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HBI » Topics » 10.01 Payments to Participants

This excerpt taken from the HBI 8-K filed Sep 5, 2006.

10.01 Payments to Participants

 

  (a) Vesting.

 

  (i) Before-Tax Contribution, After-Tax, and Rollover Contribution Accounts. A Participant shall at all times be fully vested in and have a nonforfeitable right to the balance in his or her Before-Tax Contribution Account and his or her After-Tax and Rollover Contribution Accounts, if any.

 

  (ii) Annual Company Contribution, Transition Contribution, Matching Contribution Accounts. If a Participant’s Separation Date occurs on or after his or her Normal Retirement Age, the date he or she dies or becomes Totally Disabled, he or she shall be fully vested in his or her Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account. If a Participant’s Separation Date occurs under any other circumstances, the balances in his or her Annual Company Contribution Account, Transition Contribution Account, Matching Contribution Account, as applicable, will be reduced to an amount computed in accordance with the following schedule:

 

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If the Participant’s Number of Years of Service is:

    The Vested Percentage of
His or Her Applicable
Accounts will be:		  

Less than 1 year

    0 %

1 year but less than 2 years

    20 %

2 years but less than 3 years

    40 %

3 years but less than 4 years

    60 %

4 years but less than 5 years

    80 %

5 years or more

    100 %

The resulting balance in his or her Annual Company Contribution Account, Transition Contribution Account and Matching Contribution Account will be distributable to him or her, or, in the event of his or her death, to his or her Beneficiary, in accordance with this Subsection and Subsection 10.02.

 

  (iii) Special Provisions Applicable to Certain Participants. Notwithstanding the foregoing, a Participant who had an account balance in a Predecessor Plan shall be vested in his or her Accounts to the extent provided in the Sara Lee Plan. In addition, a Participant who was subject to special vesting rules under the Sara Lee Plan shall be fully vested in his or her Accounts to the extent provided in the Sara Lee.

 

  (b) Time of Payment. Except as provided in Subsection 10.03 below, payment of a Participant’s benefits will be made or commence within the time determined by the Committee after his or her Separation Date, but not later than sixty (60) days after (i) the end of the Plan Year in which his or her Separation Date occurs, or (ii) such later date on which the amount of the payment can be ascertained by the Committee. In the event a

 

52

Participant receives a lump sum distribution of his or her entire vested Accounts and additional contributions are subsequently credited to his or her Accounts, his or her entire remaining vested Account balance shall be distributed in an immediate lump sum to the extent such vested Account balance does not exceed $1,000 as of the date of such distribution. Except as provided in the preceding sentence, distributions may not be made to the Participant before his or her Normal Retirement Age without his or her consent.

 

  (c) Method of Distribution. A Participant’s vested Accounts will be distributed to him or her (or, in the event of his or her death, to his or her Beneficiary) in a lump sum unless the Participant (or, in the event of his or her death, the Participant’s Beneficiary) elects, in accordance with procedures established by the Committee, to receive such distribution by any one or more of the following methods, if applicable:

 

  (i) Partial Distributions. A Participant (or, in the event of his or her death, his or her Beneficiary) may elect to receive a partial distribution of the vested Account balance (but not less than the lesser of his or her total Account balance or $250.00) as of any Accounting Date after the Participant’s Separation Date. All partial distributions under this Subparagraph shall be made in cash only.

 

  (ii) Installments. If the vested portion of the applicable vested Account balance exceeds $5,000, a Participant (or, in the event of his or her death, his or her surviving spouse) may elect to receive substantially equal installments over a period not to exceed five (5) Plan Years, commencing in any year designated but no later than the applicable Required Commencement Date with final distribution of all Accounts by the fifth year. No Beneficiary other than a Participant’s surviving spouse may elect to receive installments.

 

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  (iii) Special Distribution Provisions for Certain Participants. Notwithstanding the foregoing, a Participant who had an account balance in a Predecessor Plan may elect distribution under any other method available to such Participant to the extent provided in the Sara Lee Plan; provided, however, that Participants who participated in a Predecessor Plan that was subject to Section 401(a)(11) and Section 417 of the Code or which provided special distribution rules may no longer elect payment of their Account Balances in any form other than a lump sum or partial lump sum distribution, notwithstanding any provision in this Plan or any prior or current Supplement thereto to the contrary.

 

  (iv) Order of Accounts. Distributions under this Subparagraph shall be charged to the Participant’s vested Accounts (if applicable) in the following order: (A) After-Tax Account; (B) Rollover Contribution Account; (C) Before-Tax Contribution Account; (D) Predecessor Company Account; (E) Matching Contribution Account (classified as company match); (F) Matching Contribution Account (classified as monthly company contributions); (G) Matching Contribution Account attributable to Matching Contributions made pursuant to a collective bargaining agreement; (H) Annual Company Contribution Account; and (I) Transition Contribution Account.

 

  (v) Special Provisions Applicable to Dividends. Notwithstanding Subparagraph (ii), dividends attributable to Sara Lee Stock or Hanesbrands Stock in a Participant’s Accounts that are subject to the election in Subsection 10.08 shall be one hundred percent (100%) vested.

 

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  (d) Fees. The Committee may, on an annual or more frequent basis, charge the Accounts of any Alternate Payee, any Beneficiary, or any Participant whose Separation Date has occurred for a reason other than Retirement, for reasonable and necessary administrative fees incurred in the ongoing maintenance of such Accounts in the Plan, in accordance with uniform rules and procedures applicable to all Participants similarly situated. “Retirement” means Separation from Service on or after the earlier of: (i) the attainment of age fifty-five (55) and ten (10) Years of Service, or (ii) Normal Retirement Age.
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