**Exhibit 10.56**

** **

**EMPLOYEE**

**INCENTIVE STOCK OPTION**

**AGREEMENT**

 

POOREBROTHERS, INC., a Delaware corporation (the “*Company*”),hereby grants effective                       (the “*Grant Date*”) to                                          (the “*Optionee*”) an option to purchase atotal of                           shares of common stock, par value $.01 per share, of the Company (the “*Common Stock*”) at a price of $          per share. The option granted to you is subject to the terms and conditions ofthe Company’s 2005 Equity Incentive Plan (the “*Plan*”)and such additional terms and conditions as are set forth in this IncentiveStock Option Agreement (the “Agreement”). The terms of the Plan areincorporated by reference in this Agreement and govern the granting, holdingand exercise of your option as though set forth in full in this Agreement. Acopy of the Plan is attached to the Prospectus delivered to you with thisAgreement. All capitalized terms used in this Agreement and not otherwisedefined herein shall have the meanings expressly assigned thereto in the Plan.

 

1.                                       *Nature of the Option*. This option is intended to be an “IncentiveStock Option” as defined in and subject to the limitations of Section 422Aof the Internal Revenue Code of 1986.

 

2.                                       *Exercise of Option*.

 

a)                                      Thisoption may be exercised by delivery of written notice to the Company inthe form attached as Exhibit A stating the number of shares ofCommon Stock with respect to which the option is being exercised, making suchrepresentations, warranties and agreements with respect to such shares ofCommon Stock as may be required by the Company, and accompanied by fullpayment of the purchase price therefor. Payment may be made in cash, bycheck, by delivery of shares of Common Stock or in such other form orcombination of forms as shall be acceptable to the Company. This option shallnot be exercisable as to fewer than 500 shares of Common Stock, or theremaining shares of Common Stock covered by this option if fewer than 500.

 

b)                                     Providedthat the Optionee is then employed by the Company, this option shall vest andbecome exercisable in installments on the following dates:

 

|   |   |                        shares |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                        shares |
|   |   |                        shares |

 

(each of the above dates,a “*Vesting Date*”).

 

3.                                       *Termination*. This option shall expire five (5) yearsfrom the Grant Date above, (the “*Expiration Date*”)unless earlier terminated in accordance with the provisions hereof.

 

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4.                                       *Early Termination.*

 

a)                                      Inthe event that Optionee ceases to be an employee of the Company for any reasonwhatsoever (including by death, Retirement or Disability, or termination byvoluntary resignation or removal with or without Cause), this option shallautomatically terminate on the date Optionee ceases to be an employee to theextent this option is unvested on such date.

 

b)                                     Inthe event that Optionee is removed as an employee for Cause, this option shallautomatically terminate immediately upon the effective date of the notice ofsuch removal whether or not this option is vested or unvested on such date.

 

c)                                      Inthe event that Optionee ceases to be an employee of the Company for any reasonother than death, Disability or removal for Cause (including by Retirement,termination by voluntary resignation or removal without Cause), Optionee shallhave the right to exercise this option to the extent that Optionee was entitledto exercise such option on the date Optionee ceased to be an employee; provided,however, that such exercise must be made on or before the earlier of (i) the60th day following the date Optionee ceases to be an employee or (ii) theExpiration Date.

 

d)                                     Inthe event of the Disability or death of Optionee, Optionee or Optionee’s estateshall have the privilege of exercising this option to the extent that Optioneewas entitled to exercise such option on the date of Optionee’s Disability or death;provided, however, that such exercise must be made on or before the earlier of (i) the180th day following the date of Optionee’s Disability or death or (ii) theExpiration Date.

 

5.                                       *Assignment or Transfer*. This option may not be assignedor transferred and shall be exercisable only by the Optionee during theOptionee’s lifetime.

 

6.                                       *Governing Law*. This Agreement shall be governed andconstrued in accordance with the laws of the State of Arizona without givingeffect to the principles of conflicts of laws.

 

7.                                       *Tax Matters*.

 

a)                                      TaxTreatment. Section 422 of the Internal Revenue Code of 1986, asamended, provides for advantageous tax treatment upon the disposition of sharesacquired pursuant to an incentive stock option such as you have been grantedherein. Such advantageous treatment is presently only available to the extentthat the value of shares exercisable for the first time by you pursuant to allyour outstanding incentive stock options in the Company does not exceed$100,000 in any one year, based on the fair market value of the shares on thedate of grant. Accordingly, if the total value of shares vesting under thisstock option and any other incentive stock option granted to you by the Companyexceeds the maximum amount permissible under Section 422 or any successorstatute, this stock option will be treated as an incentive stock option with 

 

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respect to the maximumnumber of permissible shares and as a nonqualified stock option with respect tothe balance of shares. There is no assurance that your option will, in fact, betreated as an incentive stock option.

 

Inaddition, in order to qualify presently for incentive stock option treatment,you must not make a “disqualifying disposition” of shares acquired pursuant tothis stock option within two (2) years from the Grant Date nor withinone (1) year after the shares are transferred to you. Although theforegoing holding period requirements do not represent a term or condition ofthis stock option, you may find that it is in your best interests tocomply with them.

 

**Becausethe tax effect may vary depending on your personal circumstances,including any alternative minimum tax treatment, and the tax laws may changefrom time to time, it is strongly recommended that you consult with tax counselor a tax advisor in order to realize any available tax benefits associated withthis stock option.**

 

b)                                     Withholding.If the exercise of any rights granted in this Agreement of the disposition ofshares following exercise of such rights results in the Optionee’s realizationof income which for federal, state or local income tax purposes is, in theopinion of the Company, subject to withholding of tax, the Optionee will pay tothe Company an amount equal to such withholding tax (or the Company may withholdsuch amount from any compensation due the Optionee) prior to delivery ofcertificates evidencing the shares of Common Stock purchased.

 

8.                                       *Not an Employment Agreement*. **ThisAgreement is not an assurance of continued engagement as a director for anyperiod of time, including any period of time necessary to permit vesting ofyour option under Paragraph 2(b) above.**

 

 

INWITNESS WHEREOF, the Company and the Optionee have executed this IncentiveStock Option Agreement effective on the first date mentioned above.

 
| THE COMPANY:              |   |      |
|---------------------------|--------|-----------|
|                      |   |      |
| POORE BROTHERS, INC. |   | OPTIONEE: |
|                      |   |      |
| By:                       |   |      | Signature: |   |   |
| Its:                      |   |      | Print Name: |   |   |
|                           |        |           |  |  |  |  |  |  |

 

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**EXHIBIT A**

 

**Form of Notice**

 

**POORE BROTHERS, INC.**

 

**NOTIFICATION OF EMPLOYEE**

**STOCK OPTION EXERCISE**

 

I,                                     ,hereby notify the Senior Vice President & Chief Financial Officer ofPoore Brothers, Inc. (the “Company”) of my request to exercise                 (quantity) options granted on                         at the option price of $           per share under the terms and conditions of the Poore Brothers, Inc. 2005Equity Incentive Plan.

 

A check in the amount of$                       ,payable to Poore Brothers, Inc., is attached.

 

Please register theseshares as follows and mail the certificate to the address below:

 

Name:

Address:

City/State/Zip:

 

*I understand that theCompany may be entitled to a tax deduction in certain circumstances if Idecide to sell the underlying shares. I hereby agree to provide the Companywith information regarding the sale of these shares, including date of sale,sales price per share, the number of shares sold and such other informationthat they may reasonably require, or do hereby authorize my broker toprovide such information directly to the Company.*

 

 
|                          |                    | ______-______-_______ |   |
|-------------------------------|-------------------------|-----------------------|--------|
| Employee Name  (please print) | Social Security  Number |
|                          |                    |
|                          |                    |
|                          |                    |                  |   |
| Employee  Signature           |                    | Date                  |   |

 

 

 

Stock Option exerciserequest received and accepted on behalf of Poore Brothers, Inc.:

 

 

 
| By: |   | Date |   |
|-----|--------|------|--------|

 

A-1

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