OFFER OF EMPLOYMENT

Executive Employment Agreement

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DIEDRICH COFFEE INC | Sean McCarthy

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Title: OFFER OF EMPLOYMENT
Date: 1/5/2006
Industry: Restaurants

OFFER OF EMPLOYMENT, Parties: diedrich coffee inc , sean mccarthy

EXHIBIT 10.1

December 30, 2005

Sean McCarthy

[Address]

Dear Sean:

We’re pleased to offer you the position of Chief Financial Officer with Diedrich Coffee, Inc. The offer is as follows:

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Base salary: $7,692.31 per pay period (paid on a bi-weekly basis) that equates to $200,000 annually at the completion of one full year of employment.

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Incentive/Bonus plan: You will continue to participate in our Vice President level incentive plan up to 25% of your annual base salary, which is paid based upon achievement of specific financial goals.

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Stock Options: You will be eligible to participate at the Vice President level as our Board of Directors awards stock options. The Board reviews issuance of additional stock options annually.

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Vacation: You will begin earning three weeks of vacation per year of employment as of the effective date of your promotion.

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