions and
terms of Plan and to decide claims for benefits under the terms of the Plan.
Subject to applicable law, any interpretation of the provisions of the Plan
(including any Supplement) and any decision on any matter within the discretion
of the Committee, or as applicable its delegates, made by it or them in good
faith shall be final and binding on all persons. A misstatement or other mistake
of fact shall be corrected when it becomes known, and the Committee or as
applicable its delegates shall make such adjustment on account thereof as it
considers equitable and practicable. The Committee shall not be liable in any
manner for any determination of fact made in good faith. Any claim for benefits
under the Plan shall be handled by the Committee, or as applicable its
delegates, pursuant to the claims procedures under the Retirement Savings Plan
or the Pension Plan, as applicable, and such procedures are incorporated herein
by this reference. No action at law or in equity may be brought to recover
benefits under the Plan until the Participant has exercised all appeal rights
and the Plan benefits requested in such appeal have been denied in whole or in
part. Benefits under the Plan shall be paid only if the Committee, or as
applicable its delegates, in its or their discretion, determines that a
Participant (or other claimant) is entitled to them.
5.2 Interests Not Transferable
     Except as provided under an agreement between the Participant and the
Corporation or required for purposes of withholding of any tax under the laws of
the United States or any State

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or locality, the interest of any Participant, his or her spouse or minor
children under the Plan is not subject to the claims of creditors and may not be
voluntarily or involuntarily sold, transferred, assigned, alienated or
encumbered.
5.3 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 amounts payable to such person may be paid to such
person’s legal representative, or to a relative or friend of such person for his
or her benefit, or such amounts may be applied for the benefit of such person in
any way the Committee considers advisable.
5.4 Gender and Number
     Where the context admits, words denoting men include women, the plural
includes the singular and vice versa.
5.5 Controlling Law
     To the extent not superseded by the laws of the United States, the laws of
North Carolina (without regard to any state’s conflict of law principles) shall
be controlling in all matters relating to the Plan.
5.6 Successors
     This Plan is binding on each Employer and will inure to the benefit of any
successor of an Employer, whether by way of purchase, merger, consolidation or
otherwise.
5.7 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.

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5.8 Litigation by Participants
     If a legal action begun against 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 benefits, the cost to
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 or on behalf of the Participant concerned.
5.9 Uniform Rules
     In managing the Plan, the Committee will apply uniform rules to all
Participants similarly situated.
5.10 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.
5.11 Tax Effects
     The Corporation, the Committee, the Controlled Group Members, and their
representatives and delegates do not in any way guarantee the tax treatment of
benefits for any individual, and the Corporation, the Committee, the Controlled
Group Members, and their representatives and delegates do not in any way
guarantee or assume any responsibility or liability for the legal, tax, or other
implications or effects of the Plan. In the event of any legal, tax, or other
change that may affect the Plan, the Corporation, or the Controlled Group
Members, the Corporation may, in its sole discretion, take any actions it deems
necessary or desirable as a result of such change.

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SECTION 6
Amendment and Termination
     While the Employers expect to continue the Plan indefinitely, the
Corporation reserves the right to amend or terminate the Plan by action of the
Board of Directors of the Corporation or by action of a committee or an
individual authorized to amend or terminate the Plan, provided that in no event
shall any Participant’s SERP Benefit accrued to the date of such amendment or
termination be reduced or modified by such action.
     Any amendment or termination of the Plan shall comply with the restrictions
of Code Section 409A to the extent applicable. Specifically, no amendment or
termination of the Plan may accelerate a scheduled payment unless permitted by
Treasury regulations section 1.409A-3(j)(4), nor may any amendment permit a
subsequent deferral unless such amendment complies with the requirements of
Treasury regulations section 1.409A-2(b).

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SUPPLEMENT A
TO
HANESBRANDS INC.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN
Provisions Relating to Transferred Participants Previously Participating in
the Earthgrains Company Supplemental Executive Retirement Plan
     A-1. History and Purpose. The purpose of this Supplement A is to describe
the benefits that would have been payable under the Earthgrains SERP to each
Supplement A Participant (defined below) and to describe the benefits payable to
each eligible Supplement A Participant under the Plan. This Supplement A is
intended to supersede the terms of the Earthgrains SERP as applied to any
Supplement A Participant. Accordingly, any benefit payable to or on behalf of a
Supplement A Participant under this Supplement shall be considered to have been
provided under the Earthgrains SERP for all purposes. A Supplement A Participant
who receives the benefits described in this Supplement shall be deemed to have
received his or her entire Earthgrains SERP benefit. Except as otherwise
specifically provided herein, a Supplement A Participant is not intended to
receive any rights under this Supplement A in addition to his or her rights
under the Earthgrains SERP. “Supplement A Participant” means each Transferred
Participant who was an active participant in the Earthgrains SERP as of
December 31, 2002.
     A-2. Supplement A Pension SERP Benefit. In lieu of a Pension SERP Benefit,
a Supplement A Participant shall be entitled to the following:

  (a)   Amount of Supplement A Pension SERP Benefit. Subject to the requirements
set forth below, each Supplement A Participant who retires or terminates
employment with all Controlled Group Members shall be entitled to a benefit
equal to the following:

  (i)   The benefit which would be payable to the Supplement A Participant under
the Earthgrains supplement to the Pension Plan, determined (A) without regard to
the limitation of Code Section 401(a)(17), and (B) using

A-1

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      the definition of Earthgrains Formula Compensation (as defined in the Sara
Lee SERP); minus     (ii)   The Supplement A Participant’s actual accrued
benefit under the Earthgrains supplement of the Pension Plan.

  (b)   Form of Payment.

  (i)   The benefit payable to a Supplement A Participant (the Participant’s
“Supplement A SERP Benefit”) shall be paid as follows:

  (A)   Subject to Subparagraphs (B) through (D) below, if the Participant did
not make a valid 2008 Supplement A Special Election (as defined below), the
Participant’s vested Supplement A SERP Benefit shall be paid in a lump sum in
the seventh month following the Participant’s Separation from Service.     (B)  
If the Supplement A Participant made a valid 2008 Supplement A Special Election,
the Participant’s vested Supplement A Benefit shall be paid in accordance with
such election. A “2008 Supplement A Special Election” means a Supplement A
Participant’s valid election, made prior to December 31, 2008 in accordance with
rules and procedures established by the Committee, to receive his or her
Supplement A Benefit in actuarially equivalent quarterly installments,
semi-annual installments or annual installments (as elected) for a period not to
exceed five years, commencing in the seventh month after such Supplement A
Participant’s Separation from Service or commencing at the later of the seventh
month following the Supplement A Participant’s Separation from Service or a

A-2

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      specified date that is not later than the Supplement A Participant’s 70th
birthday.     (C)   After 2008, a Participant may make an irrevocable election
to receive his or her vested Supplement A Benefit in actuarially equivalent
quarterly installments, semi-annual installments or annual installments (as
elected) for a period not to exceed five years, commencing at least five years
after the later of (I) the Participant’s Separation from Service, or (II) the
date the Participant otherwise would have commenced payment of his or her
Supplement A Benefit under Subparagraphs (A) or (B) above, as applicable;
provided, however that an election under this Subparagraph (C) must be made in
accordance with rules and procedures established by the Committee and must be
received by the Committee at least one year before the Participant’s previously
scheduled distribution date.     (D)   Notwithstanding the foregoing, a
Participant may elect to receive his or her vested Supplement A Benefit
attributable to his or her post-2002 service in a lump sum in January 2009 or
January 2010, as elected by the Participant. For purposes of this Subparagraph
(D), the lump sum Present Value of the post-2002 Supplement A Benefit will be
based on the Participant’s age at January 1 of the selected distribution year,
the Participant’s Supplement A Benefit payable at age 65, and an interest rate
of 5.25%; provided that this lump sum benefit shall include any applicable early
retirement subsidy if the Participant has a Separation from Service before the
lump sum benefit is paid. The Participant may also elect to receive that portion
of his or

A-3

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      her Supplement A Benefit attributable to his or her pre-2003 service; if
the Participant makes such an election, the pre-2003 benefit shall be paid in a
lump sum on the date such benefit becomes vested, with a reduction in the
benefit to reflect the Participant’s then current age based on the early
retirement factors specified in Paragraph A-2(c)(ii) below. All elections under
this Subparagraph shall be made in accordance with rules and procedures and
within the time period specified by the Committee.

  (c)   Actuarial Factors. The following actuarial factors shall apply for
purposes of this Paragraph A-2:

  (i)   Present Value. Present value shall be determined using the factors set
forth in the Pension Plan on December 31, 2007.     (ii)   Early Retirement
Reduction. The Supplement A SERP Benefit shall be reduced 4/12% per month for
each of the first 60 months and 5/12% per month for each of the next 60 months
that payment commences before Normal Retirement Date; provided, however, that no
reduction shall apply if the Supplement A Participant retires after attaining
age 62 with 20 Years of Service.     (iii)   Installment Payments. The actuarial
factors for determining installment payments shall be determined using the
factors set forth in the Pension Plan on December 31, 2007.

     A-3. Plan Provisions. All provisions of the Plan, to the extent that they
are consistent with the provisions of this Supplement, shall apply to Supplement
A Participants; provided, however, that a Supplement A Participant shall only be
entitled to a benefit under the Plan to the extent such benefit is specifically
provided under this Supplement A.

A-4