**Exhibit10.25**

 

 

February 6, 2001

 

Pam Britton

28092 Paseo Rincon

Mission Viejo, CA  92692

 

Dear Pam:

 

We are pleased to offeryou the position of Executive Vice President of Operations for Gloria Jean’sGourmet Coffee.  This is a criticalposition with responsibility for the successful operations of Gloria Jean’sfranchisees.  As you know, we arecurrently the second largest specialty Coffee Company in the United States. Weview this as a unique opportunity to create something really special.

 

Our offer is as follows:

 

| • |   | Base salary - $3,365.38  per week (paid on a bi-weekly basis) which equates to $175,000 annually.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Incentive/Bonus plan -  For the first year of employment only this award will pay out a guaranteed  amount of $52,500 at the end of 12 months of employment.  You will then be eligible to participate  in our Executive Vice President level incentive plan, up to 30% of your  annual base salary, which is paid based upon achievement of specific  financial goals agreed upon with the Chief Executive Officer.  This award will be prorated for stub  portion remaining of fiscal 2001/2002 only. |
| • |   | Stock Options - The  Company will issue you options to purchase at least 20,000 shares of Diedrich  Coffee.  The strike price of the  shares will be the trailing 5 day average of the price of the shares from the  day you begin employment.  These  options vest over 3 years at a rate of 33% per year.  The Board reviews issuance of additional  stock options annually. This option grant will be subject to Board approval.                                                                |
| • |   | Vacation - You will be  entitled to 3 weeks of vacation during your first year of employment.  Additional vacation time will be earned as  plan eligibility requirements are met.                                                                                                                                                                                                                                                                                                                            |
| • |   | Benefits - You will  participate in the company’s executive benefits plan. Your initial salary  will be increased $99.06 per bi-week to provide employee +1 coverage and  deducted pretax to pay your portion of the premium.  The benefit program may be modified from time to time.  Future changes to employee contribution  levels will be your responsibility.                                                                                                                                |
| • |   | 401(k) participation  based on plan eligibility criteria.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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| • |   | Employment at will -  you may resign at any time and Diedrich Coffee may terminate your employment  at any time, with or without cause or notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • |   | Termination not for cause  - Should your employment be terminated for reasons other than cause (cause  meaning willful misconduct, repeated failure to perform duties, fraud or  dishonesty, felonious, or criminal acts), and you execute a simple release of  claims agreement you will be entitled to bi-weekly payments equal to six  months of your then current salary.   In any event, these payments would cease if you accept other  employment or accept work as an independent contractor.  Additionally, this benefit would not apply  in the event of your death or inability to perform the job due to disability. |
| • |   | This position reports  directly to the Mike Jenkins, Chief Executive Officer of Diedrich Coffee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| • |   | Start date will be on  or before February 26, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

 

We look forward to yourearly response in becoming part of our team. Please confirm your acceptance of this offer by signing and returning anexecuted copy to Matt Kimble.

 
| Very truly yours,                              |
|------------------------------------------------|
|                                           |
|                                           |   |
| J. Michael Jenkins                             |
| Chief Executive  Officer, Diedrich Coffee Inc. |

 

 

**I accept the position of ExecutiveVice President of Operations for Gloria Jean’s Gourmet Coffee, effective on orbefore February 26, 2001 on the above terms and conditions.**

 

 
|           |   |   |   |
|----------------|--------|--------|--------|
| Pamela Britton | Date   |

 

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