Cto Employment Agreement

February 3, 2000



Michael Zorehkey

17 Tanzanite

Rancho Santa Margarita, CA 92688



Dear Mike:



We are pleased to offer you the position of Director of Mall Development for Diedrich Coffee. This is a critical position with our Company that will take total responsibility for the maintenance and expansion of the Company in malls. As you know, we are currently the second largest specialty coffee company in the United States with plans to expand significantly in the near future. We view this as a growth position and a unique opportunity to help create something really special.





Our offer is as follows:



95 Base salary - $2,211.54 per week (paid on a bi-weekly basis) which equates to $115,000 annually at the completion of one full year of employment. Wages are reviewed annually as anniversary dates are reached.
95 Incentive/Bonus plan - For traditional full line stores, a bonus of $1,000 will be paid for each new opening you complete and paid upon store opening. Non-traditional locations (e.g. kiosks, carts, airports, colleges, hospitals) are paid at .15% of first year sales and is paid on the 13 th month anniversary of the location opening. A bonus of $250 will be paid for each lease renewal you complete and will be paid on the execution of the lease by both parties (excludes extensions of less than 3 years or exercise of options). For each sublease you complete during the fiscal year, a payment of $500 will be paid upon full execution of the sublease ...