<Page>

                                                                    Exhibit 10.1

July 23, 2001

Mr. James O'Leary
U.S. Industries, Inc.
101 Wood Avenue South
Iselin, NJ 08830-0169

Dear Jim:

Reference is made to your restated employment agreement with U.S. Industries,
Inc. ("USI") dated September 1, 1999, as amended by letter agreements dated
February 6, 2001 and March 23, 2001, (the "Restated Employment Agreement"). The
parties acknowledge that a "Good Reason" event, as defined in the Restated
Employment Agreement, has occurred as a result of the change in your
responsibilities and duties (the "Existing Event") and you could terminate your
employment by USI on such basis. USI acknowledges that your continued services
to USI are of significant value to USI and, therefore, USI would like to induce
you not to terminate as a result of the Existing Event, but to stay on with USI
through at least June 30, 2002.

In consideration of the obligations of USI under this agreement, you hereby
waive your right to terminate the Restated Employment Agreement on account of
the Existing Event and you and USI agree that "Good Reason" under Section
7(c)(i) of the Restated Employment Agreement shall occur under said Section
7(c)(i) only if (a) you are removed from having the title of Executive Vice
President, (b) you no longer report directly to the Chairman, or (c) you are no
longer a Director of USI. In addition, it is agreed you will be based in the New
Jersey area through June 30, 2002.

Accordingly, in consideration of your waiving the Existing Event and agreeing
that, absent a Change in Control, you will not, prior to June 30, 2002,
voluntarily terminate your employment by USI for other than Good Reason , USI
agrees to pay you a "stay bonus" (the "Stay Bonus") in the amount of one million
three hundred seventy two thousand six hundred eighty eight dollars ($1,372,688)
if you do not, prior to the earlier of (i) June 30, 2002 or (ii) a Change in
Control, voluntarily terminate your employment by USI for other than Good
Reason. As used herein, Cause, Good Reason, Disability and Change in Control
shall have the meanings set forth in the Restated Employment Agreement, as
modified herein.

The Stay Bonus will be payable to you upon the earliest to occur of the
following (the "Payment Date"): (i) June 30, 2002, if you are employed by USI on
such date, (ii) the occurrence of a Change in Control, if you are employed by
USI on such date, and (iii) the termination of your employment by USI for any
reason other than (x) by USI for Cause


<Page>

or (y) voluntarily by you for other than Good Reason. By way of illustration
only, the Stay Bonus would be payable under clause (iii) above upon the
termination of your employment by USI as a result of your death, termination by
USI on account of your Disability, termination by USI without Cause or
termination by you for Good Reason. No Stay Bonus would be payable if, prior to
the Payment Date, your employment by USI is terminated by USI for Cause or
voluntarily by you for other than Good Reason.

USI will simultaneous with the execution of this agreement pay the full amount
of the Stay Bonus, i.e., the sum of one million three hundred seventy two
thousand six hundred eighty eight dollars ($1,372,688) (the "Escrow Funds") by
wire transfer to Manufacturers and Traders Trust Company ("M&T Bank"), to be
held in escrow by M&T Bank pursuant to the terms of an Escrow Agreement of even
date by and among you, USI and M&T Bank (the "Escrow Agreement"). Pursuant to
the terms of the Escrow Agreement, legal title to the Escrow Funds is being
transferred to and shall vest in M&T Bank, as escrow agent, subject to your
equitable rights to be paid the Escrow Funds on account of the Stay Bonus and/or
USI's equitable rights to receive the return of the Escrow Funds in the event
that you do not become entitled to be paid the Stay Bonus. Said equitable rights
of USI shall automatically terminate upon the Payment Date.

On the Payment Date, $876,461 of the Escrow Funds shall be paid to you (or your
estate or legal representative) and the balance of the Escrow Funds shall be
paid to USI for the purpose of USI immediately paying the sum of $496,227 over
to the appropriate governmental authorities as withholding and other required
governmental deductions payable for your benefit on account of the Stay Bonus
(with USI being entitled to retain any interest earned through such date on the
Escrow Funds). If, prior to the Payment Date, your employment by USI is
terminated by USI for Cause or voluntarily terminated by you for other than Good
Reason, then the Escrow Funds shall be paid over to USI. In the event of any
legal action between you and USI with respect to the disposition of said Escrow
Funds, the prevailing party in such action shall be entitled to recover his or
its reasonable attorneys' fees and court costs from the non-prevailing party.

In addition to the payment of the Stay Bonus, upon termination of your
employment with USI, all entitlements, as applicable, pursuant to the Restated
Employment Agreement shall be paid and/or provided to you in accordance with the
terms of the Restated Employment Agreement (it being acknowledged and agreed
that the Stay Bonus is intended to be in addition to, and not in substitution
for, any of your entitlements under the Restated Employment Agreement).

USI and you hereby acknowledge and agree that that certain letter agreement
dated November 3, 2000 respecting the proposed "Spinoff" and the corresponding
termination of the Restated Employment Agreement, as said letter agreement has
been amended, is null and void and of no further force or effect. USI hereby
acknowledges and agrees that USI knows of no basis for a termination of your
employment by USI for Cause as of the date hereof. You hereby acknowledge and
agree that, other than the Existing Event, you know of no basis for a
termination of your employment by you for Good Reason as of the date hereof.


<Page>

This letter shall serve as an amendment to the Restated Employment Agreement
which amendment is entered into between you and USI on the date hereof. All
other terms of the Restated Employment Agreement shall remain unchanged and, as
amended, shall continue in full force and effect.

By signing this letter, you consent to and agree to these amendments. This
letter may not be altered, modified or amended except by a written instrument
signed by both parties hereto. Please execute and return this letter to us.

                                         Very truly yours,

                                         U.S. INDUSTRIES, INC.


                                         By: /s/  Dorothy E. Sander
                                            --------------------------------
                                                  Dorothy E. Sander
                                                  Senior Vice President
Agreed:

/s/ James O'Leary
-------------------------------
James O'Leary