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Sample Business Contracts

Separation Agreement and Release of All Claims - Poore Brothers Inc. and Scott D. Fullmer

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                              SEPARATION AGREEMENT
                                       AND
                                       ---
                              RELEASE OF ALL CLAIMS
                              ---------------------

This  Separation  Agreement and Release of All Claims  ("Agreement")  is entered
into this 14th day of August,  1998,  between Scott D. Fullmer  ("Employee") and
Poore Brothers,  Inc. ("Employer").  The term "parties" shall refer collectively
to both of these entities.

         In consideration of the mutual promises herein contained,  the adequacy
of which consideration is hereby acknowledged, the parties agree as follows.

         1. Employee's  employment by Employer is terminated by mutual agreement
as of August 7, 1998 (the "Termination Date").

         2. Employer shall provide the following severance benefits to Employee:

                  a. Employer shall pay Employee severance pay until December 7,
1998. This severance pay,  subject to appropriate  withholding and deductions as
required by law, shall be paid to Employee by continuing to pay Employee amounts
equaling  Employee's  regular base salary,  on the regular  paydays of Employer,
until the obligation to pay severance is completed.

                  b.  Vested  stock  options  held by Employee  shall  expire on
February 7, 1999.  Employee may exercise such stock options at any time prior to
the expiration date.

                  c. Any  unvested  stock  options  held by  Employee  that were
scheduled  to vest prior to  February 7, 1999 will vest as of the  execution  of
this Agreement and will be subject to the expiration date stated in paragraph 2b
above.

                  d. Unvested  stock options held by Employee will expire on the
Termination Date stated in paragraph 1 above.

                  e.  Employer  shall  continue   Employee's  medical  and  life
insurance during the severance  period specified in subparagraph 2a above.  Upon
the  expiration  of the  severance  period,  Employee  shall  have all rights to
continuation  of such  coverage  as may be provided  by law,  including  without
limitation COBRA.

                  f. Employer shall pay Employee  his/her  accrued  vacation and
sick days not yet taken or paid (total of 4.75 days).

                  g.  Employer  shall  provide   outplacement   and  job  search
assistance to the Employee as outlined on the attached Exhibit A.

                  h. Employee shall have use of his/her company-owned automobile
until  December  7,  1998,  or until such  earlier  time as the  Employee  finds
employment,  at  which  time it shall  be  returned  to  Employer.  Employee  is
responsible for all gasoline expenses.

                  i.  The  parties  acknowledge  that  the  above  payments  and
benefits are consideration in addition to anything of value to which Employee is
already entitled.

         3.  Employee,   on  behalf  of  himself/herself   and  his/her  marital
community, heirs, executors,  assigns and personal representatives,  does hereby
release  and  forever  discharge  Employer  and any parent  company,  subsidiary
company,  and any other company  affiliated with or under common  ownership with
Employer,  and each of their respective  current and former officers,  partners,
principals,  directors,  shareholders,  attorneys,  employees, agents, servants,
representatives,   independent  contractors,   guarantors,   heirs,  successors,
insurers,  assigns,  and  all  affiliated  entities,   hereinafter  collectively
referred to as the "the Released  Parties," from any and all claims, or demands,
causes of actions,  or  liability  of any kind or  character,  known or unknown,
arising or accruing  through the date this  Agreement  is executed by  Employee,
including  without  limitation  all  claims  that  are in  any  way  related  to
Employee's employment by Employer or the termination thereof.

         Without  limiting the  generality  of the  foregoing,  the full release
contained in this paragraph applies to all claims arising under the Civil Rights
Act of 1964;  the Age  Discrimination  in Employment  Act of 1967; the Americans
With Disabilities Act of 1990; the Labor Management  Relations Act; the Employee
Retirement Income Security Act of 1974; the Fair Labor Standards Act; the Family
and Medical Leave Act; the Immigration  Reform and Control Act; the Consolidated
Omnibus Budget  Reconciliation  Act; the Occupational  Safety and Health Act, or
any  comparable  state  occupational  safety and health  statute;  the  Workers'
Adjustment and Retraining Act; 42 U.S.C. ss. 1981; the Arizona Civil Rights Act;
the Arizona Wage Act; or under any other  applicable  state or federal  statute;
and to any common law cause of action,  including without  limitation claims for
breach of contract,  wrongful discharge, unpaid wages, tort, personal injury, or
any claim for attorney's fees or other damages, costs or expenses of any kind or
nature.

         4. Employer,  on behalf of any parent company,  subsidiary  company and
any other company  affiliated with or under common  ownership with Employer does
hereby release and forever  discharge  Employee and his/her  marital  community,
heirs, executors, assigns and personal representatives, from any and all claims,
or demands,  causes of actions, or liability of any kind or character,  known or
unknown,  arising or  accruing  through the date this  Agreement  is executed by
Employee, including without limitation all claims that are in any way related to
Employee's employment by Employer or the termination thereof.

         5. Notwithstanding the foregoing,  the releases contained in paragraphs
3 and 4 do not waive any claim  arising  out of any breach or alleged  breach of
this  Agreement,  or any  claim  that may arise  after  the date this  waiver is
executed.

         6. Each of the persons  identified as a subject or  beneficiary  of the
release  provisions of paragraphs 3 and 4 above is intended as, and is expressly
designated as, a third party beneficiary of this Agreement.

         7. On or before the  effective  date of  termination  set forth  above,
Employee shall return all of Employer's property in his/her possession, custody,
or control,  including without limitation all records,  files, goods, equipment,
documents,  computer,  software, data, disks, and any other property of any kind
or description whatsoever, including (if applicable) all copies thereof.

         8. Employee  agrees to keep the terms of this  Agreement  confidential,
and not to disclose the terms of this  Agreement to any person  except as may be
required by law.  This  obligation  shall be equally be binding upon  Employee's
counsel and upon his/her  spouse (if any), who shall also keep the terms of this
Agreement  confidential  and not  disclose  them to any person  except as may be
required by law.

         9.  Consistent  with the full  release  contained in paragraph 3 above,
Employee agrees not to file or lodge any type of complaint alleging violation of
any law by  Employer  with  any  agency,  or  otherwise  disparage  Employer  in
statements  to any person or assert any  claims or  demands  against  it. In the
event that Employee brings such a lawsuit or files or lodges such a complaint in
breach of this  paragraph,  then Employee shall be required (in addition to such
damages as may be recoverable by Employer) to reimburse  Employer the sum and/or
value  of all  severance  benefits  received  pursuant  to  paragraph  2 of this
Agreement.

         10.  Employee  understands  and  agrees  that  the  execution  of  this
Agreement and the provision of severance benefits described herein are not to be
construed as an admission  by Employer of any  liability to Employee,  liability
being expressly denied;  but this Agreement instead  represents a compromise and
settlement of disputed and unliquidated claims.

         11.  Employee  is hereby  advised to consult  with an  attorney  before
executing this Agreement.  By his/her  signature hereon,  Employee  acknowledges
that  he/she has been so  advised,  and that  he/she has had an  opportunity  to
consult  with,  and has  consulted  with,  an  attorney  before  executing  this
Agreement.

         12.  Employee  acknowledges  that  he/she  has been  given a period  of
twenty-one (21) days within which to consider this Agreement.

         13.  For a period of seven (7) days  following  the  execution  of this
Agreement by  Employee,  Employee may revoke the  Agreement,  and the  Agreement
shall not  become  effective  or  enforceable  until the  revocation  period has
expired.  This  Agreement  shall become  effective upon the eighth day following
Employee's  signature  hereon,  provided that Employee has delivered this signed
Agreement to Employer within the same period (the "Effective Date").

         14. This Agreement  constitutes the entire Agreement and  understanding
among  the  parties  hereto  with  respect  to the  subject  matter  hereof  and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions  express or implied,  oral or written,  of any nature  whatsoever
with respect to the subject matter hereof. This Agreement may not be modified or
amended other than by an agreement in writing  signed by the party to be charged
with such modification or amendment.

         15.  Should any  litigation  be  commenced  between the parties  hereto
concerning the terms of this Agreement,  or the rights and duties of the parties
hereto under this Agreement,  the prevailing  party in such litigation  shall be
entitled,  in addition to such other  relief as may be granted,  to a reasonable
sum as and for the  prevailing  party's  attorneys'  fees,  expert's  fees,  and
expenses of litigation.

         16. The  provisions of this  Agreement are  independent of and separate
and severable  from each other,  and no provision  shall be affected or rendered
invalid or  unenforceable by virtue of the fact that for any reason any other or
others  of them may be  invalid  or  unenforceable  in whole or in part.  If any
provision of this Agreement is held by a court of competent  jurisdiction  to be
invalid or  unenforceable,  that provision shall be deemed modified and replaced
by a  provision,  as similar in form,  content  and effect as  possible,  to the
invalid or  unenforceable  provision and the Agreement  shall be deemed reformed
accordingly.  Notwithstanding the foregoing,  however, the obligations of either
party shall be rendered null and void if any part of the material  consideration
for that  party's  obligations  is or becomes  unenforceable  and no  reasonable
substitute provision with the same material effect is available to the parties.

         17.  Neither  the  failure  nor any  delay on the part of any  party to
exercise  any right,  remedy,  power or  privilege  under this  Agreement  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right, power, or privilege preclude any other or further exercise of the same or
of any other  right,  remedy,  power or  privilege,  nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed as
a waiver of such rights,  remedy,  power, or privilege with respect to any other
occurrence.

         18. This Agreement is the product of  negotiation  between the parties.
This Agreement shall be construed in accordance with its plain meaning and shall
not be construed for or against any party on account of the role of any party or
its counsel in the drafting of this Agreement.

         19. This Agreement shall be governed by the substantive laws of Arizona
and any action to enforce or construe this Agreement or to declare the rights of
the parties  hereunder  shall be commenced and  maintained in a state or federal
court in Arizona.

         20.  Employee has read this  Agreement,  and  understand the extent and
effect of its terms,  the  relinquishment  of his/her legal rights and the legal
consequences  involved in entering  into this  Agreement.  Employee is satisfied
with the terms and  conditions  of  settlement  represented  by this  Agreement.
Employee is signing this Agreement voluntarily.

[Employee  must initial the  following  paragraph,  if  applicable;  that is, if
Employee chooses to sign this Agreement before the expiration of twenty-one days
after it was offered to Employee.]

         21.  Employee  hereby waives the  twenty-one day period within which to
consider this  Agreement (but not the seven day period within which Employee may
revoke this Agreement),  because it is Employee's desire and request to have the
severance pay paid as promptly as possible.  Employee acknowledges that Employee
has had a reasonable  time to consider this  Agreement,  and that Employee could
have and would have taken the full  twenty-one  days to consider this  Agreement
had Employee  needed or desired it. Employee  acknowledges  that no pressure has
been  applied or  deadline  stated by  Employer in  connection  with  Employee's
execution  of this  Agreement  and that  Employee was guided by  Employee's  own
judgment and desire to expedite  payment of the severance pay, in determining to
sign  this  Agreement  before  the  expiration  of the  twenty-one  day  period.
_________(initial here, if applicable)







                                    "Employee":
                                    Scott D. Fullmer
                                    ---------------------------------------

                                    (Print name)

                                    /s/  Scott D. Fullmer
                                    ---------------------------------------
                                    (Signature)

                                    "Employer":
                                    POORE BROTHERS, INC.


                                    By: /s/ Eric J. Kufel
                                        -----------------------------------

                                        Its: President and CEO
                                             ------------------------------