EXHIBIT 10.1

 

MUTUAL RELEASE AGREEMENT

 

I understand that my position with Diedrich Coffee, Inc. (the “Company”)
terminated effective December 13, 2005 (the “Separation Date”). The Company has
agreed that if I choose to sign this Release Agreement (this “Agreement”), the
Company will pay me severance benefits (minus the standard withholdings and
deductions) pursuant to the terms of the Chief Executive Officer Employment
Agreement, entered into as of April 24, 2003, between myself and the Company and
the Laverty Stock Option Agreement and Plan (the “Laverty Option Plan”).
I understand that I am not entitled to this severance payment unless I sign this
Agreement. I understand that in addition to this severance, the Company will pay
me all of my accrued salary and vacation, to which I am entitled by law
regardless of whether I sign this release.

 

In consideration for the severance payment I am receiving under this Agreement,
I agree not to use or disclose any of the Company’s proprietary information
without written authorization from the Company, to immediately return all
Company property and documents (including all embodiments of proprietary
information) and all copies thereof in my possession or control, and to release
the Company and its current and former officers, directors, agents, attorneys,
employees, shareholders, and affiliates from any and all claims, liabilities,
demands, causes of action, attorneys’ fees, damages, or obligations of every
kind and nature, whether they are known or unknown, arising at any time prior to
the date I sign this Agreement. The Company hereby releases you, Roger M.
Laverty (“Laverty”), from any and all claims, liabilities, demands, causes of
action, attorneys’ fees, damages or obligations of every kind and nature,
whether they are known or unknown, arising at any time prior to the date of this
Agreement. The general release given by each party hereto includes, but is not
limited to: all federal and state statutory and common law claims, claims
related to my employment or the termination of my employment or related to
breach of contract, tort, wrongful termination, discrimination, wages or
benefits, or claims for any form of compensation. Neither release is intended to
release any claims that Laverty or the Company has or may have against any of
the released parties for (a) indemnification as a director, officer, agent or
employee under applicable law, charter document or agreement, (b) severance and
other termination benefits specifically provided for in my employment agreement
and the Laverty Option Plan which constitute a part of the consideration for
this release, (c) health or other insurance benefits based on claims already
submitted or which are covered claims properly submitted in the future,
(d) vested rights under pension, retirement or other benefit plans, or (e) in
respect of events, acts or omissions occurring after the date of this Agreement.
In releasing claims unknown to Laverty and the Company at present, each party
hereto is waiving all rights and benefits under Section 1542 of the California
Civil Code, and any law or legal principle of similar effect in any
jurisdiction: “A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with
the debtor.”

 

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”). I also acknowledge that the consideration given for
the waiver in the above paragraph is in addition to anything of value to which I
was already entitled. I have been advised by this writing, as required by the
ADEA that: (a) my waiver and release do not apply to any

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claims that may arise after my signing of this Agreement; (b) I should consult
with an attorney prior to executing this release; (c) I have twenty-one
(21) days within which to consider this release (although I may choose to
voluntarily execute this release earlier); (d) I have seven (7) days following
the execution of this release to revoke the Agreement; and (e) this Agreement
will not be effective until the eighth day after this Agreement has been signed
both by me and by the Company (“Effective Date”).

 

This Agreement constitutes the complete, final and exclusive embodiment of the
entire agreement between the Company and me with regard to the subject matter
hereof. I am not relying on any promise or representation by the Company that is
not expressly stated herein. This Agreement may only be modified by a writing
signed by both me and a duly authorized officer of the Company.

 

NOW, THEREFORE, the parties below have executed this Agreement as of the date
first written above.

 

/s/ Roger M. Laverty Roger M. Laverty DIEDRICH COFFEE, INC. By:   /s/ Paul C.
Heeschen    

Paul C. Heeschen

Chairman of the Board of Directors