LEE SARA CORP, 10-K, 1995-09-29

LEE SARA CORP
10-K, 1995-09-29
SAUSAGES & OTHER PREPARED MEAT PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JULY 1, 1995 COMMISSION FILE NUMBER 1-3344
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SARA LEE CORPORATION
(Exact name of registrant as specified in its charter)

MARYLAND 36-2089049
(State of Incorporation) (I.R.S. Employer Identification No.)
THREE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60602-4260
(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code: (312) 726-2600
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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<S> <C>
Common Stock, $1.33 1/3 par value The Chicago Stock Exchange
The New York Stock Exchange
The Pacific Stock Exchange
Amsterdam Stock Exchange
The Bourse (Paris)
Stock Exchange of Basel
Stock Exchange of Geneva
The Stock Exchange (London)
Stock Exchange of Zurich
Preferred Stock Purchase Rights The Chicago Stock Exchange
The New York Stock Exchange
The Pacific Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
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Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

As of September 1, 1995, the aggregate market value of the voting stock
(based upon the closing price per share of Common Stock on The New York Stock
Exchange on such date) held by non-affiliates of the registrant was
$13,981,096,170.

On September 1, 1995, the registrant had outstanding 484,116,512 shares of
common stock of $1.33 1/3 par value, which is the registrant's only class of
common stock.
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement, dated September 20, 1995, are
incorporated by reference into Items 10-12 of Part III.

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PART I

Item 1. Business

(A) GENERAL DEVELOPMENT OF BUSINESS

Sara Lee Corporation ("Sara Lee") is a global manufacturer and marketer of
high-quality, brand-name products for consumers throughout the world. It was
incorporated in Baltimore, Maryland in 1939 as the C.D. Kenney Company and
adopted its current name in 1985.

In fiscal 1995, the main focus of Sara Lee's two industry segments,
Packaged Foods and Packaged Consumer Products, was to continue to build brand
equity and improve returns. These objectives were pursued through the
introduction of new products, the expansion of existing products into new
markets, and a significant commitment to marketing support in order to build
leadership brands. In fiscal 1995, Sara Lee spent nearly $1.7 billion to retain
and grow the equity its brands have with customers, and to support its stable of
value-added, high-margin products. This amount represents an increase of 11.8%
over fiscal 1994.

During fiscal 1995, Sara Lee continued to implement its worldwide
restructuring program, which was announced in the latter part of fiscal 1994. As
part of the restructuring, 42 manufacturing and distribution facilities were
closed and 6,029 employees were terminated during fiscal 1995. Sara Lee
anticipates that the restructuring will be substantially completed by the close
of calendar year 1996.

SARA LEE PACKAGED FOODS
SARA LEE PACKAGED MEATS AND BAKERY

Sara Lee Packaged Meats continued to introduce new food products during
fiscal 1995, with an emphasis on "better-for-you" products and convenience
foods. Several Sara Lee meat brands introduced no-fat or reduced-fat products in
fiscal 1995, including Ball Park Fat Free Classics, Kahn's Fat Free Franks and
Bryan Fat Free Juicy Jumbos. Jimmy Dean Foods introduced Tastefuls! packaged
meals, consisting of two small submarine sandwiches, potato chips and cookies.

In fiscal 1995, Sara Lee pursued its objectives of building brands and
increasing business outside the United States through its acquisition of
Imperial Meats Group, Belgium's largest packaged meats producer. The company's
Imperial, Cornby, and Marcassou brands are sold in Belgium, France, Germany and
the Netherlands.

Sara Lee Bakery introduced, and/or expanded its distribution of, a number
of new products. In fiscal 1995, Sara Lee added a collection of sweet goods to
its fresh-baked line, including Danish, pound cakes, iced cakes, muffins,
doughnuts, cookies and pies. Sara Lee Chocolate Chip Cheesecake, Strawberry
Swirl Pound Cake, Breakfast Quick Breads, several flavors of reduced-fat,
no-sugar-added fruit pies and reduced-fat muffins were new frozen product
introductions. In addition, Sara Lee Bakery's foodservice unit introduced a
variety of mini-muffins and homestyle cakes.

Sara Lee Foodservice's business, PYA/Monarch, strengthened its position as
the leading foodservice distributor in the southeastern United States and the
third-largest full-line foodservice company in the nation with the acquisition
of the remaining outstanding shares of Virginia-based Consolidated Foodservice
Companies.

SARA LEE COFFEE AND GROCERY

During fiscal 1995, the Coffee and Grocery line of business introduced new
items to meet growing consumer demand for premium and specialty products,
including Marcilla Mocca coffee in Spain, an assortment of roasted coffees under
the Moccona label in Australia, and Merrild Gourmet coffee, sold as whole beans
that are ground at the point of sale, in Denmark. For the out-of-the-home
market, Superior Coffee introduced an Instant Cappuccino beverage. The Cafitesse
system of coffee serving equipment was introduced in Europe, and Piazza D'Oro
espresso was introduced in Australia. Sara Lee also acquired an interest in the
Bravo coffee company in Greece in fiscal 1995.

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Green coffee costs fluctuated severely during fiscal 1995, principally due
to unfavorable weather conditions and economic and social instability in several
coffee-producing nations. In Brazil, for example, two frosts in a single winter
season -- the first such occurrence on record -- were followed by severe
drought. These extraordinary events in the green coffee market led to higher
retail prices and reduced consumption in fiscal 1995. Sara Lee's retail coffee
operations managed price changes on a market-by-market basis in an effort to
protect margins and profits. Modest declines in market share were reported in
the Netherlands, Belgium, Denmark, the Czech Republic and the United Kingdom for
fiscal 1995, while market share remained stable in France and Australia, and
improved slightly in Spain and Hungary. Primarily due to the effect of high
green coffee costs on consumer buying habits, unit volumes for retail and
out-of-home roasted coffee were down 8% for fiscal 1995, excluding the effect of
acquisitions.

New tea products were launched during the fiscal year. In the Netherlands,
major product introductions under the Pickwick brand were Pickwick Framboos
fruit tea and Pickwick Seasons variety packs. Pickwick Regelli breakfast tea was
introduced in Hungary. To supply growing Russian and Eastern European markets,
capacity was expanded at Pickwick's Budapest production facility.

SARA LEE PACKAGED CONSUMER PRODUCTS

SARA LEE PERSONAL PRODUCTS

Sara Lee Intimates introduced new features and products and increased the
profitability of its bra, panty and shapewear business in fiscal 1995. North
American manufacturing operations faced capacity constraints primarily as a
result of the national introduction of the Wonderbra brand in fiscal 1995.
Playtex launched a minimizer bra with comfort straps for full-busted women in
fiscal 1995. In Europe, Sara Lee introduced a line of coordinating bras and
panties under the Liabel brand in Italy.

Sara Lee formed the Sara Lee Bodywear Group in fiscal 1995 to manufacture
and market exercise wear and activewear under the Champion Jogbra, Body Force
and Hanes Her Way names. The group also acquired the license for Spalding
Bodywear and will market sports-inspired bodywear under the Spalding name.

Sara Lee Accessories opened 17 new Coach retail stores in the United
States, including a flagship location in New York City. The major new Coach
product introduction of 1995 was the Sonoma Collection, a line of nubuc and
natural grain leather handbags, backpacks, wallets and belts. Mark Cross, a
premium leather goods company, reintroduced its handbags, business cases and
executive accessories into department stores, and resumed its catalog business.
Also in fiscal 1995, Aris Isotoner expanded its line of slippers. Aris Isotoner
posted weak results in fiscal 1995, due in part to warmer than normal winter
temperatures.

Sara Lee Knit Products focused on value-added products and cost-effective
manufacturing and sourcing in fiscal 1995. In the U.S. women's and girls'
panties category, Hanes Her Way and other Sara Lee brands increased their
leading market position. The increase in Sara Lee's share of the girls' panties
market was partially a result of increased distribution and new licensed
character agreements. In fiscal 1995, Hanes underwear was introduced in Brazil
and Venezuela.

In fiscal 1995, Sara Lee Knit Products became the master licensee to
manufacture sports apparel bearing the Spalding name. Hanes Licensed Products,
which markets licensed college and professional sportswear, was negatively
affected by labor strikes in professional sports. In the retail fleece business,
Sara Lee reduced excess capacity.

For all apparel categories, Sara Lee began to capitalize on its unique
partnership agreement with the 1996 Olympic Games -- the first agreement of its
kind to combine Games sponsorship, product licensing and U.S. Team outfitting.
An agreement with Warner Brothers and the United States Olympic Committee led to
the introduction of Warner Brothers' familiar Looney Tunes characters on Hanes
T-shirts to be used in creative apparel relating to the Olympics.

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Sara Lee Hosiery continued to respond to changing market forces in the
hosiery area during fiscal 1995 through the introduction of shaping and toning
products, new colors and textures, increased durability and special occasion
hosiery. The global market for sheer hosiery continued to exhibit weakness, and
unit volumes fell 7% as Sara Lee eliminated low-margin items from its product
line. However, profits for Sara Lee's worldwide sheer hosiery business
increased. In the United States, Sara Lee Hosiery continued to decrease
production capacity and improve inventory flow to maximize efficiencies, returns
and profitability. In Europe, Sara Lee continued to reduce manufacturing
overhead and excess sheer hosiery capacity.

L'eggs launched Smooth Silhouettes, a Body Contouring product in fiscal
1995. Hanes introduced its own Body Contouring product, Smooth Illusions, in
fiscal 1995, with strong advertising support and a "tag" line of "Liposuction
without surgery." Under its licensed designer brand Donna Karan, Sara Lee
introduced The Nudes hosiery, an ultrasheer product offering colors to
complement a wide array of skin tones. In Mexico, Sara Lee introduced Hanes Her
Way hosiery in fiscal 1995. In Europe, Sara Lee introduced several new hosiery
products under the Dim brand, including Teint de Soleil, extra-sheer hosiery for
warm weather, and Ventre Plat, the first hosiery with tummy control to be
introduced in Europe. Pretty Polly introduced Legworks hosiery, which offers
thigh and tummy control, in the United Kingdom.

In fiscal 1995, Sara Lee introduced the Silk Reflections Casual collection
of tights, trouser socks and casual socks in North America, contributing to
strong growth in unit and dollar sales of tights and opaque legwear.

SARA LEE HOUSEHOLD AND PERSONAL CARE

Sara Lee Household and Personal Care continued to grow through the
introduction of new products and entry into new markets. Geographic expansion of
Sara Lee's shoe care business continued in fiscal 1995, with the introduction of
Kiwi products in China, Mexico and Hungary. Also in fiscal 1995, Sara Lee
acquired the rights to market Brylcreem products for men in Indonesia.

Sanex Sun Care tanning lotions and sunblockers were introduced in the
Netherlands during the fiscal year. Also in the Netherlands, Sanex toothpaste
debuted. In Spain, the Sanex brand was extended to a line of new shaving creams
and aftershaves under the Sanex for Men label. Duschdas Milk & Silk bath and
shower foam was introduced in Germany, while Badedas for Kids soap was launched
in the Netherlands. The Ambi-Pur electrical diffuser air freshener, introduced
in five European markets in fiscal 1994, was extended to Belgium, the United
Kingdom and Hungary. The Ambi-Pur Neutraliser air freshener debuted in the
Netherlands and Italy. In the oral care line, Prodent Sensitive and Prodent
Baking Soda toothpastes were made available in the Netherlands.

Sara Lee's Direct Selling business in Mexico, House of Fuller, suffered the
negative impact of the peso's devaluation on sales in Mexico. House of Fuller
has nevertheless expanded its product offerings, particularly in the area of
apparel products and, in fiscal 1995, House of Fuller began selling Playtex
intimate apparel.

(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

Sara Lee's businesses are classified into two industry segments: Sara Lee
Packaged Foods and Sara Lee Packaged Consumer Products. The financial
information about Sara Lee's industry segments can be found on page F-21 of this
Report.

SARA LEE PACKAGED FOODS

Sara Lee's Packaged Foods segment is comprised of Sara Lee Packaged Meats
and Bakery, and Sara Lee Coffee and Grocery.

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SARA LEE PACKAGED MEATS AND BAKERY

Sara Lee Packaged Meats processes and sells pork, poultry and beef products
to supermarkets, warehouse clubs, national chains and institutions throughout
the United States, Europe and Mexico. Sales are transacted through Sara Lee's
own sales force, brokers and institutional buyers. Some of the more prominent
brands in the United States within this category include Ball Park, Best's
Kosher, Bryan, Hillshire Farm, Hygrade, Jimmy Dean, Kahn's, Mr. Turkey, Sara Lee
and Sinai 48. Sara Lee's more prominent European brands include Stegemann in the
Netherlands, Argal in Spain and Nobre in Portugal. Sara Lee has a 49.9% interest
in AXA Alimentos, S.A. de C.V., which owns Kir Alimentos S.A. de C.V., a leading
processed meats company in Mexico. In fiscal 1995, Sara Lee acquired Imperial
Meats Group, Belgium's largest packaged meats producer. The company's Imperial,
Cornby and Marcassou brands are sold in Belgium, France, Germany and the
Netherlands.

The products offered by this line of business include smoked sausage,
bacon, hot dogs, breakfast sausage, breakfast sandwiches, premium deli and
luncheon meats, ham, turkey, and packaged lunch combinations. The ingredients --
pork, turkey and beef -- are purchased by Sara Lee from a variety of sources.
The prices of these raw materials fluctuate, depending primarily on supply and
demand. Because of the range of sources from which these raw materials are
available, Sara Lee believes that it will continue to have access to adequate
supplies.

The Packaged Meats category is highly competitive, with an emphasis on
product quality, price, advertising and promotion, and customer service. Sara
Lee's competitors include international, national, regional and local companies.
The Packaged Meats category has accounted for 10% or more of Sara Lee's
consolidated revenues during the past three fiscal years. Sara Lee believes it
is one of the three industry leaders in the United States.

Most of Sara Lee's Packaged Meats operations are regulated by the U.S.
Department of Agriculture, whose focus is the quality, sanitation and safety of
meat products, and, to some extent, by state and local government agencies. Sara
Lee's Packaged Meats operations in Europe and Mexico are regulated by local
authorities.

Sara Lee Bakery produces a wide variety of fresh and frozen baked and
specialty items. Its core products are pies, cheesecakes, pound cakes and
Danish. These products are sold through supermarkets, foodservice distributors,
bakery-deli and direct channels throughout the United States, United Kingdom,
France, Mexico, Australia and numerous Asia-Pacific countries. Sales are
transacted through Sara Lee's sales force and independent wholesalers and
distributors. The key ingredients for these products -- butter, milk, sugar,
fruits, eggs and flour -- are purchased from suppliers at prices that are
subject to such influences as supply and demand, weather, and government price
controls. Because of the number of sources from which such raw materials are
generally available, Sara Lee believes it will continue to have access to
adequate supplies.

Competition in this category is keen, with a large number of participants.
Sara Lee seeks to maintain and enhance a leading position in the industry
through marketing efforts that are designed to reinforce and build brand
recognition, and through superior customer service.

In the United States, Sara Lee Bakery products are subject to regulation by
the Food and Drug Administration, the federal agency charged with, among other
things, enforcing laws pertaining to food processing, content and labeling, and
to a lesser extent, by state and local government agencies.

Sara Lee Foodservice's business is conducted principally under the
PYA/Monarch name. With the acquisition of the remaining outstanding shares of
Virginia-based Consolidated Foodservice Companies in fiscal 1995, PYA/Monarch
strengthened its position as the leading foodservice distributor in the
southeastern United States and became the third largest full-line foodservice
company in the nation. This business distributes dry, refrigerated and frozen
foods, paper supplies and foodservice equipment to institutional and commercial
foodservice customers.

The institutional foodservice distribution industry is highly competitive,
with price and service being the major means by which Sara Lee Foodservice
competes. This line of business generates lower margins on sales dollars than
Sara Lee's other businesses.

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SARA LEE COFFEE AND GROCERY

Sara Lee believes it is one of the top four coffee roasters in the world,
and one of the top three in the European market. It has a significant presence
in such countries as the Netherlands, Belgium, France, Denmark, Spain and
Australia, and has established positions in Central and Eastern Europe through
acquisitions and expanded sales efforts. While Douwe Egberts is its European
flagship brand, its other premium European coffee brands include Maison du Cafe,
Marcilla, and Merrild. Sara Lee's Pickwick brand, an important brand in the
European tea market, is expanding its current lines in an effort to appeal to
younger consumers and is entering the Russian and Eastern European markets.

This is a very competitive business with the other participants consisting
primarily of other large multi-national companies. Sara Lee seeks to maintain a
competitive edge by offering its customers superior quality and value.

Sara Lee is also a significant competitor in the out-of-home coffee service
business. Its Douwe Egberts Coffee Systems business provides coffee and
dispensing equipment in Europe, while its Superior Coffee and Foods business
provides similar products and services in the United States.

The significant cost item in the production of coffee products is the price
of green coffee, which varies depending on such factors as weather (which
affects the quality and quantity of available supplies), consumer demand, the
political climate in the producing nations, unilateral pricing policies of
producing nations, speculation on the commodities market, and the relative
valuations and fluctuations of the currencies of producer versus consumer
countries. These factors also generally affect Sara Lee's competitors. At the
end of fiscal 1994, and the beginning of fiscal 1995, Brazil, the world's
largest coffee producer, suffered two major frosts, followed by a drought, that
negatively affected crop output in fiscal 1995. Uncertainty over the
availability of supplies resulted in extreme volatility in the price of green
coffee in fiscal 1995, leading to the highest prices in recent years. Sara Lee
anticipates that green coffee prices will continue to be affected due to
uncertainty over the availability of future supplies. Sara Lee has and expects
to continue to offset the negative effect of price increases through careful
inventory management, cost cutting, and higher prices for its coffee products.
Primarily due to the effect of higher green coffee costs on consumer buying
habits, unit volumes for retail and out-of-home roasted coffee were down 8% for
fiscal 1995, excluding the effect of acquisitions.

The Sara Lee Coffee and Grocery line of business also manufactures rice
products under the Lassie brand in the Netherlands, and snack and nut products
under the Duyvis, Felix and Benenuts brands in the Netherlands, Belgium and
France, respectively.

The Sara Lee Coffee and Grocery business has accounted for 10% or more of
Sara Lee's consolidated revenues during the past three fiscal years.

SARA LEE PACKAGED CONSUMER PRODUCTS

Sara Lee's Packaged Consumer Products segment is divided into two lines of
business: Personal Products and Household and Personal Care.

SARA LEE PERSONAL PRODUCTS

The Personal Products line of business, which is headquartered in
Winston-Salem, North Carolina, includes the Intimates, Accessories, Knit
Products and Hosiery business groups.

Sara Lee Intimates' business includes bras, panties and shapewear. These
are manufactured and distributed under such labels as Bali, Hanes Her Way,
Playtex, WonderBra and Daisyfresh in North America, and Playtex and Dim in
Europe. Sara Lee holds a leading position in the Mexican bra market through its
Playtex and Hanes Her Way brand and continued to build market share in Canada
during fiscal 1995 through its Playtex, Wonderbra, Daisyfresh and Hanes Her Way
brands.

Distribution channels for intimate apparel range from department and
specialty stores for such premium brands as Bali, and some Playtex products, to
warehouse clubs and mass-merchandise outlets for some of the value-priced
brands. Sales are effected through Sara Lee's sales force.

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The intimate apparel market is a competitive one based on consumer brand
loyalty. Sara Lee endeavors to maintain its competitive edge through marketing
and promotional efforts, and by offering consumers value through a superior
combination of quality and price.

Sara Lee Accessories' business involves the manufacture and marketing of
premium leather products through its Coach division, under the Coach and Mark
Cross brands, and the manufacture and marketing of men's and women's gloves,
slippers and knitwear through its Aris Isotoner division under the Aris and
Isotoner brands. Aris Isotoner products are sold primarily to department stores,
while Coach and Mark Cross products are sold through department stores, catalog
sales and Sara Lee stores. Coach and Mark Cross now operate approximately 120
stores in the United States.

Sara Lee Knit Products' business involves the manufacture and distribution
of men's, women's and children's underwear and activewear (T-shirts, fleecewear
and other jersey products for casualwear) in North America, South and Central
America, Europe and the Asia-Pacific countries. These products are sold through
Sara Lee's sales force to department stores, mass merchandisers, discount chains
and the screen print trade. Principal brands in this category include Champion,
Hanes, Hanes Her Way and Rinbros in North America, and Abanderado, Princesa,
Champion, Hanes and Dim in Europe. Sara Lee believes that it has the leading
market share in the women's and girls' panties category in the United States,
the second largest share in the heavily branded category of men's and boys'
underwear in the United States, and the leading position in men's and boys'
underwear in Mexico.

Activewear is marketed under Sara Lee's Hanes and Champion lines. In
addition to targeting the public activewear market, Champion also manufactures
and markets authentic uniforms and practicewear for professional and amateur
athletic teams, including such organizations as the National Basketball
Association, the National Football League, the Olympics and a number of major
university sports teams.

The principal raw material in this product category is cotton. Sara Lee
currently believes it has access to an adequate supply of cotton from a variety
of sources.

The knit products business is highly competitive, with products relying on
brand recognition, quality, price and loyalty. Sara Lee competes by offering
superior value, utilizing its megabranding strategy -- marketing various
products through common packaging, promotion and advertising, increased
marketing activity, and low-cost sourcing. The Knit Products business has
accounted for 10% or more of Sara Lee's consolidated revenues during each of the
past three fiscal years.

Sara Lee Hosiery is the market leader in hosiery markets in North America,
Western Europe, Australia, New Zealand and South Africa. It also continues to
establish operations in various Asia-Pacific countries, placing it in a
strategic position to capitalize on developing markets in that area. The
European hosiery business is somewhat seasonal in nature in contrast to the
domestic business.

Hosiery products consist of a wide variety of branded, packaged consumer
products, including pantyhose, stockings, combination panty and pantyhose
garments, tights, knee-highs and socks, many of which are available in both
sheer and opaque styles. These products are sold domestically under such brand
names as Hanes, L'eggs, Donna Karan and DKNY (the last two being licensed), and
abroad under such labels as Dim, Pretty Polly, Elbeo, Nur Die, Bellinda,
Filodoro, Philippe Matignon and Omero. Sara Lee is the largest sock manufacturer
in the United States.

Hosiery products are sold by Sara Lee's sales force in channels ranging
from department and specialty stores (for premium brands such as Hanes, Donna
Karan and DKNY in the United States, and Dim abroad), to supermarkets, warehouse
clubs, discount chains and convenience stores for brands like L'eggs and some
Dim products aimed at the price-conscious consumer. Hosiery products are also
distributed through catalog sales and Sara Lee stores. The hosiery business has
accounted for 10% or more of Sara Lee's consolidated revenues during each of the
past three fiscal years.

The hosiery business is very competitive in both the United States and
Europe. In the United States, Sara Lee's major competitors are other hosiery
companies, and the primary methods of competition are quality, value, function,
and, with respect to L'eggs products, service and distribution. In Europe, where
most of Sara

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Lee's competitors are small companies who compete in the unbranded sector of the
market, the primary focus is on quality.

Raw materials -- nylon, spandex, and cotton -- for the products in this
category are readily available to Sara Lee from a variety of sources.

HOUSEHOLD AND PERSONAL CARE

Sara Lee's Household and Personal Care line of business includes three
primary core categories: shoe care -- led by a worldwide line of Kiwi products;
body care items -- led by the Sanex brand, but also including Duschdas and
Badedas and baby care products sold under the Zwitsal, Fissan and Proderm names;
and insecticides -- sold internationally under the Catch, Bloom, Vapona and
Ridsect brand names. Ambi-Pur air fresheners, Zendium and Prodent oral care
products, and Biotex and Neutral specialty detergents are also important
categories for Sara Lee.

Sara Lee Direct Selling distributes a wide range of products -- cosmetics,
fragrances, toiletries, personal products and jewelry -- through a network of
independent sales representatives. This method of reaching the consumer has been
particularly successful at the House of Fuller business in Mexico, the House of
Sara Lee businesses in Indonesia and the Philippines, and the Avroy Shlain
business in South Africa. While this segment is very fragmented, Sara Lee
believes it has an important position in many product lines in those countries
in which it competes.

TRADEMARKS

Sara Lee is the owner of over 30,000 trademark registrations and
applications in over 140 countries. Sara Lee's trademarks are among its most
valuable assets as it pursues its strategy of building brands globally.

CUSTOMERS

None of Sara Lee's business segments or lines of business is dependent upon
a single customer or a small number of customers, the loss of whom would have a
material adverse effect on Sara Lee's consolidated operations. Sara Lee
considers major mass retailers and supermarket chains in both the United States
and Europe to be significant customers across one or more product categories,
and it has developed specific approaches to working with individual customers.

ENVIRONMENTAL MATTERS

Sara Lee is subject to a number of federal, state and local statutes,
rules, regulations and ordinances in the United States and other countries
relating to the discharge of materials into the environment, or otherwise
relating to the protection of the environment ("Environmental Laws").

While Sara Lee expects to make capital and other expenditures in compliance
with Environmental Laws, it does not anticipate that such compliance will have a
material adverse effect on its capital expenditures, earnings or competitive
position. Sara Lee has implemented a program to monitor compliance with
Environmental Laws and is continually examining its methods of operation and
product packaging to reduce its use of natural resources.

EMPLOYEES

Sara Lee has approximately 149,000 employees worldwide.

(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
AND EXPORT SALES

Sara Lee's foreign operations are conducted primarily through wholly- or
partially-owned subsidiaries incorporated outside the United States. The foreign
operations of the Packaged Meats line of business within the Packaged Foods
segment are conducted through Sara Lee Processed Meats (Europe) B.V., while the
Sara Lee Bakery business includes Kitchens of Sara Lee U.K. Ltd. and Kitchens of
Sara Lee (Australia) Pty. Ltd. The Coffee and Grocery line of business within
the Packaged Foods segment is conducted by a number of

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subsidiaries, principally European, including Douwe Egberts Nederland B.V.,
Douwe Egberts France S.A., Douwe Egberts Espana S.A., Merrild Kaffe A/S, Douwe
Egberts N.V., Compack Douwe Egberts Rt., Harris/DE Pty. Ltd., Balirny Douwe
Egberts A.S. and Douwe Egberts Coffee Systems Nederland B.V.

The Personal Products line of business within the Packaged Consumer
Products segment includes numerous foreign businesses, including Dim S.A., Grupo
Sans S. A., Sara Lee Personal Products (Australia) Pty. Ltd., Pretty Polly Ltd.,
Vatter GmbH, the Filodoro Group, Manufacturas Mallorca, S.A. de C.V., Rinbros,
S.A. de C.V., and a 60% interest in Maglificio Bellia S.p.A.

The Household and Personal Care line of business within the Packaged
Consumer Products segment is composed of subsidiaries in over forty countries.
The principal subsidiaries are Kiwi Brands Pty. Ltd., Kiwi France S.A., Kortman
Intradal B.V., A/S Blumoller, Sara Lee/DE Espana S.A., Sara Lee Household and
Personal Care U.K. Ltd., and Sara Lee/DE Italy S.p.A.

The financial information about foreign and domestic operations can be
found on page F-22 of this Report.

Item 2. Properties.

Sara Lee operates 289 food processing and consumer product manufacturing
plants, each containing more than 20,000 square feet in building area, in 27
states and 35 foreign countries. Sara Lee owns 221 and leases 68 of these
plants. It also operates 135 warehouses containing more than 20,000 square feet
in building area in 18 states and 20 foreign countries. Of these warehouses, 57
are owned and 78 are leased. The following table identifies the plants and
warehouses presently owned or leased by Sara Lee that contain at least 250,000
square feet in building area.

<TABLE>
<CAPTION>
APPROXIMATE
INDUSTRY SEGMENT AND BUILDING AREA
DIVISION OR SUBSIDIARY LOCATION IN SQUARE FEET
- --------------------------------------- --------------------------------------- --------------
<S> <C> <C>
SARA LEE PACKAGED FOODS
Bil Mar Foods.......................... Zeeland, Michigan 567,000
Bryan Foods, Inc. ..................... West Point, Mississippi 769,000
Douwe Egberts Van Nelle
Tabaksmaatschappij B.V. ............. Rotterdam, the Netherlands 605,000
Hillshire Farm & Kahn's................ Alexandria, Kentucky 325,000
Hillshire Farm & Kahn's................ Cincinnati, Ohio 556,000
Hillshire Farm & Kahn's................ New London, Wisconsin 563,000
Koninklijke Douwe Egberts B.V. ........ Joure, the Netherlands 1,094,000
Koninklijke Douwe Egberts B.V. ........ Utrecht, the Netherlands 577,000
Koninklijke Douwe Egberts B.V. ........ Zaandam, the Netherlands 367,000
PYA/Monarch, Inc. ..................... Charlotte, North Carolina 288,000
PYA/Monarch, Inc. ..................... Lexington, South Carolina 364,000
PYA/Monarch, Inc. ..................... Montgomery, Alabama 276,000
Sara Lee Bakery........................ Forest, Mississippi 260,000
Sara Lee Bakery........................ New Hampton, Iowa 294,000
Sara Lee Bakery........................ Tarboro, North Carolina 346,000
Sara Lee Bakery........................ Traverse City, Michigan 295,000
Sara Lee Processed Meats (Europe)
B.V. ................................ Rio Maior, Portugal 348,000
Sara Lee Processed Meats (Europe)
B.V. ................................ Miralcamp, Spain 260,000
Van Nelle International B.V. .......... Joure, the Netherlands 301,000*
</TABLE>

8
<PAGE> 10

<TABLE>
<CAPTION>
APPROXIMATE
INDUSTRY SEGMENT AND BUILDING AREA
DIVISION OR SUBSIDIARY LOCATION IN SQUARE FEET
- --------------------------------------- --------------------------------------- --------------
<S> <C> <C>
SARA LEE PACKAGED CONSUMER PRODUCTS
Adams-Millis Corporation Kernersville, North Carolina 340,000
Aris Isotoner Edison, New Jersey 297,000*
Aris Philippines Manila, Philippines 334,000***
Canadelle Inc. Montreal, Canada 261,000
Champion Products, Inc. Laurel Hill, North Carolina 368,000
Champion Products, Inc. Gaffney, South Carolina 294,000
Champion Products, Inc. Perry, New York 253,000**
Champion Products, Inc. Dunn, North Carolina 289,000
Filodoro Calze SpA Casalmoro, Italy 319,000
Kiwi Brands Inc. Douglassville, Pennsylvania 290,000
Kiwi Brands Pty. Ltd. Clayton, Australia 271,000
L'eggs Products Clarksville, Arkansas 321,000
L'eggs Products Rockingham, North Carolina 440,000
Playtex Apparel, Inc. Dover, Delaware 424,000
Sara Lee/DE Espana S.A. Santiga, Spain 284,000*
Sara Lee/DE Germany Dusseldorf, Germany 333,000*
Sara Lee Direct Rural Hall, North Carolina 598,000*
Sara Lee Hosiery East Rockingham, North Carolina 330,000*
Sara Lee Hosiery Winston-Salem, North Carolina 770,000
Sara Lee Hosiery Darlington, South Carolina 287,000
Sara Lee Household & Personal Care U.K.
Limited Slough, England, United Kingdom 331,000
Sara Lee Knit Products Forest City, North Carolina 340,000
Sara Lee Knit Products Eden, North Carolina 418,000
Sara Lee Knit Products Galax, Virginia 424,000
Sara Lee Knit Products Martinsville, Virginia 704,000*
Sara Lee Knit Products Martinsville, Virginia 628,000**
Sara Lee Knit Products Martinsville, Virginia 442,000**
Sara Lee Knit Products Mountain City, Tennessee 562,000
Sara Lee Knit Products Rabun Gap, Georgia 754,000
Sara Lee Knit Products Rural Hall, North Carolina 931,000
Sara Lee Knit Products Sanford, North Carolina 275,000
Sara Lee Knit Products Winston-Salem, North Carolina 568,000
Sara Lee Knit Products Greenwood, South Carolina 500,000
Vatter GmbH Augsburg, Germany 297,000***
Vatter GmbH Rheine, Germany 482,000
Vatter GmbH Schongau, Germany 256,000
</TABLE>

- ---------------
* These facilities are leased; the remainder are owned by Sara Lee.

** Facilities have been closed as part of 1994 restructuring and are awaiting
sale. See pages F-16 through F-17 of this Report for a description of the
restructuring.

*** Facilities have been closed and are awaiting sale.

Item 3. Legal Proceedings.

In September 1994, Sara Lee and the State of Wisconsin stipulated and
agreed that (i) Sara Lee would pay $200,000 into an escrow fund established at
the conclusion of the bankruptcy proceedings of Peck Foods Corporation ("Peck"),
a former subsidiary of Sara Lee sold in 1988, in connection with certain
allegations that Peck had violated hazardous spill remediation laws, and (ii)
judgment in the amount of $218,400, including a penalty assessment, would be
entered against Sara Lee in connection with certain allegations that Peck had
illegally discharged wastewater in violation of water pollution control laws.
The current owners of Peck have reimbursed Sara Lee for approximately $318,000
of these costs.

9
<PAGE> 11

In addition to the foregoing, Sara Lee is a party to several pending legal
proceedings and claims, and environmental actions by governmental agencies.
Although the outcome of such items cannot be determined with certainty, Sara
Lee's General Counsel and management are of the opinion that the final outcomes
should not have a material adverse effect on Sara Lee's results of operations or
financial position.

Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable.

10
<PAGE> 12
EXECUTIVE OFFICERS OF SARA LEE

Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered Item in Part I of this Report in lieu of being
included in the Proxy Statement for the Annual Meeting of Stockholders to be
held on October 26, 1995 (the "Proxy Statement").

The following is a list of names and ages of all current executive officers
of Sara Lee indicating positions and offices with Sara Lee held by each such
person. All such persons have been elected by, and hold office at the pleasure
of, the Board of Directors. No person other than those listed below has been
chosen to become an executive officer of Sara Lee.

<TABLE>
<CAPTION>
AGE AS OF FIRST
OCTOBER 26, OFFICES AND ELECTED
NAME 1995 POSITIONS HELD AN OFFICER
- ----------------------------------------- ----------- --------------------------------- -----------
<S> <C> <C> <C>
John H. Bryan............................ 59 Chairman of the Board, Chief 3/28/74
Executive Officer and Director

Michael E. Murphy........................ 59 Vice Chairman, Chief 6/28/79
Administrative Officer and
Director

Donald J. Franceschini................... 60 Executive Vice President and 8/27/92
Director

C. Steven McMillan....................... 49 Executive Vice President and 3/31/83
Director

Gary C. Grom............................. 48 Senior Vice President -- Human 10/25/90
Resources

Joseph E. Heid........................... 49 Senior Vice President 4/28/94*

Janet Langford Kelly..................... 37 Senior Vice President, Secretary 1/25/95
and General Counsel

Mark J. McCarville....................... 49 Senior Vice President -- 6/24/82
Corporate Development

Frank L. Meysman......................... 43 Senior Vice President 3/31/94*

Judith A. Sprieser....................... 42 Senior Vice President and Chief 11/1/94
Financial Officer
</TABLE>

- ---------------
* Mr. Heid and Mr. Meysman assumed the duties of executive officers (as defined
in Rule 3b-7 under the Securities Exchange Act of 1934, as amended) of Sara
Lee as of September 26, 1995.

There are no family relationships between any of the above-named executive
officers and directors.

Each of the executive officers listed above has served Sara Lee or its
subsidiaries in various executive capacities for the past five years except
Donald J. Franceschini, Joseph E. Heid and Janet Langford Kelly.

Prior to his election, Mr. Franceschini served in various executive
capacities at Playtex Apparel, Inc. prior to its acquisition by Sara Lee. Before
joining Sara Lee in December 1992, Mr. Heid was President of Guiness America,
Inc., a marketer and producer of distilled beverages. Ms. Kelly was a partner in
the Chicago office of Sidley & Austin from June 1991 until her election and
prior thereto was an associate at Sidley & Austin.

11
<PAGE> 13

PART II

Item 5. Market for Sara Lee's Common Equity and Related Stockholder Matters.

Sara Lee's securities are traded on the exchanges listed on the cover page
of this Form 10-K Report. As of September 1, 1995, Sara Lee had approximately
93,200 holders of record of its Common Stock. Information about the high and low
sales prices for each full quarterly period and the amount of cash dividends
declared on Sara Lee's Common Stock during the past three fiscal years is set
forth on page F-23 of this Report.

Item 6. Selected Financial Data.

The requisite financial information for Sara Lee for the five fiscal years
ending July 1, 1995, is set forth on pages F-2 and F-3 of this Report. Such
information should be read in conjunction with the consolidated Financial
Statements and related Notes to Financial Statements on pages F-4 through F-23
of this Report.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

This discussion and analysis of financial condition and results of
operations should be read in conjunction with the General Development of
Business on pages 1 through 3, Narrative Description of Business on pages 3
through 7, and the consolidated Financial Statements and related Notes to
Financial Statements on pages F-4 through F-23 of this Report.

RESULTS OF OPERATIONS

Net sales increased 14.1% to $17.7 billion in 1995, from $15.5 billion in
1994, and $14.6 billion in 1993. The increase in 1995 was due to higher unit
volumes and improved product mix, as well as the strengthening of foreign
currencies relative to the U.S. dollar and business acquisitions. Business
acquisitions and unit volume growth, offset in part by the weakening of foreign
currencies relative to the U.S. dollar, were the primary contributing factors in
the 1994 increase. Excluding the effects of foreign currencies and acquisitions
and dispositions, sales dollars increased 6% in 1995 and 3% in 1994.

The gross profit margin was 37.8% in 1995, compared with 37.6% in 1994 and
38.0% in 1993. Improved margins in the corporation's Personal Products and
Packaged Meats and Bakery operations, offset in part by lower Coffee and Grocery
margins, generated the increase in 1995. The decrease in 1994 was attributable
to margin declines in the European hosiery and knit products businesses, offset
in part by improved margins in the Household and Personal Care and Packaged
Meats and Bakery operations.

On June 6, 1994, the corporation announced a restructuring of its worldwide
operations that will ultimately result in the closure of 94 manufacturing and
distribution facilities and the severance of 9,900 employees. This restructuring
reduced 1994 operating income (pretax earnings before interest and corporate
expenses), net income and primary earnings per share by $732 million, $495
million and $1.03, respectively. The 1994 operating income included charges for
restructuring as follows: Personal Products -- $630 million; Household and
Personal Care -- $55 million; Coffee and Grocery -- $25 million; and Packaged
Meats and Bakery -- $22 million.

Of the total provision of $732 million, non-cash charges of $304 million
represent the excess of the net book value of plants to be closed and businesses
to be sold over the estimated sales proceeds. The balance of the restructuring
provision primarily represents cash outflows. During fiscal 1995, cash payments
totaled $173 million. Restructuring actions are expected to be substantially
completed by the close of 1996 and the corporation expects to fund the remaining
costs of the plan from internal sources and available borrowings.

During 1995, 42 manufacturing and distribution facilities were closed and
6,029 employees terminated. Operating costs were lowered in 1995 by $89 million,
primarily as a result of lower plant overhead and labor costs. The corporation
expects the restructuring plan to generate increasing savings in subsequent
years, growing to an annual savings of approximately $250 million in 1998.
Savings from the planned actions will be

12
<PAGE> 14

used for both business-building initiatives and profit improvement. The
restructuring reserve is analyzed in greater detail in the Restructuring
Provision note to the financial statements on pages F-16 and F-17.

Operating income, excluding the restructuring charge, increased 18.5% in
the Packaged Foods segment, while the Packaged Consumer Products segment
increased 15.6% from 1994 results. The increase in the Packaged Foods segment is
primarily attributable to business acquisitions, the strengthening of foreign
currencies relative to the U.S. dollar and cost controls. The increased results
in the Packaged Consumer Products segment were primarily attributable to the
improved profitability of the worldwide hosiery, knit products and intimates
businesses. Business acquisitions and the strengthening of foreign currencies
relative to the U.S. dollar also contributed to the improved results of the
Packaged Consumer Products segment. Excluding the restructuring charge and the
effects of acquisitions and fluctuations in foreign exchange rates, operating
income increased 7% in 1995, and in 1994 was virtually unchanged from 1993.

Net interest expense was $185 million in 1995, compared with $145 million
in 1994 and $82 million in 1993. The 1995 increase was largely due to higher
interest rates, while the increase in 1994 interest expense was a result of
increased financing needs for acquisitions and capital expenditures.

Unallocated corporate expenses are costs not directly attributable to
specific segment operations. Unallocated corporate expenses were $192 million in
1995, $98 million in 1994 and $143 million in 1993. Unallocated corporate
expenses in 1995 were negatively impacted by the costs of hedging foreign
currency movements and expenses associated with minority interests in
subsidiaries. In 1993, unallocated corporate expenses were greater than in 1994
because of costs of hedging foreign currency movements and higher administrative
expenses.

The effective tax rate was 34.1% in 1995, 39.9% in 1994 and 34.9% in 1993.
Excluding the impact of unusual items in 1994, the effective tax rate was 35.0%.
The reduction of the tax rate from 35.0% in 1994 to 34.1% in 1995 was primarily
due to increased earnings in certain foreign jurisdictions that have lower tax
rates than the United States.

In fiscal 1994, the corporation adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." The cumulative effect of this
mandated accounting change was a one-time charge of $35 million, or $.07 per
share.

Excluding the effects of the 1994 restructuring charge and the cumulative
effect of the accounting change, 1995 net income increased 10.3% to $804
million, and earnings per share increased 10.2% to $1.62. In 1994, net income
decreased 71.8% to $199 million and primary earnings per share decreased 73.6%
to $.37. Excluding the effects of the restructuring charge and the cumulative
effect of the accounting change, net income and primary earnings per share in
1994 increased 3.5% and 5.0%, respectively.

During 1995, the corporation acquired several companies for an aggregate
purchase price of $168 million in cash. The principal acquisitions were in the
Packaged Meats and Bakery segment, and included the remaining outstanding shares
of Consolidated Foodservice Companies, a domestic foodservice distribution
business, and the Imperial Meats Group, a European manufacturer and distributor
of processed meats.

During 1994, the corporation acquired several companies for an aggregate
purchase price of $412 million in cash. The principal acquisitions were the
European personal care businesses of SmithKline Beecham (Household and Personal
Care), Kiwi Brands (Pty.) Ltd. and subsidiaries (Household and Personal Care and
Personal Products), and Maglificio Bellia S.p.A. (Personal Products).

During 1993, the corporation acquired several companies for an aggregate
purchase price of $352 million in cash and the issuance of common stock having a
market value of $69 million. The principal acquisitions were BP Nutrition's
Consumer Food Group (Packaged Meats and Bakery) and the Filodoro Group (Personal
Products).

These transactions are discussed in greater detail in the Acquisitions and
Divestments note to the financial statements on page F-12.

13
<PAGE> 15

During the past three years, the general rate of inflation has averaged 2%.
Additionally, approximately 35% of the corporation's inventories are valued on
the last-in, first-out basis. As a result, much of the current cost of
production is reflected in operating results and not retained as a component of
inventory.

FINANCIAL POSITION

Net cash provided from operating activities was $1.4 billion in 1995 as
compared to $839 million in 1994. The favorable 1995 results were due to
improved gross margins, operating efficiencies resulting in part from the 1994
restructuring, and improved working capital management. Net cash provided from
operating activities in 1994 was approximately the same as in 1993.

Net cash used in investment activities was $517 million in 1995, $937
million in 1994 and $967 million in 1993. Lower capital expenditures and
business acquisition costs were the primary reasons for the reduced 1995 cash
use. Capital expenditures were $480 million in 1995, $628 million in 1994 and
$728 million in 1993. A significant portion of these expenditures was for the
reduction of manufacturing and distribution costs, and for expansion of capacity
to meet internal growth. The corporation expects fiscal 1996 capital
expenditures to approximate $600 million. The 1996 expenditures will be funded
from internal sources and available borrowing capacity. The corporation retains
substantial flexibility to adjust its spending levels in order to act upon other
opportunities, including business acquisitions.

During 1995, cash of $853 million was used for financing activities,
primarily to repay $459 million of debt and pay dividends of $358 million.
During 1994, cash of $42 million was used in financing activities. In 1994, a
domestic subsidiary of the corporation issued $200 million of equity securities,
the proceeds of which were used to purchase shares of the corporation's common
stock. During 1993, cash of $248 million was provided from financing activities,
primarily through the utilization of available short-term debt capacity. As of
July 1, 1995, the total-debt-to-total-capital ratio decreased to 33.8% from
38.9% at July 2, 1994. The current capital structure is within the corporation's
objective of maintaining a total-debt-to-total-capital ratio of no more than 40%
over time, and provides sufficient financial flexibility to pursue business
opportunities.

Item 8. Financial Statements and Supplementary Data.

The consolidated Financial Statements and related Notes to Financial
Statements of Sara Lee identified in the Index to Financial Statements appearing
under Item 14, Exhibits, Financial Statement Schedules and Reports on Form 8-K,
are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

Not Applicable.

14
<PAGE> 16

PART III

Item 10. Directors and Executive Officers of Sara Lee.

For information with respect to the executive officers of Sara Lee, see
"Executive Officers of Sara Lee" on page 11 of this Report. For information with
respect to the directors of Sara Lee, see "Election of Directors" on pages 2
through 8 of the Proxy Statement, which is incorporated herein by reference.

Item 11. Executive Compensation.

The information set forth in the Proxy Statement on pages 11 through 19,
under the caption "Executive Compensation," and on pages 19 through 21, under
the caption "Retirement Plans," is incorporated herein by reference; provided,
however, that the Report of the Compensation and Employee Benefits Committee on
Executive Compensation and the Performance Graph contained therein is
specifically excluded and shall not be deemed so incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

(a) No person or "group" (as that term is used in Section 3(d)(3) of the
Securities Exchange Act of 1934) is known by Sara Lee to beneficially own more
than 5% of any class of Sara Lee's voting securities, except that, as of
September 1, 1995, State Street Bank & Trust Company of Boston, as trustee
("Trustee") of the Sara Lee Corporation Employee Stock Ownership Plan ("ESOP"),
held in trust 4,514,427 shares (100% of the outstanding shares) of Sara Lee's
Employee Stock Ownership Plan Convertible Preferred Stock ("ESOP Stock"), of
which 1,168,043 shares (25.87%) were allocated to participant accounts and
3,346,384 shares (74.13%) were unallocated shares, and 9,517 shares of Sara Lee
Common Stock (less than 1% of the outstanding shares of Common Stock), all of
which were allocated to participant accounts. Each ESOP participant is entitled
to direct the Trustee how to vote the shares allocated to such participant's
account, as well as a proportionate share of unallocated or unvoted shares. The
ESOP Stock votes as a class with the Common Stock and each share of ESOP Stock
is entitled to 5.133 votes. Each share of ESOP Stock is convertible into four
shares of Sara Lee Common Stock.

(b) Security ownership by management as outlined on page 9 of the Proxy
Statement under the caption "Ownership of Common Stock and ESOP Stock by
Directors, Nominees and Executive Officers" is incorporated herein by reference.

(c) There are no arrangements known to Sara Lee the operation of which may
at a subsequent date result in a change in control of Sara Lee.

Item 13. Certain Relationships and Related Transactions.

During fiscal 1995, Sara Lee paid fees for legal services performed by the
law firm of Sidley & Austin, to which Newton N. Minow is counsel, and the law
firm of Akin, Gump, Strauss, Hauer & Feld, L.L.P., of which Vernon E. Jordan,
Jr. is a senior partner. Sara Lee paid fees for investment banking services to
The First National Bank of Chicago, of which Richard L. Thomas is Chairman of
the Board and Chief Executive Officer. Each of the above individuals is a
director of Sara Lee.

15
<PAGE> 17

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
(A) 1. FINANCIAL STATEMENTS

Report of Independent Public Accountants F-1
Consolidated Statements of Income -- Years ended July 3, 1993, July 2, 1994
and July 1, 1995 F-4
Consolidated Balance Sheets -- July 3, 1993, July 2, 1994 and July 1, 1995 F-5
Consolidated Statements of Common Stockholders' Equity -- Balances at July
3, 1993, July 2, 1994 and July 1, 1995 F-7
Consolidated Statements of Cash Flows -- Years ended July 3, 1993, July 2,
1994 and July 1, 1995 F-8
Notes to Financial Statements F-9

2. FINANCIAL STATEMENT SCHEDULES

Report of Independent Public Accountants F-24
Schedule II -- Valuation and Qualifying Accounts F-25

(B) REPORTS ON FORM 8-K

None.

(3a) Articles of Restatement of the Charter, Exhibit 4.1 to Registration Statement
as amended No. 33-35760 on Form S-8 dated July 6,
1990, and Exhibit 3(a) to Report on Form
10-K for Fiscal Year ended July 2, 1994
(3b) By-Laws, as amended

(4) Sara Lee, by signing this Report, agrees to furnish the Securities and Exchange
Commission, upon its request, a copy of any instrument which defines the rights of
holders of long-term debt of Sara Lee and all of its subsidiaries for which
consolidated or unconsolidated financial statements are required to be filed, and
which authorizes a total amount of securities not in excess of 10% of the total
assets of Sara Lee and its subsidiaries on a consolidated basis.

(10) 1. 1979 Stock Option Plan, as amended

2. 1981 Stock Option Plan, as amended Exhibit 10 (11) to Report on Form 10-K
for Fiscal Year ended July 1, 1989
3. 1988 Non-Qualified Stock Option Plan,
as amended

4. 1989 Incentive Stock Plan, as amended Exhibit B to 1991 Proxy Statement dated
September 20, 1991

5. Supplemental Benefit Plan, as amended Exhibit 10 (8) to Report on Form 10-K
for Fiscal Year ended June 30, 1990

6. Short-Term (Annual) Incentive Plan
Fiscal Year 1995

7. Accelerated Growth Incentive Plan Exhibit 10 (12) to Report on Form 10-K
Fiscal Years 1990-1994 for Fiscal Year ended June 30, 1990

8. 1991 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended June 29, 1991
</TABLE>

16
<PAGE> 18

<TABLE>
<S> <C> <C> <C>
EXHIBITS PAGE/INCORPORATION BY REFERENCE
9. 1992 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended June 27, 1992

10. FY '93 Non-Qualified Deferred Exhibit 10 (16) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended June 27, 1992

11. 1993 Non-Qualified Deferred Exhibit 10 (19) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended July 3, 1993

12. FY '94 Non-Qualified Deferred Exhibit 10 (20) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended July 3, 1993

13. 1994 Non-Qualified Deferred Exhibit 10 (14) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended July 2, 1994

14. FY '95 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended July 2, 1994

15. Performance-Based Annual Incentive Appendix A, Exhibit 99 to Proxy
Plan Statement dated September 20, 1995

16. 1995 Long-Term Incentive Stock Plan Appendix B, Exhibit 99 to Proxy
Statement dated September 20, 1995

17. 1995 Non-Employee Director Stock Appendix C, Exhibit 99 to Proxy
Plan Statement dated September 20, 1995

18. Non-Qualified Deferred Compensation Exhibit 10 (21) to Report on Form 10-K
Plan for Outside Directors for Fiscal Year ended July 3, 1993

19. Non-Qualified Estate Builder Exhibit 10 (17) to Report on Form 10-K
Deferred Compensation Plan for Fiscal Year ended June 29, 1985

20. Severance Policy for Corporate Exhibit 10 (19) to Report on Form 10-K
Officers for Fiscal Year ended July 2, 1994

21. Stockholder Rights Agreement Exhibit 4 to Report on Form 10-Q for the
quarter ended March 26, 1988

22. Employment Agreement, dated November
9, 1994, between Sara Lee
Corporation and Frank L. Meysman

23. Employment Agreement, dated November
9, 1994, between Sara Lee/DE N.V.
and Frank L. Meysman and attachments
(translated from Dutch)

(11) Computation of Net Income per Common
Share

(12) 1. Computation of Ratio of Earnings to
Fixed Charges

2. Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock
Dividend Requirements

(21) List of Subsidiaries

(23) Consent of Arthur Andersen LLP

(24) Powers of Attorney from those directors
whose names appear on pages 18 and
19 hereof followed by an asterisk

(27) Financial Data Schedules
</TABLE>

17
<PAGE> 19

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, Sara Lee Corporation has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.

September 29, 1995

SARA LEE CORPORATION

By: /s/ JANET LANGFORD KELLY

----------------------------------
Janet Langford Kelly
Senior Vice President,
Secretary and General Counsel

Pursuant to the requirements of the Securities and Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of Sara Lee
Corporation and in the capacities indicated on September 29, 1995.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY
- --------------------------------------------- ---------------------------------------------
<S> <C>
/s/ JOHN H. BRYAN Chairman of the Board, Chief Executive
- --------------------------------------------- Officer and Director
John H. Bryan

/s/ MICHAEL E. MURPHY Vice Chairman, Chief Administrative Officer
- --------------------------------------------- and Director
Michael E. Murphy

/s/ DONALD J. FRANCESCHINI Executive Vice President and Director
- ---------------------------------------------
Donald J. Franceschini

/s/ C. STEVEN MCMILLAN Executive Vice President and Director
- ---------------------------------------------
C. Steven McMillan

/s/ JUDITH A. SPRIESER Senior Vice President and Chief Financial
- --------------------------------------------- Officer
Judith A. Sprieser

/s/ WAYNE R. SZYPULSKI Vice President and Controller
- ---------------------------------------------
Wayne R. Szypulski

* Director
- ---------------------------------------------
Paul A. Allaire

* Director
- ---------------------------------------------
Frans H.J.J. Andriessen

* Director
- ---------------------------------------------
Duane L. Burnham

* Director
- ---------------------------------------------
Charles W. Coker
</TABLE>

18
<PAGE> 20

<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
* Director
- ---------------------------------------------
Willie D. Davis
* Director
- ---------------------------------------------
Allen F. Jacobson
* Director
- ---------------------------------------------
Vernon E. Jordan, Jr.
* Director
- ---------------------------------------------
James L. Ketelsen
* Director
- ---------------------------------------------
Hans B. van Liemt
* Director
- ---------------------------------------------
Joan D. Manley
* Director
- ---------------------------------------------
Newton N. Minow
* Director
- ---------------------------------------------
Sir Arvi H. Parbo A.C.
* Director
- ---------------------------------------------
Rozanne L. Ridgway
* Director
- ---------------------------------------------
Richard L. Thomas
</TABLE>

*By Janet Langford Kelly as Attorney-in-Fact pursuant to Powers of Attorney
executed by the directors listed above, which Powers of Attorney have been filed
with the Securities and Exchange Commission.

/s/ JANET LANGFORD KELLY

------------------------------------
Janet Langford Kelly
As Attorney-in-Fact

19
<PAGE> 21

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders,
SARA LEE CORPORATION:

We have audited the accompanying consolidated balance sheets of SARA LEE
CORPORATION (a Maryland corporation) AND SUBSIDIARIES as of July 1, 1995, July
2, 1994, and July 3, 1993, and the related consolidated statements of income,
common stockholders' equity, and cash flows for each of the three years in the
period ended July 1, 1995. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on these consolidated 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Sara Lee
Corporation and Subsidiaries as of July 1, 1995, July 2, 1994, and July 3, 1993,
and the results of their operations and their cash flows for each of the three
years in the period ended July 1, 1995 in conformity with generally accepted
accounting principles.

As explained in the Notes to Financial Statements, the Corporation adopted
the requirements of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," effective July 4, 1993.

/s/ Arthur Andersen LLP

Chicago, Illinois,
July 31, 1995.

F-1
<PAGE> 22

SARA LEE CORPORATION AND SUBSIDIARIES

FINANCIAL SUMMARY

<TABLE>
<CAPTION>
COMPOUND YEARS ENDED
GROWTH RATE ------------------------
-------------------- JULY 1, JULY 2,
5 YEARS 10 YEARS 1995 1994<F1>
------- -------- -------- -----------
(DOLLARS IN MILLIONS
EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net sales.......................................... 8.8% 8.1% $ 17,719 $ 15,536
Operating income................................... 11.2 12.9 1,596 632
Income before income taxes......................... 11.3 13.4 1,219 389
Net income......................................... 11.3 14.6 804 199
Effective tax rate................................. -- -- 34.1% 39.9%
- ------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Total assets....................................... 10.2% 14.5% $ 12,431 $ 11,665
Long-term debt..................................... -- -- 1,817 1,496
Redeemable preferred stock......................... -- -- 334 331
Common stockholders' equity........................ 11.4 14.8 3,939 3,326
Return on average common stockholders' equity...... -- -- 21.4% 5.1%
- ------------------------------------------------------------------------------------------------------
PER COMMON SHARE <F5>
Net income -- primary.............................. 11.0% 13.7% $ 1.62 $ .37
Average shares outstanding (in millions)...... -- -- 480 480
Net income -- fully diluted........................ 11.0 13.3 1.57 .36
Average shares outstanding (in millions)...... -- -- 499 498
Dividends <F6>...................................... 10.6 14.3 .67 .63
Book value at year-end............................. 10.5 13.5 8.20 6.92
Market value at year-end........................... 14.4 18.1 28.50 20.63
- ------------------------------------------------------------------------------------------------------
OTHER INFORMATION
Capital expenditures............................... (4.2)% 6.9% $ 480 $ 628
Depreciation and amortization...................... 11.5 14.7 606 568
Media advertising expense.......................... 6.2 7.6 422 371
Total advertising and promotion expense............ 10.6 10.9 1,675 1,498
Common stockholders of record...................... -- -- 93,400 95,600
Number of employees................................ -- -- 149,100 145,900
- ------------------------------------------------------------------------------------------------------
<FN>

<F1> In 1994, a restructuring provision reduced operating income and income
before income taxes by $732 and net income by $495. In addition, in 1994,
the cumulative effect of adopting a mandated change in the method of
accounting for income taxes reduced net income by $35.

<F2> 53-week year.

<F3> Fiscal 1992 income before income taxes includes a $412 gain on sale of
business offset by a $190 restructuring provision. These transactions
increased net income by $140.

<F4> Fiscal 1989 income before income taxes includes an $87 gain on sales of
businesses offset by a $55 restructuring provision. These transactions
increased net income by $11.

<F5> Restated for the 2-for-1 stock splits in fiscal 1993, 1990 and 1987.

<F6> Fiscal 1992 includes a $.12 special dividend.

</FN>
</TABLE>
The Notes to Financial Statements should be read in conjunction with the
Financial Summary.

F-2
<PAGE> 23

SARA LEE CORPORATION AND SUBSIDIARIES

FINANCIAL SUMMARY

<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------------------------------------
JULY 3, JUNE 27, JUNE 29, JUNE 30, JULY 1, JULY 2, JUNE 27, JUNE 28, JUNE 29,
1993<F2> 1992<F3> 1991 1990 1989<F4> 1988<F2> 1987 1986 1985
------- -------- -------- -------- ------- -------- -------- -------- --------
(DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net sales................. $14,580 $ 13,243 $12,381 $11,606 $11,718 $10,424 $9,155 $7,938 $8,117
Operating income.......... 1,307 1,207 1,085 938 847 753 632 514 474
Income before income
taxes................... 1,082 1,174 830 713 639 513 448 356 345
Net income................ 704 761 535 470 410 325 267 223 206
Effective tax rate........ 34.9% 35.2% 35.5% 34.1% 35.8% 36.7% 40.4% 37.2% 40.3%
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
Total assets.............. $10,862 $ 9,989 $ 8,122 $ 7,636 $ 6,523 $ 5,012 $4,192 $3,503 $3,216
Long-term debt............ 1,164 1,389 1,399 1,524 1,488 893 633 634 464
Redeemable preferred
stock................... 357 351 344 338 182 225 75 75 75
Common stockholders'
equity.................. 3,551 3,382 2,550 2,292 1,915 1,575 1,416 1,155 991
Return on average common
stockholders' equity.... 19.6% 24.7% 20.6% 20.9% 22.7% 21.1% 20.5% 20.4% 20.5%
- ---------------------------------------------------------------------------------------------------------------------------------
PER COMMON SHARE<F5>
Net income -- primary..... $ 1.40 $ 1.54 $ 1.08 $ .96 $ .88 $ .71 $ .59 $ .51 $ .45
Average shares
outstanding (in
millions)........... 485 476 464 460 454 447 447 433 443
Net income -- fully
diluted................. 1.37 1.50 1.05 .93 .87 .71 .59 .50 .45
Average shares
outstanding (in
millions)........... 504 497 485 480 456 447 447 434 444
Dividends<F6>.............. .56 .61 .46 .41 .35 .29 .24 .20 .18
Book value at year-end.... 7.31 7.05 5.48 4.97 4.21 3.56 3.20 2.70 2.32
Market value at
year-end................ 24.25 24.81 20.19 14.56 13.47 9.22 11.63 8.91 5.39
- ---------------------------------------------------------------------------------------------------------------------------------
OTHER INFORMATION
Capital expenditures...... $ 728 $ 509 $ 522 $ 595 $ 541 $ 449 $ 287 $ 222 $ 247
Depreciation and
amortization............ 522 472 394 351 280 251 202 165 153
Media advertising
expense................. 392 325 288 313 303 253 203 195 202
Total advertising and
promotion expense....... 1,455 1,294 1,067 1,013 925 801 637 587 594
Common stockholders of
record.................. 88,100 75,400 69,400 64,800 56,500 52,400 50,000 44,900 42,600
Number of employees....... 138,000 128,000 113,400 107,800 101,800 85,700 92,400 87,000 92,800
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>

<F2> 53-week year.

<F3> Fiscal 1992 income before income taxes includes a $412 gain on sale of
business offset by a $190 restructuring provision. These transactions
increased net income by $140.

<F4> Fiscal 1989 income before income taxes includes an $87 gain on sales of
businesses offset by a $55 restructuring provision. These transactions
increased net income by $11.

<F5> Restated for the 2-for-1 stock splits in fiscal 1993, 1990 and 1987.

<F6> Fiscal 1992 includes a $.12 special dividend.

</FN>

</TABLE>
The Notes to Financial Statements should be read in conjunction with the
Financial Summary.

F-3
<PAGE> 24

SARA LEE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------
JULY 1, JULY 2, JULY 3,
1995 1994 1993
------- ------- -------
(IN MILLIONS EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
NET SALES..................................................... $17,719 $15,536 $14,580
------- ------- -------
Cost of sales................................................. 11,023 9,700 9,039
Selling, general and administrative expenses.................. 5,292 4,570 4,377
Interest expense.............................................. 243 188 162
Interest income............................................... (58) (43) (80)
Restructuring provision....................................... -- 732 --
------- ------- -------
16,500 15,147 13,498
------- ------- -------
Income before income taxes.................................... 1,219 389 1,082
Income taxes.................................................. 415 155 378
------- ------- -------
NET INCOME BEFORE ACCOUNTING CHANGE........................... 804 234 704
Cumulative effect of accounting change........................ -- (35) --
------- ------- -------
NET INCOME.................................................... 804 199 704
Preferred dividends, net of tax............................... (28) (24) (26)
------- ------- -------
Net income available for common stockholders.................. $ 776 $ 175 $ 678
======= ======= =======
NET INCOME PER COMMON SHARE -- PRIMARY
Before cumulative effect of accounting change............... $ 1.62 $ .44 $ 1.40
Cumulative effect of accounting change...................... -- (.07) --
------- ------- -------
$ 1.62 $ .37 $ 1.40
======= ======= =======
Average shares outstanding.................................. 480 480 485
======= ======= =======
NET INCOME PER COMMON SHARE -- FULLY DILUTED
Before cumulative effect of accounting change............... $ 1.57 $ .43 $ 1.37
Cumulative effect of accounting change...................... -- (.07) --
------- ------- -------
$ 1.57 $ .36 $ 1.37
======= ======= =======
Average shares outstanding.................................. 499 498 504
======= ======= =======
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.

F-4
<PAGE> 25

SARA LEE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JULY 1, JULY 2, JULY 3,
1995 1994 1993
------- ------- -------
(DOLLARS IN MILLIONS EXCEPT SHARE
DATA)
<S> <C> <C> <C>
ASSETS
Cash and equivalents...................................... $ 202 $ 189 $ 325
Trade accounts receivable, less allowances of $192 in
1995, $164 in 1994 and $154 in 1993..................... 1,653 1,472 1,171
Inventories
Finished goods.......................................... 1,782 1,603 1,413
Work in process......................................... 423 361 322
Materials and supplies.................................. 625 603 545
------- ------- -------
2,830 2,567 2,280
Other current assets...................................... 243 241 200
------- ------- -------
Total current assets...................................... 4,928 4,469 3,976
------- ------- -------
Investments in associated companies....................... 109 142 205
Trademarks and other assets............................... 506 492 518
Property
Land.................................................... 136 131 129
Buildings and improvements.............................. 1,879 1,746 1,570
Machinery and equipment................................. 3,462 3,077 2,804
Construction in progress................................ 206 283 339
------- ------- -------
5,683 5,237 4,842
Accumulated depreciation................................ 2,719 2,337 1,964
------- ------- -------
Property, net............................................. 2,964 2,900 2,878
Intangible assets, net.................................... 3,924 3,662 3,285
------- ------- -------
$12,431 $11,665 $10,862
======= ======= =======
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
balance sheets.

F-5
<PAGE> 26

SARA LEE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JULY 1, JULY 2, JULY 3,
1995 1994 1993
------- ------- -------
(DOLLARS IN MILLIONS EXCEPT SHARE
DATA)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable............................................. $ 559 $ 1,281 $ 843
Accounts payable.......................................... 1,436 1,253 1,151
Accrued liabilities
Payroll and employee benefits........................... 693 668 429
Advertising and promotion............................... 278 313 282
Taxes other than payroll and income..................... 218 206 179
Income taxes............................................ 66 13 50
Other................................................... 1,373 1,103 909
Current maturities of long-term debt...................... 221 82 426
------- ------- -------
Total current liabilities................................. 4,844 4,919 4,269
------- ------- -------
Long-term debt............................................ 1,817 1,496 1,164
Deferred income taxes..................................... 273 290 512
Other liabilities......................................... 705 783 705
Minority interest in subsidiaries......................... 519 520 304
Preferred stock (authorized 13,500,000 shares; no par
value)
Convertible adjustable: Issued and
outstanding -- 607,000 shares in 1993; redeemed in
1994 at $50 per share................................ -- -- 30
Auction: Issued and outstanding -- 3,000 shares;
redeemable at $100,000 per share..................... 300 300 300
ESOP convertible: Issued and outstanding -- 4,570,153
shares in 1995, 4,678,857 shares in 1994 and
4,755,217 shares in 1993............................. 331 339 345
Unearned deferred compensation.......................... (297) (308) (318)
Common stockholders' equity
Common stock: (authorized 600,000,000 shares;
$1.33 1/3 par value)
Issued and outstanding -- 480,656,301 shares in 1995,
480,765,240 shares in 1994 and 485,378,368 shares in
1993................................................. 640 641 647
Capital surplus......................................... 67 76 66
Retained earnings....................................... 3,252 2,799 3,056
Translation adjustments................................. 3 (170) (194)
Unearned restricted stock issued for future services.... (23) (20) (24)
------- ------- -------
Total common stockholders' equity......................... 3,939 3,326 3,551
------- ------- -------
$12,431 $11,665 $10,862
======= ======= =======
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
balance sheets.

F-6
<PAGE> 27

SARA LEE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
UNEARNED
COMMON CAPITAL RETAINED TRANSLATION RESTRICTED
TOTAL STOCK SURPLUS EARNINGS ADJUSTMENTS STOCK
------ ------ ------- -------- ----------- ----------
(DOLLARS IN MILLIONS EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT JUNE 27, 1992................ $3,382 $320 $ 306 $2,649 $ 126 $(19)
Net income............................... 704 -- -- 704 -- --
Cash dividends
Common ($.56 per share)................ (270) -- -- (270) -- --
Convertible adjustable preferred
($2.75 per share)................... (2) -- -- (2) -- --
Auction preferred ($2,860.33 per
share).............................. (8) -- -- (8) -- --
ESOP convertible preferred
($5.4375 per share)................. (26) -- -- (26) -- --
Two-for-one stock split.................. -- 322 (322) -- -- --
Stock issuances
Business acquisitions.................. 69 3 66 -- -- --
Stock option and benefit plans......... 66 6 60 -- -- --
Restricted stock, less amortization of
$4.................................. 4 -- 8 -- -- (4)
Reacquired shares........................ (77) (4) (73) -- -- --
Translation adjustments.................. (320) -- -- -- (320) --
ESOP tax benefit......................... 10 -- -- 10 -- --
Other.................................... 19 -- 21 (1) -- (1)
- ----------------------------------------------------------------------------------------------------------
BALANCES AT JULY 3, 1993................. 3,551 647 66 3,056 (194) (24)
Net income............................... 199 -- -- 199 -- --
Cash dividends
Common ($.625 per share)............... (298) -- -- (298) -- --
Auction preferred ($2,732.33 per
share).............................. (8) -- -- (8) -- --
ESOP convertible preferred
($5.4375 per share)................. (26) -- -- (26) -- --
Stock issuances
Stock option and benefit plans......... 69 6 63 -- -- --
Restricted stock, less amortization of
$4.................................. 4 -- 2 -- -- 2
Reacquired shares........................ (224) (12) (82) (130) -- --
Translation adjustments.................. 24 -- -- -- 24 --
ESOP tax benefit......................... 10 -- -- 10 -- --
Other.................................... 25 -- 27 (4) -- 2
- ----------------------------------------------------------------------------------------------------------
BALANCES AT JULY 2, 1994................. 3,326 641 76 2,799 (170) (20)
Net income............................... 804 -- -- 804 -- --
Cash dividends
Common ($.67 per share)................ (320) -- -- (320) -- --
Auction preferred ($4,188.00 per
share).............................. (13) -- -- (13) -- --
ESOP convertible preferred
($5.4375 per share)................. (25) -- -- (25) -- --
Stock issuances
Stock option and benefit plans......... 57 4 53 -- -- --
Restricted stock, less amortization of
$7.................................. 7 -- 13 -- -- (6)
Reacquired shares........................ (93) (5) (88) -- -- --
Translation adjustments.................. 173 -- -- -- 173 --
ESOP tax benefit......................... 10 -- -- 10 -- --
Other.................................... 13 -- 13 (3) -- 3
------ ------ ------ ------ ------ -----
BALANCES AT JULY 1, 1995................. $3,939 $640 $ 67 $3,252 $ 3 $(23)
====== ====== ====== ====== ====== =====
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.

F-7
<PAGE> 28

SARA LEE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
JULY 1, JULY 2, JULY 3,
1995 1994 1993
------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................... $ 804 $ 199 $ 704
Adjustments for noncash charges included in net income
Depreciation and amortization of intangibles................ 606 568 522
Restructuring provision..................................... -- 732 --
Cumulative effect of accounting change...................... -- 35 --
Increase (decrease) in deferred taxes....................... 88 (222) 27
Other noncash credits, net.................................. (118) (109) (117)
Changes in current assets and liabilities, net of businesses
acquired and sold
(Increase) decrease in trade accounts receivable......... (38) (162) 57
(Increase) in inventories................................ (138) (224) (124)
(Increase) decrease in other current assets.............. 18 (29) (40)
Increase (decrease) in accounts payable.................. 81 20 (10)
Increase (decrease) in accrued liabilities............... 70 31 (169)
------- ------- ------
Net cash from operating activities.......................... 1,373 839 850
------- ------- ------
INVESTMENT ACTIVITIES
Purchases of property and equipment........................... (480) (628) (728)
Acquisitions of businesses.................................... (168) (412) (352)
Returns from associated companies............................. 43 48 5
Dispositions of businesses.................................... 12 -- 31
Sales of property............................................. 73 49 51
Other......................................................... 3 6 26
------- ------- ------
Net cash used in investment activities...................... (517) (937) (967)
------- ------- ------
FINANCING ACTIVITIES
Issuances of common stock..................................... 57 69 66
Purchases of common stock..................................... (93) (224) (77)
Redemption of preferred stock................................. -- (30) --
Issuance of equity securities by subsidiary................... -- 200 --
Borrowings of long-term debt.................................. 573 385 256
Repayments of long-term debt.................................. (289) (438) (300)
Short-term borrowings (repayments), net....................... (743) 328 609
Payments of dividends......................................... (358) (332) (306)
------- ------- ------
Net cash (used in) from financing activities................ (853) (42) 248
------- ------- ------
Effect of changes in foreign exchange rates on cash........... 10 4 (4)
------- ------- ------
Increase (decrease) in cash and equivalents................... 13 (136) 127
Cash and equivalents at beginning of year..................... 189 325 198
------- ------- ------
Cash and equivalents at end of year........................... $ 202 $ 189 $ 325
======= ======= ======
</TABLE>

The accompanying Notes to Financial Statements are an integral part of these
statements.

F-8
<PAGE> 29

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

(dollars in millions except per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The consolidated financial statements include all majority-owned
subsidiaries. All significant intercompany transactions of consolidated
subsidiaries are eliminated. Acquisitions recorded as purchases are included in
the income statement from the date of acquisition.

INVESTMENTS IN ASSOCIATED COMPANIES

Investments in associated companies consist of minority positions in
several companies whose activities are similar to those of the corporation's
operating divisions. The equity method of accounting is used when the
corporation's ownership exceeds 20% and it exercises significant influence over
the investee. Other minority positions are recorded at cost.

FISCAL YEAR

The corporation's fiscal year ends on the Saturday closest to June 30.
Fiscal 1995 and 1994 were 52-week years, while 1993 was a 53-week year. Unless
otherwise stated, references to years relate to fiscal years.

INTANGIBLE ASSETS

The excess of cost over the fair market value of tangible net assets and
trademarks of acquired businesses is amortized on a straight-line basis over the
periods of expected benefit, which range from 10 years to 40 years. Accumulated
amortization of intangible assets amounted to $710 at July 1, 1995, $572 at July
2, 1994 and $457 at July 3, 1993.

Subsequent to its acquisition, the corporation continually evaluates
whether later events and circumstances have occurred that indicate the remaining
estimated useful life of an intangible asset may warrant revision or that the
remaining balance of an intangible asset may not be recoverable. When factors
indicate that an intangible asset should be evaluated for possible impairment,
the corporation uses an estimate of the related business' undiscounted future
cash flows over the remaining life of the asset in measuring whether the
intangible asset is recoverable.

INVENTORY VALUATION

Inventories are valued at the lower of cost (in 1995, approximately 35% at
last-in, first-out [LIFO] and the remainder at first-in, first-out [FIFO]) or
market. Inventories recorded at LIFO were approximately $18 at July 1, 1995, $24
at July 2, 1994 and $38 at July 3, 1993, lower than if they had been valued at
FIFO. Inventory cost includes material and conversion costs.

PROPERTY

Property is stated at cost, and depreciation is computed using principally
the straight-line method at annual rates of 2% to 20% for buildings and
improvements, and 4% to 33% for machinery and equipment. Additions and
improvements that substantially extend the useful life of a particular asset and
interest costs incurred during the construction period of major properties are
capitalized. Repair and maintenance costs are charged to expense. Upon sale, the
cost and related accumulated depreciation are removed from the accounts.

F-9
<PAGE> 30

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

FOREIGN OPERATIONS

Foreign currency-denominated assets and liabilities are translated into
U.S. dollars at the exchange rates existing at the balance sheet date.
Translation adjustments resulting from fluctuations in the exchange rates are
recorded as a separate component of common stockholders' equity. Income and
expense items are translated at the average exchange rates during the respective
periods.

FINANCIAL INSTRUMENTS

The corporation uses financial instruments in its management of foreign
currency and interest rate exposures. Financial instruments are not held or
issued for trading purposes. Non-U.S. dollar financing transactions generally
are effective as hedges of long-term investments or intercompany loans in the
corresponding currency. Foreign currency gains and losses on the hedges of
long-term investments are recorded as foreign currency translation adjustments
included in stockholders' equity. Gains and losses related to hedges of
intercompany loans offset the gains and losses on intercompany loans and are
recorded in net income. Interest rate exchange agreements are effective at
modifying the corporation's interest rate exposures. Net interest is accrued as
either interest receivable or payable with the offset recorded in interest
expense. The company also uses short-term forward exchange contracts for hedging
purposes. Realized and unrealized gains and losses on these instruments are
deferred and recorded in the carrying amount of the related hedged asset,
liability or firm commitment.

NET INCOME PER COMMON SHARE

Primary net income per common share is based on the average number of
common shares outstanding and common share equivalents and net income reduced
for preferred dividends, net of the tax benefits related to the ESOP convertible
preferred stock dividends. The fully diluted net income per share calculation
assumes conversion of the ESOP convertible preferred stock into common stock and
further adjusts net income for the additional ESOP compensation expense, net of
tax benefits, resulting from the assumed replacement of the ESOP convertible
preferred stock dividends with common stock dividends.

INCOME TAXES

Income taxes are provided on the income reported in the financial
statements, regardless of when such taxes are payable. U.S. income taxes are
provided on undistributed earnings of foreign subsidiaries that are intended to
be remitted to the corporation. If the permanently reinvested earnings of
foreign subsidiaries were remitted, the U.S. income taxes due under current tax
law would not be material.

ADVERTISING

The costs of advertising are generally expensed in the year in which the
advertising first takes place.

COMMON STOCK

Under the corporation's stock option plans, executive employees may be
granted options to purchase common stock at the market value on the date of
grant. Under the corporation's nonqualified stock option plans, an active
employee will receive a replacement stock option equal to the number of shares
surrendered upon a stock-for-stock exercise. The exercise price of the
replacement option will be 100% of the market value at the date of exercise of
the original option and will remain exercisable for the remaining term of the
original option.

F-10
<PAGE> 31

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

At July 1, 1995, 3,428,746 common shares were available for granting;
options had been granted on 15,947,144 shares at prices ranging from $8.30 to
$31.94 per share. During 1995, options on 4,798,160 shares were granted at
prices ranging from $19.63 to $28.68; options for 1,403,375 shares were
exercised at prices ranging from $5.38 to $28.07; and options for 466,051 shares
expired or were canceled. Options exercisable at year-end were: 1995-10,111,475;
1994-9,548,858; and 1993-10,425,115.

Employees may purchase up to twenty-five thousand dollars market value of
common stock annually at 85% of the market value. At July 1, 1995, 10,044,613
shares of common stock were available for issuance under this stock purchase
plan.

The corporation has restricted stock plans that provide for awards of
common stock to executive employees, subject to forfeiture if employment
terminates prior to the end of prescribed periods. The market value of shares
awarded under the plans is recorded as unearned compensation. The unearned
amounts are amortized to compensation expense over the periods the restrictions
lapse.

Effective December 1, 1992, the corporation declared a two-for-one stock
split in the form of a 100% stock dividend.

Changes in outstanding common shares for the past three years were:

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Beginning balances.................................. 480,765,240 485,378,368 239,862,390
Stock issuances
Business acquisitions............................. -- -- 1,924,411
Stock option and benefit plans.................... 3,157,809 4,413,148 4,276,753
Restricted stock plans............................ 367,650 87,000 238,700
Two-for-one stock split........................... -- -- 241,988,568
Stock purchased/retired............................. (3,932,400) (9,098,100) (2,922,000)
Other............................................... 298,002 (15,176) 9,546
----------- ----------- -----------
Ending balances..................................... 480,656,301 480,765,240 485,378,368
=========== =========== ===========
</TABLE>

PREFERRED STOCK

Six series of 500 shares each of nonvoting auction preferred stock are
outstanding. Dividends are cumulative and are determined every 49 days through
specific auction procedures.

The convertible preferred stock sold to the corporation's Employee Stock
Ownership Plan (ESOP) is redeemable at the option of the corporation at any time
after December 15, 2001. Each share is currently convertible into four shares of
the corporation's common stock and is entitled to 5.133 votes. This stock has a
7.5% annual dividend rate, payable semiannually, and has a liquidation value of
$72.50 plus accrued but unpaid dividends. The purchase of the preferred stock by
the ESOP was funded with notes guaranteed by the corporation. The loan is
included in long-term debt and is offset in the corporation's Consolidated
Balance Sheets under the caption Unearned Deferred Compensation. Each year, the
corporation makes contributions that, with the dividends on the preferred stock
held by the ESOP, will be used to pay loan interest and principal. Shares are
allocated to participants based upon the ratio of the current year's debt
service to the sum of the total principal and interest payments over the life of
the loan. Plan expense is recognized in accordance with methods prescribed by
the FASB.

F-11
<PAGE> 32

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

ESOP-related expenses amounted to $12 in 1995, $11 in 1994, and $11 in
1993. Payments to the ESOP were $38 in 1995, $38 in 1994 and $35 in 1993.
Principal and interest payments by the ESOP amounted to $12 and $26 in 1995, $11
and $27 in 1994, and $7 and $28 in 1993.

The corporation has a Preferred Stock Purchase Rights Plan. The Rights are
exercisable 10 days after certain events involving the acquisition of 20% or
more of the corporation's outstanding common stock or the commencement of a
tender or exchange offer for at least 25% of the common stock. Upon the
occurrence of such an event, each Right, unless redeemed by the board of
directors, entitles the holder to receive common stock equal to twice the
exercise price of the Right. The exercise price is $140 multiplied by the number
of preferred shares held. There are 3,000,000 shares of preferred stock reserved
for issuance upon exercise of the Rights.

The corporation redeemed for cash its cumulative convertible adjustable
preferred stock on July 26, 1993 for $30.

MINORITY INTEREST IN SUBSIDIARIES

Minority interest in subsidiaries primarily consists of preferred equity
securities issued by subsidiaries of the corporation. No gain or loss was
recognized as a result of the issuance of these securities and the corporation
owned substantially all of the voting equity of the subsidiaries both before and
after the transactions.

In 1994, a domestic subsidiary of the corporation issued $200 of preferred
equity securities. The securities provide the holder a rate of return based upon
a specified inter-bank borrowing rate, are redeemable in 1998 and may be called
at any time by the subsidiary. The subsidiary has the option of redeeming the
securities with either cash, debt or equity of the corporation. The subsidiary
used the cash proceeds received to purchase the common stock of the corporation
on the open market.

Minority interest in subsidiaries also includes $295 of preferred equity
securities issued by a wholly owned foreign subsidiary of the corporation. The
securities provide a rate of return based upon specified inter-bank borrowing
rates. The securities are redeemable in 1997 in exchange for common shares of
the issuer, which may then be put to the corporation for preferred stock. The
subsidiary may call the securities at any time.

ACQUISITIONS AND DIVESTMENTS

During 1995, the corporation acquired several companies for an aggregate
purchase price of $168 in cash. The principal acquisitions were the remaining
outstanding shares of the Consolidated Foodservice Companies, a domestic
foodservice distribution business, and the Imperial Meats Group, a European
manufacturer and distributor of processed meats.

During 1994, the corporation acquired several companies for an aggregate
purchase price of $412 in cash. The principal acquisitions were the European
personal care businesses of SmithKline Beecham; Kiwi Brands (Pty.) Ltd. and
subsidiaries, a group of South African companies that manufacture and market
personal care products and hosiery; and Maglificio Bellia S.p.A., a manufacturer
and marketer of intimate apparel in Italy.

During 1993, the corporation acquired several companies for an aggregate
purchase price of $352 in cash and the issuance of 1,924,411 shares of common
stock having a market value of $69. The principal acquisitions were BP
Nutrition's Consumer Food Group, a manufacturer and marketer of packaged meat
products in Europe, and the Filodoro Group, a manufacturer and marketer of
hosiery in Italy.

No material divestments were made during the last three years.

F-12
<PAGE> 33

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

INTEREST RATE AND CURRENCY SWAPS

To manage interest rate and foreign exchange risk and to lower its cost of
borrowing, the corporation has entered into interest rate and currency swaps.
The currency swaps effectively hedge long-term Dutch guilder-and Swiss
franc-denominated investments and French franc-denominated intercompany loans.
The weighted average maturities of interest rate and currency swaps as of July
1, 1995 were 2.6 years and 1.2 years, respectively.

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
INTEREST
RATES<F2>
NOTIONAL ----------------
PRINCIPAL<F1> RECEIVE PAY
------------ ------- ---
<S> <C> <C> <C>
INTEREST RATE SWAPS
1995 Receive variable -- pay fixed............................... $200 6.1% 5.7%
Receive fixed -- pay variable............................... 45 7.6 5.9

1994 Receive variable -- pay fixed............................... 150 4.3 8.8

1993 Receive variable -- pay fixed............................... 160 3.3 8.8
Receive fixed -- pay variable............................... 1 9.0 4.1

CURRENCY SWAPS
1995 Receive variable -- pay fixed............................... $175 6.4% 7.3%
Receive fixed -- pay fixed.................................. 194 6.4 6.6
Receive variable -- pay variable............................ 320 7.9 6.9

1994 Receive variable -- pay fixed............................... 175 4.1 7.3
Receive fixed -- pay fixed.................................. 90 5.1 7.3
Receive variable -- pay variable............................ 281 6.6 6.2

1993 Receive variable -- pay fixed............................... 175 3.5 7.3
Receive fixed -- pay fixed.................................. 90 5.1 7.3
Receive variable -- pay variable............................ 298 11.1 4.4

- ---------------
<FN>

<F1> The notional principal is the amount used for the calculation of interest
payments which are exchanged over the life of the swap transaction and is
equal to the amount of foreign currency or dollar principal exchanged at
maturity.
<F2> The weighted average interest rates are as of the respective balance sheet
dates.

</FN>
</TABLE>

FORWARD EXCHANGE CONTRACTS

The corporation uses forward exchange contracts to reduce the effect of
fluctuating foreign currencies on short-term foreign currency-denominated
intercompany transactions, firm third-party product sourcing commitments and
other known foreign currency exposures.

The table below summarizes by major currency the contractual amounts of the
corporation's forward exchange contracts in U.S. dollars. The bought amounts
represent the net U.S. dollar equivalent of commitments to purchase foreign
currencies, and the sold amounts represent the net U.S. dollar equivalent of
commitments to sell foreign currencies. The foreign currency amounts have been
translated into a U.S. dollar

F-13
<PAGE> 34

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

equivalent value using the exchange rate at the reporting date. Forward exchange
contracts mature at the anticipated cash requirement date of the hedged
transaction, generally within one year.

<TABLE>
<CAPTION>
BOUGHT (SOLD)
--------------------------
FOREIGN CURRENCY 1995 1994 1993
- ------------------------------------------------------------------ ---- ---- ----
<S> <C> <C> <C>
French franc...................................................... (352) (242) (402)
Italian lira...................................................... (254) (151) 1
Belgian franc..................................................... (230) (52) (7)
Dutch guilder..................................................... (236) 73 (165)
German mark....................................................... 36 (174) (37)
Other............................................................. (139) (223) 117
</TABLE>

At July 1, 1995, the deferred unrealized gains and losses on forward
exchange contracts were not material to the financial position of the
corporation.

CONCENTRATIONS OF CREDIT RISK

A large number of major international financial institutions are
counterparties to the corporation's financial instruments. The corporation
enters into financial instrument agreements only with those counterparties
meeting very stringent credit standards, limiting the amount of agreements or
contracts it enters into with any one party and, where legally available,
executing master netting agreements. These positions are continuously monitored.
While the corporation may be exposed to credit losses in the event of
nonperformance by these counterparties, it does not anticipate losses, because
of these control procedures.

Trade accounts receivable due from highly leveraged customers were $49 at
July 1, 1995, $52 at July 2, 1994 and $41 at July 3, 1993. The financial
position of these businesses has been considered in determining allowances for
doubtful accounts.

GUARANTEES

The corporation had third-party guarantees outstanding, aggregating
approximately $31 at July 1, 1995, $28 at July 2, 1994 and $22 at July 3, 1993.
These guarantees relate primarily to financial arrangements to support various
suppliers of the corporation, and are secured by the inventory and fixed assets
of suppliers.

FAIR VALUES

The carrying amounts of cash and equivalents, trade receivables, notes
payable, accounts payable, and auction preferred shares approximated fair value
as of July 1, 1995, July 2, 1994 and July 3, 1993. The fair values of the
remaining financial instruments recognized on the Consolidated Balance Sheets of
the corporation at the respective year-end were:

<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Long-term debt, including current portion.................... $2,102 $1,549 $1,645
ESOP convertible preferred stock............................. 567 443 530
</TABLE>

The fair value of the corporation's long-term debt, including the current
portion, is estimated using discounted cash flows based on the corporation's
current incremental borrowing rates for similar types of borrowing arrangements.
The fair value of the ESOP preferred shares is based upon the contracted
conversion into the corporation's common stock.

F-14
<PAGE> 35

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

The fair value of the corporation's interest rate swaps, currency swaps,
and forward exchange contracts approximate their carrying value in the financial
statements as of July 1, 1995, July 2, 1994 and July 3, 1993. The fair value of
these instruments was not material to the financial position of the corporation.

LONG-TERM DEBT

<TABLE>
<CAPTION>
INTEREST RATE RANGE MATURITY 1995 1994 1993
------------------- --------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
U.S. dollar
obligations: ESOP debt...................... 8.176% 2004 $ 311 $ 323 $ 334
Notes and debentures........... 4.40-9.70 1996-2016 1,165 876 548
Revenue bonds.................. 4.10-6.10 2002-2024 36 23 25
Zero coupon notes.............. 10.00-14.25 2014-2015 14 12 11
Eurodollar bonds............... -- -- 150
Various other obligations...... 7 8 17
------ ------ ------
1,533 1,242 1,085
------ ------ ------
Foreign currency
obligations: Swiss franc.................... 4.75 1998 111 96 223
Dutch guilder.................. 6.00-6.50 1998 259 123 177
Various other obligations...... 135 117 105
------ ------ ------
505 336 505
------ ------ ------
Total long-term debt.............................. 2,038 1,578 1,590
Less current maturities........................... 221 82 426
------ ------ ------
$1,817 $1,496 $1,164
====== ====== ======
</TABLE>

The ESOP debt is guaranteed by the corporation.

The zero coupon notes are net of unamortized discounts of $110 in 1995,
$112 in 1994 and $113 in 1993. Principal payments of $19 and $105 are due in
2014 and 2015, respectively.

Payments required on long-term debt during the years ending in 1996 through
2000 are $221, $132, $419, $86 and $241, respectively.

The corporation made cash interest payments of $236, $203, and $161 in
1995, 1994 and 1993, respectively.

Rental expense under operating leases amounted to approximately $222 in
1995, $207 in 1994 and $182 in 1993. Future minimum annual fixed rentals
required during the years ending in 1996 through 2000 under noncancelable
operating leases having an original term of more than one year are $113, $95,
$81, $68 and $62, respectively. The aggregate obligation subsequent to 2000 is
$137.

The corporation is contingently liable for long-term leases on properties
operated by others. The minimum annual rentals under these leases average
approximately $5 for the years ending in 1996-2000 and $2 in 2001-2005. Amounts
thereafter are not material.

CREDIT FACILITIES

The corporation has numerous credit facilities available, including
revolving credit agreements totaling $1,920 that had an annual fee of 0.07% as
of July 1, 1995. These agreements support commercial paper

F-15
<PAGE> 36

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

borrowings. Subsequent to July 1, 1995 the corporation reduced its revolving
credit facility to $1,635 in anticipation of lower borrowing needs. Selected
data on the corporation's short-term obligations follow:

<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Maximum period-end borrowings.................................... $2,300 $1,998 $1,484
Average borrowings during the year............................... 1,969 1,833 1,067
Weighted average interest rate during the year................... 6.6% 4.2% 5.3%
Weighted average interest rate at year-end....................... 6.9 5.0 5.0
</TABLE>

CONTINGENCIES

The corporation is a party to several pending legal proceedings and claims,
and environmental actions by governmental agencies. Although the outcome of such
items cannot be determined with certainty, the corporation's general counsel and
management are of the opinion that the final outcome should not have a material
effect on the corporation's results of operations or financial position.

RESTRUCTURING PROVISION

The composition of the corporation's restructuring reserves is as follows:

<TABLE>
<CAPTION>
WRITEDOWN OF RECOGNITION OF
PROPERTY AND CURTAILMENT
INVESTMENTS LOSS AND RESTRUCTURING
ORIGINAL TO NET SPECIAL FOREIGN RESERVES
RESTRUCTURING REALIZABLE TERMINATION CASH EXCHANGE AS OF
RESERVE VALUE BENEFITS PAYMENTS IMPACTS JULY 1, 1995
------------- ------------ -------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Anticipated losses
associated with disposal
of land, buildings and
improvements, and
machinery and
equipment................. $289 $(289) $ -- $ -- $-- $ --
Anticipated expenditures to
close and dispose of idle
facilities -- includes $33
of noncancelable lease
obligations............... 112 -- -- (30) -- 82
Anticipated severance
benefits.................. 239 -- -- (99) -- 140
Pension benefits associated
with severed employee
group..................... 33 -- (33) -- -- --
Anticipated losses
associated with the
disposal of certain
businesses................ 59 (15) -- (44) -- --
---- ----- ---- ----- --- ----
732 (304) (33) (173) -- 222
Foreign exchange impacts.... -- -- -- -- 20 20
---- ----- ---- ----- --- ----
Total restructuring
reserves.................. $732 $(304) $(33) $(173) $20 $242
==== ===== ==== ===== === ====
</TABLE>

In the fourth quarter of 1994, the corporation provided for the cost of
restructuring its worldwide operations, which will result in the closure of 94
manufacturing and distribution facilities and the severance of 9,900 employees.
The restructuring provision reduced 1994 income before income taxes, net income
and net

F-16
<PAGE> 37

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

income per common share by $732, $495 and $1.03, respectively. As of July 2,
1994, no material actions contemplated in the restructuring plan had taken
place.

During 1995, 42 manufacturing and distribution facilities were closed and
6,029 employees terminated. Operating costs were lowered in 1995 by $89,
primarily as a result of lower plant overhead and labor costs. The corporation
expects the restructuring plan to generate increasing savings in subsequent
years, growing to an annual savings of approximately $250 in 1998. Savings from
the planned actions will be used both for business-building initiatives and
profit improvement. As of July 1, 1995, $166 of the remaining reserves were
classified as current liabilities and $76 as noncurrent.

RETIREMENT PLANS

The corporation has noncontributory defined benefit plans covering certain
of its domestic employees. The benefits under these plans are primarily based on
years of service and compensation levels. The plans are funded in conformity
with the requirements of applicable government regulations. The plans' assets
consist principally of marketable equity securities, corporate and government
debt securities and real estate.

The corporation's foreign subsidiaries have plans for employees consistent
with local practices.

The corporation also sponsors defined contribution pension plans at several
of its subsidiaries. Contributions are determined as a percent of each covered
employee's salary.

Certain employees are covered by union-sponsored, collectively bargained,
multi-employer pension plans. Contributions are determined in accordance with
the provisions of negotiated labor contracts and generally are based on the
number of hours worked.

The annual pension expense for all plans was:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Defined benefit plans................................................... $43 $31 $30
Defined contribution plans.............................................. 11 11 13
Multi-employer plans.................................................... 4 4 4
--- --- ---
Total pension expense................................................... $58 $46 $47
=== === ===
</TABLE>

The components of the defined benefit plan expenses were:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- -----
<S> <C> <C> <C>
Benefits earned by employees..................................... $ 60 $ 52 $ 50
Interest on projected benefit obligations........................ 105 92 90
Actual investment return on plan assets.......................... (47) (99) (131)
Net amortization and deferral.................................... (75) (14) 21
---- ---- -----
Net pension expense.............................................. $ 43 $ 31 $ 30
==== ==== =====
</TABLE>

The increase in the 1995 defined benefit plan expense is primarily
attributable to lower asset returns, the strengthening of foreign currencies
relative to the U.S. dollar, and benefit increases in certain foreign plans.

F-17
<PAGE> 38

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

The status of defined benefit plans at the respective year-end was:

<TABLE>
<CAPTION>
1995 1994 1993
------ ------ -------
<S> <C> <C> <C>
Fair market value of plan assets................................ $1,592 $1,420 $ 1,284
------ ------ -------
Actuarial present value of benefits for services rendered:
Accumulated benefits based on salaries to date:
Vested..................................................... 1,281 1,144 989
Nonvested.................................................. 47 38 42
Additional benefits based on estimated future salary levels... 204 217 222
------ ------ -------
Projected benefit obligations................................. 1,532 1,399 1,253
------ ------ -------
Excess of plan assets over projected benefit obligations........ 60 21 31
Unamortized net transitional asset.............................. (17) (26) (33)
Unrecognized net gain........................................... (3) (8) (62)
Unrecognized prior service cost................................. 81 88 89
------ ------ -------
Prepaid pension liability recognized on the Consolidated Balance
Sheets........................................................ $ 121 $ 75 $ 25
====== ====== =======
</TABLE>

Weighted average rates used in determining net pension expense and related
obligations for defined benefit plans were:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Discount rate........................................................... 7.5% 7.5% 7.6%
Rate of compensation increase........................................... 5.2 5.2 5.3
Long-term rate of return on plan assets................................. 8.3 8.3 8.8
</TABLE>

The corporation adopted Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other than Pensions"
(SFAS 106), for its domestic retiree benefit plans in 1994. Under SFAS 106, the
corporation accrues the estimated cost of retiree health care and life insurance
benefits during the employees' active service periods. The corporation's
previous method of accounting for postretirement benefits other than pensions
was similar to that required by SFAS 106, and as of the start of 1994, the
accumulated benefit obligation for domestic employees had been accrued.

The corporation provides health care and life insurance benefits to certain
domestic retired employees, their covered dependents and beneficiaries.
Generally, employees who have attained age 55 and who have rendered 10 years of
service are eligible for these postretirement benefits. Certain retirees are
required to contribute to plans in order to maintain coverage. The components of
the expense for these plans were:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Benefits earned by employees................................................. $ 5 $ 4
Interest on projected benefit obligations.................................... 11 11
--- ---
Net postretirement benefit expense........................................... $16 $15
=== ===
</TABLE>

The domestic postretirement benefit expense was $18 in 1993.

F-18
<PAGE> 39

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

The status of domestic postretirement benefit plans at the respective
year-end was:

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Actuarial present value of benefits for services rendered:
Retirees.................................................................. $ 90 $ 87
Fully eligible active participants........................................ 15 19
Other active participants................................................. 43 48
---- ----
Accumulated postretirement benefit obligations.............................. 148 154
Fair market value of plan assets............................................ 2 2
---- ----
Accumulated postretirement benefit obligations in excess of plan assets..... 146 152
Unrecognized net transitional asset......................................... 14 15
Unrecognized net gain (loss)................................................ 14 (4)
Unrecognized prior service cost............................................. (1) (1)
---- ----
Postretirement benefit obligations recognized on Consolidated Balance
Sheets.................................................................... $173 $162
==== ====
</TABLE>

Actuarial assumptions used to determine the accumulated postretirement
benefit obligation include a discount rate of 7.75% for 1995 and 1994. The
assumed health care cost trend rate was 14% for 1995, decreasing to 7% by the
year 2002 and remaining at that level thereafter. These trend rates reflect the
corporation's prior experience and management's expectation that future rates
will decline. Increasing the assumed health care cost trend rates by one
percentage point in each year would increase the accumulated postretirement
benefit obligation as of July 1, 1995 by 10% and the post-retirement benefit
expense for 1995 by 12%.

Employees outside the United States are covered principally by
government-sponsored plans, and the cost of company-provided plans is not
material. The corporation is required to adopt SFAS 106 for its plans outside
the United States in 1996.

INCOME TAXES

Effective July 4, 1993, the corporation adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The
cumulative effect as of July 4, 1993 of adopting SFAS 109 was a one-time charge
of $35, or $.07 per share, primarily due to adjusting deferred taxes from
historical to current rates. Financial statements for years prior to 1994 have
not been restated to reflect the adoption of this standard.

F-19
<PAGE> 40

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

The provisions for income taxes computed by applying the U.S. statutory
rate to income before taxes as reconciled to the actual provisions were:

<TABLE>
<CAPTION>
1995 1994 1993
---------------- ---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Income before provision for income taxes
United States................................ $ 648 53.1% $218 56.0% $ 615 56.8%
Foreign...................................... 571 46.9 171 44.0 467 43.2
------ ----- ---- ----- ------ -----
$1,219 100.0% $389 100.0% $1,082 100.0%
====== ===== ==== ===== ====== =====
Taxes at U.S. statutory rates.................. $ 427 35.0% $136 35.0% $ 368 34.0%
States taxes, net of federal benefit........... 16 1.3 24 6.2 22 2.0
Difference between U.S. and foreign rates...... (67) (5.5) (34) (8.8) (31) (2.8)
Nondeductible amortization..................... 50 4.1 46 11.7 44 4.0
Other, net..................................... (11) (0.8) (17) (4.2) (25) (2.3)
------ ------ ---- ----- ------ -----
Taxes at effective worldwide tax rates......... $ 415 34.1% $155 39.9% $ 378 34.9%
====== ===== ==== ===== ====== =====
</TABLE>

Current and deferred tax provisions were:

<TABLE>
<CAPTION>
1995 1994 1993
------------------ ------------------ ------------------
CURRENT DEFERRED CURRENT DEFERRED CURRENT DEFERRED
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
United States................................. $154 $39 $200 $(144) $175 $(7)
Foreign....................................... 150 47 143 (61) 159 17
State......................................... 23 2 34 (17) 33 1
---- --- ---- ----- ---- ---
$327 $88 $377 $(222) $367 $11
==== === ==== ===== ==== ===
</TABLE>

Following are the components of the deferred tax provisions occurring as a
result of transactions being reported in different years for financial and tax
reporting:

<TABLE>
<CAPTION>
1995 1994 1993
----- ----- ----
<S> <C> <C> <C>
Depreciation.......................................................... $ 31 $ 22 $ 1
Unremitted earnings of foreign subsidiaries........................... -- -- 20
Inventory valuation methods........................................... (4) 2 (1)
Restructuring reserves................................................ 64 (230) --
Other, net............................................................ (3) (16) (9)
---- ----- ----
$ 88 $(222) $ 11
==== ===== ====

Cash payments for income taxes........................................ $279 $ 295 $304
==== ===== ====
</TABLE>

F-20
<PAGE> 41

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

The deferred tax (assets) liabilities at the respective year-end were as
follows:

<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Deferred tax (assets):
Restructuring reserves..................................................... $(166) $(230)
Reserves not deductible until paid......................................... (213) (243)
Pension, postretirement and other employee benefits........................ (8) (4)
Net operating loss and other tax carryforwards............................. (3) (15)
Deferred tax liabilities:
Property, plant and equipment.............................................. 265 230
Other...................................................................... 13 62
----- -----
Net deferred tax (assets).................................................... $(112) $(200)
===== =====
</TABLE>

INDUSTRY SEGMENT INFORMATION

The corporation's business segments are described in the Narrative
Description of Business on pages 3 through 7.

<TABLE>
<CAPTION>
PACKAGED CONSUMER
PACKAGED FOODS PRODUCTS
-------------------- ------------------------
PACKAGED COFFEE HOUSEHOLD
MEATS AND PERSONAL AND INTER-
AND BAKERY GROCERY PRODUCTS PERSONAL CARE CORPORATE SEGMENT TOTAL
---------- ------- -------- ------------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1995
Sales<F1>.................... $6,110 $2,777 $7,151 $1,691 $ -- $ (10) $17,719
Pretax income................ 383 374 658 181 (377)<F2> -- 1,219
Assets....................... 2,062 1,986 6,686 1,391 306 <F3> -- 12,431
Depreciation and
amortization............... 129 82 294 79 22 -- 606
Capital expenditures......... 116 66 262 35 1 -- 480
1994
Sales<F1>.................... $5,472 $2,090 $6,449 $1,530 $ -- $ (5) $15,536
Pretax income (loss)<F4>..... 318 274 (71) 111 (243)<F2> -- 389
Assets....................... 1,662 1,776 6,535 1,335 357<F3> -- 11,665
Depreciation and
amortization............... 108 74 289 71 26 -- 568
Capital expenditures......... 108 69 408 41 2 -- 628
1993
Sales<F1>.................... $5,148 $2,058 $6,098 $1,279 $ -- $ (3) $14,580
Pretax income................ 287 292 602 126 (225)<F2> -- 1,082
Assets....................... 1,560 1,629 6,209 859 605<F3> -- 10,862
Depreciation and
amortization............... 99 80 265 55 23 -- 522
Capital expenditures......... 99 87 485 42 15 -- 728

- ---------------
<FN>
<F1> Includes sales between segments. Such sales are at transfer prices that are
equivalent to market value.

<F2> Includes net interest expense of $185 in 1995, $145 in 1994 and $82 in 1993
incurred primarily in the United States to finance and support consolidated
operations.

<F3> Principally cash and equivalents and investments in associated companies
and certain fixed assets.

<F4> Includes provisions for restructuring reported in the 1994 Consolidated
Statement of Income, as follows: Packaged Meats and Bakery $22; Coffee and
Grocery $25; Personal Products $630; and Household and Personal Care $55.
</FN>
</TABLE>

Industry segment sales and operating income applicable to businesses sold
prior to July 1, 1995 were not material.

F-21
<PAGE> 42

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

GEOGRAPHIC AREA INFORMATION

<TABLE>
<CAPTION>
ASIA-
WESTERN/ PACIFIC/
UNITED CENTRAL LATIN
STATES EUROPE AMERICA OTHER CORPORATE INTER-AREA TOTAL
------- -------- ------- ----- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1995
Sales<F1>...................... $10,659 $5,484 $1,160 $439 $ -- $(23) $17,719
Pretax income.................. 880 564 101 51 (377)<F2> -- 1,219
Assets<F3>..................... 5,729 5,038 999 359 306 <F4> -- 12,431
- ----------------------------------------------------------------------------------------------------------------
1994
Sales<F1>...................... $ 9,782 $4,433 $1,006 $348 $ -- $(33) $15,536
Pretax income<F5>.............. 330 193 65 44 (243)<F2> -- 389
Assets<F3>..................... 5,558 4,459 984 307 357 <F4> -- 11,665
- ----------------------------------------------------------------------------------------------------------------
1993
Sales<F1>...................... $ 9,423 $4,114 $801 $257 $ -- $(15) $14,580
Pretax income.................. 763 422 94 28 (225)<F2> -- 1,082
Assets<F3>..................... 5,364 3,880 858 155 605 <F4> -- 10,862
- ----------------------------------------------------------------------------------------------------------------

<FN>
<F1> Includes sales between geographic areas. Such sales are at transfer prices
that are equivalent to market value.

<F2> Includes net interest expense of $185 in 1995, $145 in 1994 and $82 in 1993
incurred primarily in the United States to finance and support consolidated
operations.

<F3> The tangible net assets of foreign operations included in the accompanying
Consolidated Balance Sheets were $892 at July 1, 1995, $594 at July 2, 1994
and $651 at July 3, 1993.

<F4> Principally cash and equivalents and investments in associated companies and
certain fixed assets.

<F5> Includes provisions for restructuring reported in the 1994 Consolidated
Statement of Income, as follows: United States $483; Western/Central Europe
$200; Asia-Pacific/Latin America $42; and Other $7.

</FN>
</TABLE>
F-22
<PAGE> 43

SARA LEE CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(dollars in millions except per share data)

QUARTERLY FINANCIAL DATA
(unaudited)

<TABLE>
<CAPTION>
QUARTER
----------------------------------
FIRST SECOND THIRD FOURTH
------ ------ ------ ------
<S> <C> <C> <C> <C>
1995
Net sales.................................................... $4,290 $4,648 $4,193 $4,588
Gross profit................................................. 1,618 1,764 1,565 1,749
Net income................................................... 165 252 166 221
Per common share
Net income................................................. .33 .51 .33 .45
Cash dividends declared.................................... .16 .17 .17 .17
Market price -- high....................................... 23.38 26.00 27.75 29.00
-- low........................................ 19.38 22.38 24.25 26.25
- -------------------------------------------------------------------------------------------------
1994
Net sales.................................................... $3,796 $4,010 $3,664 $4,066
Gross profit................................................. 1,412 1,533 1,388 1,503
Net income (loss)............................................ 120<F1> 236 152 (309)<F2>
Per common share
Net income (loss).......................................... .24<F1> .48 .30 (.65)<F2>
Cash dividends declared.................................... .145 .16 .16 .16
Market price -- high....................................... 26.63 28.25 26.00 23.75
-- low........................................ 21.00 23.38 21.00 20.13
- -------------------------------------------------------------------------------------------------
1993
Net sales.................................................... $3,583 $3,840 $3,308 $3,849
Gross profit................................................. 1,355 1,493 1,259 1,434
Net income................................................... 142 220 152 190
Per common share<F3>
Net income................................................. .28 .44 .30 .38
Cash dividends declared.................................... .125 .145 .145 .145
Market price -- high....................................... 29.19 32.44 31.88 28.13
-- low........................................ 24.75 27.63 27.00 23.25
- -------------------------------------------------------------------------------------------------
<FN>
<F1> Includes cumulative effect of accounting change of $35.

<F2> Includes provision for restructuring of $495.

<F3> Restated for the 2-for-1 stock split in December 1992.
</FN>
</TABLE>

F-23
<PAGE> 44

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Management
of SARA LEE CORPORATION:

We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Sara Lee Corporation included in this
Form 10-K, and have issued our report thereon dated July 31, 1995. Our audit was
made for the purpose of forming an opinion on the basic consolidated financial
statements taken as a whole. The supplemental schedule II is the responsibility
of the Corporation's management and is presented for purposes of complying with
the Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This supplemental schedule has been subjected
to the auditing procedures applied in the audit of the basic consolidated
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

/s/ Arthur Andersen LLP

Chicago, Illinois,
July 31, 1995.

F-24
<PAGE> 45

SCHEDULE II

SARA LEE CORPORATION AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JULY 3, 1993, JULY 2, 1994, AND JULY 1, 1995
(IN MILLIONS)

<TABLE>
<CAPTION>
BALANCE AT PROVISION WRITE-OFFS<F1>/ OTHER BALANCE
BEGINNING CHARGED TO COSTS ALLOWANCES ADDITIONS AT END
OF YEAR AND EXPENSES TAKEN (DEDUCTIONS) OF YEAR
---------- ---------------- -------------- ------------ -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED JULY 3, 1993:
Allowances for bad debts.......... $101 $ 23 $ (19) $ (6) $ 99
Other receivable allowances....... 53 86 (97) 13 55
---- ---- ------ ---- -----
Total.......................... $154 $109 $ (116) $ 7 $ 154
==== ==== ====== ==== =====
FOR THE YEAR ENDED JULY 2, 1994:
Allowances for bad debts.......... $ 99 $ 30 $ (21) $ 1 $ 109
Other receivable allowances....... 55 78 (81) 3 55
---- ---- ------ ---- -----
Total.......................... $154 $108 $ (102) $ 4 $ 164
==== ==== ====== ==== =====
FOR THE YEAR ENDED JULY 1, 1995:
Allowances for bad debts.......... $109 $ 42 $ (30) $ 6 $ 127
Other receivable allowances....... 55 122 (115) 3 65
---- ---- ------ ---- -----
Total.......................... $164 $164 $ (145) $ 9 $ 192
==== ==== ====== ==== =====

- ---------------
<FN>
<F1> Net of collections on accounts previously written off.
</FN>
</TABLE>

F-25
<PAGE> 46

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBITS PAGE/INCORPORATION BY REFERENCE
- -------- -----------------------------------------
<S> <C> <C>
(3a) Articles of Restatement of the Charter, Exhibit 4.1 to Registration Statement No.
as amended 33-35760 on Form S-8 dated July 6, 1990,
and Exhibit 3(a) to Report on Form 10-K
for Fiscal Year ended July 2, 1994
(3b) By-Laws, as amended
(4) Sara Lee, by signing this Report, agrees to furnish the Securities and Exchange
Commission, upon its request, a copy of any instrument which defines the rights of
holders of long-term debt of Sara Lee and all of its subsidiaries for which
consolidated or unconsolidated financial statements are required to be filed, and
which authorizes a total amount of securities not in excess of 10% of the total
assets of Sara Lee and its subsidiaries on a consolidated basis.
(10) 1. 1979 Stock Option Plan, as amended
2. 1981 Stock Option Plan, as amended Exhibit 10 (11) to Report on Form 10-K
for Fiscal Year ended July 1, 1989
3. 1988 Non-Qualified Stock Option Plan,
as amended
4. 1989 Incentive Stock Plan, as amended Exhibit B to 1991 Proxy Statement, dated
September 20, 1991
5. Supplemental Benefit Plan, as amended Exhibit 10 (8) to Report on Form 10-K for
Fiscal Year ended June 30, 1990
6. Short-Term (Annual) Incentive Plan
Fiscal Year 1995
7. Accelerated Growth Incentive Plan Exhibit 10 (12) to Report on Form 10-K
Fiscal Years 1990-1994 for Fiscal Year ended June 30, 1990
8. 1991 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended June 29, 1991
9. 1992 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended June 27, 1992
10. FY '93 Non-Qualified Deferred Exhibit 10 (16) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended June 27, 1992
11. 1993 Non-Qualified Deferred Exhibit 10 (19) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended July 3, 1993
12. FY '94 Non-Qualified Deferred Exhibit 10 (20) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended July 3, 1993
13. 1994 Non-Qualified Deferred Exhibit 10 (14) to Report on Form 10-K
Compensation Plan (Base Salary) for Fiscal Year ended July 2, 1994
14. FY '95 Non-Qualified Deferred Exhibit 10 (15) to Report on Form 10-K
Compensation Plan (Annual Bonus) for Fiscal Year ended July 2, 1994
15. Performance-Based Annual Incentive Appendix A, Exhibit 99 to Proxy Statement
Plan dated September 20, 1995
16. 1995 Long-Term Incentive Stock Plan Appendix B, Exhibit 99 to Proxy Statement
dated September 20, 1995
17. 1995 Non-Employee Director Stock Plan Appendix C, Exhibit 99 to Proxy Statement
dated September 20, 1995
</TABLE>
<PAGE> 47

<TABLE>
<CAPTION>
EXHIBITS PAGE/INCORPORATION BY REFERENCE
- -------- -----------------------------------------
<S> <C>
18. Non-Qualified Deferred Compensation Exhibit 10 (21) to Report on Form 10-K
Plan for Outside Directors for Fiscal Year ended July 3, 1993

19. Non-Qualified Estate Builder Deferred Exhibit 10 (17) to Report on Form 10-K
Compensation Plan for Fiscal Year ended June 29, 1985

20. Severance Policy for Corporate Exhibit 10 (19) to Report on Form 10-K
Officers for Fiscal year ended July 2, 1994

21. Stockholder Rights Agreement Exhibit 4 to Report on Form 10-Q for the
quarter ended March 26, 1988

22. Employment Agreement, dated November
9, 1994, between Sara Lee Corporation
and Frank L. Meysman

23. Employment Agreement, dated November
9, 1994, between Sara Lee/DE N.V. and
Frank L. Meysman and attachments
(translated from Dutch)

(11) Computation of Net Income per Common
Share

(12) 1. Computation of Ratio of Earnings to
Fixed Charges

2. Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock
Dividend Requirements

(21) List of Subsidiaries

(23) Consent of Arthur Andersen LLP

(24) Powers of Attorney from those directors
whose names appear on pages 18 and 19
hereof followed by an asterisk

(27) Financial Data Schedules
</TABLE>

<PAGE> 1
EXHIBIT 3b

BY-LAWS OF SARA LEE CORPORATION,

AS AMENDED ON JUNE 29, 1995
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 -- Meetings of Stockholders ............................... 1

Section 1 -- The Annual Meeting ................................ 1

Section 2 -- Special Meetings .................................. 1

Section 3 -- Place of Meetings ................................. 1

Section 4 -- Presiding Officer ................................. 1

Section 5 -- Notice of Meeting ................................. 1

Section 6 -- Stock Ownership Record Date ....................... 1

Section 7 -- Quorum ............................................ 1

Section 8 -- Voting ............................................ 1

Section 9 -- Organization of Meetings .......................... 2

ARTICLE II -- Board of Directors .................................... 2

Section 1 -- Function and Number of Directors................... 2

Section 2 -- Election .......................................... 2

Section 3 -- Chairman .......................................... 2

Section 4 -- Vacancies ......................................... 2

Section 5 -- Annual Meeting .................................... 2

Section 6 -- Regular Meetings .................................. 2

Section 7 -- Special Meetings .................................. 2

Section 8 -- Quorum; Voting .................................... 2

Section 9 -- Informal Actions .................................. 2

</TABLE>

2
<PAGE> 3
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Section 10 -- Participation in Meetings
by Conference Telephone ............................ 3

Section 11 -- Compensation ....................................... 3

ARTICLE III -- Committees of the Board of Directors ................... 3

Section 1 -- Standing Committees and Membership .................. 3

Section 2 -- Selection; Term; Removal ............................ 3

Section 3 -- Meetings; Quorum; Minutes ........................... 3

Section 4 -- Executive Committee ................................. 3

Section 5 -- Finance Committee ................................... 4

Section 6 -- Limitations of Authority of Executive Committee
and Finance Committee ............................... 4

Section 7 -- Audit Committee ..................................... 4

Section 8 -- Compensation and
Employee Benefits Committee ......................... 5

Section 9 -- Board Affairs Committee ............................. 6

Section 10 -- Employee and Public
Responsibility Committee ........................... 6

Section 11 -- Authority to
Designate Committees ............................... 6

ARTICLE IV -- Officers ................................................ 7

Section 1 -- Officers ............................................ 7

Section 2 -- Election and Qualification .......................... 7

</TABLE>

<PAGE> 4
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Section 3 -- The Chairman of the Board ............................... 7

Section 4 -- The President ........................................... 7

Section 5 -- The Vice Chairman and Vice Presidents ................... 7

Section 6 -- Secretary ............................................... 7

Section 7 -- Treasurer ............................................... 8

Section 8 -- Controller .............................................. 8

Section 9 -- Assistant Secretaries and
Assistant Treasurers .................................... 8

ARTICLE V -- Indemnification of Directors,
Officers, Employees and Agents ............................... 8

Section 1 -- Right to Indemnification ................................ 8

Section 2 -- Time for Payment Enforcement ............................ 8

Section 3 -- Standard of Conduct ..................................... 8

Section 4 -- General ................................................. 9

Section 5 -- Effective Time .......................................... 9

Section 6 -- Further Action .......................................... 9

ARTICLE VI -- Fiscal Year and Dividends ................................... 9

Section 1 -- Fiscal Year ............................................. 9

Section 2 -- Dividends ............................................... 9

ARTICLE VII -- Auditors ................................................... 9
</TABLE>

4
<PAGE> 5
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE VIII -- Corporation Documents ................................... 10

Section 1 -- Execution of Negotiable Instruments .................. 10

Section 2 -- Execution of Documents ............................... 10

ARTICLE IX -- Seal ...................................................... 10

ARTICLE X -- Capital Stock .............................................. 10

Section 1 -- Execution of Stock Certificates ...................... 10

Section 2 -- Transfers ............................................ 10

Section 3 -- Registration ......................................... 10

Section 4 -- Stock Ownership Record Date .......................... 10

Section 5 -- Recognition of Holder ................................ 11

Section 6 -- Replacement Certificates ............................. 11

ARTICLE XI -- Waiver of Notice .......................................... 11

ARTICLE XII -- Making, Altering or Repealing By-Law ..................... 11

Section 1 -- Power Vested in Board of Directors ................... 11

Section 2 -- Scope of By-Laws ..................................... 11
</TABLE>

5
<PAGE> 6
ARTICLE I

MEETINGS OF STOCKHOLDERS

SECTION 1. THE ANNUAL MEETING. An annual meeting of the stockholders
of the Corporation for the election of directors and the transaction of any
other business as may properly come before the meeting shall be held on the
last Thursday in October in each year at a time fixed by the Board of Directors
(or if such day is a legal holiday, then on the next succeeding business day
which is not a holiday). Any business of the Corporation may be transacted at
any such annual meeting without being specifically designated in the notice of
such meeting, except such business as is specifically required by the Maryland
General Corporation Law to be stated in such notice. The meeting may be
adjourned from time to time and place to place until its business is completed.

SECTION 2. SPECIAL MEETINGS. Special meetings of the stockholders
shall be held upon the call of the Chairman of the Board, President or a
majority of the Board of Directors. The Secretary of the Corporation shall
call a special meeting of the stockholders (i) whenever requested in writing to
do so by the stockholders of the Corporation entitled to cast at least
one-fourth of all of the votes entitled to be cast at the meeting and (ii) on
the payment to the Corporation by such requesting stockholders of the reasonably
estimated costs of preparing and mailing a notice of the meeting. A request
for a special meeting shall state the purpose or purposes of such meeting and
the matters proposed to be acted on at it.

SECTION 3. PLACE OF MEETINGS. All meetings of the stockholders shall
be held at such place within the United States as shall be designated by the
Board of Directors.

SECTION 4. PRESIDING OFFICER. The Chairman of the Board, or in his
absence or at his request, and in the following succession, the President, the
Chairman of the Executive Committee, any Executive Vice President, any Senior
Vice President, or any Vice President, shall preside at any meeting of the
stockholders.

SECTION 5. NOTICE OF MEETING. Not less than 10 days nor more than 40
days before the date of each stockholders' meeting, the Secretary shall give to
each stockholder entitled to vote at and notice of such meeting, written or
printed notice stating the time and place of the meeting, and in the case of a
special meeting, the purpose or purposes for which the meeting is called,
either by mail or by presenting it to him personally or by leaving it at his
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage thereon prepaid,
addressed to the stockholder at his address as it appears on the records of the
Corporation.

SECTION 6. STOCK OWNERSHIP RECORD DATE. The stock ownership record
date for the determination of the stockholders entitled to notice of and to
vote at any meeting of stockholders and for other purposes shall be the date
fixed by the Board of Directors pursuant to Article X, Section 4 of these
By-Laws.

SECTION 7. QUORUM. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast a majority of the votes
entitled to be cast at such meeting shall constitute a quorum.

SECTION 8. VOTING. Except as otherwise provided by the Certificate of
Incorporation of the Corporation or Maryland

1
<PAGE> 7
General Corporation Law, at all meetings of the stockholders, each stockholder
entitled to vote at such meeting shall be entitled to (i) one vote upon each
matter submitted to a vote at such meeting for each share of common stock of
the Corporation owned of record by such stockholder and (ii) such voting
rights, if any, as are provided in the applicable Articles Supplementary with
respect to any series of preferred stock of the Corporation owned of record by
such stockholder. Stockholders may vote either in person or by proxy. Every
proxy shall be in writing and dated and shall be signed by the stockholder or
his duly authorized attorney-in-fact, but need not be sealed, witnessed or
acknowledged, and shall be filed with the Secretary of the Corporation at or
prior to the meeting. No proxy shall be valid after 11 months from its date,
unless otherwise provided in the proxy. A majority of the votes cast at any
meeting of stockholders at which a quorum is present shall be sufficient to
take or authorize action upon any matter which may properly come before the
meeting, unless more than a majority is required by the Certificate of
Incorporation of the Corporation or Maryland General Corporation Law.

SECTION 9. ORGANIZATION OF MEETINGS. The order of business and all
other matters of procedure at every meeting of the stockholders shall be
determined by the presiding officer.

ARTICLE II

BOARD OF DIRECTORS

SECTION 1. FUNCTION AND NUMBER OF DIRECTORS. The business and affairs
of the Corporation shall be managed under the direction of a Board of
Directors. The majority of the entire Board of Directors may, from time to
time, alter the number of directors as set by the Certificate of Incorporation
of the Corporation or by the Board of Directors; provided, however, that the
number of Directors comprising the Board of Directors shall be no less than
three or more than 25. The tenure of office of any director shall not be
affected by any alteration in the number of Directors.

SECTION 2. ELECTION. The Directors shall be elected at the annual
meeting of the stockholders and shall hold office until the next annual meeting
of the stockholders or until their successors are elected and qualify.

SECTION 3. CHAIRMAN. The Chief Executive Officer of the Corporation
shall serve as Chairman. The Chairman shall preside at all meetings of the
Board of Directors, and, in his absence, the President, and, in his absence, a
director designated by the Board of Directors.

SECTION 4. VACANCIES. Any vacancy on the Board of Directors for any
cause other than by reason of an increase in the number of Directors, may be
filled by a majority of the remaining Directors, though less than a quorum.
Any vacancy on the Board of Directors by reason of an increase in the number of
Directors may be filled by action of a majority of the entire Board of
Directors. A Director elected by the Board of Directors to fill a vacancy
shall be elected to hold office until the next annual meeting of stockholders
or until his successor is elected and qualifies.

SECTION 5. ANNUAL MEETING. An annual meeting of the Board of
Directors shall be held on the same day as the annual meeting of stockholders
for the purpose of electing the officers of the Corporation, the appointment
of the committees of the Board of Directors and for the transaction of any
other business.

2
<PAGE> 8
SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such times as may be fixed from time to time by the
Board of Directors, without call or notice.

SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, or the President, upon
their own motions, or by the Secretary upon the written request of a majority
of the Directors. At least two days' written notice shall be given of all
special meetings.

SECTION 8. QUORUM; VOTING. At any and all meetings of the Board of
Directors, the greater of (a) one-third (calculated in case of a fraction to
the next larger whole number) of the duly elected and qualified Directors or
(b) two Directors shall constitute a quorum for the transaction of business;
but if at any meeting of the Board of Directors there be less than a quorum
present, the Directors at the meeting may, without further notice, adjourn the
same, from time to time, for a period not exceeding 10 days at any one time,
until a quorum is in attendance. A majority of such quorum shall decide any
questions that may come before the meeting.

SECTION 9. INFORMAL ACTIONS. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee thereof may be
taken without a meeting, if a written consent to such action is signed by all
the members of the Board of Directors or such committee, as the case may be,
and filed with the minutes of proceedings of the Board of Directors or
committee.

SECTION 10. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE.
Members of the Board of Directors or of any committee thereof may participate
in a meeting of the Board of Directors or any committee by means of conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other. Such participation shall constitute presence
in person at such meeting.

SECTION 11. COMPENSATION. Directors shall be paid such compensation,
including retainers and fees for attendance at meetings of the Board of
Directors and its committees, as shall be determined from time to time by the
vote of the Board of Directors. No compensation for service as a director
shall be paid to officers or employees of the Corporation or any subsidiary of
the Corporation.

ARTICLE III

COMMITTEES OF THE BOARD OF DIRECTORS

SECTION 1. STANDING COMMITTEES AND MEMBERSHIP. The standing
committees of the Board of Directors shall be Executive Committee, Finance
Committee, Audit Committee, Compensation and Employee Benefits Committee, Board
Affairs Committee and Employee and Public Responsibility Committee. The number
of members of each committee, which shall not be less than two, shall be fixed
by the Board of Directors from time to time by resolution. The members of each
such committee shall be elected by the Board of Directors from among the
members of the Board of Directors provided, however, that in the absence of a
member or members at a meeting of either the Executive Committee or the
Finance Committee, the members present at any meeting of such committee
(whether a quorum is present) may appoint Directors who are not members of
such committees to act in the place or places of

3
<PAGE> 9
such absent member or members in order to constitute a quorum at such meeting.
A Director may concurrently serve on more than one of such committees. An
employee of the Corporation shall not be eligible to serve as a member of the
Audit Committee or the Compensation and Employee Benefits Committee.

SECTION 2. SECTION; TERM; REMOVAL. The members of each of the
standing committees of the Board of Directors and the chairman thereof shall be
elected at the regular annual meeting of the Board of Directors and shall hold
office until the next such regular annual meeting of the Board of Directors and
until their respective successors are elected and qualified; provided, however,
that vacancies during the year on any standing committee shall be filled by the
Board of Directors.

SECTION 3. MEETINGS; QUORUM; MINUTES. Each of the standing committees
of the Board of Directors shall from time to time meet at such time and place
as shall be directed by the Chairperson of each committee and, in his or her
absence, by the Chairman of the Board of Directors, or in his absence, by the
President. A majority of the members of each such committee (including
Directors appointed to act at any meeting of the Executive Committee or Finance
Committee in the place of absent members thereof as provided in Section 1
above), shall constitute a quorum for that committee meeting and shall have
full authority to act for and the action of such quorum shall be taken as the
action of the whole of that committee. Each of the committees shall keep
minutes of its proceedings and actions and shall submit a report thereof at the
next regular meeting of the Board of Directors. The Executive Committee and
Finance Committee can only act upon the vote of a majority of all members of
each such committee.

SECTION 4. EXECUTIVE COMMITTEE. The Executive Committee shall perform
such duties and exercise such powers as may be directed or delegated by the
Board of Directors, and between meetings of the Board of Directors, it may
exercise any and all powers of the Board of Directors in the management of the
business and affairs of the Corporation with the same effect as if exercised by
the Board of Directors, and the exercise of such powers shall be conclusive of
the fact that the Executive Committee had full authority to exercise such
powers, subject, however, to the limitations of authority specifically set
forth in Section 6 of this Article III of these By-Laws.

SECTION 5. FINANCE COMMITTEE. The Finance Committee shall:

(a) review (i) the financial structure of the Corporation; its source
and use of funds; and its overall financial policies; (ii) the overall
corporate annual operating plans and long-range plans for the purpose of
analyzing the long-term and short-term debt and financing requirements of the
Corporation; and (iii) periodic comparison reports of corporate cash flow and
financial position with the annual operating plans;

(b) review the terms and conditions of all proposed borrowings and/or
the issuance of any other security by the Corporation or any of its
subsidiaries for proposed acquisition or for any other purpose;

(c) review at least annually (i) the Corporation's overall insurance
program; (ii) the Corporation's overall income tax status (including but not
limited to a review of pending audits, proposed deficiencies, and

4
<PAGE> 10
tax reserves), and (iii) the Corporation's status and program for Foreign
Exchange Exposure Risk Management;

(d) approve material accounting policy changes of the Corporation as
recommended by management;

(e) be responsible for (i) the investment management of employee benefit
plan assets and, in connection therewith, (ii) the appointment of an
Investment Committee comprised of management personnel who will (A) select
investment managers, (B) allocate annual contributions to the pension and
profit sharing trusts among investment managers or other investment
alternatives and (C) establish investment performance objectives; and (iii)
reviewing periodic reports on Investment Committee action; and

(f) perform such other duties and exercise such other powers as shall
be directed and delegated to the Finance Committee by the Board of Directors
from time to time.

The Finance Committee, at its discretion, shall report its findings and
conclusions to the Board of Directors with respect to any of the functions of
the Finance Committee enumerated above and make such recommendations with
respect thereto as it shall deem appropriate under the circumstances.

SECTION 6. LIMITATIONS OF AUTHORITY OF EXECUTIVE COMMITTEE AND FINANCE
COMMITTEE. Neither the Executive Committee nor the Finance Committee shall
have the authority to (i) declare dividends or distributions, (ii) issue stock,
other than as provided by Section 2-411(b) of the Maryland General Corporation
Law, (iii) recommend to the stockholders any action which requires
stockholder approval, (iv) amend these By-Laws, or (v) approve any merger or
share exchange which does not require stockholder approval.

SECTION 7. AUDIT COMMITTEE. The Audit Committee shall consist solely
of Directors who are neither officers nor employees of the Corporation and
shall have the following responsibilities and functions:

(a) recommend annually to the Board of Directors the appointment, or
the ratification of the appointment by management of, the independent public
accountants ("Public Accountants") to audit the books, records and accounts of
the Corporation and its subsidiaries with respect to each of their fiscal years
("Annual Audit");

(b) discuss the scope of the prospective Annual Audit and review the
proposed fees to be paid therefor with the Public Accountants;

(d) review compliance by management of the Corporation with the
existing major accounting and financial policies of the Corporation;

(e) review, at least annually, the adequacy of reserves established for
contingent liabilities of the Corporation and its subsidiaries;

(f) without the presence of management employees of the Corporation,
review (i) the results of the Annual Audit with the Public Accountants, (ii)
the performance, competence and cooperation of the financial officers and staff
of the corporate office and operating companies of the Corporation,

5
<PAGE> 11
respectively, and (iii) the adequacy of the Corporation's internal auditing
program and internal audit staff;

(g) review with the Executive Director of Internal Audit who has
direct responsibility for the internal audit function of the Corporation (i)
the results of audits performed by the internal audit staff during the
immediately preceding fiscal year, (ii) the independence from management of
the Corporation of the internal audit function to determine audit scopes and
(iii) the overall performance of the internal audit staff.

(h) following the completion of the review of the Annual Audit and of
the performance, competence, cooperation and adequacy of the financial
organization of the Corporation, meet with representatives of the Public
Accountants and the management of the Corporation for the purpose of
discussing and clarifying issues and questions raised by the Public Accountants
with respect to the Annual Audit, and report the Audit Committee's findings
with respect thereto to the Board of Directors within 60 days after the
completion of such meetings;

(i) be available from time to time to receive, or at the discretion of
the Chairman of the Audit Committee, to meet with respect to reports,
suggestions, questions or recommendations from the Public Accountants,
the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting
Officer, the Executive Director of Internal Audit or the General Counsel of
the Corporation, respectively, relating to the responsibilities and functions of
the Audit Committee; and

(j) review, at least annually, management's procedures and policies to
implement and maintain adequate and effective internal accounting controls in
the Corporation and review management's programs to assure compliance with the
Corporation and review management's programs to assure compliance with the
Foreign Corrupt Practices Act of 1977 and accounting and financial
recordkeeping provisions under the Securities Exchange Act of 1934 and other
federal and state laws.

SECTION 8. COMPENSATION AND EMPLOYEE BENEFITS COMMITTEE. The
Compensation and Employee Benefits Committee, which shall consist solely of
Directors who are not employees or former employees of the Corporation, shall
be responsible for the approval and administration of programs affecting the
total compensation for key executives. In order to accomplish this objective,
the committee shall:

(a) review and approve the total compensation philosophy covering
officers and other key executives of the Corporation, and periodically review
an analysis of the competitiveness of the total compensation practices of the
Corporation, comparing the relationship between pay practices and the financial
performance of the Corporation;

(b) review and approve the salary ranges for the specified position
grades of management personnel of the Corporation pursuant to the Corporation's
executive salary administration program;

(c) review, approve and, when deemed appropriate by the Committee,
recommend the definitive approval by the Board of Directors of, the terms and
conditions of proposed incentive bonus plans applicable to corporate officers
and key operating company executives of the Corporation and specify the
standards of performance, or delegate the authority to specify such standards,
pursuant to which

6
<PAGE> 12
awards may be paid to such executives and officers under such incentive bonus
plans;

(d) review and approve annual base salaries (as recommended by the Chief
Executive Officer and President, respectively, of the Corporation) of all
officers of the Corporation and of all other employees with salaries above such
amount in such salary grades under the Corporation's salary administration
program as shall be determined by the Compensation and Employee Benefits
Committee from time to time;

(e) review and approve proposed stock option plans, other long-term
incentive plans and stock purchase plans, and all proposed changes thereto and,
where appropriate, recommend their definitive approval by the Board of
Directors and, when deemed appropriate or required by law, approval by the
stockholders of the Corporation;

(f) administer the stock option and stock purchase plans of the
Corporation and designate from time to time the employees of the Corporation
and its subsidiaries to whom the options under the stock option plans are to be
granted and the number of shares subject to each such option or the executive
to whom such duties may be delegated;

(g) review and approve special hiring and severance arrangements with
executive officers of the Corporation, as defined from time to time by the
regulations of the Securities and Exchange Commission and designated by the
Board of Directors;

(h) review and approve proposed employee benefit plans of the Corporation
and proposed changes thereto from time to time (including but not limited to
pension and profit sharing plans, group medical plans and insurance programs)
and recommend their definitive approval by the Board of Directors when such
approval shall be deemed appropriate or required by law;

(i) review and approve disclosures to be made in the name of the committee
concerning the executive compensation programs of the Corporation, and review
other information concerning these programs to be disclosed in the
Corporation's annual proxy statement.

SECTION 9. BOARD AFFAIRS AND CORPORATE GOVERNANCE COMMITTEE. The Board
Affairs and Corporate Governance Committee shall consider and recommend to the
Board of Directors from time to time Board policies, procedures and practices,
including director compensation, and consider and recommend to the Board of
Directors candidates for election as directors of the Corporation. The
Committee shall also review the management succession plan and executive
resources periodically as determined appropriate by the Committee to assure the
continuity and quality of management necessary to provide the financial
performance expected by the financial community and the stockholders of the
Corporation.

SECTION 10. EMPLOYEE AND PUBLIC RESPONSIBILITY COMMITTEE. The Employee
and Public Responsibility Committee shall provide oversight and guidance in
those areas concerning the Corporation's obligations to its employees and to
its major public constituencies, namely its stockholders, customers, consumers
and the communities in which it operates. It shall also oversee the
Corporation's commitment to employee health and safety, equal employment
opportunity and affirmative action, and minority relations. The Committee
shall oversee those marketing

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<PAGE> 13
practices relating to advertising standards, product safety, and the handling
of consumer complaints and requests for product information. The Committee
shall define and oversee the charitable contributions policies and practices of
the Corporation, without authority to make, decide or to direct individual
contributions. The Committee shall review actions taken by management as the
result of current or emerging public policy issues or political and social
changes that may affect the affairs and operations of the Corporation.

SECTION 11. AUTHORITY TO DESIGNATE COMMITTEES. The Board of Directors
may, from time to time, designate committees other than the standing committees
set forth in Section 1 of this Article III consisting of two or more Directors
by a resolution adopted by a majority of the Directors. Such committees may be
delegated any of the powers of the Board of Directors, except the power to
declare dividends or other distributions on stock, elect directors, issue stock
other than as provided in the next sentence, recommend to the stockholders any
action which requires stockholder approval, amend the By-Laws, or approve any
merger or share exchange which does not require stockholder approval. If the
Board of Directors has given general authorization for the issuance of stock, a
committee of the Board, in accordance with a general formula or method
specified by the Board by resolution or by adoption of a stock option or other
plan, may fix the terms of stock subject to classification or reclassification
and the terms on which any stock may be issued, including all terms and
conditions required or permitted to be established or authorized by the Board
of Directors. The Board of Directors shall have the power at any time to
change the members of any committee so designated, to fill vacancies or to
dissolve any such committee.

ARTICLE IV

OFFICERS

SECTION 1. OFFICERS. The officers of the Corporation shall be the
Chairman of the Board of Directors, the President, Vice Chairman, such
Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and
Secretary, Treasurer and Controller as the Board of Directors shall elect, and
such Assistant Secretaries and Assistant Treasurers or other officers as the
Chairman or the Board of Directors shall from time to time deem advisable.

SECTION 2. ELECTION AND QUALIFICATION. The officers shall be elected by,
and shall hold office at the pleasure of, the Board of Directors. None of the
officers, except the Chairman of the Board, the President and Vice Chairman,
need be members of the Board of Directors. Any two of the offices set forth in
Section 1 of this Article IV may, at the discretion of the Board of Directors,
be held by the same person, except that the Chairman of the Board may hold only
the additional office of President. No officer shall execute, acknowledge or
verify any instrument or document on behalf of the Corporation in more than
one capacity, if such instrument or document is required by law or by these
By-Laws to be executed, acknowledged or verified by two or more officers. The
Board of Directors may from time to time elect or appoint other officers and
agents with such powers and duties as they may deem necessary.

SECTION 3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
the Chief Executive Officer of the Corporation

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<PAGE> 14
and, subject to the direction of the Board of Directors and to the committees
of the Board of Directors, shall have general charge of the business and affairs
of the Corporation. He shall preside at all meetings of the stockholders and
of the Board of Directors.

SECTION 4. THE PRESIDENT. The President shall be the Chief Operating
Officer of the Corporation and shall have general charge and supervision of the
operations of the Corporation under the direction of the Chairman of the Board
and subject to the control of the Board of Directors. He shall perform such
other duties as may be assigned to him by the Board of Directors or the
Chairman of the Board. In the absence of the Chairman of the Board, or in the
case of the inability of the Chairman of the Board to act, the President shall
assume the duties of the Chairman of the Board, unless the Board of Directors
shall otherwise determine.

SECTION 5. THE VICE CHAIRMAN AND VICE PRESIDENTS. The Vice Chairman and
each Executive Vice President, Senior Vice President or Vice President, the
number of each as the Board of Directors may determine, shall perform such
duties and have such authority as shall be assigned to him by the Chairman of
the Board or the President, subject to the approval of the Board of Directors.

SECTION 6. SECRETARY. The Secretary shall issue or cause to be issued
notices for all meetings of the stockholders or Board of Directors, shall keep
minutes of such meetings and shall have charge of the seal and corporate books
and records. He shall supervise all matters relating to the Securities and
Exchange Commission and the stock exchanges on which the shares of the
Corporation are listed. He shall perform such other duties as pertain to his
office as the Chairman of the Board of Directors may direct. In the abscence
of the Secretary from any meetings of the stockholders or Board of Directors,
the record of the proceedings shall be kept and authenticated by such person as
may be appointed for that purpose by the chairman of the meeting.

SECTION 7. TREASURER. The Treasurer shall have charge and custody of the
funds, securities and other valuable effects of the Corporation and shall keep
full and accurate accounts of all receipts and disbursements. He shall deposit
all moneys to the credit of the Corporation in such banks or depositories as he
shall designate subject to the control of the Board of Directors or the Finance
Committee. He shall cause disbursement of the funds of the corporation as may
be required in the conduct of business. Whenever required to do so, he shall
render an account of all his transactions as Treasurer of the Corporation.

SECTION 8. CONTROLLER. The Controller shall be the Chief Accounting
Officer of the Corporation and shall be responsible for the conduct and
surveillance of general corporate accounting procedures. He shall supervise
the preparation of the Corporation's financial statements and other financial
reports and statistics as required by management and governmental agencies, and
shall perform such other duties as the Chief Financial Officer of the
Corporation or the Board of Directors may from time to time prescribe.

SECTION 9. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The Assistant
Secretaries and Assistant Treasurers shall perform such duties as the Board of
Directors may from time to time prescribe or require. In the absence or
disability of the Secretary or Treasurer, the Assistant Secretaries or
Assistant Treasurers, as the case may be, shall,

9
<PAGE> 15
in the order of their seniority, perform the duties and have the powers of the
Secretary and Treasurer, respectively. The Board of Directors may, in its
discretion, confer upon any Assistant Secretary or Assistant Treasurer any
power of the Secretary or Treasurer, respectively, to be exercised jointly with
or independently of the Secretary or Treasurer, respectively, as the board of
Directors may from time to time determine.

ARTICLE V

INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS

SECTION 1. RIGHT TO INDEMNIFICATION. Subject to the provisions of Section
3 of this Article V, the Corporation (a) shall indemnify its directors and
officers, whether serving the Corporation or at its request any other entity,
to the full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses under the
procedures and to the full extent permitted by law and (b) may indemnify other
employees and agents to such extent, if any, as shall be authorized by the
Board of Directors and be permitted by law.

SECTION 2. TIME FOR PAYMENT ENFORCEMENT. Any indemnification, or payment
of expenses in advance of the final disposition of any proceeding, shall be
made promptly, and in any event within sixty (60) days, upon the written
request of the director or officer entitled to seek indemnification (the
"Indemnified Party"). The right to indemnification and advances hereunder
shall be enforceable by the Indemnified Party in any court of competent
jurisdiction, if (i) the Corporation denies such request, in whole or in part,
or (ii) no disposition thereof is made within 60 days. The Indemnified Party's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part, in any such action shall
also be indemnified by the Corporation.

SECTION 3. STANDARD OF CONDUCT. Anything in these By-Laws to the
contrary notwithstanding, except in circumstances where indemnification is
required under the General Laws of the State of Maryland now or hereafter in
force, no indemnification of a director or officer may be made hereunder unless
a determination has been made in accordance with the procedures set forth in
Section 2-418(e) of the Maryland General Corporation Law that the party seeking
indemnification has met the requisite standard of conduct. A party seeking
indemnification shall be deemed to have met the requisite standard of conduct
unless it is established that:

(a) The act or omission of the director or officer was material to
the matter giving rise to the proceeding; and

(i) was committed in bad faith; or

(ii) was the result of active and deliberate dishonesty; or

(b) The director or officer actually received an improper benefit in
money, property or services; or

(c) In the case of a criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful.

SECTION 4. GENERAL. The indemnification and advance of expenses

<PAGE> 16

provided by this By-law shall not be deemed exclusive of any other rights to
which a person seeking indemnification or advance of expenses may be entitled
under any law (common or statutory), or any agreement, vote of stockholders or
disinterested directors or other provision that is not contrary to law, both as
to action in his official capacity and as to action in another capacity while
holding office or while employed by or acting as agent for the Corporation,
shall continue in respect of all events occurring while a person was a director
or officer after such person has ceased to be a director or officer, and shall
inure to the benefit of the estate, heirs, executors and administrators of such
person. All rights to indemnification and advance of expenses hereunder shall
be deemed to be a contract between the Corporation and each director or officer
of the Corporation who serves or served in such capacity at any time while this
By-law is in effect.

SECTION 5. EFFECTIVE TIME. This By-law shall be effective from and
after the date of its adoption and shall apply to all proceedings arising prior
to or after such date, regardless of whether relating to facts or circumstances
occurring prior to or after such date. Nothing herein shall prevent an
amendment of this By-law, provided that no such amendment shall diminish the
rights of any person hereunder with respect to events occurring or claims made
before the adoption of such amendment or as to claims made after such adoption
in respect of events occurring before such adoption.

SECTION 6. FURTHER ACTION. The Board of Directors may take such action
as is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law.

ARTICLE VI

FISCAL YEAR AND DIVIDENDS

SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall end
on the Saturday nearest to June 30 of each year and commence on the following
Sunday.

SECTION 2. DIVIDENDS. The Board of Directors from time to time may
declare, in accordance with the provisions and limitations of the Certificate
of Incorporation of the Corporation and of Section 2-309 of the Maryland
General Corporation Law or any amendment to or successor of such Section,
dividends on the shares of the Corporation in cash, property or stock of the
Corporation.

ARTICLE VII

AUDITORS

At its first meeting of each new fiscal year, the Board of Directors
shall appoint a firm of independent certified public accountants to serve for
such fiscal year for the purposes of examining the consolidated financial
statements of the Corporation and issuing an auditors' report thereon. Such
appointment shall be subject to the ratification by the stockholders, to be
voted upon at the annual meeting of stockholders in the following October.

ARTICLE VIII

CORPORATE DOCUMENTS

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SECTION 1. EXECUTION OF NEGOTIABLE INSTRUMENTS. All checks, drafts,
notes and other negotiable instruments shall be signed by two officers of the
Corporation, or by one officer and any authorized agent, to be determined from
time to time by the Board of Directors.

SECTION 2. EXECUTION OF DOCUMENTS. Except as otherwise authorized
by the Board of Directors, all contracts, conveyances, leases, powers of
attorney and other agreements or instruments executed by or on behalf of the
Corporation shall be signed by any one of the Chairman of the Board, the Vice
Chairman, the President, an Executive Vice President, a Senior Vice President,
or a Vice President. A contract, conveyance, lease, power of attorney or other
agreement or instrument which relates to a transaction of a division of the
Corporation may be signed by or on behalf of such division by its Chairman,
President, an Executive Vice President, a Senior Vice President or a Vice
President of such division, or if there are no such officer designations in a
division, by its Managing Director or General Manager.

ARTICLE IX

SEAL

The seal of the Corporation shall be circular in form and with the
words, "SARA LEE CORPORATION - MARYLAND - 1941" inscribed thereon.

ARTICLE X

CAPITAL STOCK

SECTION 1. EXECUTION OF STOCK CERTIFICATES. Certificates of stock
shall be issued in such form as may be approved by the Board of Directors, and
shall be signed by the Chairman or by the President and by the Secretary, and
sealed with the seal of the Corporation; provided, however, that certificates
of stock may be issued bearing the facsimile signatures of such officers and
the facsimile seal of the Corporation whenever the stock represented thereby is
to be transferred and registered by or through a transfer agent and registrar.
The said stock shall be issued, transferred and canceled in accordance with
such rules and regulations as the Board of Directors shall prescribe.

SECTION 2. TRANSFERS. All transfers of stock shall be made on the
books of the Corporation, by the holder of the shares, in person or by his
attorney, on surrender and cancellation of certificates for a like number of
shares.

SECTION 3. REGISTRATION. The Board of Directors shall have power and
authority to make all such rules and regulations as they may deem expedient
concerning the issuance and registration of certificates of stock, including
the appointment from time to time of transfer agents and registrars. An original
or duplicate stock ledger containing the names and addresses of all
stockholders and the number of shares of each class held by each stockholder
shall be maintained by the transfer agent or agents of the Corporation, if any,
and otherwise at the principal business office of the Corporation.

SECTION 4. STOCK OWNERSHIP RECORD DATE. The Board of Directors shall
have authority from time to time to fix a date of not less than 10 days and not
more than 60 days preceding the date of any meeting of stockholders, any
dividend payment date, or

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<PAGE> 18

any date for the allotment of rights, as a record date for the determination of
stockholders who are entitled to notice of and to vote at such meeting, or
entitled to receive such dividend or rights, as the case may be; and only
stockholders of record on such date shall be entitled to notice of and to vote
at such meeting, or to receive such dividend or rights, as the case may be;
provided, however, that unless the Board of Directors shall fix such date, such
record date for determining the stockholders entitled to notice of and to vote
at such meeting, or entitled to receive such dividend or rights, as the case
may be, shall be a date 30 days preceding the date of such stockholders'
meeting or the date of such dividend payment or allotment of rights.

SECTION 5. RECOGNITION OF HOLDER. The Corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Maryland.

SECTION 6. REPLACEMENT CERTIFICATES. The Board of Directors or the
Executive Committee may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, destroyed, stolen or mutilated, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, destroyed, stolen or mutilated, and the Board of Directors or Executive
Committee, when authorizing such issue of a new certificate or certificates,
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, destroyed, stolen or mutilated certificate or
certificates, or his legal representatives, to give the Corporation a bond in
such sums as it may direct as indemnity against any claim that may be made
against the Corporation.

ARTICLE XI

WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
stockholders, Board of Directors or committee of the Board of Directors is
required to be given under the provisions of the laws of Maryland or under the
provisions of the Certificate of Incorporation of the Corporation or these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to such notice and filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the meeting in person or by
proxy, shall be deemed equivalent to the giving of such notice to such persons.

ARTICLE XII

MAKING, ALTERING OR REPEALING BY-LAWS

SECTION 1. POWER VESTED IN BOARD OF DIRECTORS. The Board of Directors
shall have the power and right to make, alter or repeal any or all By-Laws of
the Corporation at any time or from time to time.

SECTION 2. SCOPE OF BY-LAWS. The By-Laws may contain any provisions
not inconsistent with the laws of Maryland or the Certificate of Incorporation
of the Corporation, for the regulation and management of the affairs of the
Corporation.

<PAGE> 1
EXHIBIT 10.1

SARA LEE CORPORATION
1979 STOCK OPTION PLAN, AS AMENDED

1. PURPOSE OF PLAN. The Purpose of the 1979 Stock Option Plan
("Plan") is to attract and retain able and experienced key management employees
and to provide an incentive to, and encourage stock ownership in, Sara Lee
Corporation ("Corporation") by the key management employees of the Corporation
and its subsidiaries.

2. ADMINISTRATION OF PLAN. This Plan shall be administered by the
Compensation and Employee Benefits Committee ("Committee") appointed by the
Board of Directors of the Corporation consisting of not less than three (3)
members of the Board of Directors of the Corporation ("Board"), all of whom
shall be ineligible to participate in this Plan. A majority of the Committee
shall constitute a quorum, or actions approved in writing by all the members of
the Committee shall constitute the acts of the Committee. The Committee shall
have full authority and discretion to (a) determine, consistent with the
provisions of this Plan, the employees to be granted options, the times at
which options shall be granted, the number of shares subject to each option,
the period during which each option becomes exercisable (subject to Section 8),
and the terms contained in each option agreement, and (b) adopt rules and
regulations and prescribe or approve the forms to carry out the purposes and
provisions of this Plan. The Committee's interpretation and construction of any
provisions of this Plan or any option granted hereunder shall be binding and
conclusive, unless otherwise determined by the Board. Any power that may be
exercised or action that may be taken by the Committee under this Plan may also
be exercised or taken by the Board. Notwithstanding the provisions of this
Plan, the Committee shall have full authority to grant options to Executives
(as defined in the Supplement described below) who are subject to the personal
income tax laws of the United Kingdom and employed by the Corporation or any of
its subsidiaries pursuant to the terms and conditions of the Supplement
attached hereto which sets forth a scheme approved by the United Kingdom Inland
Revenue under Schedule 10 to the United Kingdom's Finance Act 1984; and the
Committee shall have full authority and discretion to amend the Supplement so
that its terms and conditions will comply with the applicable requirements of
United Kingdom law. No member of the Committee or the Board shall be liable for
any action taken or determination made in good faith with respect to this Plan
or any option granted hereunder.

3. ELIGIBILITY. The Committee shall from time to time determine the
key management employees of the Corporation and any of its subsidiaries
(including officers and directors of the Corporation who are also employees)
who shall be granted options under this Plan. An employee who has been granted
an option may be granted an additional option or options under this Plan if the
Committee shall so determine. The granting of an option under this Plan shall
not affect any outstanding stock option previously granted to an optionee under
<PAGE> 2
this Plan or any other plan of the Corporation. The term "subsidiary" shall
mean any domestic or foreign corporation or entity of which the Corporation
owns, directly or indirectly, at least 50% of the total combined voting power
of such corporation or entity.

4. SHARES SUBJECT TO PLAN. Subject to adjustment as provided in
Section 11, the aggregate number of shares which may be issued pursuant to
options granted by the Committee under this Plan shall not exceed 2,400,000
shares of Common Stock of the Corporation, par value $1.33 1/3 per share
("Shares"), which may be treasury shares reacquired by the Corporation or
authorized and unissued shares, or a combination of both. Any Shares subject to
an option under this Plan which shall expire or be terminated for any reason
shall be available for the granting of other options during the term of this
Plan.

5. OPTION PRICE. The option price per share under each option
granted by the Committee shall be not less than 100% of the fair market value
per share on the date an option is granted, but in no event less than the par
value thereof. The fair market value shall be the average between the highest
and lowest quoted selling price per share on the New York Stock Exchange
Composite Transactions Tape ("Composite Tape") on the date the option is
granted. If there should be no sale of the Shares reported on such date, then
the option price per share shall be the average between the highest and lowest
quoted selling price per share reported on the Composite Tape on the next
preceding day on which there shall have been a sale.

6. STOCK APPRECIATION RIGHTS.

(a) At the discretion of the Committee, any option granted under
this Plan may, at the time of such grant or thereafter at any time prior to the
exercise, termination or expiration of such option, include stock
appreciation rights ("SAR"). SAR represents the right of an optionee,
without payment to the Corporation (except for applicable withholding taxes),
to receive the excess of the fair market value per share on the date on which
SAR are exercised over the option price per share as provided in the related
underlying option. SAR shall pertain to, and be granted only in conjunction
with, a related underlying option granted under this Plan ("related option")
and shall be exercisable and exercised only to the extent that the related
option is exercisable. The number of SAR included in a related option shall be
equal to the number of shares subject to the related option. The Committee may
impose conditions upon the grant of exercise of SAR, which conditions may
include a condition that SAR may only be exercised in accordance with rules and
regulations adopted by the Committee from time to time. Such rules and
regulations may govern the right to exercise SAR granted prior to the adoption
or amendments of such rules and regulations, as well as SAR granted
thereafter.

-2-

<PAGE> 3
(b) Subject to any restrictions or conditions imposed by the
Committee, SAR may be exercised by the optionee only upon the surrender of the
exercisable portion of the related option. Upon the exercise of SAR and the
surrender of the exercisable portion of the related option, the optionee shall
be awarded cash. Shares or a combination of shares and cash having a total
value equal to the product obtained by multiplying (i) the excess of the fair
market value per share on the date which SAR are exercised ("Exercise Date")
over the option price per share by (ii) the number of Shares subject to the
exercisable portion of the related option so surrendered. An exercise of SAR
shall be made during the period specified in Rule 16b-3 under the
Securities Exchange Act of 1934, as in effect at the time of such exercise, or
under any law, rule or regulation which may replace or supersede
Rule 16b-3.

(c) The portion of SAR which may be awarded in cash shall be
determined by the Committee from time to time. The number of Shares awardable
to an optionee with respect to the non-cash portion of SAR shall be determined
by dividing such non-cash portion by the fair market value per share on the
Exercise Date. No fractional shares shall be issued. The fair market value per
share on the exercise date shall be the average of the highest and lowest
quoted selling price per share reported on the Composite Tape on the exercise
date. If there shall be no sale on the exercise date, then the fair market
value shall be determined on the next preceding day on which there shall have
been a sale.

7. EXERCISE OF OPTIONS.

(a) Each option granted under the Plan shall be exercisable on the
dates and for the number of Shares as shall be provided in a stock option
agreement between the Corporation and optionee evidencing the option granted by
the Committee and the terms thereof. Shares shall be issued to the optionee
pursuant to the exercise of an option only upon receipt by the Corporation from
the optionee of payment in full either in cash or by a single exchange of shares
of Common Stock of the Corporation previously owned by the optionee for at least
six months from the date of a exercise, or a combination of both, in an amount
or having a combined value equal to the aggregate purchase price for the Shares
subject to the option or portion thereof being exercised. The value of the
previously owned shares of Common Stock exchanged in full or partial payment for
the Shares purchased upon the exercise of an option shall be equal to the
aggregate fair market value, as defined in Section 5, of such shares on the
date of the exercise of such options.

(b) The optionee may elect to satisfy, in whole or in part, any
amount required to be withheld under applicable income tax laws and the amount
required to be withheld under the Federal Insurance Contribution Act ("FICA"),
if any, upon the exercise of an option by the optionee requesting the
Corporation to withhold Shares otherwise issuable which have an aggregate fair
market

- 3 -
<PAGE> 4

value, as defined in Section 5, equal to the amount of taxes required to be
withheld ("Share Withholding Election"). The value of the Shares to be withheld
shall equal the aggregate amount of withholding tax and the FICA amount, if
any, to be withheld on the date such tax and amount are determined ("Tax
Date"). The Share Withholding Election shall be (i) made prior to or on the
Exercise Date, (ii) irrevocable and (iii) subject to (a) the Committee
disapproving any individual election or (b) the Board amending this Plan to
rescind all Share Withholding Elections by optionees. If an optionee is an
officer of the Corporation, as defined by Rule 3b-2 of the Securities Exchange
Act of 1934 ("Officer Optionee"), then (i) the Share Withholding Election must
be exercised six months or more before an option is exercised, or (ii) the
Share Withholding Election must be made in a 10-day period beginning on the
third business day following the date of release of the Corporation's quarterly
or annual summary of sales and earnings and ending on the twelfth business day
following such date ("Window Period") before the option is exercised, or (iii)
an option and the related Share Withholding Election can be both exercised
during the same Window Period, or (iv) if the Officer Optionee elects to defer
the Tax Date until six months after the Exercise Date ("Deferred Tax Date"),
the Share Withholding Election can be made at any time up to and including the
Exercise Date, or (v) if the Deferred Tax Date is elected by an Officer
Optionee, the Share Withholding Election can be exercised in any subsequent
Window Period before the Deferred Tax Date, or the option may be exercised
outside the Window Period and the Share Withholding Election exercised during a
subsequent Window Period but before the Deferred Tax Date. If an Officer
Optionee elects the Deferred Tax Date, such optionee shall execute an agreement
with the Corporation agreeing to tender back to the Corporation the proper
number of Shares received on the Exercise Date to satisfy the tax withholding
requirement on the Deferred Tax Date.

8. TERM OF OPTION.

(a) Except with respect to options granted to employees who are
residents of the Netherlands and subject to the personal income tax laws of the
Netherlands ("Dutch Optionees"), each option granted under the Plan shall be
exercisable on the dates and for the number of Shares as shall be provided in a
stock option agreement between the Corporation and optionee evidencing the
option granted by the Committee and the terms thereof, provided that no option
shall be exercisable earlier than six months from the date of the grant of the
option, and in no event shall the period of time over which the option may be
exercised exceed 10 years from the date of the grant of the option, after which
the unexercised portion thereof shall expire. Each option granted to employees
who are residents of the Netherlands and subject to the personal income tax
laws of the Netherlands shall become exercisable immediately after the grant
thereof. Notwithstanding the foregoing, in circumstances under which the
Committee shall deem appropriate, the Committee may authorize a future stock
option agreement or an amendment to an existing stock option agreement between
the

-4-
<PAGE> 5
Corporation and an individual optionee evidencing an option granted under the
Plan to provide that upon the expiration of six months from the date such
option is granted, the option subject to such stock option agreement shall
become exercisable in its entirety.

(b) Change of Control.

(i) In the event there shall be a "Change of Control" of
the Corporation (as defined below), the unexercised portion of
the Option shall become immediately exercisable in its entirety,
notwithstanding the provisions of Section 8(a) above.

(ii) A "Change of Control" shall occur when: (a) any
"Person" (which term, when used in this Section 4, shall have
the meaning it has when it is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes
the "Beneficial Owner" (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of Voting Stock (as defined
below) representing twenty percent or more of the votes entitled to be
cast by the holders of all then outstanding Shares of the Corporation;
or (b) the stockholders of the Corporation approve a definitive
agreement or plan to merge or consolidate the Corporation with or into
another corporation, or to sell, or otherwise dispose of, all or
substantially all of the Corporation's property and assets, or to
liquidate the Corporation; or (c) the individuals who are Continuing
Directors of the Corporation cease for any reason to constitute at
least a majority of the Board of the Corporation.

The term "Continuing Director" means (i) any member of the Board who is
a member of the Board on June 29, 1989, or (ii) any person who subsequently
becomes a member of the Board whose nomination for election or election to the
Board is recommended or approved by a majority of the Continuing Directors. The
term "Voting Stock" means all capital stock of the Corporation which by its
terms may be voted on all matters submitted to stockholders of the Corporation
generally.

9. NONTRANSFERABILITY OF OPTION. No option or SAR granted under
this Plan shall be transferable except by will or the laws of descent. Each
such option or SAR shall be exercisable during the optionee's lifetime only by
the optionee.

10. TERMINATION OF EMPLOYMENT AND DEATH OR DISABILITY OF OPTIONEE.

(a) If during the term of the Option:

(i) the Optionee's employment with the Corporation or any
of its subsidiaries is terminated for any reason other than retirement,
death or disability, the Option may be exercised within the next
successive six-

- 5 -

<PAGE> 6
month period following the date of termination of employment, but only
to the extent that the Optionee was entitled to exercise the Option or
any portion thereof on the date of termination, but in no event later
than 10 years after the date hereof;

(ii) the Optionee shall die or his or her employment with the
Corporation or any of its subsidiaries shall be terminated by reason of
the Employee's total disability as defined from time to time under the
Sara Lee Corporation Long Term Disability Plan, the Option may be
exercised by the Optionee's legal representative or estate, as the case
may be, within a one-year period following the date of death or
termination to the extent that the Option or any portion thereof is or
shall become exercisable within such one-year period, but in no event
later than 10 years from the date hereof; or

(iii) the Optionee's employment with the Corporation or any of
its subsidiaries shall be terminated by reason of retirement under the
terms and conditions of the Corporation's retirement plans applicable
to the Optionee, the Option may be exercised within a two-year period
following the date of retirement, to the extent that the Option or any
portion thereof is or shall become exercisable within such two-year
period, but in no event later than 10 years from the date hereof.

(b) The transfer of the Optionee from employment by the Corporation to
one of its subsidiaries or by one of its subsidiaries to the Corporation or
from one subsidiary to another subsidiary shall not be deemed to be a
termination of employment of the Optionee by the Corporation or any of its
subsidiaries for purposes of this Agreement.

11. ADJUSTMENT IN NUMBER OF SHARES AND OPTION PRICE. The Committee
shall make appropriate and equitable adjustments in the number, option price
and kind of Shares with respect to which all outstanding options, or portions
thereof then unexercised, shall be exercisable in the event of any subdivision
or combination of outstanding Shares of the Corporation by reclassification or
otherwise, or in the event of the payment of a stock dividend, a capital
reorganization, a reclassification of shares, a consolidation or merger, or the
sale, lease or conveyance of substantially all the assets of the Corporation.
Any such adjustment made by the Committee shall be final and binding upon all
optionees, the Corporation and all other interested persons.

12. AMENDMENT AND DISCONTINUANCE. The Board of Directors of the
Corporation may alter, suspend or terminate this Plan; provided, however, that
no such action shall increase the period within which options may be granted, or
the maximum term for which any option may be granted, the term of any option
previously granted, or increase the number of Shares available to be optioned
under the Plan (other than as provided in Section 11), or reduce the minimum

- 6 -
<PAGE> 7
option price per share as provided in Section 5, or otherwise alter or impair
any option previously granted under this Plan without the consent of the
optionee.

13. REQUIREMENTS OF LAW. The granting of options and the issuance of
Shares upon the exercise of an option or SAR shall be subject to all applicable
laws, rules and regulations and to such approvals by governmental agencies as
may be required.

14. EFFECTIVE DATE AND TERMINATION OF PLAN. The effective date of this
Plan shall be October 25, 1979; provided, however, that the holders of at least
a majority of the outstanding shares of the Corporation's Common Stock and
Preferred Stock, respectively, voting as a single class at the annual meeting
of the Corporation's stockholders on October 25, 1979 shall approve and ratify
this Plan.

- -------------------
As approved by the Board of Directors on October 25, 1979, as amended on June
29, 1989.

-7-

<PAGE> 1
EXHIBIT 10.3

SARA LEE CORPORATION
1988 STOCK OPTION PLAN, AS AMENDED

1. PURPOSE OF PLAN. The Purpose of the 1988 Non-Qualified Stock Option
Plan ("Plan") is to attract and retain able and experienced key management
employees and to provide an incentive to those persons to improve operations and
increase profits by affording them an opportunity to acquire stock ownership in
Sara Lee Corporation ("Corporation"). The options granted under the Plan are
not intended to comply with Section 422A of the Internal Revenue Code of 1986,
as amended.

The Committee shall have full authority and discretion to (a) determine,
consistent with the provisions of this Plan, the employees to be granted
options, the times at which options shall be granted, the number of shares
subject to each option, the period during which each option becomes exercisable
(subject to Section 8), and the terms contained in each option agreement, and
(b) adopt rules and regulations and prescribe or approve the forms to carry out
the purposes and provisions of this Plan. The Committee's interpretation and
construction of any provisions of this Plan or any option granted hereunder
shall be binding and conclusive, unless otherwise determined by the Board. Any
power that may be exercised or action that may be taken by the Committee under
this Plan may also be exercised or taken by the Board.

Notwithstanding any provision to the contrary in this Plan, the
Committee shall have full authority to grant options to Executives (as defined
in the Supplement described below) who are subject to the personal income tax
laws of the United Kingdom and employed by the Corporation or any of its
subsidiaries pursuant to the terms and conditions of the Supplement attached
hereto which sets forth a plan approved by the United Kingdom Inland Revenue
under Schedule 10 to the United Kingdom's Finance Act 1984; and the Committee
shall have full
<PAGE> 2
authority and discretion to amend the Supplement so that its terms and
conditions will comply with the applicable requirements of United Kingdom law.

3. ELIGIBILITY. The Committee shall from time to time determine
the key management employees of the Corporation and any of its subsidiaries who
shall be granted options under this Plan. An employee who has been granted an
option may be granted an additional option or options under this Plan if the
Committee shall so determine. The granting of an option under this Plan shall
not affect any outstanding stock option previously granted to an optionee under
this Plan or any other plan of the Corporation. The term "subsidiary" shall
mean any domestic or foreign entity of which the Corporation owns, directly
or indirectly, at least 50% of the total combined voting power of such
corporation or entity.

4. SHARES SUBJECT TO PLAN. Subject to adjustment as provided in
Section 11, the aggregate number of shares which may be issued pursuant to
options granted by the Committee under this Plan shall not exceed 1,500,000
shares of Common Stock of the Corporation, par value $1.33 1/3 per share, which
may be treasury shares reacquired by the Corporation or authorized and unissued
shares, or a combination of both. Any shares subject to an option under this
Plan which shall expire or be terminated for any reason shall be available for
the granting of other options during the term of this Plan.

5. OPTION PRICE. The option price per share under each option granted
by the Committee shall be not less than 100% of the fair market value per share
on the date an option is granted, but in no event less than the par value
thereof. The fair market value shall be the average between the highest and
lowest quoted selling price per share on the New York Stock Exchange Composite
Transactions Tape ("Composite Tape") on the date the option is granted. If
there should be no sale of the shares reported on such date, then the
option price per share shall be the average between the highest and lowest
quoted selling price per share reported on the Composite Tape on the next
preceding day on which there shall have been a sale.

6. STOCK APPRECIATION RIGHTS.

(a) At the discretion of the Committee, any option granted under the
Plan may, at the time of such grant or thereafter at any time prior to the
exercise, termination or expiration of such option, include stock appreciation
rights ("SARs"). SARs represent the right of any optionee, without payment to
the Corporation (except for applicable withholding taxes), to receive the
excess of the fair market value per share on the date on which SARs are
exercised over the option price per share as provided in the related underlying
option. SARs shall pertain to, and be granted only in conjunction with, a
related underlying option granted under this Plan ("related option") and
shall be exercisable and exercised only to the extent that the related option
is exercisable. The number of SARs included in a related option shall be equal
to the number of shares subject to the related option. The Committee may impose
conditions upon the grant or exercise of SARs, which

-2-

<PAGE> 3

conditions may include a condition that SARs may only be exercised in
accordance with rules and regulations adopted by the Committee from time to
time. Such rules and regulations may govern the right to exercise SARs granted
prior to the adoption or amendments of such rules and regulations, as well as
SARs granted thereafter.

(b) Subject to any restrictions or conditions imposed by the
Committee, SARs may be exercised by the optionee only upon the surrender of the
exercisable portion of the related option. Upon the exercise of SARs and the
surrender of the exercisable portion of the related option, the optionee shall
be awarded cash, shares or a combination of shares and cash having a total
value equal to the product obtained by multiplying (i) the excess of the fair
market value per share on the date which SARs are exercised ("Exercise Date")
over the option price per share by (ii) the number of shares subject to the
exercisable portion of the related option so surrendered.

(c) The portion of SARs which may be awarded in cash shall be
determined by the Committee from time to time. The number of shares awardable
to an optionee with respect to the non-cash portion of SARs shall be determined
by dividing such non-cash portion by the fair market value per share on the
Exercise Date. No fractional shares shall be issued. The fair market value per
share on the Exercise Date shall be the average of the highest and lowest
quoted selling price per share reported on the Composite Tape on the Exercise
Date. If there shall be no sale on the Exercise Date, then the fair market
value shall be determined on the next preceding day on which there shall have
been a sale.

7. EXERCISE OF OPTIONS.

(a) Each option granted under the Plan shall be exercisable on the
dates and for the number of shares as shall be provided in a stock option
agreement between the Corporation and optionee evidencing the option granted by
the Committee and the terms thereof. Shares shall be issued to the optionee
pursuant to the exercise of an option only upon receipt by the Corporation from
the optionee of payment in full either in cash or by an exchange of shares of
Common Stock of the Corporation previously owned by the optionee for at least
six months prior to the date of exercise, or a combination of both, in an amount
or having a combined value equal to the aggregate purchase price for the shares
subject to the option or portion thereof being exercised. In the discretion of
the Committee, payment for any shares subject to an option may also be made by
delivering a properly executed exercise notice to the Corporation together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds to pay the purchase price. To
facilitate the foregoing, the Corporation may enter into agreements for
coordinated procedures with one or more brokerage firms. The value of the
previously owned shares of Common Stock exchanged in full or partial payment
for the shares purchased upon the exercise of an option shall be equal to the
aggregate fair market value, as defined in Section 5, of such shares on the
date of the exercise of such options.

-3-
<PAGE> 4
(b) The Corporation shall be entitled to withhold the amount of any
tax attributable to any amounts payable or shares deliverable under the Plan
after giving the person entitled to receive the payment or delivery notice as
far in advance as practicable, and the Corporation may defer making payment or
delivery of any benefits under the Plan if any tax is payable until indemnified
to its satisfaction. The Committee may, in its discretion and subject to rules
which it may adopt, permit an optionee to pay all or a portion of all taxes
arising in connection with the exercise of an option by electing to (i) have
the Corporation withhold shares of Common Stock, (ii) tender back shares of
Common Stock received in connection with the benefit or (iii) deliver other
shares of Common Stock previously owned by the optionee for at least six
months, having a fair market value (as defined in Section 5) equal to the
amount to be withheld; provided, however, that the amount to be withheld shall
not exceed the optionee's estimated total federal, state and local tax
obligations associated with the transaction. The fair market value of
fractional shares remaining after payment of the withholding taxes shall be
paid to the optionee in cash.

8. TERM OF OPTION. Options granted under the Plan shall become
exercisable at such intervals or date or dates and over such period of time
("Exercise Period") and for such number of shares which may be purchased at any
one time as shall be determined by the Committee (collectively "Option Terms")
to be set forth in the stock option agreements between individual optionees and
the Corporation under the Plan ("Option Agreements"), but in no event shall the
Exercise Period be more than 10 years after the date of grant. The Committee
may authorize existing Option Agreements to be amended to provide for different
Option Terms, in whole or in part. Options which are not exercised by the tenth
anniversary of the date on which the option was granted shall expire.

9. NONTRANSFERABILITY OF OPTION. No options or SARs granted under
this Plan shall be transferable except by will or the laws of descent. Such
options or SARs shall be exercisable during the optionee's lifetime only by the
optionee.

10. TERMINATION OF EMPLOYMENT AND DEATH OR DISABILITY OF OPTIONEE.

(a) In the event that during the term of an unexercised option, an
optionee terminates employment with the Corporation or any of its subsidiaries
for any reason (other than retirement, death or disability), the option may be
exercised within the six successive month period following the date of
termination of employment, but only to the extent that the optionee was
entitled to exercise such option or any portion thereof at the date of
termination of employment, and in no event later than 10 years from the date of
the grant of such option.

(b) In the event that during the term of an unexercised option, the
optionee dies or terminates employment with the Corporation or any of its
subsidiaries by reason of the optionee's disability within the meaning of
permanent

- 4 -

<PAGE> 5
and total disability as defined from time to time under the Sara Lee
Corporation Long Term Disability Plan, the option may be exercised within a one
year period following the date of death or termination of employment to the
extent that the option or portion thereof shall become exercisable within such
one year period, but in no event later than 10 years from the date of the grant
of the option. In the event of an optionee's death or disability, the legal
representative of the optionee or the optionee's estate shall be entitled to
exercise the option.

(c) In the event that during the term of an unexercised option, the
optionee terminates employment with the Corporation or any of its subsidiaries
by reason of retirement under the terms and conditions of the retirement plans
of the Corporation applicable to the optionee, the option may be exercised
within a two year period following the date of retirement to the extent the
option or portion thereof shall become exercisable within such two year period,
but in no event later than 10 years from the date of the grant of the option.

(d) The unexercised portion of any option subject to this Section
10 which is not exercised within the six month period, the one year period or
the two year period, as the case may be, shall lapse, and the shares subject to
such option shall become available for the granting of other options under this
Plan.

11. ADJUSTMENT PROVISIONS.

(a) If the Corporation shall at any time change the number of
issued Shares without new consideration to the Corporation (such as by stock
dividend, stock split, recapitalization, reorganization, exchange of shares,
liquidation, combination or other change in corporate structure affecting the
Shares) or make a distribution of cash or property which has a substantial
impact on the value of issued Shares, the total number of Shares reserved for
issuance under the Plan shall be appropriately adjusted and the number of
Shares covered by each outstanding Award and the option price for each
outstanding Option shall be adjusted so that the aggregate consideration
payable to the Corporation and the value of each such Award shall not be
changed.

(b) Notwithstanding any other provision of the Plan, and without
affecting the number of Shares reserved or available hereunder, the Board or
the Committee may authorize the issuance, continuation or assumption of Awards
or provide for other equitable adjustments after changes in the Shares
resulting from any merger, consolidation, sale of assets, acquisition of
property or stock, recapitalization, reorganization or similar occurrence in
which the Corporation is the continuing or surviving corporation, upon such
terms and conditions as it may deem equitable and appropriate.

(c) In the case of any sale of assets, merger, consolidation or
combination of the Corporation with or into another corporation other than a
transaction in which the Corporation is the continuing or surviving corporation
and which does

-5-

<PAGE> 6
not result in the outstanding Shares being converted into or exchanged for
different securities, cash or other property, or any combination thereof (an
"Acquisition"), any Participant to whom an Option has been granted under the
Plan shall have the right (subject to the provisions of the Plan and any
limitation applicable to the Option) thereafter and during the term of the
Option, to receive upon exercise thereof the Acquisition Consideration (as
defined below) receivable upon the Acquisition by a holder of the number of
Shares which might have been obtained upon exercise of the Option or portion
thereof, as the case may be, immediately prior to the Acquisition. The term
"Acquisition Consideration" shall mean the kind and amount of shares of the
surviving or new corporation, cash, securities, evidence of indebtedness, other
property or any combination thereof receivable in respect of one Share of the
Corporation upon consummation of an Acquisition.

12. DURATION, AMENDMENT AND TERMINATION. By mutual agreement between
the Corporation and an optionee hereunder or under any other stock option plan
of the Corporation, options or rights may be granted to the optionee in
substitution and exchange for, and in cancellation of, any benefits previously
granted to the optionee under this Plan or any other stock option plan of the
Corporation. Also, by mutual agreement between the Corporation and an optionee
hereunder or under any stock option plan of the Corporation, options or
rights may be granted to the optionee in substitution and exchange for, and in
cancellation of, any benefits previously granted to the optionee under this
Plan or any other stock option plan of the Corporation. The Board of Directors
may amend the Plan from time to time or terminate the Plan at any time.
However, no action authorized by this Section shall reduce the amount of any
existing benefit or change the terms and conditions thereof without the
optionee's consent. No amendment of the Plan shall, without approval of the
stockholders of the Corporation, (a) materially increase the total number of
shares which may be issued under the Plan; (b) materially reduce the minimum
purchase price of shares of Common Stock which may be made subject to options
under the plan; or (c) materially modify the requirements as to the eligibility
for options under the Plan.

13. STOCKHOLDER APPROVAL. The Plan was adopted by the Board of
Directors on August 25, 1988 subject to stockholder approval. The Plan and any
benefits granted thereunder shall be null and void if stockholder approval is
not obtained within twelve months of the adoption of the Plan by the Board of
Directors.

- ---------------------------
As approved by the Board of Directors on August 25, 1988, as amended on June
29, 1989.

- 6 -

<PAGE> 1
EXHIBIT 10.6

SARA LEE CORPORATION

SHORT-TERM (ANNUAL) INCENTIVE PLAN

FISCAL YEAR 1995

PLAN DESCRIPTION
<PAGE> 2
PURPOSE
The purpose of the FY95 Short-Term (Annual) Incentive Plan is to advance the
interests of Sara Lee Corporation (hereafter called "SLC") by:

a) achieving consistently superior performance;

b) enabling SLC to attract and retain talented executives by providing
incentive opportunities which are more attractive than those generally
available in the executive labor market;

c) rewarding those executives whose duties and responsibilities provide an
opportunity to make a material and substantial contribution to the
performance of SLC;

d) providing meaningful awards which are directly related to such performance;
and

e) distinguishing among the performance contributions of individual
executives.

DEFINITIONS

a) INCENTIVE YEAR shall be the same as SLC's fiscal year ending July 1, 1995
("FY95").

b) THE BOARD shall mean the Board of Directors of SLC.

c) THE COMMITTEE shall mean the Compensation and Employee Benefits Committee
of the Board.

d) DIVISION shall mean the operating profit centers of SLC.

e) PARTICIPANT in the Plan shall mean an "A", "B" or "C" level executive
throughout the Corporation.

f) EARNINGS PER SHARE ("EPS") shall mean reported primary earnings per share
as defined by generally accepted accounting principles as of July 3, 1994.

g) RETURN ON INVESTMENT ("ROI") shall mean Operating Profit as defined below
expressed as a percent of average investment, defined and calculated in
accordance

1
<PAGE> 3
with SLC Finance Manual Policy No. 130 as revised July 1, 1992, subject
to the following adjustments, if any, to the average investment:

Tangible net assets (as defined by Policy No. 130) at the date of
acquisition for acquisitions made during the year and NOT included in
the Annual Operating Plan shall be excluded from the computation of
average investment from the date of acquisition to the end of the
fiscal year.

Tangible net assets, as defined, for those businesses divested during
the year and not included in the Annual Operating Plan as divestments
shall be included in the computation of average investment from the
date of divestment to the end of the fiscal year at planned amounts.

h) OPERATING PROFIT shall mean operating profits as shown on Line 16 of the
EO-200 income statement, with the following adjustment(s);

Operating Profit of businesses acquired during the year and NOT
included in the Annual Operating Plan shall be EXCLUDED.

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

i) ASSET MANAGEMENT refers to various financial standards used to measure
performance on a consolidated or divisional basis as determined by the
operating officer to whom the group or division reports. For operations
participants this may typically include ROI, cash flow or other measures
related to the management of assets.

j) BASE SALARY shall mean base salary earned or actually paid (as is the
practice of the Division) to the participant during FY95, disregarding
deferral elections, premiums, allowances, expense reimbursements,
commissions, incentives, severance or termination pay, payments under
deferred salary or incentive agreements and compensation attributable to
the exercise of stock options.

k) TOTAL DISABILITY shall be defined as per the Long-Term Disability Plan of
the Corporation under which the participant is covered.

2
<PAGE> 4
STANDARDS OF PERFORMANCE AND INCENTIVE OPPORTUNITY

Standards of performance will be established early in the plan year for both
financial and individual performance. A summary of suggested incentive
components and the corresponding incentive opportunities are shown in
Attachment I. The following applies to the incentive plan goals:

The financial and individual weightings for Operations Participants may
be adjusted, with the approval of the appropriate SLC Operating
Executive Vice President, to reflect different priorities during the
Incentive Year.

Financial and individual goals are established at the beginning of the
fiscal year and approved by the Committee or Corporate Officer, as
appropriate.

The financial standards of performance which have been approved for corporate
earnings per share are listed in Attachment II.

NON-FINANCIAL INDIVIDUAL PERFORMANCE

All participants in the plan must have pre-determined individual standards of
performance. Pre-determined individual standards should be established at the
beginning of the fiscal year by agreement between the participant and the
individual responsible for appraising his/her performance. Approval of
standards should be received from the responsible superior two levels up. The
standards should be as specific and as quantifiable as possible, should
represent the key goals for the individual's responsibility during the next
fiscal year, and should relate to AOP objectives and action plans. Standards
should include between five to seven objectives (hence, should prioritize the
individual's activities). One objective, worth 5% for A-level individuals in
operating companies, should contain the two Human Resource areas which are
described in the note at the bottom of Attachment I unless those have otherwise
been factored in to the individual's annual performance evaluation. Standards
should be skewed to longer-term objectives and away from sub-elements of this
year's earnings and asset management goals since these standards are covered in
the financial standards section. The exception would be current operating
problems (such as inventory turns, unit sales volume, etc.).

Following are definitions of the various performance levels;

OUTSTANDING - performance that demonstrably exceeds the Superior level
and where all goals are met and major goals surpassed. Attainment
requires significant "stretch".

3
<PAGE> 5

SUPERIOR - the expected level of performance where attainment requires
normal "stretch". Most goals are met or surpassed.

ACCEPTABLE - performance which is acceptable in the short term because
it demonstrates progress relative to goals and to the
past, but it falls below the superior level. Performance where
attainment requires little or no "stretch".

MARGINAL - performance which is judged marginally acceptable in the
short term, but which is unacceptable and requires
corrective action in the longer term.

RANGES OF INCENTIVE AWARDS

Incentive award ratings shall be determined as follows:

***************************************************************************
* *
* Outstanding = Maximum *
* Superior = 67% of Maximum *
* Acceptable = 33% of Maximum *
* Marginal = 0% *
* *
***************************************************************************

Interpolations will be used for results which fall between the various ratings.

INCENTIVE DISTRIBUTION

Incentive awards shall be distributed on or about September 1, 1995 after the
final financial results of SLC have been publicly announced and after the
August, 1995 meeting of the Committee. Unless otherwise provided in the plan, a
participant must be an employee at the conclusion of the fiscal year in order to
be eligible to receive an incentive award.

ADMINISTRATION

The Plan shall be administered jointly by the Committee and the Chief Executive
Officer of SLC, whose decisions shall be final. The Senior Vice President, Human
Resources, will be responsible for the administrative procedures governing the
Plan including assuring the existence of approved standards of performance and
presenting the results of the Plan to the Committee for final approval. The
following administrative procedures shall govern:

a) Individual incentive awards for corporate officers will be approved by
the Committee. All other incentive awards shall be approved by the Chief
Executive Officer.

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<PAGE> 6
b) All incentive awards shall be made in cash. However, a participant may
elect to partially or totally defer his/her incentive award pursuant to the
terms and conditions of the SLC Non-Qualified Deferred Compensation Plan.

c) A new participant who begins participation during the plan year may be
eligible for a pro-rata incentive award from the date of entry into the
Plan with the approval of the Chief Executive Officer or the Senior Vice
President, Human Resources.

d) In the case of death, total disability, or retirement under a SLC
retirement plan, a pro-rata incentive award shall be distributed on or
about September 1, 1995, based on actual service during the Incentive Year,
unless otherwise deferred under the SLC Non-Qualified Deferred
Compensation Plan.

e) Unless otherwise approved by the Chief Executive Officer, any participant
who resigns or is terminated during the Incentive Year (except as provided
for above) shall not be entitled to any incentive award attributable to the
Incentive Year.

f) A participant who is employed as of the end of the Incentive Year shall be
entitled to receive an incentive award regardless of whether the
participant resigns or is terminated between the end of the Incentive Year
and the date the incentive awards are distributed.

g) 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.

h) The Committee may delegate certain administrative responsibilities to the
Chief Executive Officer except that:
1) The Committee must approve any actions affecting the Chief Executive
Officer, and other elected officers of SLC;
2) The Committee shall approve corporate incentive standards at the
beginning of the fiscal year; and
3) The Committee shall approve any substantive changes or
amendments to the Plan.

<PAGE> 1
EXHIBIT 10.22

AGREEMENT

THIS AGREEMENT entered into this 9th day of November, 1994, by and
between Sara Lee Corporation, a Maryland corporation, with its principal place
of business at Three First National Plaza, Suite 4600, Chicago, Illinois 60602
United States of America (hereinafter called "Sara Lee"), and Frank L.
Meysman, an individual whose principal residence is at Nachtegaallaan 1, 2243
E1 Wassenaar, The Netherlands (hereinafter called "Meysman").

WITNESSETH:

WHEREAS, Sara Lee has elected Meysman to serve as a Senior Vice
President and has nominated Meysman to serve as Chairman of the Board of
Management of Sara Lee/DE N.V., an indirect, wholly-owned subsidiary of Sara
Lee incorporated in the Netherlands (hereinafter called "Sara Lee/DE"); and

WHEREAS, the Supervisory Board of Sara Lee/DE has approved the
nomination of Meysman as Chairman of the Board of Management of Sara Lee/DE;
and

WHEREAS, Meysman has agreed to serve Sara Lee as a Senior Vice
President and Sara Lee/DE as Chairman of its Board of Management in
consideration for certain compensation and benefits; and

WHEREAS, Meysman has entered into a written employment agreement with
Sara Lee/DE dated as of November 9, 1994, providing for certain of the
compensation and benefits related to his service as Chairman of the Board of
Management of Sara Lee/DE (hereinafter called "Sara Lee/DE Agreement"); and

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<PAGE> 2

WHEREAS, Sara Lee has agreed to provide certain additional benefits to
Meysman in consideration for his service as a Senior Vice President;

NOW, THEREFORE, Sara Lee and Meysman hereby agree to the following
terms and conditions with respect to the additional benefits which Sara Lee
shall provide to him:

1. SHORT-TERM (ANNUAL) INCENTIVE PLAN

During the term of this Agreement, Meysman shall be entitled to
participate in the Sara Lee Corporation Short-Term (Annual) Incentive Plan
(hereinafter called the "Annual Plan") applicable for each Sara Lee fiscal
year. The Annual Plan shall provide for the payment of additional cash
compensation on a fiscal year basis, the amount of which shall be related to
the performance of operating businesses for which Meysman is accountable and/or
the performance of Sara Lee Corporation in its entirety. Meysman shall be
eligible to earn an incentive award of up to ninety-five percent (95%) of the
base salary payable to him under the Sara Lee/DE Agreement. The performance
standards against which his award will be determined shall be established at
the beginning of each fiscal year during the term of this Agreement by the Sara
Lee executive to whom Meysman reports and the terms and provisions established
for the Annual Plan by Sara Lee's Board of Directors, or a committee thereof.

2. LONG TERM INCENTIVE PLANS

During the term of this Agreement, Meysman shall be entitled to
participate in any Sara Lee long term incentive compensation plan providing for
the payment of additional cash compensation (hereinafter called "Long-Term
Plan"). The amount of cash compensation payable under the Long-Term Plan shall
be related to the performance of operating businesses for which Meysman is
accountable and/or the performance of Sara Lee Corporation in its entirety.
The time period for which performance shall be measured, the maximum amount of
compensation

<PAGE> 3

which he may earn and the procedures for determining his earnings under such
plans, shall be established by Sara Lee's Board of Directors, or a committee
thereof.

3. STOCK OPTION PLANS

During the term of this Agreement, Meysman shall be entitled to
participate in any stock option plans providing for the granting of options to
purchase shares of Sara Lee securities over an extended period of time at the
market value of such shares on the date of grant of the option, and in any
plans which provide for the distribution or reservation of shares for
management personnel, including, without limitation, restricted stock plans.
The number of shares to which Meysman shall be entitled pursuant to a grant,
distribution or reservation under a particular plan shall be established by
Sara Lee's Board of Directors, or a committee thereof.

4. DEFERRED COMPENSATION PLANS

During the term of this Agreement, Meysman shall be entitled to
participate in any plans which permit management personnel of Sara Lee to defer
the payment to him or her of base salary or incentive annual or long term cash
compensation.

5. FINANCIAL COUNSELING

During the term of this Agreement, Sara Lee shall reimburse Meysman,
or pay directly to such financial adviser as Meysman may direct, the fees
related to his personal financial counseling, provided that the amount of such
fees that Sara Lee shall be obligated to pay during any one calendar year shall
not exceed three percent (3%) of Meysman's base salary at the [beginning/end]
of such calendar year.

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<PAGE> 4

6. PARTICIPATION SUBJECT TO TERMS OF PLANS

Meysman shall be entitled to participate in the above-described
benefits plans on the same basis as other Sara Lee management personnel of the
same employment grade and rank as Meysman.

Meysman's participation in the above-described benefit plans shall be
subject at all times to the terms and conditions of such plans, as they may
exist from time-to-time, and as established by Sara Lee's Board of Directors,
or a committee thereof. Meysman acknowledges that Sara Lee shall have the
right to amend or discontinue any plan at any time, subject to the rights
which Meysman shall have accrued under such plan prior to the effective date of
any amendment or discontinuance.

7. TERMINATION OF AGREEMENT

Meysman shall continue to be entitled to participate in the benefit
plans provided for in this Agreement until such time as annexes A or B to the
Sara Lee/DE Agreement become applicable.

8. OTHERS TERMS AND CONDITIONS OF EMPLOYMENT

All other terms and conditions of the Sara Lee/DE Agreement shall
remain in full force and effect as set forth in that certain agreement dated
November 9, 1994, by and between Meysman and Sara Lee/DE.

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<PAGE> 5

IN WITNESS WHEREOF, Meysman and Sara Lee have signed this Agreement on
the date first above written.

SARA LEE CORPORATION

By: /s/ Gary C. Grom
____________________________
Gary C. Grom
Senior Vice President
Human Resources

/s/ Frank L. Meysman
________________________________
Frank L. Meysman

<PAGE> 1
EXHIBIT 10.23

The following is a fair and accurate English translation of the
Employment Contract between Sara Lee/DE N.V. and Frank L. Meysman, dated
November 9, 1994, which is originally in the Dutch language.

Sara Lee Corporation

/s/ Janet Langford Kelly
-------------------------
By: Janet Langford Kelly
Its: Senior Vice President,
Secretary and General
Counsel

<PAGE> 2

Translated from DUTCH

EMPLOYMENT CONTRACT

THE UNDERSIGNED:

1. SARA LEE/DE N.V., with corporate seat in Joure and administrative
offices at Utrecht, in accordance with the provisions of article 24
indent 2, in these presents represented by Mr. H.B. van Liemt in his
capacity of Chairman of the Board of Supervisors hereinafter called the
"Company",

AND

2. Mr. F. Meysman, residing at Nachtegaallaan 1, 2243 El Nassenaar The
Netherlands, hereinafter called "Member of the Board of Management".

WHEREAS

Member of the Board of Management entered the employment of Douwe Egberts N.V.
in Belgium on January 16, 1986 in the capacity of Marketing Director Douwe
Egberts Belgium, and started his employment with the Company on September 1,
1990, where he consecutively held the positions of Senior Vice President
Corporate Strategy & Business Development, member of the Coffee & Grocery
Board, and chairman of the Household & Personal Care Board;

Member of the Board of Management was appointed Vice President in 1992, and
Senior Vice President of Sara Lee Corporation "SLC" on April 6, 1994;

the Board of Supervisors of the Company, in its decision dated April 16, 1992,
named the Member of the Board of Management a member of the Board of Management
of the Company;

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<PAGE> 3

the Board of Supervisors of the Company, in accordance with article 21 indent 1
of the Company's Bylaws, by decision dated April 19, 1994, named the Member of
the Board of Management Chairman of the Board of Management of the Company;

Member of the Board of Management is familiar with the agreements concluded
with SLC such as the memorandum dated June 27, 1977, the agreement of February
24, 1984 and the protocol of February 27, 1987; and

the parties wish to settle their employment relations while taking into account
the provision of article 22 of the Company's Bylaws;

THEREFORE AGREE AS FOLLOWS:

Article 1 - Term

a. This agreement enters into effect on April 19, 1994 and replaces all
employment contracts and/or agreements relating to their service
relationship executed prior to that date between the Company and the
Member of the Board of Management, which are hereby canceled.

b. Without prejudice to the provisions of Attachments A and B to this
agreement, this agreement is concluded for an unspecified term and can
be terminated by either party by registered letter at the end of a
calendar month providing a notice of six months, while taking into
account the provisions of the Bylaws of the Company regarding the
resignation of members of the Board of Management.

c. This agreement terminates in each case legally without requiring any
notice when reaching the age at which a member of the Board of
Management is obliged to resign in accordance with the Bylaws of the
Company.

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<PAGE> 4

Article 2 - Task/Competencies

a. The Member of the Board of Management is obliged to carry out
his activities in accordance with the pertinent legal provisions and
those in the Company's Bylaws.
In addition, the Member of the Board of Management is obliged
to be always bound by the "Management Regulation" drawn up in
accordance with article 20 indent 2 of the Bylaws, if and as long as
it remains in existence.

b. The Member of the Board of Management is Chairman of the
Board of Management which as a Group is entrusted with the Management
of the Company. As Chairman, the Member of the Board of Management is
in particular entrusted with the following tasks and areas: strategy,
complete operational matters, financial policy, internal and external
communications, personnel and juridical matters.

The Board of Supervisors is at all times authorized, after
consultation with the Board of Management and the Member of the Board
of Management, to effect changes in and make additions to the task
description.

c. In addition to his function of Chairman of the Board of
Management, the Member of the Board of Management will be requested to
take on administrative functions at sister companies and/or
subsidiaries of the Company.

d. The Member of the Board of Management is obliged to observe the
Code of Conduct of SLC, as set forth from time to time. The Code of
Conduct contains among others, provisions with regard to limitations
which are placed on private investments.

Article 3 - Primary Employment Conditions

a. Salary

The Member of the Board of Management is entitled to an annual salary of
DFL 644,000 gross. This salary incorporates all legally

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<PAGE> 5

compulsory payments of whatever nature, including vacation allowance,
as well as year-end bonus.

b. Payment
Payment will be on a monthly basis.

c. Raise
The salary of the Member of the Board of Management can be raised
annually, i.e. on January first on the basis of an evaluation by the
Board of Supervisors of the performance of the Member of the Board
of Management, as well as of the market developments in relation to the
functions on a comparative level. The first raise may take place on
January 1, 1996.

d. Incapacity
During the first year of illness during which the (Dutch)
Health Law is applicable, and the two consecutive years during which
the incapacity applies according to WAO/AAW, the Company shall
supplement the benefits under the Health Law and/or WAO/AAW (or legal
regulation taking its place and/or any addition to it) up to 100% of
the salary prevalent on the day preceding the first sick day, applied
in a manner as described in indent c of this article.

Benefits on the basis of above insurances shall, in case the
Member of the Board of Management retires during the period of illness
or in case of incapacity, be deducted from the pension benefits for
the corresponding period.

e. Recovery clause
The Company is not obligated to make any payment on account of
incapacity, as meant in indent d. of this article, if and to the
extent the Member of the Board of Management can exercise a claim
against a third party with regard to a damage compensation claim
because of lost salary. In the latter case, the Company will disburse
the amounts as per indent d. of this article by way of advance to the
damage compensation to be received from the third party, and against a
cash-in waiver by

<PAGE> 6

Member of the Board of Management of his right to the damage
compensation up to the sum of the advances paid out by the Company.
The obligation of the Company to turn over to the Member of the Board
of Management the cashed-in damage compensation amounts will be
legally compensated with the advances disbursed to him.

Article 4 - Secondary Employment Conditions

a. Vacation Entitlements
The Member of the Board of Management is entitled to thirty
days of vacation per year. Member of the Board of Management shall
take his vacation following mutual consultation with the other members
of the Board of Management. In case of a lengthy absence, the Member
of the Board of Management shall so advise the Board of Supervisors.

b. Pension Provision
The pension arrangement is included in Attachment E to this agreement.

c. The successors of the Member of the Board of Management are
entitled to a benefit, as meant in article 7A:1639.1 of the Civil
Code.

Article 5 - Tertiary Employment Conditions

a. The Member of the Board of Management is and remains insured
under the voluntary collective health insurance plan of the Company.
The corresponding premiums are totally for account of the Member of
the Board of Management. 60% of the premium owed by the Member of the
Board of Management is reimbursed on a gross basis by the Company on
the basis of insurance class 2a for the Member of the Board of
Management and spouse, and class 3 for his children.

b. Car Allowance
1. Member of the Board of Management has available to him
for business use a suitable vehicle with chauffeur.
2. Besides the car mentioned under b.1., Member of the
Board of Management can make use of the car policy applicable
to the

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<PAGE> 7
Board of Management for private and business use.

c. Telephone Expenses
The company reimburses the Member of the Board of Management
for the complete subscription and call expenses of the telephone
connection at the Member of the Board of Management's home, after he
deducts a contribution for private use in accordance with the
arrangement applicable to the Board of Management.

d. Out-of-pocket Expenses
Expenses, which the Member of the Board of Management incurs
within the framework of carrying out his tasks as member of the Board
of Management for the Company, such as travel and lodging expenses, are
reimbursed on a declaration basis. If so desired, the Chairman of the
Board of Supervisors can request to inspect the expense account
declarations, which are processed on a quarterly basis.

e. Non-reimbursable Expenses
For the non-reimbursable expenses, the Company pays the Member of the
Board of Management a representation compensation, which is set by
the Board of Supervisors, from year to year. For 1994, a
representation reimbursement of Dfl. 18,000 is applicable.

f. Third Party Liability Insurance
As Chairman of the Board of Management, and in all functions
which he holds on the basis of and in connection with the Company, the
Member of the Board of Management is insured during the term of this
agreement and after that, as to his third party liability in
accordance with the policy affixed as Attachment C. The costs of the
insurance are for account of the Company. If the Member of the Board
of Management, on the basis of his above-mentioned liability, which
does not fall under the coverage of above insurance policy, is held
liable for damages according to a judicial decision, the Company shall
compensate the Member of the Board of Management for the material
damage suffered by the Member of the Board of Management,

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<PAGE> 8
unless it is established by judicial decision that the Member of
the Board of Management is guilty of intent or gross neglect. The
Member of the Board of Management is obliged to keep the provision of
this indent f. secret vis-a-vis third parties.

Article 6

If the Member of the Board of Management, owing to a function he occupies by
virtue of his capacity as member of the Board of Management of the Company,
receives an allowance or compensation, he shall deposit same into the treasury
of the Company.

Article 7 - Additional Functions

The Member of the Board of Management binds himself not to be active for any
other employer for the duration of his employment contract, - either directly
or indirectly -, to abstain from doing business for own account and not to
accept a position, nor to occupy any paid and/or time-consuming unpaid
function without the advance written consent of the Chairman of the Board of
Supervisors of the Company. The Member of the Board of Management declares
that on the date he signs this agreement, he is holding the additional
functions as listed in Attachment D, which the Board of Supervisors hereby
approves as per above provision.

The interest and/or compensations attached to the side functions meant in this
article do not need to be deducted from the salary mentioned in article 3,
indent a or from any payment or compensation mentioned in this agreement.

Article 8 - Non Compete Clause

a. The Member of the Board of Management binds himself, during the term
of his employment relationship and during a period of 24 months after
termination of his employment, neither directly nor indirectly,
neither for himself nor for others, to be active or connected in any
form whatsoever in or with any enterprise

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<PAGE> 9

with activities similar to, or otherwise competing with those of the
Company and its affiliates, nor to lend thereby his intervention as an
intermediary, in any form whatsoever, directly or indirectly. Taking
into account the potential damage for the Company and its affiliates,
the Chairman of the Board of Supervisors can, at the request of the
Member of the Board of Management, declare that a specific activity
or connection of the Member of the Board of Management falls outside
of the sphere of competition. Such a request by the Member of the
Board of Management shall not be refused on unreasonable grounds.

The Member of the Board of Management furthermore binds himself to
abstain during the above defined term from any efforts to solicit any
employee(s) of the Company or affiliated companies.

b. If the Member of the Board of Management acts in violation of his
obligations, by virtue of the provision under a of this article, he
shall owe the Company a penalty for each violation without the need
to serve notice, the amount of which is equal to one time the last
applicable gross annual salary of the Member of the Board of
Management, together with a fine equalling Dfl. 50,000 for each day
the violation continues following communication of the corresponding
discovery by the Company, without prejudice to the Company's right
to claim complete compensation of damages instead of the fine.

Article 9 - Confidentiality

a. The Member of the Board of Management is bound to secrecy with regard
to all particulars concerning the affairs of the Company and its
affiliates.

b. The Member of the Board of Management binds himself both during the
term of his employment contract and after the employment agreement
has terminated for whatever reason, not to divulge to anybody in any
way whatsoever any information, knowledge or data related to the
affairs of the Company and its affiliates, about which

8
<PAGE> 10

he has obtained knowledge during or as a result of his employment
contract with the Company and about which secrecy was imposed on him,
or the confidential character of which is known to him and should be
known by him.

c. The Member of the Board of Management shall only utilize information,
knowledge or data as meant under b of this article within the
framework of his activities by virtue of his employment contract with
the Company.

d. If the Member of the Board of Management acts in violation of his
obligations by virtue of the provisions in indents a, b and c of this
article, he shall owe the Company for each violation a fine in the
amount of one time the last applicable gross annual salary, without
prejudice to the right of the Company to claim complete compensation
of damages instead of the fine.

Article 10 - Documents

The Member of the Board of Management is prohibited in any way whatsoever from
having or keeping in his private possession documents or correspondence or
duplicates of them which he received in connection with his activities at the
Company, except to the extent and for the period of time this is required for
carrying out his activities for the Company. In each case, the Member of the
Board of Management is obliged, even without the corresponding request, to
immediately turn such documents, correspondence or duplicates of them over to
the Company at the end of his service or in case of non-activity for whatever
reason.

Article 11 - Relief

The Company has the right to relieve the Member of the Board of Management of
his function as a member of the Board of Management of the Company,
without thereby terminating the employment contract with the Member of the
Board of Management, if and as long as the Member of the Board of Management
of the Company is incapable due to illness or accident or otherwise of

9
<PAGE> 11

carrying out his activities as member of the Board of Management in due form,
and the Company shall in such case not be held liable for compensation of
damages. Without prejudice to the foregoing, the Company retains the right to
terminate the employment thereafter in accordance with the provisions of this
agreement.

Article 12

a. All disputes, which might arise by virtue of the present agreement, as
well as of subsequent agreements, which might be the result thereof,
will be decided in accordance with the Regulations of the Dutch
Arbitrage Institute in Rotterdam. The Arbitration Court shall consist
of three arbiters. The arbitrage site shall be Utrecht.

b. This agreement shall be subject to Dutch law.

c. Amendments or additions to this agreement must be set forth in writing
in order to have legal validity.

Article 13

The attachments form an integral part of this agreement.

They are: A. Regulation concerning voluntary early retirement
B. Regulation regarding termination of employment
C. Third party liability insurance
D. Additional functions
E. Pension letter

Thus drawn up in duplicate and signed, in Utrecht on November 9,
1994

(signed) (signed)
SARA LEE/D.E., N.V. F. Meysman
H.B. van Liemt

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<PAGE> 12
Attachment A

This Attachment is an integral part of the Labor Agreement dated November 9,
1994.

1. Prior to reaching the pension entitlement age of 62, but after
reaching age 57 1/2, the Company has the right to request the Member
of the Board of Management to retire as Chairman of the Board of
Management for reasons at Company's discretion.

If the Company requests the Member of the Board of Management to
retire in this manner, whereby the Company observes a notice of at
least 6 months, the Member of the Board of Management, without any
reservation and with his full cooperation, shall accept such
resignation at the desired moment specified to this effect.

2. The Company hereby grants the Member of the Board of Management the
right to resign voluntarily upon his request at age 60, whereby
the Member of the Board of Management shall observe a notice of at
least 6 months.

3. In case of resignation as Chairman of the Board of Management as a
result of the provision sub 1, resp. 2 of this Attachment during the
period starting on the date of termination of his employment with the
Company until the effective date of his pension being 62 years, the
Member of the Board of Management shall be entitled to an arrangement
for voluntary early retirement, which is applicable or declared to be
applicable for members of the Board of Management.

4. For the Member of the Board of Management who retires as a member of
the Board of Management in accordance with the provision sub 1 of 2 of
this Attachment, in deviation from the regulation in effect
for the other employees of the Company, an allowance applies on the
basis of 90% of the gross annual salary paid out last during the first
year starting on the date of termination of his employment with the
Company and on the basis of 80% of the gross annual salary received
last for the

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<PAGE> 13

remaining period until reaching age 62, whereby the Board of
Supervisors can decide to index the annual salary.

The required provision for this arrangement shall be made by the
Company. The Company has the right to transfer the rights and
obligations by virtue of the arrangement provided for in this
Attachment A to a Foundation which is set up for this purpose for the
benefit of the members of the Board of Management of the Company.

5. To the extent that the Member of the Board of Management after
above-mentioned arrangement becomes effective receives income from
other sources or acquires income from his independent enterprise,
while such income on a gross basis together with the allowances
according to sub 3 and 4 of Attachment A exceeds 100% of
above-mentioned gross annual salary paid out last, the excess shall be
withheld from the allowance owed by the Company. Remuneration paid
for carrying out the Supervisor's function is not deemed to form part
of above-mentioned income from employment or from independent
entrepreneurship. Of this type of income meant here, the Member of the
Board of Management shall always prepare and submit a detailed
accounting to the Company.

6. At the end of the employment contract, the Member of the Board of
Management shall resign all directorships/administrative functions in
enterprises affiliated with the Company and to affix all signatures
required to this effect and to lend his cooperation.

Thus drawn up in duplicate and signed in Utrecht on Nov. 9, 1994.

(signed) (signed)
SARA LEE/DE N.V. F. Meysman
H.B. van Liemt

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<PAGE> 14

Attachment B

This attachment forms an integral part of the Labor Agreement dated November 9,
1994.

The following arrangement applies to the Member of the Board of Management for
the period starting with his appointment as Chairman of the Board of Management
until he reaches age 57 1/2.

1. If the Company terminates the employment prior to the Member of the
Board of Management reaching age 57 1/2 without observing the 6
months' notice, or while observing the six months' notice for
reasons other than for cause, as meant in article 7A:1639.p of the
Civil Code - if necessary, in case of a difference of opinion about
this as decided by a judge of the highest instance - the Company
shall owe the Member of the Board of Management an amount equal to:

a) either 2.5 (two and a half) times the gross annual salary
received last, as meant in article 3 indent a of the
employment contract, in case of termination without observing
the notice of six months;
b) or 2 (two) times the gross annual salary received last, as
meant in article 3 indent a of the employment contract, in
case of termination while observing the notice of
six months;
c) increased by one gross monthly salary, as meant in article 3
indent a of the employment contract for each year the Member
of the Board of Management exceeds age 50.

This allowance shall be paid out by the Company in monthly
installments, each amounting to 1:30 of the total amount in case of
sub a, or 1:24 of the total amount, in case of sub b, such increased
each time by the number of installments in accordance with the
provision sub c, this however while making all mandatory withholdings
and furthermore without prejudice to provision sub 2 of this
Attachment. During the period mentioned no employment agreement
exists between the Member of the Board of Management and the Company.

<PAGE> 15

By the end of the employment contract, a premium-free policy will be
provided for the pension entitlements built up during the period of
employment, on the basis of an actuarial computation.

The Member of the Board of Management can remain insured under the
collective health plan subscribed to by the Company, however without
being entitled to a Company contribution in the premiums.

All employment conditions, to the extent not explicitly provided for
otherwise, are automatically terminated at the end of the employment
contract.

2. Over the payments meant under sub 1, the Company shall withhold the
pro rata portion of 2/3 of all income of the Member of the Board of
Management as mentioned below, acquired during the first year
after termination of employment and 1/3 of all income mentioned
hereinafter acquired from the beginning of the second year after
termination of employment for a period ending on the last day of the
month during which the final installment payment meant sub 1 takes
place. "All income" means all earnings from employments and/or
independent entrepreneurship and/or as adviser and/or supervisor, if
such an activity or connection relates to an enterprise with
activities in a field which are similar to or otherwise competing
with those of the Company and its affiliates.

In order to be able to apply these deductions, the Member of the Board
of Management shall supply the Company with a monthly statement of all
income mentioned above. To verify this, the Company shall have the
right to request all relevant information from a relevant income tax
inspector, as well as from the employers of the Member of the Board of
Management.

3. At the end of the employment contract, the Member of the Board of
Management shall resign all directorships/administrative functions
with the Company's affiliates and shall execute all documents and

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<PAGE> 16

lend his full cooperation to this effect.

Thus drawn up in duplicate and signed in Utrecht on November 9, 1994.

(signed) (signed)
SARA LEE/DE N.V. F. Meysman
H.B. van Liemt

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<PAGE> 17

Attachment C

This attachment forms an integral part of the Labor Agreement dated November 9,
1994.

(W.A. Policy)

This attachment refers to a third-party insurance policy which is part of an
overall corporate insurance policy in Dutch language and which contains
confidential information.

<PAGE> 18

Attachment D

This attachment forms an integral part of the Labor Agreement dated Nov. 9,
1994.

Additional functions held by the Member of the Board of Management at the time
of signing this agreement:

None

<PAGE> 19
Stichting
Attachment E "Excedentenpensioenfonds
Douwe Egberts"
Translation from originial Dutch version
- ---------------------------------------

Posrbus 1428
3600 BK MAARSSEN
Mr. F.L.V. Meysman
Nachtegaallaan 1, 2243
El Nassenaar,
The Netherlands
Utrecht, February 16, 1995
(L-0995.02)

Dear Mr. Meysman,

Based on your membership of the "Excedentenpensioenfonds Douwe Egberts"
Foundation and in accordance with the provisions of Article 11, clause 5 of
the Foundation's by-laws, the following pension entitlements apply to you with
effect from 19 April 1994, subject to the terms and provisions of the
Foundation's by-laws.

a. An old-age pension, commencing on the first day of the month in which you
reach the age of 62, set at 50% of your last annual salary. In addition,
until the date on which you become eligible for a statutory old-age pension
(AOW) the required employee's and employer's social security insurances
contributions will be paid/refunded by the Foundation; however, with effect
from the date of commencement of the AOW pension an amount will be
deducted from the old-age pension in respect of AOW, calculated according
to the formula:

SMW x 0.0125
------
0.0175

where SMW - statutory minimum wage including holiday bonus as of 1
January of the year of your retirement, or 10/7 x the joint gross AOW
pension entitlements, including holiday payments, applicable at the same
date to an eligible married couple, both of whom are aged 65 or over, if
this results in a lower total.

N.B. For the purpose of calculating your severance rights the date of
commencement of this pension commitment shall be taken as 16 April
1992. The AOW amount to be deducted in determining the Foundation's
obligations issuing from your severance rights is calculated as
follows:

1
SMW x 0.0125 x m
------ -
0.0175 n

<PAGE> 20

STITCHTING
"EXEEDENTENPENSIOENFONDS
DOUWE EGBERTS"

-2-

where SMW(1) represents the above-mentioned minimum wage as of 1 January
of the year used for computation, in the number of years' service with
Douwe Egberts and in the number of years between the commencement of your
employment with Douwe Egberts and the date of commencement of your AOW
pension.

For the year 1994 you are entitled to an old-age pension from the age
of 62 in the amount of NLG 332,000, - p.a., from which there will be an AOW
deduction of NLG 25,314.00 p.a. from age 65.

The old-age pension is payable from the first day of the month in which
you reach your sixty-second birthday and will terminate on the last day of
the month of your decease.

b. A widow's pension totalling 70% of the old-age pension described under a.
In the case of your death in service, the widow's pension to which your
spouse is entitled will be increased on a temporary basis.

This temporary supplement to the widow's pension will be paid at the
same time as the widow's pension, but in no case beyond the first day of
the month in which the widow reaches the age of 65, and will total 30% of
the old-age pension to which there is an entitlement at that pension date.
For 1994 the widow's pension totals NLG 255,400,- p.a. and the temporary
widow's pension NLG 96,600,-p.a.

The widow's pension will be payable from the date of your decease, or -
if you were already in receipt of an old-age pension - on the first day of
the month following your decease and will terminate on the last day of the
month of decease of the widow.

c. Orphans' pension for all eligible orphans together will be calculated on
the basis of the following table of percentages of the old-age pension
described under a:

no. of children no. of children having
having lost one parent % lost both parents %
---------------------- ---- ---------------------- -----
1 20 1 20
2 30 2 45
3 or more 40 3 60
4 or more 75

the total orphans' pension will be divided equally among the eligible
children.

<PAGE> 21
STICHTING
"EXEDENTENPENSIOENFONDS
DOUWE EGBERTS"

-3-

The pensions will be paid monthly in arrears.

Pension entitlements which (may) accrue to yourself or your next-of-kin from
Stichting Pensioenfonds Douwe Egberts, and any pension entitlements deriving
from previous employers are deducted from the total pension entitlements
described under a-c above, so that there will be claims on this Foundation only
to the extent that entitlement exceeds the latter entitlements.

In order to simplify the procedure for deducting pensions deriving from
pensionschemes elsewhere, it will be sufficient if you or your next-of-kin
report annually to this Foundation of the pension payments received on account
of pensionschemes with previous employers, so that these can be offset against
your claims on this Foundation.

You will receive an annual pension statement indicating the amount of the
entitlements listed under a-c above.

Stichting Excedentenpensioenfonds
Douwe Egberts

<PAGE> 1
EXHIBIT 11

SARA LEE CORPORATION AND SUBSIDIARIES

COMPUTATION OF NET INCOME PER COMMON SHARE
------------------------------------------
(In millions except per share data)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JULY 1, 1995
---------------------------------
PRIMARY FULLY DILUTED
------------- -----------------
<S> <C> <C>
EARNINGS:

Net income $ 804 $ 804

Less: Dividends on preferred stocks,
net of tax benefits (28) (12)

Adjustment attributable to conversion of
ESOP convertible preferred stock -- (8)
------ ------
Net income available for common stockholders $ 776 $ 784
====== ======

Average shares outstanding 478 478

Add: Common stock equivalents -

Stock options 1 2

ESOP convertible preferred stock -- 18

Restricted stock and other 1 1
------ ------
Adjusted weighted average shares outstanding 480 499
====== ======

NET INCOME PER COMMON SHARE $ 1.62 $ 1.57
====== ======
</TABLE>

<PAGE> 2
EXHIBIT 11
(continued)

SARA LEE CORPORATION AND SUBSIDIARIES

COMPUTATION OF NET INCOME PER COMMON SHARE
(In millions except per share data)

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JULY 2, 1994
---------------------------------
PRIMARY FULLY DILUTED
-------- -------------
<S> <C> <C>
EARNINGS:

Net income before accounting change $ 234 $ 234

Cumulative effect of accounting change (35) (35)
-------- --------
Net income 199 199

Less: Dividends on preferred stocks,
net of tax benefits (24) (12)

Adjustment attributable to conversion of
ESOP convertible preferred stock -- (9)
-------- --------
Net income available for common stockholders $ 175 $ 178
======== ========

Average shares outstanding 478 478

Add: Common stock equivalents -

Stock options 1 1

ESOP convertible preferred stock -- 18

Restricted stock and other 1 1
-------- --------
Adjusted weighted average shares outstanding 480 498
======== ========

NET INCOME PER COMMON SHARE:

Before cumulative effect of accounting change $ 0.44 $ 0.43

Cumulative effect of accounting change (0.07) (0.07)
-------- --------
$ 0.37 $ 0.36
======== ========

</TABLE>

<PAGE> 1
EXHIBIT 12.1

SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions except ratios)

<TABLE>
<CAPTION>
Year Ended
-------------------------
July 1, July 2,
1995 1994 <F1>
---------- ----------
<S> <C> <C>
Fixed charges:
Interest expense $243 $188
Interest portion of rental expense 68 60
---------- ----------
Total fixed charges before capitalized interest 311 248
Capitalized interest 12 21
---------- ----------
Total fixed charges $323 $269
========== ==========

Earnings available for fixed charges:
Income before income taxes $1,219 $389
Less undistributed income in minority-owned companies (10) (8)
Add minority interest in majority-owned subsidiaries 36 25
Add amortization of capitalized interest 21 19
Add fixed charges before capitalized interest 311 248
---------- ----------
Total earnings available for fixed charges $1,577 $673
========== ==========
Ratio of earnings to fixed charges 4.9 2.5
========== ==========

<FN>
<F1> During the fourth quarter of fiscal 1994, the corporation recorded a
pretax charge of $732 million in connection with various restructuring
actions.
</FN>
</TABLE>

<PAGE> 1
EXHIBIT 12.2

SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(In millions except ratios)

<TABLE>
<CAPTION>
Year Ended
--------------------------------
July 1, July 2,
1995 1994 <F1>
----------- -----------
<S> <C> <C>
Fixed charges and preferred stock dividend requirements:
Interest expense $243 $188
Interest portion of rental expense 68 60
----------- -----------
Total fixed charges before capitalized interest
and preferred stock dividend requirements 311 248
Capitalized interest 12 21
Preferred stock dividend requirements <F2> 44 38
----------- -----------
Total fixed charges and preferred stock
dividend requirements $367 $307
=========== ===========

Earnings available for fixed charges and preferred
stock dividend requirements:
Income before income taxes $1,219 $389
Less undistributed income in minority-owned companies (10) (8)
Add minority interest in majority-owned subsidiaries 36 25
Add amortization of capitalized interest 21 19
Add fixed charges before capitalized interest and
preferred stock dividend requirements 311 248
----------- -----------
Total earnings available for fixed charges and
preferred stock dividend requirements $1,577 $673
=========== ===========
Ratio of earnings to fixed charges and preferred stock
dividend requirements 4.3 2.2
=========== ===========

<FN>
<F1> During the fourth quarter of fiscal 1994, the corporation recorded a
pretax charge of $732 million in connection with various restructuring
actions.
<F2>
Preferred stock dividends in the computation have been increased to an
amount representing the pretax earnings that would have been required to
cover such dividends.
</FN>
</TABLE>

<PAGE> 1

EXHIBIT 21

SUBSIDIARIES
OF
SARA LEE CORPORATION

The following is a list of the Registrant's subsidiary corporations. Certain
subsidiaries which are inactive or exist solely to protect business names,
but conduct no business, have been omitted; such omitted subsidiaries
considered in the aggregate do not constitute a significant subsidiary.

Domestic Subsidiaries

Place of
Name Incorporation
- ---- -------------
Adams-Millis Corporation North Carolina

APD Chemicals Corporation Delaware

Aris Isotoner, Inc. Delaware

Aris (Philippines), Inc. Delaware

Bali Company Delaware

Bali Foundations, Inc. Delaware

Bessin Corporation Illinois

BG Marketing Corp. Delaware

Bil Mar Farms, Inc. Delaware

Bil Mar Foods, Inc. Delaware

BNH, Inc. Delaware

Bryan Foods, Inc. Delaware

Canadelle Intimate Fashions, Inc. Nevada

Champion Products Inc. New York

Coach Stores, Inc. Delaware

<PAGE> 2

Coach Leatherware International, Inc. Delaware

DEA Leasing Corporation Delaware

D.E. Direct, Inc. Delaware

Douwe Egberts/Van Nelle, Inc. Kentucky

The Fuller Brush Company Connecticut

GPI Corp. Nebraska

Hanes Menswear, Inc. Delaware

Hanes Puerto Rico, Inc. Delaware

Hygrade Food Products Corporation New York

International Baking Co., Inc. Delaware

Interstar, Inc. Florida

JPF Holdings, Inc. Delaware

JP Foodservice, Inc. Delaware

Jogbra Inc. Delaware

Kiwi (Europe) Corporation Delaware

L'eggs Brands, Inc. Delaware

Lyon's Restaurants, Inc. California

Milky Way Products Company Delaware

Nihon Sara Lee KK Corporation Delaware

Ozark Salad Company, Inc. Delaware

PAI Subsidiary, Inc. Delaware

Playtex Apparel, Inc. Delaware

2
<PAGE> 3

Playtex Dorado Corporation Delaware

Playtex Industries, Inc. Delaware

Playtex Marketing Corporation Delaware

PYA Holding, Inc. Delaware

PYA, Inc. Delaware

PYA/Monarch, Inc. Delaware

Rice Hosiery Corporation North Carolina

Sara Lee Bond Investment Corp. Delaware

Sara Lee Champion Europe Inc. Delaware

Sara Lee Corporation Asia, Inc. Delaware

Sara Lee/DE Asia, Inc. Delaware

Sara Lee Foundation Illinois

Sara Lee French Investment Company, Inc. Delaware

Sara Lee International Corporation Delaware

Sara Lee International Finance Corporation Delaware

Sara Lee Investments, Inc. Delaware

Sara Lee JV Corp. Delaware

Sara Lee - Kiwi Holdings, Inc. Delaware

Sara Lee Leasing Company Illinois

Sara Lee U.K. Holdings, Inc. Delaware

Saramar Corporation Delaware

Schloss & Kahn, Inc. Delaware

Scotch Maid, Inc. Delaware

Sealily, Inc. Delaware

3
<PAGE> 4

<TABLE>
<S> <C>
Seaotter, Inc. Delaware

Seitz Foods, Inc. Delaware

SL Alaska II, Inc. Delaware

SL Associates Delaware

SLC Leasing (Nevada)-II, Inc. Delaware

SLC Leasing (Wyoming), Inc. Delaware

SLE, Inc. Delaware

SLI Administrative Services Company, Inc. Delaware

SLKP Sales, Inc. Delaware

Smoky Hollow Foods, Inc. Delaware

Southern Belle, Inc. Delaware

Spring City Knitting Co., Inc. Delaware

State Fair Foods, Inc. Texas

Super Products, Inc. Delaware

Sweet Sue Kitchens, Inc. Delaware

Tailby-Nason Company, Inc. Delaware

Wolferman's, Inc. Delaware
</TABLE>

4
<PAGE> 5
FOREIGN SUBSIDIARIES

Abel Bonnex S.A. France

Agepal SarL Luxemburg

Allende International, S.A. de C.V. Mexico

A.P. Developments Limited Zambia

Aris Isotoner S.A. France

Aris Isotoner UK Limited England

Aris (Philippines) Inc. Philippines

Arno Leasing B.V. Netherlands

Ashe Limited England

Ashe Pension Trustees Ltd. England

Auragate Pty. Ltd. Australia

Avroy Shlain Cosmestics (Pty) Ltd. South Africa

Balirny Douwe Egberts AS Czech Republic

Ballograf Bic Austria Vertriebs Ges. mbh Austria

Bal-Mex S.A. de C.V. Mexico

Beviston Pty. Ltd. Australia

A/S Blumoller Denmark

Boers Groothandel B.V. Netherlands

Boers Vleeswaren B.V. Netherlands

Buhler Fontaine S.A. France

Caitlin Financial Corporation N.V. Netherlands
Antilles

Canadelle Incorporated Canada

5
<PAGE> 6

<TABLE>
<S> <C>
Casual Wear de Mexico, S.A. de C.V. Mexico

Champion Products, S.A. de C.V. Mexico

Champion UK Ltd. England

Charter de Mexico, S.A. de C.V. Mexico

Coach (UK) Limited England

Coffenco International GmbH Germany

Cofico N.V. Netherlands
Antilles

Comercial de Puntillas, S.A. Spain

Comercial Rinbros, S.A. de C.V. Mexico

Commandant B.V. Netherlands

Compack Douwe Egberts Rt Hungary

Confeccionadora Canarias, S.A. de C.V. Mexico

Confecciones de Monclova, S.A. de C.V. Mexico

Confecciones de Monterrey, S.A. de C.V. Mexico

Confecciones de Nueva Rosita, S.A. de C.V. Mexico

Confecciones El Pedregal S.A. de C.V. El Salvador

Congelacion y Conservacion de Alimentos Mexico

Conoplex Insurance Company Bermuda

Contex, Sociedad Anomina de Capital Variable El Salvador

Corjan, S.A. Panama

Corporacion Champion de El Salvador, S.A. de C.V. El Salvador

Corporacion H.M., S.A. de C.V. Mexico

Cruz Verde Portugal - Productos de Consumo Lda. Portugal
</TABLE>

6
<PAGE> 7

<TABLE>
<S> <C>
Dacor N.V. Belgium

DEA (Bermuda) Ltd. Bermuda

Decaf B.V. Netherlands

Decaf N.V. Belgium

Decem B.V. Netherlands

Decotrade A.G. Switzerland

DEF Finance S.A. France

DEF Holding S.A. France

Defico N.V. Netherlands
Antilles

Detrex B.V. Netherlands

Difan S.A.M. Monaco

Dim S.A. France

Dim-Rosy AB Sweden

Dim-Rosy AG Switzerland

Dim-Rosy A/S Denmark

Dim-Rosy Benelux N.V. Belgium

Dim-Rosy GmbH Germany

Dim-Rosy Portugal Lda Portugal

Dim-Rosy S.p.A. Italy

Dim Rosy Textiles, Incorporated Canada

Dimtex S.A. France

Douwe Egberts N.V. Belgium

Douwe Egberts Agio GmbH Germany

Douwe Egberts Coffee & Tea International B.V. Netherlands
</TABLE>

7
<PAGE> 8

<TABLE>
<S> <C>
Douwe Egberts Coffee Systems France S.A. France

Douwe Egberts Coffee Systems Ltd. Canada

Douwe Egberts Coffee Systems Ltd. England

Douwe Egberts Coffee Systems International B.V. Netherlands

Douwe Egberts Coffee Systems Nederland B.V. Netherlands

Douwe Egberts Compack Kft. Hungary

Douwe Egberts Espana S.A. Spain

Douwe Egberts France S.A. France

Douwe Egberts Kaffee Systeme GmbH Germany

Douwe Egberts Kaffee Systeme GmbH & CO., K.G. Germany

Douwe Egberts GmbH Germany

Douwe Egberts Kaffee B.V. Netherlands

Douwe Egberts Limited Canada

Douwe Egberts Nederland B.V. Netherlands

Douwe Egberts (Portugal) Produtos Almentares Lda. Portugal

Douwe Egberts Van Nelle Diensten B.V. Netherlands

Douwe Egberts Van Nelle Operating B.V. Netherlands

Douwe Egberts Van Nelle Tabaksmaatschappij B.V. Netherlands

Douwe Egberts Van Nelle Netherlands
Tabaksproduktiemaatschappij B.V.

Douwe Egberts Van Nelle Tobacco Belgium N.V. Belgium

Douwe Egberts Van Nelle Tobacco International B.V. Netherlands

Duyvis B.V. Netherlands

Era Expeditie B.V. Netherlands

Eri Feine Schuhpflege Vertriebs GmbH Germany
</TABLE>

8
<PAGE> 9

<TABLE>
<S> <C>
Esa Eppinger GmbH Germany

AB Fenom Sweden

Filodoro Calze S.p.A. Italy

De Friesche Erven B.V. Netherlands

Fujian Sara Lee Consumer Products Company Ltd. China

Gromtex S.A. Tunisia

Hanes Caribe Ltd. Cayman Islands

Hanes Choloma Ltd. Cayman Islands

Hanes de Centroamerica S.A. Guatemala

Hanes (Deutschland) GmbH Germany

Hanes Dominican Inc. Dominican Republic

Hanes de El Salvador, S.A. de C.V. El Salvador

Hanes Europe N.V. Belgium

Hanes Foreign Sales Company B.V. Netherlands

Hanes France S.A. France

Hanes International N.V. Belgium

Hanes de Mexico, S.A. de C.V. Mexico

Hanes Panama, Inc. Panama

Hanes Jamaica Limited Jamaica

Hanes Tejidos Costa Rica Ltd. Costa Rica

Hanes U.K. Limited England

Harris/DE Pty. Ltd. Australia

H.D.I. S.A. France
</TABLE>

9
<PAGE> 10

<TABLE>
<S> <C>
Hesperia de Alimentacion S.A. Spain

Hesperia Centro S.A. Spain

Hesperia Levante S.A. Spain

Hesperia Noroeste S.A. Spain

Hesperia Sur S.A. Spain

Hilton Bonds N.Z. (1991) Limited New Zealand

Holmeats Belgium

Home Safe Products Sdn Bhd Malaysia

House of Fuller, S.A. de C.V. Mexico

Household & Personal Care Research B.V. Netherlands

Imperial Meats Belgium

International Food Service B.V. Netherlands

Inco Hellas A.E. Cosmetics, Dietetics and Greece
Pharmaceutical Products Industry

Industrias Carnicas Navarras S.A. Spain

Industrias de Carnes Nobre S.A. Portugal

Industrias Internacionales de San Pedro, S.A. de C.V. Mexico

Industrias Mallorca, S.A. de C.V. Mexico

Inmobiliaria Meck-Mex, S.A. de C.V. Mexico

Intec B.V. Netherlands

Inter Food Service Ltd. England

Internacional Manufacturera, S.A. Mexico

International Underwear Ltd. Morocco

INTEX Dessous GmbH Germany

INTEX Textil-Vertriebsgesellschaft AG Switzerland
</TABLE>

10
<PAGE> 11
<TABLE>
<S> <C>
Intradal Produktie Belgium N.V. Belgium

I. Tas Ezn B.V. Netherlands

Kaffehuset Friele A/S Norway

King Gee Clothing Company Pty. Ltd. Australia

Kitchens of Sara Lee (Australia) Pty. Ltd. Australia

Kitchens of Sara Lee, SNC France

Kitchens of Sara Lee U.K. Limited England

Kiwi Brands (Tinanjin) Co. Ltd. China

Kiwi Brands Hong Kong Ltd. Hong Kong

Kiwi Brands Ltd. Kenya

Kiwi Brands Ltd. Malawi

Kiwi Brands Ltd. Zambia

Kiwi Brands Pty. Ltd. Australia

Kiwi Brands Pty. Ltd. South Africa

Kiwi Brands (Malaysia) Sdn. Bhd. Malaysia

Kiwi Brands (N.Z.) Ltd. New Zealand

Kiwi Brands (Private) Limited Zimbabwe

Kiwi Caribbean Limited England

P.T. Kiwi Distribution Company Indonesia

Kiwi (EA) Ltd. England

Kiwi European Holdings B.V. Netherlands

Kiwi France S.A. France

Kiwi Holdings S.A. France

Kiwi Holdings Limited England

P.T. Kiwi Indonesia Indonesia

</TABLE>

11
<PAGE> 12

<TABLE>
<S> <C>
Kiwi International Pte. Ltd. Singapore

Kiwi (Manufacturing) Sdn Bhd Malaysia

Kiwi (Nigeria) Limited Nigeria

Kiwi (Thailand) Limited Thailand

Kiwi TTK Limited India

Kiwi United Taiwan Company Ltd. China

Koffiebranderijen Theehandel Kanis & Gunnink B.V. Netherlands

Koninklijke Douwe Egberts B.V. Netherlands

Kortman Intradal B.V. Netherlands

Kortman Nederland B.V. Netherlands

N.V. Kortman Intradal S.A. Belgium

Lassie B.V. Netherlands

Maglificio Bellia S.p.A. Italy

Marcilla Coffee System S.A. Spain

Manufacturera de Cartago, S.A. Costa Rica

Manufacturera Libra, S.A. de C.V. Mexico

Manufacturas Mallorca, S.A. de C.V. Mexico

Marander Assurantie Compagnie B.V. Netherlands

Marketing-en Verkoopmaatschappij Stegeman B.V. Netherlands

Merrild Coffee Systems AB Sweden

Merrild Kaffe A/S Denmark

Nicholas Manufacturing Limited England

Nihon Kiwi K.K. Japan

Nihon Sara Lee K.K. Japan
</TABLE>

12
<PAGE> 13

<TABLE>
<S> <C>
Opus Chemical AB Sweden

Oxwall Tools B.V. Netherlands

Palas de Mexico, S.A. de C.V. Mexico

Pamyc, S.A. de C.V. Mexico

Playtex Dominicana, S.A. Dominican
Republic

Playtex Espana, S.A. Spain

Playtex France S.A. France

Playtex Investments Europe S.A. France

Playtex Limited England

Playtex Trading Limited England

Plustex B.V. Netherlands

Plustex S.A. Belgium

Pretty Polly (Killarney) Limited Ireland

Pretty Polly Pension Trustees Ltd. England

Probemex, S.A. de C.V. Mexico

PT Premier Ventures Indonesia

PT Prodenta Indonesia

PT Suria Yozani Indonesia

PTX Tunisie S.A. Tunisia

Product Suppliers A.G. Switzerland

Rinbros, S.A. de C.V. Mexico

Sagepar SaRL France

Sara Lee Bakery Malaysia

Sara Lee Bakery Company Limited Hong Kong
</TABLE>

13
<PAGE> 14

<TABLE>
<S> <C>
Sara Lee Champion France S.A. France

Sara Lee Charcuterie, S.A. France

Sara Lee Chile S.A. Chile

Sara Lee Corporation of Canada Ltd. Canada

Sara Lee de Costa Rica, S.A. Costa Rica

Sara Lee/DE Espania S.A. Spain

Sara Lee/DE Finance B.V. Netherlands

Sara Lee/DE Italy S.p.A Italy

Sara Lee/DE N.V. Netherlands

Sara Lee Europe Direct Marketing S.A. France

Sara Lee Europe Finance S.A. France

Sara Lee France SNC France

Sara Lee Foreign Sales Corporation Barbados

Sara Lee Germany GmbH Germany

Sara Lee (Hong Kong) Limited Partnership Hong Kong

Sara Lee Hosiery Canada Ltd. Canada

Sara Lee Hosiery de Mexico, S.A. de C.V. Mexico

Sara Lee Household & Personal Care UK Limited England

Sara Lee Mexicana S.A. de C.V. Mexico

Sara Lee Overseas Finance N.V. Netherlands
Antilles

Sara Lee Personal Products S.A. France

Sara Lee Personal Products S.p.A. Italy

Sara Lee Personal Products (Argentina) S.A. Argentina

Sara Lee Personal Products (Australia) Pty. Ltd. Australia
</TABLE>

<PAGE> 15

<TABLE>
<S> <C>
Sara Lee Personal Products (Colombia) S.A. Colombia

Sara Lee Personal Products (South Africa) (Pty.) Ltd. South Africa

Sara Lee Personal Products (Venezuela) S.A. Venezuela

Sara Lee Philippines Inc. Philippines

Sara Lee Processed Meats Belgium N.V. Belgium

Sara Lee Processed Meats (Europe) B.V. Netherlands

Sara Lee Trading Ltd. Thailand

Sara Lee UK Holdings Plc England

Sara Lee (UK Investments) Limited England

Servicios Administrativos Sara Lee, S.A. de C.V. Mexico

Shanghai Vocal Enterprise Limited China

Siamcona Ltd. Thailand

Spantex, S.A. de C.V. Mexico

Spring City de Honduras, S.A. Honduras

Stegeman B.V. Netherlands

The Stubbies Clothing Company Pty. Ltd. Australia

Tana B.V. Netherlands

Tana Canada Incorporated Canada

Tana France S.A. France

Tana Schuhpflege AG Switzerland

Tejidos Flex Corporation Dominican
Republic

Telec A.G. Switzerland

Temana Ges. mbH Austria

Temana International Ltd. England
</TABLE>

15
<PAGE> 16

<TABLE>
<S> <C>
Temana Verkaufs-AG Switzerland

Textiles Tropicales, Sociedad Anonima Costa Rica

Tomten A/S Norway

Tuxan Schuhpflegemittel GmbH Austria

Underwear Ltd. Malta

Valma B.V. Netherlands

Van Nelle Holding (Germany) GmbH Germany

Van Nelle Produktie B.V. Netherlands

Vatter GmbH Germany

Verpakkingsindustrie Boers B.V. Netherlands

Nv Zwarte Kat/Cle d'Or Belgium

168765 Canada Inc. Canada

24762030 Nova Scotia Ltd. Canada

1116-9087 Quebec Inc. Canada
</TABLE>

<PAGE> 1

EXHIBIT 23

Consent of Independent Public Accountants

To the Board of Directors and Management
of Sara Lee Corporation:

As independent public accountants, we hereby consent to the incorporation of
our reports dated July 31, 1995, included in this Form 10-K, into the
Corporation's previously filed Form S-8 registration statement Nos. 33-35760
and the first and second amendments thereto, 33-57615, 33-60837, and Form S-3
registration statement No. 33-60071.

/s/ Arthur Andersen LLP

Chicago, Illinois,
September 29, 1995.

<PAGE> 1
EXHIBIT 24

POWER OF ATTORNEY
-----------------

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature
appears below constitutes and appoints John H. Bryan and Janet Langford Kelly,
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to act for him and in his name, place and
stead, in any and all capabilities to sign the Annual Report on Form 10-K of
Sara Lee Corporation for the fiscal year ending July 1, 1995, and any and all
amendments thereto and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agent, or his substitute, may lawfully do or cause to be done by
virtue himself.

/s/ Paul A. Allaire
-------------------
Paul A. Allaire

Dated: 8/28/95
----------------
<PAGE> 2
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Frans H.J.J. Andriessen
-----------------------------
Frans H.J.J. Andriessen

Dated: 8/30/95
----------------
<PAGE> 3
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Duane L. Burnham
--------------------
Duane L. Burnham

Dated: 8/28/95
----------------
<PAGE> 4
EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that the person whose signature
appears below constitutes and appoints John H. Bryan and Janet Langford Kelly,
each of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, to act for him and in his name, place and
stead, in any and all capabilities to sign the Annual Report on Form 10-K of
Sara Lee Corporation for the fiscal year ending July 1, 1995, and any and all
amendments thereto and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute, may lawfully do or cause to be
done by virtue himself.

/s/ Charles W. Coker
---------------------------
Charles W. Coker

Dated: August 29, 1995
---------------------
<PAGE> 5
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Willie D. Davis
-------------------
Willie D. Davis

Dated: 8/30/95
----------------
<PAGE> 6
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Allen F. Jacobson
---------------------
Allen F. Jacobson

Dated: 8/31/95
----------------
<PAGE> 7
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Vernon E. Jordan, Jr.
-------------------------
Vernon E. Jordan, Jr.

Dated: 8/30/95
----------------
<PAGE> 8
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ James L. Ketelsen
---------------------
James L. Ketelsen

Dated: 8/30/95
----------------
<PAGE> 9
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Hans B. van Liemt
---------------------
Hans B. van Liemt

Dated: 8/30/95
----------------

<PAGE> 10
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Joan D. Manley
------------------
Joan D. Manley

Dated: 8/30/95
----------------

<PAGE> 11
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Newton N. Minow
-------------------
Newton N. Minow

Dated: 8/29/95
----------------

<PAGE> 12
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Sir Arvi H. Parbo A. C.
---------------------------
Sir Arvi H. Parbo A. C.

Dated: 8/31/95
----------------

<PAGE> 13
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Rozanne L. Ridgway
----------------------
Rozanne L. Ridgway

Dated: 8/31/95
----------------

<PAGE> 14
EXHIBIT 24

POWER OF ATTORNEY
-----------------

/s/ Richard L. Thomas
---------------------
Richard L. Thomas

Dated: 8/29/95
----------------

<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED BALANCE SHEET AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-01-1995
<PERIOD-START> JUL-03-1994
<PERIOD-END> JUL-01-1995
<CASH> 167
<SECURITIES> 35
<RECEIVABLES> 1,845
<ALLOWANCES> 192
<INVENTORY> 2,830
<CURRENT-ASSETS> 4,928
<PP&E> 5,683
<DEPRECIATION> 2,719
<TOTAL-ASSETS> 12,431
<CURRENT-LIABILITIES> 4,844
<BONDS> 1,817
<COMMON> 640
0
334
<OTHER-SE> 3,299
<TOTAL-LIABILITY-AND-EQUITY> 12,431
<SALES> 17,719
<TOTAL-REVENUES> 17,719
<CGS> 11,023
<TOTAL-COSTS> 11,023
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 164
<INTEREST-EXPENSE> 185
<INCOME-PRETAX> 1,219
<INCOME-TAX> 415
<INCOME-CONTINUING> 804
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 804
<EPS-PRIMARY> 1.62
<EPS-DILUTED> 1.57

</TABLE>