Exhibit 10.19
Lloyd Johnson
24818 NE 20th Street
Sammamish, WA 98074
Dear Lloyd:
We are pleased to offer you the position of Executive Vice President, Chief
Sales Officer with Diamond Foods, Inc. (“Diamond” or the “Company”). In this
position you will report to Michael Mendes, President and Chief Executive
Officer. The terms and conditions of our offer are as follows:
Start Date: We will mutually agree on a start date.
Compensation:

 
Annual Base Salary:
$390,000.00 annualized base salary (Exempt), payable in accordance with standard
Company payroll practices.
Sign-on Bonus:
The Company will pay you a sign-on bonus of $50,000, with $25,000 payable three
months after commencement of your employment and $25,000 payable nine months
after commencement of your employment.
Bonus Incentive Program:
You will participate in the annual bonus program, which is designed to reward
outstanding performance. Your position is eligible for a maximum bonus potential
of 140% of base salary, with a target bonus potential of 70% of base salary. The
bonus amount will be based on individual objectives and Company financial
metrics, as will be established after commencement of your employment and
approved by the Compensation Committee of the Board of Directors and/or the full
Board of Directors. You will be eligible for this non-guaranteed bonus in fiscal
2009. You must continue to be an active employee through July 31 for eligibility
in the bonus program and be an active employee on the day of the payout.
Equity Awards: You will be granted an option to purchase 33,000 shares of common
stock and 33,000 shares of restricted stock (subject to Board approval at the
next Board meeting, scheduled for September 25, 2008). The exercise price for
the options will be Diamond’s closing price on the date the Board approves your
grant, and your purchase price for the restricted stock would be $0.001 per
share.

D I A M O N D F O O D S , I N C .

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

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The options will vest and become exercisable over a four-year period, with 25%
of the shares vesting on the first anniversary of the date of grant, and the
remaining shares vesting ratably on a quarterly basis over the 36-month period
following the first anniversary of the date of grant. The restricted stock will
vest over a four-year period, with 25% of the restricted stock vesting on each
anniversary of your date of grant. The option and restricted stock will require
your completion of applicable grant documents, which provide that vesting is
subject to you remaining in continuous service as an employee of Diamond through
each vest date.

Performance Evaluation/Salary Review:

An evaluation of your performance against the Company’s expectations, along with
financial consideration, will be conducted in accordance with the annual salary
plan around September 2009.
Health & Welfare Benefits:

Eligibility for Diamond Foods, Inc. Health & Welfare Benefits commences on the
first day of employment. Plan description of these benefits will be provided
under separate cover during orientation.

 
Group Medical: Blue Cross
Group Dental Insurance: Delta Dental
Group Vision Insurance: Vision Service Plan (VSP)
Group Life Insurance: The Company provides basic life insurance at one (1) times
your annual base salary. We offer the option to purchase additional voluntary
life insurance at competitive group rates.
Long & Short Term Disability: The Company will provide both of these plans for
you at no cost.
IRS Section 125: You will be provided the opportunity to participate in three
(3) optional plans — (a) for pre-tax employee co-share premiums; (b) Tax-free
Medical Flexible Spending Account (FSA) up to $2,600 per year; or (c) Tax-free
Dependent Care Flexible Spending Account (FSA) up to $5,000 per year.

Executive Premium Health Benefit: You will be eligible to participate in the
Company’s Exec-u-Care program, which provides for additional health and medical
reimbursements that are not otherwise covered by our Group Medical program.
D I A M O N D F O O D S , I N C .

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

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The Retirement Program:
Diamond has a Savings and Investment Plan, which is a 401k plan, with the
following terms:

     
        a.
  You will be vested at 100% on your first day of eligibility after 6 months of
employment and worked 1,000 hours.
        b.
  Company will make a contribution equal to 3% of employee’s base salary on a
quarterly basis after six (6) months of employment.

Other Benefits:
Holidays: Ten (10) paid holidays per year.

 
Paid Time Off (PTO) Annual Accrual: Date of Hire — completing 14 yrs. 6.154
hrs/pay period = 4 weeks/year 15 or more years 7.692 hrs/pay period =
5 weeks/year
Change of Control/Severance Agreement: Upon approval by the Board of Directors,
the Company will enter into its standard form of Change of Control/Severance
Agreement with you. The form of the agreement is attached to this letter.
Severance upon Termination without Cause: In the event the Company terminates
your employment without Cause, as defined below, you will be entitled to receive
the following termination benefits:
· Payment of 12 months of base salary, based on your base salary on the date of
termination;
· Payment of your target bonus amount for the year in which the termination
occurs;
· Acceleration of any stock options, restricted stock or other equity grant that
would have otherwise vested in the 12 months following the date of termination;
and
· The Company will offer to you the ability to elect coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) under the
Company’s medical or dental plans as in effect immediately prior to the date of
termination. If you elect timely continuation of coverage under COBRA, provided
that you pay the amount required to continue coverage, the Company will maintain
coverage for you and your dependants for up to the maximum period of time
allowed under COBRA.
As used in this letter, “Cause” shall mean commission of a felony, fraud, crime
of moral terpitude, or intentional or willful misconduct.
Health Club Membership: Diamond will provide you with a membership in a health
club. Currently, the company provides memberships for senior executives at the
Bay Club in San Francisco.

D I A M O N D F O O D S , I N C .

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

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Car Allowance: Diamond will pay you a monthly car allowance of $1,000 to cover a
car and car expenses.
Financial Planning: Diamond provides its senior level executives with a
financial planning service for tax preparation, financial consulting and
education. We partner with Ayco, a Goldman Sachs company, to provide these
services.
Relocation: Diamond will reimburse you for real estate broker commissions you
incur in connection with the sale of your home and relocation to the San
Francisco Bay Area, provided that you relocate within 12 months of commencement
of your employment. This reimbursement will not exceed 5% of the selling price
of your home. In addition, the Company will arrange for and bear the cost of a
moving company to relocate your household goods.
Temporary Housing: For a period of 12 months, Diamond will provide temporary
housing for you, not to exceed $3,500 per month.

Obligations of Employee During & After Employment:

 
Records: All records, files, documents and the like, or abstracts, summaries or
copies thereof, relating to the business of the Company or the business of any
subsidiary or affiliated companies, which the Company or you shall prepare or
use or come into contract with, shall remain the sole property of the Company or
the affiliated or subsidiary company, as the case may be, and shall not be
removed from the premises without the written consent of the Company, and shall
be promptly returned upon termination of employment.
Competitors of the Company: You acknowledge that you have acquired and will
acquire knowledge regarding confidential, proprietary and/or trade secret
information in the course of performing your responsibilities for the Company,
and you further acknowledge that such knowledge and information is the sole and
exclusive property of the Company. You recognize that disclosure of such
knowledge and information, or use
of such knowledge and information, to or by a competitor could cause serious and
irreparable harm to the Company. You therefore agree that you shall not accept
employment with, nor provide any form of service for, any company that competes
with the business of the Company during and for one year after termination of
your employment with the Company.
Non-Solicitation: During your employment with the Company and for a period of
one year after termination, for any reason, you agree that you will not,
directly or indirectly (i) solicit any employee of the Company to leave the
employment of the Company or (ii)

D I A M O N D F O O D S , I N C .

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

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induce or attempt to induce, any customer or supplier of the Company to cease
doing business with the Company.
Lloyd, we believe this outlines the primary components related to your
employment with the Company. Upon commencement of your employment, we will have
additional employment for you to sign, including company policies. Should you
accept our offer of employment, please sign, date and return the original copy
of this letter to the Company, we have included a copy of this letter for your
files.
Sincerely,
DIAMOND FOODS, INC.
/s/ Michael J. Mendes
Michael J. Mendes
President & Chief Executive Officer
Diamond Foods, Inc. operates under an employment-at-will concept, which means
either party may terminate the employment relationship at any time, with or
without cause and with or without notice. In addition, no statements made in
this offer letter are meant to imply or state a guarantee of continued
employment. If any part of the terms set forth in this letter is determined to
be unenforceable, including without limitation the section entitled “Competitors
of the Company,” the remaining terms shall not be affected and shall remain
fully enforceable.

                Acceptance: /s/ Lloyd Johnson   Date: August 17, 2008      
      Lloyd Johnson           

cc: Personnel File
D I A M O N D F O O D S , I N C .

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND