{"id":38530,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/annual-incentive-plan-sara-lee-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"annual-incentive-plan-sara-lee-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/annual-incentive-plan-sara-lee-corp.html","title":{"rendered":"Annual Incentive Plan – Sara Lee Corp."},"content":{"rendered":"

SARA LEE CORPORATION <\/strong><\/p>\n

ANNUAL INCENTIVE PLAN FOR EMPLOYEES OF THE NORTH
\nAMERICAN BUSINESS <\/strong><\/p>\n

SEGMENT FISCAL YEAR 2012 (FY12) <\/strong><\/p>\n

(AIP descriptions for other business segments substantially
\nsimilar)<\/p>\n

Capitalized terms used but not defined are defined in Attachment 1.<\/p>\n

Purpose <\/u><\/strong><\/p>\n

The objective of this Sara Lee Corporation Annual Incentive Plan for
\nEmployees of the North American Business Segment (the “FY12 AIP”) is to advance
\nthe interests of Sara Lee Corporation (“Sara Lee” or the “Company”) and, in
\nparticular, the interests of Sara Lee153s North American business segment (“SLE
\n2.0”) separate from its international beverage business segment, in anticipation
\nof the spin-off during Sara Lee153s fiscal year 2012 of such international
\nbeverage business segment (the “Anticipated CoffeeCo Spin-Off”) by:<\/p>\n\n\n\n
<\/td>\n\n

a)<\/p>\n<\/td>\n

\n

Rewarding financial performance of SLE 2.0 that contributes to increased
\nshareholder value;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

b)<\/p>\n<\/td>\n

\n

Measuring the effectiveness of SLE 2.0 operating performance, sales and
\ncapital management;<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

c)<\/p>\n<\/td>\n

\n

Continuing to provide significant rewards for exceptional performance.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Where context permits, references in this FY12 AIP to the “Company” or “Sara
\nLee” will be to, and will include, “SLE 2.0” from and following the Anticipated
\nCoffeeCo Spin-Off.<\/p>\n

Incentive Opportunity & Performance Objectives <\/u><\/strong>\n<\/p>\n

Attachment 2 [attached to each individual business segment Plan
\ndescription]shows the FY12 AIP Target and Maximum bonus payout opportunities at
\nthe various salary grades. Notwithstanding the bonus opportunity levels set
\nforth in Attachment 2, during FY12, the Committee may, in its sole discretion,
\nadjust the FY12 target payout levels applicable to certain Participants,
\nincluding adjustments to organize Participants by salary bands rather than by
\nsalary grades.<\/p>\n

The following applies to the FY12 AIP generally:<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Performance measures are approved by the Committee at the beginning of each
\nyear (“Performance Measures”).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Specific financial performance goals within the selected Performance Measures
\nare established at the beginning of the Incentive Plan Year. The financial
\nperformance goals related to the Incentive Plan Year are contained in the table
\nbelow (“Performance Goals”). The Performance Goals have been approved by the
\nCommittee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The FY12 Performance Measures are:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Operating Income of SLE 2.0 : 40% of target bonus opportunity<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Net Sales of SLE 2.0 : 40% of target bonus opportunity<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Average Working Capital of SLE 2.0 : 20% of target bonus opportunity<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

When expressed as a percentage of target bonus opportunity, the weighting of
\neach Performance Measure is the same for each salary grade and\/or salary band,
\nas may be applicable during FY12. A summary of FY12 Performance Measures and the
\ncorresponding incentive opportunities for Participants are shown in Attachment 3
\n[attached to each individual business segment Plan description], which incentive
\nopportunities are subject to adjustment during FY12 as described above under
\nthis section, “Incentive Opportunity & Performance Objectives.<\/em>”\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Maximum payout opportunity is 150% of target bonus opportunity, and threshold
\npayout opportunity is 25% of target bonus opportunity.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Performance Period <\/u><\/strong><\/p>\n

All objectives are measured over a one-year performance period, which is the
\nIncentive Plan Year.<\/p>\n

Performance Levels <\/u><\/strong><\/p>\n

Maximum<\/strong> : A high level of performance exceeding targeted
\nperformance and requiring “stretch” achievement of the Performance Goal beyond
\nthe Annual Operating Plan (“AOP”) level.<\/p>\n

Target<\/strong> :Target level of performance equivalent to
\nachievement at the AOP level.<\/p>\n

Threshold<\/strong> : Performance that just achieves an acceptable
\nlevel of results warranting incentive recognition. For FY12, threshold
\nperformance is defined as the prior fiscal year153s actual result for each of the
\nPerformance Measures: SLE 2.0 Operating Income, SLE 2.0 Net Sales and SLE 2.0
\nAverage Working Capital.<\/p>\n

Incentive Award Payout Levels <\/u><\/strong><\/p>\n

Performance Goals * <\/u><\/p>\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Performance Level<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Performance
\nGoal<\/em><\/strong>
\n(Operating
\nIncome)<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Performance
\nGoal<\/em><\/strong>
\n(Net Sales)<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Performance
\nGoal<\/em><\/strong>
\n(Average
\nWorking Capital) <\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Payout Level as<\/em><\/strong>
\na % of Target
\nBonus
\nOpportunity<\/em><\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Maximum<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n<\/tr>\n

\n

Above Target<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n<\/tr>\n

\n

Target<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n<\/tr>\n

\n

Below Target<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n<\/tr>\n

\n

Threshold<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n

<\/td>\n\n

(1)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

*<\/p>\n<\/td>\n

\n

Each Performance Goal represents, and will be computed based solely upon, the
\nbusinesses that will comprise the SLE 2.0 business at the time the Anticipated
\nCoffeeCo Spin-Off is completed.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(1)<\/p>\n<\/td>\n

\n

The specific performance goals for fiscal year 2012 were approved by the
\nCompensation and Employee Benefits Committee of the Company153s Board of Directors
\nand are contained in the minutes of the meeting at which the Program was
\napproved.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Attachment 4 graphically displays the payout curve for all three Performance
\nMeasures applicable to this FY12 AIP. Straight-line interpolation is used for
\ncalculating results between performance levels.<\/p>\n

2<\/p>\n

\n

Incentive Award Payments <\/u><\/strong><\/p>\n

Incentive award payments are distributed as soon as practicable after the
\nIncentive Plan Year results have been publicly announced and the individual
\nawards requiring the review and approval of the Committee have been approved at
\nthe Committee153s August 2012 meeting; provided that in no event will any
\nincentive award payments under the FY12 AIP be made later than the 15th day of
\nthe third month following the close of the Incentive Plan Year. A Participant
\nmust be an employee of Sara Lee or SLE 2.0, as applicable, or any respective
\nsubsidiary thereof, on the last day of the fiscal year in order to be eligible
\nto receive any incentive award.<\/p>\n

Administrative Provisions <\/u><\/strong><\/p>\n

The Committee and the Chief Executive Officer shall administer this FY12 AIP
\njointly and their decisions are final. The Executive Vice President Human
\nResources, or anyone serving in the equivalent position, and Chief Financial
\nOfficer of the Company will be responsible for the administrative procedures
\ngoverning this FY12 AIP, including ensuring the existence of approved
\nPerformance Measures and specific performance goals and the presentation to the
\nCommittee for its approval at the end of FY12 of the performance results under
\nthis FY12 AIP. The following administrative procedures shall govern:<\/p>\n\n\n\n
\n

a)<\/p>\n<\/td>\n

\n

The Committee will approve individual incentive awards for all corporate
\nofficers, those executives in salary grade 38 and above and individuals in
\nsalary band Senior Vice President : I and above. For individuals who participate
\nin the Sara Lee Performance-Based Incentive Plan (the “PBIP”), individual
\nincentive awards are coordinated with and subject to the terms, conditions,
\nmaximums and limitations of the PBIP (which, for those individuals, is
\nincorporated into this FY12 AIP by reference), with the AIP incentive award
\nbeing one factor to be considered by the Committee in exercising its negative
\ndiscretion to reduce the maximum award under the PBIP. The CEO and his or her
\ndirect reports may approve all other incentive awards.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

b)<\/p>\n<\/td>\n

\n

Any awards earned under this FY12 AIP will be paid in cash. Participants paid
\nin the U.S. and subject to taxation in the U.S. may elect to defer part or all
\nof their incentive awards pursuant to the terms and conditions of the Sara Lee
\nExecutive Deferred Compensation Plan.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

c)<\/p>\n<\/td>\n

\n

In the Committee153s sole discretion, a new Participant who begins
\nparticipation during the Incentive Plan Year may be eligible for a pro-rata
\nincentive award from the date of entry into this FY12 AIP. A new Participant
\nshould have been actively employed in a bonus-eligible role for at least one
\ncalendar quarter of the Incentive Plan Year in order to receive consideration
\nfor a pro-rata incentive award.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

d)<\/p>\n<\/td>\n

\n

In the case of death, Disability, Total Disability, or retirement under a
\nSara Lee or SLE 2.0 retirement plan during the Incentive Plan Year, a
\nParticipant or the Participant153s estate is eligible for a pro-rata incentive
\naward based upon the Participant153s period of active service (i.e., coded as
\nactive on the payroll system) during the Incentive Plan Year and<\/u><\/em>
\nan assessment of actual achievement of the Performance Goals. Any such pro-rata
\naward will be distributed at the same time as awards are distributed to active
\nParticipants.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

e)<\/p>\n<\/td>\n

\n

A Participant who is involuntarily terminated and who subsequently receives
\nseverance pay under a Sara Lee or SLE 2.0 severance plan may be eligible for a
\npro-rata incentive award based on active service through the date of the
\nParticipant153s termination of employment. The amount of any pro-rata incentive
\naward will be determined based on the amount of time the Participant was
\nactively employed during the Incentive Plan Year and<\/u><\/em> an
\nassessment of actual achievement of the Performance Goals. Any such pro-rata
\naward will be distributed at the same time as awards are distributed to active
\nParticipants.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

3<\/p>\n

\n\n\n\n
\n

f)<\/p>\n<\/td>\n

\n

Unless otherwise approved by the Committee or the Chief Executive Officer of
\nSara Lee or SLE 2.0, as applicable, and subject in any case to subparagraph (g),
\nany Participant who voluntarily terminates, or who is involuntarily terminated
\nand does not receive severance pay, regardless of the Participant153s eligibility
\nfor retirement status, during the Incentive Plan Year will not be entitled to
\nany incentive award attributable to the Incentive Plan Year.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

g)<\/p>\n<\/td>\n

\n

In the event that the division, business unit or business segment of Sara Lee
\nor SLE 2.0 to which at least 80% of a Participant153s time is dedicated or from
\nwhich the Participant is on leave of absence is sold, closed, spun off or
\notherwise divested and, as a result of such transaction, the Participant153s
\nemployment with Sara Lee or SLE 2.0 or any of their respective subsidiaries is
\nterminated, as of the closing date of such transaction the Participant will be
\nentitled to a pro-rata incentive award based on the Participant153s active service
\nthrough the date of Participant153s termination of employment. The amount of any
\npro-rata incentive award will be determined based upon the amount of time the
\nParticipant was actively employed during the Incentive Plan Year
\nand<\/u><\/em> an assessment of actual achievement of the Performance
\nGoals. Any such pro-rata award will be distributed no later than the date the
\nincentive award is distributed to active Participants.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

h)<\/p>\n<\/td>\n

\n

Notwithstanding anything contained in this document to the contrary, a
\nParticipant may be entitled to receive either an increased or reduced incentive
\naward payment, or no incentive award payment whatsoever, attributable to the
\nIncentive Plan Year upon the occurrence of any of the following events:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1)<\/p>\n<\/td>\n

\n

If any Participant engages in any activity contrary or harmful to the
\ninterests of the Company (or, in each case, SLE 2.0), including but not limited
\nto: (1) competing, directly or indirectly (either as owner, employee or agent),
\nwith any of the businesses of the Company, (2) violating any Company policies,
\n(3) soliciting any present or future employees or customers of the Company to
\nterminate such employment or business relationships(s) with the Company, (4)
\ndisclosing or misusing any confidential information regarding the Company, or
\n(5) participating in any activity not approved by the Board which could
\nreasonably be foreseen as contributing to or resulting in a Change of Control of
\nthe Company (as defined in the Sara Lee 1998 and 2002 Long-Term Incentive Stock
\nPlans), then the Participant will not be entitled to any incentive award
\nattributable to the Incentive Plan Year.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

2)<\/p>\n<\/td>\n

\n

This paragraph (h)(2) applies only to those Participants who are “officers”
\nof the Company, as defined in Rule 16a-1(f) under the Securities Exchange Act of
\n1934 during the Incentive Plan Year and who participate in any Sara Lee
\nExecutive Management Long-Term Incentive Program (each such Participant, an
\n“Officer Participant”). If an Officer Participant receives an incentive award
\npayment that was predicated upon the Company achieving certain Performance
\nMeasures (the “Original Payout”) and, within two years after the date of such
\nOriginal Payout, the Company restates its financial statements due to material
\nnoncompliance with the financial reporting requirements under the securities
\nlaws (such restated financial statements, the “Restated Financials”), then the
\namount of the incentive award payment for such Officer Participant shall be
\nrecalculated based on the Restated Financials (such recalculated amount, the
\n“Restated Amount”). If the Original Payout is greater than the Restated Amount,
\nthen the Company shall be entitled to recoup from such Officer Participant, and
\nsuch Officer Participant shall pay to the Company, in cash, an amount equal to
\n(1) the Original Payout, less (2) the Restated Amount. If the Restated Amount is
\ngreater than the Original Payout, then the Company shall pay to the Officer
\nParticipant<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

4<\/p>\n

\n\n\n\n
<\/td>\n\n

an amount equal to (i) the Restated Amount, less (ii) the Original Payout.
\nAny such payment or recoupment shall be due and payable within 90 days after the
\ndate on which the Company files the Restated Financials with the Securities and
\nExchange Commission. If an Officer Participant elected to defer part or all of
\ntheir Original Payout pursuant to the Sara Lee Executive Deferred Compensation
\nPlan, then the Officer Participant153s account under such Deferred Compensation
\nPlan automatically shall be credited or charged so that the amount deferred in
\nconnection with such incentive award payment equals the Restated Amount. No
\ninterest will be due to or paid by the Company or the Officer Participant to the
\nother with respect to any true up payment. Notwithstanding the foregoing, the
\nCommittee may determine, in its discretion and based on the circumstances
\nleading to the filing of the Restated Financials, that recoupment or payment
\nunder this paragraph (h)(2) of the Restated Amount is not practical and may
\nelect to forego the application of this paragraph (h)(2).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

i)<\/p>\n<\/td>\n

\n

Performance results under this FY12 AIP will be measured in accordance with
\nthe Definitions in Attachment 1.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

j)<\/p>\n<\/td>\n

\n

Performance results and Eligible Earnings will be used to determine the
\nincentive award payment.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

k)<\/p>\n<\/td>\n

\n

Any Participant who is employed as of the end of the Incentive Plan Year
\nshall be entitled to receive an incentive award payment regardless of whether
\nthe Participant resigns or is terminated between the end of the Incentive Plan
\nYear and the date the incentive awards are distributed.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

l)<\/p>\n<\/td>\n

\n

Sara Lee reserves the right to offset against any incentive award payment
\nowed by Sara Lee to a terminating or terminated Participant any amounts to which
\nSara Lee has a “claim of right.”<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

m)<\/p>\n<\/td>\n

\n

Except for participant deferral elections made under the Sara Lee Executive
\nDeferred Compensation Plan (which shall be construed to comply with Section 409A
\nof the Internal Revenue Code of 1986, as amended, and the Treasury Regulation
\nguidance thereunder (the “Code”)), the terms of the AIP shall be construed and
\npaid in such manner as to satisfy the short-term deferral exception to the
\napplication of Section 409A of the Code as set forth in Subsections (a)(4) and
\n(b)(4) of Treasury Regulations Section 1.409A-1.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

n)<\/p>\n<\/td>\n

\n

Nothing herein shall be construed as an agreement or commitment to employ any
\nParticipant or to employ a Participant for any fixed period of time or
\nconstitute a commitment by Sara Lee, SLE 2.0, or any of their respective
\nsubsidiaries, that any Participant will continue to receive an incentive award
\nor will continue as a Participant in this FY12 AIP.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

o)<\/p>\n<\/td>\n

\n

The Committee reserves the right to amend, modify, interpret or terminate
\nthis FY12 AIP or awards to be paid under this FY12 AIP at any time for any
\nreason. Specifically, an individual153s target bonus opportunity may be modified
\nduring FY12 in the Committee153s discretion and the performance criteria may be
\nadjusted by the Committee for extraordinary and similar items that prevent undue
\nand\/or unintended gain or loss; provided that, for any incentive awards under
\nthe AIP to individuals participating in the PBIP, any adjustments will be
\nsubject to the terms, conditions, maximums and limitations under the PBIP.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

p)<\/p>\n<\/td>\n

\n

The Committee may delegate certain administrative responsibilities to the
\nChief Executive Officer except for the following:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

1)<\/p>\n<\/td>\n

\n

Any actions affecting the Chief Executive Officer, and other elected officers
\nof Sara Lee or SLE 2.0, as applicable,<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

5<\/p>\n

\n\n\n\n
<\/td>\n\n

2)<\/p>\n<\/td>\n

\n

Approval of corporate Performance Goals and certification of performance
\nresults relative to such standards following the end of the Incentive Plan Year,
\nand<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
<\/td>\n\n

3)<\/p>\n<\/td>\n

\n

Approval of any substantive changes or amendments to this FY12 AIP.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

6<\/p>\n

\n

Attachment 1 <\/strong><\/p>\n

Definitions <\/strong><\/p>\n\n\n\n
\n

(a)<\/p>\n<\/td>\n

\n

Average Working Capital<\/strong> is a 13-point average of Core
\nWorking Capital as of the period-end for fiscal 2011 Period 12 and the
\nperiod-end balances for each of the twelve periods of fiscal 2012.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(b)<\/p>\n<\/td>\n

\n

Board<\/strong> means the Sara Lee Board of Directors prior to the
\nAnticipated CoffeeCo Spin-Off and means the Board of Directors of SLE 2.0 from
\nand following the Anticipated CoffeeCo Spin-Off.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(c)<\/p>\n<\/td>\n

\n

Committee<\/strong> is the Compensation and Employee Benefits
\nCommittee or other committee of the Sara Lee Board (prior to, or SLE 2.0 from
\nand after, the Anticipated CoffeeCo Spin-Off) as may be appointed by the Board.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(d)<\/p>\n<\/td>\n

\n

Core Working Capital<\/strong> means the Company153s net accounts
\nreceivable plus net inventories less accounts payable, excluding intercompany
\nreceivable and intercompany accounts; provided, however, that for purposes of
\nthis FY12 AIP, only the Core Working Capital that is attributable to the
\nbusinesses that will comprise the SLE 2.0 business at the time of the
\nAnticipated CoffeeCo Spin-Off will be used to measure achievement of the Average
\nWorking Capital performance goal.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(e)<\/p>\n<\/td>\n

\n

Disability<\/strong> is as defined under the applicable Sara Lee Long
\nTerm Disability Plan or the specific Sara Lee sponsored long-term disability
\nplan under which the Participant is covered.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(f)<\/p>\n<\/td>\n

\n

Eligible Earnings<\/strong> mean regular salary or wages paid to the
\nParticipant from July 1, 2011 through June 30, 2012. It does not include
\nallowances, reimbursements, commissions, other incentives, severance, lump sums,
\nawards, deferred compensation and compensation attributable to the exercise of
\nstock options or other forms of long-term incentive compensation.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(g)<\/p>\n<\/td>\n

\n

Incentive Plan Year<\/strong> is the Company153s fiscal year 2012
\nstarting on July 3, 2011 and ending on June 30, 2012.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(h)<\/p>\n<\/td>\n

\n

Net Sales<\/strong> means that portion of the Company153s Adjusted Net
\nSales, as disclosed in the Company153s earnings press releases and filings with
\nthe SEC, that is attributable to the businesses that will comprise the SLE 2.0
\nbusiness at the time of the Anticipated CoffeeCo Spin-Off, as may be further
\nadjusted by the Committee to (i) include or exclude the results of businesses
\nacquired and\/or divested during the measurement period, to the extent such
\nresults were included or excluded in the Company153s annual operating plan, (ii)
\nadjust for currency exchange rates used in the Company153s annual operating plan,
\nand\/or (iii) prevent undue and\/or unintended gain or loss.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(i)<\/p>\n<\/td>\n

\n

Operating Income<\/strong> means that portion of the Company153s
\nAdjusted Operating Income from continuing operations that is attributable to the
\nbusinesses that will comprise the SLE 2.0 business at the time of the
\nAnticipated CoffeeCo Spin-Off (which will be calculated using such businesses153
\noperating segment income), as disclosed in the Company153s earnings press releases
\nand filings with the SEC, with regard to SLE 2.0, as may be further adjusted by
\nthe Committee (as defined below) to (i) include or exclude the results of
\nbusinesses acquired and\/or divested during the measurement period, to the extent
\nsuch results were included or excluded in the Company153s annual operating plan,
\nand\/or (ii) prevent undue and\/or unintended gain or loss. Adjusted Operating
\nIncome is a non-GAAP financial measure that adjusts operating income, as
\nreported under U.S. GAAP, to exclude Significant Items and select other charges
\nand gains.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

7<\/p>\n

\n\n\n\n
\n

(j)<\/p>\n<\/td>\n

\n

Participant<\/strong> means an employee in the Company153s North
\nAmerican business segments in salary grades 22 through and including 50 or
\nsalary bands Manager through Chief Executive Officer, subject to adjustments
\nduring FY12 pursuant to the terms of this FY12 AIP. (Employees in grades 22
\nthrough 27 and salary bands Manager through Senior Manager eligible for sales
\nincentive plans are excluded from this FY12 AIP.)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(k)<\/p>\n<\/td>\n

\n

Significant Items<\/strong> mean those items that are reported by the
\nCompany in its annual report in the table entitled “Impact of Significant Items
\non Income from Continuing Operations and Net Income” and that meet the
\nController153s criteria for materiality and that are not indicative of our core
\noperating results. Significant items vary each year and may include items such
\nas charges for exit activities, impairment charges, tax costs and benefits
\nresulting from the disposition of a business, gains or losses on the sale of
\ndiscontinued operations and changes in tax valuation allowances.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n
\n

(l)<\/p>\n<\/td>\n

\n

Total Disability<\/strong> is as defined under the Sara Lee Key
\nExecutive Long Term Disability Plan under which the Participant is covered.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

8<\/p>\n

\n

Attachment 4 <\/strong><\/p>\n

FY12 AIP PAYOUT CURVE FOR ALL PERFORMANCE MEASURES
\n<\/strong><\/p>\n

\n

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