Document:

Form of 1998 Long-Term Incentive Stock Plan

 Exhibit 10.1 
  
 SARA LEE CORPORATION 
 1998 Long-Term Incentive Stock Plan 
 Form of Stock Option Grant Notice and Agreement

  
 {Participant Name} 
  
 Sara Lee Corporation (the “Company”) is pleased to confirm that
you have been granted a stock option (an “Option”), effective as of                      (the “Grant Date”), as provided
in this agreement (the “Agreement”): 
  
 1. Option
Right. Your Option is to purchase, on the terms and conditions set forth below, the following number of shares (the “Option Shares”) of the Company’s Common Stock, par value $.01 per share (the “Common Stock”) at the
exercise price specified below (the “Exercise Price”). 
  

						
	 	  	Number of
Option Shares

	  	 Exercise Price Per
 Option Share

	 Shares Granted
	  	_____	  	$	 

  
 2. Option. This
Option is a non-qualified stock option that is intended to conform in all respects with the 1998 Long-Term Incentive Stock Plan (the ”Plan”), a copy of which will be supplied to you upon your request, and the provisions of which are
incorporated herein by reference. This Option is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 3. Expiration Date. This Option expires on the tenth anniversary of
the Grant Date (the “Expiration Date”), subject to earlier expiration upon your death, disability or other termination of employment, as provided below. 
  
 4. Vesting. This Option may be exercised only to the extent it has vested. Subject to paragraphs 5 and 6 below, if
you are continuously employed by the Company or any of its subsidiaries (collectively, the “Sara Lee Companies”) from the Grant Date until the first anniversary of the Grant Date, this Option will vest with respect to one-third of the
Option Shares, and on each subsequent anniversary of the Grant Date on which you continue to be employed by the Sara Lee Companies, your Option will vest with respect to an additional one-third of the Option Shares, until you are 100% vested in your
Option on the third anniversary of the Grant Date. 
  
 5.
Death, Total Disability or Retirement. If you cease active employment with the Sara Lee Companies, because of your death or permanent and total disability (as defined under the appropriate disability benefit plan if applicable), the last day on
which this Option may be exercised is the earlier of (a) the Expiration Date or (b) five years after the date of your death or permanent and total disability. In the case of your retirement at age 55 or later (or as otherwise defined under the
appropriate retirement benefit plan if applicable), the last date on which this Option may be exercised is the Expiration Date of the Option. You are not eligible to receive any Restoration Stock Options (“RSOs”) following your death,
permanent and total disability or retirement. 
  
 In the event of
your death or permanent and total disability, all Option Shares will vest as of the date of death or the date you are determined to be permanently and totally disabled. In the event of your retirement, this Option will continue to vest subject to
paragraph 4. 
  
 6. Involuntary Termination, Voluntary
Termination and Non-Severance Event Termination. 
  
 (a)
Involuntary Termination. If your employment with the Sara Lee Companies is terminated by the Company or its subsidiaries and you are eligible to receive severance benefits under the Sara Lee Corporation Severance Plan for Corporate Officers, the
Severance Pay Plan, the Severance Pay Plan for A & B Players, the Severance Pay Plan for Certain Events or any other written severance plan of the Sara Lee Companies (collectively, a “Severance Event Termination”), the last day on
which this Option may be exercised is the earlier of (i) the Expiration Date or (ii) 90 days following the last day of your severance period as defined in your severance agreement. This Option will continue to vest only through the last day of your
severance period. You are not eligible to receive any RSOs following the date of your involuntary termination. 
  
 In the event your employment with the Sara Lee Companies is terminated as a result of the sale, closing or spin-off of a division, business unit or other
component of the Company, all Options may vest as of the closing date of the transaction and be exerciseable for six months following the closing date of the transaction, subject to the provisions of paragraph 5, unless otherwise determined by the
Company. This provision does not apply with respect to any transaction that would be considered a Change of Control as defined in Article X of the Plan. 

 (b) Voluntary Termination and Non-Severance Event Termination. If your employment terminates (i)
for reasons other than your death, permanent and total disability or retirement or (ii) for any other reason that is not a Severance Event Termination, (i.e., you voluntarily terminate your employment with the Sara Lee Companies or your employment
is terminated by Sara Lee and you are not eligible for severance pay under the Company’s severance plans), then this Option shall terminate 90 days after the date of your termination of employment. Vesting on this Option ends on the date of
your termination of employment. You are not eligible to receive any RSOs following your Voluntary Termination or Non-Severance Event Termination. 
  
 7. Exercise. This Option may be exercised in whole or in part for the number of shares specified (which in all cases must be at least the lesser of
250 or the total number of shares outstanding under this Option) in a written notice that is delivered to the Company or its designated agent and is accompanied by full payment of the Exercise Price for such number of Option Shares. Payment of the
Exercise Price may be made in cash, or by surrendering or attesting to the ownership of shares of Common Stock, or a combination of cash and shares of Common Stock, in an amount or having a combined value equal to the aggregate Exercise Price for
such Option Shares. In connection with any payment of the Exercise Price by surrender or attesting to the ownership of shares of Common Stock, proof acceptable to the Company shall be submitted that such previously acquired shares have been owned by
you for at least six months prior to the date of exercise. Any RSO issued to you for any portion of the Option exercised by attesting to the ownership of previously acquired shares of Common Stock shall not exceed the number of Option Shares
issuable as a result of such exercise (determined as though payment in full therefor were being made in cash) less the number of shares of Common Stock for which attestation of ownership is submitted. The value of previously acquired shares
submitted (directly or by attestation) in full or partial payment for the Option Shares purchased upon exercise of the Option shall be equal to the aggregate fair market value (as defined in the Plan) of such previously acquired shares on the date
of the exercise of the Option. This Option will be considered exercised on the date on which (a) your written notice of exercise and (b) your payment of the Exercise Price have both been received by the Company. The RSO may not be exercised until
the date which is at least six months after its Grant Date. The Company reserves the right to terminate the RSO feature at anytime for any reason. The exercise of any portion of this Option will be considered your acceptance of all terms and
conditions specified in this Agreement. 
  
 8.
Forfeiture. Notwithstanding anything contained in this Agreement to the contrary, if you engage in any activity inimical, contrary or harmful to the interests of the Company, including but not limited to: (1) competing, directly or indirectly
(either as owner, employee or agent), with any of the businesses of the Company, (2) violating any Company policies, (3) soliciting any present or future employees or customers of the Company to terminate such employment or business relationship(s)
with the Company, (4) disclosing or misusing any confidential information regarding the Company, or (5) participating in any activity not approved by the Board of Directors which could reasonably be foreseen as contributing to or resulting in a
Change of Control of the Company (as defined in the Plan) (such activities to be collectively referred to as “wrongful conduct”), then (i) this Option, to the extent it remains unexercised, shall terminate automatically on the date on
which you first engaged in such wrongful conduct and (ii) you shall pay to the Company in cash any financial gain you realized from exercising all or a portion of this Option within the six month period immediately preceding such wrongful conduct.
For purposes of this paragraph 8, financial gain shall equal, on each date of exercise during the six month period immediately preceding such wrongful conduct, the difference between the fair market value of the Common Stock on the date of exercise
and the Exercise Price, multiplied by the number of shares of Common Stock purchased pursuant to that exercise (without reduction for any shares of Common Stock surrendered or attested to) reduced by any taxes paid in countries other than the United
States to acquire and or exercise and which taxes are not otherwise eligible for refund from the taxing authorities. By accepting this Option, you consent to and authorize the Sara Lee Companies to deduct from any amounts payable by the Sara Lee
Companies to you, any amounts you owe to the Company under this paragraph 8. This right of set-off is in addition to any other remedies the Company may have against you for your breach of this Agreement. 
  
 9. Rights as a Stockholder. You will have no rights as a stockholder
with respect to any Option Shares until and unless ownership of such Option Shares has been transferred to you. 
  
 10. Option Not Transferable. This Option will not be assignable or transferable by you, other than by will or by the laws of descent and
distribution, and will be exercisable during your lifetime only by you (or your legal guardian or personal representative). If this Option remains exercisable after your death, subject to paragraphs 5 and 7 above, it may be exercised by the personal
representative of your estate or by any person who acquires the right to exercise such Option by bequest, inheritance or otherwise by reason of your death. 
  
 11. Transferability of Option Shares. Option Shares generally are freely tradeable in the United States. However, you
may not offer, sell or otherwise dispose of any Option Shares in a way which would: (i) require the Company to file any registration statement with the Securities and Exchange Commission (or any similar filing under state law or the laws of any
other country) or to amend or supplement any such filing or (ii) violate or cause the Company to violate the Securities Act of 1933, as amended, the Securities Act of 1934, as amended, the rules and regulations promulgated thereunder, any other
state or federal law, or the laws of any other country. The Company reserves the right to place restrictions on Common Stock received by you pursuant to this Option. 

 12. Conformity with the Plan. This Option is intended to conform in all respects with, and is
subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. By your acceptance of this Agreement, you agree to be bound by all of the terms of
this Agreement and the Plan. 
  
 13. No Rights to
Continued Employment. Nothing in this Agreement confers any right on you to continue in the employ of the Sara Lee Companies or affects in any way the right of any of the Sara Lee Companies to terminate your employment at any time with or
without cause. 
  
 14. Miscellaneous. 
  
 (a) Amendment or Modification. The grant of this Option is documented
by the minutes of the Committee, which records are the final determinant of the number of shares granted and the conditions of this grant. The Committee may amend or modify this Option in any manner to the extent that the Committee would have had
the authority under the Plan initially to grant such Option, provided that no such amendment or modification shall impair your rights under this Agreement without your consent. Except as in accordance with the two immediately preceding sentences,
this Agreement may be amended, modified or supplemented only by an instrument in writing signed by both parties hereto. 
  
 (b) Governing Law. All matters regarding or affecting the relationship of the Company and its stockholders shall be governed by the General
Corporation Law of the State of Maryland. All other matters arising under this Agreement shall be governed by the internal laws of the State of Illinois, including matters of validity, construction and interpretation. You and the Company agree that
all claims in respect of any action or proceeding arising out of or relating to this Agreement shall be heard or determined in any state or federal court sitting in Chicago, Illinois, and you agree to submit to the jurisdiction of such courts, to
bring all such actions or proceedings in such courts and to waive any defense of inconvenient forum to such actions or proceedings. A final judgment in any action or proceeding so brought shall be conclusive and may be enforced in any manner
provided by law. 
  
 (c) Successors and Assigns.
Except as otherwise provided herein, this Agreement will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not. 
  
 (d) Severability. Whenever feasible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this Agreement. 
  
 SARA LEE CORPORATIONAnnual Incentive Plan

 Exhibit 10.2 
  
 SARA LEE CORPORATION 
 ANNUAL INCENTIVE PLAN 
 PROGRAM DESCRIPTION FOR FISCAL YEAR 2005 
  
 Performance Goals Applicable to Sara Lee Corporate Staff Participants

  
 Explanatory Note: In June 2004, the Compensation and Employee Benefits
Committee of the Board of Directors of Sara Lee Corporation approved the general terms and the categories of financial standards for Sara Lee’s annual incentive plan for fiscal year 2005. In August and September 2004, the Committee approved the
specific fiscal year 2005 targets for each payout level under the annual incentive plan; however, the plan was not finalized in time for filing with Sara Lee’s annual report on Form 10-K. 
  
 Purpose 
  
 The objective of the Annual Incentive Plan (the “Plan”) is to advance the interests of Sara Lee Corporation (“SLC”) by:

  

	a)	Rewarding financial performance that is closely linked to increased shareholder value; 

  

	b)	Measuring the effectiveness of SLC operating performance and capital management; 

  

	c)	Basing a significant portion of all executives’ incentives on operating unit results; 

  

	d)	Continuing to provide significant rewards for exceptional performance. 

  
 Incentive Opportunity & Standards of Performance 
  
 A summary of FY05 Standards of Performance and the corresponding incentive opportunities for U.S. Participants are shown in Attachment 1. Where applicable, similar
Attachments for Participants in countries other than the U.S. are available from the appropriate Group Human Resources Vice Presidents. The following applies to the Plan goals: 
  

	•	 	Financial and Individual Standards of Performance are established at the beginning of the Incentive Plan Year. The Financial Standards of Performance for Corporate Staff
Participants and the Plan parameters applicable to all Plan Participants are approved by the Compensation and Employee Benefits Committee of the SLC Board of Directors (“the Committee”). 

  

	•	 	Operating Unit executive management will develop the financial goals within their respective lines of business. The SLC Chief Executive Officer (CEO) and President and Chief
Operating Officer (COO) will approve the Operating Unit financial goals for each line of business. Operating Unit Corporate Officers also have a corporate earnings per share goal. 

  

	•	 	Financial Standards of Performance for Plan Participants are based on diluted earnings per share (EPS), sales, operating profit, return on investment (ROI or ROIC), and cash flow.
Attachment 2 displays the financial goals applicable to Corporate Staff Participants for FY05. In the event of a major divestiture during the Incentive Plan Year, performance goals may need to be appropriately adjusted. 

	•	 	It is recommended that Individual Standards of Performance (SOPs) be limited to a maximum of five, substantive and measurable objectives. Where applicable, specific Diversity and
Marketing, Advertising and Promotion (MAP) spending Standards of Performance will be set. 

  

	•	 	For all “A”-level executives the Individual SOP percentage, listed in Attachment 1, is considered entirely discretionary. The executive should identify up to five specific
Individual SOPs and set the performance criteria associated with achieving each SOP. A specific percentage should not be allocated to the achievement of each Individual SOP. At the end of the fiscal year, the executive’s manager will make an
overall assessment of performance results for each of the specific SOPs as well as any other accomplishments or criteria deemed relevant in determining the percentage payout attributable to this overall category. 

  
 Performance Period 
  
 All Standards of Performance are measured over a one-year performance period, i.e. the Incentive Plan Year. The Incentive Plan Year for FY05
is July 4, 2004 to July 2, 2005. 
  
 Performance Level Definitions

  
 Outstanding (“Maximum”) - An unusually high level of
performance far exceeding targeted performance requiring significant “stretch” to achieve. 
  
 Superior /Target – Typically the target level of performance; attainment requires considerable “stretch” to achieve. 
  
 Good - The level of performance at which attainment of goals is below the Superior level but considerably above the Acceptable
performance level. 
  
 Acceptable - A minimal level of acceptable
performance. 
  
 Marginal – Performance below the Acceptable
level. 
  
 Incentive Award Payout Levels  
  
 Incentive Award Payout Levels expressed as a percentage of a position’s annual
incentive maximum are as follow: 
  

					
	 Outstanding
	  	=	  	 100% of Maximum

	 Superior / Target
	  	=	  	 75% of Maximum

	 Good
	  	=	  	 50% of Maximum

	 Acceptable
	  	=	  	 25% of Maximum

	 Marginal
	  	=	  	 0%

  
 Straight-line interpolation is
used for calculating results between performance levels.  
  

 2 

 Incentive Award Payments 
  

Incentive award payments are distributed after the Incentive Plan Year results have been publicly announced and the individual awards requiring the review and approval
of the Committee at its August, 2005 meeting have been approved. Generally, a Participant must be an employee on the last day of the fiscal year in order to be eligible to receive any incentive award. 
  
 Beginning in FY05, the following two changes are effective: 
  

	•	 	bonus maximums for “A” level Participants have been reduced by 25% with the equivalent value being shifted into incremental funding of each business unit’s long-term
incentive pool 

  

	•	 	all participants will receive their bonus payments, if any, in cash (unless otherwise deferred); “A” level executives will no longer receive a portion of their bonus in
stock or restricted stock units 

  
 Administrative Provisions

  
 The Committee and the Chief Executive Officer of SLC, whose decisions are
final, shall administer the Plan jointly. The Senior Vice President - Human Resources will be responsible for the administrative procedures governing the Plan including ensuring the existence of approved Standards of Performance and presenting the
performance results under the Plan to the Committee for its approval. The following administrative procedures shall govern: 
  
 a) The Committee will approve individual incentive awards for all corporate officers and those executives whose salaries are above the midpoint of salary grade 39. The
Chief Executive Officer may approve all other incentive awards. 
  
 b) Incentive
awards may be made in cash, stock or any combination of cash and stock as permitted under the 1998 and 2002 Long-Term Incentive Stock Plans. Any awards earned under the FY05 AIP will be made in cash. Participants paid in the U.S. and subject to
taxation in the U.S. may elect to defer part or all of their incentive awards pursuant to the terms and conditions of the SLC Executive Deferred Compensation Plan. 
  
 c) A new Participant who begins participation during the Incentive Plan Year may be eligible for a pro-rata incentive award from the date of
entry into the Plan. Typically, a new Participant should have been actively employed for at least one calendar quarter of the Incentive Plan Year in order to receive consideration for a pro-rata incentive award. 
  
 d) In the case of death, total disability, or retirement under a SLC retirement plan during
the Incentive Plan Year, a Participant or the Participant’s estate is eligible for a pro-rata incentive award based upon the Participant’s period of active service during the Incentive Plan Year. The award will be distributed at the same
time as those of active Participants. 
  
 e) A Participant who is terminated and
who subsequently receives severance pay under a SLC severance plan may be eligible for a pro-rata incentive award. Management will determine the amount of any pro-rata incentive award based upon the facts and circumstances related to the
Participant’s termination as well as the amount of time the Participant was actively employed during the Incentive Plan Year. 
  

 3 

 f) Unless otherwise approved by the Chief Executive Officer, any Participant who resigns or is terminated during the
Incentive Plan Year (except as provided for above) will not be entitled to any incentive award attributable to the Incentive Plan Year. 
  
 g) A Participant who is employed as of the end of the Incentive Plan Year shall be entitled to receive an incentive award regardless of whether the Participant resigns or
is terminated between the end of the Incentive Plan Year and the date the incentive awards are actually distributed. 
  
 h) Performance results under the Plan will be measured by taking into consideration those Exclusions listed in Attachment 3. 
  
 i) SLC reserves the right to offset any funds from any incentive award due a terminating or
terminated Participant to which SLC has a “claim of right”. 
  
 j)
Nothing herein shall be construed as an agreement or commitment to employ any Participant or to employ a Participant for any fixed period of time or constitute a commitment by SLC that any Participant will continue to receive an incentive award or
will continue as a Participant in the Plan. 
  
 k) The Committee reserves the
right to amend, modify, interpret or terminate the Plan or awards to be paid under the Plan at any time for any reason. 
  
 l) The Committee may delegate certain administrative responsibilities to the Chief Executive Officer except for the following: 
  
 1) Any actions affecting the Chief Executive Officer, and other elected officers of SLC,

  
 2) Approval of Corporate Financial Standards of Performance and certification
of performance results relative to such standards following the end of the Incentive Plan Year, 
  
 3) Approval of any substantive changes or amendments to the Plan. 
  
 m) For purposes of calculating the actual performance results at the end of the Performance Period, Operating Profit will be reduced by any amount that actual MAP expenditures are less than the budgeted amount stated
in an Operating Unit’s FY05 AOP for Strategic Investment Brands and Support and Grow Brands as submitted to SLC. The impact of any such adjustment will also be reflected in the Operating Unit’s ROI and operating cash flow results.

  

 4 

 Attachment 1 
  
 Sara Lee Corporation 
 FY05 Annual Incentive Plan Parameters 
  
 Employee Members of the SLC Board of Directors 
  

																								
	 	  	 	  	Maximum Incentive Opportunity as a Percent of Base Salary

	 
	 	  	 	  	Financial Standards

	 	 	 Discretionary /
 Individual
 Standards Of
Performance

	 	 	 Total
 Incentive
 Opportunity

	 
	 Executive
 Level

	  	 Title

	  	EPS

	 	 	Sales

	 	 	 Operating
 Profits

	 	 	ROIC

	 	 	Cash Flow

	 	 	 
	A	  	Chairman and CEO	  	100	%	 	30	%	 	60	%	 	35	%	 	45	%	 	—  	 	 	270	%
	A	  	President and COO	  	55	%	 	40	%	 	65	%	 	30	%	 	30	% (Oper.)	 	—  	 	 	220	%
	
	 Corporate Staff Participants
  
	  
 

	 	  	 	  	Maximum Incentive Opportunity as a Percent of Base Salary

	 
	 	  	 	  	Financial Standards

	 	 	 Discretionary /
 Individual
 Standards Of
Performance

	 	 	 Total
 Incentive
 Opportunity

	 
	 Executive
 Level

	  	 Title

	  	EPS

	 	 	Sales

	 	 	 Operating
 Profits

	 	 	ROIC

	 	 	Cash Flow

	 	 	 
	A	  	Executive Vice President	  	50	%	 	20	%	 	25	%	 	25	%	 	25	%	 	25	%	 	170	%
	A	  	Senior Vice President	  	45	%	 	15	%	 	25	%	 	25	%	 	20	%	 	25	%	 	155	%
	A	  	Vice President	  	40	%	 	10	%	 	20	%	 	20	%	 	15	%	 	20	%	 	125	%
	A	  	 Other Designated
 A-Level Executive
	  	30	%	 	10	%	 	15	%	 	15	%	 	10	%	 	15	%	 	95	%
	B	  	 Executive Director
 (Grade 32 and above)
	  	30	%	 	5	%	 	10	%	 	10	%	 	5	%	 	15	%	 	75	%
	B	  	 Executive Director
 (Below grade 32)
	  	20	%	 	5	%	 	10	%	 	5	%	 	5	%	 	10	%	 	55	%
	C	  	Director	  	15	%	 	5	%	 	5	%	 	5	%	 	5	%	 	5	%	 	40	%
	
	 U.S. Operating Unit Participants
  
	  
 

	 	  	 	  	Maximum Incentive Opportunity as a Percent of Base Salary

	 
	 	  	 	  	Financial Standards

	 	 	 Discretionary /
 Individual
 Standards Of
Performance

	 	 	 Total
 Incentive
 Opportunity

	 
	 Executive
 Level

	  	 Title

	  	EPS

	 	 	Sales

	 	 	 Operating
 Profits

	 	 	ROI

	 	 	 Operating
 Cash
 Flow

	 	 	 
	A	  	 Corporate Executive
 Vice President
	  	25	%	 	35	%	 	50	%	 	20	%	 	20	%	 	20	%	 	170	%
	A	  	 Corporate Senior Vice
 President
	  	20	%	 	35	%	 	45	%	 	20	%	 	20	%	 	20	%	 	160	%
	A	  	Corporate Vice President	  	15	%	 	35	%	 	40	%	 	15	%	 	25	%	 	20	%	 	150	%
	A	  	 Operating Unit President
 (Grade 35 & Above)
	  	—  	 	 	30	%	 	35	%	 	20	%	 	20	%	 	20	%	 	125	%
	A	  	 Operating Unit President
 (Below Grade 35)
	  	—  	 	 	30	%	 	20	%	 	15	%	 	20	%	 	20	%	 	105	%
	A	  	 Other Designated
 A-Level Executive
	  	—  	 	 	25	%	 	20	%	 	15	%	 	15	%	 	20	%	 	95	%
	B	  	 Operating Executive
 (Grade 32 and above)
	  	—  	 	 	20	%	 	15	%	 	10	%	 	10	%	 	20	%	 	75	%
	B	  	 Operating Executive
 (Below Grade 32)
	  	—  	 	 	15	%	 	10	%	 	5	%	 	10	%	 	15	%	 	55	%
	C	  	Operating Executive	  	—  	 	 	10	%	 	10	%	 	5	%	 	5	%	 	10	%	 	40	%

 Attachment 2 
  
 SARA LEE CORPORATION 
 FY05 ANNUAL INCENTIVE PLAN 
  
 Performance targets would be reset to reflect impact of major divestitures 
  
 DILUTED EPS GOALS 
  

							
	 Performance Levels

	  	Payout Levels

	 	 	 FY05 Diluted
 EPS Goals

	 
	 Outstanding
	  	100	%	 	(1	)
	 Superior
	  	75	%	 	(1	)
	 Good
	  	50	%	 	(1	)
	 Acceptable
	  	25	%	 	(1	)
	 Marginal
	  	0	%	 	(1	)
	 
 ROIC GOALS
  
	 
  
 

	 Performance Levels

	  	Payout Levels

	 	 	FY05 ROIC Goals

	 
	 Outstanding
	  	100	%	 	(1	)
	 Superior
	  	75	%	 	(1	)
	 Good
	  	50	%	 	(1	)
	 Acceptable
	  	25	%	 	(1	)
	 Marginal
	  	0	%	 	(1	)

	(1)	The specific financial goals were approved by the Committee and are contained in the minutes of the August 27, 2004 meeting.  

 Attachment 2 (cont’d.) 
  
 SARA LEE CORPORATION 
 FY05 ANNUAL INCENTIVE PLAN 
  
 NET SALES GOALS 
  

							
	 Performance Levels

	  	Payout Levels

	 	 	 FY05 Net Sales Goals
 ($ in millions)

	 
	 Outstanding
	  	100	%	 	(1	)
	 Superior
	  	75	%	 	(1	)
	 Good
	  	50	%	 	(1	)
	 Acceptable
	  	25	%	 	(1	)
	 Marginal
	  	0	%	 	(1	)
	 
 CASH FLOW * GOALS
  
	 
  
 

	 Performance Levels

	  	Payout Levels

	 	 	 Cash Flow*
 ($ in millions)

	 
	 Outstanding
	  	100	%	 	(1	)
	 Superior
	  	75	%	 	(1	)
	 Good
	  	50	%	 	(1	)
	 Acceptable
	  	25	%	 	(1	)
	 Marginal
	  	0	%	 	(1	)

	*	For Corporate Staff Participants, Cash Flow is defined as Net Cash from Operating Activities, plus Tobacco Divestiture Proceeds, less Capital Expenditures. Merger and acquisition
activity would be included with the exception of the possible sale of the Sara Lee Apparel Europe business. 

	(1)	The specific financial goals were approved by the Committee and are contained in the minutes of the August 27, 2004 meeting.  

 Attachment 2 (cont’d.) 
  
 SARA LEE CORPORATION 
 FY05 ANNUAL INCENTIVE PLAN 
  
 OPERATING PROFIT GOALS 
 (At FY05 Peg
Rates, $ in millions) 
  

							
	 Performance Levels

	  	Payout Levels

	 	 	 Operating Profit*
 ($ in millions)

	 
	 Outstanding
	  	100	%	 	(1	)
	 Superior
	  	75	%	 	(1	)
	 Good
	  	50	%	 	(1	)
	 Acceptable
	  	25	%	 	(1	)
	 Marginal
	  	0	%	 	(1	)

	(1)	The specific financial goals were approved by the Committee and are contained in the minutes of the August 27, 2004 meeting.  

 Attachment 3 
  
 Definitions 
  

	a)	Base Salary means base salary earned or actually paid (dependent upon the practice of the business unit) to the Participant during the Incentive Plan Year disregarding any
deferral elections, premiums, expatriate allowances, expense reimbursements, commissions, other incentives, severance or termination pay, lump sum merit awards, payments from deferred compensation arrangements and compensation attributable to the
exercise of stock options or other forms of long-term incentive compensation. 

  

	b)	The Board means the SLC Board of Directors. 

  

	c)	Cash Flow means Net Cash from Operating Activities, plus Tobacco Divestiture Proceeds, less Capital Expenditures. Merger and acquisition activity would be included with the
exception of the possible sale of the Sara Lee Apparel Europe business. 

  

	d)	The Committee is the Compensation and Employee Benefits Committee of the Board. 

  

	e)	Division means an operating profit center of SLC. 

  

	f)	Earnings Per Share means diluted earnings per share. 

  

	g)	Exclusions means the automatic exclusion of the following from relevant financial data for purposes of measuring performance (subject to the Committee’s use of negative
discretion): 

  

	 	1.	Any other extraordinary or unusual charges or income (accounting definition) that are quantified and identified separately on the face of the Income Statement

  

	 	2.	Revisions to the U.S Internal Revenue Code 

  

	 	3.	Changes in generally accepted accounting principles 

  

	 	4.	Gains or losses from discontinued operations (accounting definition) 

  

	 	5.	Restructuring charges 

  

	 	6.	Acquisitions made during the fiscal year and not included in the Annual Operating Plan will be excluded. Divestitures made during the fiscal year and not included in the Annual
Operating Plan as divestments will only be included through the date of divestment. 

  

	h)	Incentive Plan Year is the same as SLC’s fiscal year beginning on July 4, 2004 and ending July 2, 2005. 

  

	i)	Operating Profit means operating profits as shown on Line 16 of the EO-200 income statement, with the following adjustment(s): 

  

	 	1.	Operating Profit of businesses acquired during the year and not included in the Annual Operating Plan shall be excluded. 

  

	 	2.	Operating Profit of businesses divested and not included in the Annual Operating Plan as divestments will only be included through the date of divestment.

  

	j)	Participant means an “A”, “B” or “C” level executive of SLC or any of its Divisions or business units. 

  

	k)	Return on Investment (“ROI”) as defined in Finance Policy 130. 

  

	l)	Standards of Performance means a Financial or Individual performance measure. 

  

	m)	Total Disability is as defined under the SLC Long-Term Disability Plan or the specific Sara Lee sponsored disability plan under which the Participant is covered.

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