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