Document:

exv10w01

 

Exhibit 10.01

Steven Neil

26343 Esperanza Drive

Los Altos Hills, CA 94022

Dear Steve:

We are pleased to offer you the position of Executive Vice President, Chief Financial and
Administrative Officer with Diamond Foods, Inc. (“Diamond” or the “Company”). In this position you
will report to Michael Mendes, CEO/President. The terms and conditions of our offer are as
follows:

Start Date: We anticipate that your start date will be March 1, 2008.

Compensation:

Annual Base Salary:

$400,000.00 annualized base salary (Exempt), payable in accordance with standard Company
payroll practices.

Bonus Incentive Program:

You will participate in the Annual Incentive Plan, which is designed to reward outstanding
performance. Your position is eligible for a maximum 70% bonus potential depending on your
performance against your individual goals, which in turn support the overall corporate
goals. For fiscal 2008, you will be guaranteed the maximum bonus amount of 70% of your
annual base salary, prorated for the portion of fiscal 2008 during which you were employed
with Diamond.

Signing Bonus:

Diamond will pay you a signing bonus of $25,000, payable on commencement of your employment
with Diamond. In addition, Diamond will pay you an additional $25,000 bonus on the
six-month anniversary of your first date of employment with Diamond.

Equity Awards: At the next meeting of the Board of Directors, I will recommend that
you be granted an option to purchase 45,000 shares of common stock and 45,000 shares of
restricted stock. If these grants are approved, 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.

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 2008.

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.

Exec-u-Care: You will be eligible to participate in the Company’s Exec-u-Care
program, which provides for additional health and medical reimbursements which are not
otherwise covered by our Group Medical program.

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 4 yrs.

	 	4.615 hrs/pay period = 3 weeks/year
	5 years — 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.

Company Automobile: 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.

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) induce or attempt to induce, any customer or
supplier of the Company to cease doing business with the Company.

Steve, 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. It is our practice to make this offer contingent upon a successful
post-offer drug screen, background and reference check. We are looking forward to having the
opportunity of developing a meaningful business relationship. 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 Mendes
 	 	 
	Michael Mendes 	 	 
	CEO/President 	 	 

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. It is also understood that this is a contingent offer,
contingent on a successful drug screen and background check. 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/ Steve Neil
 	 	 
	 	Steven Neil 	 	 

cc: Personnel Fileexv10w02

 

Exhibit 10.02

SEPARATION AGREEMENT AND RELEASE OF CLAIMS

          SETH HALIO (“Employee”) and Diamond Foods, Inc. (“Employer”) agree as follows:

          1. Employer and Employee have agreed that Employee will leave employment and all other
positions he occupied with or on behalf of Employer effective February 12, 2008 (“Termination
Date”) to pursue other interests.

          2. Employee, for himself and his heirs, attorneys, agents, spouse, and assigns, agrees to
waive, release and forever discharge fully any claims Employee has or may have in law or equity as
of the date of this Agreement, whether now known or later discovered, against Employer, or its
current, future, or former directors, officers, shareholders, attorneys, employees, agents,
members, trustees, representatives, benefit plans, plan administrators, predecessors, successors,
affiliates or assigns, arising out of or concerning in any way Employee’s employment by or
separation from Employer, including but not limited to any claim based on any alleged contract or
tort, arising out of or concerning Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et
seq., the Americans With Disabilities Act, the Rehabilitation Act of 1973, the California Labor
Code, the California Fair Employment and Housing Act, the California Family Rights Act, the
Sarbanes-Oxley Act, or any similar state or local law, or any claims for wages, bonuses, vacation
pay, PTO pay, severance pay, sick pay, attorneys’ fees, penalties or interest, any other
compensation or benefits, back pay, front pay, or emotional distress damages. Nothing contained in
this Section 2 will constitute a waiver of any claims that may arise from any breach of this
Agreement.

          3. Employer has advised Employee by this Agreement to consult an attorney prior to signing the
Agreement because Employee may have, by virtue of Employee’s age, rights or claims arising on or
prior to signing this Agreement under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et
seq. Employee understands and agrees that these rights or claims will be barred by signing this
Agreement.

          4. This Agreement will remain open for Employee’s consideration and signature for twenty-one
(21) days from presentation to Employee, unless rejected or rescinded by either party earlier.
Employee may sign this Agreement sooner if Employee chooses to do so voluntarily. Subject to this
Section 4, if this offer is not accepted on or before 21 days from presentation, it is null and
void. After Employee signs this Agreement, Employee will have seven (7) days to rescind the
Agreement in writing. This Agreement will not become effective until the expiration of this seven
(7) day period.

          5. In exchange for this Agreement, Employer will provide Employee the following benefits
commencing on the eighth (8th) day after execution by Employee and Employer, provided that it has
not been revoked earlier pursuant to paragraph 4 above (the “Effective Date”) and that Employee
complies with this Agreement in all respects:

     (a) an amount equal to six (6) months of the Employee’s salary as of the Termination
Date, less legally required and authorized deductions, such amount to be

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paid in the Employer’s regular payroll cycle commencing on the first pay day occurring
on or after the Effective Date and remitted by direct deposit to Employee’s bank account on
record with Employer as of the Termination Date for payment of base salary;

     (b) Employer will pay the entire cost of continuation of medical insurance coverage for
Employee and his dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”) until the earlier of: nine (9) months from the Termination Date or the
date Employee obtains such coverage through another employer. After this period, Employee
shall have the option to continue these benefits at his own expense to the extent permitted
by law;

     (c) 21,000 shares of unvested restricted common stock that are currently scheduled to
vest on July 20, 2008 will vest and be immediately exercisable on March 14, 2008;

     (d) 15,834 shares of common stock subject to options that are currently scheduled to
vest on July 20, 2008 shall vest and be immediately exercisable on the Effective Date;

     (e) Employer will transfer title for the Employee’s current company-provided vehicle to
Employee at no cost to Employee. Employee shall be solely responsible for any and all costs
of insuring and registering such vehicle upon transfer of title, and any taxes owed on such
vehicle as a result of such transfer;

     (f) Employer will reimburse Employee for up to $10,000 in outplacement services
selected by Employee and used before December 31, 2008, provided that Employee provides
receipts to Employer for such services within 90 days of the date of such receipts;

     (g) Employer will maintain existing financial planning and tax preparation services
provided by Ayco for Employee until April 15, 2008;

     (h) Employer acknowledges that Employee is covered by the Company’s Exec-u-Care program
for medical expenses incurred on or prior to the Termination Date; and

     (i) Employer will reimburse Employee for all appropriate business expenses incurred
prior to the Termination Date by Employee in the ordinary course of business.

Except as provided above, Employee will not accrue any additional benefits after the Termination
Date. Employee agrees to pay any taxes owed on any benefits provided pursuant to this Agreement.
Employee understands and agrees that no other stock options or restricted stock grants provided to
him will vest after the Termination Date, unless specifically provided in this Agreement.

          6. Employee agrees that this Agreement is a full and final general release of all claims,
including, but not limited to unknown, unanticipated and undisclosed losses, wrongs, injuries,
claims and special, general or compensatory damages that arise wholly or in part from

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any act or omission occurring before this Agreement becomes effective. Therefore, Employee
agrees that this Agreement waives and releases any claims which would otherwise be preserved by
operation of section 1542 of the California Civil Code, which provides:

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

          7. Employee warrants that he has not made any assignment, transfer, conveyance or alienation
of any potential claim, cause of action, or any right of any kind whatsoever, including but not
limited to, potential claims and remedies for discrimination, harassment, retaliation, or wrongful
termination, and that no other person or entity of any kind has had, or now has, any financial or
other interest in any of the demands, obligations, causes of action, debts, liabilities, rights,
contracts, damages, costs, expenses, losses or claims which could have been asserted by the
Employee against Employer.

          8. Employee agrees that he remains bound by the terms of all prior written agreements
regarding the protection of confidential and proprietary information and continuing obligations.
Nowithstanding the foregoing, the noncompetition provision set forth in Employee’s offer letter
dated October 11, 2004 is waived by Employer. Such agreements remain in full force and effect, and
are incorporated into this Agreement. Employee represents and agrees that all tangible
confidential and proprietary information has been returned to the Employer. Confidential and
proprietary information includes, but is not limited to, all information protected under the
Uniform Trade Secrets Act; processes, trade secrets, computer programs, electronic codes,
inventions, improvements, and research projects; information about costs, profits, markets, and/or
sales; lists of customers or clients; business, marketing, and/or strategic plans; and confidential
information regarding employees. Employer acknowledges that as of the next opening of the trading
window established by Employer’s Insider Trading Compliance program, Employee shall not be subject
to the pre-clearance procedures established by such program.

          9. Except as expressly provided in paragraph 5 above, Employee represents and agrees that he
has returned all Employer-provided tangible property to Employer, including but not limited to cell
phones, personal digital assistants, pagers, and computer equipment.

          10. Employee represents and agrees that effective as of the Effective Date, after receiving
his final wages including accrued PTO and refund of all outstanding ESPP contributions, he will
have been paid all wages owed to him on the Termination Date, that the benefits provided in this
Agreement are in excess of any amounts owed to him, and that good and sufficient consideration has
been provided for this Agreement. Employee further agrees that he has waived any right to recovery
in any action that could have been alleged by Employee, and any action alleged by any other entity
on his behalf, and that he will not recover upon, or otherwise enforce or accept monies from any
judgment, decision or award upon any claim released by him in this Agreement.

          11. Employee shall not make any disparaging remarks about Employer, or its officers, agents,
employees, practices or products. Employer’s executive officers shall not make

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disparaging remarks about Employee. Notwithstanding the foregoing, it shall not be a
violation of this non-disparagement provision for either party to provide information in good faith
if compelled by law or legal process, such as subpoena, or in response to a request by governmental
or regulatory agency.

          12. The parties acknowledge that this Agreement is a settlement of disputed potential claims
and is not an admission of liability or of the accuracy of any alleged fact or claim. Employer
expressly denies any violation of any federal, state, or local statute, ordinance, rule,
regulation, order, common law or other law in connection with Employee’s employment and his
separation. The parties expressly agree that this Agreement shall not be construed as an admission
by any of the parties of any violation, liability or wrongdoing, and shall not be admissible in any
proceeding as evidence of or an admission by any party of any violation or wrongdoing.

          13. Employee expressly agrees to keep the fact and terms of this Agreement confidential, and
not to publicize, discuss, or disclose this Agreement or any of its terms to anyone except his
immediate family, governmental taxing authorities, tax preparers and retained attorneys and
accountants, unless otherwise required by law.

          14. Employer also agrees that Employee will be provided any and all indemnity available to him
pursuant to applicable insurance policies and law, including without limitation, California Labor
Code Section 2802, and that nothing in paragraph 2 of this Agreement diminishes the right of
Employee to enforce this paragraph concerning any cooperation provided or claim alleged after the
date of this Agreement.

          15. Employee and Employer agree that, except as otherwise set forth in this Agreement, this
Agreement fully replaces any other agreements they have had, is the exclusive agreement covering
Employee’s separation from employment, and that this Agreement may not be changed except in writing
signed by both parties.

          16. The parties agree that this Agreement may be executed in counterparts and as executed
shall constitute one Agreement, binding on all parties. The parties further agree that execution
of this Agreement may be accomplished by receipt of facsimile signatures of the parties. This
Agreement shall be of no force or effect until executed by all the signatories.

          17. Should any provision of this Agreement be declared or be determined by a court of
competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and the illegal or invalid part, term, or provision shall
be deemed not to be a part of this Agreement.

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THIS AGREEMENT CONTAINS A RELEASE.

PLEASE READ CAREFULLY BEFORE SIGNING.

	 	 	 	 	 	 	 	 	 
	SETH HALIO	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	/s/ Seth Halio

 

	 	 
	 	2/8/08

 

Date
	 	 
	 
	 	 	 	 	 	 	 	 
	DIAMOND FOODS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen Kim

 

Its: VP, General Counsel
	 	 	 	2/8/08

 

Date	 	 

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