Culinary. We sell culinary nuts under the Diamond of California brand in grocery store center aisle and produce aisles and through mass merchandisers and club stores. Culinary nuts are marketed to individuals who prepare meals or baked goods at home and who value fresh, high-quality products

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.

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.

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.

        a.

        b.

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.

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.

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)