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As filed with the Securities and Exchange Commission on February 4, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SARA LEE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 2089049
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
THREE FIRST NATIONAL PLAZA, SUITE 4600
CHICAGO, ILLINOIS 60602-4260
TELEPHONE: (312) 726-2600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
JANET LANGFORD KELLY, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
SARA LEE CORPORATION
THREE FIRST NATIONAL PLAZA, SUITE 4600
CHICAGO, ILLINOIS 60602-4260
TELEPHONE: (312) 558-8503
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ___________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Shares Amount Maximum Maximum Amount of
To Be To Be Aggregate Aggregate Registration
Registered Registered Price Offering Price Fee
(1)(2) Per Unit (2)(3) (3)
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Common Stock,
$.01 par value 5,000,000 $24.03 $120,150,000.00 $33,401.70
(including
Preferred
Stock Purchase
Rights (4))
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(1) Also registered hereby are such additional and indeterminate number of
shares of Common Stock and Preferred Stock Purchase Rights ("Rights") as
may become issuable in accordance with the provisions of the Sara Lee
Corporation 1998 Long-Term Incentive Stock Plan, the Sara Lee Corporation
1995 Long-Term Incentive Stock Plan, as amended, the Sara Lee Corporation
1995 Non-Employee Director Stock Plan, as amended, and the Sara Lee
Corporation 1989 Incentive Stock Plan, as amended.
(2) The information included in this Registration Statement gives effect to a
2-for-1 split of the Company's outstanding Common Stock which was effected
in the form of a 100 percent stock dividend declared on October 29, 1998
and distributed on December 21, 1998 to stockholders of record as of the
close of business on December 1, 1998.
(3) Estimated solely for the purpose of calculating the Registration Fee and,
pursuant to Rule 457(h) under the Securities Act of 1933, based upon the
average of the high and low sale prices of Common Stock of the Registrant
on The New York Stock Exchange on February 2, 1999.
(4) Rights are initially carried and traded with the Common Stock of the
Company. Value attributable to such Rights, if any, is reflected in the
market price of the Common Stock.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED FEBRUARY 4, 1999
PROSPECTUS
SARA LEE CORPORATION
5,000,000 SHARES OF COMMON STOCK
__________________
This Prospectus relates to up to 5,000,000 shares of Common Stock of
Sara Lee Corporation which we may offer and sell to you and to other holders of
options to purchase our Common Stock. Our Common Stock is listed and traded on
The New York Stock Exchange (under the symbol "SLE"), The Chicago Stock
Exchange, The Pacific Stock Exchange, The Stock Exchange (London), The Bourse
(Paris), The Amsterdam Stock Exchange, and The Swiss Exchange. On January 28,
1999, the last reported sale price of our Common Stock on The New York Stock
Exchange was $25.75 per share.
Each share of our Common Stock includes one-half of a Right to purchase
one-one hundredth of a share of our Series A Junior Participating Preferred
Stock or, under certain circumstances, our Common Stock or other securities,
cash or other assets.
Our principal executive offices are located at Three First National Plaza,
Chicago, Illinois 60602-4260. Our telephone number is (312) 726-2600.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The purchase price for the shares of Common Stock you are entitled to
receive upon exercise of each of your stock options is set forth in a stock
option agreement. We set the price for each of your stock options at the fair
market value of a share of Common Stock on the date we granted the stock option.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this Prospectus is _____________, 1999
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TABLE OF CONTENTS
Page
About This Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Description of the Plans and the Non-Qualified Stock Options . . . . . . . . .3
Certain Federal Income Tax Consequences. . . . . . . . . . . . . . . . . . . .6
Description of Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . .8
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Where You Can Find More Information. . . . . . . . . . . . . . . . . . . . . .9
ABOUT THIS PROSPECTUS
This Prospectus relates to up to 5,000,000 shares of Common Stock, par
value $.01 per share, including the associated Preferred Stock Purchase Rights
("Common Stock"), of Sara Lee Corporation, a Maryland corporation (the
"Company"), which may be offered and sold to permitted transferees of
participants ("Participants") in the Sara Lee Corporation 1998 Long-Term
Incentive Stock Plan (the "1998 Plan"), the Sara Lee Corporation 1995 Long-Term
Incentive Stock Plan, as amended (the "1995 Plan"), the Sara Lee Corporation
1995 Non-Employee Director Stock Plan, as amended (the "Director Plan"), and the
Sara Lee Corporation 1989 Incentive Stock Plan, as amended (the "1989 Plan"),
pursuant to non-qualified stock options ("Stock Options") granted to such
Participants. The 1998 Plan, the 1995 Plan, the Director Plan and the 1989 Plan
are each referred to as a "Plan," and are collectively referred to as the
"Plans." The Prospectus also relates to the offer and sale of Common Stock
pursuant to such Stock Options to the beneficiaries of such permitted
transferees, or the executors or administrators of their estates, or other
persons duly authorized by law to administer the estate or assets of such
persons. The information in this Prospectus gives effect to a 2-for-1 split of
the Company's outstanding Common Stock which was effected in the form of a 100
percent stock dividend declared on October 29, 1998 and distributed on
December 21, 1998 to stockholders of record as of the close of business on
December 1, 1998.
THE COMPANY
The Company is a global manufacturer and marketer of high-quality,
brand-name products for consumers throughout the world. We have operations
in more than 40 countries and market branded products in more than 140
countries. Our products and services include packaged meats, frozen and
fresh-baked goods, coffee and tea, foodservice distribution, intimate
apparel, knit products, legwear, underwear, activewear and other apparel and
accessory items, and household and body care products.
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USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Common
Stock for general corporate purposes.
DESCRIPTION OF THE PLANS AND THE NON-QUALIFIED STOCK OPTIONS
GENERAL
The primary purposes of the 1998 Plan, the 1995 Plan and the 1989 Plan are
to promote the interests of the Company and its stockholders by strengthening
Sara Lee's ability to attract and retain highly competent individuals to serve
as officers and other key employees and to provide a means to encourage stock
ownership and proprietary interest by officers and key employees in the Company.
The primary purpose of the Director Plan is to promote the long-term growth of
the Company by enhancing the Company's ability to attract and retain highly
qualified and capable non-employee directors with diverse backgrounds and
experience and by increasing the proprietary interest of non-employee directors
in the Company. Only non-employee directors of the Company are eligible to
participate in the Director Plan.
The Plans generally are administered by the Compensation and Employee
Benefits Committee of the Board of Directors (the "Committee"). The 1998 Plan
and the 1995 Plan may be administered by a subcommittee thereof, or such other
committee as may be appointed by the Board of Directors. The Committee consists
of at least three members who may be "Non-Employee Directors" within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act") and
who are "outside directors" within the meaning of Section 162(m) of the Internal
Revenue Code of 1986 (the "Code"). Except with respect to grants to persons who
are subject to Section 16 of the Exchange Act, or who are or are likely to be
"covered employees" within the meaning of Section 162(m) of the Code, the
Committee may delegate some or all of its authority to administer the Plans to
the Chairman and Chief Executive Officer or other executive officer of the
Company.
The 1998 Plan became effective on October 29, 1998. Unless earlier
terminated by the Board of Directors, the 1998 Plan will expire when shares are
no longer available for grant, exercise or settlement. The Director Plan became
effective as of March 30, 1995 and may be terminated at any time by the Board of
Directors. The 1998 Plan replaces the 1995 Plan and the 1989 Plan. Termination
of any of the Plans does not affect the rights of any Participant under any
grants or awards made prior to termination.
STOCK OPTIONS
A Stock Option represents the right to purchase a specified number of
shares of Common Stock during a specified period up to ten years.
Under the 1998 Plan, the 1995 Plan and the 1989 Plan, the number of shares
of Common Stock subject to a Stock Option, the period for the exercise of a
Stock Option and the purchase price per share are determined by the Committee;
provided that, subject to certain exceptions, the purchase price
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per share may not be less than 100% of the fair market value on the date of
grant. In addition, the shares covered by a Stock Option may be purchased,
in accordance with the applicable Stock Option agreement, by cash payment or
other method permitted by the Committee, including (i) tendering (or
attesting to ownership of) shares of Common Stock, (ii) authorizing third
party exercise transactions, or (iii) any combination of the above.
Under the Director Plan, non-employee directors receive an annual grant of
Stock Options to purchase 10,000 shares of Common Stock (11,000 shares for
chairs of committees of the Board of Directors), giving effect to the 2-for-1
stock split declared on October 29, 1998. In addition, non-employee directors
may elect to receive Stock Options in lieu of all or a portion of their annual
retainer. The purchase price per share may not be less than 100% of the fair
market value on the date of grant. Stock Options granted under the Director Plan
vest immediately, but are not exercisable until six months from the date of
grant, except that a Stock Option granted to a Participant who is a resident of
the Netherlands and subject to the personal income tax laws of the Netherlands
may be exercised immediately after the date of grant. Stock Options granted
under the Director Plan may be exercised until the tenth anniversary of the date
of grant (fifth anniversary in the case of Participants resident in and subject
to the income tax laws of the Netherlands). Under the Director Plan, the shares
covered by a Stock Option may be purchased, in accordance with the applicable
Stock Option agreement, by cash payment, by tendering (or attesting to ownership
of) shares of Common Stock, or by a combination of cash payment and tendering
shares.
TRANSFERABILITY
The Plans provide that Stock Options are generally not transferable by a
Participant other than by will, the laws of descent and distribution or
pursuant to the terms of the applicable Stock Option agreement. Certain
Stock Option agreements permit transfer (a) by will or by the laws of descent
and distribution, (b) pursuant to a domestic relations order, (c) to one or
more of the Participant's Immediate Family Members, (d) to a trust or trusts
for the exclusive benefit of one or more of a Participant's Immediate Family
Members, (e) to a partnership in which a Participant and/or one or more of
the Participant's Immediate Family Members are the only partners, (f) to a
limited liability company in which a Participant and/or one or more of the
Participant's Immediate Family Members are the only members, (g) to a
charitable foundation or other charitable organization established by a
Participant or (h) to such other persons or entities as may be approved in
writing by the Committee prior to such transfer. For purposes of such
transferability provisions, the term "Immediate Family Member" means a
Participant's child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law, niece or nephew, and shall include adoptive
relationships. Any such permitted transferee of a Participant's Stock
Options is referred to herein as a "Stock Option Transferee" and such
Participant is referred to herein as a "Participant Transferor."
Upon transfer to a Stock Option Transferee, a Stock Option is governed by
and subject to the terms and limitations of the applicable Plan and the
applicable Stock Option agreement, as such agreement may be amended by the
Committee in consenting to a transfer of the Stock Option, and, subject to any
such amendment, the Stock Option Transferee is entitled to the same rights as
the Participant Transferor thereunder, as if no transfer had taken place.
Accordingly, the rights of the Stock Option Transferee are subject to the terms
and conditions of the original grant to the Participant
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Transferor, as amended, including provisions relating to the expiration date,
exercisability, exercise price and forfeiture. For information regarding the
Plans and the terms of a particular Stock Option grant, Stock Option
Transferees may contact the Executive Director-Compensation and Benefits of
the Company.
Although a Stock Option agreement may provide for the grant of a
replacement option ("Replacement Stock Option") if the exercise price and
related withholding tax obligations are satisfied by tendering (or attesting to
ownership of) shares of Common Stock to, or having shares withheld by, the
Company (and, in the case of the Director Plan, where the assumed withholding
tax obligation is deemed to be satisfied by the tender of shares of Common
Stock), neither the Stock Option Transferee nor the Participant Transferor shall
be eligible to receive Replacement Stock Options upon the exercise of any Stock
Option transferred to a Stock Option Transferee.
EXERCISE OF OPTIONS BY STOCK OPTION TRANSFEREES
A Stock Option may be exercised by a Stock Option Transferee at any time
from the date established in the applicable Plan or the original grant to the
Participant Transferor until the close of business on the expiration date of the
Stock Option as established in the applicable Plan or the original grant to the
Participant Transferor, or the earlier date on which the Stock Option terminates
due to the Participant Transferor's termination of employment or service as
director, as discussed below. A Stock Option may be exercised by giving written
notice to the Company specifying the number of whole shares of Common Stock to
be purchased. The notice of exercise must be accompanied by payment for the
shares of Common Stock being purchased and payment of any tax withholding
obligations. The Stock Option agreement will set forth whether payment of the
exercise price may be made by (i) tendering cash or tendering (or attesting to
ownership of) shares of Common Stock, (ii) authorizing third party exercise
transactions (other than Stock Options granted under the Director Plan), or
(iii) any combination of the above. No certificate representing Common Stock
shall be delivered until the purchase price therefor and any tax withholding
obligations have been paid.
Under existing regulations of the Federal Reserve Board, a Stock Option
Transferee may not make the payment of the exercise price in cash by or
through a broker-assisted exercise of a Stock Option. At the time of
exercise, however, a Stock Option Transferee may inquire of the the
Executive Director-Compensation and Benefits of the Company, as to the
availability of such payment procedure under the then prevailing regulations.
If permitted by law, the Company may, in its sole discretion, permit payment
of the exercise price of Stock Options, other than Stock Options granted
under the Director Plan, in cash by or through a broker acceptable to the
Company to whom the Stock Option Transferee has submitted an irrevocable
notice of exercise.
Any required tax withholding must be satisfied by the party required to
recognize income in connection with the exercise of the Stock Option under the
rules discussed below under the heading "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES." Accordingly, the receipt of the certificate representing Common
Stock after the exercise of a Stock Option by a Stock Option Transferee is not
entirely within his or her control when the Stock Option Transferee is not the
party required to recognize income in connection with the exercise of the Stock
Option. Once the exercise, payment of the purchase price and payment of any tax
withholding obligations are completed as described above, a stock certificate
for the appropriate number of shares will be delivered to the Stock
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Option Transferee or his or her estate or beneficiaries, or such shares shall
otherwise be delivered in such manner as the person(s) entitled thereto may
direct.
EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE ON THE BOARD OF DIRECTORS
Because Stock Options transferred to Stock Option Transferees continue to
be governed by the terms of the applicable Plan and the original grant, their
exercisability continues to be affected by the Participant Transferor's
employment or service status. The Committee has authority to determine the
circumstances under which Stock Options shall vest and be exercisable upon the
termination of employment or service on the Board of Directors of the
Participant Transferor for any reason. Such provisions are contained in the
Stock Option agreement for such Stock Option. The Company has no obligation to
notify any Stock Option Transferee of the termination of employment or service
on the Board of Directors of the Participant Transferor.
CHANGE IN CONTROL
In the event of a "Change in Control" (as defined in the Plans), or in
contemplation thereof, the Committee may make appropriate adjustments to Stock
Options granted under the 1998 Plan and the 1995 Plan (including acceleration of
vesting and settlements of or substitutions for Stock Options) and Stock Options
granted under the 1989 Plan and the Director Plan will become immediately
exercisable. Under the Plans, a "Change in Control" occurs if (i) a person
becomes the beneficial owner of 20% or more of the voting power of the Company's
outstanding stock which may be voted on all matters submitted to stockholders
generally (subject to certain exceptions), (ii) the stockholders approve a
reorganization, merger or consolidation or the Company sells or disposes of all
or substantially all of its property and assets (unless the Company's
stockholders receive 50% or more of the voting power of the resulting entity) or
the Company liquidates or dissolves, or (iii) individuals who immediately after
a date specified in each of the Plans constitute the Board of Directors, and any
new director whose nomination for election or election is recommended or
approved by a majority of the directors who were directors immediately after
such date or whose nomination or election was previously so recommended or
approved, cease to constitute a majority of the Board of Directors.
AMENDMENT
The Board of Directors may amend the Plans at any time, subject to any
requirement of stockholder approval required by applicable law, rule or
regulation; provided that no amendment to the 1998 Plan may be made without
stockholder approval if such amendment would (i) increase the maximum number of
shares of Common Stock available under the 1998 Plan or (ii) effect any change
inconsistent with Section 422 of the Code. No amendment may impair the rights
of a holder of an outstanding Stock Option without the consent of such holder.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary discusses the federal income tax consequences of a
transfer of a Stock Option and of the exercise of such Stock Option. The
summary is not a complete description of tax consequences applicable to a
Participant Transferor and Stock Option Transferee. Accordingly, prior to
transferring a Stock Option, a Participant should consult with his or her
personal tax advisor concerning
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the possible federal, state and local income, gift, estate, inheritance,
generation skipping and other tax consequences of such a transfer, and a
Stock Option Transferee should consult with his or her personal tax advisor
concerning the possible federal, state and local income and other tax
consequences of the exercise of a Stock Option.
INCOME TAX CONSEQUENCES FOR PARTICIPANT TRANSFEROR
A Participant who transfers a Stock Option by gift to a Stock Option
Transferee will not recognize income at the time of the transfer. Instead, the
Participant Transferor will recognize ordinary compensation income at the time
the Stock Option Transferee exercises the Stock Option in an amount equal to the
excess, if any, of the fair market value of the shares purchased on the date of
exercise (which will not necessarily be equal to the price at which such shares
are sold, even if sold on the same day as exercise) over the exercise price.
Any income recognized by the Participant Transferor will be subject to
required tax withholding by the Company. Payment of the withholding obligation
by the Participant Transferor may be made, subject to the applicable Plan and
Stock Option agreement, by (i) tendering cash or tendering (or attesting to
ownership of) shares of Common Stock, (ii) authorizing third party exercise
transactions (other than Stock Options granted under the Director Plan), or
(iii) any combination of the above. Subject to certain limitations, the Company
will generally be entitled to claim a federal income tax deduction at such time
and in the same amount that the Participant Transferor recognizes ordinary
income.
INCOME TAX CONSEQUENCES FOR STOCK OPTION TRANSFEREE
The Company also has been advised that a Stock Option Transferee will not
recognize income at the time of the transfer of a Stock Option by gift. As
described in the preceding two paragraphs, the Participant Transferor, and not
the Stock Option Transferee, will recognize ordinary compensation income at the
time the Stock Option Transferee exercises the Stock Option. A Stock Option
Transferee who chooses to exercise a Stock Option in whole or in part by
delivery of previously owned shares of Common Stock should consult with his or
her personal tax advisor concerning the tax consequences of such a transaction.
INCOME TAX CONSEQUENCES UPON THE SUBSEQUENT SALE OF COMMON STOCK
If shares acquired upon exercise of a Stock Option are later sold or
exchanged, then the difference between the sales price and the Stock Option
Transferee's tax basis for the shares will generally be taxable as long-term or
short-term capital gain or loss (if the stock is a capital asset of the
taxpayer), depending upon whether the stock has been held for more than 12
months after the exercise date. If the Stock Option is exercised by the Stock
Option Transferee for cash, the tax basis for the shares in the hands of the
Stock Option Transferee would be the exercise price for the Stock Option plus
the amount of the income recognized by either the Stock Option Transferee or the
Participant Transferor at the time of exercise. Different basis rules apply if
the Stock Option Transferee delivered previously owned shares of Common Stock in
payment of all or a portion of the exercise price of the Stock Option.
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DESCRIPTION OF COMMON STOCK
GENERAL
Holders of shares of Common Stock are entitled to receive dividends when,
as and if declared by the Board of Directors out of funds legally available
therefor, subject to the rights of holders of any outstanding shares of
Preferred Stock. In the event of any liquidation, dissolution or winding up of
the Company, holders of shares of Common Stock are entitled to receive ratably
all assets of the Company remaining after satisfaction of all preferences of any
outstanding Preferred Stock and all other liabilities.
Holders of Common Stock are entitled to one vote per share in the election
of directors and on any question arising at any meeting of stockholders.
Holders of shares of Common Stock vote as a single class together with holders
of shares of the Sara Lee Employee Stock Ownership Plan Convertible Preferred
Stock ("ESOP Stock"). Each share of ESOP Stock is entitled to 10.264 votes,
giving effect to the 2-for-1 stock split declared on October 29, 1998. Certain
other series of Preferred Stock may vote together with the Common Stock as a
single class. Under certain circumstances as provided by law and the Company's
Articles of Restatement of Charter, as supplemented (the "Articles"), certain
series of Preferred Stock may vote as separate classes. The Common Stock does
not have cumulative voting rights, and no holder of Common Stock, solely by
virtue of such holdings, has or will have, any pre-emptive right to subscribe
for or purchase any shares of any class of stock which is now or may hereafter
be authorized or issued. All of the outstanding shares of Common Stock of the
Company are fully paid and non-assessable.
PREFERRED STOCK PURCHASE RIGHTS
One-half of a Preferred Stock Purchase Right (a "Right") is associated
and trades with each outstanding share of Common Stock. As long as the
Rights are associated with the Common Stock, each new share of Common Stock
issued by the Company, including any shares of Common Stock offered hereby,
will include one-half of a Right (subject to adjustment). Upon the
occurrence of certain events, each Right will entitle its holder to purchase
one one-hundredth of a share of Series A Junior Participating Preferred Stock
for $215 (subject to antidilution provisions). Subject to certain
exceptions, the Rights will separate from the Common Stock 10 days after any
person or group announces its beneficial ownership of 15% or more of the
outstanding shares of Common Stock, or 10 business days after a person or
group announces a tender or exchange offer that would result in a person or
group beneficially owning 15% or more of the outstanding shares of Common
Stock. If the Rights thereafter become exercisable, each Right will entitle
its holder (except the acquiring party) to buy shares of Common Stock of the
Company having a market value of two times the exercise price of the Right.
If after the Rights become exercisable the Company is involved in a merger or
sells more than 50% of its assets, each Right will entitle its holder to buy
common stock of the surviving entity having a market value of two times the
exercise price of the Right. The Company has the right to redeem the Rights
for $.01 per Right prior to the time that they become exercisable. The
Rights expire on May 31, 2008.
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LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Janet Langford Kelly, Esq., Senior Vice
President, Secretary and General Counsel of the Company. As of December 31,
1998, Ms. Kelly beneficially owned 83,188 shares of Common Stock and had the
right to acquire 128,394 shares of Common Stock through the exercise of options
pursuant to stock option plans of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company included
in its Annual Report on Form 10-K for the year ended June 27, 1998 and
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any document we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain further
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Our SEC filings are also available to the public over the
Internet at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, unless we
update or supersede that information by the information contained in this
prospectus or a prospectus supplement or by information that we file
subsequently that is incorporated by reference into this prospectus. We
incorporate by reference the following documents that we have filed with the SEC
and our future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 until our offering of the Common Stock is
completed:
- Annual Report on Form 10-K for the year ended June 27, 1998;
- Quarterly Report on Form 10-Q for the quarter ended September 26,
1998;
- Registration Statement No. 33-18488 filed with the Commission on
November 12, 1987, and Registration Statement No. 34-397183 on
Form 8-A filed with the Commission on May 11, 1988 (as amended by
Form 8 thereto filed with the Commission on November 15, 1989), as to
Description of the Common Stock of the Company only; and
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- Description of the Rights contained in the Company's Registration
Statement on Form 8-A filed under the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
This prospectus is part of a registration statement we have filed with the
SEC relating to the Common Stock. As permitted by SEC rules, this prospectus
does not contain all of the information included in the registration statement
and accompanying exhibits and schedules we file with the SEC. You may refer to
the registration statement, the exhibits and schedules for more information
about us and our Common Stock. The registration statement, exhibits and
schedules are also available at the SEC's Public Reference Room or through its
web site.
You may obtain a copy of these filings, at no cost, by writing to or
telephoning us at the following address:
Sara Lee Corporation
Three First National Plaza, Suite 4600
Chicago, Illinois 60602-4260
Attention: Janet Langford Kelly, Esq.,
Senior Vice President, Secretary and General Counsel
Telephone (312) 558-8503.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the cover of the
document. We are not making an offer of the Common Stock in any state in which
the offer or sale is not permitted.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered. All of the amounts shown
are estimated, except the SEC registration fee.
<TABLE>
<CAPTION>
<S> <C>
SEC registration fee. . . . . $33,401.70
Legal fees and expenses . . . 5,000
Accounting fees and expenses. 1,000
Total fees and expenses $39,401.70
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 2-418 of the Maryland General Corporation Law provides for
indemnification of the Company's directors, officers, employees, and agents
under specified circumstances, which may include indemnity against expenses,
including attorneys' fees and judgments, fines, and amounts paid in settlement
under the Securities Act of 1933 (the "Securities Act"). The Company has
purchased and maintains insurance as is permitted by said Section 2-418 on
behalf of directors and officers, which insurance may cover liabilities under
the Securities Act. Article V of the By-Laws of the Company provides for such
indemnification to the extent and under the circumstances permitted by said
Section 2-418.
Article V of the Bylaws of the Company provides as follows:
Section 1. Right To Indemnification. To the maximum extent permitted
by Maryland law in effect from time to time, the Corporation shall indemnify
and, without requiring a preliminary determination of the ultimate entitlement
to indemnification, shall pay or reimburse reasonable expenses in advance of
final disposition of a proceeding to (a) any individual who is a present or
former director or officer of the Corporation or a subsidiary thereof and who is
made a party to the proceeding by reason of his or her service in that capacity
or (b) any individual who, while a director or officer of the Corporation and at
the request of the Corporation, serves or has served another corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner or trustee of such corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise and who is made
a party to the proceeding by reason of his or her service in that capacity. The
Corporation may, with the approval of its Board of Directors, provide such
indemnification and advance for expenses to a person who served a predecessor of
the Corporation in any of the capacities described in (a) or (b) above and to
any employee or agent of the Corporation or a predecessor of the Corporation.
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 60 days, upon the written request of
the director or officer entitled to indemnification (the "Indemnified Party").
The right to indemnification and advance of expenses 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.
<PAGE>
Section 3. General. The indemnification and advance of expenses
provided by this Article V (a) 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 or her official capacity and as to action in another capacity
while holding office or while employed by or acting as agent for the
Corporation, (b) 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 (c) 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 Article V is in effect.
Section 4. Effective Time. This Article V 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. Neither the amendment nor
repeal of this Article, nor the adoption or amendment of any other provision of
the Charter or Bylaws inconsistent with this Article, shall apply to or affect
in any respect the applicability of this Article with respect to any act or
failure to act which occurred prior to such amendment, repeal or adoption.
Section 5. Further Action. The Board of Directors may take such
action as is necessary to carry out the provisions of this Article V and is
expressly empowered to adopt, approve and amend from time to time such
resolutions or contracts implementing such provisions or such further
arrangements for indemnification or advance of expenses as may be permitted by
law.
ITEM 16. EXHIBITS.
A list of exhibits included as part of this Registration Statement is
set forth in the Exhibit Index appearing elsewhere herein and is incorporated
herein by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent
S-2
<PAGE>
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
S-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on this 29 day of
January, 1999.
SARA LEE CORPORATION
By: /s/ Janet Langford Kelly
------------------------------------
Janet Langford Kelly
Senior Vice President, Secretary
and General Counsel
POWER OF ATTORNEY
KNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Janet Langford Kelly and R. Henry
Kleeman, and each of them, his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubsitution, for him or her and in
his or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same with all Exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming that all said attorneys-in-fact and agents or
any of them, or their or his or her substitute and substitutes, may lawfully do
or cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on January 29, 1999.
Name Title
- ---- -----
/s/ John H. Bryan Chairman of the Board and
- ------------------------------ Chief Executive Officer and
John H. Bryan Director (Principal Executive Officer)
/s/ C. Steven McMillan President and Chief Operating Officer
- ------------------------------- and Director
C. Steven McMillan
/s/ Frank L. Meysman Executive Vice President and
- ------------------------------- Director
Frank L. Meysman
S-4
<PAGE>
/s/ Judith A. Sprieser Executive Vice President and Chief
- ------------------------------- Financial Officer and Director
Judith A. Sprieser (Principal Financial Officer)
/s/ Wayne R. Szypulski Vice President and Controller
- ------------------------------- (Principal Accounting Officer)
Wayne R. Szypulski
/s/ Paul A. Allaire Director
- -------------------------------
Paul A. Allaire
/s/ Frans H.J.J. Andriessen Director
- -------------------------------
Frans H.J.J. Andriessen
/s/ Duane L. Burnham Director
- -------------------------------
Duane L. Burnham
/s/ Charles W. Coker Director
- -------------------------------
Charles W. Coker
/s/ James S. Crown Director
- -------------------------------
James S. Crown
/s/ Willie D. Davis Director
- -------------------------------
Willie D. Davis
/s/ Vernon E. Jordan, Jr. Director
- -------------------------------
Vernon E. Jordan, Jr.
/s/ James L. Ketelsen Director
- -------------------------------
James L. Ketelsen
/s/ Hans B. van Liemt Director
- -------------------------------
Hans B. van Liemt
/s/ Joan D. Manley Director
- -------------------------------
Joan D. Manley
S-5
<PAGE>
/s/ Rozanne L. Ridgway Director
- -------------------------------
Rozanne L. Ridgway
/s/ Richard L. Thomas Director
- -------------------------------
Richard L. Thomas
/s/ John D. Zeglis Director
- -------------------------------
John D. Zeglis
S-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
4.1 Articles of Restatement of Charter of the registrant, dated April 9,
1990, incorporated by reference to Exhibit 4.1 of Registration
Statement No. 33-35760 on Form S-8 filed with the Commission on
July 6, 1990.
4.2 Articles Supplementary to the Charter of the registrant, dated May 18,
1990, incorporated by reference to Exhibit 4.2 of the Registration
Statement No. 33-37575 on Form S-8 filed with the Commission on
November 1, 1990.
4.3 Articles Supplementary to the Charter of the registrant, dated October
30, 1992, incorporated by reference to Exhibit 4.3 of the Registration
Statement No. 33-59002 on Form S-8 filed with the Commission on
March 4, 1993.
*4.4 Articles of Amendment to the Charter of Registrant, dated November 19,
1998.
*4.5 Articles Supplementary to the Charter of the registrant, dated
January 7, 1999.
4.6 Amended By-Laws of the registrant, dated August 29, 1996, incorporated
by reference to Exhibit 3(b) of the registrant's Annual Report on Form
10-K for the fiscal year ended June 29, 1996.
4.7 Stockholder Rights Agreement, dated as of March 26, 1998 between the
Company and First Chicago Trust Company of New York, as Rights Agent,
incorporated by reference to Exhibit 4.1 of the Registration Statement
on Form 8-A filed with the Commission on May 19, 1998.
*5. Opinion of Janet Langford Kelly, Esq., Senior Vice President,
Secretary and General Counsel.
*23.1 Consent of Arthur Andersen LLP.
*23.2 Consent of Janet Langford Kelly, Esq. (included in Exhibit 5).
*24 Powers of Attorney (included on signature page to this Registration
Statement).
99.1 1989 Incentive Stock Plan, as amended, incorporated by reference to
Exhibit 10(4) to Report on Form 10-K for Fiscal Year ended June 28,
1997.
99.2 1995 Long-Term Incentive Stock Plan, as amended, incorporated by
reference to Exhibit 10(16) to Report on Form 10-K for Fiscal Year
ended June 28, 1997.
99.3 1995 Non-Employee Director Stock Plan, as amended, incorporated by
reference to Exhibit 10(8) to Report on Form 10-K for Fiscal Year
ended June 27, 1998.
*99.4 1998 Long-Term Incentive Stock Plan, as amended on January 27, 1999.
______
*Filed herewith
<PAGE>
Exhibit 4.4
Articles of Amendment to the Charter of Registrant,
dated November 19, 1998
<PAGE>
SARA LEE CORPORATION
ARTICLES OF AMENDMENT
THIS IS TO CERTIFY THAT:
FIRST: The charter of Sara Lee Corporation, a Maryland corporation (the
"Corporation"), is hereby amended by (a) deleting the first two paragraphs of
existing Article FIFTH in their entirety and substituting in lieu thereof the
following new paragraphs:
"The total number of shares of all classes which the Corporation
has authority to issue is One Billion Two Hundred Thirteen
Million Five Hundred Thousand (1,213,500,000), consisting of the
following number of shares of the following classes:
(a) THE COMMON STOCK. One Billion Two Hundred Million
(1,200,000,000) shares of Common Stock of the par value of $.01
per share, having an aggregate par value of $12,000,000, and"
and (b) changing any reference to the par value of Common Stock to $.01 par
value per share
SECOND: The amendments to the charter of the Corporation as set forth
above have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.
THIRD: The total number of shares of stock which the Corporation had
authority to issue immediately prior to these Articles of Amendment being
accepted for record was 613,500,000, consisting of 600,000,000 shares of
Common Stock, $1.33 par value per share, and 12,000,000 shares of Preferred
Stock, without par value, and 1,500,000 shares of Convertible Adjustable
Preferred Stock, without par value. The total aggregate par value of all
shares of all classes of stock with par value was $800,000,000.
FOURTH: The total number of shares of stock which the Corporation has
authority to issue, pursuant to the charter of the Corporation as hereby
amended, is 1,213,500,000, consisting of 1,200,000,000 shares of Common
Stock, $.01 par value per share, 12,000,000 shares of Preferred Stock,
without par value, and 1,500,000 shares of Convertible Adjustable Preferred
Stock, without par value. The total aggregate par value of all shares of all
classes of stock with par value is $12,000,000.
FIFTH: The information required by subsection (b)(2)(i) of Section
2-607 of the Maryland General Corporation Law was not changed by the
amendments set forth herein.
- 1 -
<PAGE>
The undersigned Senior Vice President acknowledges these Articles of
Amendment to be the corporate act of the Corporation and as to all matters or
facts required to be verified under oath, the undersigned Senior Vice
President acknowledges that to the best of her knowledge, information and
belief, these matters and facts are true in all material respects and that
this statement is made under the penalties for perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be signed in its name and on its behalf by its Senior Vice
President and attested to by its Assistant Secretary on this 19th day of
November, 1998.
ATTEST SARA LEE CORPORATION
/s/ R. Henry Kleeman By: /s/ Janet Langford Kelly
- -------------------- -------------------------
R. Henry Kleeman Janet Langford Kelly
Assistant Secretary Senior Vice President
- 2 -
<PAGE>
Exhibit 4.5
Articles Supplementary to the Charter of the Registrant
dated January 7, 1999
<PAGE>
SARA LEE CORPORATION
ARTICLES SUPPLEMENTARY
Sara Lee Corporation, a Maryland corporation (the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: Under a power contained in Article SIXTH of the charter of the
Corporation (the "Charter"), the Board of Directors of the Corporation (the
"Board of Directors"), by resolutions duly adopted at a meeting duly called,
held on March 26, 1998, changed the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of shares
of Series A Junior Participating Preferred Stock as set forth in the Charter
under the heading "1998 Articles Supplementary" as follows:
In the second sentence of Section 2(A), the reference to "April 28,
1988" is changed to "March 26, 1998".
SECOND: Under a power contained in Article SIXTH of the Charter, the
Board of Directors, by resolutions duly adopted at a meeting duly called,
held on March 26, 1998, reclassified and designated 3,000,000 shares (the
"Shares") of Preferred Stock (as described in the Charter) as 3,000,000
additional shares of Series A Junior Participating Preferred Stock, with the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption of shares of Series A Junior Participating
Preferred Stock as set forth in the Charter under the heading "1988 Articles
Supplementary" so that the total number of shares of Series A Junior
Participating Preferred Stock after such classification is 6,000,000.
THIRD: The Series A Junior Participating Preferred Stock and the Shares
have been reclassified and designated by the Board of Directors under the
authority contained in the Charter.
FOURTH: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
FIFTH: The undersigned Senior Vice President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under
oath, the undersigned Senior Vice President acknowledges that to the best of
her knowledge, information and belief, these matters and facts are true in
all material respects and that this statement is made under the penalties for
perjury.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
- 1 -
- 1 -
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
Senior Vice President and attested to by its Assistant Secretary on this 7th
day of January, 1999.
ATTEST: SARA LEE CORPORATION
/s/ R. Henry Kleeman By: (SEAL)
- -------------------- -------------------------
R. Henry Kleeman Janet Langford Kelly
Assistant Secretary Senior Vice President
- 2 -
<PAGE>
Exhibit 5
Opinion of Janet Langford Kelly
<PAGE>
Exhibit 5
[Sara Lee Corporation letterhead]
January 29, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Sara Lee Corporation
Registration Statement on Form S-3
------------------------------------
------------------------------------
Ladies and Gentlemen:
I am Senior Vice President, Secretary and General Counsel of Sara
Lee Corporation (the "Company"). In that connection, I am familiar with the
filing by the Company of a Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Act"), relating to 5,000,000
shares of the Company's common stock, $.01 par value ("Common Stock"),
including the preferred stock purchase rights appurtenant thereto. The terms
of the preferred stock purchase rights are set forth in the Rights Agreement
dated as of March 26, 1998 (the "Rights Agreement") between the Company and
First Chicago Trust Company of New York, as Rights Agent.
I am also familiar with the Articles of Restatement of Charter and
the Amended By-Laws of the Company and all supplements or amendments thereto
and resolutions of the Board of Directors of the Company relating to the
Plans (as such term is defined in the Prospectus which forms a part of the
Registration Statement) and the Registration Statement.
In this connection, I have examined or caused to be examined and am
familiar with originals or copies, certified or otherwise identified to my
satisfaction, of all such records of the Company and others as I have deemed
necessary or appropriate as a basis for the opinions set forth herein. In my
examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as original, certified or
photostatic copies, the authenticity of the originals of such certified or
photostatic documents and the legal capacity of all natural persons. As to
any facts material to the opinions expressed herein which were not
independently established or verified by me, I have relied upon statements
and representations of certain officers and other representatives of the
Company and others.
Based upon the foregoing, I am of the opinion that:
<PAGE>
1. The Company is duly incorporated and validly existing under the
laws of the State of Maryland.
2. If the Company's Board of Directors or a duly authorized
committee thereof authorizes the issuance of authorized and unissued shares
of Common Stock for the consideration provided in a Plan, each such share
will, when (i) the Registration Statement shall have become effective under
the Act and (ii) a certificate representing such share shall have been duly
executed, countersigned and registered and duly delivered against the receipt
by the Company of the consideration provided in such Plan, be validly issued,
fully paid and non-assessable.
3. The preferred stock purchase rights associated with each share
of Common Stock referred to in paragraph 2 will be validly issued when
(i) such rights shall have been duly issued in accordance with the terms of
the Rights Agreement and (ii) such share shall have been duly issued and paid
for as set forth in paragraph 2.
I do not find it necessary for the purposes of this opinion letter
to cover, and accordingly I express no opinion as to, the application of the
securities or blue sky laws of the various states to the sale of shares of
Common Stock.
This opinion is limited to the General Corporation Law of the State
of Maryland.
I assume no obligation to update or supplement this opinion letter
to reflect any facts or circumstances which may hereafter come to my
attention with respect to the opinions expressed above, including any changes
in applicable law which may hereafter occur.
I hereby consent to the filing of this opinion letter as an exhibit
to the Registration Statement.
Sincerely,
/s/ Janet Langford Kelly
Janet Langford Kelly
<PAGE>
Exhibit 23.1
Consent of Arthur Andersen LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-3, used
to register 5,000,000 shares of common stock of Sara Lee Corporation, of our
report dated July 27, 1998, included in Sara Lee Corporation's Annual Report
on Form 10-K for the fiscal year ended June 27, 1998 and to all references to
our firm included in this Registration Stastement.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois
February 4, 1999
<PAGE>
Exhibit 99.4
1998 Long-Term Incentive Stock Plan, as amended
<PAGE>
1998 LONG-TERM INCENTIVE PLAN
ARTICLE I -- PURPOSES
The purposes of the Sara Lee Corporation 1998 Long-Term Incentive Stock
Plan are to promote the interests of the Corporation and its stockholders by
strengthening the Corporation's ability to attract and retain highly
competent officers and other key employees, and to provide a means to
encourage stock ownership and proprietary interest in the Corporation. The
1998 Long-Term Incentive Stock Plan is intended to provide plan participants
with stock-based incentive compensation which is not subject to the deduction
limitation rules prescribed under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), and should be construed to the extent
possible as providing for remuneration which is "performance-based
compensation" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.
ARTICLE II -- DEFINITIONS
Unless the context clearly indicates otherwise, the following terms
shall have the following meanings:
a. "AWARD" means, individually or in the aggregate, an award granted to
a Participant under the Plan in the form of an Option, a Stock Award, or an
SAR, or any combination of the foregoing.
b. "BOARD" means the Board of Directors of Sara Lee Corporation.
c. "COMMITTEE" means the Compensation and Employee Benefits Committee
of the Board of Directors, a subcommittee thereof, or such other committee as
may be appointed by the Board of Directors. The Committee shall be comprised
of three or more members of the Board of Directors who may be "non-employee
directors" under Rule 16b-3 of the Exchange Act and "outside directors" under
Section 162(m) of the Code.
d. "CORPORATION" means Sara Lee Corporation, or any entity that is
directly or indirectly controlled by Sara Lee Corporation, and its
subsidiaries.
e. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
f. "FAIR MARKET VALUE" means the average of the highest and lowest sale
prices of a Share on the New York Stock Exchange Composite Transactions Tape
on the date of determination, provided that if there should be no sales of
Shares reported on such date, the Fair Market Value of a Share on such date
shall be the average of the highest and lowest sale prices of a Share on such
Composite Tape for the last preceding date on which sales of Shares were
reported.
g. "INCENTIVE STOCK OPTION" means a stock option that complies with
Section 422 of the Code, or any successor law.
1
<PAGE>
h. "NON-QUALIFIED STOCK OPTION" means a stock option that does not meet
the requirements of Section 422 of the Code, or any successor law.
i. "OPTION" means an option awarded under Article VI to purchase
Shares. An Option may be either an Incentive Stock Option or a Non-Qualified
Stock Option, as determined by the Committee in its sole discretion.
j. "PARTICIPANT" means any employee of the Corporation, person expected
to become an employee of the Corporation, or former employee of the
Corporation for the purposes of adjustments to Awards pursuant to Article
V(b) of the Plan, designated by the Committee as eligible to receive an Award
or Awards under the Plan.
k. "PLAN" means this Sara Lee Corporation 1998 Long-Term Incentive
Stock Plan, as amended and restated from time to time.
l. "PRIOR PLAN" means the Sara Lee Corporation 1995 Long-Term Incentive
Stock Plan, as amended and restated from time to time.
m. "SAR" means a stock appreciation right.
n. "SHARES" means shares of the Corporation's common stock.
o. "STOCK AWARD" means an Award made under Article VI in Shares. The
term "CHANGE OF CONTROL" has the meaning set forth in Article X.
ARTICLE III -- EFFECTIVE DATE AND DURATION
The Plan shall become effective upon its approval by the stockholders of
the Corporation. Unless previously terminated by the Board, the Plan shall
expire when Shares are no longer available for the grant, exercise or
settlement of Awards.
ARTICLE IV -- ADMINISTRATION
The Committee shall be responsible for administering the Plan, and shall
have full power to interpret the Plan and to adopt such rules, regulations
and guidelines for carrying out the Plan as it may deem necessary or
appropriate. This power includes, but is not limited to, selecting Award
recipients, establishing all Award terms and conditions, adopting procedures
and regulations governing Awards, and making all other determinations
necessary or advisable for the administration of the Plan. In no event,
however, shall the Committee have the power to cancel outstanding Options or
SARs for the purpose of replacing or regranting such Options or SARs with a
purchase price that is less than the purchase price of the original Option or
SAR. All decisions made by the Committee shall be final and binding on all
persons.
2
<PAGE>
The Committee may delegate some or all of its power to the Chairman and
Chief Executive Officer or other executive officer of the Corporation as the
Committee deems appropriate; provided, that (i) the Committee may not
delegate its power with regard to the grant of an Award to any person who is
a "covered employee" within the meaning of Section 162(m) of the Code or who,
in the Committee's judgment, is likely to be a covered employee at any time
during the period an Award to such employee would be outstanding and (ii) the
Committee may not delegate its power with regard to the selection for
participation in the Plan of an officer or other person subject to Section 16
of the Exchange Act or decisions concerning the timing, pricing or amount of
an Award to such an officer or other person.
ARTICLE V -- AVAILABLE SHARES
a. LIMITATIONS -- Subject to Article V(b) of the Plan, the aggregate
number of Shares which may be issued under the Plan shall be 30,000,000
Shares plus the number of Shares available under the Prior Plan which are not
subject to awards under the Prior Plan, reduced by the aggregate number of
Shares which become subject to outstanding Awards; provided, that the number
of Shares subject to Awards that are granted in substitution of an option or
other award (a "Substitute Award") issued by an entity acquired by (or whose
assets are acquired by) the Corporation shall not reduce the number of Shares
available under the Plan. To the extent that Shares subject to an
outstanding Award or an award under the Prior Plan are not issued by reason
of the expiration, termination, cancellation or forfeiture of such award or
by reason of the tendering or withholding of Shares to pay all or a portion
of the purchase price, if any, or to satisfy all or a portion of the tax
withholding obligations relating to an award, and to the extent Shares are
purchased by the Corporation with the amount of cash obtained upon the
exercise of Options or options granted under the Prior Plan, then such Shares
shall again be available under the Plan.
The aggregate number of Shares that be may used in settlement or payment
of Stock Awards or that may be issued upon exercise of Incentive Stock
Options is 10,000,000. The number of Shares for which Awards may be granted
to any person in any calendar year shall not exceed 1,000,000; provided, that
such limit shall be 2,000,000 with respect to the calendar year in which such
person begins service as the Chief Executive Officer of the Corporation; and
provided, further, that neither limit shall include any Restoration Options
and the number of Shares for which Restoration Options may be granted to any
person in any calendar year shall not exceed 4,000,000. Issued Shares shall
consist of authorized and unissued Shares and no fractional Shares shall be
issued. Cash may be paid in lieu of any fractional Shares in settlement of
Awards.
b. ADJUSTMENTS -- In the event of any stock dividend, stock split,
combination or exchange of securities, merger, consolidation,
recapitalization, spin-off or other distribution (other than normal cash
dividends) of any or all of the assets of the Corporation to stockholders, or
any other similar change or event, such proportionate adjustments, if any, as
the Committee in its discretion may deem appropriate to reflect such change
or event shall be made with respect to the number and class of securities
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available under the Plan, the number and class of securities subject to each
outstanding Option and the purchase price per security, the terms of each
outstanding SAR, and the number and class of securities subject to each
outstanding Stock Award shall be appropriately adjusted by the Committee,
such adjustments to be made in the case of outstanding Options without an
increase in the aggregate purchase price. If any such adjustment would
result in a fractional security being (a) available under the Plan, such
fractional security shall be disregarded, or (b) subject to an Award, the
Corporation shall pay the holder of such Award, in connection with the first
vesting, exercise or settlement of such award in whole or in part occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the
excess, if any, of (A) the Fair Market Value on the vesting, exercise or
settlement date over (B) the exercise price, if any, of such Award.
ARTICLE VI -- AWARDS
a. GENERAL -- The Committee shall determine the type or types of
Award(s) to be made to each Participant. Awards may be granted singly, in
combination or in tandem. In the sole discretion of the Committee, Awards
also may be made in combination or in tandem with, in replacement of, as
alternatives to, or as the payment form for grants or rights under any other
compensation plan of the Corporation including a plan of any entity acquired
by (or whose assets are acquired by) the Corporation. The types of Awards
that may be granted under the Plan are:
(i) OPTIONS -- An Option shall represent the right to purchase a
specified number of Shares during a specified period up to ten years as
determined by the Committee. The purchase price per Share for each Option
shall not be less than 100% of the Fair Market Value on the date of grant;
provided, that a Substitute Award may be granted with a purchase price per
Share that is intended to preserve the economic value of the award which the
Substitute Option replaced. If an Option is granted retroactively in
substitution for an SAR, the Fair Market Value in the Award agreement may be
the Fair Market Value on the grant date of the SAR. An Option may be in the
form of an Incentive Stock Option or a Non-Qualified Stock Option, as
determined by the Committee. The Shares covered by an Option may be
purchased, in accordance with the applicable Award agreement, by cash payment
or such other method permitted by the Committee, including (i) tendering
(either actually or by attestation) Shares valued at the Fair Market Value at
the date of exercise; (ii) authorizing a third party to sell the Shares (or a
sufficient portion thereof) acquired upon exercise of an Option, and
assigning the delivery to the Corporation of a sufficient amount of the sale
proceeds to pay for all the Shares acquired through such exercise and any tax
withholding obligations resulting from such exercise; or (iii) any
combination of the above. The Committee may grant Options that provide for
the grant of a Restoration Option ("Restoration Options") if the exercise
price and tax withholding obligations are satisfied by tendering (either
actually or by attestation) Shares to, or having Shares withheld by, the
Corporation. The Restoration Option would cover the number of Shares tendered
or withheld, would have an option purchase price per Share set at the Fair
Market Value per Share on the date of exercise of the original Option, and
would have a term equal to the remaining term of the original Option.
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(ii) SARS -- An SAR shall represent a right to receive a payment, in
cash, Shares or a combination, equal to the excess of the Fair Market Value
of a specified number of Shares on the date the SAR is exercised over the
Fair Market Value on the grant date of the SAR as set forth in the Award
agreement, except that if an SAR is granted retroactively in substitution for
an Option, the designated Fair Market Value in the Award agreement may be the
Fair Market Value on the grant date of the Option.
(iii) STOCK AWARDS -- A Stock Award shall represent an Award made in or
valued in whole or in part by reference to Shares, such as performance shares
or units or phantom shares or units. Stock Awards may be payable in whole or
in part in Shares. Each Stock Award shall be subject to conditions and
restrictions established by the Committee, and set forth in the Award
agreement or other plan or document, which shall include continuous service
with the Corporation for a period of at least three years after the date of
the Award and/or the achievement of one or more performance goals having a
performance period of at least one year; provided, however, that, subject to
Article V(b) of the Plan, up to 3,000,000 Shares may be awarded that are not
subject to any requirement of continuous service or performance goal(s). The
performance criteria that may be used by the Committee in granting Stock
Awards contingent on performance goals shall consist of total stockholder
return, net sales, operating income, income before income taxes, net income,
net income per share (basic or diluted), profitability as measured by return
ratios, including return on invested capital, return on equity and return on
investment, cash flows, market share or cost reduction goals. The Committee
may select one criterion or multiple criteria for measuring performance, and
the measurement may be based on Corporation or business unit performance, or
based on comparative performance with other companies.
ARTICLE VII -- DIVIDENDS AND DIVIDEND EQUIVALENTS
The Committee may provide that any Awards under the Plan earn dividends
or dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a Participant's Plan account. Any crediting
of dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in
additional Shares or Share equivalents.
ARTICLE VIII -- PAYMENTS AND PAYMENT DEFERRALS
Payment of Awards may be in the form of cash, Shares, other Awards or
combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee, either at the time of grant or
by subsequent amendment, may require or permit Participants to elect to defer
the issuance of Shares or the settlement of Awards in cash under such rules
and procedures as it may establish under the Plan. It also may provide that
deferred settlements include the payment or crediting of interest on the
deferral amounts, or the payment or crediting of dividend equivalents where
the deferral amounts are denominated in Share equivalents.
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ARTICLE IX -- TRANSFERABILITY
Unless otherwise specified in an Award agreement, Awards shall not be
transferable or assignable other than by will or the laws of descent and
distribution or pursuant to beneficiary designation procedures approved by
the Company. The interests of Participants under the Plan are not subject to
their debts or other obligations and, except as may be required by the tax
withholding provisions of the Internal Revenue Code or any state's income tax
act, or pursuant to an agreement between a Participant and the Corporation,
may not be voluntarily sold, transferred, alienated, assigned or encumbered.
ARTICLE X -- CHANGE OF CONTROL
Either in contemplation of or in event of a Change of Control (as
defined below), the Committee may provide for appropriate adjustments
(including acceleration of vesting and settlements of or substitutions for
Awards either at the time an Award is granted or at a subsequent date).
A "Change of Control" shall occur when:
(a) a "Person" (which term, when used in this Article X, shall have
the meaning it has when it is used in Section 13(d) of the Exchange Act,
but shall not include the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation, or
any corporation owned, directly or indirectly, by the stockholders of
the Corporation in substantially the same proportions as their ownership
of Voting Stock (as defined below) of the Corporation) is or becomes,
without the prior consent of a majority of the Continuing Directors of
the Corporation (as defined below), 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 combined voting power of the Corporation's then outstanding
securities; or
(b) the stockholders of the Corporation approve a reorganization,
merger or consolidation or the Corporation sells, or otherwise disposes
of, all or substantially all of the Corporation's property and assets,
or the Corporation liquidates or dissolves (other than a reorganization,
merger, consolidation or sale which would result in all or substantially
all of the beneficial owners of the Voting Stock of the Corporation
outstanding immediately prior thereto continuing to beneficially own,
directly or indirectly (either by remaining outstanding or by being
converted into voting securities of the resulting entity), more than
fifty percent of the combined voting power of the voting securities of
the Corporation or such entity resulting from the transaction
(including, without limitation, an entity which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's property or assets, directly or indirectly) outstanding
immediately after such transaction in substantially the same
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proportions relative to each other as their ownership immediately prior to
such transaction); or
(c) the individuals who are Continuing Directors of the Corporation
(as defined below) 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 immediately after the 1998 annual meeting of
stockholders, 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.
ARTICLE XI -- AWARD AGREEMENTS
Awards may be evidenced by an agreement that sets forth the terms,
conditions and limitations of such Award. Such terms may include, but are
not limited to, the term of the Award, the provisions applicable in the event
the Participant's employment terminates, and the Corporation's authority to
unilaterally or bilaterally amend, modify, suspend, cancel or rescind any
Award. The Committee need not require the execution of any such agreement by
a Participant, in which case acceptance of the Award by the respective
Participant shall constitute agreement by the Participant to the terms of the
Award.
ARTICLE XII -- AMENDMENTS
The Board may amend the Plan at any time as it deems necessary or
appropriate, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including Section 162(m) and Section 422
of the Code; provided, however, that no amendment shall be made without
stockholder approval if such amendment would increase the maximum number of
Shares available under the Plan (subject to Article V(b)), or effect any
change inconsistent with Section 422 of the Code. No amendment may impair
the rights of a holder of an outstanding Award without the consent of such
holder. The Board may suspend the Plan or discontinue the Plan at any time;
provided, that no such action shall adversely affect any outstanding Award.
ARTICLE XIII -- MISCELLANEOUS PROVISIONS
a. EMPLOYMENT RIGHTS -- The Plan does not constitute a contract of
employment and participation in the Plan will not give a Participant the
right to continue in the employ of the Corporation on a full-time, part-time,
or any other basis. Participation in the Plan will not give any Participant
any right or claim to any benefit under the Plan, unless such right or claim
has specifically accrued under the terms of the Plan.
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b. GOVERNING LAW -- Except to the extent superseded by the laws of the
United States, the laws of the State of Illinois, without regard to its
conflict of laws principles, shall govern in all matters relating to the Plan.
c. SEVERABILITY -- In the event any provision of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if such illegal or invalid provisions had never been
contained in the Plan.
d. WITHHOLDING -- The Corporation shall have the right to withhold from
any amounts payable under the Plan all federal, state, foreign, city and
local taxes as shall be legally required.
e. EFFECT ON OTHER PLANS OR AGREEMENTS -- Payments or benefits provided
to a Participant under any stock, deferred compensation, savings, retirement
or other employee benefit plan are governed solely by the terms of such plan.
f. FOREIGN EMPLOYEES -- Without amending the Plan, the Committee may
grant awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in the Plan as may, in the judgment
of the Committee, be necessary or desirable to foster and promote achievement
of the purposes of the Plan and, in furtherance of such purposes, the
Committee may make such modifications, amendments, procedures, subplans and
the like as may be necessary or advisable to comply with provisions of laws
in other countries or jurisdictions in which the Corporation or its
subsidiaries operates or has employees.
AS ADOPTED AND APPROVED BY STOCKHOLDERS ON OCTOBER 29, 1998 AND AMENDED
ON JANUARY 27, 1999.
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