Exhibit 10.1




January 26, 2011



Christopher
      (“Chris”) Daniel
1235 Pleasantridge Drive
Altadena,
      CA  91001

    

    
      Dear Chris,
    

    
      This letter sets forth the terms and conditions of our agreement (the
      “Agreement”) regarding your separation of employment with Hot Topic,
      Inc. (the “Company”).  This Agreement will become effective on the date
      specified in Section 13, below.  Once effective, this Agreement shall
      supersede the Amended and Restated Employment Letter Agreement dated
      November 24, 2008 between you and the Company, except as specifically
      noted herein.  You and the Company hereby agree as follows:
    

    
      1.  RESIGNATION AND CONTINUED SERVICE.  You
      have submitted, and the Company has accepted, your resignation effective
      April 29, 2011 (the “Resignation Date”).  You agree to continue to serve
      the Company full time in the capacity of President, Torrid and to devote
      full attention to such duties through the Resignation Date.  During such
      time you will continue to receive your current base salary and you will
      remain enrolled in all Company benefit plans in which you are presently
      enrolled.
    

    
      2.  BENEFITS.  In exchange for your continued
      service specified above and your covenants and releases herein, and
      provided that this Agreement becomes effective as specified in Section
      13 below, the Company will: i) continue to pay you your base salary
      currently in effect, subject to standard payroll deductions, and on the
      Company’s standard payroll dates, for a period of twelve (12) months
      following the Resignation date; and ii) assuming you timely and
      accurately elect to continue your medical, dental and vision group
      health insurance benefits under the Consolidated Omnibus Budget
      Reconciliation Act of 1985 (“COBRA”), following the Resignation Date the
      Company shall pay the same percentage of the COBRA premiums for you and
      your qualified beneficiaries as it paid for you and your qualified
      beneficiaries at the time of your termination of employment until the
      earliest of (i) the twelfth month following the Resignation Date, (ii)
      the date upon which you obtain coverage under another employer plan, or
      (iii) the expiration of your continuation coverage under COBRA and any
      applicable state COBRA-like statute that provides mandated continuation
      coverage.  For purposes of this provision, references to COBRA premiums
      shall not include any amounts payable under a Code Section 125 health
      care reimbursement plan.  You agree to immediately notify the Company if
      you acquire coverage under another employer plan.  If your employment is
      terminated due to your death or Disability (as defined in the Amended
      and Restated Letter Agreement dated November 24, 2008 between you and
      the Company), you shall receive only your salary and benefits through
      the effective date of such termination.
    

    
      The Company will pay your individual monthly Exec-U-Care fee and
      reimburse eligible expenses covered by the Exec-U-Care policy from May
      1, 2011 through April 30, 2012, subject to earlier termination if your
      COBRA participation ends prior to April 30, 2012.  At the end of this,
      as long as you are participating in COBRA through the Company’s plan
      your Exec-U-Care participation can continue at your own expense until
      the end of your COBRA participation.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      In order to qualify for the benefits specified in this section, you must
      satisfactorily comply with the following standards:
    

    
              Refrain from any conversation with Company employees regarding
      the terms of this Agreement.
    

    
              Refrain from any conversation, suggestion, or action that could
      disparage the Company, or its officers, directors, employees,
      shareholders and agents, in any manner.  
    

    
      Any breach of this Agreement by you will result in the immediate
      forfeiture of the rights provided for herein including the benefits
      described above.
    

    
      3.  EXPENSE REIMBURSEMENT.  You agree that you will
      submit your final documented expense reimbursement statement reflecting
      all business expenses you incurred prior to and including the
      Resignation Date, if any, for which you seek reimbursement no later than
      May 15, 2011.  The Company shall reimburse your expenses pursuant to
      Company policy and regular business practice.
    

    
      4.  STOCK OPTIONS.  Your stock options will continue to
      vest on the normal vesting schedule in accordance with the terms of the
      Company’s stock option plan through the Resignation Date.  As of the
      Resignation Date, all unvested stock options will be forfeited.  You may
      exercise your vested stock options following such time permitted in the
      applicable option agreement(s), after which time all vested and
      unexercised stock options will be forfeited.
    

    
      5.  OTHER COMPENSATION AND BENEFITS.  Except as
      expressly provided herein, you acknowledge and agree that you are not
      entitled to and will not receive any additional compensation, severance,
      stock options, stock or benefits from the Company.
    

    
      6.  NON-SOLICITATION.  You agree that for two (2) years
      following the Resignation Date, you, your agents, or others acting on
      your behalf will not, either directly or through others, hire, solicit,
      suggest, encourage, or persuade (or attempt to do so) any employee,
      consultant, independent contractor or vendor of the Company to withdraw,
      curtail, cancel or terminate any relationship with the Company.
    

    
      7.  TERMINATION OF COMPANY’S OBLIGATIONS.  Notwithstanding
      any provisions in this Agreement to the contrary and except as consented
      to above, the Company’s obligations hereunder shall cease and be
      rendered a nullity immediately should you fail to comply with any of the
      provisions of this Agreement.
    

    
      8.  COMPANY PROPERTY.  Upon the Resignation
      Date, you agree to return to the Company all Company documents (and all
      copies thereof) and other Company property in your possession or your
      control, including, but not limited to, computer security access,
      Company files, business plans, notes, samples, sales notebooks,
      drawings, specifications, calculations, sequences, data,
      computer-recorded information, tangible property, including, but not
      limited to, cellular phones, blackberries, computers, credit cards,
      entry cards, keys and any other materials of any nature pertaining to
      your work with the Company, and any documents or data of any description
      (or any reproduction of any documents or data) containing or pertaining
      to any proprietary or confidential material of the Company.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      9.  PROPRIETARY INFORMATION OBLIGATIONS.  At all times
      you shall comply with your Proprietary Information and Inventions
      Agreement dated October 4, 2004, which prohibits unauthorized use or
      disclosure of the Company’s proprietary information, among other things.
    

    
      10.  CONFIDENTIALITY AND PUBLICITY.  The
      provisions of this Agreement shall be held in strictest confidence by
      you and the Company and shall not be publicized or disclosed in any
      manner whatsoever; provided, however, that: (a) you may disclose this
      Agreement, in confidence, to your immediate family; (b) the parties may
      disclose this Agreement in confidence to their respective attorneys,
      accountants, auditors, tax preparers, and financial advisors; (c) the
      Company may disclose this Agreement as necessary to fulfill standard or
      legally required corporate reporting or disclosure requirements; and (d)
      the parties may disclose this Agreement insofar as such disclosure may
      be necessary to enforce its terms or as otherwise required by law.
    

    
      11.  NON-DISPARAGEMENT.  You and the Company
      agree that neither party will at any time disparage the other party, and
      the other party’s officers, directors, employees, shareholders and
      agents, in any manner likely to be harmful to them or their future
      employment opportunities, business, business reputation or personal
      reputation; provided that each party shall respond accurately and fully
      to any questions, inquiry or request for information when required by
      legal process.  The party that is harmed by breach of this Agreement
      will be entitled to appropriate damages resulting from the breach.
    

    
      12.  RELEASE OF CLAIMS.  Except as otherwise
      set forth in this Agreement, you hereby release, acquit and forever
      discharge the Company, its parents and subsidiaries, and their officers,
      directors, agents, servants, employees, shareholders, successors,
      assigns and affiliates, of and from any and all claims, liabilities,
      demands, causes of action, costs, expenses, attorneys fees, damages,
      indemnities and obligations of every kind and nature, in law, equity, or
      otherwise, known and unknown, suspected and unsuspected, disclosed and
      undisclosed (other than any claim for indemnification you may have as a
      result of any third party action against me based on my employment with
      the Company), arising out of or in any way related to agreements,
      events, acts or conduct at any time prior to the date you execute this
      Agreement, including, but not limited to: all such claims and demands
      directly or indirectly arising out of or in any way connected with your
      employment with the Company or the termination of that employment,
      including but not limited to, claims of intentional and negligent
      infliction of emotional distress, any and all tort claims for personal
      injury, claims or demands related to salary, bonuses, commissions,
      stock, stock options, or any other ownership interests in the Company,
      vacation pay, fringe benefits, expense reimbursements, severance pay, or
      any other form of disputed compensation; claims pursuant to any federal,
      state or local law or cause of action including, but not limited to, the
      federal Civil Rights Act of 1964, as amended; the federal Age
      Discrimination in Employment Act of 1967, as amended (“ADEA”); the
      federal Employee Retirement Income Security Act of 1974, as amended; the
      federal Americans with Disabilities Act of 1990; the federal Worker
      Adjustment and Retraining Notification Act of 1988; the California Fair
      Employment and Housing Act, as amended; tort law; contract law;
      statutory law; common law; wrongful discharge; discrimination; fraud;
      defamation; emotional distress; and breach of the implied covenant of
      good faith and fair dealing; provided, however, that nothing in this
      paragraph shall be construed in any way to release the Company from its
      obligation to indemnify you pursuant to the Company’s indemnification
      obligation pursuant to agreement or applicable law.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      13.  ADEA WAIVER.  You further acknowledge
      that you are knowingly and voluntarily waiving and releasing any rights
      you may have under the Age Discrimination in Employment Act of 1967
      (“ADEA”).  You also acknowledge that the consideration given for the
      waiver and release in the preceding paragraphs hereof is in addition to
      anything of value to which you were already entitled.  If you are forty
      (40) years of age or older when this release is signed, you hereby
      provide the further acknowledgment that you are advised by this writing,
      as required by the Older Workers Benefit Protection Act, that: (a) your
      waiver and release do not apply to any rights or claims that may arise
      after the Effective Date of this release; (b) you are advised to consult
      with an attorney prior to executing this release; (c) you may have
      twenty-one (21) days to consider this Agreement (although you may by
      your own choice execute this release earlier); (d) you have seven (7)
      days following the execution of this release to revoke this release; and
      (e) this Agreement shall not be effective until the date upon which the
      revocation period has expired provided that you have not earlier revoked
      (the “Effective Date”).  
    

    
      14.  SECTION 1542 WAIVER.  In giving this
      release, which includes claims which may be unknown to you at present,
      you hereby acknowledge that you have read and understand Section 1542 of
      the Civil Code of the State of California which reads as follows:
    

    
      A general release does not extend to claims which the creditor does
      not know or suspect to exist in his or her favor at the time of
      executing the release, which if known by him or her must have materially
      affected his or her settlement with the debtor.
    

    
      You hereby expressly waive and relinquish all rights and benefits under
      this section and any law or legal principle of similar effect in any
      jurisdiction with respect to claims released hereby.
    

    
      15.  ENTIRE AGREEMENT.  This Agreement
      constitutes the complete, final and exclusive embodiment of the entire
      Agreement between you and the Company with regard to the subject matter
      hereof.  It is entered into without reliance on any promise or
      representation, written or oral, other than those expressly contained
      herein.  It may not be modified except in writing signed by you and the
      Chief Executive Officer of the Company.  Each party has carefully read
      this Agreement, has been afforded the opportunity to be advised of its
      meaning and consequences by his or its respective attorneys, and signed
      the same of his or its free will.
    

    
      16.  SUCCESSORS AND ASSIGNS.  This Agreement shall bind
      the heirs, personal representatives, successors, assigns, executors, and
      administrators of each party, and inure to the benefit of each party,
      its agents, directors, officers, employees, servants, heirs, successors
      and assigns.
    

    
      17.  APPLICABLE LAW.  This Agreement shall be deemed to
      have been entered into and shall be construed and enforced in accordance
      with and governed by the laws of the State of California as applied to
      contracts made and to be performed entirely within the State of
      California.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      18.  ATTORNEYS’ FEES.  In the event of any
      litigation arising out of or relating to this Agreement, its breach or
      enforcement, including an action for declaratory relief, the prevailing
      party in such action or proceeding shall be entitled to receive his or
      its damages, court costs, and all out-of-pocket expenses, including
      attorneys fees.  Such recovery shall include court costs, out-of-pocket
      expenses, and attorneys’ fees on appeal, if any.
    

    
      19.  SEVERABILITY.  If a court of competent
      jurisdiction determines that any term or provision of this Agreement is
      invalid or unenforceable, in whole or in part, then the remaining terms
      and provisions hereof shall be unimpaired.  Such court will have the
      authority to modify or replace the invalid or unenforceable term or
      provision with a valid and enforceable term or provision that most
      accurately represents the parties’ intention with respect to the invalid
      or unenforceable term or provision.
    

    
      20.  AUTHORIZATION.  You warrant and represent that
      there are no liens or claims of lien or assignments in law or equity or
      otherwise of or against any of the claims or causes of action released
      herein and, further, that you are fully entitled and duly authorized to
      give your complete and final general release and discharge.
    

    
      21.  SECTION HEADINGS.  The section and paragraph
      headings contained in this Agreement are for reference purposes only and
      shall not affect in any way the meaning or interpretation of this
      Agreement.
    

    
      Please confirm your assent to the foregoing terms and conditions of our
      Agreement by signing and returning a copy of this letter to me.
    

    
      Sincerely,
HOT TOPIC, INC.

    

    
    	
          
            /S/ ELIZABETH MCLAUGHLIN
          

        	
           
        	
          
            JANUARY 26, 2011
          

        	

        
	
          
            ELIZABETH MCLAUGHLIN
          

        	

        	
          
            DATED
          

        	

        
	
          
            CHIEF EXECUTIVE OFFICER
          

        	

        	

        	

        
	
          
            HOT TOPIC, INC.
          

        	

        	

        	

        


    

    
      Having read and reviewed the foregoing, I hereby agree to and accept the
      terms and conditions of this Agreement as stated above.
    

    
    	
          
            /S/ CHRIS DANIEL
          

        	
           
        	
          
            JANUARY 26, 2011
          

        	

        
	
          
            CHRIS DANIEL
          

        	

        	
          
            DATED