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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
(Fee Required)
FOR THE FISCAL YEAR ENDED JUNE 30, 1994 COMMISSION FILE NUMBER 1-3344
BIL MAR FOODS RETIREMENT PLAN
(Full title of the plan)
--------------------
SARA LEE CORPORATION
THREE FIRST NATIONAL PLAZA
SUITE 4600
CHICAGO, ILLINOIS 60602
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
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[ARTHUR ANDERSEN LLP LETTERHEAD]
BIL MAR FOODS RETIREMENT PLAN
FINANCIAL STATEMENTS
AS OF JUNE 30, 1994 AND 1993
TOGETHER WITH AUDITORS' REPORT
EMPLOYER IDENTIFICATION NUMBER: 52-1521450
PLAN NUMBER: 002
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[ARTHUR ANDERSEN LLP LETTERHEAD]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Sara Lee Corporation
Pension and Employee Benefits Committee:
We have audited the accompanying statements of net assets available for Plan
benefits of the BIL MAR FOODS RETIREMENT PLAN as of June 30, 1994 and 1993, and
the related statement of changes in net assets available for Plan benefits for
the year ended June 30, 1994. These financial statements are the
responsibility of Sara Lee Corporation's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described in Note 2, these financial statements were prepared on a modified
cash basis of accounting, which is a comprehensive basis of accounting other
than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of the Bil
Mar Foods Retirement Plan as of June 30, 1994 and 1993, and the changes in its
net assets available for Plan benefits for the year ended June 30, 1994, on the
basis of accounting described in Note 2.
/s/ Arthur Andersen LLP
Chicago, Illinois,
December 15, 1994
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BIL MAR FOODS RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF JUNE 30, 1994 AND 1993
1994 1993
ASSETS:
Value of interest in Master Trust-
Interest Income Fund $11,371,704 $10,836,779
Diversified Equity Fund 3,994,125 4,106,905
Aggressive Equity Fund - 5,780,761
Small Stock Fund 5,701,952 -
Bil Mar Sara Lee Stock Fund 6,080,180 6,526,862
International Equity Fund 816,374 -
Balanced Fund 1,187,706 -
Loan Fund 721,504 402,379
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $29,873,545 $27,653,686
=========== ===========
The accompanying notes to financial statements
are an integral part of these statements.
<PAGE> 5
BIL MAR FOODS RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
Wachovia Master Trust
---------------------------------------------------------------------------
Interest Diversified Aggressive Small Stock Sara Lee
Income Fund Equity Fund Equity Fund Fund Stock Fund
------------ ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $10,836,779 $4,106,905 $ 5,780,761 $ - $6,526,862
----------- ---------- ----------- ---------- ----------
ADDITIONS TO NET ASSETS:
Investment income-
Interest 820,051 188 - 860 4,624
Dividends - 116,492 - 353,443 166,775
Realized gains - 38,439 - 12,782 (187,516)
Unrealized gain (loss) - (92,810) - (154,093) (821,876)
Net change in accrued income (1,034) 4 - (480) 6,093
Other income 769 - - - -
Contributions-
Employer 1,318,985 311,561 - 393,968 831,189
Participant 444,889 225,777 - 286,081 534,747
----------- ---------- ----------- ---------- ----------
Total additions 2,583,660 599,651 - 892,561 534,036
----------- ---------- ----------- ---------- ----------
DEDUCTIONS TO NET ASSETS:
Benefits paid to participants (1,158,545) (482,380) - (620,195) (523,227)
Administrative expenses (38,356) (4,110) - (5,870) (6,672)
Other (62,211) (3,042) - (3,823) 7,912
----------- ---------- ----------- ---------- ----------
Total deductions (1,259,112) (489,532) - (629,888) (521,987)
----------- ---------- ----------- ---------- ----------
Net increase 1,324,548 110,119 - 262,673 12,049
----------- ---------- ----------- ---------- ----------
INTERFUND TRANSFERS, net (789,623) (222,899) (5,780,761) 5,439,279 (458,731)
----------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $11,371,704 $3,994,125 $ - $5,701,952 $6,080,180
=========== ========== ========== ========== ==========
<CAPTION>
Wachovia Master Trust
----------------------------------------------------------
International Balanced Loan
Equity Fund Fund Fund Total
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $ - $ - $402,379 $27,653,686
-------- ---------- -------- -----------
ADDITIONS TO NET ASSETS:
Investment income-
Interest 92 59 - 825,874
Dividends 6,958 44,980 - 688,648
Realized gain 673 (233) - (135,855)
Unrealized gain (loss) 51,718 (46,316) - (1,063,377)
Net change in accrued income 4 7 - 4,594
Other income - - - 769
Contributions-
Employer 8,597 16,568 - 2,880,868
Participant 56,408 98,676 - 1,646,578
-------- ---------- -------- -----------
Total additions 124,450 113,741 - 4,848,099
-------- ---------- -------- -----------
DEDUCTIONS TO NET ASSETS:
Benefits paid to participants (11,156) (38,520) - (2,834,023)
Administrative expenses (953) (782) - (56,743)
Other 1,156 3,409 319,125 262,526
-------- ---------- -------- -----------
Total deductions (10,953) (35,893) 319,125 (2,628,240)
-------- ---------- -------- -----------
Net increase 113,497 77,848 319,125 2,219,859
-------- ---------- -------- -----------
INTERFUND TRANSFERS, net 702,877 1,109,858 - -
-------- ---------- -------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $816,374 $1,187,706 $721,504 $29,873,545
======== ========== ======== ===========
</TABLE>
The accompanying notes to financial statements are an
integral part of this statement.
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BIL MAR FOODS RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1994 AND 1993
1. DESCRIPTION OF PLAN:
The following brief description of the Bil Mar Foods Retirement Plan (the
"Plan") is provided for general information purposes only. The Plan was
originally named The Bil Mar Savings Plan. The effective date of the amendment
and restatement of the Plan is June 27, 1992. Prior to June 27, 1992, Sara Lee
Corporation (the "Company") also maintained the Bil Mar Profit Sharing
Retirement Plan. The amendment and restatement of the Plan is intended to
constitute the merger, consolidation and continuation of the Plan and the Bil
Mar Profit Sharing Retirement Plan. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering eligible salaried, nonunion
employees on the Bil Mar Foods (the "Employer") payroll who have reached the
age of 21 and completed at least 1,000 hours of service. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Contributions
The Plan maintains two different accounts to hold participant savings.
401(k) Savings Account--This account holds savings and earnings
from pretax contributions, the Employer match to pretax contributions
and any balances in the account from the Bil Mar 401(k) Savings Plan.
The participants may defer payment of a percentage of their
compensation by electing to have such percentage withheld from their
compensation on a pretax basis and contributed to the Plan on their
behalf by Bil Mar Foods. The participant contributions can range from
not less than 1% to no greater than 18% of compensation, subject to
limitations as noted in the Plan. Bil Mar will "match" the pretax
dollars contributed by an employee with 20% of participant's elective
deferral. The matching contribution applies to the first 6% of
compensation that a participant contributes.
Profit Sharing Account--This account holds savings and earnings
from the Employer's discretionary profit sharing contribution, after-
tax contributions and any balances in the account from the Bil Mar
Profit Sharing Retirement Plan.
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At the end of each Plan year, the Employer may contribute a profit
sharing contribution in an amount up to 1% of participating
compensation to the accounts of eligible participants who were
employed by the Employer during that Plan year.
In addition to pretax contributions, a participant may contribute 1%
to 10% of his/her compensation to the Plan on an after-tax basis.
As of each December 31, the Employer shall determine the total elective
deferrals made on behalf of each participant during the preceding calendar
year. In the event that the total exceeds the limitation amount, such excess
deferrals shall be distributed to the participant by the following April 15.
Participants have the option to invest in one or more of the six investment
funds of the Plan in even multiples of 10%. Participants may change their
contribution percentage at the start of each plan quarter. The investment
funds consist of:
Interest Income Fund--The Interest Income Fund seeks to provide
stability of principal and a positive rate of return. The Interest
Income Fund invests primarily in investment contracts issued by
insurance companies and banks of high credit quality. The investment
contracts held by the fund are obligations of the issuing insurance
companies or banks and are not guaranteed as to principal or interest
by an agency of the federal government. A small portion of the fund
will be invested in money market instruments to facilitate daily cash
flow into and out of the fund.
Diversified Equity Fund--The Diversified Equity Fund attempts to
achieve growth of principal and modest current income. The
Diversified Equity Fund invests proportionately in all of the stocks
included in the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized benchmark of stock market performance.
Aggressive Equity Fund--The Aggressive Equity Fund seeks long-term
growth of capital and invests primarily in common stock and securities
convertible into common stock.
Small Stock Fund--The Small Stock Fund seeks long-term growth of
capital. The Small Stock Fund attempts to provide investment results
paralleling those of the Russell 2000 Index, a broadly diversified
index of small company stocks.
Bil Mar Sara Lee Stock Fund--The Bil Mar Sara Lee Stock Fund is
designed to provide employees with the opportunity to share in the
potential growth of the Company's stock. The fund invests in the
common stock of Sara Lee Corporation. A small portion of the fund
will be invested in money market instruments to facilitate daily cash
flow into and out of the fund.
International Equity Fund--The International Equity Fund seeks
long-term growth of capital by investing in stocks of companies
located outside the United States.
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Balanced Fund--The Balanced Fund attempts to provide current income
and the potential for long-term growth of income and capital. The
Balanced Fund invests 60% of its assets in a portfolio of stocks that
is expected to parallel the returns of the Wilshire 5000 Stock Index
and 40% of its assets in a fixed income portfolio that is structured
to track the Uhman Brothers Aggregate Bond Index.
Loan Fund--A participant may borrow from his/her Plan account balance,
but must pay back the loan amount to the account with interest through
regular after-tax payroll deductions. The maximum amount able to be
borrowed is the lesser of 50% of one's 401(k) balance as valued on the
last day of the previous quarter, less distributions made since, or
$50,000. A participant may have only one loan outstanding at a time.
The minimum loan amount is $1,000.
Participant Accounts
Each participant's account is credited with the participant's contribution, the
participant's portion of the Company's contribution and an allocation of the
Plan's earnings. Allocations are based on the ratio that each participant's
account balance for the period bears to the total of all participant's account
balances for the period.
Adjustment of Participants' Accounts
As of each valuation date the Company shall:
a. First, charge to the proper accounts one half of all hardship
withdrawals made since the last preceding valuation date and
before the current valuation date that have not been charged
previously, and adjust the subaccount under such accounts
accordingly;
b. Next, allocate and credit the balances in the accounts of all
participants with one half of the employer elective deferrals,
matching contributions, nonelective contributions and supplemental
contributions and forfeitures, if any, made on their behalf for
the valuation period ending on that valuation date and adjust the
subaccount under such accounts accordingly;
c. Next, allocate and credit the balances in the accounts of all
participants with one half of the employee nondeductible
contributions, if any, made on their behalf for the valuation
period ending on that valuation date and adjust the subaccounts
under such accounts accordingly;
d. Next, adjust the credit balances in the subaccounts of all
participants invested in each investment fund upward or downward,
pro rata, to reflect the appreciation, depreciation, income or
losses attributable to the investment fund so that the total of
the credit balances will equal the then adjusted net worth (as
defined below) of that investment fund;
e. Next, charge to the proper accounts the remaining one-half
of all hardship withdrawals made since the last preceding
valuation date and
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before the current valuation date that have not been charged
previously, and adjust the subaccounts under such accounts
accordingly;
f. Next, allocate and credit the balances in the accounts of all
participants with the remaining one half of the employer elective
deferrals matching contributions, nonelective contributions and
forfeitures, if any, made on their behalf for the valuation period
ending on that valuation date and adjust the subaccounts under
such accounts accordingly;
g. Next, allocate and credit the balances in the accounts of all
participants with one half of the employee nondeductible
contributions, if any, made on their behalf for the valuation
period ending on that valuation date in accordance with Subsection
6.8 and adjust the subaccounts under such accounts accordingly;
h. Finally, charge to the proper accounts all withdrawals or
distributions which are to be made as of the current valuation
date and adjust the subaccounts under such accounts accordingly.
Administrative Fees and Expenses
Certain administrative fees and expenses associated with the Plan are paid by
the Plan. All other administrative fees are paid by the Company.
Vesting
Plan participants are always 100% vested in the 401(k) pretax contributions,
after-tax contributions, Employer matching contributions, rollover
contributions and earnings on these contributions.
Participant's vested interest in his/her share of the Company's discretionary
profit sharing contributions is based on years of service as shown in the
following schedule.
<TABLE>
<S> <C>
Less than 3 years of service 0%
3 years of service 20%
4 years of service 40%
5 years of service 60%
6 years of service 80%
7 years or more of service 100%
====
</TABLE>
A year of service is each Plan year in which participant completes at least
1,000 hours of service.
If employment ends with the Employer on or after the normal retirement date, or
because of disability or death, participants will become 100% vested in all of
account balances in the Plan.
<PAGE> 10
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Forfeiture of Profit Sharing Account
If a participant leaves the Company for reasons other than death, disability or
retirement before his/her profit sharing account is fully vested, the right to
receive nonvested Employer contributions is forfeited. At the end of the Plan
year, forfeited Employer profit sharing contributions and earnings thereon will
be allocated to employees who remain in the Plan. The amount allocated to each
participant will be based on the ratio of his/her compensation divided by the
total compensation paid to all participants for the year.
Benefit Payments
Upon termination of service, distribution of the balance in a participant's
account will be made to the participant or, in the case of the participant's
death, to his/her beneficiary by payment in cash or stock if invested in the
Bil Mar Sara Lee Stock Fund.
A participant's settlement date will be the date on which his employment with
the Company is terminated due to one of the following (the first to occur):
a. Normal or late retirement--The date of the participant's
retirement on or after attaining age 60.
b. Death--The date of the participant's death.
c. Resignation or dismissal--The date the participant resigns or is
dismissed from the Company before attaining age 60.
d. Total disability retirement--The date the participant becomes
totally disabled.
A participant may also elect to rollover his/her account balance to an eligible
retirement plan.
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements are presented on the modified cash basis
of accounting, which is a comprehensive basis of accounting other than
generally accepted accounting principles. Under the modified cash basis of
accounting, cash investments are recorded at accrued fair market value per
Wachovia Bank and Trust Company, N.A. (the "Trustee") and payments and
contributions are recorded as the cash is paid or received by the Trustee.
Valuation of Investments
Investments are stated at aggregate market value.
During 1992, the assets of the Plan were held and managed by Manufacturer's
Bank until Wachovia Bank and Trust Company, N.A. was named trustee in 1993. As
a result of the change in trustee, all of the Plan's assets were transferred to
the Sara Lee Corporation Investment Trust (the "Investment Trust") at the
Trustee. The
<PAGE> 11
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Investment Trust had investments totaling $321,865,969 at June 30, 1994. The
composition of these investments is as follows:
<TABLE>
<S> <C>
Non-interest-bearing cash $ 58,541
Employer contribution receivable 86,757
Participant contribution receivable 75,023
Income receivable 1,518,691
Other receivables 183,136
Corporate stock common 29,702,040
Nonparticipant loans secured by mortgage 630,483
Participant loans 14,331,821
Investment in common/collective trust 9,425,127
Investment in registered investment company 67,941,912
Unallocated insurance contract investments 197,912,438
------------
Total $321,865,969
============
</TABLE>
Master Trust income allocated to the participating plans for the year ended
June 30, 1994, is as follows:
<TABLE>
<S> <C>
Employer contributions $ 5,765,875
Participant contributions 30,724,966
Noncash contributions 1,779,832
Interest income 14,605,649
Common stock dividends 867,797
Realized gain on sale of assets (103,634)
Net investment gain from common/collective trusts 523,233
Net investment gain from registered investment companies 1,760,769
-----------
Net investment income $55,924,487
===========
</TABLE>
The Plan assets represent 9.29% and 9.48% of Investment Trust assets as of June
30, 1994 and 1993, respectively. The schedule of assets held for investment
purposes and the schedule of 5% reportable transactions are disclosed in the
Wachovia Master Trust filing.
3. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company may discontinue
its contributions to the Plan at any time and terminate the Plan subject to the
provisions of ERISA. In the event of the termination of the Plan, participants
will become fully vested in their accounts.
4. FEDERAL INCOME TAX STATUS:
The Plan obtained its latest determination letter date January, 1989, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. Although the plan
administrator believes that the Plan is currently designed and operated in
compliance with the requirements of
<PAGE> 12
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the Internal Revenue Code, a new determination letter has been filed to ensure
that the amendments and revisions that have occurred after January, 1989, are
included. Therefore, the plan administrator believes that the Plan was
qualified and the trust was tax-exempt as of the financial statement date.
5. RECONCILIATION TO FORM 5500:
As of June 30, 1994, the Plan had approximately $909,094 of pending
distributions to participants who elected to withdraw from the operation and
earnings of the Plan. This amount is recorded as a liability in the Plan's
Form 5500; however, this amount is not recorded as a liability in accordance
with generally accepted accounting principles.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the year
ended June 30, 1994:
<TABLE>
<CAPTION>
Benefits Net Assets
Payable to Benefits Available for
Participants Paid Plan Benefits
------------ ---------- --------------
<S> <C> <C> <C>
Per financial statements $ - $2,834,023 $29,873,545
Accrued benefit payments 909,094 909,094 (909,094)
-------- ---------- -----------
Per Form 5500 $909,094 $3,743,117 $28,964,451
======== ========== ===========
</TABLE>
6. CURRENT-YEAR EVENTS:
Effective July 1, 1993, two additional investment fund choices, the Balanced
Fund and the International Equity Fund, were made available to participants.
The Aggressive Equity Fund was changed to the Small Stock Fund.
7. SUBSEQUENT EVENTS:
Effective July 27, 1994, an employee eligible to participate in the Sara Lee
Corporation Consolidated Pension and Retirement Plan shall not be eligible to
receive a matching contribution under this Plan.
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Sara Lee Corporation Bil Mar
Foods Retirement Plan previously filed Registration Statement File No.
33-35760.
/s/ Arthur Andersen LLP
Chicago, Illinois
December 15, 1994
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 21, 1994
BIL MAR FOODS
RETIREMENT PLAN
By: BIL MAR FOODS RETIREMENT
PLAN COMMITTEE
By: /s/ Michael E. Murphy
---------------------------------
Michael E. Murphy, As a Committee
Member on Behalf of the Committee
