ELWOOD WINN

TERMINATION AND SEVERANCE AGREEMENT AND MUTUAL RELEASE

        THIS TERMINATION AND SEVERANCE AGREEMENT AND MUTUAL RELEASE (“Agreement
and Release”) is made by and between FRESH BRANDS, INC. (along with and
including its subsidiaries and affiliates, “FBI”) and ELWOOD F. WINN (“Winn”)
effective as of this November 14, 2003.

        WHEREAS, to further the best interests of both FBI and Winn, Winn has
elected to voluntarily resign from FBI effective as of this November 14, 2003
(“Resignation Date”), and FBI has elected to accept such resignation, on the
terms and conditions set forth below.

        WHEREAS, in consideration of Winn agreeing to the terms and conditions
of this Agreement and Release, FBI is willing to provide Winn with the severance
payments and other additional benefits described below, to which he would not
otherwise be entitled.

        NOW THEREFORE, FBI and Winn, in consideration of the mutual promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, agree as follows:

  1. Voluntary Resignation. As a result of Winn’s decision to voluntarily resign
from FBI on the terms set forth herein, Winn’s employment with FBI will
terminate in all respects effective for all purposes immediately. Winn also
hereby resigns as an officer and director of FBI (including Fresh Brands
Distributing, Inc. (“FBDI”) and Dick’s Supermarkets, Inc. (“DSI”)), effective
immediately. FBI hereby accepts such resignations, including on behalf of FBDI
and DSI.

  2. Transition Plan; Consulting Services. In exchange for the severance
payments and other additional benefits provided hereunder to which he would not
otherwise have been entitled, Winn: (i) has prepared and submitted to FBI a list
of all of his pending matters that he is working on and a transition plan
associated with each such matter and (ii) from the Resignation Date through
February 13, 2004, Winn shall provide telephonic consulting services on an “as
needed” basis as may be reasonably requested by or on behalf of FBI.

  3. Severance Payments and Other Additional Benefits. Subject to Winn’s
compliance with this Agreement and Release:

  A. On or before November 26, 2003, FBI will pay Winn for his 20 unused
vacation days (less required withholdings). After the Resignation Date, as
severance payments hereunder and in consideration of Winn’s other covenants
hereunder, FBI will continue to pay Winn the pro rata amount of his current base
salary compensation (less required withholdings) through February 13, 2004. Such
severance payments will be paid on FBI’s normal payroll dates.

  B. After the Resignation Date, Winn will be offered COBRA coverage eligibility
for family health and dental insurance coverage. Should Winn wish to carry COBRA
coverage, he will be responsible for personally paying all of the necessary
premium payments. Details of COBRA coverage will be provided separately to Winn
upon his request.

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  C. Other than as set forth above, Winn’s coverage under all other group
benefits programs maintained by FBI will cease as of the Resignation Date.

  D. After the Resignation Date, Winn may exercise his currently outstanding
stock options (the “Option Agreements”) pursuant to the terms and conditions of
such Option Agreements.

  E. After the Resignation Date, subject to the terms of FBDI’s Retirement
Savings Plan and Executive Benefit Restoration Plan, Winn shall be entitled to
receive the vested balances in his accounts within such plans.

  F. FBI shall provide mutually agreed upon appropriate positive job references
to third parties upon Winn’s or such parties’ request. FBI shall not discuss
Winn or his job performance with any third parties in a manner that is
inconsistent with such job references.

  G. During the three month period immediately following the Resignation Date,
FBI shall continue to provide Winn a cellular telephone with the cost thereof to
be paid by FBI so long as such cost is reasonable in light of previous costs
incurred by FBI for Winn’s telephone.

  H. Winn is not entitled to, and hereby waives, any other severance,
compensation or bonuses, or other benefits, except as otherwise specifically
provided in this Agreement and Release or in the Option Agreements.

  4. Access. Winn’s access to FBI’s offices will end on Sunday, November 16,
2003. When Winn delivers this Agreement and Release to FBI, he shall also
deliver all keys and/or access cards.

  5. Return of All FBI Documents and Property. No later than Sunday, November
16, 2003, Winn will return to FBI all documents and property (including, without
limitation, all records, memoranda, notes, correspondence, client information,
reports, manuals, plans, computer discs, tapes and files, printouts, software,
presentations and the like, including all copies thereof, computers, telephones,
PDAs, equipment, and the like) in his possession or under his control pertaining
to FBI’s business, excluding only Winn’s personal files and property; provided,
however, that Winn shall return the cellular telephone provided to him by FBI on
or before February 13, 2004. Winn will not copy or cause to be copied any of
FBI’s records nor cause a removal of any record, document or property belonging
to FBI from the premises without authorization from FBI.

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  6. Noncompetition and Confidentiality Obligations. In exchange for the
severance payments and other additional benefits provided hereunder to which he
would not otherwise have been entitled:

  A. Winn hereby agrees not to, for a period from and after the Resignation Date
through December 31, 2004 (the “Noncompetition Period”):

  (i) engage in, continue in or carry on any business which competes with any of
FBI’s existing corporate or franchised supermarkets (the “Stores”), including
owning or controlling any financial interest in any corporation, partnership,
firm or other form of business organization which is so engaged;

  (ii) consult with, advise or assist in any way, whether or not for
consideration, any corporation, partnership, firm or other business organization
which is now or becomes a competitor of any of the Stores in any respect
including, but not limited to, advertising or otherwise endorsing the products
of any such competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; loaning money or rendering any other form
of financial assistance to or engaging in any form of business transaction on
other than an arm’s length basis with any such competitor;

  (iii) hire, offer to hire, or solicit for employment any person who, at any
time during the Noncompetition Period, has been an employee of FBI, without the
prior consent of FBI, until such person has been separated from employment by
FBI for at least 180 days; or

  (iv) engage in any practice, the purpose of which is to evade the provisions
of this covenant not to compete or to commit any act which adversely affects any
of the Stores or FBI;

  provided, however, that the foregoing shall not prohibit the ownership of
securities of corporations which are listed on a national securities exchange or
traded in the national over-the-counter market in an amount which shall not
exceed 5% of the outstanding shares of any such corporation. FBI and Winn agree
that the geographic scope of this covenant not to compete shall be limited to
the State of Wisconsin. FBI and Winn agree that FBI may sell, assign or
otherwise transfer this covenant not to compete, in whole or in part, to any
person, corporation, firm or entity. In the event a court of competent
jurisdiction determines that the provisions of this covenant not to compete are
excessively broad as to duration, geographical scope or activity, it is
expressly agreed that this covenant not to compete shall be construed so that
the remaining provisions shall not be affected, and shall remain in full force
and effect, and any such over broad provisions shall be deemed, without further
action on the part of any person, to be modified, amended and/or limited, but
only to the extent necessary to render the same valid and enforceable in such
jurisdiction. Winn recognizes and agrees that additional consideration to which
he would not otherwise be entitled is being provided to him hereunder in
exchange for his foregoing obligations.

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  B. Winn hereby agrees not to, for a period of two years from and after the
Resignation Date, participate or engage in any activity whatsoever, either
directly or indirectly, in connection with or in support of any indication of
interest, proposal, offer or other transaction to acquire all, or any
substantial part, of FBI.

  C. Prior to and for an indefinite period after the Resignation Date, Winn will
not directly or indirectly disclose to any person or entity (other than FBI or
one of its representatives or agents), or otherwise use for Winn’s own or any
other purposes, any confidential or proprietary information related in any way
to FBI or its clients or prospects that Winn has received or learned of as an
employee of FBI, without the prior written consent of an FBI officer. Winn
understands and agrees that this is an absolute and strict obligation of
confidentiality and nonuse of information important to FBI’s continued business
success. Additionally, Winn will not at any time divulge the circumstances or
terms of this Agreement (however, Winn is free to discuss the terms of this
Agreement with his immediate family members and with legal and tax advisors as
necessary to obtain advice and assistance, as required by any court order or as
reasonably required to prosecute or defend an action for breach of this
Agreement). Winn recognizes and agrees that additional consideration to which he
would not otherwise be entitled is being provided to him hereunder in exchange
for his foregoing obligations.

  D. In the event of any breach by Winn of any of the covenants herein contained
in this Section 6, it is specifically understood and agreed that FBI shall be
entitled, in addition to any other remedy which it may have, to equitable relief
by way of injunction or otherwise.

  E. The foregoing restrictions in this Section 6 are deemed fair and reasonable
to FBI and Winn, and Winn acknowledges and agrees that these restrictions are
necessary to protect FBI from the unfair competition of Winn who, as a result of
his association and position with FBI, has had access to, used and acquired
confidential information of FBI pertaining to its customers, business and
operation. Winn acknowledges and agrees that such confidential information is of
special and unique value to, and constitutes a valuable asset of, FBI, and that
the duration and scope of the restrictive covenants contained herein are
reasonable and necessary to protect FBI.

  7. Winn’s Release.

  A. In consideration of the severance payments and additional benefits provided
to Winn herein to which he would not otherwise have been entitled, Winn,
individually, and as an officer, director, employee and shareholder of FBI and
in all other capacities, does hereby fully and completely forever discharge,
waive and release, and covenants not to sue, FBI and its past, present and
future employees, agents, representatives, officers, directors and shareholders,
from and with respect to any and all actions, causes of action, claims, demands,
damages, liabilities, costs, expenses and/or compensation of any kind and nature
whatsoever (collectively and individually, “Claims”) on account of, or in any
way growing out of, any and all known and unknown facts, circumstances or
matters resulting from or related to (i) Winn’s employment with FBI; and/or
(ii) the termination of Winn’s employment with FBI; provided, however, that this
release does not relate to any claims for a breach or default by FBI of this
Agreement and Release and/or the Option Agreements.

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  B. By way of example only and without in any way limiting the generality of
the foregoing language, Winn’s release includes a complete release of any and
all Claims under the Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. §2000e et seq.; the Americans with Disabilities Act of 1991, 42 U.S.C.
§12l1-1217; the Rehabilitation Act of 1973, as amended, through 1988; the
Employment Retirement Income Security Act of 1974, 29 U.S.C. §1001 et seq.; the
Fair Labor Standards Act of 1938, 29 U.S.C. §201 et seq.; the National Labor
Relations Act, 29 U.S.C. §151 et seq.; the Family and Medical Leave Act of 1993,
29 U.S.C. §2601 et seq.; the Wisconsin Fair Employment Law, § 111.33, et seq.,
Wis. Stats.; the Wisconsin Family and Medical Leave Act, § 103.10, Wis. Stats.,
and any other federal, state or local statute, ordinance or regulation dealing
in any respect with employment, discrimination or termination of employment, and
in addition, from any Claims brought on the basis of alleged wrongful or
retaliatory discharge, breach of an oral or written contract, misrepresentation,
defamation, interference with contract or tortuous conduct.

  C. It is the intention of Winn in executing this Agreement and Release that
these provisions of this Section 7 shall be effective as a complete bar to each
and every Claim hereinabove described and that these provisions shall be binding
upon Winn and his agents, attorneys, personal representatives, executors,
administrators, heirs, beneficiaries, successors and assigns.

  8. FBI’s Release.

  A. FBI does hereby fully and completely forever discharge, waive and release,
and covenants not to sue, Winn and his agents, attorneys, representatives,
successors and assigns from any and all Claims on account of, or in any way
growing out of, any and all known and unknown facts, circumstances or matters
resulting from or related to Winn’s employment or the termination of his
employment or both at FBI; provided, however, that this release does not relate
to any claims for a breach or default by Winn of this Agreement and Release
and/or the Option Agreements.

  B. It is the intention of FBI in executing this Agreement and Release that
these provisions of this Section 8 shall be effective as a complete bar to each
and every Claim hereinabove described and that these provisions shall be binding
upon FBI and its past, present and future employees, agents, attorneys,
representatives, officers, directors, successors and assigns.

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  9. Non-Disparagement; Cooperation; Publicity. From and after the execution of
this Agreement and Release, Winn will not act in any way to harm or disrupt
FBI’s business or personal relationships with its shareholders, franchisees,
franchisee prospects, acquisition prospects, employees, vendors, banks, bank
prospects, landlords, landlord prospects or other business relationships, or
disparage in any way FBI or any of its directors, officers, employees,
shareholders or business operations.

  10. Unemployment Compensation. This Agreement and Release will not bar Winn
from filing for unemployment compensation. FBI will not contest any unemployment
compensation claim by alleging voluntary resignation or misconduct, if such a
claim is filed.

  11. Acceptance. Winn acknowledges that he has had sufficient time to read this
Agreement and Release and consider his acceptance of this Agreement and Release
and voluntarily enters into this Agreement and Release with full knowledge of
its meaning and consequences. In entering into this Agreement and Release, Winn
is relying on his own judgment and knowledge and not on representations or
statements made by FBI, its shareholders, directors, officers, employees or
agents. Winn is aware of his right to consult an attorney before entering into
this Agreement and Release. Winn has executed this Agreement and Release in
consideration for the substantial severance benefits described above and Winn
acknowledges and agrees that these payments represent substantial consideration
in addition to anything of value that he is otherwise entitled to receive from
FBI. These severance payments are sufficient to fully support this Agreement and
Release and the termination of Winn’s employment.

  12. Revocation. For a period of seven (7) days following the execution of this
Agreement and Release, Winn may revoke it in writing to the Chairman of the
Board of Directors of FBI. This Agreement and Release will not become effective
or enforceable until the revocation period has expired. If this Agreement and
Release is revoked by Winn, then any payment made in accordance with it shall be
immediately repaid by Winn to FBI and all future obligations or agreements of
FBI and Winn hereunder shall be null and void.

  13. Non-Admission. The parties’ participation in this Agreement and Release is
not to be construed an admission of any wrongdoing or liability whatsoever by or
on behalf of FBI, its employees or agents or Winn.

  14. Governing Law. This Agreement and Release shall be construed and enforced
in accordance with the laws of the State of Wisconsin.

  15. Relationship of Severance Benefits to Winn’s Rights Under Other Benefit
Plans. Winn agrees that the severance payments and other additional benefits and
other consideration payable to him hereunder shall not be taken into account for
purposes of determining his benefits under any other qualified or nonqualified
plans of FBI.

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  16. Violation of this Agreement and Release-Loss of Benefits and Payment of
Costs. If Winn breaches or violates this Agreement and Release in any way or if
Winn brings an action asking that the Agreement and Release be declared invalid
or unenforceable, Winn will tender back to FBI all payments, severance payments
and other additional benefits and other consideration which Winn has received as
consideration for this Agreement and Release (including under the Option
Agreements and together with interest thereon at the prime rate), and all such
future payments, severance benefits and other consideration shall immediately
cease and be null and void. If Winn’s action is unsuccessful or if FBI
successfully brings an action for his failure to comply with the terms of this
Agreement and Release, Winn further agrees that he will pay all costs, expenses
and reasonable attorneys’ fees incurred by FBI in its successful defense against
the action Winn brought or in its successful prosecution of the action FBI
brought. However, the previous two sentences shall not be applicable if Winn
brings an action challenging the validity of this release under the Age
Discrimination in Employment Act (which Winn may do without penalty under this
Agreement and Release).

  17. Entire Agreement. This Agreement and Release constitutes the entire
agreement between the parties.

        IN WITNESS WHEREOF, the parties have duly executed this Agreement and
Release as of the date first set forth above.

FRESH BRANDS, INC.

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

I HEREBY ACKNOWLEDGE THAT I HAVE READ THE FOREGOING DOCUMENT, UNDERSTAND ITS
CONTENTS, AND AGREE TO ITS TERMS AND CONDITIONS OF MY OWN FREE WILL. I
UNDERSTAND THAT MY AGREEMENT CONTAINS A FINAL GENERAL RELEASE AND THAT I CAN
MAKE NO FURTHER CLAIMS AGAINST FBI, OR AGAINST ANY OF ITS PRESENT OR FORMER
SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES IN
CONNECTION WITH MY EMPLOYMENT BY FBI OR THE TERMINATION OF MY EMPLOYMENT WITH
FBI.

/s/ Elwood F. Winn
Elwood F. Winn

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