Exhibit 10.13
HANESBRANDS INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(As Amended and Restated December 9, 2008)
HANESBRANDS INC.
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
(As Amended and Restated December 9, 2008)
1. Purpose. The purpose of theHanesbrands Inc.Non-Employee Director Deferred Compensation Plan is to allowNon-Employee Directorsof theCorporationto defer the payment ofCash Retainers and, effective January 1, 2008,Equity Retainers.Notwithstanding any provision of thePlanto the contrary, amounts deferred under thePlanare subject to the provisions of Section 409A of theCode and at all times thePlanshall be interpreted and administered so that it is consistent with suchCodesection.
2. Definitions. Where the context of thisPlanpermits, 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) | Balance Calculation Datemeans the date aNon-Employee Director’s Deferral Accountis valued for purposes of making a distribution from suchNon-Employee Director’s Deferral Account. For a distribution payable on aDistribution Date, theBalance Calculation Dateis the last business day of the month preceding theDistribution Date; except that,for distributions payable due to aNon-Employee Director’searlierSeparation from Serviceor pursuant to sections 10 and 17, theBalance Calculation Dateis the last business day of the month in which the applicable distribution event occurs. | ||
| (b) | Boardmeans the Board of Directors of theCorporation. | ||
| (c) | Cash Retainermeans the annual cash retainer fee payable by theCorporationto aNon-Employee Directorfor services as a director of theCorporation, as such amount may be changed from time to time. TheCash Retainershall includeCommittee Feesexcept as otherwise provided herein. | ||
| (d) | Change in Controlmeans “Change in Control” as defined under the terms of theStock Plan. | ||
| (e) | Codemeans the Internal Revenue Code of 1986, as amended. | ||
| (f) | Committeemeans the Compensation Committee of theBoard. |
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| (g) | Committee Feesmeans the annual fees payable by theCorporationto aNon-Employee Directorfor services as a member or chair of aBoardcommittee, as such amounts may be changed from time to time. | ||
| (h) | Corporationmeans Hanesbrands Inc. and any successor thereto. | ||
| (i) | Deferralmeans an amount deferred pursuant to aDeferral Electionand any automatic deferral of restricted stock units as described in section 5 below. | ||
| (j) | Deferral Accountmeans a bookkeeping account in the name of aNon-Employee Directorto hold theNon-Employee Director’s Deferrals. | ||
| (k) | Deferral Crediting Datemeans the last business day of each calendar quarter. | ||
| (l) | Deferral Electionsmeans irrevocable elections to defer receipt of aCash Retaineror anEquity Retainer. | ||
| (m) | Distribution Datemeans the specified date on which aDeferralwill be paid or begin to be paid, pursuant to either aDeferral Electionor the applicable provisions of thePlanor the award agreement. | ||
| (n) | Equity Retainermeans any annual equity retainer fee payable by theCorporation to aNon-Employee Directorfor services as a director of theCorporation, as such amount may be determined from time to time, that is not required to be deferred by its terms as described in section 5. | ||
| (o) | Fair Market Valuemeans the average of the high and low quotes ofStockon the applicable day on the New York Stock Exchange Composite Transaction Tape; provided, however, that effective as of January 1, 2008, theFair Market ValueofStockshall be the closing price on the applicable day on the New York Stock Exchange Composite Transaction Tape. | ||
| (p) | Interest Accountmeans the default alternative from among the two investment alternatives (the other being aStock Equivalent Account) in which aNon-Employee Directormay elect to invest aDeferralas described in sections 7 and 8 below. | ||
| (q) | Non-Employee Directormeans a director of theCorporationwho is not an employee of theCorporationor any subsidiary of theCorporation. | ||
| (r) | Planmeans this Hanesbrands Inc. Non-Employee Director Deferred Compensation Plan. | ||
| (s) | Plan Yearmeans the calendar year. | ||
| (t) | Re-Deferral Electionmeans aNon-Employee Director’sirrevocable election to extend aDistribution Date. |
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| (u) | Separation from Servicemeans the date of aNon-Employee Director’stermination of service on theBoard, which date shall be determined in a manner that is consistent with the requirements of Treasury regulations section 1.409A-1(h). | ||
| (v) | Stockmeans a share of the common stock of theCorporationthat, by its terms, may be voted on all matters submitted to stockholders of theCorporationgenerally. | ||
| (w) | Stock Equivalent Accountmeans one of two investment alternatives (the other being anInterest Account) in which aNon-Employee Directormay elect to invest aDeferralas described in sections 7 and 8 below. | ||
| (x) | Stock Planmeans the Hanesbrands Inc. Omnibus Incentive Plan of 2006 or any successor thereto that provides for the issuance ofStocktoNon-Employee Directors. |
3. Administration.ThePlanshall be administered by theCommittee. TheCommitteeshall have full power and authority to interpret and construe thePlanand adopt such rules and regulations as it shall deem necessary and advisable to implement and administer thePlanand to designate persons other than members of theCommitteeto carry out its responsibilities, subject to applicable law and such limitations, restrictions and conditions as it may prescribe, such actions to be taken in accordance with theCommittee’sbest business judgment as to the best interests of theCorporation and its stockholders and in accordance with the purposes of thePlan. TheCommitteemay delegate administrative duties under thePlanto one or more agents, as it shall deem necessary or advisable. A majority of theCommitteeshall constitute a quorum at any meeting of theCommittee, and all determinations of theCommitteeshall be made by a majority of its members. Any determination of theCommitteeunder thePlanmay be made without notice or a meeting of theCommitteeby a written consent signed by all members of theCommittee. No member of theCommittee or theBoardshall be personally liable for any action or determination made in good faith with respect to thePlanor to any settlement of any dispute between aNon-Employee Directorand theCorporation. Any decision or action taken by theCommitteeor theBoardwith respect to the administration or interpretation of thePlanshall be conclusive and binding upon all persons.
4. Deferral Elections. Any eligibleNon-Employee Directormay make irrevocable elections to defer receipt of hisCash Retainerand, effective January 1, 2008, hisEquity Retainer.Each such election shall be referred to as a “Deferral Election” and any amount
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deferred pursuant to such election shall be referred to as a “Deferral” for aPlan Year,in accordance with the rules set forth below.
| (a) | ANon-Employee Directorshall be eligible to make aDeferral Electiononly if he is an active member of theBoard, or has been elected to theBoardon the date such election is made. | ||
| (b) | For the 2007Plan Year,aNon-Employee Directormay defer all or any portion not less than 25 percent of hisCash Retainer,and may make a separate election to defer all or any portion not less than 25 percent of hisCommittee Fees.Effective January 1, 2008, aNon-Employee Directormay elect to defer not less than 100% percent of hisCash Retainer,hisEquity Retainer,or both. | ||
| (c) | AllDeferral Electionsmust be made pursuant to such rules as theCommitteemay prescribe and must be received by theCommitteeno later than the date specified by theCommittee. In no event will the date specified by theCommitteewith respect to aDeferral Electionbe later than the end of thePlan Yearpreceding thePlan Yearin which theCash RetainerorEquity Retainerwould otherwise be paid. In the case of the first year in which theNon-Employee Directorbecomes eligible to participate, such election may be made with respect to services to be performed subsequent to the election within 30 days after the date theNon-Employee Directorbecomes eligible to participate. | ||
| (d) | As part of eachDeferral Electionfor the 2007Plan Year, theNon-Employee Directormust specify theDistribution Dateon which theDeferralwill be paid or commence. For 2008 and subsequentPlan Years, theDistribution Datewith respect to aDeferralshall be the earlier of the fifth anniversary of the applicableDeferral Crediting Dateor theNon-Employee Director’s Separation from Service.ANon-Employee Directormay make a differentDeferral Electionfor each separateDeferralunder the Plan. Except as provided in subsection (e) below, an election under this subsection (d) is irrevocable and shall apply only to that portion of theNon-Employee Director’s Deferral Accountwhich is attributable to theDeferral. | ||
| (e) | ANon-Employee Directormay 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 Dateshall be the earlier of theNon-Employee Director’s Separation from Service and a date that is not earlier than the fifth anniversary of the priorDistribution Date. If aNon-Employee Directormakes aRe-Deferral Electionwith respect to aDeferralfor the 2007Plan Year, theDeferralshall become payable upon the earlier of the fifth anniversary of the priorDistribution Dateand theNon-Employee Director’s Separation from Service.AllRe-Deferral Electionsmust be made pursuant to such rules as theCommitteemay prescribe. TheCommittee, in its complete discretion, may modify the general rules set forth |
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| above as permitted by IRS Notice 2005-1, applicable regulations and other guidance issued underCodeSection 409A. | |||
| (f) | As part of eachDeferral Electionfor the 2007Plan Year, aNon-Employee Directormust elect the form in which theDeferralwill be paid in accordance with section 9. Except as provided in section 9, aNon-Employee Director’selection as to the form of payment shall be irrevocable. | ||
| (g) | As part of eachDeferral Election, aNon-Employee Directormust elect the investment alternatives that shall apply to theDeferralof aCash Retainerin accordance with sections 7 and 8 below. | ||
| (h) | DeferralsandDeferral Electionsshall be irrevocable. |
5. Automatic Deferral of Stock Grants.In addition to any electiveDeferralsmade by aNon-Employee Directoras provided under section 4 above, any restricted stock, restricted stock units or deferred stock units awarded to aNon-Employee Directorthat are automatically deferred pursuant to the terms of the award agreement shall be deferred under thePlanand credited to aNon-Employee Director’s Deferral Accountas described below. Notwithstanding anyPlanprovision to the contrary, theBalance Calculation Datefor automatic deferrals under this section shall at all times be the date which is six months following theNon-Employee Director’s Separation from Service.
6. Deferral Accounts. All amounts deferred pursuant to aNon-Employee Director’s Deferral Electionsunder section 4 above as well as any automaticDeferralsunder section 5 above shall be allocated to a bookkeeping account in the name of theNon-Employee Director. EachDeferralshall be credited to theDeferral Accountas of the applicableDeferral Crediting Date. ANon-Employee Directorshall be fully vested at all times in the balance of hisDeferral Account.
7. Investment Alternatives. ANon-Employee Directormust make an investment election at the time of eachDeferral Election,with respect toDeferralsofCash Retainers. The investment election must be made pursuant to such rules as theCommitteemay prescribe, subject to this section and section 8 below, and shall designate the portion of theDeferralwhich is to be treated as invested in each investment alternative. The two investment alternatives shall be as follows:
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| (a) | Stock Equivalent Account. |
| (i) | Under theStock Equivalent Account, the value of theNon-Employee Director’s Deferralshall be determined as if theDeferralwere invested inStockas of theDeferral Crediting Date. If a payment ofStockis deferred, then the number ofStockequivalents to be credited to theNon-Employee Director’s Deferral Accountand appropriate subaccounts on eachDeferral Crediting Dateshall equal the number of shares deferred. If a payment of cash is deferred, then the number ofStockequivalents to be credited to theNon-Employee Director’s Deferral Accountand appropriate subaccounts on eachDeferral Crediting Dateshall be determined by dividing theDeferralto be “invested” on that date by theFair Market ValueofStockon that date. FractionalStockequivalents will be computed to six decimal places. | ||
| (ii) | An amount equal to the number ofStockequivalents as of the record date multiplied by the dividend paid on a share ofStockon each dividend payment date shall be credited to theNon-Employee Director’s Deferral Accountand appropriate subaccount as of theDeferral Crediting Datecoincident with or next following the dividend payment date and “invested” in additionalStockequivalents as though such dividend credits were aDeferral. | ||
| (iii) | TheCorporationmay, but is not required to, match any amounts that aNon-Employee Directorelects to invest in theStock Equivalent Account. | ||
| (iv) | In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any distribution to holders ofStockother than a regular cash dividend, the number ofStockequivalents in theStock Equivalent Accountunder thePlanshall be equitably adjusted by theCommittee. |
| (b) | Interest Account. Under theInterest Account, prior to 2008, interest accrues daily and is credited to theNon-Employee Director’s Deferral Accounton a monthly basis. Effective January 1, 2008, interest accrues and is credited daily. The rate of interest to be credited shall equal the 5-year constant maturity Treasury note interest rate as published by the Federal Reserve in effect on the first business day of the applicable calendar year. If installment payments are elected, the amount to be paid to theNon-Employee Directoras of aDistribution Dateshall be determined by dividing theNon-Employee Director’s Deferral Accountbalance as of the applicableBalance Calculation Dateby the number of remaining installment payments. |
8. Investment Elections and Changes. ANon-Employee Director’sinvestment elections shall be subject to the following rules:
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| (a) | With respect toCash Retainerpayments, if theNon-Employee Directorfails to make an investment election with respect to aDeferral, theDeferralshall be deemed to be invested in theInterest Account. | ||
| (b) | AllEquity Retainerpayments that are deferred at the election of theNon-Employee Directorand all awards that are deferred automatically as described in section 5 above shall be invested in theStock Equivalent Account. | ||
| (c) | All investments in theStock Equivalent Accountshall be irrevocable. | ||
| (d) | As of the last business day of any calendar quarter, aNon-Employee Director may elect to transfer amounts invested in theInterest Accountto theStock Equivalent Accountby 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 ofStockequivalents to be credited to theNon-Employee Director’s Deferral Accountand appropriate subaccounts as of the effective date of theNon-Employee Director’selection shall be determined by dividing the amount to be transferred by theFair Market ValueofStockon the last business day of the calendar quarter preceding the effective date of theNon-Employee Director’s election. Notwithstanding the foregoing, effective January 1, 2008, aNon-Employee Directormay 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. |
9. Time and Method of Payment. Payment of aNon-Employee Director’s Deferral Accountshall be made in accordance with the following rules:
| (a) | Payment of aNon-Employee Director’s Deferralshall be made in a single lump sum; provided that, for aCash Retainerdeferred for the 2007Plan Year, theNon-Employee Directormay elect to receive payment in substantially equal annual installments over a period not exceeding ten years, as elected by theNon-Employee Directorin theDeferral Election. | ||
| (b) | If aNon-Employee Directormakes aRe-Deferral Electionwith respect to aDeferralfor the 2007Plan Year,any prior election of annual installments shall be null and void and theNon-Employee Director’s Deferralshall become payable in a single lump sum. Installment payments shall be treated as a single payment for purposes of 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 4(e) above. | ||
| (c) | If aNon-Employee Director’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 aNon-Employee Director’s Deferralis payable in installment payments, then theNon-Employee Director’s Deferral shall be paid in substantially equal annual |
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| 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 theNon-Employee Directorin theDeferral Election. |
10. Payment Upon Death of a Non-Employee Director. In the event aNon-Employee Directordies before all amounts credited to hisDeferral Accounthave been paid, payment of theNon-Employee Director’s Deferral Accountshall be made in a single sum payment to theNon-Employee Director’s Beneficiarywithin the 60-day period after the applicableBalance Calculation Dateas determined in the sole discretion of theCommittee.
11. Beneficiary. ANon-Employee Director’s“Beneficiary” shall mean the individual(s) or entity designated by theNon-Employee Directorto receive the balance of theNon-Employee Director’s Deferral Accountin the event of theNon-Employee Director’sdeath prior to the payment of his entireDeferral Account. To be effective, anyBeneficiarydesignation shall be filed with theCommitteepursuant to rules established by theCommitteefrom time to time. ANon-Employee Directormay revoke an existingBeneficiarydesignation by filing anotherBeneficiarydesignation with theCommittee. The latestBeneficiarydesignation received by theCommitteeprior to theNon-Employee Director’sdeath shall be controlling. If noBeneficiaryis named by aNon-Employee Directoror if noBeneficiarysurvives theNon-Employee Director, theNon-Employee Director’s Deferral Accountshall be paid in the following order of precedence:
| (a) | theNon-Employee Director’sspouse; | ||
| (b) | theNon-Employee Director’schildren (including adopted children), per stirpes; or | ||
| (c) | theNon-Employee Director’sestate. |
12. Form of Payment. The payment of that portion of aDeferraldeemed to be invested in theInterest Accountshall be made in cash. The distribution of that portion of aDeferraldeemed to be invested at theNon-Employee Director’selection or automatically invested in theStock Equivalent Accountshall be distributed under theStock Planin whole shares ofStockwith fractional shares distributed in cash.
13. Funding. Payouts under thePlanto anyNon-Employee Directorshall be paid directly by theCorporation. TheCorporationshall not be required to fund, or otherwise
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segregate assets to be used for payment of benefits under thePlan. Notwithstanding the foregoing, theCorporation, in the discretion of theCommittee, may maintain one or more grantor trusts to hold assets to be used for payment of benefits under thePlan; provided that, in no event shall theCorporationmake a contribution or deposit to a trust during a “restricted period” as defined inCodeSection 409A(b)(3). The assets of any such trust shall remain the assets of theCorporationsubject to the claims of its general creditors. Any payments from such a trust of benefits provided to aNon-Employee Directorunder thePlanshall be considered payment by theCorporationand shall discharge theCorporationof any further liability under thePlanfor such payments.
14. Interests 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. 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 theCommittee may deem proper.
15. Forfeitures of Unclaimed Amounts. Unclaimed amounts shall consist of the amounts of theDeferral Accountof aNon-Employee Directorthat are not distributed because of theCommittee’s inability, after a reasonable search, to locate aNon-Employee Directoror 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 the
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Corporationunder thePlan,and theNon-Employee DirectororBeneficiary, as applicable, shall have no further right to hisDeferral Account.
16. Change in Control.Notwithstanding aNon-Employee Director’selections under sections 4 and 9 above or the other terms of thePlanregarding the form and timing of payment, upon theNon-Employee Director’s Separation from Servicefollowing aChange in Control, theNon-Employee Director’s Deferral Accountshall be payable in a single lump sum within the 60-day period after theBalance Calculation Dateas determined in the sole discretion of theCommittee.
17. Amendment and Termination.TheCorporationmay amend thePlanfrom time to time, or may terminate thePlanat any time, by resolution of theBoardor by resolution of a committee authorized by resolution of theBoard.TheBoardor any duly authorized committee also may unilaterally modify the terms and conditions of an outstanding election under thePlanas necessary, including revoking an election entirely, to reflect changes in applicable law. 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).
18. Governing Law, Venue.Except to the extent superseded by the laws of the United States, the laws of the State of North Carolina, without regard to any state’s conflict of laws principles, shall govern in all matters relating to thePlan. Any legal action related to thisPlanshall be brought only in a federal or state court located in North Carolina.
19. Effective Date of Plan.ThisPlanshall be effective as of July 2, 2006.
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