EX-10.3






Exhibit
10.3




HANESBRANDS INC.




EXECUTIVE DEFERRED COMPENSATION PLAN





Conformed through September 25, 2008




 









 





Section 1




Introduction




     1.1 The Plan and Its Effective Date. The Hanesbrands Inc. Executive Deferred Compensation
Plan was established as of January 1, 2006 and was subsequently amended. The Plan has now been
amended and restated, effective as of January 1, 2006.



     1.2 Purpose.




	 	(a)	 	The Company has established this Plan to allow Eligible
Employees to defer compensation as described herein. The Plan is intended to
be a top-hat plan described in Section 201(2) of ERISA.
	 
	 	(b)	 	Amounts deferred under the Plan on and after the Effective Date
(and amounts described in Paragraph 5 of Supplement I to the Plan) are subject
to the provisions of Section 409A of the Code; accordingly, as applied to those
amounts, the Plan shall at all times be interpreted and administered so that it
is consistent with such Code section notwithstanding any provision of the Plan
to the contrary.





     1.3 Administration. The Plan shall be administered by the Committee. The Committee shall
have the powers set forth in the Plan and the complete discretionary power to interpret its
provisions. Any decisions of the Committee shall be final and binding on all persons with regard
to the Plan. The Committee may delegate its authority hereunder to the Executive Vice President,
Human Resources of the Company or to such other officers of the Company as it may deem appropriate.



     1.4 Plan Year. The Plan shall be administered on the basis of the Plan Year.



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Section 2




Glossary of Terms




     2.1 “Annual Base Salary” means the regular rate of compensation to be paid to the Eligible
Employee for services rendered during the Plan Year while an Eligible Employee, excluding elective
deferrals under Code Section 125, severance or termination payments, commissions, foreign service
payments, payments for consulting services and such other unusual or extraordinary payments as the
Committee may determine.



     2.2 “Annual Bonus” means an Eligible Employee’s bonus for a year due under an annual bonus
plan or any other short-term incentive plan of the Company or an Employer.



     2.3 “Balance Calculation Date” means the date a Participant’s Deferral Account is valued for
purposes of making a distribution from such Participant’s Deferral Account. For a distribution
payable on a Distribution Date, the Balance Calculation Date is the last business day of the month
preceding the Distribution Date; for distributions payable due to a Participant’s Separation from
Service or pursuant to Sections 5.2 and 5.3, the Balance Calculation Date is the last business day
of the month in which the Participant has a Separation from Service, is determined to be totally
disabled or dies, as the case may be.



     2.4 “Beneficiary” means the individual(s) or entity designated by a Participant to receive the
balance of the Participant’s Deferral Account in the event of the Participant’s death prior to the
payment of the Participant’s entire Deferral Account. To be effective, any beneficiary designation
shall be filed in such manner as prescribed by the Committee. A Participant may revoke an existing
beneficiary designation by filing another Beneficiary designation in such manner as prescribed by
the Committee. The latest beneficiary designation received by the Committee shall be controlling.
If no Beneficiary is named by a Participant or if he survives all of his named Beneficiaries, the
Deferral Account shall be paid in the following order of precedence:




	 	(a)	 	the Participant’s spouse;
	 
	 	(b)	 	the Participant’s children (including adopted children), per
stirpes;




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	 	(c)	 	the Participant’s beneficiary as designated by the Participant
under the applicable life insurance plan sponsored by the Company or the
Employer; or
	 
	 	(d)	 	the Participant’s estate.





     2.5 “Code” means the Internal Revenue Code of 1986, as amended.



     2.6 “Committee” means the Employee Benefits Administrative Committee of the Sara Lee
Corporation for as long as the Company is a member of Sara Lee Corporation’s controlled group of
corporations (as defined in Section 414 of the Code and the regulations thereunder). Thereafter,
“Committee” shall mean the Employee Benefits Administrative Committee of the Company.



     2.7 “Company” means Hanesbrands Inc.



     2.8 “Deferral” means the amount deferred pursuant to a Deferral Election and, as the context
warrants, includes an “Employer Deferral.”



     2.9 “Deferral Account” means the bookkeeping account established in the name of the
Participant to hold all amounts deferred pursuant to the Participant’s Deferral Elections or
pursuant to an Employer Deferral. As described in Supplement I to this Plan, separate rules apply
to Transferred Participants’ Grandfathered Deferrals.



     2.10 “Deferral Crediting Date” means the date on which, in the absence of a Deferral Election,
the Participant would otherwise have received the Deferral. If such date is not a business day,
then the Deferral Crediting Date shall mean the next business day after the Participant would
otherwise have received the Deferral.



     2.11 “Deferral Election” means a Participant’s irrevocable election to defer receipt of a
Long-Term Incentive Payment, an Annual Bonus, and/or Annual Base Salary for a Plan Year.



     2.12 “Deferral Program” means the terms and conditions, described herein, pursuant to which a
Participant may on or after January 1, 2006 make a Deferral Election.



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     2.13 “Distribution Date” means the specified date on which an Eligible Employee elects to have
a Deferral paid or begin to be paid, pursuant to a Deferral Election.



     2.14 “Effective Date” means the effective date of the Plan, January 1, 2006.



     2.15 “Eligible Employee” means each executive of the Company or an Employer who is identified
as eligible by the Committee.



     2.16 “Employer” means any subsidiary or affiliate of the Company incorporated under the laws
of any state in the United States that has adopted the Plan with the consent of the Committee.



     2.17 “Employer Deferral” means an amount credited to a Participant’s Deferral Account by an
Employer.



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



     2.19 “Fixed Interest Account” means the investment alternative under which interest is
credited to all or a portion of a Participant’s Deferral Account at the rate of 9% each Plan Year.



     2.20 “Interest Account” means the investment alternative (in addition to the Fixed Interest
Account) under which interest is credited to all or a portion of a Participant’s Deferral Account
each Plan Year.



     2.21 “Long-Term Incentive Payment” means any payment due with respect to restricted stock
units granted under the terms of the Stock Plan.



     2.22 “Market Value” of common stock means the average of the high and low quotes for the
applicable common stock on the applicable day on the New York Stock Exchange Composite Transaction
Tape; provided, however, that effective January 1, 2008, the Market Value of common stock of the
Company shall be the closing price on the applicable day on the New York Stock Exchange Composite
Transaction Tape.



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     2.23 “Participant” means any Eligible Employee who makes a Deferral Election or has a Deferral
Account under the Plan.



     2.24 “Plan” means the Hanesbrands Inc. Executive Deferred Compensation Plan.



     2.25 “Plan Year” means the calendar year.



     2.26 “Re-Deferral Election” means a Participant’s irrevocable election to extend a
Distribution Date.



     2.27 “Separation from Service” means a Participant’s termination of employment due to
retirement or otherwise, as defined in Treasury regulations section 1.409A-1(h).



     2.28 “Stock Equivalent Account” means the investment alternative under which all or a portion
of a Participant’s Deferral Account is treated as if it is invested in common stock equivalents.



     2.29 “Stock Plan” means the Hanesbrands Inc. Omnibus Incentive Plan of 2006 (as amended from
time to time) or any successor thereto that provides for the issuance to Participants of common
stock of the Company.



     2.30 “Top-50 Employee” means an employee of the
Company or an Employer who is a U.S. taxpayer or is on
the U.S. payroll and, at any time during the 12-month period ending each December 31st is: (a) one
of the 50 top-paid employees of the Company or an Employer who is either an officer or a director
and has annual compensation greater than $140,000 (as indexed); (b) a five-percent owner (as
defined in Code Section 416(i)(1)(B)) of the Company or an Employer; or (c) a one-percent owner (as
defined in Code Section 416(i)(1)(B)) of the Company or an Employer with annual compensation of
more than $150,000. When identifying Top-50 Employees, the term “annual compensation” shall mean
compensation required to be reported as taxable income on IRS Form W-2, plus elective deferrals
under Code sections 125(a), 132(f)(4) and 402(e)(3), but disregarding the compensation of
nonresident aliens who do not participate in the Plan. If an employee is a Top-50 Employee as of
any December 31st, he shall be treated as a Top-50 Employee for the 12-month period beginning on
the March 1st following that December 31st. NOTE: Effective as of January 1, 2009, the foregoing shall be replaced in its entirety with the
following: “Top-50 Employee” means an employee described in the Company’s Procedures for Determining
Top-50 Employees under Code Section 409A, as amended from time to time.



     2.31 “Trust” means the grantor Trust or Trusts, if any, that the Company or an Employer may
maintain to hold assets to be used for payment of benefits under the Plan.



     2.32 “Unforeseeable Financial Emergency” means a severe financial hardship to the Participant
resulting from (a) an illness or accident of the Participant or of a dependent of the Participant;
(b) loss of the Participant’s property due to casualty; or (c) such other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant as
determined by the Committee.



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Section 3




Participation and Deferral Elections




     3.1 Participation. Subject to the conditions and limitations of the Plan, any Eligible
Employee who makes a Deferral Election as described in Section 3.2 shall become a Participant in
the Plan and shall remain a Participant until the entire balance of his Deferral Account is
distributed to him.



     3.2 Rules for Deferral Elections. Any Eligible Employee may make a Deferral Election for a
Plan Year in accordance with the rules set forth below.




	 	(a)	 	Eligibility. An Eligible Employee shall be eligible to make a
Deferral Election only if he is an active, regular, full-time employee on the
date such election is made.
	 
	 	(b)	 	Deferral Amounts. Under the Deferral Program, for each Plan
Year, an Eligible Employee may make no more than one Deferral Election for each
of the Eligible Employee’s Long-Term Incentive Payments, Annual Bonus, Annual
Base Salary and other payments in the amounts set forth below:






	 	(i)	 	All or any portion of the Eligible Employee’s
Annual Base Salary.
	 
	 	(ii)	 	All or any portion not less than 25 percent of
the Eligible Employee’s Annual Bonus.
	 
	 	(iii)	 	The Eligible Employee’s Long-Term Incentive
Payment in such increments and subject to such limitations and
restrictions as the Committee may establish.
	 
	 	(iv)	 	With respect to any other bonuses and incentive
payments under any plan or arrangement established by the Company or an
Employer as the Committee may designate as compensation




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	 	 	 	eligible for deferral under this Plan, in such increments and subject
to such limitations and restrictions as the Committee may establish.






	 	(c)	 	Timing and Other Requirements for Deferral Elections. All
Deferral Elections must be made in such form as the Committee may prescribe and
must be received by the Committee no later than the date specified by the
Committee. With respect to deferrals of Annual Base Salary, the date specified
by the Committee generally may be no later than the end of the calendar year
preceding the calendar year in which the Annual Base Salary is anticipated to
be paid. With respect to the deferral of an Annual Bonus, the date specified
by the Committee generally may be no later than the end of the calendar year
preceding the beginning of the measurement period for such Annual Bonus;
provided, however, that if the Committee determines that such Annual Bonus
qualifies as “performance-based compensation” (as defined in Code Section
409A(4)(B)(iii) and the regulations thereunder), such Deferral Election may be
made no later than 6 months before the end of the measurement period. With
respect to the initial deferral of a Long-Term Incentive Payment, the date
specified by the Committee generally may be no later than the date that is 30
days after the date of grant and no later than 12 months prior to the earliest
date on which such Long-Term Incentive Payment will become vested; provided,
however, that: (i) if an initial deferral of a Long-Term Incentive Payment is
not completed within the time frames specified above, then a Re-Deferral
Election may be elected to the extent permitted by subsection 3.2(i) below, and
(ii) if the Committee determines that such Long-Term Incentive Payment
qualifies as “performance-based compensation” (as defined above), then such
Deferral Election may be made no later than 6 months before the end of the
measurement period. The Committee, in its complete discretion, may modify the
general rules set forth above as permitted by IRS Notice 2005-1, applicable
regulations and other guidance issued under Code Section 409A.




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	 	(d)	 	Special Rule for Newly Eligible Employees. Notwithstanding
anything in paragraph (c) above to the contrary, in the first year in which an
Eligible Employee becomes eligible to participate in the Plan, such Participant
may make a Deferral Election within 30 days after the date the Participant
first become eligible to participate; provided, however, that such election may
only apply to compensation with respect to services to be performed subsequent
to the election (with Annual Bonuses and Long-Term Incentive Payments prorated
to the extent necessary to comply with regulations issued under Code Section
409A).
	 
	 	(e)	 	Elections Generally Irrevocable. Deferral Elections shall be
irrevocable; provided, that if the Committee determines that a Participant has
an Unforeseeable Financial Emergency, then the Participant’s Deferral Elections
then in effect shall be revoked for the balance of the Plan Year with respect
to all amounts not previously deferred; however, such Participant may make a
new Deferral Election for the following Plan Year.
	 
	 	(f)	 	Investment Election. As part of each Deferral Election, an
Eligible Employee must elect the investment alternatives that shall apply to
the Deferral in accordance with Section 4.2.
	 
	 	(g)	 	Distribution Dates. As part of each Deferral Election, the
Eligible Employee must specify a Distribution Date, which cannot be prior to
the January 1 following the first anniversary of the date the Deferral Election
is made. For 2006 and later years, the Eligible Employee may also specify that
payment may be made on the earlier of the Distribution Date or the Eligible
Employee’s Separation from Service. An Eligible Employee may make a different
Deferral Election for each separate Deferral under the Plan. Except as
provided in subsection (i) below, an election under this subsection (g) is
irrevocable and shall apply only to that portion of the Participant’s Deferral
Account which is attributable to the Deferral.




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	 	(h)	 	Distribution Form. As part of each Deferral Election, an
Eligible Employee must elect the form in which the Deferral will be paid in
accordance with Section 5.1. The distribution form specified may, but need
not, be the same for all distribution events. Except as provided in Section
5.1, an Eligible Employee’s election as to the method of payment shall be
irrevocable.
	 
	 	(i)	 	Re-Deferrals. A Participant may make a Re-Deferral Election;
provided, that no Re-Deferral Election shall be effective unless (i) the
Committee receives the election not later than 12 months prior to the
Distribution Date to be changed, and (ii) the new Distribution Date is not
earlier than the fifth anniversary of the prior Distribution Date. All
Re-Deferral Elections shall be irrevocable and shall be made pursuant to such
rules as the Committee may prescribe. If an initial deferral of a Long-Term
Incentive Payment is not made within the time period specified in subsection
3.2(c), then a Re-Deferral Election may be made under this subsection no later
than 12 months prior to the date on which such Long-Term Incentive Payment
becomes vested. Notwithstanding any rules of the Plan to the contrary, the
Committee, in its complete discretion, may modify the general redeferral rules
set forth above as permitted by IRS Notice 2005-1, applicable regulations and
other guidance issued under Code Section 409A. Pursuant to the preceding
sentence, during 2005, 2006, 2007, and 2008, a Re-Deferral Election need not be
received by the Committee 12 months prior to the Distribution Date to be
changed, and the new Distribution Date may be earlier than the fifth
anniversary of the prior Distribution Date; provided that such a Re-Deferral
Election is completed by the date prescribed by the Committee in the applicable
year, and further provided that a Re-Deferral Election made in 2006 may neither
specify a Distribution Date in 2006 nor defer amounts otherwise payable in
2006, a Re-Deferral Election made in 2007 may neither specify a Distribution
Date in 2007 nor defer amounts otherwise payable in 2007,




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	 	 	 	and a Re-Deferral Election made in 2008 may neither specify a Distribution
Date in 2008 nor defer amounts otherwise payable in 2008.
	 
	 	(j)	 	Reduction for FICA and Income Taxes. Notwithstanding a
Participant’s Deferral Election or any Plan provision to the contrary, the
Company or an Employer may reduce a Participant’s Deferrals to the extent
necessary to pay applicable Social Security taxes, including the Medicare
portion of such taxes, or applicable state, local or foreign income taxes,
payable on Deferrals before they would otherwise be paid or made available to
the Participant.
	 
	 	(k)	 	Change in Deferrals due to Change in Election under Section 125
Plan. A change in a Participant’s Deferrals under the Plan will not be treated
as an accelerated payment nor an impermissible Deferral Election, to the extent
the change results solely from a change in the Participant’s election under a
Code Section 125 plan maintained by the Company or an Employer.





     3.3 Transfers. With the consent of the Committee and subject to such limits and in accordance
with such rules as the Committee may establish in its sole discretion, a Participant who is
employed by a subsidiary of the Company may elect to transfer his entire Deferral Account to a
similar deferred compensation plan maintained by such subsidiary; provided, that no portion of a
Participant’s Deferral Account that is attributable to a Deferral, the Distribution Date for which
has or will have occurred before the scheduled transfer date, may be transferred under this
provision.



     3.4 Employer Deferrals. In addition to Deferrals made pursuant to a Participant’s Deferral
Election under this Section 3, an Employer may credit an Employer Deferral to a Participant’s
Deferral Account. The amount of any Employer Deferral shall be determined by the Employer in its
complete discretion. Prior to the beginning of the period in which the related services are
performed with respect to an Employer Deferral, the Employer shall specify the Distribution Date,
any applicable vesting requirements, and the form of payment for the Employer Deferral. Once
credited to the Participant’s Deferral Account, the Employer Deferral shall be treated as any other
Deferral under the Plan.



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Section 4




Deferral Accounts




     4.1 Deferral Accounts. All amounts deferred pursuant to a Participant’s Deferral Elections
under the Plan shall be allocated to the Participant’s Deferral Account and the Committee shall
maintain a separate subaccount under a Participant’s Deferral Account for each Deferral. Each
Deferral shall be credited to the Deferral Account as of the applicable Deferral Crediting Date.



     4.2 Investment Alternatives. A Participant must make an investment election at the time of
each Deferral Election. The investment election must be made pursuant to such rules as the
Committee may prescribe, subject to Section 4.3, and shall designate the portion of the Deferral
which is to be treated as invested in each available investment alternative. Subject to the
Committee’s right to change the investment alternatives in the future, the investment alternatives
are as follows:




	 	(a)	 	Stock Equivalent Account.






	 	(i)	 	Under the Stock Equivalent Account, the value
of the Participant’s Deferral shall be determined as if the Deferral
were invested in common stock equivalents as of the Deferral Crediting
Date. Subject to the special transition rules set forth in
subparagraph (ii) below, until the Company ceases to be a member of
Sara Lee Corporation’s controlled group of corporations (as defined in
Section 414 of the Code and the regulations thereunder) (referred to
herein as the “Spin-Off Date”), Sara Lee Corporation common stock
equivalents shall be used, and after the Spin-Off Date, Company common
stock equivalents shall be used.
	 
	 	(ii)	 	In connection with Sara Lee Corporation’s
intent to distribute to its shareholders all of Sara Lee Corporation’s
interest in the Company, each Participant deemed to be invested in the
Stock Equivalent Account will automatically be deemed to have part of
his Stock




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	 	 	 	Equivalent Account based on Company common stock equivalents in the
same ratio as all other shareholders of Sara Lee Corporation common
shares. With respect to the remaining portion of the Participant’s
interest in the Stock Equivalent Account that is determined based on
Sara Lee Corporation common stock equivalents, each Participant
invested in the Stock Equivalent Account shall be permitted to elect
to have his interest in the Stock Equivalent Account: (A) determined
as if such amounts were invested in Company common stock, or (B)
transferred to the Interest Account. The Participant election
described in the immediately preceding sentence shall be made at such
times and in accordance with such rules as shall be established by
the Committee; provided, however, that no such election shall be
permitted after the end of the quarter containing the one-year
anniversary of the Spin-Off Date. If a Participant with a balance in
the Stock Equivalent Account that is determined based on Sara Lee
Corporation common stock equivalents does not make such an election
pursuant to this subparagraph, amounts in the Participant’s Stock
Equivalent Account shall continue to be determined as if the amounts
were invested in Sara Lee Corporation common stock; provided,
however, that at the end of the quarter containing the one-year
anniversary of the Spin-Off Date, any amounts which are still
determined as if the amounts were invested in Sara Lee Corporation
common stock shall thereafter be transferred to the Interest Account.
The foregoing transition rules only apply to Stock Equivalent
Account amounts deemed invested in the Sara Lee Corporation common
stock equivalents prior to December 31, 2006; after that date,
investments in the Stock Equivalent Account shall be determined as if
the amounts were invested in Company common stock.




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	 	(iii)	 	The conversion of Sara Lee Corporation’s
common stock equivalents to Company stock equivalents shall be
determined by the Committee in its complete discretion based on the
Market Value for Sara Lee Corporation and for Company common stock from
time to time.
	 
	 	(iv)	 	The number of common stock equivalents to be
credited to the Participant’s Deferral Account and appropriate
subaccounts on each Deferral Crediting Date shall be determined by
dividing the Deferral to be “invested” on that date by the Market Value
of the Sara Lee Corporation or Company common stock, as applicable.
Fractional stock equivalents will be computed to six decimal places.
	 
	 	(v)	 	An amount equal to the number of common stock
equivalents as of the record date multiplied by the dividend paid on
applicable common stock on each dividend payment date shall be credited
to the Participant’s Deferral Account and appropriate subaccount as of
the Deferral Crediting Date coincident with or next following the
dividend payment date and “invested” in additional common stock
equivalents as though such dividend credits were a Deferral.
	 
	 	(vi)	 	In the event of any stock dividend, stock
split, combination or exchange of securities, merger, consolidation,
recapitalization, spin-off or other distribution (other than normal
cash dividends) of any or all of the assets of Sara Lee Corporation or
of the Company to stockholders, or any other similar change or event,
such proportionate adjustments, if any, as the Committee in its
discretion may deem appropriate to reflect such change or event shall
be made with respect to the number of common stock equivalents credited
to a Participant’s Deferral Account.
	 
	 	(vii)	 	The number of shares of applicable Company
common stock to be paid to a Participant as of a Distribution Date or
event shall be




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	 	 	 	equal to the number of common stock equivalents accumulated in the
Stock Equivalent Account on the Balance Calculation Date divided by
the total of the payments to be made. All payments from the Stock
Equivalent Account shall be made in whole shares of Company common
stock with fractional shares credited to federal income taxes
withheld.






	 	(b)	 	Interest Account. Under the Interest Account, for periods
prior to 2008, interest accrues daily and is credited to the Participant’s
Deferral Account on a monthly basis. Effective January 1, 2008, interest
accrues and is credited daily. The rate of interest to be credited will be set
based on a current external rate determined by the Committee from time to time;
provided, however, that the rate of interest from the Effective Date through
the end of the Company’s 2006 fiscal year shall be 4.775% and, effective
January 1, 2007, the rate of interest shall be equal to the 5-year constant
maturity Treasury note interest rate as published by the Federal Reserve in
effect on the first business date of the applicable calendar year. If
installment payments are elected, the amount to be paid to the Participant as
of a Distribution Date shall be determined by dividing the Participant’s
Deferral Account balance as of the applicable Balance Calculation Date by the
number of remaining installment payments. All payments from the Interest
Account shall be made in cash.
	 
	 	(c)	 	Fixed Interest Account. Notwithstanding any Plan provision to
the contrary, the Fixed Interest Account is available only for the deemed
investment of certain Grandfathered Deferrals of Transferred Participants.
With respect to any such amounts deemed invested in the Fixed Interest Account,
for periods prior to 2008, interest is accrued daily and is credited monthly,
at a fixed rate of 9% per year. Effective January 1, 2008, interest accrues
and is credited daily. If installment payments are elected, the amount to be
paid to the Participant as of a Distribution Date shall be determined by
dividing the Participant’s Deferral Account balance as of the applicable
Balance Calculation Date by the number of






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remaining installment payments. All payments from the Fixed Interest Account shall
be made in cash.



     4.3 Investment Elections and Changes. A Participant’s investment elections shall be subject
to the following rules:




	 	(a)	 	Except as provided in subsection (b) below with respect to
Long-Term Incentive Payments, if the Participant fails to make an investment
election with respect to a Deferral, the Deferral shall be deemed to be
invested in the Interest Account.
	 
	 	(b)	 	Any Deferral attributable to a Long-Term Incentive Payment in
the form of common stock, restricted or otherwise, shall automatically be
deemed to be invested in the Stock Equivalent Account.
	 
	 	(c)	 	All investments in the Stock Equivalent Account shall be
irrevocable.
	 
	 	(d)	 	A Participant may elect to transfer amounts invested in the
Interest Account as of the last business day of any calendar quarter to the
Stock Equivalent Account, by filing an investment change election during the
time period specified by the Committee. Any such election shall be effective
as of the first business day of the following calendar quarter. The number of
common stock equivalents to be credited to the Participant’s Deferral Account
and appropriate subaccounts as of the effective date of the Participant’s
election shall be determined by dividing the amount to be transferred by the
Market Value of the applicable company stock on the last business day of the
calendar quarter preceding the effective date of the Participant’s election.
Notwithstanding the foregoing, effective January 1, 2008, a Participant may
elect to transfer amounts from the Interest Account to the Stock Equivalent
Account as of any business day; any such transfer shall be made in accordance
with procedures established by the Committee.





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	 	(e)	 	A Participant may elect to transfer amounts invested in the
Fixed Interest Account as of the last business day of any calendar quarter to
the Interest Account or the Stock Equivalent Account, by filing an investment
change election during the period specified by the Committee. Any such
election shall be effective as of the first business day of the following
calendar quarter. In the event a Participant elects to transfer amounts to the
Stock Equivalent Account, the number of common stock equivalents to be credited
to the Participant’s Deferral Account and appropriate subaccounts as of the
effective date of the Participant’s election shall be determined by dividing
the amount to be transferred by the Market Value of the applicable company
stock on the last business day of the calendar quarter preceding the effective
date of the Participant’s election. Notwithstanding the foregoing, effective
January 1, 2008, a Participant may elect to transfer amounts from the Fired
Interest Account as of any business day; any such transfer shall be made in
accordance with procedures established by the Committee. A Participant may not
elect to transfer amounts into the Fixed Interest Account at any time.





     4.4 Vesting. Unless a different rule is specified for Employer Deferrals under Section 3.4, a
Participant shall be fully vested at all times in the balance of his Deferral Account.



Section 5




Payment of Benefits




     5.1 Time and Method of Payment Under the Deferral Program.




	 	(a)	 	Distribution Options. Payment of a Participant’s Deferral made
under the Deferral Program shall be made in a single lump sum or in
substantially equal annual installments over a period not exceeding ten years
as elected by the Participant in the Deferral Election. If a Participant
fails to elect a method of payment, such payment shall be made in a single lump
sum. Notwithstanding any provision of the Plan or




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	 	 	 	a Participant’s Deferral Election, if a Participant’s distribution event is
his Separation from Service, then payment shall be made in a single lump
sum.
	 
	 	(b)	 	Time When Payments Begin. If a Participant’s Deferral is
payable in a single lump sum, the payment shall be made within the 60-day
period following the Balance Calculation Date, as determined in the sole
discretion of the Committee. If a Participant’s Deferral is payable in
installment payments, then the Participant’s Deferral shall be paid in
substantially equal annual installments commencing in the month following the
initial Balance Calculation Date, with the remaining installment payments made
as of each subsequent January 1st (based on the preceding December 31st
Deferral balance) over the period elected by the Participant in the Deferral
Election. Notwithstanding any other provision of the Plan to the contrary,
distributions to be made to a Top-50 Employee upon his Separation from Service
shall not be made before the date that is six months after the Top-50
Employee‘s Separation from Service.
	 
	 	(c)	 	Changing Distribution Method. A Participant may make a
one-time election after the original Deferral Election to change the method of
payment elected by the Participant; provided, that such election shall be
treated as a Re-Deferral Election. Installment payments shall be treated as a
single payment for purposes of making a Re-Deferral Election, and the first
scheduled installment will be the measuring standard for purposes of
determining whether a Re-Deferral Election complies with the requirements of
subsection 3.2(i) above.
	 
	 	(d)	 	Special Rule for Small Amounts. Notwithstanding any election
by the Participant regarding the timing and manner of payment of his Deferrals,
upon a Participant’s Separation from Service, if the total value of the
Participant’s Deferral Account (excluding Grandfathered Deferrals described in
Supplement I to this Plan, and determined as of the last




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	 	 	 	business day of the month in which the Participant’s Separation from Service
occurs) is less than $25,000, then the Participant’s Deferral Account shall
be distributed in a lump sum within 60 days after the month in which the
Participant’s Separation from Service occurs. Pursuant to subsection 5.1(b)
above, a six-month delay shall be required for any such distribution to a
Top-50 Employee.





     5.2 Payment Upon Total Disability. In the event a Participant becomes totally disabled before
all amounts credited to his Deferral Account have been paid, payment of the Participant’s Deferral
Account shall be made in a lump sum within the 60-day period following the applicable Balance
Calculation Date as determined in the sole discretion of the Committee; provided that, if a
Participant who is a Top-50 Employee incurs a Separation from Service and then becomes totally
disabled, payment may not be made under this Section 5.2 before the end of the six-month period
following the Participant’s Separation from Service. A Participant will be considered to be
totally disabled if the Participant (a) is determined to be unable to engage in any substantially
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, or (b) is, by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than
12 months, receiving income replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the Participant’s Employer.



     5.3 Payment Upon Death of a Participant. In the event a Participant dies before all amounts
credited to his Deferral Account have been paid, payment of the Participant’s Deferral Account
shall be made to the Participant’s Beneficiary in a single lump sum payment within the 60-day
period after the applicable Balance Calculation Date as determined in the sole discretion of the
Committee.



     5.4 Form of Payment. The payment of that portion of a Deferral deemed to be invested in the
Interest Account or the Fixed Interest Account shall be made in cash. The distribution of that
portion of a Deferral deemed to be invested in the Stock Equivalent Account less applicable
withholding shall be distributed in whole shares of Company common stock with



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fractional shares credited to federal income taxes withheld; provided, that any portion of a
Deferral deemed to be automatically invested in the Stock Equivalent Account pursuant to subsection
4.3(b) shall be distributed under the Stock Plan. However, if at the time of distribution a
Deferral is deemed to be invested in the Stock Equivalent Account based on Sara Lee Corporation
common stock equivalents, that Deferral shall be paid in cash.



     5.5 Unforeseeable Financial Emergency. If the Committee determines that a Participant has
incurred an Unforeseeable Financial Emergency, the Participant may withdraw in cash and/or stock
the portion of the balance of his Deferral Account needed to satisfy the Unforeseeable Financial
Emergency, to the extent that the Unforeseeable Financial Emergency may not be relieved through
reimbursement or compensation by insurance or otherwise, or by liquidation of the Participant’s
assets, to the extent the liquidation of such assets would not itself cause severe financial
hardship, or by cessation of Deferrals under the Plan. A withdrawal on account of an Unforeseeable
Financial Emergency shall be paid within the 60-day period following the date on which the
withdrawal is approved as determined in the sole discretion of the Committee.



     5.6 Withholding of Taxes. The Company shall withhold any applicable Federal, state or local
income, employment or other tax from payments due under the Plan.



Section 6




Miscellaneous




     6.1 Funding. Benefits payable under the Plan to any Participant shall be paid directly by the
Participant’s Employer (including the Company if the Participant is employed by the Company). The
Company and the Employers shall not be required to fund or otherwise segregate assets to be used
for payment of benefits under the Plan. Notwithstanding the foregoing, the Company and the
Employers, in the discretion of the Committee, may maintain one or more Trusts; provided that, in
no event shall the Company or an Employer make a contribution or deposit to a Trust during a
“restricted period” as defined in Code Section 409A(b)(3). The assets of any such Trusts with
respect to benefits payable to the employees of each Employer shall remain the assets of such
Employer subject to the claims of its general



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creditors. Any payments by a Trust of benefits provided to a Participant under the Plan shall
be considered payment by the Company or the Employer and shall discharge the Company or the
Employer of any further liability under the Plan for such payments.



     6.2 Account Statements. As soon as practical after the end of each calendar year (or after
such additional date or dates as the Committee, in its discretion, may designate), each Participant
shall be provided with a statement of the balance of his Deferral Account hereunder as of the last
day of such calendar year (or as of such other dates as the Committee, in its discretion, may
designate).



     6.3 Employment Rights. Establishment of the Plan shall not be construed to give any Eligible
Employee the right to be retained in the Company’s service or to any benefits not specifically
provided by the Plan.



     6.4 Interests Not Transferable. No benefit payable at any time under the Plan shall be
subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, or other legal
process, or encumbrance of any kind, except (a) as provided for under the sections of a Company
plan or agreement that state the Company’s authority to demand repayment of amounts owed to the
Company pursuant to those sections, (b) as required for purposes of withholding of any tax under
the laws of the United States or any state or locality, or (c) pursuant to a court-approved
property settlement agreement issued incident to the Participant’s divorce. Any attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any such benefits, whether currently
or thereafter payable, shall be void. No person shall, in any manner, be liable for or subject to
the debts or liabilities of any person entitled to such benefits. If any person shall attempt to,
or shall alienate, sell, transfer, assign, pledge or otherwise encumber his benefits under the
Plan, or if by any reason of his bankruptcy or other event happening at any time, such benefits
would devolve upon any other person or would not be enjoyed by the person entitled thereto under
the Plan, then the Committee, in its discretion, may terminate the interest in any such benefits of
the person entitled thereto under the Plan and hold or apply them for or to the benefit of such
person entitled thereto under the Plan or his spouse, children or other dependents, or any of them,
in such manner as the Committee may deem proper.



     6.5 Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist of the amounts of the
Deferral Account of a Participant that are not distributed because of the



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Committee’s inability, after a reasonable search, to locate a Participant or his Beneficiary,
as applicable, by the later of the end of the Plan Year in which the Participant’s Distribution
Date, Separation from Service, or death occurs, or the end of the 90-day period following said
Distribution Date, Separation from Service, or death. Unclaimed amounts shall be forfeited at the
end of such period. These forfeitures will reduce the obligations of the Company under the Plan,
and the Participant or Beneficiary, as applicable, shall have no further right to his Deferral
Account.



     6.6 Controlling Law, Venue. The law of North Carolina, without regard to any state’s choice of
law principles, shall be controlling in all matters relating to the Plan to the extent not
preempted by ERISA. Any legal action related to the Plan shall be brought only in a federal or
state court located in North Carolina.



     6.7 Gender and Number. Words in the masculine gender shall include the feminine, and the
plural shall include the singular and the singular shall include the plural.



     6.8 Action by the Company. Except as otherwise specifically provided herein, any action
required of or permitted by the Company under the Plan shall be by resolution of the Board of
Directors of the Company or by action of any member of the Committee or person(s) authorized by
resolution of the Board of Directors of the Company.



Section 7




Employer Participation




     Any subsidiary or affiliate of the Company incorporated under the laws of any state in the
United States may, with the approval of the Committee and under such terms and conditions as the
Committee may prescribe, adopt the Plan. The Committee may amend the Plan as necessary or
desirable to reflect the adoption of the Plan by an Employer; provided, however, that an adopting
Employer shall not have the authority to amend or terminate the Plan under Section 8.



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Section 8




Amendment and Termination




     The Company intends the Plan to be permanent, but reserves the right at any time by action of
its Board of Directors to modify, amend or terminate the Plan; provided, however, that any
amendment or termination of the Plan shall not reduce or eliminate any Deferral Account accrued
through the date of such amendment or termination. Upon termination of the Plan, the Committee may
provide that, notwithstanding the Distribution Date or form selected by each Participant, all
Deferral Accounts will be distributed on a date and in a form selected by the Committee.



     The Committee shall have the authority to adopt amendments to the Plan as set forth in
resolutions of the Compensation and Employee Benefits Committee of the Board of Directors of the
Company. The Committee shall provide notice of amendments it adopts to the Compensation and
Employee Benefits Committee of the Board of Directors of the Company on a timely basis.



     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 I




TO




HANESBRANDS INC.




EXECUTIVE DEFERRED COMPENSATION PLAN




(Effective as of January 1, 2006)




Transfer Of Liabilities From




Sara Lee Corporation




Executive Deferred Compensation Plan





	1.	 	Background. Sara Lee Corporation (“Sara Lee”) maintains the Sara Lee Corporation Executive
Deferred Compensation Plan (the “Sara Lee Plan”). In connection with the establishment of the
Company, Sara Lee and the Company desire to cause the liabilities under the Sara Lee Plan
attributable to current and former employees of the Company (and of the Company’s predecessor,
the Branded Apparel division of Sara Lee) to be transferred to the Plan. Current and former
employees described in the immediately preceding sentence are described herein as “Transferred
Participants.”






	2.	 	Transfer, Effect of Transfer. Effective on January 1, 2006 (the “Transfer Date”), the
liabilities/account balances of the Sara Lee Plan attributable to the Transferred Participants
shall be transferred to the Company, to be held and administered in accordance with the terms
of the Plan, as amended; provided, that any elections and beneficiary designations made under
the Sara Lee Plan shall remain in effect under the Plan. The Plan is the successor to the
Sara Lee Plan with regard to Transferred Participants.






	3.	 	Special Rules for Grandfathered Deferrals. Any deferrals made by a Transferred Participant
under the Sara Lee Plan prior to January 1, 2005 (“Grandfathered Deferrals”) shall be subject
to the rules set forth below.






	 	(a)	 	Previously Elected Distribution Dates. As part of each
Deferral Election, the Transferred Participant was required to specify a
Distribution Date for the Grandfathered Deferral, which may differ for




I-1









 






	 	 	 	various Grandfathered Deferrals. Except as provided below, each
Distribution Date is irrevocable and shall apply only to that portion of the
Transferred Participant’s Deferral Account which is attributable to that
Grandfathered Deferral.
	 
	 	(b)	 	Previously Elected Distribution Form. As part of each Deferral
Election, a Transferred Participant was required to elect the form in which the
Grandfathered Deferral will be paid beginning on the selected Distribution Date
as either (i) a single lump sum or (ii) substantially equal annual installments
over a period not exceeding ten years. If a Transferred Participant’s
Grandfathered Deferral is payable in a single lump sum, the payment shall be
made within the 60-day period following the applicable Balance Calculation
Date. If a Transferred Participant’s Grandfathered Deferral is payable in
installment payments, then payments shall be made in substantially equal annual
installments commencing in the month following the initial Balance Calculation
Date, with the remaining installment payments made as of each subsequent
January 1 (based on the preceding December 31st Grandfathered Deferral Account
balance) over the period elected by the Transferred Participant in the Deferral
Election. Except as provided below, a Transferred Participant’s election as to
the time and method of payment shall be irrevocable.
	 
	 	(c)	 	Re-Deferral Elections for Grandfathered Amounts. A Transferred
Participant may make a Re-Deferral Election with respect to Grandfathered
Deferrals; provided, that no Re-Deferral Election shall be effective unless (i)
the Committee receives the election prior to the December 1 of the calendar
year preceding the calendar year in which the Distribution Date to be changed
occurs, and (ii) the new Distribution Date is not earlier than the January 1
immediately following the first anniversary of the date the Re-Deferral
Election is made. All Re-Deferral Elections must be made pursuant to such
rules as the Committee may prescribe.




I-2









 






	 	(d)	 	Change in Method of Payment of Grandfathered Deferrals. A
Transferred Participant may make a one-time election to change the method of
payment elected by the Transferred Participant; provided, that such election
shall not be effective unless the election to change the method of payment is
received by the Committee prior to the December 1 of the calendar year
preceding the calendar year in which the Distribution Date specified in the
original Deferral Election occurs. All such elections must be made pursuant to
such rules as the Committee may prescribe.
	 
	 	(e)	 	Unforeseeable Financial Emergency. If the Committee determines
that a Participant has incurred an Unforeseeable Financial Emergency, the
Participant may withdraw in cash and/or stock the portion of the balance of his
Deferral Account needed to satisfy the Unforeseeable Financial Emergency, to
the extent that the Unforeseeable Financial Emergency may not be relieved
through reimbursement or compensation by insurance or otherwise, or by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship. A withdrawal on
account of an Unforeseeable Financial Emergency shall be paid as soon as
possible following the date on which the withdrawal is approved.
	 
	 	(f)	 	Early Withdrawal with Penalty. Notwithstanding the other
provisions of the Plan and this Supplement to the contrary, a Transferred
Participant may request a withdrawal from his Grandfathered Deferrals, pro
rata, by filing a request with the Committee in such form as the Committee may
prescribe. Any withdrawal under this provision will be charged with a 10
percent early withdrawal penalty which will be withheld from the amount
withdrawn and forfeited.
	 
	 	(g)	 	Disability. In the event a Transferred Participant becomes
totally disabled (as defined above) before all Grandfathered Deferrals have
been paid, payment of the Transferred Participant’s Grandfathered Deferrals
shall be made or commence at the time and in the form of payment elected




I-3









 






	 	 	 	by the disabled Transferred Participant; provided, that the disabled
Transferred Participant requests payment in writing within 180 days of
becoming disabled. If such a request is not made, the disabled Transferred
Participant’s Grandfathered Deferrals will be paid pursuant to the Deferral
Elections and the normal provisions of the Plan.
	 
	 	(h)	 	Death. In the event a Transferred Participant dies before all
Grandfathered Deferrals have been paid, payment of the Transferred
Participant’s Grandfathered Deferrals shall be made or shall commence in at the
time and in the form of payment elected by the Transferred Participant’s
Beneficiary or the executor/executrix of the Transferred Participant’s estate;
provided, that the request is made in writing within 180 days of the
Transferred Participant’s death. If such a request is not made, the deceased
Transferred Participant’s Grandfathered Deferrals will be paid pursuant to the
Deferral Elections and the normal provisions of the Plan.
	 
	 	(i)	 	Small Amounts. Notwithstanding any election by the Transferred
Participant regarding the timing and manner of payment of his Grandfathered
Deferrals, upon a Participant’s retirement or other termination of employment,
if the total value of the Transferred Participant’s Grandfathered Deferrals
(determined as of the end of the month in which the Participant retires or
otherwise terminates his employment) is less than $10,000, then the Transferred
Participant’s Grandfathered Deferrals shall be distributed in a lump sum as
soon as practicable thereafter.






	4.	 	Liberty Fabrics Plan Transfer. Effective June 30, 2002, the account balance of certain
participants in the Liberty Fabrics, Inc. Nonqualified Deferred Compensation Plan (the
“Liberty Plan”) was transferred to and became subject to the provisions of the Sara Lee Plan.
Those balances in the Sara Lee Plan were transferred to the Plan as part of the transfers
described in this Supplement and shall be treated as separate Grandfathered Deferrals under
the Plan. Accordingly, each Liberty Plan participant has specified a Distribution Date,
method of payment, and investment alternative with respect to such




I-4









 






	 	 	transferred account balance. However, notwithstanding anything contained in the Plan to the
contrary, a Liberty Plan participant may not make a one-time election to change the method
of payment under Paragraph 3 above with respect to his transferred account balance.






	5.	 	Rules for Non-Grandfathered Amounts. Amounts transferred from the Sara Lee Plan that were
deferred on or after January 1, 2005 shall be subject to the rules described in the Plan
rather than under Paragraph 3 of this Supplement.






	6.	 	General. Except as expressly provided to the contrary in this Supplement, Transferred
Participants will be subject to the terms and conditions of the Plan, as amended from time to
time. The terms expressly defined in this Supplement shall supersede any conflicting terms of
the Plan. All other defined terms used in this Supplement shall have the same meanings
assigned to them by the Plan.






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