##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K/A
 (Amendment No. 1)
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended July 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to
 Commission File No.: 000-51439
 
 DIAMOND FOODS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State of Incorporation)
    
    20-2556965(IRS Employer Identification No.)1050 South Diamond StreetStockton, California(Address of Principal Executive Offices)
    
    95205-7087(Zip Code)
 209-467-6000
(Telephone No.)
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act:
 Title of each class:
    
    Name of exchange on which registered:Common Stock, $0.001 par value 
Series A Junior Preferred Stock Purchase Right
    
    Nasdaq National Market
Nasdaq National Market
 þ o
 þ
  o þ o
 o o




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EXPLANATORY NOTE
    2




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TABLE OF CONTENTS
 PagePart IIIItem 10. Directors and Executive Officers of the Registrant
    
    4Item 11. Executive Compensation
    
    8Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    14Item 13. Certain Relationships and Related Transactions
    
    16Item 14. Principal Accountant Fees and Services
    
    17Exhibit 31.03Exhibit 31.04




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##### 



PART III
 
 Item 10. Directors and Executive Officers of the Registrant
 Identification of Directors
   DirectorName of Director
    
    Age
    
    Principal Occupation
    
    SinceJoseph P. Silveira
    
    
    59
    
    
    President of Farmland Management Services, Inc.
    
    
    2005Laurence M. Baer
    
    
    49
    
    
    Executive Vice President and Chief
Operating Officer, San Francisco Giants
    
    
    2005Michael J. Mendes
    
    
    43
    
    
    President and Chief Executive Officer of
Diamond Foods, Inc.
    
    
    2005
 Joseph P. Silveira
 Laurence M. Baer
 Michael J. Mendes
  DirectorName of Director
    
    Age
    
    Principal Occupation
    
    SinceRobert
M. Lea
    
    
    63
    
    
    Founder and Owner, Law Offices of Robert Lea
    
    
    2005Dennis Mussell
    
    
    64
    
    
    Retired, former President and Chief
Executive Officer of Chicken of the Sea
International
    
    
    2005Glen C. Warren, Jr.
    
    
    50
    
    
    President, Chief Financial Officer and a
director of Antero Resources Corporation
    
    
    2005
 Robert M. Lea
 Dennis Mussell
 4




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Glen C. Warren, Jr.
  DirectorName of Director
    
    Age
    
    Principal Occupation
    
    SinceJohn J. Gilbert
    
    
    63
    
    
    Owner and President of Gilbert
Orchards and Rio Oso Groves, Inc.
    
    
    2005Steven M. Neil
    
    
    54
    
    
    Vice President and Chief
Financial Officer of The Cooper
Companies, Inc.
    
    
    2005Robert J. Zollars
    
    
    49
    
    
    President and Chief Executive
Officer of Wound Care Solutions,
LLC.
    
    
    2005
 John J. Gilbert
 Steven M. Neil
 Robert J. Zollars
 5




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##### 



Executive Officers
 Name
    
    Age
    
    PositionMichael J. Mendes
    
    
    43
    
    
    President, Chief Executive Officer and DirectorGary K. Ford
    
    
    52
    
    
    Chief Operating Officer, Executive Vice PresidentSeth Halio
    
    
    44
    
    
    Chief Financial Officer, Executive Vice PresidentSamuel J. Keiper
    
    
    56
    
    
    Vice President, Corporate Affairs and Human
Resources, and SecretaryAndrew Burke
    
    
    40
    
    
    Vice President, Marketing
 Michael J. Mendes
 Gary K. Ford
 Seth Halio
 Samuel J. Keiper
 Andrew Burke
 Identification of Audit Committee and Financial Expert
  6




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Section 16(a) Beneficial Ownership Reporting Compliance
  7




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Code of Conduct and Ethics
 http://www.diamondfoods.com.
 
 Item 11. Executive Compensation
 Director Compensation
 Cash Retainer and Meeting Fees.
 Option Grants.
  Restricted Stock Grants.
 8




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##### 



Executive Compensation
 Summary Compensation Table
  Summary Compensation Table
 Long-TermAnnual Compensation
    
    CompensationOther
    
    
    
    
    
    Securities
    
    Long TermAnnual
    
    Restricted
    
    Underlying
    
    Incentive
    
    All OtherFiscal
    
    Salary
    
    Bonus
    
    Compensation
    
    Stock Value
    
    Options
    
    Program
    
    CompensationName and Principal Position
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)(1)
    
    (#)
    
    ($)
    
    ($)Michael Mendes
    
    
    2006
    
    
    
    475,691
    
    
    
    450,000
    
    
    
    91,629
    (2)
    
    
    443,121
    
    
    
    288,288
    (3)
    
    
    
    
    
    
    152,005
    (4)President and
    
    
    2005
    
    
    
    428,846
    
    
    
    400,000
    
    
    
    52,004
    (5)
    
    
    4,306,661
    
    
    
    253,333
    
    
    
    160,000
    
    
    
    Chief Executive Officer
    
    
    2004
    
    
    
    400,000
    
    
    
    400,000
    
    
    
    27,918
    (6)
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    255,577
    (7)Gary Ford
    
    
    2006
    
    
    
    247,743
    
    
    
    175,000
    
    
    
    40,598
    (8)
    
    
    125,307
    
    
    
    17,915
    
    
    
    
    
    
    
    Executive Vice President,
    
    
    2005
    
    
    
    219,894
    
    
    
    150,396
    
    
    
    40,512
    (9)
    
    
    1,615,000
    
    
    
    95,000
    
    
    
    44,133
    
    
    
    Chief Operating Officer
    
    
    2004
    
    
    
    200,605
    
    
    
    127,226
    
    
    
    16,956
    
    
    
    
    
    
    
    
    
    
    
    25,076
    
    
    
    30,896
    (10)Seth Halio
    
    
    2006
    
    
    
    237,692
    
    
    
    168,000
    
    
    
    39,233
    (11)
    
    
    114,534
    
    
    
    16,349
    
    
    
    
    
    
    
    Executive Vice President,
    
    
    2005
    
    
    
    117,923
    
    
    
    
    
    
    
    20,942
    (12)
    
    
    1,399,661
    
    
    
    95,000
    
    
    
    
    
    
    
    Chief Financial Officer
    
    
    2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sam Keiper
    
    
    2006
    
    
    
    172,848
    
    
    
    87,500
    
    
    
    35,617
    (13)
    
    
    54,432
    
    
    
    7,790
    
    
    
    
    
    
    
    Vice President, Corporate
    
    
    2005
    
    
    
    147,026
    
    
    
    58,810
    
    
    
    35,289
    (14)
    
    
    538,339
    
    
    
    31,667
    
    
    
    14,703
    
    
    
    Affairs and Human Resources
    
    
    2004
    
    
    
    141,371
    
    
    
    57,225
    
    
    
    13,603
    
    
    
    
    
    
    
    
    
    
    
    8,826
    
    
    
    Andrew Burke
    
    
    2006
    
    
    
    26,538
    
    
    
    40,000
    
    
    
    
    
    
    
    223,950
    
    
    
    
    
    
    
    
    
    
    
    Vice President,
    
    
    2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Marketing(15)
    
    
    2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    As of July 31, 3006, the named executive officers held shares awarded as restricted stock as follows: Mr.
Mendes  274,434 shares; Mr. Ford  86,617 shares, Mr. Halio  75,337 shares; Mr. Keiper  29,359; and Mr.
Burke  15,000. The value of restricted stock reported in this column is calculated using the closing price of
our common stock on the date of grant. On July 31, 2006, the closing price of our common stock was $15.36.
Based on this price, the values of the aggregated shares awarded as restricted stock held by the named
executive officers were: Mr. Mendes  $4,215,306; Mr. Ford  $1,330,437; Mr. Halio  $1,157,176; Mr. Keiper 
$450,954; and Mr. Burke  $230,400. If we declare dividends on our common stock, such dividends will be paid on
the restricted stock disclosed above. All restricted stock in this table vest in three, equal, annual
installments on each anniversary of the date of grant.(2)
    
    Includes $39,078 in financial planning and tax preparation services, $3,492 in amounts reimbursed for taxes and
$30,364 in temporary living expenses.(3)
    
    Includes an option to purchase 225,000 shares of common stock granted in consideration of termination of Mr.
Mendess Long Term Incentive Compensation Program (LTIC). From 2001 until October 2005. Mr. Mendes was the
beneficiary of an LTIC, pursuant to which we agreed to provide Mr. Mendes with annual cash benefits over a ten
year period, with payments to begin as early as Mr. Mendes 50th birthday, under certain circumstances. To
better align Mr. Mendes interests with those of our stockholders, on October 25, 2005, the Board approved
terminating the LTIC and granted Mr. Mendes an option to purchase 225,000 shares of common stock. The option
was granted under our 2005 Equity Incentive Plan and vests over five years, with options to purchase 20% of the
shares vesting on October 25, 2006, and the remainder vesting on a pro rata basis on each quarterly anniversary
thereafter over the next four years. The option has an exercise price of $17.07 per share.(4)
    
    Represents relocation costs.(5)
    
    Includes $25,250 in financial planning and tax preparation services.(6)
    
    Includes $8,086 in health insurance cost contribution and $7,326 in medical expense reimbursements.(7)
    
    Represents $197,939 in relocation costs and $57,638 in unused vacation time disbursements. 9




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(8)
    
    Includes $12,588 for financial planning and tax preparation services and $4,397 in amounts reimbursed for taxes.(9)
    
    Includes $17,114 in financial planning and tax preparation services.(10)
    
    Represents $30,896 in unused vacation time disbursements.(11)
    
    Includes $10,046 for personal use of company
automobile and $8,794 in amounts reimbursed for taxes.(12)
    
    Includes $17,000 in financial planning and tax preparation services.(13)
    
    Includes $12,588 in financial planning and tax preparation services and $9,009 in health insurance cost
contribution and $4,397 in amounts reimbursed for taxes.(14)
    
    Includes $17,114 in financial planning and tax preparation services.(15)
    
    Mr. Burke commenced employment with us in June 2006, and as a result, the information contained in this table
represents compensation information with respect to the partial fiscal year during which he was an employee. Option Grants in the 2006 Fiscal Year
   Option Grants in the 2006 Fiscal Year
 Individual GrantsPercent ofTotalOptionsNumber of
    
    Granted toSecurities
    
    Employees
    
    Exercise
    
    
    
    
    
    Grant DateUnderlying
    
    in
    
    Price
    
    
    
    
    
    PresentOptions
    
    Fiscal 2006
    
    per Share
    
    Expiration
    
    ValueName
    
    Granted
    
    (%)(1)
    
    ($)
    
    Date
    
    ($)(2)Michael Mendes
    
    
    225,000
    (3)
    
    
    39.0
    
    
    
    17.07
    
    
    
    10/25/2015
    
    
    
    1,324,28363,288
    (4)
    
    
    11.0
    
    
    
    21.00
    
    
    
    1/10/2016
    
    
    
    445,934Gary Ford
    
    
    17,915
    (4)
    
    
    3.1
    
    
    
    21.00
    
    
    
    1/10/2016
    
    
    
    126,231Seth Halio
    
    
    16,349
    (4)
    
    
    2.8
    
    
    
    21.00
    
    
    
    1/10/2016
    
    
    
    115,197Sam Keiper
    
    
    7,790
    (4)
    
    
    1.4
    
    
    
    21.00
    
    
    
    1/10/2016
    
    
    
    54,889Andrew Burke
    
    
    15,000
    (4)
    
    
    2.6
    
    
    
    14.93
    
    
    
    6/19/2016
    
    
    
    76,493
 
 (1)
    
    Diamond granted options to purchase 577,713 shares of common stock to all of our employees
during the 2006 fiscal year.(2)
    
    In calculating the grant date values set forth in the table, expected stock price
volatilities are estimated based on 10




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##### 



a combination of volatilities of comparable companies
and the historical volatility of our stock price during the six-month period following our
initial public offering. The expected terms of options granted are based on the average of
the contractual period of the option and the duration of the vesting period, adjusted by
the rate at which the options vest. The risk-free rates are based on U.S. Treasury yields
in effect at the time of grant for 10-year notes that have comparable terms as the option
grants. For purposes of this valuation model, dividend yields are based on the annualized
historical rate. The following assumptions are used in the table: Risk-FreeRate of
    
    
    
    
    
    Dividend
    
    ExpirationGrant Date
    
    Return
    
    Volatility
    
    Yield
    
    Term10/25/2005 (options with 10/25/2015 expiration date)
    
    
    4.500
    
    
    
    27.500
    
    
    
    0.703
    
    
    
    6.3501/10/2006 (options with 1/10/2016 expiration date)
    
    
    4.450
    
    
    
    27.500
    
    
    
    0.571
    
    
    
    5.8706/19/2006 (options with 6/19/2016 expiration date)
    
    
    5.100
    
    
    
    27.500
    
    
    
    0.760
    
    
    
    5.87
 
 (3)
    
    From 2001 until October 2005, Mr. Mendes was the beneficiary of a Long
Term Incentive Compensation program (LTIC), pursuant to which we
agreed to provide Mr. Mendes with annual cash benefits over a ten year
period, with payments to begin as early as Mr. Mendes 50th birthday,
under certain circumstances. To better align Mr. Mendes interests
with those of our stockholders, on October 25, 2005, the Board
approved terminating the LTIC and granted Mr. Mendes an option to
purchase 225,000 shares of our common stock. The option vests over
five years, with options to purchase 20% of the shares vesting on
October 25, 2006, and the remainder vesting on a pro rata basis on
each quarterly anniversary thereafter over the next four years.(4)
    
    One third of the shares subject to these options vests on the first
anniversary of the date of grant. The balance will vest in equal
installments at the end of each quarter after such first anniversary,
such that the options become fully vested three years after the date
of grant. Aggregated Option Exercises in the 2006 Fiscal Year and Fiscal Year-End Option Values
  Aggregate Option Exercises in Fiscal 2006 and Fiscal Year-End Values
 Number ofSecurities Underlying
    
    Value of UnexercisedShares
    
    Value
    
    Unexercised Options
    
    In-the-Money OptionsAcquired on
    
    Realized
    
    at Year-End (#)
    
    at Fiscal Year-End ($)(1)Name
    
    Exercise
    
    ($)
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableMichael Mendes
    
    
    
    
    
    
    
    
    
    
    84,445
    
    
    
    457,176
    
    
    
    
    
    
    
    Gary Ford
    
    
    
    
    
    
    
    
    
    
    31,667
    
    
    
    81,248
    
    
    
    
    
    
    
    Seth Halio
    
    
    
    
    
    
    
    
    
    
    31,667
    
    
    
    79,682
    
    
    
    
    
    
    
    Sam Keiper
    
    
    
    
    
    
    
    
    
    
    10,556
    
    
    
    28,901
    
    
    
    
    
    
    
    Andrew Burke
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    
    
    
    
    6,450
 
 (1)
    
    Except with respect to Mr. Burke, all of the options in the table above have exercise prices higher than the
fair market value of our common stock on July 31, 2006, which was $15.36. Mr. Burkes options have an exercise
price of $14.93 per share, which was the fair market value of our common stock on the date of grant. Employment Contracts, Termination of Employment and Change-in-Control Arrangements
 Termination and severance payments upon a change of control.
 11




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nolo contendere
  Employment Agreements.
 Pension Plans
  Estimated Annual Retirement Benefits(1)
 Highest Five-Year
    
    Years of ServiceAverage Compensation(2)
    
    5
    
    10
    
    15
    
    20
    
    25
    
    30
    
    35
    
    40$   150,000
    
    $
    13,481
    
    
    $
    26,962
    
    
    $
    40,444
    
    
    $
    53,925
    
    
    $
    67,406
    
    
    $
    80,887
    
    
    $
    94,369
    
    
    $
    107,850250,000
    
    
    17,946
    
    
    
    35,892
    
    
    
    53,839
    
    
    
    71,785
    
    
    
    89,731
    
    
    
    107,677
    
    
    
    125,624
    
    
    
    143,570350,000
    
    
    17,946
    
    
    
    35,892
    
    
    
    53,839
    
    
    
    71,785
    
    
    
    89,731
    
    
    
    107,677
    
    
    
    125,624
    
    
    
    143,570450,000
    
    
    17,946
    
    
    
    35,892
    
    
    
    53,839
    
    
    
    71,785
    
    
    
    89,731
    
    
    
    107,677
    
    
    
    125,624
    
    
    
    143,570550,000
    
    
    17,946
    
    
    
    35,892
    
    
    
    53,839
    
    
    
    71,785
    
    
    
    89,731
    
    
    
    107,677
    
    
    
    125,624
    
    
    
    143,570
 
 (1)
    
    We also maintain the Diamond Walnut Growers Retirement Restoration
Plan in which Mr. Mendes is the sole participant. This supplemental
plan provides benefits that are additional to the benefits under the
Diamond 12




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##### 



Foods, Inc. Pension Plan. Benefits under this plan are
calculated as a single life annuity with a guaranteed 10-year term.
Normal retirement age is 60. Assuming the applicable average
compensation to be $830,000, Mr. Mendes would receive a benefit from
this supplemental plan estimated as follows: (15 years) $323,632; (20
years) $330,148; (25 years) $341,890; (30 years) $409,874.(2)
    
    No more than $210,000 for the plan year from August 1, 2005 to July
31, 2006 (as adjusted from time to time by the Internal Revenue
Service) of cash compensation may be taken into account in calculating
benefits payable under the Diamond Foods, Inc. Pension Plan.   Compensation
Committee Interlocks and Insider Participation
  13




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##### 



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Securities
Authorized for Issuance under Equity Compensation Plans
  Equity Compensation Plan Information Table
 (a)
    
    
    (b)
    
    
    (c)Number of SecuritiesAvailable forNumber of Securities
    
    
    
    
    
    
    Future Issuanceto be Issued
    
    
    Weighted Average
    
    
    Under EquityUpon Exercise of
    
    
    Exercise Price of
    
    
    Compensation PlansOutstanding Options,
    
    
    Outstanding Options,
    
    
    (Excluding SecuritiesWarrants and Rights
    
    
    Warrants and Rights
    
    
    Reflected in Column (a))Equity compensation plans approved by security holders
    
    
    1,648,459
    
    
    $
    17.43
    
    
    
    942,143
    (1)Equity compensation plans not approved by security holders
    
    
    0
    
    
    
    
    
    
    
    Total
    
    
    1,648,459
    
    
    $
    17.43
    
    
    
    942,143
    (1)
 
 (1)
    
    Of these shares, 499,000 shares remain available for purchase
under our 2005 Employee Stock Purchase Plan and 443,143 shares
remain available for purchase under our 2005 Equity Incentive
Plan. All of the shares available for grant under the 2005 Equity
Incentive Plan may be issued in the form of stock options,
restricted stock, stock bonuses, stock appreciation rights or
restricted stock units. Under the terms of our 2005 Equity
Incentive Plan, on the first business day of each of the fiscal
years 2006 through 2014, the aggregate number of shares reserved
and available for grant and issuance pursuant to the plan is
automatically increased by a number of shares equal to 2% of the
total outstanding shares as of the immediately preceding July 31,
or a lesser number of shares determined by our Board of
Directors, provided that no more than 25,000,000 shares may be
issued pursuant to the exercise of incentive stock options. Under
the terms of our 2005 Employee Stock Purchase Plan, beginning in
fiscal 2007, on the first business day of each fiscal year the
aggregate number of shares reserved for issuance under the plan
is automatically increased by a number of shares equal to 1% of
the total outstanding shares as of the last day of the
immediately preceding fiscal year, or a lesser number of shares determined by our Board of Directors, provided that the aggregate
number of shares issued over the term of the plan shall not
exceed 4,000,000 shares Security
Ownership of Certain Beneficial Owners and Management
    Number of Shares of
    
    % ofName of Beneficial Owner
    
    Common Stock
    
    Common Stock(1)Directors and Officers:Michael J. Mendes(2)
    
    
    456,884
    
    
    
    2.9
    %Gary K. Ford(3)
    
    
    134,939
    
    
    
    *Seth Halio(4)
    
    
    121,658
    
    
    
    *John J. Gilbert(5)(6)
    
    
    85,278
    
    
    
    *Joseph P. Silveira(5)(7)
    
    
    47,122
    
    
    
    *Samuel J. Keiper(8)
    
    
    47,407
    
    
    
    *Andrew Burke
    
    
    15,000
    
    
    
    *Robert M. Lea(5)
    
    
    34,668
    
    
    
    *Laurence M. Baer(5)
    
    
    11,225
    
    
    
    *Dennis Mussell(5)
    
    
    11,225
    
    
    
    *Steven M. Neil(5)
    
    
    11,225
    
    
    
    *Glen C. Warren, Jr.(5)
    
    
    21,225
    
    
    
    *Robert J. Zollars(5)
    
    
    11,225
    
    
    
    *All 12 current directors and executive officers as a group(2)  (8)
    
    
    1,009,081
    
    
    
    6.3
    %Other 5% Stockholders:Prides Capital Partners, L.L.C.(9)
    
    
    1,242,704
    
    
    
    7.9
    %Massachusetts Financial Services Company(10)
    
    
    885,532
    
    
    
    5.6
    %
 
 *
    
    Less than one percent.(1)
    
    Percentage of shares beneficially owned is based on 15,737,194 shares of common
stock outstanding as of November 21, 2006.(2)
    
    Pursuant to Rule 13d-3(d)(1) of the Exchange Act, includes 171,651 shares
subject to stock options exercisable in the next 60 days.(3)
    
    Pursuant to Rule 13d-3(d)(1) of the Exchange Act, includes 45,555 shares
subject to stock options exercisable in the next 60 days. 14




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##### 



(4)
    
    Pursuant to Rule 13d-3(d)(1) of the Exchange Act, includes 45,033 shares
subject to stock options exercisable in the next 60 days.(5)
    
    Pursuant to Rule 13d-3(d)(1) of the Exchange Act, includes 4,167 shares subject
to stock options exercisable in the next 60 days.(6)
    
    Includes 42,833 shares in the name of Gilbert Orchards and 20,076 shares in the
name of Rio Oso Groves, Inc. Mr. Gilbert is an owner and executive officer of
Rio Oso Groves, Inc. and Gilbert Orchards. Mr. Gilbert has sole voting and
dispositive control over the shares owned by Rio Oso Groves, Inc. Mr. Gilbert
and William H. Gilbert have shared voting and dispositive control over the
shares owned by Gilbert Orchards. Also includes 11,144 shares in the name of
The John and Sandra Gilbert Trust DTD 3/6/2000. Mr. Gilbert is a co-trustee of
the trust.(7)
    
    Includes 25,548 shares in the name of John Hancock Life Insurance Company,
1,047 shares in the name of John Hancock Variable Life Insurance Company, 3,561
shares in the name of Texas Municipal Plans Consortium and 2,913 shares in the
name of Goose Pond Ag. Inc. Mr. Silveira provides farm management services for
each of these entities. Mr. Silveira disclaims beneficial ownership of these
shares. Also includes 2,828 shares owned by Mr. Silveira directly.(8)
    
    Pursuant to Rule 13d-3(d)(1) of the Exchange Act, includes 15,791 shares
subject to stock options exercisable in the next 60 days.(9)
    
    We obtained this ownership information for Prides Capital Partners, L.L.C. et
al. (Prides) from a Schedule 13D/A filed with the SEC by Prides and certain
individuals who are partners in Prides, reporting ownership as of July 24,
2006. Prides and its partners share voting and dispositive power as to
1,242,704 shares. The address of Prides is 200 High Street, Suite 700, Boston,
Massachusetts 02110.(10)
    
    We obtained this ownership information for Massachusetts Financial Services
Company (MFS) from a Schedule 13G filed with the SEC reporting ownership as
of December 31, 2005. MFS has sole voting power over 864,722 shares and has
sole dispositive power over 885,532 shares. The address of MFS is 500 Boylston
Street, Boston, Massachusetts, 02116. 15




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Item 13. Certain Relationships and Related Transactions
   
 
 Grower Payments
  Fiscal
    
    GrowerName
    
    Year
    
    PaymentsJohn J. Gilbert(1)
    
    
    2007
    
    
    $
    1,042,4312006
    
    
    $
    1,545,658Robert M. Lea
    
    
    2007
    
    
    $
    332,4732006
    
    
    $
    405,585
 
 (1)
    
    Represents amounts paid to Rio Oso
Groves, Inc., of which Mr. Gilbert is
an owner and executive officer, and
to Gilbert Orchards, a corporation of
which Mr. Gilbert is an owner and
executive officer. Indemnification of Directors and Executive Officers and Limitation of Liability
  
    
    for any breach of the directors duty of loyalty to our company or our stockholders;
    
    for acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law;
    
    under section 174 of the Delaware General Corporation Law regarding unlawful dividends
and stock purchases; or
    
    for any transaction from which the director derived an improper personal benefit.
  
    
    must indemnify its directors and executive officers to the fullest extent permitted by
Delaware law, subject to limited exceptions;
    
    may indemnify our other employees and agents to the same extent that we indemnified our
directors and executive officers, unless otherwise required by law, our certificate of
incorporation, bylaws or
 16




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##### 



agreements; and
    
    must advance expenses, as incurred, to our directors and executive officers in
connection with a legal proceeding to the fullest extent permitted by Delaware law, subject
to limited exceptions.
  
 Item 14. Principal Accounting Fees and Services
  For the Year Ended July 31,Nature of Services
    
    2006
    
    
    2005(In thousands)Audit Fees
    
    $
    1,197
    
    
    $
    655Audit-Related Fees
    
    
    
    
    
    
    Tax Fees
    
    
    12
    
    
    
    12All Other Fees
    
    
    
    
    
    
    Total Fees
    
    $
    1,209
    
    
    $
    667
 Audit Fees.
 Audit-Related Fees. Audit-Related Fees
 Tax Fees.
 All Other Fees. Other Fees
 Audit Committee Pre-Approval Policies and Procedures
  17




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SIGNATURES
  DIAMOND FOODS, INC.By:
    
    /s/ Seth HalioSeth HalioChief Financial Officer
 18




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##### 



EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit Description31.03
    
    Certification of Chief Executive Officer pursuant to Exchange
Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.04
    
    Certification of Chief Financial Officer pursuant to Exchange
Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
 19