Exhibit 10.2
HANESBRANDS INC.
EMPLOYEE STOCK PURCHASE PLAN OF 2006
EMPLOYEE STOCK PURCHASE PLAN OF 2006
(Conformed Through Second Amendment)
HANESBRANDS INC.
EMPLOYEE STOCK PURCHASE PLAN OF 2006
EMPLOYEE STOCK PURCHASE PLAN OF 2006
1. Purpose. The Hanesbrands Inc. Employee Stock Purchase Plan of 2006 (the “Plan”) provides eligible employees of Hanesbrands Inc. (the “Corporation”), and itsSubsidiariesan opportunity to purchase common stock of theCorporationthrough payroll deductions on an after-tax basis. ThePlanis intended to qualify for favorable tax treatment under section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
2. Definitions. Where the context of thePlanpermits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form. Unless the context clearly indicates otherwise, the following terms shall have the following meanings:
| (a) | Administratormeans the shareholder services division of theCorporationor such independent third party administrator as theCorporationmay engage to administer the Plan. | ||
| (b) | Authorization Formmeans a payroll deduction form which authorizes payroll deductions from aParticipant’s Basic Payand evidences theParticipant’smembership in thePlan.AnAuthorization Formmay be completed in such written, electronic or telephonic form as theCommitteein its discretion shall determine. | ||
| (c) | Basic Paymeans, in relation to aParticipantfor a payroll period, theParticipant’sregular compensation earned during such payroll period, before any deductions or withholding, but excluding overtime, bonuses, amounts paid as reimbursement of expenses (including those paid as part of commissions) and any other additional compensation. | ||
| (d) | Boardmeans the Board of Directors of theCorporation. | ||
| (e) | Committeemeans the Compensation and Benefits Committee of theBoard. | ||
| (f) | Country Programmeans detailed rules specific to a country or group of countries as set forth in a supplement to thePlan. The terms and provisions of each supplement to thePlanthat outline the rules for aCountry Programare a part of thePlanand supersede the provisions of thePlanto the extent necessary to eliminate inconsistencies between thePlanand the supplement. | ||
| (g) | Corporationmeans Hanesbrands Inc., a Maryland corporation, or any successor thereto. |
| (h) | Eligible Employeeis defined in section 4 below. | ||
| (i) | Exchange Actmeans the Securities Exchange Act of 1934, as amended. | ||
| (j) | Exercise Datewith respect to anyOffering Periodmeans theGrant Dateof the immediately followingOffering Period. | ||
| (k) | Exercise Pricewith respect to anyOffering Periodmeans, subject to the terms and conditions of eachCountry Programand unless a greater amount is established by theCommitteeprior to theOffering Period, 85% of theFair Market ValueofShareson theOffering Period’s Exercise Date. | ||
| (l) | Fair Market Valueof aShareon any date shall be the closing price of theCorporation’sStock as reported on the New York Stock Exchange — Composite Transactions Tape (“Composite Tape”) for such date. | ||
| (m) | Grant Datemeans the first Monday of eachOffering Periodon which sales of theCorporation’s Sharesare reported on theComposite Tapeor if noSharesare sold on that Monday, then on the next succeeding day on which there is a sale. | ||
| (n) | Offering Periodmeans a three-month period beginning on the first Monday of each February, May, August, and November, respectively, (or such alternative four months in a cycle of three-month intervals as theCommitteemay establish in its discretion), and ending on the last business day before the first Monday of the succeeding three-month period. If noSharesare sold on what would otherwise be the first Monday of anOffering Period, then thatOffering Periodshall commence on the next succeeding day on which there is a sale, and the immediately precedingOffering Periodshall end on the last business day before the date on which there is a sale. Notwithstanding the definition ofOffering Period, theInitial Offering Periodmeans that period commencing on the date established by theCommitteefor implementing thePlanand ending on the last business day before the first Monday of the next following regularOffering Periodunder thePlan. | ||
| (o) | Participantmeans anEligible Employeewho has completed anAuthorization Form and who continues to make contributions to thePlan, or who no longer contributes to thePlan, but hasSharesstill held by theAdministratorin accordance with thisPlan. | ||
| (p) | Participating Subsidiariesmeans corporations, 50% or more of each class of the outstanding voting stock or voting power of which is beneficially owned, directly or indirectly, by theCorporation, which are authorized by theCorporationto participate in thePlanand which have agreed to participate. | ||
| (q) | Planmeans the Hanesbrands Inc. Employee Stock Purchase Plan of 2006, as amended from time to time. ThePlanis effective June 27, 2006 (the “Effective Date”). |
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| (r) | Plan Accountmeans a payroll deduction account maintained by theCommitteefor eachParticipantto which shall be credited all payroll deductions and from which shall be deducted amounts charged for the purchase ofShareshereunder and withdrawals. | ||
| (s) | Sharesmean shares of Hanesbrands Inc. common stock, par value $.01 per share. |
3. Shares Subject to the Plan.There is hereby reserved for issuance under thePlanan aggregate of 2,442,000Shares. AvailableSharesshall be from such authorized but unissuedShares or fromSharesreacquired from time to time.
4. Eligible Employees.Each employee of theCorporationor aParticipating Subsidiaryshall be eligible to participate in thePlan, except an employee whose customary employment is 20 hours or less per week or who, immediately after anyGrant Date, own 5% or more of the total combined voting power or value of all classes of stock of theCorporationor any related company. If an individual is not an employee (as determined pursuant to applicable regulations under sections 421 and 423 of the Code) of theCorporationor aParticipating Subsidiary, he shall not be eligible to participate in thePlan.
5. Participation in the Plan.AnEligible Employeemay participate voluntarily, by completing and submitting anAuthorization Format designated times, according to the applicableCountry Programprocedures. SuchAuthorization Formmay authorize payroll deductions from the employee’sBasic Pay, or some other means of contributions received from employees (defined according to local procedures). An employee may actively participate in only oneCountry Programat a time.
6. Purchase Price.The purchase price of theSharesshall be determined in accordance with the terms of eachCountry Program. Unless otherwise defined in theCountry Programthe purchase price shall be theExercise Priceas defined herein.
7. Number of Shares Purchasable.AParticipant’sright to purchaseSharesunder the Plan shall be subject to the limits described below.
| (a) | NoParticipantshall have the right to acquireSharesunder thePlanat a rate that exceeds $25,000 inFair Market Value(determined as of theGrant Date) for each |
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| calendar year in which the right is outstanding at any time. If anOffering Period spans two calendar years, then, for purposes of the foregoing $25,000 limitation,Sharespurchased on theExercise Datefor suchOffering Periodwill be applied first against the $25,000 limitation for the earlier year of theOffering Period, and then against the $25,000 limitation for the second year of theOffering Period. |
| (b) | The maximum number ofSharesavailable for purchase by aParticipantat the end of anyOffering Periodshall be equal to $25,000 divided by theFair Market Valueof aShareon the first day of that OfferingPeriod, except that for theOffering Period that begins in November of each year, the above formula shall be applied by replacing “$25,000” with “$50,000.” |
These limits shall be monitored by theCommitteeor its delegate(s).
8. Plan Accounts/Shares Acquired.Participating Subsidiariesshall maintainPlan AccountsforParticipants, where applicable.Sharespurchased pursuant to thePlanshall be recorded on the stock transfer records of theCorporationin book entry form and no stock certificates with respect to anyShareswill be issued.Shareownership shall be kept electronically in theParticipant’s name. As deemed appropriate by theCommitteeacting in its discretion, and consistent with the terms of theCountry Programs,Participantsshall receive periodic statements detailing theirPlan Accountbalances.
9. Changes in Participation.Subject to rules set forth in eachCountry Program(and consistent with otherwise applicablePlanlimitations), aParticipantmay change the amount of his or her payroll deduction or contributions pursuant to administrative rules established by theCommittee.
10. Termination of Participation.Subject to rules set forth in eachCountry Program, aParticipant, at any time and for any reason, may voluntarily terminate participation in thePlanby notification of withdrawal delivered to the appropriate office pursuant to administrative rules established by theCommittee. AParticipant’sparticipation in thePlanshall be involuntarily terminated by his/her employer upon termination of employment for any reason, or upon theParticipantno longer being eligible for participation. In the event of aParticipant’s
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voluntary or involuntary termination of participation in thePlan, no payroll deduction shall be taken from any pay due thereafter; and at the election of suchParticipantorParticipant’s estate, as the case may be, the balance in theParticipant’s Plan Accountshall be paid either to theParticipantor theParticipant’sestate, or shall be retained to purchaseSharesin accordance with normal procedures. Except as provided above, aParticipantmay not withdraw any credit balance in theParticipant’s Plan Account, in whole or in part.
11. Rights as a Stockholder.Except as provided in section 12, none of the rights or privileges of a stockholder of theCorporationshall exist with respect toSharespurchased under thePlanunless and until a statement representing suchSharesshall have been issued to theParticipant.
12. Dividends.Cash dividends onSharesacquired under thePlanwill accrue toParticipants in the same manner as for other shareholders.Participantsshall be invited to enroll in theCorporation’sautomatic dividend reinvestment plan (unless such enrollment is automatic pursuant to the applicableCountry Program).
13. Rights Not Transferable.Rights under thePlanare not transferable by aParticipant other than by will or the laws of descent, and are exercisable during theParticipant’slifetime only by theParticipant.
14. Application of Funds.All funds received or held by theCorporationunder thePlanmay be used for any corporate purposes.
15. Adjustments in Case of Changes Affecting Shares.In the event of a subdivision of outstandingShares, or the payment of a stock dividend, the number ofSharesauthorized for issuance under thePlanshall be increased proportionately, and such equitable adjustments shall be made by theCommittee. In the event of any other change affecting theCorporation’scommon stock, such equitable adjustment shall be made by theCommitteeto give proper effect to such event, subject to shareholder approval to the extent required by Treasury regulations issued under Section 423 of the Code.
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16. Administration of Plans.ThePlanand the detailedCountry Programsshall be administered by theCommittee. TheCommitteeshall have authority to make rules and regulations for the administration of theCountry Programsincluding when and how purchases shall be made, and its interpretations and decisions with regard thereto shall be final and conclusive. TheCommittee shall have authority to delegate its ministerial tasks hereunder to theCorporation’sHuman Resources and Shareholder Accounting Departments and the Human Resources Departments ofParticipating Subsidiarieswhich employParticipants.
17. Amendments to Plans.TheBoardor any person or persons authorized by theBoard, at any time, or from time to time, may amend, suspend, or terminate thePlanor any of theCountry Programs, provided, however, that except to conform thePlanor anyCountry Programto the requirements of local legislation, no amendment shall be made withdrawing the administration of thePlanorCountry Programsfrom theCommittee, or permitting any rights under thePlanto be granted to any employee who is a member of theCommitteeadministering thePlan.
18. Termination.ThePlanshall terminate upon the earlier of the date it is terminated by theBoardand the date that no moreSharesremain to be acquired under thePlan. Upon the termination of thePlan, all remaining credit balances from authorized payroll deductions inParticipants’ Plan Accountsshall be returned to suchParticipants.
19. Governmental Regulations.TheCorporation’sobligation to sell and deliverSharesunder thePlanis subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such stock.
20. Stockholder Approval. ThisPlanshall be effective as of June 27, 2006, as approved by Sara Lee Corporation as the sole shareholder of theCorporation.
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SUPPLEMENT A
TO
HANESBRANDS INC.
EMPLOYEE STOCK PURCHASE PLAN OF 2006
TO
HANESBRANDS INC.
EMPLOYEE STOCK PURCHASE PLAN OF 2006
US PROGRAM
1. Purpose. The purpose of this Supplement A to the Hanesbrands Inc. Employee Stock Purchase Plan of 2006 is to modify and further specify the terms and conditions of thePlanas applied to employees in the United States (the“US Program”). TheUS Programis intended to qualify as an employee stock purchase plan under section 423 of the Code. Any defined term not defined in this Supplement A shall be defined pursuant to thePlan.
2. Contributions. AnEligible Employeemay participate in theUS Programat any time by completing and filing with theAdministratoranAuthorization Form. TheCommittee, in its discretion, may establish a minimum or maximum deduction per payroll period. AParticipant’s deductions will commence as soon as administratively possible during the next succeedingOffering Periodafter theParticipant’s Authorization Formis filed with theAdministratorand recorded. The deductions shall continue until theParticipantterminates participation in theUS Programor until theUS Programis terminated. Subject to the minimum and maximum deductions set forth in thePlanand thisUS Program, aParticipantmay change the amount of his or her payroll deduction no more than four times in each calendar year by filing a newAuthorization Formwith theAdministrator. The election made on the most recentAuthorization Formfiled with theAdministratorat the end of eachOffering Periodwill be the payroll deduction election recorded. Each such change shall become effective as soon as administratively possible during the next succeeding (or designated future)Offering Periodafter theParticipant’s Authorization Formis received and recorded by theAdministrator. Payroll deductions will be held in theCorporation orParticipating Subsidiary’sgeneral accounts until after the end of theOffering Periodat which time they will be applied solely for the purchase ofSharesunder theUS Program. Participants will receive periodic statements of theirPlan Accountbalances.
3. Share Purchases.On eachExercise Date, eachParticipant’s Plan Accountshall be charged for the amount of theSharesto be purchased on that date. The number ofSharesto
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be purchased on anExercise Dateshall be determined by dividing the balance of theParticipant’s Plan Account(including any balance in theParticipant’s Plan Accountafter the immediately priorExercise Date) by theExercise Price, and then rounding downward to the nearest wholeShare. No fractionalSharesshall be purchased, and any balance remaining in theParticipant’s Plan Accountafter theShareshave been purchased on theExercise Dateshall be carried forward to the next succeedingOffering Period. As soon as practicable after theExercise Date, a statement shall be delivered to theParticipantwhich shall include the number ofShares purchased on theExercise Dateand the aggregate number ofSharespurchased on behalf of suchParticipantunder theUS Program. Shareownership shall be kept electronically in the name of theParticipant.
4. Ceasing Contributions/Rights of Participants Who Leave Service.AParticipantwhose participation in theUS Programhas terminated (either upon theParticipant’srequest or upon theParticipant’stermination of employment for any reason) may not rejoin theUS Programuntil the third succeedingOffering Periodfollowing the date of such termination.
5. Contracts of Employment and Other Employment Rights.TheUS Programmay be terminated at any time at the discretion of theCorporationand no compensation will be due to aParticipantas a result. Neither the value of theSharesnor the discount derived from thePurchase Priceshall be added to aParticipant’sincome for the purpose of calculating any employee benefits. No additional rights arise to aParticipantas a result of participating in theUS Programor the opportunity to participate. Participation in theUS Programdoes not confer on anyParticipantany right to future employment. Participation in theUS Programis at the discretion ofEligible Employees.No representation or warranty is given by theCorporationorParticipating Subsidiaries as to the present or future benefit of participation in theUS Program.If aCorporationor aParticipating Subsidiaryceases participation in theUS Programor theCorporationceases operation of thePlan, employees will have no right or action against theParticipating Subsidiary, theCommitteeor theCorporationfor such termination.
6. Administration.
| (a) | TheCommittee(or its delegate(s)) will be responsible for: |
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| (i) | administering theUS Programin unison with theAdministrator and theCorporation; | ||
| (ii) | informingParticipantsof the current market price of theSharesupon request; | ||
| (iii) | informingParticipantsof theExercise Pricefor eachOffering Period; | ||
| (iv) | informingEligible Employeesabout theUS Program, making deductions fromBasic Pay,converting foreign currencies,and maintainingParticipants’ Plan Accounts; and | ||
| (v) | obtaining information from theAdministratorneeded by theCorporationorParticipating Subsidiariesin order to comply with any applicable reporting and withholding requirements. |
| (b) | TheAdministratorwill be responsible for: |
| (i) | holding theSharesin trust in a book account; | ||
| (ii) | maintaining all relevant records and issuing documents required for tax purposes by theCorporation, theParticipating SubsidiariesandParticipants; | ||
| (iii) | providing quarterly statements and other documents as required to theParticipating Subsidiariesfor distribution toParticipants; and | ||
| (iv) | providing management information reports to theCommitteeandParticipating Subsidiaries. |
7.Amendments to the US Program. TheCorporationmay at any time or from time to time amend, suspend or terminate theUS Program.No amendment may be made and no suspension or termination may take effect in respect of rights already accrued to aParticipantas a holder ofShares. TheCorporationmay at any time or from time to time amend theUS
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Programto comply with the requirements of legislation or any regulatory body in the United States.
8. Governmental Regulation.TheUS Programshall be suspended and become inoperative with respect toSharesnot theretofore optioned under theUS Programduring any period in which no registration statement or amendment thereto under the Securities Act of 1933, as amended, is in effect with respect to theSharesso remaining to be purchased under theUS Program.
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