Exhibit 10.11
HANESBRANDS INC.
EMPLOYEE STOCK PURCHASE PLAN OF 2006
CERTIFICATE
I hereby certify that the attached document is the official version of the Hanesbrands Inc. Employee Stock Purchase Plan of 2006 adopted by the Board of Directors of the Company by resolution dated July 19, 2006 and subsequently finalized by the duly authorized officers of the Company effective as of June 27, 2006.
Dated this1stday of September, 2006.
| HANESBRANDS INC. | ||
| By | /s/ Kevin Oliver | |
| Its | Senior Vice President, Human Resources | |
HANESBRANDS INC.
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 theCorporation through payroll deductions on an after-tax basis. ThePlan is 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 thePlan permits, 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 theCorporation or such independent third party administrator as theCorporation may engage to administer the Plan. |
| (b) | Authorization Formmeans a payroll deduction form which authorizes payroll deductions from aParticipant’s Basic Payand evidences theParticipant’s membership in thePlan. |
| (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) | Board means the Board of Directors of theCorporation. |
| (e) | Committee means 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 thePlan and supersede the provisions of thePlan to the extent necessary to eliminate inconsistencies between thePlan and 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 Period means theGrant Dateof the immediately followingOffering Period. |
| (k) | Exercise Pricewith respect to anyOffering Period means, subject to the terms and conditions of eachCountry Program, an amount established by theCommitteeprior to theOffering Periodwhich amount shall in no event be less than 85% of theFair Market Value ofShares on theOffering Period’s Exercise Date. |
| (l) | Fair Market Value of aShare on any date shall be the closing price of theCorporation’s Stock as reported on the New York Stock Exchange - Composite Transactions Tape (“Composite Tape”) for such date. |
| (m) | Grant Date means the first Monday of eachOffering Periodon which sales of theCorporation’s Shares are reported on theComposite Tapeor if noShares are sold on that Monday, then on the next succeeding day on which there is a sale. |
| (n) | Offering Period means 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 theCommittee may establish in its discretion) and ending on the first Monday of the succeeding three-month period. If noShares are sold on the first Monday of anOffering Period, then thatOffering Periodshall commence, and the immediately precedingOffering Period shall end, on the next succeeding day on which there is a sale.Notwithstanding the definition ofOffering Period, theInitial Offering Period means that period commencing on the date established by theCommittee for implementing thePlanprovided that such date is not sooner that the date on which theCorporation first issues equity securities of theCorporation that are required to be registered under Article II of theExchange Act, and ending on the first Monday of the next following regularOffering Periodunder thePlan. |
| (o) | Participant means an Eligible Employee who has completed an Authorization Form and who continues to make contributions to the Plan, or who no longer contributes to the Plan, but has Shares still held by the Administrator in accordance with this Plan. |
| (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 theCorporation to participate in the Plan and which have agreed to participate. |
| (q) | Plan means the Hanesbrands Inc. Employee Stock Purchase Plan of 2006, as amended from time to time. ThePlan is 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) | Shares mean shares of Hanesbrands Inc. common stock, par value $.01 per share. |
3.Shares Subject to the Plan. There is hereby reserved for issuance under the Plan an aggregate of 2,442,000Shares. AvailableSharesshall be from such authorized but unissuedSharesor fromSharesreacquired from time to time.
4.Eligible Employees. All employees of theCorporationor any of itsParticipating Subsidiariesshall be eligible to participate in thePlan, except employees whose customary employment is 20 hours or less per week or not more than five months in any calendar year, 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 anyParticipating Subsidiary.
5.Participation in the Plan. AnEligible Employee may participate voluntarily, by completing and submitting anAuthorization Form at designated times, according to the applicableCountry Program procedures. SuchAuthorization Form may 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 Program at 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 Price as defined herein.
7.Number of Shares Purchasable. NoParticipantmay be permitted to acquire more than $25,000 worth ofSharesunder thePlan per year (with such limit being measured using the purchase price set forth in the applicableCountry Program). This limit shall be monitored by theCommitteeor its delegate(s).
8.Plan Accounts/Shares Acquired.Participating Subsidiariesshall maintainPlan Accounts forParticipants, where applicable.Shares purchased pursuant to thePlan shall be
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recorded on the stock transfer records of theCorporationin book entry form and no stock certificates with respect to anyShareswill be issued.Share ownership shall be kept electronically in theParticipant’s name, or if specified on theParticipant’s Authorization Form, in theParticipant’s name and the name of another person of legal age as joint tenants with right of survivorship. As deemed appropriate by theCommitteeacting in its discretion, and consistent with the terms of theCountry Programs,Participants shall receive periodic statements detailing theirPlan Account balances.
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 thePlan by written notification of withdrawal delivered to the appropriate office pursuant to administrative rules established by theCommittee. AParticipant’s participation in thePlan shall 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 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 Account shall be paid either to theParticipantor theParticipant’s estate, 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.
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12.Dividends. Cash dividends onSharesacquired under thePlan will 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 thePlan are not transferable by aParticipantother than by will or the laws of descent, and are exercisable during theParticipant’s lifetime only by theParticipant.
14.Application of Funds. All funds received or held by theCorporationunder thePlan may 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 thePlan shall 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.
16.Administration of Plans. ThePlan and the detailedCountry Programsshall be administered by theCommittee. TheCommitteeshall have authority to make rules and regulations for the administration of theCountry Programs including when and how purchases shall be made, and its interpretations and decisions with regard thereto shall be final and conclusive. TheCommitteeshall 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 thePlan or any of theCountry Programs, provided, however, that except to conform thePlan or anyCountry Programto the requirements of local legislation, no amendment shall be made withdrawing the administration of thePlan orCountry Programsfrom theCommittee, or permitting any rights under thePlan to be granted to any employee who is a member of theCommitteeadministering thePlan.
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18.Termination. ThePlan shall 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 Accounts shall be returned to suchParticipants.
19.Governmental Regulations. TheCorporation’s obligation to sell and deliverSharesunder thePlan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such stock.
20.Stockholder Approval. ThisPlan shall 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
US PROGRAM
1.Purpose. The purpose of this Supplement A to the Hanesbrands Inc. 2006 Employee Stock Purchase Plan is to modify and further specify the terms and conditions of thePlan as applied to employees in the United States and Puerto Rico (the “US Program”). With respect to employees in the United States, theUS Programis intended to qualify as an employee stock purchase plan under section 423 of the Code. Any defined term not defined in section 2 of this Supplement A shall be defined pursuant to thePlan.
2.Contributions. AnEligible Employeemay participate in theUS Programat any time by completing and filing with the appropriate payroll office anAuthorization Form. TheCommittee, in its discretion, may establish a minimum deduction per payroll period. Such deductions shall commence with the pay period beginning after suchAuthorization Form is filed and recorded in the appropriate payroll office and shall continue until theParticipantterminates participation in theUS Programor until theUS Programis terminated. Subject to the minimum and maximum deductions set forth in the Plan and thisUS Program, aParticipantmay change the amount of his or her payroll deduction no more than twice in each calendar year by filing a newAuthorization Formwith the appropriate payroll office. The change shall not become effective earlier than the first payroll period in the next succeedingOffering Periodafter theAuthorization Formis received and recorded by the appropriate payroll office. Payroll deductions will be held in theCorporationorParticipating Subsidiary’sgeneral accounts until the end of theOffering Period at which time they will be applied solely for the purchase ofSharesunder theUS Program. Participantswill receive periodic statements of theirPlan Account balance.
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 be purchased on anExercise Date shall be determined by dividing the balance of theParticipant’s Plan Account(including any balance in theParticipant’s Plan Accountafter the
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immediately priorExercise Date) by theExercise Price, and then rounding downward to the nearest wholeShare. No fractionalShares shall be purchased, and any balance remaining in theParticipant’s Plan Account after theShares have been purchased on theExercise Date shall be carried forward to the next succeedingOffering Period. As soon as practicable after theExercise Date, a statement shall be delivered to theParticipant which shall include the number ofShares purchased on theExercise Date and the aggregate number ofShares purchased on behalf of such Participant under theUS Program.Share ownership shall be kept electronically in the name of theParticipant, or if so specified in theParticipant’s Authorization Form, in theParticipant’s name and the name of another person of legal age as joint tenants with right of survivorship.
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 Period following 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 Subsidiariesas to the present or future benefit of participation in theUS Program.If aCorporationor aParticipating Subsidiaryceases participation in theUS Programor theCorporationceases operation of the Plan, 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 theAdministratorand 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 Programto comply with the requirements of legislation or any regulatory body in the United States.
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8.Governmental Regulation. TheUS Program shall be suspended and become inoperative with respect toShares not theretofore optioned under theUS Program during any period in which no registration statement or amendment thereto under the Securities Act of 1933, as amended, is in effect with respect to the Shares so remaining to be purchased under theUS Program.
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