Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
Sara Lee Corporation (the “Company”) and Barry H. Beracha (“Executive”) enter
into this Employment Agreement (the “Agreement”) as of the 29th of August, 2002
(“Effective Date”).
 
W I T N E S S E T H
 
WHEREAS, Executive had been the Chairman of the Board of Directors and Chief
Executive Officer of The Earthgrains Company (“Earthgrains”); and
 
WHEREAS, Executive had entered into an Executive Severance Agreement with
Earthgrains (“Earthgrains Severance Agreement”); and
 
WHEREAS, the Company acquired Earthgrains; and
 
WHEREAS, the Company agreed to employ Executive as an Executive Vice President
of the Company and as the Chief Executive Officer of the Sara Lee Bakery Group
(“Bakery Group”), upon and subject to the conditions set forth herein, and the
Executive has accepted such employment upon and subject to such terms and
conditions; and
 
WHEREAS, this Employment Agreement will supercede and replace Executive’s
Earthgrains Severance Agreement;
 
NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by both parties, the parties hereby
agree as follows:
 
1.    Employment.    Company hereby agrees to employ Executive and Executive
hereby accepts such employment upon the terms and conditions set forth herein
for the period commencing on the Effective Date and ending at the time of
Executive’s retirement on June 30, 2004, unless earlier terminated pursuant to
Section 5 hereof (the “Employment Period”) or otherwise mutually agreed to by
Executive and the Company’s Chief Executive Officer (“CEO”).
 
2.    Position, Duties and Responsibilities.    Except as otherwise mutually
agreed to by the Executive and the Company, the Company shall employ the
Executive during the Employment Period as an Executive Vice President of the
Company and as Chief Executive Officer of the Bakery Group. During the
Employment Period, the Executive shall be based in St. Louis, Missouri and shall
perform his duties faithfully, to the best of his abilities and in the best
interests of the Company. The Executive shall oversee the operation of the
Bakery Group, assist with the succession planning at the Bakery Group in light
of Executive’s planned retirement on June 30, 2004 and perform such other duties
on behalf of the Company and the Bakery Group as the Company’s CEO may from time
to time request. The Executive shall report to the Company’s CEO.
 
3.    Compensation and Benefits.
 
(a)    Base Salary.    During the Employment Period, the Company shall pay to
Executive a base salary at the gross rate of $720,000 per annum, less required
and authorized withholding and deductions (the “Base Salary”), payable in
monthly installments in accordance with the

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Company’s payroll policy. The Base Salary shall be reviewed annually in
accordance with applicable Company policy and may be increased, but in no event
shall be less than $720,000 per annum.
 
(b)    Annual Bonus.    With respect to the Employment Period, the Executive
shall participate in the Company’s Annual Incentive Plan for its corporate
officers as approved by the Compensation and Employee Benefits Committee of the
Board of Directors of the Company. The Executive’s bonus objectives will be
consistent with the bonus objectives for other similarly situated Company
corporate officers. The bonus payment, if any, made by the Company shall be
reduced by applicable withholding and other customary payroll deductions.
 
(c)    Employee Benefits.    During the Employment Period, Executive shall
continue to participate in either (i) the Earthgrains’ employee benefit plans,
to the extent the Company continues to maintain such plans and Executive is
eligible to participate in such plans, or (ii) the Company’s employee benefit
plans, to the extent that the Company makes such plans available generally to
the employees of Earthgrains. Executive shall receive such other benefits and
perquisites as the Company generally makes available to similarly situated
corporate officers, subject to all present and future terms and conditions of
such benefit plans and other fringe benefits.
 
(d)    Financial Counseling.    During the Employment Period Executive shall, at
the expense of the Company, be entitled to receive up to $40,000 per year of
financial counseling.
 
(e)    Benefits Upon Retirement.    Upon the earlier to occur of (a) Executive’s
retirement on June 30, 2004, or (b) the termination of Executive’s employment
pursuant to Sections 5(a) due to Executive’s Disability or 5(b) of this
Agreement, Executive shall be entitled to the following (in addition to all
vested ERISA benefits that Executive has accrued under any Earthgrains or
Company maintained ERISA plan plus those provided under the Sara Lee Corporation
Supplemental Benefit Plan):
 
(i)    Executive shall be provided retiree medical coverage under the
transitional retiree medical benefit plan applicable to Earthgrains employees
who retire prior to December 31, 2004, in accordance with the terms and
conditions of such plan, as in effect from time to time.
 
(ii)    Executive shall be provided retiree life insurance pursuant to the
Company’s Executive Life Insurance Plan in accordance with the terms and
conditions of such plan (insurance benefit equal to one times base salary), as
in effect from time to time.
 
(iii)    For five years following his retirement in June 2004, Employee shall,
at the expense of the Company, be entitled to receive up to $20,000 per year of
financial counseling.
 
(f)    Stock Options.    Executive’s stock options will continue to be governed
by the terms contained in such options and the Company’s plan under which such
options were granted.
 
4.    Special Payment.    As consideration for Executive’s undertakings in this
Agreement, including but not limited to Executive’s covenants in Section 6, the
Company agrees:
 
(a)    to credit as of August 29, 2002 the amount of $3,347,000 to Executive’s
account maintained in the Sara Lee Executive Deferred Compensation Plan (the
“Deferred Compensation Plan”). Such amount will be credited to the Plan’s
Interest Account, vest immediately, be payable in accordance with the written
instructions of Executive and otherwise be subject to the terms and conditions
of the Deferred Compensation Plan.

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(b)    to grant to Executive 198,598 of the Company’s restricted share units
(“RSUs”). One half of the total number of RSUs granted to Executive, or 99,299
RSUs, will vest on August 29, 2003. The remaining 99,299 RSUs will vest on June
30, 2004. Executive will be credited with dividend equivalents upon the RSUs,
beginning with and including the dividend payable on October 1, 2002, in the
same amount as dividends are paid upon the Company’s common stock. Upon vesting,
the RSUs will be converted on a one to one basis into shares of the Company’s
common stock and such shares, together with all accrued dividend equivalents,
will be delivered to the Executive, less all applicable withholding and payroll
taxes. The shares will be delivered to Executive without restriction(s). The
accrued dividend equivalents will be payable in cash. The parties agree that the
RSUs shall not be eligible for deferral into the Sara Lee Deferred Compensation
Plan upon vesting. Should Executive’s employment terminate before June 30, 2004
for Cause pursuant to Section 5(c) of this Agreement, or if Executive
voluntarily terminates his employment prior to his retirement date on June 30,
2004 where such termination is not pursuant to Sections 5(a) or (b), vesting of
any unvested RSUs will be prorated based on Executive’s active service between
August 29, 2002 and the date of his termination and the remaining RSUs shall be
forfeited. In the event Executive’s employment terminates pursuant to Section
5(a) or Executive terminates his employment pursuant to Section 5(b), any
unvested RSUs shall immediately vest and be distributed to the Trustees of the
Barry H. Beracha Revocable Trust dated 10/19/95, as amended.
 
5.    Termination.    Notwithstanding anything to the contrary in this
Agreement:
 
(a)    Executive’s employment shall automatically terminate upon the Executive’s
death or Disability. In the event of a termination due to death or Disability,
Executive shall receive a prorata portion of the annual bonus that was earned
for the period up to the effective termination date of Executive’s employment;
 
(b)    Executive may terminate his employment in the event Company breaches this
Agreement and such breach is not cured within three weeks of written notice from
Executive to Company, provided, however that such termination shall not release
the Company from its obligations to the Executive under this Agreement,
including the Company’s obligations under Sections 3 and 4 of this Agreement;
and
 
(c)    The Company may immediately terminate Executive’s employment for Cause
(as defined below) effective upon written notice to Executive. In the event of
termination for Cause, except as otherwise provided in the Agreement, Executive
shall not be entitled to any amounts other than any earned and unpaid Base
Salary through the effective termination date.
 
As used herein:
 
“Disability” will be determined under the terms and conditions of the Sara Lee
Corporation Key Executive Long Term Disability Plan.
 
“Cause” means (i) fraud, embezzlement, theft or misappropriation by Executive,
(ii) intentionally and willfully causing material harm to the Company or the
Bakery Group, or (iii) the commission of a felony or any crime involving moral
turpitude.
 
6.    Confidentiality and Restrictive Covenants.    Executive hereby
acknowledges that, by virtue of his unique relationship with the Bakery Group
and the Company, Executive will acquire and have access to Confidential
Information (as defined below) and will also develop a unique and comprehensive
familiarity with the Company and its business, which Executive would not have

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otherwise had but for his employment with the Company, and which Executive
acknowledges are valuable assets of the Company. Accordingly, Executive agrees
to undertake the following obligations, which he acknowledges are reasonably
designed to protect the legitimate business interests of the Company, without
unreasonably restricting his post-employment opportunities:
 
(a)    At all times during his Employment Period and thereafter, Executive will
maintain the confidentiality of all information in whatever form concerning the
Company or any of its affiliates relating to its or their businesses, tax
strategies and tax positions, customers, finances, strategic or other plans,
marketing, employees, trade practices, trade secrets, know-how or other matters
which are not generally known outside the Company (collectively “Confidential
Information”), and Executive will not, directly or indirectly, make any
disclosure thereof to anyone, or make any use thereof, on his own behalf or on
behalf of any third party, unless (i) such Confidential Information has
theretofore been publicly disclosed by another person not under an obligation to
keep such information confidential, (ii) Executive is required by law, in a
legal proceeding or otherwise, to disclose any such Confidential Information, or
(iii) Executive is specifically requested by or agreed to in writing by an
executive officer of the Company.
 
(b)    Executive agrees that, during the Employment Period and for two years
thereafter, Executive:
 
(i)    will not, without the prior written consent of the Company, either alone
or through others directly, solicit for employment or assist or encourage the
solicitation for employment, any employee of the Company, or any of its
operating divisions, subsidiaries or affiliates, including, without limitation,
the Bakery Group; and
 
(ii)    will not, without the prior written consent of the Company, directly or
indirectly counsel, advise, perform services for, or be employed by, or
otherwise engage or participate in any Competing Business (regardless of whether
Executive receives any compensation of any kind). For purposes of this
Agreement, a “Competing Business” shall mean any person, firm, corporation or
entity engaged in, or conducting business, which is the same as, or competing
with, the bakery business being conducted by the Bakery Group or any of its
subsidiaries, divisions or affiliates, other than passive ownership of less that
5% of a Competing Business.
 
(c)    The parties agree that in the event any of the prohibitions or
restrictions set forth in this Section 6 are found by a court or arbitrator of
competent jurisdiction to be unreasonable or otherwise unenforceable, it is the
purpose and intent of the parties that any such prohibitions or restrictions be
deemed modified or limited so that, as modified or limited, such prohibitions or
restrictions may be enforced to the fullest extent possible.
 
7.    Remedies.    Executive and the Company acknowledge and agree that the
Company will or would suffer irreparable injury in the event of a breach or
violation or threatened breach or violation of the provisions set forth in
Section 6 of this Agreement and agree that in the event of actual or threatened
breach or violation of such provisions the Company shall be awarded injunctive
relief in a federal or state court of competent jurisdiction to prohibit any
such violation or breach or threatened violation or breach, without necessity of
posting any bond or security and such right to injunctive relief shall be in
addition to any other right available under this Agreement.
 
8.    Entire Agreement.    This Agreement sets forth all the terms and
conditions with respect to Executive’s terms of employment, compensation,
remuneration of payments and benefits due Executive from the Company or
Earthgrains with respect to

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Executive’s employment and severance from employment by the Company or
Earthgrains and supersedes and replaces all other agreements or understandings
Executive may have had with respect thereto including, but not limited to, the
Earthgrains Severance Agreement Executive entered into with Earthgrains in 1999.
Except to the extent Executive is entitled to receive benefits which are vested
and accrued pursuant to the employee benefit plans of the Company or Earthgrains
for the period prior to the date his employment with the Company terminates,
Executive agrees that he will not be entitled to any other payments or benefits
in connection with his employment (or severance from employment) from
Earthgrains or the Company, including but not limited to any obligation under
the Earthgrains Severance Agreement and any other severance agreements, policies
or plans of Earthgrains or the Company.
 
This Agreement may not be modified or amended except in writing and signed by
both Executive and an authorized representative of the Company.
 
9.    Non-Disclosure, Governing Law and Headings.    Executive agrees that he
will not disclose the existence or terms of this Agreement to any third parties
with the exception of his accountants, attorneys, financial advisors or spouse,
and shall ensure that none of them discloses such existence or terms to any
other person, except as required to comply with legal process. This Agreement
shall be governed by the internal laws of the State of Illinois. The Section
headings used herein are for convenience only and are not to be considered in
interpreting this Agreement.
 
10.    Assignment, Amendment and Waiver.    The rights and benefits under this
Agreement are personal to Executive and such rights and benefits shall not be
subject to assignment, alienation or transfer, except to the extent such rights
and benefits are lawfully available to the estate or beneficiaries of Executive
upon death. The Company may assign this Agreement to any parent, affiliate, or
subsidiary of the Company or any other entity which at any time, whether by
merger, purchase, or otherwise, acquires substantially all of the assets, stock
or business of the Company. Executive may not assign any of his rights or
obligations under this Agreement, except as expressly provided herein. This
Agreement may be modified only in writing by both parties, and a party’s failure
to enforce this Agreement in the event of one or more events which violate it
shall not be a waiver of any right to enforce this Agreement against subsequent
violations.
 
11.    Severability.    Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law (after any appropriate modification or limitation pursuant
to Sections 6(c)), such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
 
12.    Notice.    Any notice to be given hereunder shall be in writing and shall
be deemed given when mailed by certified mail, return receipt requested,
addressed as follows:
 
To Executive at:
 
with a copy to:

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To the Employer at:
 
Sara Lee Corporation
Three First National Plaza
Chicago, Illinois 60602-4260
Attention: General Counsel
 
THE PARTIES ACKNOWLEDGE BY SIGNING BELOW THAT THEY HAVE READ AND UNDERSTAND THE
ABOVE AND INTEND TO BE BOUND THEREBY:
 
BARRY H. BERACHA
     
SARA LEE CORPORATION
   
/s/    BARRY H. BERACHA        
     
By:
 
/s/    LEE CHADEN        
 

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Name: Lee Chaden, Senior Vice President
– Human Resources
   
Date: October 8, 2002
         
Date: October 8, 2002

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