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This excerpt taken from the HBI 10-K filed Sep 28, 2006. Change in
Control
The Severance Agreements also contain change in control benefits
for our executive officers to help keep them focused on their
work responsibilities during the uncertainty that accompanies a
change in control, to preserve benefits after a change in
control transaction and to help us attract and retain key
talent. Generally, the agreements provide for severance pay and
continuation of certain benefits if the executive officer’s
employment is terminated involuntarily (for a reason other than
“cause” as defined in the agreement) within two years
following a change in control, or within three months prior to a
change in control. The definition of “involuntary
termination” under the Severance Agreements includes a
voluntary termination by the executive officer for “good
reason.”
The Severance Agreements provide that a terminated executive
officer will receive in a lump sum payment, two times (three
times in the case of Mr. Noll) his or her cash compensation
(consisting of base salary, the greater of their current target
bonus or their average actual bonus over the prior three years
and the matching contribution to the defined contribution plan
in which the executive officer is participating), a pro-rated
portion of his or her annual bonus for the fiscal year in which
the termination occurs based upon the greater of their target
bonus or actual performance as of the date of termination, a
pro-rata portion of his or her long-term cash incentive plan
payment for any performance period that is at least 50%
completed prior to the executive officer’s termination
date, the replacement of lost savings and retirement benefits
through the Hanesbrands SERP and the continued eligibility to
participate in our medical, dental and executive insurance plans
during the change in control severance period. The change in
control severance period is a period of two years (three years
for Mr. Noll) following the executive officer’s
termination date. Outstanding awards under the Hanesbrands OIP
will be treated pursuant to the terms of the Hanesbrands OIP. In
the event that any payments made in connection with a change in
control would be subject to the excise tax imposed on parachute
payments by Section 4999 of the Code, we will make tax
equalization payments with respect to the executive
officer’s compensation for all federal, state and local
income and excise taxes, and any penalties and interest, but
only if the total payments made in connection with a change in
control exceed 330% of such executive officer’s “base
amount” (as determined under Section 280G(b) of the
Code). Otherwise, the payments made to such executive officer in
connection with a change in control that are classified as
parachute payments will be reduced so that the value of the
total payments to such executive officer is $1 less than the
Table of Contents
maximum amount such executive officer may receive without
becoming subject to the tax imposed by Section 4999 of the
Code.
This excerpt taken from the HBI 8-K filed Sep 5, 2006. Change in Control Except as otherwise determined by the Committee, the treatment of outstanding awards upon the occurrence of a change in control after the spin off shall be as described below. For purposes of the Hanesbrands OIP, the term “Change in Control” means one or more of the following events: (1) the acquisition, directly or indirectly, of our
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Table of Contentssecurities representing at least 20% of the combined voting power of our outstanding securities (other than by any of our employee benefit plans); (2) the consummation of certain mergers and consolidations involving us; (3) the consummation of the sale or other disposition of all or substantially all of our assets; (4) the approval of a plan of complete liquidation or dissolution by our stockholders; and (5) a change in the majority of our board of directors. Stock Options and SARs. Upon the occurrence of a Change in Control, each stock option and SAR outstanding on the date on which the Change in Control occurs will immediately become vested and exercisable in full in accordance with the terms and conditions set forth in the applicable grant, award or agreement relating to the stock options or SARs. Restricted Stock and Restricted Stock Units. Upon the occurrence of a Change in Control, the restrictions on all shares of restricted stock and RSUs outstanding on the date on which the Change in Control occurs will automatically lapse. With regard to RSUs, shares of common stock will be delivered to the participant as determined in accordance with the terms and conditions in the applicable grant, award or agreement relating to RSUs. Performance Shares. Upon the occurrence of a Change in Control, any performance goal with respect to any outstanding performance shares will be deemed to have been attained at target levels, and shares of our common stock or cash will be paid to the participant as determined in accordance with the terms and conditions set forth in the applicable grant, award or agreement relating to the performance shares. Performance Cash Awards. Upon the occurrence of a Change in Control, any performance goal with respect to any outstanding performance cash awards will be deemed to have been attained at target levels, and the cash (or shares of our common stock) will be paid to the participant as determined in accordance with the terms and conditions set forth in the applicable grant, award or agreement relating to the performance cash awards. Other Stock or Cash Awards. Upon the occurrence of a Change in Control, any terms and conditions with respect to other stock or cash awards previously granted under the Hanesbrands OIP will be deemed to be fully satisfied and the other stock or cash awards will be paid out immediately to the participants, as determined in accordance with the terms and conditions set forth in the applicable grant, award, or agreement relating to such awards. | EXCERPTS ON THIS PAGE:
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