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                      THE EARTHGRAINS COMPANY

                     1996 STOCK INCENTIVE PLAN

     (AS AMENDED APRIL 11, 1996, MARCH 21, 1997, MAY 30, 1997,
                        AND APRIL 29, 1999;
            RESTATED TO REFLECT 2-FOR-1 STOCK SPLITS ON
                  JULY 28, 1997 AND JULY 20, 1998)

SECTION 1.  PURPOSE.

     The purpose of the Plan is to attract, retain, motivate and reward
employees of the Company and its Subsidiaries and Affiliates with stock-
related compensation arrangements.

SECTION 2.  MAXIMUM NUMBER OF SHARES.

     (a)  The maximum number of shares of Stock which may be issued
pursuant to Awards under the Plan, and the maximum number of shares for
which ISOs may be granted under the Plan, shall be 5,720,000 shares,
subject to adjustment as provided in Section 11.  For this purpose:

          (i)   The number of shares underlying an Award shall
     be counted against the Plan maximum ("used") at the time of
     grant; shares underlying alternative Awards shall be counted
     only once.

          (ii)  When an Award is payable in cash and the
     amount of such cash is based on the value of a number of
     shares of Stock which is determinable at the time of grant,
     that determinable number of shares shall be deemed to
     underlie that Award for purposes of the Plan.  If the amount
     of such cash, including any cash provided pursuant to
     Section 15 below, in effect is calculated by applying a
     percentage to the Fair Market Value of a certain number of
     shares of Stock, if such percentage is determinable at the
     date of grant, and if such determinable percentage in effect
     exceeds 100%, the Committee shall determine at the time of
     grant the number of shares which is deemed to underlie such
     Award.

          (iii) If the number of shares underlying an Award is
     not determinable at the time of grant, the Committee shall
     determine at the time of grant a number of shares which is
     deemed to underlie such Award; that number may be adjusted
     after grant as the Committee deems appropriate.

          (iv)  Shares which underlie Awards that (in whole or
     part) expire, terminate, are forfeited, or otherwise become
     non-payable, or which are recaptured by the Company in
     connection with a forfeiture event, may be re-used in new
     grants to the extent of such expiration, termination,
     forfeiture, non-payability, or recapture.

     (b)  Notwithstanding any other provisions of the Plan, the
maximum number of shares underlying Awards that may be granted to any
Eligible Employee during any calendar year shall be 1,300,000, subject
to adjustment as provided in Section 11.

     (c)  No more than 666,204 shares of Restricted Stock shall be
granted under the Plan (not counting, for this purpose, Restricted Stock
issuable upon exercise of Options or SARs), subject to adjustment as
provided in Section 11.

     (d)  In its discretion, the Company may issue treasury shares or
authorized but previously unissued shares.



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SECTION 3.  ELIGIBILITY.

     Officers and management employees of the Company, Subsidiaries or
Affiliates shall be eligible to receive Awards under the Plan.  A
Director of the Company or a Subsidiary or an Affiliate shall be
eligible only if he or she also is an officer or employee of the
Company, a Subsidiary or an Affiliate.  Notwithstanding the foregoing,
persons employed only by Affiliates shall not be eligible to receive
ISOs.

SECTION 4.  GENERAL PROVISIONS RELATING TO AWARDS.

     (a)  Subject to the limitations in the Plan, the Committee may
cause the Company to grant Awards to such Eligible Employees, at such
times, of such types, in such amounts, for such periods, becoming
exercisable at such times, with such features, with such option prices,
purchase prices or base prices, and subject to such other terms,
conditions, and restrictions as the Committee deems appropriate.  Each
Award shall be evidenced by a written Award Agreement between the
Company and the Recipient.  In granting an Award, the Committee may take
into account any factor it deems appropriate and consistent with the
purpose of the Plan.

     (b)  Except as otherwise provided in the Plan, one or more Awards
may be granted separately or as alternatives to each other.  If Awards
are alternatives to each other:

          (i)   the exercise of all or part of one automatically shall
     cause an immediate equal and corresponding termination of the
     other; and

          (ii)  unless the Award Agreement or the Committee expressly
     permit otherwise, alternative Awards which are transferable may
     be transferred only as a unit, and alternative Awards which are
     exercisable must be exercisable by the same person or persons.

     (c)  All or any portion of any payment to a Recipient, whether in
cash or shares of Stock, may be deferred to a later date if and as
provided in the Award Agreement.  Deferrals may be for such periods and
upon such terms and conditions (including the provision of interest,
dividend equivalents, or other return on such amounts) as the Committee
may determine.  The Committee may structure Award Agreements so that the
imposition of income and other taxes on Recipients is deferred in whole
or part.

     (d)  Award Agreements may contain any provision approved by the
Committee relating to the period for exercise or vesting after
termination of employment.  Except to the extent otherwise expressly
provided in the Award Agreement, termination of employment includes
separation from the group of companies comprised of the Company and its
Subsidiaries and Affiliates for any reason, including death, Disability,
retirement, resignation, dismissal, disposition of a Subsidiary or
operation (whether by stock or asset sale or otherwise), disposition of
an interest in an Affiliate, spin-off, shutdown, or any other event.

     (e)  Award Agreements may, in the discretion of the Committee,
contain a provision permitting a Recipient to designate the person who
may exercise or receive an Award upon the Recipient's death, either by
will or by appropriate notice to the Company.

     (f)  A Recipient shall have none of the rights of a shareholder
with respect to shares of Stock covered by his or her Award until shares
are issued in his or her name.

     (g)  The Committee may provide in Award Agreements that Awards,
except for ISOs and SARs which are alternatives to ISOs, are
transferable.  Transferability may be subject to such conditions

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and limitations as the Committee deems appropriate.  Except to the
extent otherwise expressly set forth in the Award Agreement, Awards
shall not be transferable other than by will or the laws of descent and
distribution, and (if exercise is required) shall be exercisable during
the Recipient's lifetime only by the Recipient or his or her guardian or
legal representative.  This paragraph shall not apply to Restricted
Stock after it vests.

SECTION 5.  OPTIONS AND SARS.

     (a)  Except as provided in Section 11(b), the option price per
share of Options or the base price of SARs shall not be less than Fair
Market Value per share of Stock on the Options' or the SARs' grant date,
nor less than the par value of a share of Stock, except that SARs which
are alternatives to Options but which are granted at a later time may
have a base price equal to the option price even though the base price
is less than Fair Market Value on the date the SARs are granted.

     (b)  The grant of Options and their related Option Agreement must
clearly identify the Options as either ISOs or as NQSOs.

     (c)  If Options, SARs, and/or Limited Rights are granted as
alternatives to each other:  (i) the option prices and the base prices
(as applicable) shall be equal, (ii) SARs and/or Limited Rights which
are alternatives to ISOs may be granted only at the same time the ISOs
are granted, and (iii) SARs which are alternatives to Options, and
Limited Rights which are alternatives to Options or SARs, shall expire
or terminate at the same time as the Options or SARs to which they are
alternatives.

     (d)  In the case of SARs, the Award Agreement may specify the
form of payment or may provide that the form is to be determined at a
later date, and may require the satisfaction of any rules or conditions
in connection with receiving payment in any particular form.  If the
Recipient is a Reporting Person at the time of grant or during the SARs'
term and is given an election to receive cash in full or partial
settlement of SARs, the Committee shall have sole discretion to approve
or disapprove such election at any time after it is made.

     (e)  Notwithstanding any other provision of the Plan, no Options
or SARs shall contain a so-called "reload" feature under which Options
or SARs are automatically granted to Recipients upon exercise of Options
or SARs.

SECTION 6.  LIMITED RIGHTS.

     (a)  The Committee shall have authority to grant limited stock
appreciation rights ("Limited Rights") to any Recipient of any Options
or SARs granted under the Plan (the "Related Award") with respect to all
or some of the shares of Stock which underlie such Related Award.
Limited Rights shall not be granted separately, but shall be granted
only as alternatives to their Related Award.  Limited Rights may be
granted either at the time of grant of the Related Award or (except in
the case of ISOs) at any time thereafter during its term.  Limited
Rights shall be exercisable or payable at such times, payable in such
amounts, and subject to such other terms, conditions, and restrictions
as the Committee deems appropriate.

     (b)  The Committee shall place on any Limited Rights granted to a
Reporting Person such restrictions as may be required by Rule 16b-3 at
the time of grant, and shall amend the Plan accordingly to the extent
required by Rule 16b-3.  The Committee shall place on any Limited Rights
for which the Related Award is ISOs such restrictions as may be required
by the Code at the time of grant, and shall amend the Plan accordingly
to the extent required by the Code.

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SECTION 7.  RESTRICTED STOCK.

     (a)  "Restricted Stock" means Stock issued to a Recipient which
is subject to transfer restrictions prior to vesting and is subject to
forfeiture upon the happening of such events or such conditions or upon
the failure to satisfy such rules, requirements and conditions as the
Committee specifies in the Award Agreement.  Stock issued in connection
with an Award Agreement is not Restricted Stock unless so designated in
the Award Agreement or in a rule or resolution of the Committee.  When
Restricted Stock vests, it ceases to be Restricted Stock for purposes of
the Plan.

     (b)  The certificate representing the shares of Restricted Stock
issued in the name of the Recipient may be held by the Company and/or
may have a legend placed upon it to the effect that the shares
represented by it are subject to, and may not be transferred except in
accordance with the Plan and the Award Agreement relating to such
shares.  Dividends relating to shares of Restricted Stock may be paid to
the Recipient or held by the Company for the Recipient's benefit, as the
Committee may provide in the Award Agreement; if held by the Company,
the Committee may require that the Company pay interest or other return
to the Recipient on any cash dividends at such rate(s) and time(s) as
the Committee provides in the Award Agreement.

     (c)  If the Recipient of Restricted Stock is a Reporting Person
on the grant date, at least one of the following requirements shall be
satisfied:

          (i)   the Award is a stock bonus granted for no consideration
     (other than services rendered or to be rendered);

          (ii)  the Award is a stock bonus granted for the minimum
     amount of consideration (other then services) required by
     applicable corporate law, which amount in no event exceeds
     10% of the Fair Market Value of a share of Stock on the
     payment date, and which amount is paid to the Company within
     60 days after the grant date:

          (iii) the Award consists of Options which are payable in
     Restricted Stock; or

          (iv)  the Award is an Other Stock Interest which is
     payable in Restricted Stock and which either is granted in
     conformity with (i) or (ii) above, or constitutes an option
     or similar right (including a stock appreciation right) or
     any other type of derivative security for the purposes of
     Rule 16b-3.

This paragraph (c) shall apply to a grant only when required by Rule
16b-3 at the time and under the circumstances of the grant.

SECTION 8.  OTHER STOCK INTERESTS.

     "Other Stock Interest" means any compensatory arrangement not
inconsistent with the Plan which is established by the Committee and
which might (a) involve the issuance of Stock to an Eligible Employee or
(b) involve or be treated as involving the acquisition or disposition of
an equity security of the Company for purposes of Section 16 of the Act.
Other Stock Interests are not limited to any specific form or structure.
Without limiting the above, Other Stock Interests may include stock
bonuses, deferred stock, variable priced stock options, performance
shares, phantom stock, and convertible securities, and may be granted in
connection with or apart from other compensation programs or plans or
other types of Awards under the Plan.  In connection with the grant of
Other Stock Interests, the Committee may provide for payment to the
Recipient of amounts equal to dividends which would have been paid had
Stock actually been issued to the Recipient.  In addition,

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Other Stock Interests may provide for payment of cash or other property
in lieu of Stock or other securities of the Company.  The Committee
shall place on any Other Stock Interest granted to a Reporting Person
such restrictions as may be required by Rule 16b-3 at the time of grant,
and shall amend the Plan accordingly to the extent required by Rule
16b-3.

SECTION 9.  STOCK ISSUANCE, PAYMENT, AND WITHHOLDING.

     (a)  If an Award contemplates the payment of a purchase price
(including the option price of Options), the Recipient may pay the
purchase price in cash, Stock (including shares of previously-owned
Stock, or Stock issuable in connection with the Award), or other
property, to the extent permitted or required by the Award Agreement or
the Committee from time to time.  The Committee may permit deemed or
constructive transfers of shares in lieu of actual transfer and physical
delivery of certificates.  Except to the extent prohibited by applicable
law, the Committee or its delegate may take any necessary or appropriate
steps in order to facilitate the payment of any such purchase price.
Without limiting the foregoing, the Committee may allow the Recipient to
defer payment of such purchase price, or may cause the Company to loan
the purchase price to the Recipient or to guaranty that any shares to be
issued will be delivered to a broker or lender in order to allow the
Recipient to borrow the purchase price.  The Committee may require
satisfaction of any rules or conditions in connection with paying the
purchase price at any particular time, in any particular form, or with
the Company's assistance.

     (b)  If shares used to pay any such purchase price are subject to
any prior restrictions imposed in connection with any plan of the
Company (including the Plan), an equal number of the shares of Stock
purchased shall be made subject to such prior restrictions in addition
to any further restrictions imposed on such purchased shares by the
terms of the Award Agreement or Plan.

     (c)  When the obligation arises to collect and pay Required
Withholding Taxes, the Recipient shall promptly reimburse the Company or
Employer (as required by the Committee or Company) for the amount of
such Required Withholding Taxes in cash, unless the Award Agreement or
the Committee permits or requires payment in another form.  In the
discretion of the Committee or its delegate and at the Recipient's
request, the Committee or its delegate may cause the Company or Employer
to pay to the appropriate taxing authority Withholding Taxes in excess
of Required Withholding Taxes on behalf of a Recipient, which shall be
reimbursed by the Recipient.  In the Award Agreement or otherwise, the
Committee may allow a Recipient to reimburse the Company or Employer for
payment of Withholding Taxes with shares of Stock or other property.
The Committee may require the satisfaction of any rules or conditions in
connection with any non-cash payment of Withholding Taxes.  If a
Recipient is a Reporting Person at the time of grant or during the
Award's term and is given an election to pay any Withholding Taxes with
Stock, the Committee shall have sole discretion to approve or disapprove
such election at any time after the election is made.

     (d)  If provided in the Award Agreement relating to an ISO, the
Committee may prohibit the transfer by a Recipient of shares of Stock
issued to him or her upon exercise of an ISO into the name of a nominee,
and the Committee may require the placement of a legend on certificates
for such shares reflecting such prohibition.

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SECTION 10. FORFEITURES.

     (a)  The Committee may include in any Award Agreement any
provisions relating to forfeitures of Awards that it deems appropriate.
Such forfeiture provisions may include, among others, prohibitions on
competing with the Company and its Subsidiaries and Affiliates and other
detrimental conduct.  Forfeiture provisions for one Award type may
differ from those for another type, and also may differ among Awards of
the same type.  As used in the Plan, a "forfeiture" of an Award includes
the recapture of economic benefits derived from an Award, as well as the
forfeiture of an Award itself; however, the Committee may define the
term more narrowly in specific Award Agreements or contexts.

     (b)  Award Agreements may provide for any forfeiture provision to
terminate or be waived upon an Acceleration Date.  In its discretion,
the Committee may provide in any Award Agreement for the termination of
any forfeiture provision upon the happening of any specified event, and
may terminate or waive any forfeiture provision by action taken after
grant.

SECTION 11. ADJUSTMENTS AND ACQUISITIONS.

     (a)  In the event of (i) any change in the outstanding shares of
Stock by reason of any stock split, combination of shares, stock
dividend, reorganization, merger, consolidation, or other corporate
change having a similar effect, (ii) any separation of the Company
including a spin-off or other distribution of stock or property by the
Company, or (iii) any distribution to shareholders generally other than
a normal dividend, the Committee shall make such equitable adjustments
to the Plan and to outstanding Awards as it shall deem appropriate in
order to prevent the dilution or enlargement of (A) the Awards which may
be granted, the shares of Stock which may be issued, or the shares for
which ISOs may be granted under the Plan, (B) the economic value of
outstanding Awards or (C) the limitations imposed by Section 2(b) of the
Plan, provided, however, that the Committee shall not make any
adjustment which would constitute or result in an increase in the
aggregate number of Shares available under the Plan, or the annual limit
on the number of Awards which may be granted to an Eligible Employee
under Section 2(b) of the Plan, requiring shareholder approval under
Section 422 or Section 162(m) of the Code.  Any such determination by
the Committee shall be conclusive and binding on all concerned.

     (b)  In the event the Company or a Subsidiary enters into a
transaction described in Section 424(a) of the Code with any other
corporation, the Committee may grant Options, SARs or Limited Rights to
employees or former employees of such corporation in substitution of
stock awards, stock appreciation rights or limited stock appreciation
rights (respectively) previously granted to them by such corporation
upon such terms and conditions as shall be necessary to qualify such
grant as a substitution described in Section 424(a) of the Code.

SECTION 12. ACCELERATION.

     (a)  An "Acceleration Date" occurs when any of the following
events occur:

          (i)   any Person (as defined herein) becomes the
     beneficial owner directly or indirectly (within the meaning
     of Rule 13d-3 under the Act) of more than 30% of the
     Company's then outstanding voting securities (measured on
     the basis of voting power), provided, however, that shares
     issued or distributed by the Company in connection with the
     acquisition of another company or business from such Person
     shall be counted as being

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outstanding, but otherwise shall be ignored in determining the
percentage beneficially owned by such Person;

          (ii)  the shareholders of the Company approve a
     definitive agreement of merger or consolidation with any
     other corporation or business entity, other than (x) a
     merger or consolidation which would result in the voting
     securities of the Company outstanding immediately prior
     thereto continuing to represent (either by remaining
     outstanding or by being converted into voting securities of
     the surviving entity), in combination with the ownership of
     any trustee or other fiduciary holding securities under an
     employee benefit plan of the Company, at least 50% of the
     combined voting power of the voting securities of the
     Company or such surviving entity outstanding immediately
     after such merger or consolidation, or (y) a merger or
     consolidation effected to implement a recapitalization of
     the Company (or similar transaction) in which no Person
     acquires more than 50% of the combined voting power of the
     Company's then outstanding securities;

          (iii) a change occurs in the composition of the
     Board of Directors during any period of twenty-four
     consecutive months such that individuals who at the
     beginning of such period were members of the Board of
     Directors cease for any reason to constitute at least a
     majority thereof, unless the election, or the nomination for
     election by the Company's shareholders, of each new director
     was approved by a vote of at least two-thirds of the
     directors still in office who either were directors at the
     beginning of the period or whose election or nomination for
     election was previously so approved; or

          (iv)  the shareholders of the Company approve a plan
     of complete liquidation or dissolution of the Company or an
     agreement for the sale or disposition by the Company of all
     or substantially all the Company's assets.

For purposes of this paragraph, "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (aa) the
Company or any of its subsidiaries, (bb) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
of its subsidiaries, (cc) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (dd) a corporation owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of Stock.

     (b)  If an Acceleration Date occurs while Awards remain
outstanding under the Plan, then all Awards shall "vest," which means:

          (i)   all Options and SARs shall become fully
     exercisable; and

          (ii)  all shares of Restricted Stock shall become
     nonforfeitable and freely transferable (except for such
     restrictions as may be imposed by the Securities Act of
     1933, as amended, or applicable state securities laws), and
     all conditions to unrestricted ownership provided in their
     Award Agreements which have not previously been satisfied
     shall lapse.

In the case of Other Stock Interests, the term "vest" shall have that
meaning given it by the Committee at the time of grant.

     (c)  Except to the extent prohibited by Rule 16b-3 in the case of
Reporting Persons, the Committee may accelerate the date on which any
Award or Stock or property issued pursuant to an Award shall vest and
may remove any restrictions on such Award at any time after grant and
for any reason the Committee deems appropriate.

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     (d)  All Awards, and all shares of Stock or property issued
pursuant to an Award, shall automatically vest upon a termination of
employment caused by the death, Disability, or (except for Restricted
Stock and Other Stock Interests) retirement of the Recipient.  The
Committee may determine the circumstances under which a Recipient is
deemed to have retired.

SECTION 13. ADMINISTRATION.

     (a)  The Plan shall be administered by the Compensation and Human
Resources Committee of the Board, or another committee appointed by the
Board from time to time, consisting of three or more persons, each of
whom at all times shall be a member of the Board and none of whom shall
be an officer or employee of the Company or any of its subsidiaries at
the time of service.  Committee members shall not be eligible for
selection to receive Awards under the Plan.

     (b)  During any time when one or more Committee members may not
be qualified to serve under Rule 16b-3 or Section 162(m) of the Code,
the Committee may form a sub-Committee from among its qualifying members
to act, in lieu of the full Committee, with respect to all or any
specified category of Awards granted to all or any specified group of
Recipients, and may take other actions deemed appropriate and convenient
to prevent, control, minimize, or eliminate any adverse effects of such
potential disqualification.  At the Committee's request or on its own
motion, the Board may ratify or approve grants, or any terms of any
grants, made by the Committee or a sub-Committee during any time that
any member of the Committee may not be qualified to approve such grants
or terms under Rule 16b-3.

     (c)  A majority of the members of the Committee shall constitute
a quorum.  The acts of a majority of the members present at any meeting
at which a quorum is present, or acts approved in writing by a majority
of the members of the Committee, shall be the acts of the Committee.
The Committee may meet in person, by telephone or television conference,
or in any other manner permitted by applicable law.  From time to time
the Committee may adopt, amend, and rescind such rules and regulations
for carrying out the Plan and implementing Award Agreements, and the
Committee may take such action in the administration of the Plan, as it
deems proper.  The interpretation of any provisions of the Plan by the
Committee shall be final and conclusive unless otherwise determined by
the Board.

     (d)  To the extent the Committee deems it convenient and
appropriate, the Committee may delegate such of its powers and duties,
including (among other things) its power to grant Awards, to one or more
members of the Committee or to one or more officers of the Company. Any
such delegation shall be subject to such limitations and conditions as
the Committee deems appropriate.  However, notwithstanding the
foregoing: (i) the power to grant Awards may not be delegated to an
officer who is not also a director of the Company except in conformity
with applicable Delaware law; and, (ii) no officer may grant Awards to
him- or herself or to his or her superiors unless such grants are
ratified by the Committee or the Board.

SECTION 14. AMENDMENT, TERMINATION, SHAREHOLDER APPROVAL.

     (a)  The Board may amend or terminate the Plan at any time,
except that without the approval of the Company's shareholders, no
amendment shall (i) increase the maximum number of shares issuable, or
the maximum number of shares for which ISOs may be granted, under the
Plan, (ii) change the class of persons eligible to be Recipients, (iii)
change the annual limit on Awards which

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may be granted to an Eligible Employee provided in Section 2(b), (iv)
withdraw the authority of the Committee to administer the Plan, or (v)
change the provisions of this Section 14(a).

     (b)  The Committee may amend the Plan from time to time to the
extent necessary to (i) comply with Rule 16b-3 and, to the extent it
deems appropriate, (ii) prevent benefits under the Plan from
constituting "applicable employee remuneration" within the meaning of
Section 162(m) of the Code.

     (c)  No Awards may be granted under the Plan after February 21,
2006.

     (d)  The approval by shareholders described in this Section shall
consist of the approving vote of the holders of a majority of the
outstanding shares of Stock present (in person or by proxy) at a meeting
of the shareholders at which a quorum is present, unless a greater vote
is required by the Company's charter or by-laws, by the Board, by the
Company's principal stock exchange, or by applicable law (including Rule
16b-3 or Section 162(m) of the Code).

SECTION 15. ADDITIONAL PAYMENTS.

     The Committee may grant a Recipient the right to receive
additional compensation in cash or other property (in addition to any
cash or other property payable under the terms of the Award itself) upon
the exercise of Options, SARs, or exercisable Other Stock Interests, or
the vesting of Restricted Stock or non-exercisable Other Stock
Interests, provided that (i) in the case of ISOs such compensation is
includible in income under Sections 61 and 83 of the Code at the time of
such exercise or vesting and (ii) no such right may be granted in
connection with any SARs or Limited Rights which are alternatives to
ISOs.

SECTION 16. DEFINITIONS.

     (a)  "Acceleration Date" has the meaning given in Section 12(a).

     (b)  "Act" means the Securities Exchange Act of 1934, as amended
from time to time.

     (c)  "Affiliate" means any entity in which the Company has a
substantial direct or indirect equity interest (other than a
Subsidiary), as determined by the Committee.

     (d)  "Award" means a grant of ISOs, NQSOs, SARs, Limited Rights,
Restricted Stock or Other Stock Interests.

     (e)  "Award Agreement" means the written agreement referred to in
Section 4(a) between the Company and the Recipient evidencing an Award.

     (f)  "Board" means the Board of Directors of the Company.

     (g)  Options "cease to qualify as ISOs" when they fail or cease
to qualify for the exclusion from income provided in Section 421 (or any
successor provision) of the Code.

     (h)  "Code" means the U.S. Internal Revenue Code as in effect
from time to time.

     (i)  "Committee" means the Compensation and Human Resources
Committee described in Section 13 hereof.

     (j)  "Company" means The Earthgrains Company and its successors.

     (k)  "Disability" means the condition of being "disabled" within
the meaning of Section 422(c)(6) of the Code or any successor provision.

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     (l)  "Eligible Employee" means a person who is eligible to
receive an Award under Section 3 of the Plan.

     (m)  "Employer" means the Company, the Subsidiary, or the
Affiliate which employs the Recipient.

     (n)  "Fair Market Value" of Stock on a given date means (i) the
average of the highest and lowest selling prices per share of Stock
reported on the New York Stock Exchange Composite Tape or similar
quotation service for such date, (ii) if Stock is not listed on the New
York Stock Exchange, the average of the highest and lowest selling
prices per share of Stock as reported for such date on the principal
stock exchange or quotation system in the U.S. on which Stock is listed
or quoted (as determined by the Committee), or (iii) if neither of the
preceding clauses is applicable, the value per share determined by the
Committee in a manner consistent with the Treasury Regulations under
Section 2031 of the Internal Revenue Code.  If no sale of Stock occurs
on such date, but there were sales reported within a reasonable period
both before and after such date, the weighted average of the means
between the highest and lowest selling prices on the nearest date before
and the nearest date after such date shall be used, with the average to
be weighted inversely by the respective numbers of trading days between
the selling dates and such date.  "Fair Market Value" of Restricted
Stock is the same as the Fair Market Value of any other Stock.

     (o)  "Forfeiture" has the meaning given in Section 10(a).

     (p)  "ISO" or "Incentive Stock Option" means an option to
purchase one share of Stock for a specified option price which is
designated by the Committee as an "Incentive Stock Option" and which
qualifies as an "incentive stock option" under Section 422 (or any
successor provision) of the Code.

     (q)  "Limited Right" has the meaning given in Section 6.

     (r)  "NQSO" or "Non-Qualified Stock Option" means an option to
purchase one share of Stock for a specified option price which is
designated by the Committee as a "Non-Qualified Stock Option," or which
is designated by the Committee as an ISO but which ceases to qualify as
an ISO.

     (s)  "Option" means an ISO or an NQSO.

     (t)  "Option Agreement" means an Award Agreement which evidences
a grant of Options.

     (u)  "Optionee" means a person to whom Options are granted
pursuant to the Plan.

     (v)  "Other Stock Interest" has the meaning given in Section 8.

     (w)  "Plan" means The Earthgrains Company 1996 Stock Incentive
Plan, as amended from time to time.

     (x)  "Recipient" means an Eligible Employee to whom an Award is
granted pursuant to the Plan.

     (y)  "Reporting Person," as of a given date, means a Recipient
who would be required to report a purchase or sale of Stock occurring on
such date to the Securities and Exchange Commission pursuant to Section
16(a) of the Act and the rules and regulations thereunder.

     (z)  "Restricted Stock" has the meaning given in Section 7.

     (aa) "Rule 16b-3" means Rule 16b-3 (as amended from time to time)
promulgated by the Securities and Exchange Commission under the Act, and
any successor thereto.

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     (bb) "SAR" means a stock appreciation right, which is a right to
receive cash, Stock, or other property having a value on the date the
SAR is exercised equal to (i) the excess of the Fair Market Value of one
share of Stock on the exercise date over (ii) the base price of the SAR.
The term "SAR" does not include a Limited Right.

     (cc) "Stock" means shares of the common stock of the Company, par
value $0.01 per share, or such other class or kind of shares or other
securities as may be applicable under Section 11.  The term "Stock"
shall include shares of Restricted Stock unless expressly provided
otherwise in the Plan or an Award Agreement.

     (dd) "Subsidiary" means a "subsidiary corporation" of the Company
as defined in Section 424(f) (or any successor provision) of the Code.

     (ee) "Vest" has the meaning given in Section 12(b).

     (ff) "Withholding Taxes" means, in connection with an Award, (i)
the total amount of Federal and state income taxes, social security
taxes, and other taxes which the Employer of the Recipient is required
to withhold ("Required Withholding Taxes") plus (ii) any other such
taxes which the Employer, in its sole discretion, withholds at the
request of the Recipient.

SECTION 17. MISCELLANEOUS.

     (a)  Each provision of the Plan and Option Agreement relating to
ISOs shall be construed so that all ISOs shall be "incentive stock
options" as defined in Section 422 of the Code or any statutory
provision that may replace Section 422, and any provisions thereof which
cannot be so construed shall be disregarded.  Except as provided in
Section 10, no discretion granted or allowed to the Committee under the
Plan shall apply to ISOs after their grant except to the extent the
related Option Agreement shall so provide.  Notwithstanding the
foregoing, nothing shall prohibit an amendment to or action regarding
outstanding ISOs which would cause them to cease to qualify as ISOs, so
long as the Company and the Optionee shall consent to such amendment or
action.

     (b)  Without amending the Plan, Awards may be granted to Eligible
Employees who are foreign nationals or who are employed outside the
United States or both, on such terms and conditions different from those
specified in the Plan as may, in the judgment of the Committee, be
necessary or desirable to further the purposes of the Plan.  Such
different terms and conditions may be reflected in Addenda to the Plan.
However, in the case of ISOs, no such different terms or conditions
shall be employed if such term or condition constitutes, or in effect
results in, an increase in the aggregate number of shares which may be
issued under the Plan or a change in the definition of Eligible
Employee.

     (c)  Notwithstanding any other provision in the Plan, the
Committee shall not act with respect to any Reporting Person in a manner
which would contravene any requirement of Rule 16b-3 as in effect at the
time of such action, without the knowing consent of such Reporting
Person.

     (d)  Nothing in the Plan or any Award Agreement shall confer on
any person or expectation to continue in the employ of his or her
Employer, or shall interfere in any manner with the absolute right of
the Employer to change or terminate such person's employment at any time
for any reason or for no reason.

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