EMPLOYMENT AGREEMENT 



        THIS
EMPLOYMENT AGREEMENT, made and entered into as of the 5th day of December,
2005, by and between FRESH BRANDS, INC., a Wisconsin corporation (the
“Company”), PILLOW ACQUISITION CORP., a Wisconsin corporation
(“Certified”), and JOHN H. DAHLY (the “Executive”). 



W I T N E S S E T H : 



        WHEREAS,
the Executive is employed by the Company in a key executive capacity and the
Executive’s services are valuable to the conduct of the business of the Company; 



        WHEREAS,
the Company has entered into that certain Agreement and Plan of Merger among
Certified, Pillow Acquisition Corp. and the Company, dated as of this date (the
“Merger Agreement”) providing for the merger of Certified with and into the
Company (the “Merger”); 



        WHEREAS,
Certified and the Company desire to employ the Executive, and the Executive desires to
continue in employment with the Company or Certified, for up to one year following the
Effective Time of the Merger, as that term is defined in the Merger Agreement; 



        WHEREAS,
Certified, the Company and the Executive desire to enter into an employment agreement to
be effective on the Effective Time of the Merger. 



        NOW,
THEREFORE, in consideration of the foregoing, the parties hereto agree as follows: 



        1.       Effective
Date. This Agreement shall become effective on the Effective           Time of the
Merger.  




        2.       Employment
Period. Certified or the Company will employ the Executive           from the
Effective Time of the Merger through the first anniversary thereof (the
          Employment Period), and the Executive will remain in the employ of Certified or
          the Company as applicable, in accordance with and subject to the terms and
          provisions of this Agreement.  




        3.       Duties.
During the Employment Period, the Executive shall, in such           capacities and
positions as may be assigned by Certified or the Company to the           Executive,
devote the Executive’s best efforts, attention and skill to the           business
and affairs of Certified or the Company. The Executive shall report to           the
President and Chief Executive Officer of Certified. The Executive shall           provide
such services approximately three days per week on such schedule as           shall be
agreed to by the Executive and the Company. The services which are to           be
performed by the Executive hereunder are to be rendered in such place or           places
as shall be mutually agreed upon in writing by the Executive and           Certified or
the Company from time to time.  













        4.       Compensation.
During the Employment Period, the Executive shall be           compensated as follows:  




        (a)       Base
Salary. The Executive shall receive, at such intervals and in           accordance
with such standard policies of Certified or the Company as may be in           effect, an
annual base salary in cash equivalent of not less than the           Executive’s
annual base salary as in effect immediately prior to the           Effective Time of the
Merger (subject to any deferral election then in effect),           subject to adjustment
as provided under subsection (f). The Executive’s           base salary shall be
paid in accordance with the normal payroll practices of the           company that
employs the Executive.  




        (b)       Reimbursement
of Expenses. The Executive shall, at such intervals and in           accordance with
such standard policies as may be in effect, be reimbursed for           any and all
monies advanced in connection with the Executive’s employment           for
reasonable and necessary expenses incurred by the Executive on behalf of
          Certified, the Company or any of their Affiliates, including travel expenses.
          For purposes of this Agreement, the term “Affiliate” shall have the
          meaning ascribed to such term in Rule 12b-2 of the General Rules and
Regulations           of the Securities Exchange Act of 1934, as amended.  




        (c)       Salaried
Employee Benefit Plans. The Executive shall be included, to the           extent
eligible thereunder, in any and all plans providing benefits for the           salaried
employees of the company by which the Executive is employed in general,
          including but not limited to group life insurance, hospitalization, medical,
          dental, profit sharing (including any 401(k) plan) and stock bonus plans; provided,
that, in no event shall the aggregate level of benefits           under such plans
in which the Executive is included be less than the aggregate           level of benefits
under plans of the type referred to in this Section 4(c) in           which the Executive
was participating immediately prior to the Effective Time.  




        (d)       Vacations
and Holidays. The Executive shall annually be entitled to not           less than the
amount of paid vacation and not fewer than the number of paid           holidays to which
the Executive was entitled annually immediately prior to the           Effective Time or
such greater amount of paid vacation and number of paid           holidays as may be made
available annually to other executives of Certified or           the Company of
comparable status and position to the Executive, subject to           adjustment as
provided under subsection (f).  




        (e)       Executive
Benefit Plans. The Executive shall be included in all plans           providing
additional benefits to executives of Certified or the Company of           comparable
status and position to the Executive, including but not limited to           deferred
compensation, split-dollar life insurance, supplemental retirement,           cash bonus,
stock option, stock appreciation, stock bonus and similar or           comparable plans,
but excluding any KEESA or similar severance arrangement; provided, that, in no
event shall the aggregate level of benefits under           such plans be less than the
aggregate level of benefits under plans of the type           referred to in this Section
4(e) in which the Executive was participating           immediately prior to the
Effective Time, subject to adjustment as provided under           subsection (f).  




        (f)       Adjustment
of Compensation. The amount paid to the Executive each payroll           period under
subsection (a) shall be prorated to reflect the number of business           days the
Executive actually works each payroll period. The Executive’s           entitlement
to vacation accrual and executive benefit plan participation           opportunity
(including but not limited to opportunity to receive an annual           bonus) shall be
prorated based on the number of business days the Executive is           expected to work
on an annual basis.  





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        (g)       Compensation
Accrued Prior to the Effective Time. Nothing herein shall           affect the amount
of any compensation or benefits which the Executive has earned           or accrued, or
to which the Executive is entitled, as of the Effective Time           under any plan,
program or policy of the Company, including but not limited to           any amounts
payable under the Company’s Executive Bonus Plan for 2005 and           any amount
payable as a result of the termination of the Executive’s Key           Executive
Employment and Severance Agreement dated December 15, 2003.  




        5.       Termination
of Employment. The Company or an Affiliate that employs           Executive may
terminate the Executive at any time for any reason, and the           Executive may
terminate employment at any time for any reason, by providing at           least thirty
(30) days advance written notice thereof to the other party (other           than in the
event of death). In the event of the Executive’s termination of
          employment, the Executive shall be entitled to receive his Accrued Benefits.
For           purposes of this Agreement, the Executive’s “Accrued Benefits”          shall
include the following amounts, payable as described herein: (a) all base           salary
for the time period ending with the termination date; (b) reimbursement           for any
and all monies advanced in connection with the Executive’s           employment for
reasonable and necessary expenses incurred by the Executive on           behalf of
Certified, the Company or their Affiliates for the time period ending           with the
termination date; (c) any and all other cash earned through the           termination
date and deferred at the election of the Executive or pursuant to           any deferred
compensation plan then in effect; (d) a payment of the bonus or           incentive
compensation otherwise payable to the Executive with respect to the           year in
which termination occurs under all bonus or incentive compensation plan           or
plans in which the Executive is a participant; and (e) all other payments and
          benefits to which the Executive may be entitled as compensatory fringe benefits
          or under the terms of any benefit plan or practice as in effect immediately
          prior to the termination date. Payment of Accrued Benefits shall be made
          promptly in accordance with the prevailing practice with respect to Subsections
          (a) and (b) or, with respect to Subsections (c), (d) and (e), pursuant to the
          terms of the benefit plan or practice establishing such benefits.  




        6.       Confidentiality
Obligations of the Executive; Noncompetition.  




        (a)                 During
and following the Executive’s employment by Certified or the           Company, the
Executive shall hold in confidence and not directly or indirectly           disclose or
use or copy or make lists of any confidential information or           proprietary data
of Certified or the Company, except to the extent authorized in           writing by the
Board of Directors of Certified or required by any court or           administrative
agency, other than to an employee of Certified or the Company or           a person to
whom disclosure is reasonably necessary or appropriate in connection           with the
performance by the Executive of duties as an executive of Certified or           the
Company, as applicable. Confidential information shall not include any
          information known generally to the public or any information of a type not
          otherwise considered confidential by persons engaged in the same business or a
          business similar to that of Certified or the Company. All records, files,
          documents and materials, or copies thereof, relating to the business of
          Certified or the Company which the Executive shall prepare, or use, or come
into           contact with, shall be and remain the sole property of Certified or the
Company,           as applicable, and shall be promptly returned to Certified or the
Company upon           termination of employment.  




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        (b)                 The
Executive agrees that for a period of one year after his date of termination           of
employment the Executive shall not, within the State of Wisconsin or the           State
of Illinois, except as permitted by the Company’s prior written           consent
(which shall not be unreasonably withheld), participate in the           management of
any business which is a direct and substantial competitor of the           Company or one
of its Affiliates. The ownership of less than five percent of any           class of
securities of any corporation listed on a national securities exchange           or
regularly traded over the counter even though such corporation may be a
          competitor of the Company or one of its Affiliates as specified above, shall
not           be deemed as constituting a financial interest in such competitor.  




        7.       Payment
Obligations Absolute. The Company’s obligation during and           after the
Employment Period to pay the Executive the amounts and to make the           benefit and
other arrangements provided herein shall be absolute and           unconditional and
shall not be affected by any circumstances, including, without           limitation, any
setoff, counterclaim, recoupment, defense or other right which           the Company may
have against him or anyone else. All amounts payable by the           Company hereunder
shall be paid without notice or demand. Each and every payment           made hereunder
by the Company shall be final, and the Company will not seek to           recover all or
any part of such payment from the Executive, or from whomsoever           may be entitled
thereto, for any reason whatsoever.  




        8.       Successors.  




        (a)                 This
Agreement and all rights of the Company or any Affiliate hereunder shall           inure
to the benefit of and be binding on any successor to such Company or any
          Affiliate.  




        (b)                 This
Agreement and all rights of the Executive shall inure to the benefit of and           be
enforceable by the Executive’s personal or legal representatives,
          executors, administrators, heirs and beneficiaries.  




        9.       Severability.
The provisions of this Agreement shall be regarded as           divisible, and if any of
said provisions or any part hereof are declared invalid           or unenforceable by a
court of competent jurisdiction, the validity and           enforceability of the
remainder of such provisions or parts hereof and the           applicability thereof
shall not be affected thereby.  




        10.       Amendment.
This Agreement may not be amended or modified at any time           except by written
instrument executed by the Company and the Executive.  




        11.       Certain
Rules of Construction. No party shall be considered as being           responsible
for the drafting of this Agreement for the purpose of applying any           rule
construing ambiguities against the drafter or otherwise. No draft of this
          Agreement shall be taken into account in construing this Agreement. Any
          provision of this Agreement which requires an agreement in writing shall be
          deemed to require that the writing in question be signed by the Executive and
an           authorized representative of the Company.  




        12.       Governing
Law; Resolution of Disputes. This Agreement and the rights and           obligations
hereunder shall be governed by and construed in accordance with the           laws of the
State of Wisconsin. Any dispute arising out of this Agreement shall,           at the
Executive’s election, be determined by arbitration under the rules           of the
American Arbitration Association then in effect or by litigation. Whether           the
dispute is to be settled by arbitration or litigation, the venue for the
          arbitration or litigation shall be Sheboygan, Wisconsin or, at the
          Executive’s election, if the Executive is no longer residing or working in
          the Sheboygan, Wisconsin metropolitan area, in the judicial district
          encompassing the city in which the Executive resides. The parties consent to
          personal jurisdiction in each trial court in the selected venue having subject
          matter jurisdiction notwithstanding their residence or situs, and each party
          irrevocably consents to service of process in the manner provided hereunder for
          the giving of notices.  




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        13.       Notice.
Notices given pursuant to this Agreement shall be in writing and           shall be
deemed given when actually received by the Executive or actually           received by
the Company’s Secretary or any officer of the Company other           than the
Executive. If mailed, such notices shall be mailed by United States           registered
or certified mail, return receipt requested, addressee only, postage           prepaid,
if to the Company or any of its Affiliates, to Certified Grocers           Midwest, Inc.,
Attention: Kenneth R. Koester, President and Chief Executive           Officer, One
Certified Drive, Hodgkins, Illinois 60525, or if to the Executive,           at the
address set forth below the Executive’s signature to this Agreement,           or to
such other address as the party to be notified shall have theretofore           given to
the other party in writing.  




        14.       No
Waiver. No waiver by either party at any time of any breach by the           other
party of, or compliance with, any condition or provision of this Agreement           to
be performed by the other party shall be deemed a waiver of similar or
          dissimilar provisions or conditions at the same time or any prior or subsequent
          time.  




        15.       Headings.
The headings herein contained are for reference only and shall           not affect the
meaning or interpretation of any provision of this Agreement.  




        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written above. 



		
		FRESH BRANDS, INC.
	

 	By  /s/ Walter G. Winding
		       Walter G. Winding, III
		       Chairman of the Board
	

 	PILLOW ACQUISITION CORP.
	

 	By  /s/ Kenneth R. Koester
		       Kenneth R. Koester
		       President and Chief Executive Officer
	

 	EXECUTIVE
	

 	/s/ John Dahly
		John Dahly
		Address: 2051 W. Hidden Reserve Circle
		Mequon, WI 53092





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