Document:

Common Stock Purchase Warrant dated November 8, 2005 issued to SCP

 Exhibit 10.9 
  
 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT OR AS TO SAID COMMON SHARES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO AIRNET COMMUNICATIONS CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED. 
  
 Right to Purchase up to 100,000 Shares of Common
Stock of 
 AirNet Communications Corporation 
 (subject to adjustment as provided herein) 
  
 COMMON STOCK PURCHASE WARRANT 
  

			
	 No. 1
	 	Issue Date: November 8, 2005

  
 AIRNET COMMUNICATIONS
CORPORATION, a corporation organized under the laws of the State of Delaware (the “Company”), hereby certifies that, for value received, SCP PRIVATE EQUITY PARTNERS II, L.P., a Delaware limited partnership, or its permitted successors and
assigns (collectively, the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) from and after the one hundred eighty-first (181st) day after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, through the close of business
November 8, 2010 (the “Expiration Date”), up to 100,000 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 par value per share, at the applicable Exercise Price per share (as defined below). The
number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein. 
  
 As used herein the following terms, unless the context otherwise requires, have the following respective meanings: 
  
 (a) The term “Company” shall include AirNet
Communications Corporation and any person or entity which shall succeed, or assume the obligations of, AirNet Communications Corporation hereunder. 
  
 (b) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per share; and (ii) any
other securities into which or for which any of the securities described in the preceding clause (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise. 

 (c) The term “Other Securities” refers to any stock (other than Common Stock)
and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise. 
  
 (d) The “Exercise Price” applicable under this Warrant shall be a price of $1.35 per share of
Common Stock for all shares acquired hereunder. 
  
 1. Exercise
of Warrant. 
  
 1.1 Number of Shares Issuable upon
Exercise. From and after the date that is one hundred eighty-one (181) days after the date hereof through and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by
delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the “Exercise Notice”), together with payment of the applicable Exercise Price, shares of Common Stock of the Company, subject to
adjustment pursuant to Section 4. An Exercise Notice shall only be effective upon delivery to the Company in accordance with Section 11. Notwithstanding the foregoing, in the event the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, the Holder may, at its election exercised in it sole discretion, exercise this Warrant in whole or in part by, in lieu of making a cash payment of the Exercise Price, electing instead to receive upon such exercise the “Net Number” of
shares of Common Stock determined according to the following formula: 
  
 Net Number = (A x B) – (A x C) 
                  B 
  
 For purposes of the foregoing formula: 
  
 A=the total number of shares of Common Stock with respect to which this Warrant is then being exercised. 
  
 B=the closing sales price for the Common Stock on the trading day
immediately prior to (but not including) the day that the Holder delivers the Exercise Notice at issue. 
  
 C=the Exercise Price. 
  

 - 2 - 

 1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of Common
Stock as of a particular date (the “Determination Date”) shall mean: 
  
 (a) If the Company’s Common Stock is traded on the American Stock Exchange or another national exchange or is quoted on the National
or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale price, as the case may be, reported for the last business day immediately preceding the Determination Date. 
  
 (b) If the Company’s Common Stock is not traded on the
American Stock Exchange or another national exchange or on the Nasdaq but is traded on the NASD Over The Counter Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately
preceding the Determination Date. 
  
 (c) Except
as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American
Arbitration Association, before a single arbitrator to be chosen by the Company and Holder to pass on the matter to be decided. 
  
 (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to
be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date. 
  
 1.3 Company Acknowledgment. The
Company will, at the time of the exercise of this Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights. Notwithstanding the
foregoing, this Warrant in and of itself does not confer upon the Holder, as such, any voting rights or other rights or liabilities whatsoever as a shareholder of the Company, whether such rights or liabilities are asserted by the Holder or by its
creditors. Nothing in this Warrant shall be construed to give to any Person other than the Holder any legal or equitable right, or claim under this Warrant. 
  
 1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the holders of this Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1. 
  

 - 3 - 

 2. Procedure for Exercise. 
  
 2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased
upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance
herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will
(a) cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the
number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise or (b) cause the transfer agent of the Common Stock to transmit to Holder the
certificates representing such shares by crediting the account of the Holder’s broker with the Depository Trust Corporation through its Deposit Withdrawal Agent Commission, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon
such exercise pursuant to Section 1 or otherwise. 
  
 2.2
Exercise. 
  
 Payment may be made either in cash or by
certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable
shares of Common Stock (or Other Securities) determined as provided herein. 
  
 3. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 
  
 3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder, on the exercise hereof as provided in Section 1 at any time after the consummation of such
reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in Section 4. 
  
 3.2 Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders
of its Common Stock, shall, if the Fair Market Value of the Common Stock (calculated on a fully-diluted per share basis; provided that, with respect to 
  

 - 4 - 

 convertible or exercisable securities outstanding immediately prior to the consummation of such dissolution, effect shall
only be given to such securities to the extent that the applicable conversion or exercise price of such convertible or exercisable securities is less than the Fair Market Value of the Common Stock immediately prior to the consummation of such
dissolution) (which date of dissolution shall be deemed the Determination Date under Section 1.2(d)) exceeds the applicable Exercise Price, deliver or cause to be delivered to the Holder the stock and other securities and property (including
cash, where applicable) receivable by the Holder pursuant to Section 3.1 (net of the aggregate Exercise Price which would be owed if the Holder had exercised this Warrant in full immediately prior to the dissolution), or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder. 
  
 3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution following any such transfer as provided in Section 3.1 or 3.2, as the case may be, and to the extent provided therein shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company’s securities and property (including cash, where
applicable) receivable by the Holder will be delivered to the Holder or the Trustee as contemplated by Section 3.2. 
  
 4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a
dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of Common Stock, (c) combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Exercise Price then
in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the holder shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Exercise Price in
effect on the date of such exercise (taking into account the provisions of this Section 4). 
  

 - 5 - 

 5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of
Common Stock (or Other Securities) issuable on the exercise of this Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or
receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be
outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the holder and any Warrant agent of the Company (appointed pursuant to Section 10 hereof). 
  
 6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep
available, solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant. 
  
 7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the
rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached
hereto (the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the
Transferor’s counsel (at the Company’s expense) that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes)
will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. Any Transferee shall be subject to the terms and conditions of such new Warrant,
including the transfer restrictions thereunder. 
  
 8.
Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an
indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a
new Warrant of like tenor. 
  
 9. Registration Rights. The
Holder has been granted certain registration rights by the Company. These registration rights are set forth in a Second Amended and Restated Agreement Among Series E, Series F and Series G Preferred Stockholders and Senior Registration Rights
Agreement dated as of September 7, 1999, by and among the Company and 
  

 - 6 - 

 the stockholders party thereto, as amended, modified and supplemented, including, without limitation, by the First
Amendment dated September 20, 1999, by the addendum dated May 16, 2001, and by the addendum dated August 13, 2003, as the same may be amended, modified and/or supplemented from time to time. 
  
 10. Warrant Agent. The Company may, by written notice to the each
Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant
to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 
  
 11. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company
may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary. 
  
 12. Notices, Etc. All notices and other communications from the Company to the Holder shall be mailed by first class registered or certified mail,
postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder who has so furnished an address to
the Company. 
  
 Notwithstanding the foregoing, in order for an
Exercise Notice to be deemed effective and validly delivered by the Holder to the Company, the Holder must send the Exercise Notice by telecopy (provided the Holder receives confirmation of transmission) and/or e-mail to the following persons (or
such subsequent persons as the Company shall designate in writing to the Holder): 
  

	 	(a)	Stuart Dawley, Vice President and General Counsel 

   AirNet Communications Corp. 
   Telecopy: (321) 676-9914 
   E-mail: sdawley@airnetcom.com; and 
  

	 	(b)	John G. Igoe, P.A. 

   Edwards
Angell Palmer & Dodge, LLP 
   Telecopy: (561) 655-8719 
   E-mail: jigoe@eapdlaw.com 
  
 Upon Holder’s delivery of the Exercise Notice by telecopy (provided the Holder receives confirmation of transmission) and/or e-mail, the Exercise
Notice will be deemed effective. 
  
 13. Miscellaneous.
This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS 
  

 - 7 - 

 CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE
STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such
courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees and costs. In the event that any provision of this Warrant is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party. 
  
 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; 
 SIGNATURE PAGE FOLLOWS] 
  

 - 8 - 

 IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above. 

 

					
	 	 	AIRNET COMMUNICATIONS CORPORATION
			
	WITNESS:	 	 	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	  

	  

	 	Title:	 	  

  

 - 9 - 

 EXHIBIT A 
  

FORM OF SUBSCRIPTION 
 (To Be Signed
Only On Exercise Of Warrant) 
  

			
	TO:	  	AirNet Communications Corporation
		
	 	  	____________________
		
	 	  	____________________

  
 Attention: Chief
Financial Officer 
  
 The undersigned, pursuant to the provisions
set forth in the attached Warrant (No.    ), hereby irrevocably elects to purchase              shares of the common stock covered by such warrant.

  
 Please check one of the following boxes: 
  
  ̈ The undersigned is not utilizing the cashless (or net) exercise provisions set forth in such Warrant. Accordingly, the undersigned herewith makes payment of the full Exercise Price for such shares at the price per
share provided for in such Warrant, which is $            . Such payment takes the form of $             in lawful
money of the United States. 
  
 OR 
  
  ̈ The undersigned is utilizing the cashless (or net) exercise provisions set forth in such Warrant. 
  
 The undersigned requests that the certificates for such shares be issued in the name of, and delivered to
                                        
                     whose address is
                                        
                                        
                                        .

  
 The undersigned represents and warrants that all offers and
sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an
exemption from registration under the Securities Act. 
  

					
	Dated:
                                       
 	 	  

	 	 	(Signature must conform to name of holder as specified on the face of the Warrant)
	 	 	Address:	 	  

	 	 	 	 	  

  

 - 10 - 

 EXHIBIT B 
  

FORM OF TRANSFEROR ENDORSEMENT 
 (To
Be Signed Only On Transfer Of Warrant) 
  
 For value received, the
undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the number of shares of Common Stock of AirNet Communications
Corporation into which the within Warrant relates specified under the headings “Percentage of Warrant Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person
Attorney to transfer its respective right on the books of AirNet Communications Corporation with full power of substitution in the premises. 
  

							
	Transferees    

	 	Address

	 	Percentage of
Warrant
Transferred

	 	Number
Transferred

  
  
  
  
  

					
	Dated:
                                       
 	 	  

	 	 	(Signature must conform to name of holder as specified on the face of the Warrant)
	 	 	Address:	 	  

	 	 	 	 	  

		
	 	 	SIGNED IN THE PRESENCE OF:
		
	 	 	  

	 	 	(Name)

  

	
	ACCEPTED AND AGREED:
	[TRANSFEREE]
	
	  

	(Name)

  

 - 11 -Annual Incentive Plan Program for Fiscal Year 2006

 Exhibit 10.1 
  
 SARA LEE CORPORATION 
 ANNUAL INCENTIVE PLAN 
 PROGRAM DESCRIPTION FOR FISCAL YEAR 2006 
  
 Purpose 
  
 The objective of the Annual Incentive Plan (the “AIP”) is to advance the interests of Sara Lee Corporation (“SLC”) by:

  

	a)	Rewarding financial performance that contributes 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 Business Segment results; 

  

	d)	Continuing to provide significant rewards for exceptional performance. 

  
 Incentive Opportunity & Standards of Performance 
  
 Beginning in FY06 the Plan will adjust its focus from Maximum award opportunity to Target award opportunity. Previous Plans provided a Maximum opportunity that was
approximately 133% of the Target payout level. The FY06 AIP will increase the Maximum opportunity to approximately 150% of Target, with correspondingly higher performance goals to warrant the additional Maximum opportunity. 
  
 Another change effective in FY06 is the linking of bonus opportunity to Participants’
salary grades rather than a variety of other statuses. Attachment 1 shows the FY06 AIP Target and Maximum payout levels at the various salary grades. 
  
 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”). 

  

	 	•	 	Business Segment executive management will develop the financial goals within their respective business. The SLC Chief Executive Officer (CEO) will approve the Business Segment
financial goals for each business. 

  

	 	•	 	In FY06 the number of Performance Measures has been reduced from six to four. The FY06 Performance Measures are: 

	 	•	 	Operating Profit – (Operating Income will be used for Corporate Staff positions) – 35% of Target Bonus Opportunity 

	 	•	 	Sales – 25% of Target Bonus Opportunity 

	 	•	 	Cash Flow – (Free Cash Flow for Corporate Staff positions; Operating Cash Flow for Business Segment positions) – 20% of Target Bonus Opportunity 

	 	•	 	Individual Objectives – 20% of Target Bonus Opportunity 

  
 When expressed as a percentage of Target bonus opportunity, the weighting of each performance measure is approximately the same for each salary grade. A
summary of 

 
FY06 Standards of Performance and the corresponding incentive opportunities for Participants are shown in Attachment 2. Where applicable, similar Attachments
for Participants in countries other than the U.S. are available from the appropriate Business Segment Human Resources representative. 
  

	 	•	 	It is recommended that Individual objectives be limited to a maximum of two or three including the required People/Organization objective. These same objectives should be reflected
in PMP. 

  

	 	•	 	At the end of the fiscal year, the Participant’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 payout level. 

  
 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 FY06 is July 3, 2005 to July 1, 2006. 
  
 Performance Level Definitions 
  
 Level 4 – Maximum – An unusually high level of performance far exceeding targeted performance requiring significant “stretch”
to achieve. 
  
 Level 3 – Target – Typically the
level of performance specified in the appropriate Annual Operating Plan (“AOP”). 
  
 Level 2 – Below Target – The level of performance at which attainment of goals is below the Target level but considerably above the Threshold level. 
  
 Level 1 – Threshold – Performance that is below an
acceptable level and not warranting any payout. 
  
 Incentive Award Payout
Levels  
  
 Beginning in FY06 the number of Performance Levels under the AIP
has been reduced from five to four. Also Sara Lee has established the following schedule to be used in setting the performance goals at the various payout levels. The table below shows how that goal setting process will work: 
  
 Performance Measure 
  

					
	Performance Level	 	Performance Goal	 	 Payout Level as a % of
 Target Bonus

	 Level 4 - Maximum
	 	110% of AOP	 	150%
	 Level 3- Target
	 	AOP	 	100%
	 Level 2- Below Target
	 	95% of AOP	 	50%
	 Level 1 -Threshold
	 	90% of AOP	 	0%

  
 Business Segment CEOs may deviate from
this approach with the prior approval of the SLC CEO. Attachment 3 provides an example of calculating results and the associated Payout Levels under the Target bonus approach. Attachment 4 provides the FY06 Financial Performance Measures and goals.

  
 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 have been approved at its August, 2006 meeting. 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. 
  
 Administrative Provisions 
  
 The Committee and the Chief Executive Officer of SLC, whose decisions are final, shall
administer the Plan jointly. The Senior Vice President – Global 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
FY06 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. 

 

	 	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 5. 

  

 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 FY06 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 
 FY06 ANNUAL INCENTIVE PLAN 
 TARGETS AND MAXIMUMS 
  
 FY06 Annual Incentive Plan 
  

							
	Salary
Grades

	 	Target -
    %s Of Salary    

	  	 	  	Maximum -
%s Of Salary    

	 50
	 	200%	  	 	  	300%
	 49
	 	200%	  	 	  	300%
	 48
	 	165%	  	 	  	250%
	 47
	 	160%	  	 	  	240%
	 46
	 	150%	  	 	  	225%
	 45
	 	145%	  	 	  	220%
	 44
	 	135%	  	 	  	205%
	 43
	 	130%	  	 	  	195%
	 42
	 	125%	  	 	  	190%
	 41
	 	125%	  	 	  	190%
	 40
	 	120%	  	 	  	180%
	 39
	 	120%	  	 	  	180%
	 38
	 	115%	  	 	  	175%
	 37
	 	115%	  	 	  	175%
	 36
	 	115%	  	 	  	175%
	 35
	 	  95%	  	 	  	145%
	 34
	 	  75%	  	 	  	115%
	 33
	 	  65%	  	 	  	100%
	 32
	 	  55%	  	 	  	  85%
	 31
	 	  45%	  	 	  	  70%
	 30
	 	  40%	  	 	  	  60%
	 29
	 	  30%	  	 	  	  45%
	 28
	 	  30%	  	 	  	  45%

  

 5 

 Attachment 2 
  
 SARA LEE CORPORATION 
 FY06 ANNUAL INCENTIVE PLAN 
 PERFORMANCE MEASURES AND WEIGHTINGS 
  

											
	 	 	Performance Measures as a % of Target Annual Incentive
Opportunity
		 				 
	 	 	 Operating
 Profit

	 	 Sales

	 	 Cash Flow

	 	 Individual
Objectives

	 	 Target Annual
Incentive
 Opportunity

	 	 	35%	 	25%	 	20%	 	20%	 	100%
						
	 Salary
 Grades

	 	 Operating
 Profit

	 	 Sales

	 	 Cash Flow

	 	 Individual
Objectives

	 	 Target Annual
Incentive
Opportunity

	 50
	 	85.0%	 	65.0%	 	50.0%	 	  0.0%	 	200%
	 49
	 	85.0%	 	65.0%	 	50.0%	 	  0.0%	 	200%
	 48
	 	55.0%	 	40.0%	 	35.0%	 	35.0%	 	165%
	 47
	 	54.0%	 	40.0%	 	33.0%	 	33.0%	 	160%
	 46
	 	50.0%	 	40.0%	 	30.0%	 	30.0%	 	150%
	 45
	 	50.0%	 	35.0%	 	30.0%	 	30.0%	 	145%
	 44
	 	49.0%	 	32.0%	 	27.0%	 	27.0%	 	135%
	 43
	 	46.0%	 	32.0%	 	26.0%	 	26.0%	 	130%
	 42
	 	44.0%	 	31.0%	 	25.0%	 	25.0%	 	125%
	 41
	 	44.0%	 	31.0%	 	25.0%	 	25.0%	 	125%
	 40
	 	42.0%	 	30.0%	 	24.0%	 	24.0%	 	120%
	 39
	 	42.0%	 	30.0%	 	24.0%	 	24.0%	 	120%
	 38
	 	41.0%	 	30.0%	 	22.0%	 	22.0%	 	115%
	 37
	 	41.0%	 	30.0%	 	22.0%	 	22.0%	 	115%
	 36
	 	41.0%	 	30.0%	 	22.0%	 	22.0%	 	115%
	 35
	 	32.0%	 	23.0%	 	20.0%	 	20.0%	 	  95%
	 34
	 	25.0%	 	20.0%	 	15.0%	 	15.0%	 	  75%
	 33
	 	22.0%	 	17.0%	 	13.0%	 	13.0%	 	  65%
	 32
	 	20.0%	 	13.0%	 	11.0%	 	11.0%	 	  55%
	 31
	 	16.0%	 	11.0%	 	  9.0%	 	  9.0%	 	  45%
	 30
	 	14.0%	 	10.0%	 	  8.0%	 	  8.0%	 	  40%
	 29
	 	10.0%	 	  8.0%	 	  6.0%	 	  6.0%	 	  30%
	 28
	 	10.0%	 	  8.0%	 	  6.0%	 	  6.0%	 	  30%

  

 6 

 Attachment 3 
  
 SARA LEE CORPORATION 
 FY06 PERFORMANCE MEASURES AND WEIGHTINGS 
 Calculating Payouts Under Target Bonus Approach

  

															
	 	  	Performance	  	 	  	 	  	Earned
	Performance	  	Measure	  	Performance Levels & Goals	  	Actual	  	Payout as
	 Measure

	  	Weighting

	  	Threshold

	  	Good

	  	Target

	  	Max

	  	Results

	  	% Target

	 	  	 	  	 	  	 	  	 	  	 	  	 	  	(Weighting x
Payout Rate)
	 	  	 	  	Payout Rates by Performance Level	  	 	  	 
	 	  	 	  	0%	  	50%	  	100%	  	150%	  	 	  	 
	 Sales
	  	25%	  	$75	  	$100	  	$125	  	$175	  	$175	  	37.5%
	 Op Profit
	  	35%	  	$10	  	$12	  	$14	  	$20	  	$14	  	35.0%
	 Cash Flow
	  	20%	  	$40	  	$45	  	$50	  	$65	  	$45	  	10.0%
	 Individual SOPs
	  	20%	  	 	  	 	  	 	  	 	  	Mid-way
Between
Target &
Max (1)
(i.e.
125%
payout)	  	25.0%
	 	  	
	  	
	  	
	  	
	  	
	  	 	  	

	 	  	100%	  	 	  	 	  	 	  	 	  	 	  	107.5%
	 	  	
	  	 	  	 	  	 	  	 	  	 	  	

			
		
	 Target Bonus Opportunity (Salary grade 29)
	  	30%
	 Earned Payout as % Target
	  	107.5%
	 	  	

	 Earned Bonus as % Salary
	  	32.25%
	 	  	

  

	(1)	Manager determines overall Individual SOP results 

  

 7 

 Attachment 4 
  
 SARA LEE CORPORATION 
 FY06 ANNUAL INCENTIVE PLAN 
 PERFORMANCE GOALS-CORPORATE LEVEL 
  

									
	 	 	 	 	 
	 Performance

Levels
	 	 Level 1
  
 (Threshold)
	 	 Level 2
  
 (Below Target)
	 	 Level 3
  
 (Target-AOP)
	 	 Level 4
  
 (Maximum)
  

	 	 	 	 	 
	 Bonus Payout
 Levels as a %
 of
Target
  
	 	0%	 	50%	 	100%	 	150%

  
 (All goals are
stated at plan currency rates, in $ millions) 
  

									
	 	 	 	 	 
	 Operating
 Income
	 	 90% of AOP
  
 $(1)
	 	 95% of AOP
  
 $(1)
	 	 100% of AOP
  
 $(1)
	 	 110% of AOP
  
 $(1)
  

  

									
	 	 	 	 	 
	Net Sales	 	 90% of AOP
  
 $(1)
	 	 95% of AOP
  
 $(1)
	 	 100% of AOP
  
 $(1)
	 	 110% of AOP
  
 $(1)
  

  

									
	 	 	 	 	 
	 Free Cash
 Flow
	 	 90% of AOP
  
 $(1)
	 	 95% of AOP
  
 $(1)
	 	 100% of AOP
  
 $(1)
	 	 110% of AOP
  
 $(1)
  

  
 (1) The specific financial goals were
approved by the Committee and are contained in the minutes of the Committee’s August 25, 2005 meeting. 
  

 8 

 Attachment 5 
  
 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, retention awards, payments from deferred compensation arrangements and compensation
attributable to the exercise of stock options or other forms of long-term incentive compensation. 

  

	b)	Board means the SLC Board of Directors. 

  

	c)	Business Segment means one of the three major Sara Lee business units, i.e. Sara Lee North America Food & Beverage, Sara Lee International or Sara Lee North America
Food Service. 

  

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

  

	e)	Division means an operating profit center of SLC. 

  

	f)	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 extraordinary or unusual charges or income (accounting definition) that are quantified and identified separately on the face of the Income Statement, excluding earnings related
to the receipt of Tobacco Divestiture Proceeds 

  

	 	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 and Transformation charges 

  

	g)	Free Cash Flow shall be measured using actual currency rates and is defined as Net Cash from Operating Activities, plus Tobacco Divestiture Proceeds, less Capital
Expenditures, with the following exceptions: 

  

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

  

	 	2.	Cash Flow of businesses divested 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 3, 2005 and ending July 1, 2006. 

  

	i)	Net Sales means net outside sales, as shown on Line 5 of the EO-200 income statement, with the following adjustment(s): 

  

	 	1.	Actual Net Sales shall be measured using plan currency rates 

  

	 	2.	Net Sales of businesses acquired during the year and not included in the Annual Operating Plan shall be excluded. 

  

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

 

	j)	Operating Cash Flow means cash flow as calculated in the EO-600 – cash flow statement, using FY 06 peg currency rates, with the flowing exceptions:

  

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

  

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

  

	k)	Operating Income means pre-tax income, before interest, and Exclusions, with the following adjustment(s): 

  

	 	1.	Actual Operating Income shall be measured using plan currency rates 

  

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

  

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

  

 9 

	l)	Operating Profit means Line 16 of the EO-200 income statement, using FY 06 peg currency rates, with the following exceptions: 

  

	 	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.

  

	m)	Participant means an “A”, “B” or “C” (i.e. salary grades 28 through and including 50) level executive of SLC or any of its Business Segments.

  

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

  

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

  

	p)	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.

  

 10

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