Document:

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                                                                 Exhibit 10(g)

                            INDEMNIFICATION AGREEMENT

         This INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of this 30th day of June 2002, by and between J. L. Halsey
Corporation, a Delaware corporation (the "Company"), and
______________________, a resident of ___________, ____________
("Indemnitee").

                                    RECITALS:

         A. Indemnitee is willing to serve, continue to serve, and to take on
additional service for or on behalf of the Company on the condition that he be
indemnified to the fullest extent permitted by law.

         B. The Certificate of Incorporation of the Company requires the Company
to indemnify its directors and officers to the fullest extent permitted by law.

         C. Indemnitee is serving as a director of the Company.

                                   AGREEMENTS:

         NOW, THEREFORE, in consideration of the foregoing premises,
Indemnitee's agreement to serve as a member of the Board of Directors of the
Company, and the covenants contained in this Agreement, the Company and
Indemnitee hereby covenant and agree as follows:

         1. CERTAIN DEFINITIONS.

            (a) ACQUIRING PERSON: shall mean any Person other than (i) the
Company, (ii) any of the Company's Subsidiaries, (ii) any employee benefit plan
of the Company or of a Subsidiary of the Company or of a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (iv) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

            (b) CHANGE OF CONTROL: shall be deemed to have occurred if:

                (i) an Acquiring Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), directly or indirectly, of securities of the Company
representing thirty percent or more of the combined voting power of the then
outstanding Voting Securities of the Company; or

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                (ii) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors of the Company; or

                (iii) a public announcement is made of a tender or exchange
offer by any Acquiring Person for fifty percent or more of the outstanding
Voting Securities of the Company, and the Board of Directors of the Company
approves or fails to oppose that tender or exchange offer in its statements in
Schedule 14D-9 under the Exchange Act; or

                (iv) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or partnership (or, if
no such approval is required, the consummation of such a merger or consolidation
of the Company); or

                (v) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets (other than factoring
the Company's current receivables or escrows due), (or, if no such approval is
required, the decision by the Board of Directors of the Company to proceed with
such a liquidation, sale, or disposition in one transaction or series of related
transactions).

            (c) CLAIM: any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, securities laws actions, suits, and
proceedings), or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other.

            (d) EXPENSES: all costs, expenses (including attorneys' and expert
witnesses' fees), and obligations paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
being a witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
Indemnifiable Event.

            (e) INCUMBENT BOARD: individuals who, as of the date of merger of
NAHC, Inc., a Delaware corporation, with and into the Company, constitute the
Board of Directors of the Company and any other individual who becomes a
director of the Company after that date and whose election or appointment by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board

            (f) INDEMNIFIABLE EVENT: an event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent, or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent, or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust, or other enterprise,
or by reason of any thing done or not done by Indemnitee in any such capacity.
For purposes of this Agreement, the Company agrees that Indemnitee's service on
behalf of or with respect to any Subsidiary of the Company shall be deemed to be
at the request of the Company.

            (g) PERSON: shall mean any person or entity of any nature
whatsoever, specifically including an individual, a firm, a company, a
corporation, a partnership, a trust or

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other entity. A Person, together with that Person's Affiliates and Associates
(as those terms are defined in Rule 12b-2 under the Exchange Act), and any
Persons acting as a partnership, limited partnership, joint venture,
association, syndicate, or other group (whether or not formally organized), or
otherwise acting jointly or in concert or in a coordinated or consciously
parallel manner (whether or not pursuant to any express agreement), for the
purpose of acquiring, holding, voting, or disposing of securities of the Company
with such Person, shall be deemed a single "Person."

            (h) POTENTIAL CHANGE OF CONTROL: shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change of Control; (ii) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
that, if consummated, would constitute a Change in Control; (iii) any Acquiring
Person who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power
of the then outstanding Voting Securities of the Company increases his
beneficial ownership of such securities by 5% or more over the percentage so
owned by that Person on the date hereof; or (iv) the Board of Directors of the
Company adopts a resolution to the effect that, for purposes of this Agreement,
a Potential Change of Control has occurred.

            (i) REVIEWING PARTY: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any other person or
body appointed by the Board (including Special Counsel referred to in Section 3)
who is not a party to the particular Claim for which Indemnitee is seeking
indemnification.

            (j) SPECIAL COUNSEL: special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Company or for
Indemnitee within the last three years (other than as Special Counsel under this
Agreement or similar agreements).

            (k) SUBSIDIARY: with respect to any Person, any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by that Person.

            (l) VOTING SECURITIES: any securities that vote generally in the
election of directors or in the selection of any other similar governing body.

         2. BASIC INDEMNIFICATION AND EXPENSE REIMBURSEMENT ARRANGEMENT.

            (a) In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no later
than 30 days after written demand is presented to the Company, against any and
all Expenses, judgments, fines, penalties, and amounts paid in settlement
(including all interest, assessments, and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines, penalties, or
amounts paid in settlement) of or with respect to that Claim. Notwithstanding
the foregoing, the obligations of the Company under Section 2(a) shall be
subject to the

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condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which Special Counsel referred to in Section 3 hereof
is involved) that Indemnitee would not be permitted to be indemnified under
applicable law. Nothing contained in this Agreement shall require any
determination under this Section 2(a) to be made to the Reviewing Party prior
to the disposition or conclusion of the Claim against the Indemnitee;
provided, however, that Expense Advances shall continue to be made by the
Company pursuant to and to the extent required by the provisions of Section
2(b).

            (b) If so requested by Indemnitee, the Company shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indemnitee)
within two business days after such request (an "Expense Advance"). The Company
shall be obligated to make or pay an Expense Advance in advance of the final
disposition or conclusion of any Claim. In connection with any request for an
Expense Advance, if requested by the Company, Indemnitee or Indemnitee's counsel
shall submit an affidavit stating that the Expenses incurred were reasonable.
Any dispute as to the reasonableness of any Expense shall not delay an Expense
Advance by the Company, and the Company agrees that any such dispute shall be
resolved only upon the disposition or conclusion of the underlying Claim against
the Indemnitee. If, when, and to the extent that the Reviewing Party determines
that Indemnitee would not be permitted to be indemnified with respect to a Claim
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Company without
interest (which agreement shall be an unsecured obligation of Indemnitee) for
all related Expense Advances theretofore made or paid by the Company; provided,
however, that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Board
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance, and the Company shall be obligated to continue
to make Expense Advances, until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). If there has not been a Change of Control, the Reviewing Party shall
be selected by the Board of Directors of the Company. If there has been a Change
in Control, the Reviewing Party shall be advised by or shall be Special Counsel
referred to in Section 3 hereof, if and as Indemnitee so requests. If there has
been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the states of Delaware or
Pennsylvania having subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee.

         3. CHANGE OF CONTROL. The Company agrees that, if there is a Change in
Control and if Indemnitee requests in writing that Special Counsel advise the
Reviewing Party or be the Reviewing Party, then the Company shall not deny any
indemnification payments (and Expense Advances shall continue to be paid by the
Company pursuant to Section 2(b)) that Indemnitee requests or demands under this
Agreement or any other agreement or law now or hereafter in

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<PAGE>

effect relating to Claims for Indemnifiable Events. The Company further agrees
not to request or seek reimbursement from Indemnitee of any related Expense
Advances unless, with respect to a denied indemnification payment, Special
Counsel has rendered its written opinion to the Company and Indemnitee that the
Company would not be permitted under applicable law to pay Indemnitee such
indemnification payment. The Company agrees to pay the reasonable fees of
Special Counsel referred to in this Section 3 and to indemnify fully Special
Counsel against any and all expenses (including attorneys' fees), claims,
liabilities, and damages arising out of or relating to this Agreement or Special
Counsel's engagement pursuant hereto.

         4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee (the "Trust") and from time to time upon written
request of Indemnitee shall fund the Trust in an amount sufficient to satisfy
any and all Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for, and defending any
Claim relating to an Indemnifiable Event, and any and all judgments, fines,
penalties, and settlement amounts (including all interest, assessments, and
other charges paid or payable in connection with or in respect of such expenses,
judgments, fines, penalties, and settlement amounts) of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated, or proposed to be paid. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall be
determined by the Reviewing Party, in any situation in which Special Counsel
referred to in Section 3 is involved. The terms of the Trust shall provide that,
upon a Change in Control, (i) the Trust shall not be revoked or the principal
thereof invaded, without the written consent of Indemnitee; (ii) the trustee of
the Trust shall advance, within two business days of a request by Indemnitee,
any and all expenses to Indemnitee (and Indemnitee hereby agrees to reimburse
the trust under the circumstances in which Indemnitee would be required to
reimburse the Company for Expense Advances under Section 2(b) of this
Agreement); (iii) the Trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above; (iv) the trustee of the
Trust shall promptly pay to Indemnitee all amounts for which Indemnitee shall be
entitled to indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in that Trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that Indemnitee has been fully indemnified under the terms of
this Agreement. The trustee of the Trust shall be chosen by Indemnitee. Nothing
in this Section 4 shall relieve the Company of any of its obligations under this
Agreement.

         5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within two business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with any claims
asserted against or action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Certificate of Incorporation or Bylaws
now or hereafter in effect relating to Claims for Indemnifiable Events or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to that indemnification, advance expense payment, or
insurance recovery, as the case may be.

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         6. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.

         7. CONTRIBUTION.

            (a) CONTRIBUTION PAYMENT. To the extent the indemnification provided
for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, then in the
event Indemnitee was, is or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company, in lieu of Indemnifying Indemnitee, shall contribute to the amount of
any and all Expenses, judgments, fines, or penalties assessed against or
incurred or paid by Indemnitee on account of that Claim and any and all amounts
paid in settlement of that Claim (including all interest, assessments, and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties, or amounts paid in settlement) for which such
indemnification is not permitted ("Contribution Amounts"), in such proportion as
is appropriate to reflect the relative fault with respect to the Indemnifiable
Event giving rise to the Contribution Amounts of Indemnitee, on the one hand,
and of the Company and any and all other parties (including officers and
directors of the Company other than Indemnitee) who may be at fault with respect
to such Indemnifiable Event (collectively, including the Company, the "Third
Parties") on the other hand.

            (b) RELATIVE FAULT. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
Indemnitee as determined by the court or other governmental agency assessing the
Contribution Damages or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Reviewing Party (which shall
include Special Counsel) after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or
correct the applicable Indemnifiable Event and other relevant equitable
considerations of each party. The Company and Indemnitee agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 7(b).

         8. BURDEN OF PROOF. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified under any provision of this Agreement or to receive contribution
pursuant to Section 7 of this Agreement, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.

         9. NO PRESUMPTION. For purposes of this Agreement, the termination of
any claim, action, suit, or proceeding, by judgment, order, settlement (whether
with or without court

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approval), or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Indemnitee did not meet any particular
standard of conduct or have any particular belief or that a court has determined
that indemnification is not permitted by applicable law.

         10. ACTION OF OTHERS. The knowledge and/or actions, or failure to act,
of any director, officer, agent, or employee of the Company shall not be imputed
to the Indemnitee for purposes of determining the right to indemnification under
this Agreement.

         11. INDEMNITEE'S INDIVIDUAL CAPACITY. The Company acknowledges that the
Indemnitee is undertaking to act as an officer or director of the Company at the
request of the Company and solely in the Indemnitee's individual capacity and
not in any capacity as a director, officer, member, partner, employee, trustee,
or other representative of any other corporation, partnership, association,
business trust, trust, or similar organization or entity. The Company covenants
and agrees to indemnify any such organization or entity from and against any and
all judgments, fines, or penalties assessed against or incurred or paid by such
organization or entity and any and all amounts paid in settlement (including all
interest, attorneys' and expert witnesses' fees, and other charges paid or
payable in connection with such judgments, fines, penalties, or amounts paid in
settlement) that relate to any action or inaction taken in the course of the
Indemnitee's duties as an officer or director of the Company.

         12. NON-EXCLUSIVITY. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Company's Bylaws or
Certificate of Incorporation or the Delaware General Corporation Law or
otherwise. To the extent that a change in the Delaware General Corporation Law
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company's Bylaws or
Certificate of Incorporation and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by that change.

         13. LIABILITY INSURANCE. Except as otherwise agreed to by the Company
and Indemnitee in a written agreement, to the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.

         14. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee or Indemnitee's spouse, heirs,
executors, or personal or legal representatives after the expiration of three
years from the date of accrual of that cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within that
three-year period; provided, however, that, if any shorter period of limitations
is otherwise applicable to any such cause of action, the shorter period shall
govern.

         15. AMENDMENTS. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the

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provision of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall that waiver
constitute a continuing waiver.

         16. SUBROGATION. In the event of payment under this Agreement, the
Company shall, subject to the conflicting rights of an insurer pursuant to any
policy contemplated by Section 13 hereof, be subrogated to the extent of that
payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and shall do everything that may be necessary to secure those
rights, including the execution of the documents necessary to enable the Company
effectively to bring suit to enforce those rights.

         17. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under an insurance policy, provision of the Company's Certificate of
Incorporation or Bylaws or otherwise) of the amounts otherwise indemnifiable
hereunder.

         18. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of the business
or assets of the Company), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or
another enterprise at the Company's request.

         19. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, that provision shall be fully severable; this Agreement shall
be construed and enforced as if that illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of that illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement a provision as similar
in terms to the illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.

         20. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws.

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

         22. NOTICES. Whenever this Agreement requires or permits notice to be
given by one party to the other, such notice must be in writing to be effective
and shall be deemed delivered and received by the party to whom it is sent upon
actual receipt (by any means) of such notice. Receipt of a notice by any officer
of the Company shall be deemed receipt of such notice by the Company.

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         23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart.

         EXECUTED as of the date first written above.

                                    J. L. HALSEY CORPORATION

                                    By:
                                       ----------------------------------------
                                       David R. Burt
                                       Chief Executive Officer

                                       ----------------------------------------
                                       ___________________, Indemnitee

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EXHIBIT 10.29    
  

 
 

EMPLOYMENT AGREEMENT    
  

        THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into by and between DIEDRICH COFFEE, INC.,
a Delaware corporation (the "Company") and PHILIP G. HIRSCH (the "Executive"), and shall be effective as
of September 1, 2002 (the "Effective Date"). 

 
 

RECITALS    
  

        The Company and the Executive desire to enter into this Agreement to establish the terms and conditions of the Executive's employment by the Company as its Chief
Executive Officer. 

 
 

AGREEMENT    
  

        NOW, THEREFORE, in consideration of the foregoing recital, and subject to the conditions and covenants set forth herein, the parties agree as follows: 

 
 

ARTICLE I
  DUTIES AND TERM    
  

        1.01    Duties.    The Company hereby employs the Executive as its Chief Executive Officer and the Executive hereby
accepts such employment upon the terms and subject to the conditions set forth in this Agreement. Unless earlier terminated, the term of the Executive's employment under this Agreement shall commence
on the Effective Date and shall continue until August 31, 2004 (the "Term"). The
Executive shall perform such duties and functions consistent with his role as Chief Executive Officer as may from time to time be assigned to him by the Board of Directors of the Company (the
"Board"). 

        1.02    Other Business.    The Executive agrees that during the course of the Company's business hours throughout the
Term, he will devote the whole of his time, attention and efforts to the performance of his duties and obligations hereunder. The Executive shall not, during the Term, without the written approval of
the Board first had and obtained in each instance, (a) directly or indirectly, be employed by, an advisor to or an investor in any business enterprise that offers products or services
competitive with the Company's or (b) engage in any activity that materially interferes with the Executive's performance of the duties assigned the Executive hereunder, in each case as
determined in the sole and absolute discretion of the Board. 

 
 

ARTICLE II
  COMPENSATION AND BENEFITS    
  

        2.01    Salary and Bonus.    For all services to be rendered by the Executive under this Agreement, the Company shall
pay, or cause to be paid, to the Executive in cash, payable in accordance with the normal payroll practices of the Company for senior executive officers (including deductions, withholdings and
collections as required by law), the following: 

        (a)    Annual Base Salary.    An annual base salary (the "Annual Base
Salary") equal to $325,000 per year (paid on a bi-weekly basis). During the Term, the Compensation Committee of the Board (the "Compensation
Committee") shall review the Executive's Annual Base Salary on or about each anniversary of this Agreement. The Compensation Committee, in its sole and absolute discretion, may
adjust the Executive's Annual Base Salary as it deems necessary or appropriate. 

        (b)    Annual Incentive Bonus.    A cash bonus (the "Annual Incentive
Bonus") of up to fifty percent (50%) of the Executive's Annual Base Salary, as determined by the Compensation Committee in its sole and absolute discretion and subject to the
achievement of specified objectives and targets established by the Compensation Committee. 

 

        (c)    Gross Amounts.    The Annual Base Salary and Annual Incentive Bonus set forth in this  Article II shall be the gross
amounts of such Annual Base Salary and Annual Incentive Bonus. The Executive is responsible for paying any and all
taxes due on any amounts received by him as Annual Base Salary and Annual Incentive Bonus, including, but not limited to, any income tax, social security tax, Medicare tax or capital gains tax. 

        2.02    Stock Options.    Contemporaneously with the execution of this Agreement, the Company will grant
non-qualified options to purchase one hundred twenty thousand (120,000) shares of common stock of the Company under the Company's 2000 Equity Incentive Plan (the
"Plan") upon the terms and conditions set forth on the Option Grant Schedule attached hereto, and upon such other terms and conditions contained in the
Plan. The Board will review the issuance of additional stock options annually. 

        2.03    Executive Benefits.    During the Term of the Executive's employment: 

        (a)    Healthcare.    The Company shall provide and pay for the cost of premiums for health, dental and medical
insurance coverage for the Executive and the Executive's dependents consistent with the coverage generally made available by the Company to senior executives of the Company and providing benefits at
least as favorable to the Executive's current level of coverage. 

        (b)    Expenses.    The Executive shall be entitled to receive prompt reimbursement for all reasonable and necessary
travel and other business expenses incurred or paid by the Executive in connection with the performance of his services under this Agreement in accordance with the Company's policies for other senior
executives of the Company. 

        (c)    Vacation.    The Executive shall be entitled to paid vacation leave consistent with the Company's policies for
other senior executives of the Company. 

        (d)    Additional Future Benefits.    In addition to the benefits set forth above, the Executive shall be entitled to
participate in any other policies, programs and benefits that the Company may, in its sole and absolute discretion, make generally available to its other senior executives from time to time,
including, but not limited to, health, dental, medical, life and disability insurance, pension and retirement plan, stock plans and other similar programs. 

 
 

ARTICLE III
  TERMINATION OF EMPLOYMENT    
  

        3.01    Termination of Employment.    The Executive's employment under this Agreement is expressly "at will," and
either the Executive or the Company may terminate the Executive's employment with the Company at any time and for any reason, with or without cause. Any termination of the Executive's employment is,
however, subject to the terms and provisions of Sections 3.02, 3.03 and 3.04 of this Agreement. 

        3.02    Death or Disability.    

        (a)    Death.    The Executive's employment under this Agreement shall terminate immediately and without notice by the
Company upon the death of the Executive. 

        (b)    Disability.    The Executive's employment under this Agreement shall terminate in the event that the Executive
is unable to perform his duties or responsibilities because of a mental or physical ailment or incapacity for an aggregate of ninety (90) calendar days during any calendar year (whether or not
consecutive) (a "Disability"). This Agreement, and the Executive's employment hereunder, shall immediately terminate upon the delivery of a written
notice to the Executive of his termination pursuant to this Section. 

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        (c)    Compensation.    In the event the Executive is terminated pursuant to  Section 3.02(a) or (b), he shall be entitled to
receive all unpaid salary up to the termination date and any compensation attributable to
accrued, but unpaid vacation days. The Executive shall not be entitled to any other payments, benefits or rights associated with employment. 

        3.03    Termination by the Company.    

        (a)    Termination by the Company.    At any time prior to the expiration of the Term, the Executive's employment
under this Agreement may be terminated by the Company either for cause (as defined below) or without any cause. The term
"cause" shall mean the following: 

	(i)
	the
willful failure or refusal to carry out the reasonable directions (written or oral) of the Board, which directions are consistent with the Executive's duties set forth hereunder
and which the Board believes in good faith to be in the best interests of the Company;

	(ii)
	the
Executive's material breach of his duties regarding Confidential Information contained in Section 4.01 hereof;

	(iii)
	a
willful act by the Executive that constitutes gross negligence in the performance of the Executive's duties under this Agreement and which materially injures the Company;

	(iv)
	a
conviction for a violation of a state or federal criminal law involving the commission of a felony or other crime involving moral turpitude; or

	(v)
	unethical
business practices, including fraud or dishonesty, in connection with the Company's business. 

Provided, however, that with respect to events described in Section 3.03(a)(i) above, the
Company shall give written notice to the Executive of any such event and the Executive shall have thirty (30) days, beginning on the date of delivery of such written notice, to cure same, or if
such event cannot be cured within said thirty (30) day period, the Executive shall commence his efforts to cure the event within the thirty (30) day period and diligently work to cure
such event within a reasonable time period. If the Executive, within said thirty (30) day period or within a reasonable time period, as applicable, does not cure the event for which notice has
been provided under subparagraph (a)(i) above, then the Executive's employment under this Agreement may be terminated by the Company by delivery to the Executive of written notice of
termination, and such termination shall be effective as of the date of delivery of such written notice. 

        (b)    Termination For Cause.    If the Company terminates Executive's employment for cause prior to the expiration of
the Term, then the Executive shall be entitled to receive all unpaid salary up to the termination date and any compensation attributable to accrued, but unpaid vacation days. The Executive shall not
be entitled to any other payments, benefits or rights associated with employment. 

        (c)    Termination Without Cause.    If the Company terminates Executive's employment for any reason other than for
cause prior to the expiration of the Term, then, in addition to all unpaid salary and unpaid benefits to which the Executive is entitled through the termination date under this Agreement: 

	(i)
	the
Executive shall be entitled to receive bi-weekly payments equal to one year of the Executive's then current Annual Base Salary; and

	(ii)
	if
the Executive elects to continue healthcare benefits pursuant to COBRA, the Company shall be obligated to pay the costs of such healthcare insurance continuation until the first
anniversary of the date of his termination. 

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The
payments made to the Executive pursuant to Section 3.03(c)(i) and (ii), if any, shall cease if the Executive accepts full time employment or
works full time as an independent contractor after the date of his termination by the Company. With respect to the foregoing, the Board, in good faith, shall determine whether Executive is employed
full time or working full time as an independent contractor. Other than as expressly set forth in this Section 3.03(c), the Executive shall not
be entitled to any other compensation or benefits as a result of being terminated without cause. 

        3.04    Termination by the Executive.    

        (a)    Termination by the Executive.    At any time prior to the expiration of the Term of this Agreement, the
Executive may terminate his employment with the Company for good reason (defined below) or for any other reason. The term "good reason" shall mean the
following: 

	(i)
	a
reduction of the Executive's then current Annual Base Salary;

	(ii)
	a
repeated, material breach of the Company's obligations under Section 2 hereof;

	(iii)
	the
termination of, or a material reduction in, any employee benefit or perquisite enjoyed by the Executive (other than as part of an across-the-board
reduction applying to all executive officers of the Company that has been approved by the Board);

	(iv)
	the
removal of the Executive from the Executive's position as Chief Executive Officer; or

	(v)
	the
receipt of a directive from the Board to commit an illegal act; 

        (b)    Termination Without Good Reason.    If the Executive terminates his employment prior the end of the Term for
any reason other than a good reason, then the Executive shall be entitled to receive all unpaid salary up to the termination date and any compensation attributable to accrued, but unpaid
vacation days. After the date of his termination, he shall not be entitled to any other payments, benefits or rights associated with employment. 

        (c)    Termination For Good Reason.    If the Executive terminates his employment for good reason prior to the end of
the Term, then, in addition to all unpaid salary and unpaid benefits to which the Executive is entitled through the termination date under this Agreement, the Executive shall be entitled to receive
bi-weekly payments equal to one year of the Executive's then current Annual Base Salary. 

 
 

ARTICLE IV
  CONFIDENTIAL INFORMATION AND NONSOLICITATION    
  

        4.01    Confidential Information.    The Executive acknowledges and agrees that the Company has developed and uses
certain proprietary and confidential information, data, processes, business methods, computer software, data bases, customer lists and know-how ("Confidential
Information"). The Executive agrees that the Confidential Information is a trade secret of the Company which shall remain the sole property of the Company notwithstanding that
the Executive, as an employee of the Company, may participate in the development of the Confidential Information. During the term of this Agreement and at all times thereafter, other than in the
performance of his duties hereunder, the Executive shall not disclose any Confidential Information to any person or entity for any reason or purpose whatsoever, nor shall the Executive make use of any
Confidential Information for the Executive's own benefit or for the benefit of any other person or entity. Upon termination of this Agreement for any reason, the Executive will promptly surrender to
the Company all Confidential Information in the Executive's possession or under the Executive's control, whether prepared by the Executive or by others. 

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        4.02    Nonsolicitation.    The Executive agrees that for a period of three (3) years following the termination
of the Executive's employment hereunder, the Executive will not directly or indirectly solicit or attempt to solicit any of the employees of or consultants to the Company to leave the Company or to
become employees of or consultants to any other person or entity if such employment or consulting would interfere with such employee's or consultant's ability to continue providing services to the
Company. 

 
 

ARTICLE V
  MISCELLANEOUS    
  

        5.01    Modification and Waiver of Breach.    This Agreement shall not be altered, amended or modified except by
written instrument executed by the Company and the Executive. A waiver of, or failure to insist upon compliance with, any term, covenant, agreement or condition contained in this Agreement shall not
be deemed a waiver of any other term, covenant, agreement or condition and any waiver of any other term, covenant, agreement or condition, and any waiver of any default in any such term, covenant,
agreement or condition shall not be deemed a waiver of any later default thereof or of any other term, covenant, agreement or condition. 

        5.02    Assignment, Successors.    This Agreement may not be assigned by either party hereto without the prior written
consent of the other party. This Agreement shall be binding upon and inure to the benefit of the Executive and the Executive's estate and the Company and any assignee of or successor to the Company. 

        5.03    Notices.    All notices, requests, demands and other communications under this Agreement must be in writing
and shall be deemed given upon personal delivery, facsimile transmission (with confirmation of receipt), delivery by a reputable overnight courier service or five (5) days following deposit in
the United States mail (if sent by certified or registered mail, postage prepaid, return receipt requested), in each case duly addressed to the party to whom such notice or communication is to be
given as follows: 

	To the Company:	 	Diedrich Coffee, Inc.

2144 Michelson Drive

Irvine, California 92612

Attention: Chairman of the Board

Fax Number: (949) 260-1610
	

To the Executive:	
 	

Philip G. Hirsch

[Address]

        Any party may change its address for the purpose of this Section 5.03 by giving the other party written
notice of the new address in the manner set forth above. 

        5.04    Severability.    If all or any part of this Agreement is declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not serve to invalidate any portion of this Agreement not declared to be unlawful or invalid. Any paragraph or part of a paragraph so
declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such paragraph or part of a paragraph to the fullest extent possible while
remaining lawful and valid. 

        5.05    Entire Agreement.    This Agreement, along with the terms of the Company's 2000 Equity Incentive Plan,
contains the entire agreement between the Company and the Executive with respect to the subject matters hereof and supersedes all prior or contemporaneous agreements, arrangements or understandings,
written or oral, with respect to the subject matters hereof. 

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        5.06    Legal Fees; Arbitration.    The parties hereto expressly agree that in the event of any dispute, controversy
or claim by any party regarding this Agreement, the prevailing party shall be entitled to reimbursement by the other party to the proceeding of reasonable attorney's fees, expenses and costs incurred
by the prevailing party. Any controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance or breach of this Agreement or otherwise arising out of
the execution hereof, including any claim based on contract, tort or statute, shall be resolved, at the request of any party, by submission to binding arbitration at the Orange County, California
offices of Judicial Arbitration & Mediation Services, Inc. ("JAMS"), and any judgment or award rendered by JAMS shall be final, binding
and unappealable, and judgment may be entered by any state or federal court having jurisdiction thereof Any party can initiate arbitration by sending written notice of intention to arbitrate (the
"Demand") by registered or certified mail to all parties and to JAMS. The Demand shall contain a description of the dispute, the amount involved, and
the remedy sought. The arbitrator shall be a retired or former judge agreed to between the parties from the JAMS' panel. If the parties are unable to agree, JAMS shall provide a list of three
available judges and each party may strike one. The remaining judge shall serve as the arbitrator. Each party hereto intends that the provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. In his award, the arbitrator shall allocate, in his discretion, among the parties to the arbitration all costs of the arbitration, including the fees of the arbitrator and reasonable
attorneys' fees, costs and expert witness expenses of the parties. The parties hereto agree to comply with any award made in any such arbitration proceedings that has become final and agree to the
entry of a judgment in any jurisdiction upon any award rendered in such proceeding becoming final. 

        5.07    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State
of California, without regard to its choice of law principles. 

        5.08    Counterparts.    This Agreement may be executed simultaneously in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

	 	 	THE COMPANY:
	
 	
 	

DIEDRICH COFFEE, INC.
	

 	
 	

By:	

/s/  PAUL C. HEESCHEN      
 Paul C. Heeschen

Chairman of the Board of Directors
	
 	
 	

THE EXECUTIVE:
	
 	
 	

PHILIP G. HIRSCH
	

 	
 	

/s/  PHILIP G. HIRSCH      
 Philip G. Hirsch

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OPTION GRANT SCHEDULE    
  

	
 	
 	

 
	

Date of Grant:	
 	

The date of grant shall be the date that the Board approves the grant of the Options (the "Grant Date").
	

Number of Option Shares:	
 	

120,000 non-qualified option shares (the "Options").
	

Exercise Price:	
 	

The exercise price shall be the average of the last reported price of the Company's common stock on the Nasdaq National Market on the five trading days prior to the Grant Date.
	

Vesting Schedule:	
 	

(a) 60,000 options shall vest on August 31, 2003; and (b) 60,000 options shall vest on August 31, 2004.
	

Expiration Date:	
 	

(a) If the Company terminates Executive "for cause," then all of his unexercised Options (whether or not vested) will expire and become unexercisable as of the date of such termination.
	

 	
 	

(b) If Executive's employment ceases for any other reason, (including, but not limited to, termination by the Company without cause, Executive's resignation for any reason, expiration of the Term, death or disability) then: (i) all Options that
have not become exercisable as of the date of termination or resignation will immediately terminate and become unexercisable; and (ii) all Options that have become exercisable will terminate and become unexercisable on the two year anniversary
of the date that Executive ceased to be employed by the Company.
	

Additional Terms:	
 	

The Options shall be subject to the terms and conditions of the Plan.

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QuickLinks

EXHIBIT 10.29

EMPLOYMENT AGREEMENT

RECITALS

AGREEMENT

ARTICLE I DUTIES AND TERM

ARTICLE II COMPENSATION AND BENEFITS

ARTICLE III TERMINATION OF EMPLOYMENT

ARTICLE IV CONFIDENTIAL INFORMATION AND NONSOLICITATION

ARTICLE V MISCELLANEOUS

OPTION GRANT SCHEDULE

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