Hanesbrands (HBI) 10-Q 2008 Q3 Quarterly report

Exhibit 10.3

HANESBRANDS INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

Conformed through September 25, 2008

Section 1

Introduction

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

     1.2Purpose.

(a)	TheCompanyhas established thisPlanto allowEligible Employees to defer compensation as described herein. ThePlanis intended to be a top-hat plan described in Section 201(2) ofERISA.
(b)	Amounts deferred under thePlanon and after theEffective Date (and amounts described in Paragraph 5 of Supplement I to thePlan) are subject to the provisions of Section 409A of theCode; accordingly, as applied to those amounts, thePlanshall at all times be interpreted and administered so that it is consistent with suchCodesection notwithstanding any provision of thePlan to the contrary.

     1.3Administration. ThePlanshall be administered by theCommittee. TheCommitteeshall have the powers set forth in thePlanand the complete discretionary power to interpret its provisions. Any decisions of theCommitteeshall be final and binding on all persons with regard to thePlan. TheCommitteemay delegate its authority hereunder to the Executive Vice President, Human Resources of theCompanyor to such other officers of theCompanyas it may deem appropriate.

     1.4Plan Year. ThePlanshall be administered on the basis of thePlan 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 theEligible Employeefor services rendered during thePlan Yearwhile anEligible Employee,excluding elective deferrals underCodeSection 125, severance or termination payments, commissions, foreign service payments, payments for consulting services and such other unusual or extraordinary payments as theCommitteemay determine.

     2.2 “Annual Bonus” means anEligible Employee’s bonus for a year due under an annual bonus plan or any other short-term incentive plan of theCompanyor anEmployer.

     2.3“Balance Calculation Date”means the date aParticipant’s Deferral Accountis valued for purposes of making a distribution from suchParticipant’s Deferral Account. For a distribution payable on aDistribution Date, theBalance Calculation Dateis the last business day of the month preceding theDistribution Date; for distributions payable due to aParticipant’s Separation from Serviceor pursuant to Sections 5.2 and 5.3, theBalance Calculation Dateis the last business day of the month in which theParticipanthas aSeparation 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 theParticipant’s Deferral Accountin the event of the Participant’s death prior to the payment of theParticipant’sentireDeferral Account. To be effective, any beneficiary designation shall be filed in such manner as prescribed by theCommittee. AParticipantmay revoke an existing beneficiary designation by filing anotherBeneficiarydesignation in such manner as prescribed by theCommittee. The latest beneficiary designation received by theCommitteeshall be controlling. If noBeneficiaryis named by aParticipantor if he survives all of his namedBeneficiaries, theDeferral Accountshall be paid in the following order of precedence:

(a)	theParticipant’sspouse;
(b)	theParticipant’schildren (including adopted children), per stirpes;

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(c)	theParticipant’sbeneficiary as designated by theParticipant under the applicable life insurance plan sponsored by theCompanyor theEmployer; or
(d)	theParticipant’sestate.

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

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

     2.7 “Company” means Hanesbrands Inc.

     2.8 “Deferral” means the amount deferred pursuant to aDeferral Electionand, as the context warrants, includes an “Employer Deferral.”

     2.9 “Deferral Account” means the bookkeeping account established in the name of theParticipantto hold all amounts deferred pursuant to theParticipant’s Deferral Elections or pursuant to anEmployer Deferral. As described in Supplement I to thisPlan, separate rules apply toTransferred Participants’ Grandfathered Deferrals.

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

     2.11“Deferral Election”means a Participant’s irrevocable election to defer receipt of aLong-Term Incentive Payment, anAnnual Bonus, and/orAnnual Base Salaryfor 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 aDeferral Election.

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     2.13“Distribution Date”means the specified date on which anEligible Employeeelects to have aDeferralpaid or begin to be paid, pursuant to aDeferral Election.

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

     2.15 “Eligible Employee” means each executive of theCompanyor anEmployerwho is identified as eligible by theCommittee.

     2.16 “Employer” means any subsidiary or affiliate of theCompanyincorporated under the laws of any state in the United States that has adopted thePlanwith the consent of theCommittee.

     2.17 “Employer Deferral” means an amount credited to aParticipant’s Deferral Accountby anEmployer.

     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 aParticipant’s Deferral Accountat the rate of 9% eachPlan Year.

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

     2.21 “Long-Term Incentive Payment” means any payment due with respect to restricted stock units granted under the terms of theStock 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, theMarket Valueof common stock of theCompanyshall 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 anyEligible Employeewho makes aDeferral Electionor has aDeferral Accountunder thePlan.

     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 aParticipant’sirrevocable election to extend aDistribution Date.

     2.27 “Separation from Service” means aParticipant’stermination 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 aParticipant’s Deferral Accountis 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 toParticipantsof common stock of theCompany.

     2.30 “Top-50 Employee” means an employee of theCompanyor anEmployerwho 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 theCompanyor anEmployerwho is either an officer or a director and has annual compensation greater than $140,000 (as indexed); (b) a five-percent owner (as defined inCodeSection 416(i)(1)(B)) of theCompanyor anEmployer; or (c) a one-percent owner (as defined inCodeSection 416(i)(1)(B)) of theCompanyor anEmployerwith annual compensation of more than $150,000. When identifyingTop-50 Employees,the term “annual compensation” shall mean compensation required to be reported as taxable income on IRS Form W-2, plus elective deferrals underCodesections 125(a), 132(f)(4) and 402(e)(3), but disregarding the compensation of nonresident aliens who do not participate in thePlan. If an employee is aTop-50 Employeeas of any December 31st, he shall be treated as aTop-50 Employeefor 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 theCompany’sProcedures for Determining Top-50 Employees underCodeSection 409A, as amended from time to time.

     2.31 “Trust” means the grantorTrustorTrusts, if any, that theCompanyor anEmployermay maintain to hold assets to be used for payment of benefits under thePlan.

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

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Section 3

Participation and Deferral Elections

     3.1Participation. Subject to the conditions and limitations of thePlan, anyEligible Employeewho makes aDeferral Electionas described in Section 3.2 shall become aParticipantin thePlanand shall remain aParticipantuntil the entire balance of hisDeferral Accountis distributed to him.

     3.2Rules for Deferral Elections. AnyEligible Employeemay make aDeferral Electionfor aPlan Yearin accordance with the rules set forth below.

(a)	Eligibility.AnEligible Employeeshall be eligible to make aDeferral Electiononly if he is an active, regular, full-time employee on the date such election is made.
(b)	Deferral Amounts.Under theDeferral Program, for eachPlan Year, anEligible Employeemay make no more than oneDeferral Electionfor each of theEligible Employee’sLong-Term Incentive Payments,Annual Bonus,Annual Base Salaryand other payments in the amounts set forth below:

(i)	All or any portion of theEligible Employee’s Annual Base Salary.
(ii)	All or any portion not less than 25 percent of theEligible Employee’s Annual Bonus.
(iii)	TheEligible Employee’s Long-Term Incentive Paymentin such increments and subject to such limitations and restrictions as theCommitteemay establish.
(iv)	With respect to any other bonuses and incentive payments under any plan or arrangement established by theCompanyor anEmployeras theCommitteemay designate as compensation

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eligible for deferral under thisPlan, in such increments and subject to such limitations and restrictions as theCommitteemay establish.

(c) Timing and Other Requirements for Deferral Elections.AllDeferral Electionsmust be made in such form as theCommitteemay prescribe and must be received by theCommitteeno later than the date specified by theCommittee. With respect to deferrals ofAnnual Base Salary, the date specified by theCommitteegenerally may be no later than the end of the calendar year preceding the calendar year in which theAnnual Base Salaryis anticipated to be paid. With respect to the deferral of anAnnual Bonus, the date specified by theCommitteegenerally may be no later than the end of the calendar year preceding the beginning of the measurement period for suchAnnual Bonus; provided, however, that if theCommitteedetermines that suchAnnual Bonus qualifies as “performance-based compensation” (as defined inCodeSection 409A(4)(B)(iii) and the regulations thereunder), suchDeferral Electionmay be made no later than 6 months before the end of the measurement period. With respect to the initial deferral of aLong-Term Incentive Payment, the date specified by theCommitteegenerally 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 suchLong-Term Incentive Paymentwill become vested; provided, however, that: (i) if an initial deferral of aLong-Term Incentive Paymentis not completed within the time frames specified above, then aRe-Deferral Electionmay be elected to the extent permitted by subsection 3.2(i) below, and (ii) if theCommitteedetermines that suchLong-Term Incentive Payment qualifies as “performance-based compensation” (as defined above), then suchDeferral Electionmay be made no later than 6 months before the end of the measurement period. TheCommittee, 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 underCodeSection 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 anEligible Employeebecomes eligible to participate in thePlan, suchParticipant may make aDeferral Electionwithin 30 days after the date theParticipant 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 (withAnnual BonusesandLong-Term Incentive Paymentsprorated to the extent necessary to comply with regulations issued underCodeSection 409A).
(e)	Elections Generally Irrevocable.Deferral Electionsshall be irrevocable; provided, that if theCommitteedetermines that aParticipanthas anUnforeseeable Financial Emergency, then theParticipant’s Deferral Elections then in effect shall be revoked for the balance of thePlan Yearwith respect to all amounts not previously deferred; however, suchParticipantmay make a newDeferral Electionfor the followingPlan Year.
(f)	Investment Election.As part of eachDeferral Election, anEligible Employeemust elect the investment alternatives that shall apply to theDeferralin accordance with Section 4.2.
(g)	Distribution Dates.As part of eachDeferral Election, theEligible Employeemust specify aDistribution Date, which cannot be prior to the January 1 following the first anniversary of the date theDeferral Election is made. For 2006 and later years, theEligible Employeemay also specify that payment may be made on the earlier of theDistribution Dateor theEligible Employee’s Separation from Service.AnEligible Employeemay make a differentDeferral Electionfor each separateDeferralunder thePlan. Except as provided in subsection (i) below, an election under this subsection (g) is irrevocable and shall apply only to that portion of theParticipant’s Deferral Accountwhich is attributable to theDeferral.

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(h)

Distribution Form.As part of eachDeferral Election, anEligible Employeemust elect the form in which theDeferralwill 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, anEligible Employee’selection as to the method of payment shall be irrevocable.

(i)

Re-Deferrals.AParticipantmay make aRe-Deferral Election; provided, that noRe-Deferral Electionshall be effective unless (i) theCommitteereceives the election not later than 12 months prior to theDistribution Dateto be changed, and (ii) the newDistribution Dateis not earlier than the fifth anniversary of the priorDistribution Date. AllRe-Deferral Electionsshall be irrevocable and shall be made pursuant to such rules as theCommitteemay prescribe. If an initial deferral of aLong-Term Incentive Paymentis not made within the time period specified in subsection 3.2(c), then aRe-Deferral Electionmay be made under this subsection no later than 12 months prior to the date on which suchLong-Term Incentive Payment becomes vested. Notwithstanding any rules of thePlanto the contrary, theCommittee, 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 underCodeSection 409A. Pursuant to the preceding sentence, during 2005, 2006, 2007, and 2008, aRe-Deferral Electionneed not be received by theCommittee12 months prior to theDistribution Dateto be changed, and the newDistribution Datemay be earlier than the fifth anniversary of the priorDistribution Date; provided that such aRe-Deferral Electionis completed by the date prescribed by theCommitteein the applicable year, and further provided that aRe-Deferral Electionmade in 2006 may neither specify aDistribution Datein 2006 nor defer amounts otherwise payable in 2006, aRe-Deferral Electionmade in 2007 may neither specify aDistribution Datein 2007 nor defer amounts otherwise payable in 2007,

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	and aRe-Deferral Electionmade in 2008 may neither specify aDistribution Datein 2008 nor defer amounts otherwise payable in 2008.
(j)	Reduction for FICA and Income Taxes.Notwithstanding aParticipant’s Deferral Electionor anyPlanprovision to the contrary, theCompanyor anEmployermay reduce aParticipant’s Deferralsto 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 onDeferralsbefore they would otherwise be paid or made available to theParticipant.
(k)	Change in Deferrals due to Change in Election under Section 125 Plan.A change in aParticipant’s Deferralsunder thePlanwill not be treated as an accelerated payment nor an impermissibleDeferral Election,to the extent the change results solely from a change in theParticipant’selection under aCodeSection 125 plan maintained by theCompanyor anEmployer.

     3.3Transfers. With the consent of theCommitteeand subject to such limits and in accordance with such rules as theCommitteemay establish in its sole discretion, aParticipantwho is employed by a subsidiary of theCompanymay elect to transfer his entireDeferral Accountto a similar deferred compensation plan maintained by such subsidiary; provided, that no portion of aParticipant’s Deferral Accountthat is attributable to aDeferral, theDistribution Datefor which has or will have occurred before the scheduled transfer date, may be transferred under this provision.

     3.4Employer Deferrals. In addition toDeferralsmade pursuant to aParticipant’s Deferral Electionunder this Section 3, anEmployermay credit anEmployer Deferralto aParticipant’s Deferral Account. The amount of anyEmployer Deferralshall be determined by theEmployerin its complete discretion. Prior to the beginning of the period in which the related services are performed with respect to anEmployer Deferral, theEmployershall specify theDistribution Date, any applicable vesting requirements, and the form of payment for theEmployer Deferral. Once credited to theParticipant’s Deferral Account, theEmployer Deferralshall be treated as any otherDeferralunder thePlan.

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Section 4

Deferral Accounts

     4.1Deferral Accounts. All amounts deferred pursuant to aParticipant’s Deferral Elections under thePlanshall be allocated to theParticipant’s Deferral Accountand theCommitteeshall maintain a separate subaccount under aParticipant’s Deferral Accountfor eachDeferral. EachDeferralshall be credited to theDeferral Accountas of the applicableDeferral Crediting Date.

     4.2Investment Alternatives. AParticipantmust make an investment election at the time of eachDeferral Election. The investment election must be made pursuant to such rules as theCommitteemay prescribe, subject to Section 4.3, and shall designate the portion of theDeferral which is to be treated as invested in each available investment alternative. Subject to theCommittee’sright to change the investment alternatives in the future, the investment alternatives are as follows:

(a) Stock Equivalent Account.

(i)

Under theStock Equivalent Account, the value of theParticipant’s Deferralshall be determined as if theDeferral were invested in common stock equivalents as of theDeferral Crediting Date. Subject to the special transition rules set forth in subparagraph (ii) below, until theCompanyceases to be a member of Sara Lee Corporation’s controlled group of corporations (as defined in Section 414 of theCodeand the regulations thereunder) (referred to herein as the “Spin-Off Date”), Sara Lee Corporation common stock equivalents shall be used, and after theSpin-Off Date,Companycommon 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 theCompany, eachParticipantdeemed to be invested in theStock Equivalent Accountwill automatically be deemed to have part of hisStock

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Equivalent Accountbased onCompanycommon stock equivalents in the same ratio as all other shareholders of Sara Lee Corporation common shares. With respect to the remaining portion of theParticipant’s interest in theStock Equivalent Accountthat is determined based on Sara Lee Corporation common stock equivalents, eachParticipant invested in theStock Equivalent Accountshall be permitted to elect to have his interest in theStock Equivalent Account: (A) determined as if such amounts were invested inCompanycommon stock, or (B) transferred to theInterest Account.TheParticipantelection described in the immediately preceding sentence shall be made at such times and in accordance with such rules as shall be established by theCommittee;provided, however, that no such election shall be permitted after the end of the quarter containing the one-year anniversary of theSpin-Off Date. If aParticipantwith a balance in theStock Equivalent Accountthat is determined based on Sara Lee Corporation common stock equivalents does not make such an election pursuant to this subparagraph, amounts in theParticipant’s Stock Equivalent Accountshall 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 theSpin-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 theInterest Account. The foregoing transition rules only apply toStock Equivalent Accountamounts deemed invested in the Sara Lee Corporation common stock equivalents prior to December 31, 2006; after that date, investments in theStock Equivalent Accountshall be determined as if the amounts were invested inCompanycommon stock.

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(iii)	The conversion of Sara Lee Corporation’s common stock equivalents toCompanystock equivalents shall be determined by theCommitteein its complete discretion based on theMarket Valuefor Sara Lee Corporation and forCompanycommon stock from time to time.
(iv)	The number of common stock equivalents to be credited to theParticipant’s Deferral Accountand appropriate subaccounts on eachDeferral Crediting Dateshall be determined by dividing theDeferralto be “invested” on that date by theMarket Value of the Sara Lee Corporation orCompanycommon 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 theParticipant’s Deferral Accountand appropriate subaccount as of theDeferral Crediting Datecoincident with or next following the dividend payment date and “invested” in additional common stock equivalents as though such dividend credits were aDeferral.
(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 theCompanyto stockholders, or any other similar change or event, such proportionate adjustments, if any, as theCommitteein 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 aParticipant’s Deferral Account.
(vii)	The number of shares of applicableCompany common stock to be paid to aParticipantas of aDistribution Dateor event shall be

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equal to the number of common stock equivalents accumulated in theStock Equivalent Accounton theBalance Calculation Datedivided by the total of the payments to be made. All payments from theStock Equivalent Accountshall be made in whole shares ofCompanycommon stock with fractional shares credited to federal income taxes withheld.

(b)

Interest Account. Under theInterest Account,for periods prior to 2008, interest accrues daily and is credited to theParticipant’s Deferral Accounton 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 theCommitteefrom time to time; provided, however, that the rate of interest from theEffective Datethrough the end of theCompany’s2006 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 theParticipantas of aDistribution Dateshall be determined by dividing theParticipant’s Deferral Accountbalance as of the applicableBalance Calculation Dateby the number of remaining installment payments. All payments from theInterest Accountshall be made in cash.

(c)

Fixed Interest Account. Notwithstanding anyPlanprovision to the contrary, theFixed Interest Accountis available only for the deemed investment of certainGrandfathered DeferralsofTransferred Participants. With respect to any such amounts deemed invested in theFixed 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 theParticipantas of aDistribution Dateshall be determined by dividing theParticipant’s Deferral Accountbalance as of the applicableBalance Calculation Dateby the number of

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remaining installment payments. All payments from theFixed Interest Accountshall be made in cash.

     4.3Investment Elections and Changes. AParticipant’sinvestment elections shall be subject to the following rules:

(a)	Except as provided in subsection (b) below with respect toLong-Term Incentive Payments, if theParticipantfails to make an investment election with respect to aDeferral, theDeferralshall be deemed to be invested in theInterest Account.
(b)	AnyDeferralattributable to aLong-Term Incentive Paymentin the form of common stock, restricted or otherwise, shall automatically be deemed to be invested in theStock Equivalent Account.
(c)	All investments in theStock Equivalent Accountshall be irrevocable.
(d)	AParticipantmay elect to transfer amounts invested in theInterest Accountas of the last business day of any calendar quarter to theStock Equivalent Account,by filing an investment change election during the time period specified by theCommittee. 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 theParticipant’s Deferral Account and appropriate subaccounts as of the effective date of theParticipant’s election shall be determined by dividing the amount to be transferred by theMarket Valueof the applicable company stock on the last business day of the calendar quarter preceding the effective date of theParticipant’selection. Notwithstanding the foregoing, effective January 1, 2008, aParticipantmay elect to transfer amounts from theInterest Accountto theStock Equivalent Accountas of any business day; any such transfer shall be made in accordance with procedures established by theCommittee.

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(e) AParticipantmay elect to transfer amounts invested in theFixed Interest Accountas of the last business day of any calendar quarter to theInterest Accountor theStock Equivalent Account,by filing an investment change election during the period specified by theCommittee. Any such election shall be effective as of the first business day of the following calendar quarter. In the event aParticipantelects to transfer amounts to theStock Equivalent Account,the number of common stock equivalents to be credited to theParticipant’s Deferral Accountand appropriate subaccounts as of the effective date of theParticipant’selection shall be determined by dividing the amount to be transferred by theMarket Valueof the applicable company stock on the last business day of the calendar quarter preceding the effective date of theParticipant’selection. Notwithstanding the foregoing, effective January 1, 2008, aParticipantmay elect to transfer amounts from theFired Interest Accountas of any business day; any such transfer shall be made in accordance with procedures established by theCommittee. AParticipantmay not elect to transfer amounts into theFixed Interest Accountat any time.

     4.4Vesting. Unless a different rule is specified forEmployer Deferralsunder Section 3.4, aParticipantshall be fully vested at all times in the balance of hisDeferral Account.

Section 5

Payment of Benefits

     5.1Time and Method of Payment Under the Deferral Program.

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

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	aParticipant’s Deferral Election,if aParticipant’sdistribution event is hisSeparation from Service, then payment shall be made in a single lump sum.
(b)	Time When Payments Begin.If aParticipant’s Deferralis payable in a single lump sum, the payment shall be made within the 60-day period following theBalance Calculation Date,as determined in the sole discretion of theCommittee. If aParticipant’s Deferralis payable in installment payments, then theParticipant’s Deferralshall be paid in substantially equal annual installments commencing in the month following the initialBalance Calculation Date,with the remaining installment payments made as of each subsequent January 1st (based on the preceding December 31stDeferralbalance) over the period elected by theParticipantin theDeferral Election. Notwithstanding any other provision of thePlanto the contrary, distributions to be made to aTop-50 Employeeupon hisSeparation from Service shall not be made before the date that is six months after theTop-50 Employee‘s Separation from Service.
(c)	Changing Distribution Method.AParticipantmay make a one-time election after the originalDeferral Electionto change the method of payment elected by theParticipant; provided, that such election shall be treated as aRe-Deferral Election. Installment payments shall be treated as a single payment for purposes of making aRe-Deferral Election, and the first scheduled installment will be the measuring standard for purposes of determining whether aRe-Deferral Electioncomplies with the requirements of subsection 3.2(i) above.
(d)	Special Rule for Small Amounts.Notwithstanding any election by theParticipantregarding the timing and manner of payment of hisDeferrals, upon aParticipant’s Separation from Service, if the total value of theParticipant’s Deferral Account(excludingGrandfathered Deferralsdescribed in Supplement I to thisPlan, and determined as of the last

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

     5.2Payment Upon Total Disability. In the event aParticipantbecomes totally disabled before all amounts credited to hisDeferral Accounthave been paid, payment of theParticipant’s Deferral Accountshall be made in a lump sum within the 60-day period following the applicableBalance Calculation Dateas determined in the sole discretion of theCommittee; provided that, if aParticipantwho is aTop-50 Employeeincurs aSeparation from Serviceand then becomes totally disabled, payment may not be made under this Section 5.2 before the end of the six-month period following theParticipant’s Separation from Service. AParticipantwill be considered to be totally disabled if theParticipant(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 theParticipant’s Employer.

     5.3Payment Upon Death of a Participant. In the event aParticipantdies before all amounts credited to hisDeferral Accounthave been paid, payment of theParticipant’s Deferral Account shall be made to theParticipant’s Beneficiaryin a single lump sum payment within the 60-day period after the applicableBalance Calculation Dateas determined in the sole discretion of theCommittee.

     5.4Form of Payment. The payment of that portion of aDeferraldeemed to be invested in theInterest Accountor theFixed Interest Accountshall be made in cash. The distribution of that portion of aDeferraldeemed to be invested in theStock Equivalent Accountless applicable withholding shall be distributed in whole shares ofCompanycommon stock with

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fractional shares credited to federal income taxes withheld; provided, that any portion of aDeferraldeemed to be automatically invested in theStock Equivalent Accountpursuant to subsection 4.3(b) shall be distributed under theStock Plan. However, if at the time of distribution aDeferralis deemed to be invested in theStock Equivalent Accountbased on Sara Lee Corporation common stock equivalents, thatDeferralshall be paid in cash.

     5.5Unforeseeable Financial Emergency. If theCommitteedetermines that aParticipanthas incurred anUnforeseeable Financial Emergency, theParticipantmay withdraw in cash and/or stock the portion of the balance of hisDeferral Accountneeded to satisfy theUnforeseeable Financial Emergency, to the extent that theUnforeseeable Financial Emergencymay not be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of theParticipant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or by cessation ofDeferralsunder thePlan. A withdrawal on account of anUnforeseeable Financial Emergencyshall be paid within the 60-day period following the date on which the withdrawal is approved as determined in the sole discretion of theCommittee.

     5.6Withholding of Taxes. TheCompanyshall withhold any applicable Federal, state or local income, employment or other tax from payments due under thePlan.

Section 6

Miscellaneous

     6.1Funding. Benefits payable under thePlanto anyParticipantshall be paid directly by theParticipant’s Employer(including theCompanyif theParticipantis employed by theCompany). TheCompanyand theEmployers shall not be required to fund or otherwise segregate assets to be used for payment of benefits under thePlan. Notwithstanding the foregoing, theCompanyand theEmployers, in the discretion of theCommittee, may maintain one or moreTrusts;provided that, in no event shall theCompanyor anEmployermake a contribution or deposit to aTrustduring a “restricted period” as defined inCodeSection 409A(b)(3). The assets of any suchTrustswith respect to benefits payable to the employees of eachEmployershall remain the assets of suchEmployersubject to the claims of its general

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creditors. Any payments by aTrustof benefits provided to aParticipantunder thePlanshall be considered payment by theCompanyor theEmployerand shall discharge theCompanyor theEmployerof any further liability under thePlanfor such payments.

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

     6.3Employment Rights. Establishment of thePlanshall not be construed to give anyEligible Employeethe right to be retained in theCompany’sservice or to any benefits not specifically provided by thePlan.

     6.4Interests Not Transferable. No benefit payable at any time under thePlanshall 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 aCompany plan or agreement that state theCompany’sauthority to demand repayment of amounts owed to theCompanypursuant 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 theParticipant’sdivorce. 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 thePlan, 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 thePlan, then theCommittee, in its discretion, may terminate the interest in any such benefits of the person entitled thereto under thePlanand hold or apply them for or to the benefit of such person entitled thereto under thePlanor his spouse, children or other dependents, or any of them, in such manner as theCommitteemay deem proper.

     6.5Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist of the amounts of theDeferral Accountof aParticipantthat are not distributed because of the

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Committee’sinability, after a reasonable search, to locate aParticipantor hisBeneficiary, as applicable, by the later of the end of thePlan Year in whichtheParticipant’s Distribution Date,Separation from Service, or death occurs, or the end of the 90-day period following saidDistribution Date, Separation from Service, or death. Unclaimed amounts shall be forfeited at the end of such period. These forfeitures will reduce the obligations of theCompanyunder thePlan, and theParticipantorBeneficiary, as applicable, shall have no further right to hisDeferral Account.

     6.6Controlling 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 thePlanto the extent not preempted byERISA. Any legal action related to thePlanshall be brought only in a federal or state court located in North Carolina.

     6.7Gender 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.

     6.8Action by the Company. Except as otherwise specifically provided herein, any action required of or permitted by theCompanyunder thePlanshall be by resolution of the Board of Directors of theCompanyor by action of any member of theCommitteeor person(s) authorized by resolution of the Board of Directors of theCompany.

Section 7

Employer Participation

     Any subsidiary or affiliate of theCompanyincorporated under the laws of any state in the United States may, with the approval of theCommitteeand under such terms and conditions as theCommitteemay prescribe, adopt thePlan. TheCommitteemay amend thePlanas necessary or desirable to reflect the adoption of thePlanby anEmployer; provided, however, that an adoptingEmployershall not have the authority to amend or terminate thePlanunder Section 8.

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Section 8

Amendment and Termination

     TheCompanyintends thePlanto be permanent, but reserves the right at any time by action of its Board of Directors to modify, amend or terminate thePlan; provided, however, that any amendment or termination of thePlanshall not reduce or eliminate anyDeferral Accountaccrued through the date of such amendment or termination. Upon termination of thePlan, theCommitteemay provide that, notwithstanding theDistribution Dateor form selected by eachParticipant, allDeferral Accounts will be distributed on a date and in a form selected by theCommittee.

     TheCommitteeshall have the authority to adopt amendments to thePlanas set forth in resolutions of the Compensation and Employee Benefits Committee of the Board of Directors of theCompany.TheCommitteeshall provide notice of amendments it adopts to the Compensation and Employee Benefits Committee of the Board of Directors of theCompanyon a timely basis.

     Any amendment or termination of thePlanshall comply with the restrictions ofCodeSection 409A to the extent applicable. Specifically, no amendment or termination of thePlanmay 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 CompensationPlan(the “Sara Lee Plan”). In connection with the establishment of theCompany,Sara Leeand theCompanydesire to cause the liabilities under theSara Lee Plan attributable to current and former employees of theCompany(and of theCompany’spredecessor, the Branded Apparel division ofSara Lee) to be transferred to thePlan. 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 theSara Lee Planattributable to theTransferred Participants shall be transferred to theCompany, to be held and administered in accordance with the terms of thePlan, as amended; provided, that any elections and beneficiary designations made under theSara Lee Planshall remain in effect under thePlan. ThePlanis the successor to theSara Lee Planwith regard toTransferred Participants.

3. Special Rules forGrandfathered Deferrals. Any deferrals made by aTransferred Participant under theSara Lee Planprior to January 1, 2005 (“Grandfathered Deferrals”) shall be subject to the rules set forth below.

(a) Previously Elected Distribution Dates.As part of eachDeferral Election, theTransferred Participantwas required to specify aDistribution Datefor theGrandfathered Deferral, which may differ for

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	variousGrandfathered Deferrals. Except as provided below, eachDistribution Dateis irrevocable and shall apply only to that portion of theTransferred Participant’s Deferral Accountwhich is attributable to thatGrandfathered Deferral.
(b)	Previously Elected Distribution Form.As part of eachDeferral Election, aTransferred Participantwas required to elect the form in which theGrandfathered Deferralwill be paid beginning on the selectedDistribution Date as either (i) a single lump sum or (ii) substantially equal annual installments over a period not exceeding ten years. If aTransferred Participant’s Grandfathered Deferralis payable in a single lump sum, the payment shall be made within the 60-day period following the applicableBalance Calculation Date. If aTransferred Participant’s Grandfathered Deferralis payable in installment payments, then payments shall be made in substantially equal annual installments commencing in the month following the initialBalance Calculation Date, with the remaining installment payments made as of each subsequent January 1 (based on the preceding December 31stGrandfathered Deferral Account balance) over the period elected by theTransferred Participantin theDeferral Election. Except as provided below, aTransferred Participant’selection as to the time and method of payment shall be irrevocable.
(c)	Re-Deferral Elections for Grandfathered Amounts.ATransferred Participantmay make aRe-Deferral Electionwith respect toGrandfathered Deferrals; provided, that noRe-Deferral Electionshall be effective unless (i) theCommitteereceives the election prior to the December 1 of the calendar year preceding the calendar year in which theDistribution Dateto be changed occurs, and (ii) the newDistribution Dateis not earlier than the January 1 immediately following the first anniversary of the date theRe-Deferral Electionis made. AllRe-Deferral Elections must be made pursuant to such rules as theCommitteemay prescribe.

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(d)	Change in Method of Payment of Grandfathered Deferrals.ATransferred Participantmay make a one-time election to change the method of payment elected by theTransferred Participant; provided, that such election shall not be effective unless the election to change the method of payment is received by theCommitteeprior to the December 1 of the calendar year preceding the calendar year in which theDistribution Datespecified in the originalDeferral Electionoccurs. All such elections must be made pursuant to such rules as theCommitteemay prescribe.
(e)	Unforeseeable Financial Emergency. If theCommitteedetermines that aParticipanthas incurred anUnforeseeable Financial Emergency, theParticipantmay withdraw in cash and/or stock the portion of the balance of hisDeferral Accountneeded to satisfy theUnforeseeable Financial Emergency, to the extent that theUnforeseeable Financial Emergencymay not be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of theParticipant’sassets, to the extent the liquidation of such assets would not itself cause severe financial hardship. A withdrawal on account of anUnforeseeable Financial Emergencyshall 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 thePlanand this Supplement to the contrary, aTransferred Participantmay request a withdrawal from hisGrandfathered Deferrals, pro rata, by filing a request with theCommitteein such form as theCommitteemay 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 aTransferred Participantbecomes totally disabled (as defined above) before allGrandfathered Deferralshave been paid, payment of theTransferred Participant’s Grandfathered Deferrals shall be made or commence at the time and in the form of payment elected

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	by the disabledTransferred Participant; provided, that the disabledTransferred Participantrequests payment in writing within 180 days of becoming disabled. If such a request is not made, the disabledTransferred Participant’s Grandfathered Deferralswill be paid pursuant to theDeferral Electionsand the normal provisions of the Plan.
(h)	Death. In the event aTransferred Participantdies before allGrandfathered Deferralshave been paid, payment of theTransferred Participant’s Grandfathered Deferralsshall be made or shall commence in at the time and in the form of payment elected by theTransferred Participant’s Beneficiaryor the executor/executrix of theTransferred Participant’sestate; provided, that the request is made in writing within 180 days of theTransferred Participant’sdeath. If such a request is not made, the deceasedTransferred Participant’s Grandfathered Deferralswill be paid pursuant to theDeferral Electionsand the normal provisions of the Plan.
(i)	Small Amounts.Notwithstanding any election by theTransferred Participantregarding the timing and manner of payment of hisGrandfathered Deferrals, upon aParticipant’sretirement or other termination of employment, if the total value of theTransferred Participant’s Grandfathered Deferrals (determined as of the end of the month in which theParticipantretires or otherwise terminates his employment) is less than $10,000, then theTransferred Participant’s Grandfathered Deferralsshall 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 CompensationPlan(the “Liberty Plan”) was transferred to and became subject to the provisions of theSara Lee Plan. Those balances in theSara Lee Planwere transferred to thePlanas part of the transfers described in this Supplement and shall be treated as separateGrandfathered Deferralsunder thePlan. Accordingly, eachLiberty Planparticipant has specified aDistribution Date, method of payment, and investment alternative with respect to such

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transferred account balance. However, notwithstanding anything contained in thePlanto the contrary, aLiberty Planparticipant 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 theSara Lee Planthat were deferred on or after January 1, 2005 shall be subject to the rules described in thePlan rather than under Paragraph 3 of this Supplement.

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

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