HARRY & DAVID HOLDINGS, INC. 2500 SOUTH PACIFIC HIGHWAY PO BOX 2500 MEDFORD, OREGON 97501 ###-###-#### harryanddavid.com

The starting date of your employment will be, by mutual agreement, in late July or early August 2009.

Annualized base salary will be $390,000, which is $16,250 per bi-monthly pay period (less applicable withholding). Future pay actions are contingent upon individual performance, external market competitiveness, and internal equity.

You are also eligible to receive a sign-on bonus totaling $115,000. The first portion of the sign-on bonus in the amount of $50,000 (gross) will be payable August 2009. This bonus is contingent upon your continued employment for a minimum of twelve months from your date of hire. If you chose to resign your position within your first twelve months of employment, the full sign-on bonus, net of taxes, would be payable to the Company. The second portion of the sign-on bonus in the amount of $65,000 (gross) is contingent upon the purchase of a house or condominium in the Rogue Valley within 12 months of your date of employment.

You are eligible for a Management Bonus commencing with Fiscal Year 2010, which begins June 28, 2009. The bonus award opportunity ranges from 0 percent to 100 percent of annual base salary, with a target of 50 percent. Awards are based on adjusted EBITDA of Harry & David and upon an assessment of your individual performance. Bonus awards are typically paid out in August following the completion of the fiscal year.

You will be eligible for Long Term Incentive compensation targeted at a FY13 value of $1,200,000 based on Harry & David’s Fiscal Year plans for the period June 28, 2009, through the end of June 2013. Your stock option grant will be for 8,000 shares at a strike price of $150 per share. The option shall not be exercisable as of the date of the grant. The option shall become exercisable in respect of 33.3% of the option shares on June 17, 2010 and June 17, 2011 with the remainder vesting June 17, 2012. In the event of a change of control as defined in the Harry & David Holdings, Inc. Non-Qualified Stock Option Agreement, any unvested options would fully vest.

In the absence of a formal employment agreement and in the event that your employment with Harry & David were to be involuntarily terminated for reasons other than cause, you will receive (conditioned on your signing a complete release) a payment equivalent to twelve months current base salary.

You will be eligible to participate in the Harry and David Flexible Benefits Plan on the first of the month following 90 days of employment. The Flexible Benefits Plan includes the following coverage, with respect to which you may choose your level of participation:

Medical and Dental Insurance

Life Insurance Options

Disability Insurance

Personal Accident Insurance

Dependent Life Insurance

Before-tax Health Care and Dependent Care Accounts

As part of this agreement, Harry & David will reimburse you for COBRA premiums above current cost of coverage you may pay above employee rates for benefit continuation through your current employer prior to eligibility for Harry and David’s Flexible Benefits Plan.

You will be eligible for four weeks of Paid Time Off (PTO) annually. The Company also currently provides 11 paid holidays each year.

You will have the opportunity to participate in our 401(k) Plan after completion of 1,000 working hours. You are allowed to contribute up to 95 percent of your compensation to the Plan subject to a dollar limit imposed under the tax laws (which is $22,000 including $5,500 catch-up contribution for 2009).

Relocation assistance will be provided as follows to support your move:

Mileage at the Harry & David standard reimbursement rate for driving your personal vehicle from the San Francisco Bay area to the Rogue Valley.

If required, nominal costs associated with transportation of household goods to the Rogue Valley.

Temporary housing in Harry & David corporate housing for up to 90 days following your employment date. Any extension of temporary housing benefits requires approval and may be taxable.

/s/ Edward F. Dunlap