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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

DIAMOND FOODS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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November 25, 2014

To our stockholders:

You are cordially invited to attend the Diamond Foods, Inc. 2015 annual meeting of stockholders (“Annual Meeting”) to be held at the Le Meridien hotel, 333 Battery Street, San Francisco, CA 94111 on Tuesday, January 13, 2015 at 8:30 a.m., Pacific Time.

The matters to be acted upon at the Annual Meeting are described in detail in the accompanying notice of the Annual Meeting and the proxy statement. The Annual Meeting materials include the notice, proxy statement, our annual report and proxy card, all of which are enclosed.

Please use this opportunity to contribute to our company by voting on the matters to come before this Annual Meeting. Stockholders who hold shares in their own name through our transfer agent, Computershare, or who hold physical stock certificates can cast their vote online or by telephone. To vote online or by telephone, follow the instructions for online voting contained within your Annual Meeting materials. If you do not wish to vote online or by telephone, please complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid envelope so that your shares will be represented at the Annual Meeting. Voting online, by telephone or by returning the proxy card does not deprive you of your right to attend the Annual Meeting and to vote your shares in person. If you do attend the Annual Meeting and wish to vote your shares personally, you may revoke your proxy at or prior to the Annual Meeting.

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Diamond Foods, Inc.

600 Montgomery Street, 13th Floor

San Francisco, California 94111

NOTICE OF 2015 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on January 13, 2015

This notice of annual meeting, proxy statement and form of proxy are being distributed and made available on or about December 2, 2014.

Important Notice Regarding the Availability of Proxy materials for the Stockholder Meeting to Be Held on January 13, 2015: Our proxy statement and annual report on Form 10-K are available at www.diamondfoods.com.

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Diamond Foods, Inc.

600 Montgomery Street, 13th Floor

San Francisco, California 94111

PROXY STATEMENT

November 21, 2014

Information about the Annual Meeting

The accompanying proxy is solicited on behalf of the Board of Directors (“Board”) of Diamond Foods, Inc., a Delaware corporation (“Diamond Foods”, “Diamond” or “Company”), for use at the 2015 annual meeting of stockholders (“Annual Meeting”). The Annual Meeting will be held at the Le Meridien hotel, 333 Battery Street, San Francisco, CA 94111 on Tuesday, January 13, 2015 at 8:30 a.m., Pacific Time. This proxy statement and the accompanying form of proxy card will be first mailed to stockholders on or about December 2, 2014. Our Annual Report to Stockholders is enclosed with this proxy statement.

Record Date; Quorum

Only holders of record of “Diamond” common stock as of the close of business on November 21, 2014, the record date, will be entitled to vote at the Annual Meeting. At the close of business on the record date, we had 31,416,024 shares of common stock outstanding and entitled to vote. A majority of the shares outstanding on the record date, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting.

Purpose of the Annual Meeting

You are receiving this proxy statement because the Board is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to provide to you under the rules of the U.S. Securities and Exchange Commission (“SEC”) and is designed to assist you in voting your shares. You will be voting on the following matters at the Annual Meeting:

Recommendation of the Board

Our Board recommends that you vote:

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Effect of Abstentions and Broker Discretionary Voting

Shares held by a stockholder who indicates on the proxy card that he or she wishes to abstain from voting on a proposal will not be taken into account in determining the outcome of that proposal. However, those shares are considered present and entitled to vote at the Annual Meeting and will count toward determining whether or not a quorum is present. On routine matters, such as the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm, brokers are entitled to vote shares held for beneficial holders without voting instructions from the beneficial holders of those shares. On the other hand, brokers may not be entitled to vote shares held for beneficial holders on non-routine items, such as the election of directors, absent voting instructions from the beneficial holders of such shares. Consequently, if you do not submit any voting instructions to your broker, your shares will not be voted in connection with the election of directors, the Say-on-Pay vote or the 2015 Equity Incentive Plan and will not be counted in determining the number of shares necessary for approval of these matters, although they will count for purposes of determining whether a quorum is present.

Voting Rights; Required Vote

Voting of Proxies

Most stockholders have the option of submitting their votes by Internet, telephone or mail. If you have Internet access, you may submit your proxy by following the “Vote by Internet” instructions on the proxy card. If you live in the United States or Canada, you may submit your proxy by following the “Vote by Telephone” instructions on the proxy card. If you complete and properly sign the proxy card you receive and return it to us in the prepaid envelope, your shares will be voted in accordance with the specifications made on the proxy card. If no specification is made on a signed and returned proxy card, the shares represented by the proxy will be voted:

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Stockholders who attend the Annual Meeting may vote in person, and any previously submitted votes will be superseded by the vote cast at the Annual Meeting.

Adjournment of Annual Meeting

If the persons present or represented by proxy at the Annual Meeting constitute the holders of less than a majority of the outstanding shares of common stock as of the record date, the meeting may be adjourned to a subsequent date for the purpose of obtaining a quorum.

Expenses of Soliciting Proxies

We will pay the expenses of assembling proxy materials and soliciting proxies for the Annual Meeting. After the original mailing of the proxy cards and other proxy materials, our directors, officers and employee also may solicit proxies by mail, telephone, facsimile or email, without receiving any additional compensation for such solicitation activities. After the original mailing of the proxy cards and other soliciting materials, we will request that brokers, banks, custodians, nominees and other record holders of our common stock forward copies of the proxy cards and other proxy materials to persons for whom they hold shares and request authority for the exercise of proxies. We will reimburse the record holders for their reasonable expenses if they ask us to do so. We have also retained the services of Georgeson Inc. in connection with soliciting proxies for the Annual Meeting for a fee of approximately $15,000, plus appropriate out-of-pocket expenses.

Additional Copy of the Proxy Materials

We will deliver a single copy of the proxy materials to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. Each stockholder will continue to be able to access and receive separate proxy cards. Upon written request, we will deliver promptly a separate copy of the proxy materials to any stockholder at a shared address to which we delivered a single copy of the proxy materials. To receive a separate copy of the proxy materials or an additional copy of the annual report on Form 10-K, stockholders may write or call us at the following address and phone number:

Investor Relations

Diamond Foods, Inc.

600 Montgomery Street, 13^th Floor

San Francisco, CA 94111

Telephone: (415) 230-7952

Stockholders who hold shares through a broker, bank, trustee or nominee may contact their brokerage firm, bank, broker-dealer, or other similar organization to request additional copy of the proxy materials.

Revocability of Proxies

Any person signing a proxy card in the form accompanying this proxy statement has the power to revoke it at any time before it is voted. Registered holders may revoke a proxy by signing and returning a proxy card with a later date, by delivering a written notice of revocation to Computershare, our transfer agent, by mail at P.O. Box 30170, College Station, TX 77842-3170 or via overnight correspondence to Computershare at 211 Quality Circle, Suite 210 College Station, TX 77845, that the proxy is revoked or by attending the Annual Meeting and voting in person. The mere presence at the Annual Meeting of a stockholder who has previously

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appointed a proxy will not revoke the appointment. Please note, however, that if a stockholder’s shares are held of record by a broker, bank, trustee or other nominee and that stockholder wishes to vote at the Annual Meeting, the stockholder must bring to the Annual Meeting a letter from the broker, bank, trustee or other nominee confirming the stockholder’s beneficial ownership of the shares and that the broker, bank, trustee or other nominee is not voting the shares at the Annual Meeting. In the event of multiple online or telephone votes by a stockholder, each vote will supersede the previous vote and the last vote cast will be deemed to be the final vote of the stockholder unless such vote is revoked in person at the Annual Meeting.

How to Get Information

Electronic Delivery of Stockholder Communications

We encourage you to help us conserve natural resources, as well as significantly reduce printing and mailing costs, by signing up to receive your stockholder communications electronically via e-mail. With electronic delivery, you will be notified via e-mail as soon as future Annual Reports and proxy statements are available on the Internet, and you can submit your stockholder votes online. Electronic delivery also can eliminate duplicate mailings and reduce the amount of bulky paper documents you maintain in your personal files. To sign up for electronic delivery:

Registered Owner (you hold our common stock in your own name through our transfer agent, Computershare, or you are in possession of stock certificates): visit www.computershare.com/investor to enroll.

Beneficial Owner (your shares are held by a brokerage firm, a bank, a trustee or a nominee): If you hold shares beneficially, please follow the instructions provided to you by your broker, bank, trustee, or nominee.

Your electronic delivery enrollment will be effective until you cancel it. Stockholders who are record owners of shares of our common stock may call Computershare, our transfer agent, at (800)  733-5001 or visit www-us.computershare.com/investor/Contact with questions about electronic delivery.

Corporate Governance at Diamond

We are committed to maintaining high standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders well and maintaining our integrity in the marketplace. We have adopted a code of conduct and ethics for our directors, officers and employees, known as the Diamond Code of Conduct. Our certificate of incorporation, bylaws, committee charters, Corporate Governance Guidelines and Diamond Code of Conduct form our corporate governance framework.

Notably, as part of our ongoing commitment to governance, in October 2014, we:

In July 2014, Dr. Celeste A. Clark joined our Board of Directors, increasing the percentage of our Board that is independent to 70%.

In addition, we have continued to maintain a number of practices that we believe are important aspects of our governance structure, including:

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Our Corporate Governance Guidelines, the Diamond Code of Conduct and the charters governing the responsibilities and duties of each of the Audit Committee, Compensation Committee and Nominating and Governance Committee are available through the investor relations page at our website: www.diamondfoods.com. We will post on this website any updated versions of the Diamond Code of Conduct and, if applicable, any waivers under the Code granted to our Chief Executive Officer, Chief Financial Officer, principal accounting officer (if different), controller or persons performing similar functions.

Composition of Board of Directors

Our Board currently consists of ten directors. The Board is divided into three classes for purposes of election (i.e., Class I, Class II and Class III), with Class I and III each having three members and Class II having four members. At each annual meeting of stockholders, the successors to directors whose terms have expired are elected to serve until the third annual meeting following their election.

Board Independence

We believe that having a Board comprised predominantly of independent directors is critical to the effective governance of Diamond. The Board has determined that each of Mr. Blechschmidt, Ms. Davis, Mr. Hollis, Mr. Rees, Mr. Wilson, Mr. Zollars and Dr. Clark is an “independent director” under applicable NASDAQ rules, a “non-employee director” as defined in Rule 16b-3 under the Securities Exchange Act of 1934 (“Exchange Act”), and an “outside director” as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986 (“IRC”). The non-independent Board members are Mr. Driscoll, our CEO, and two directors, Mr. Lea and Mr. Tos, who are affiliated with growers from whom we purchase walnuts.

Leadership Structure

In February 2012, the Board decided to have an independent director serve as the Chairman of the Board, and at that time, Mr. Zollars was appointed to that role. In deciding to separate the roles and to have an independent director serve as Chairman, the Board considered Diamond’s corporate governance requirements and anticipated time commitments required from the Board distinct from requirements of the CEO. Our Corporate Governance Guidelines adopted in October 2014 provide that the Chairman shall be an independent director. The Board periodically considers the appropriate leadership structure for the Company and may revise our Corporate Governance Guidelines and adjust our leadership structure in the future as circumstance require.

Mr. Driscoll, our Chief Executive Officer, serves on the Board and is a bridge between management and the Board so that both groups act with a common purpose. The CEO’s membership on the Board enhances his ability to provide insight and direction on important strategic initiatives to both management and the non-employee directors. We believe Mr. Driscoll, our CEO, and Mr. Zollars have an excellent working relationship.

Risk Oversight

Our Board has responsibility, directly and through its committees, for the oversight of risk management, and our officers are responsible for the day-to-day management of the material risks we face. In its oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by

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management are adequate and functioning as designed. The involvement of the Board in setting our annual operating plan and reviewing the key assumptions and strategies proposed by management is a key part of its oversight of risk management, as is its assessment of management’s appetite for risk and its determination of what constitutes an appropriate level of risk for Diamond. The Board regularly receives updates from management and outside advisors regarding certain risks we face, including litigation and various operating risks.

In addition, our Board committees each oversee certain aspects of risk management. For example, our Audit Committee is responsible for overseeing risk management of financial matters, financial reporting, the adequacy of our risk-related internal controls, and internal investigations; our Compensation Committee oversees risks related to compensation policies and practices as well as management succession planning; and our Nominating and Governance Committee oversees governance related risks, such as Board independence, adherence to governance policies and requirements and conflicts of interest.

Senior management attends Board and Board committee meetings at the invitation of the Board or its committees and is available to address any questions or concerns raised by the Board on risk management-related and any other matters. The Board holds strategic planning sessions with senior management periodically to discuss strategies, key challenges, and risks and opportunities for the Company.

Consideration of Director Nominees

Director Qualifications. The goal of the Nominating and Governance Committee is to ensure that the members of our Board have a variety of perspectives and skills derived from high-quality business and professional experience. The Nominating and Governance Committee seeks to achieve a balance of knowledge, experience and capability on our Board. To this end, the committee seeks nominees with high professional and personal integrity, an understanding of our business lines and industry, diversity of background and perspective, broad-based business acumen and the ability to think strategically. In addition, the committee considers the level of the candidate’s commitment to active participation as a director, both at Board and committee meetings and otherwise. Although the committee uses these and other criteria to evaluate potential nominees, we have not established a formal diversity policy or any particular minimum criteria for nominees. When appropriate, the committee may retain executive recruitment firms to assist in identifying suitable candidates. Additionally, the Nominating and Governance Committee will consider stockholder recommendations for director candidates. To recommend a prospective nominee for the Nominating and Governance Committee’s consideration, submit the candidate’s name and qualifications to the Company’s Secretary in writing to the following address: Diamond Foods, Inc., Attn: Secretary, 600 Montgomery Street, 13th Floor, San Francisco, California 94111. After its evaluation of potential nominees, the committee submits nominees to the Board for approval. The committee does not use different standards to evaluate nominees depending on whether they are recommended by our directors and management or by our stockholders.

Stockholder Nominees.

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Oaktree Designee. Oaktree Capital Management, L.P. (“Oaktree”) has the right to nominate one member to the Board (“Oaktree Designee”) who qualifies as an independent director under applicable NASDAQ rules. No Oaktree Designee may serve as a director or executive officer of a direct competitor of Diamond. Mr. Wilson is currently the Oaktree Designee.

Oaktree’s right to appoint an Oaktree Designee terminates upon the first to occur of: (i) such time as Oaktree or its affiliates, collectively, do not own at least 10% of Diamond’s outstanding common stock, (ii) Diamond sells all or substantially all of its assets, (iii) Diamond participates in any merger, consolidation or similar transaction following the consummation of which, the stockholders of Diamond immediately prior to the consummation of such transaction hold less than 50% of all of the outstanding common stock or other securities entitled to vote for the election of directors of the surviving or resulting entity in such transaction or (iv) Oaktree irrevocably waives and terminates all of their Board designation rights.

Communication with the Board

You may contact the Board by sending a letter addressed to:

Board of Directors

c/o Corporate Secretary

Diamond Foods, Inc.

600 Montgomery Street, 13^th Floor,

San Francisco, California 94111

An employee will forward these letters directly to the Board, except for spam, junk mail, mass mailings, product complaints or inquiries, job inquiries, surveys, business solicitations or advertisements, or patently offensive or otherwise inappropriate material. We may forward correspondence, such as product-related inquiries, elsewhere within Diamond for review and possible response. We reserve the right not to forward to the Board any abusive, threatening or otherwise inappropriate materials.

Board of Directors

Our Board of Directors has ten members, divided into three classes for purposes of election (i.e., Class I, Class II and Class III). We ask that our stockholders approve Proposal 1 and elect Alison Davis, Brian J. Driscoll and Nigel A. Rees as Class I members of the Board. Each of these nominees has confirmed that she or he is willing to serve on the Board if elected. Each of the nominees for election as a Class I director is currently a director of the Company. Ms. Davis and Mr. Rees have been members of the Board since their appointment in March 2012; Mr. Driscoll has been a member since his appointment in May 2012. The nominees were evaluated and recommended by the Nominating and Governance Committee in accordance with the process for nominating directors as found below in “Corporate Governance Matters—Board of Directors Meetings and Committees.”

If elected as Class I directors, Ms. Davis, Mr. Driscoll and Mr. Rees will hold office until the annual meeting in 2018 or until their earlier death, resignation or retirement. If a nominee is unavailable for election, proxy holders will vote for another nominee proposed by the board or, as an alternative, the board may reduce the number of directors to be elected at the meeting. Proxies cannot be voted for a greater number of persons than the number of nominees named. If any nominee for any reason is unable to serve or for good cause will not serve, the proxies may be voted for a substitute nominee selected by the proxy holder.

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The election of directors at the Annual Meeting is an uncontested election. Therefore, for Proposal 1, election of Alison Davis, Brian J. Driscoll and Nigel A. Rees as Class I members of the Board, a nominee will be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Abstentions and broker non-votes will have no effect.

Additionally, since the election of directors at the Annual Meeting is an uncontested election, each of Ms. Davis, Mr. Driscoll and Mr. Rees has submitted an irrevocable resignation from our Board of Directors as set forth under our Corporate Governance Guidelines. Each such resignation will be effective only if such incumbent director is not re-elected at the Annual Meeting, in which event it will be effective upon the earlier of (i) the date 90 days after the certification of the Annual Meeting vote and (ii) the date on which such director’s seat on the Board has been filled by the Board of Directors, in accordance with our Corporate Governance Guidelines.

If an incumbent director fails to receive the required vote for re-election at the Annual Meeting, the Nominating and Governance Committee will determine whether to appoint a new director, re-appoint the incumbent director or allow the seat to remain vacant and will submit such recommendation for prompt consideration by our Board of Directors. Within 90 days following the certification of the Annual Meeting Vote, our Board of Directors will publicly disclose its decision in a Form 8-K furnished to the Securities and Exchange Commission.

Class I Director Nominees 

Alison Davis is the Managing Partner of Fifth Era, which invests in and incubates early stage companies. She is the former Managing Partner of Belvedere Capital, a private equity firm and regulated bank holding company focused on investments in the financial services sector, where she worked from 2004 to December 2010. From 2000 to 2003, Ms. Davis was the Chief Financial Officer and a member of the Global Management Committee of Barclays Global Investors, an institutional asset manager with $1.5 trillion of assets under management. From 1984 to 2000, Ms. Davis worked as a strategy consultant and advisor to Fortune 500 CEOs, boards and executive teams with A.T. Kearney and McKinsey & Company. Ms. Davis has extensive experience serving on the boards of directors of public companies and currently serves on the boards of the Royal Bank of Scotland, Unisys and Fiserv, Inc. She also served on the board of City National Bank from June 2010 to July 2011 and the board of Xoom Corporation from March 2010 to November 2014. Ms. Davis received a B.A. degree and M.A. degree in Economics from Cambridge University and an M.B.A. from the Stanford Graduate School of Business. With her experience in global financial services and her roles as a senior executive and as a consultant, Ms. Davis brings valuable expertise in corporate strategy, governance and financial management to our Board and to the Audit and Compensation Committees.

Brian J. Driscoll has served as President and Chief Executive Officer of Diamond and as a member of our Board since May 2012. Prior to joining Diamond, Mr. Driscoll was Chief Executive Officer of Hostess Brands from June 2010 to March 2012, which filed for Chapter 11 bankruptcy protection in January 2012. From 2002 to June 2010, he held senior management positions at Kraft Foods, Inc., including as President, Sales, Customer Service and Logistics, Kraft North America from 2007 to June 2010. Mr. Driscoll joined Kraft Foods, Inc. as a result of Kraft’s acquisition of Nabisco Biscuits and Snacks, where he worked from 1995 to 2002, first as President of Sales and Integrated Logistics and later as the Senior Vice President, Biscuit Sales and Customer Service. Earlier in his career, Mr. Driscoll held sales and sales management positions of increasing responsibility at Nestlé USA and Procter & Gamble Company. Mr. Driscoll holds a B.S. degree from St. John’s University. Mr. Driscoll brings to the Board extensive experience is the food and consumer packaged goods industries as well as a background in general management, sales and logistics.

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Nigel A. Rees joined McKesson Corporation, a healthcare services and technology company, in 2001 and he serves as its Vice President and Controller. Prior to joining McKesson Corporation, Mr. Rees was Senior Vice President of Finance from 1998 to 2001 for Adecco, SA, a global staffing and professional services company. From 1995 to 1998, he served as Director of Internal Audit for Tandem Computers, Inc., from 1993 to 1994, he served as the Chief Financial Officer for International Microcomputer Software, Inc., and from 1991 to 1993, he served as Vice President of Finance and Administration for Challenge Dairy Products, Inc. Mr. Rees is a C.P.A. and began his career in public accounting with Deloitte & Touche LLP. He holds an M.B.A. from the University of Washington and a B.A. from Whitman College. Mr. Rees brings to Diamond deep expertise in financial reporting, accounting and compliance.

Class II Directors (term to expire in 2016)

Robert M. Lea served as a member of the board of directors of our predecessor company, Diamond Walnut Growers, from 1993 to 2005. Mr. Lea has practiced law as a solo practitioner with the Law Offices of Robert Lea, since 2004. From 1984 to 2003, Mr. Lea was a partner of the law firm Lea & Arruti. Mr. Lea holds a B.A. from the University of California, Davis and a J.D. from the University of California, Berkeley, School of Law (Boalt Hall). Mr. Lea brings to Diamond extensive legal experience handling complex civil cases, business experience generally, a long-term perspective on Diamond as a result of his service on the board of directors of Diamond Walnut Growers, and his insights on the walnut industry, tree-nut commodity markets and general economic conditions affecting Diamond.

Matthew C. Wilson has been a Managing Director with Oaktree Capital Management, L.P., an investment management firm, since November 2007 and leads the firm’s principal investments in the consumer products, food and beverage and retail sectors. Mr. Wilson worked at H.I.G. Capital, LLC from 2003 to 2007, where Mr. Wilson was a founding member of Bayside Capital, Inc., a fund focused on special situations and credit oriented investments. From 1999 to 2001 he worked at J.H. Whitney & Co in their middle market buyout group. Mr. Wilson began his career in the Investment Banking division of Merrill Lynch & Co., where he worked from 1997 to 1999. He currently serves as Chairman of Agro Merchants Group, LLC and on the boards of Billabong International Ltd., The Bridge Direct, Inc., Glam Squad, Inc., and AdvancePierre Foods, for which he chairs the Compensation Committee and serves on the Audit Committee. He is also the Chairman of the Board of Trustees of The Children’s Bureau of Los Angeles. Mr. Wilson earned a B.A. degrees in Economics and History from the University of Virginia and an M.B.A. from the Harvard Business School. Mr. Wilson is the Board designee for Oaktree Capital Management, which has the right to designate one member to the Board in connection with its investment in Diamond. Mr. Wilson brings to Diamond transactional and finance expertise as well as investment experience in consumer packaged goods companies.

William L. Tos, Jr., is a third-generation Northern California family farmer, co-owner of Tos Farms, Inc. and Tos Land Co. Inc., and a partner with the Tos Farming Company, a farm management company. Tos Farms harvests peaches, plums, nectarines, cherries, table grapes, corn, alfalfa, walnuts and almonds. Mr. Tos presently serves as a member and Chairman of the California Walnut Commission and as an alternate member of the Walnut Marketing Board. From 1991 to 2005 he served as a director of Diamond Walnut Growers, Inc., the co-operative predecessor to Diamond. Mr. Tos received a B.S. degree from California Polytechnic State University. Mr. Tos brings to Diamond deep experience in agribusiness and the walnut industry, and he has a long-term perspective on Diamond as a result of his service on the board of directors of Diamond Walnut Growers.

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Dr. Celeste A. Clark is the principal of Abraham Clark Consulting, LLC and consults on nutrition/health policy, brand reputation, crisis communications, and leadership development. She is also an adjunct professor at Michigan State University in the Department of Food Science and Human Nutrition. Dr. Clark was in senior management positions at Kellogg Company, including Senior Vice President of Global Public Policy and External Affairs from 2010 to 2011, Chief Sustainability Officer from 2008 to 2011, and Senior Vice President, Global Nutrition and Corporate Affairs and President, Kellogg Corporate Citizenship Fund from 2003 forward. Dr. Clark serves on the board of Mead Johnson Nutrition Company and is a trustee of the W.K. Kellogg Foundation. She also serves on several local and state boards including the Auto Club of Michigan. Dr. Clark received a B.S. in Food and Nutrition from Southern University, a M.S. in Nutrition from Iowa State University and completed her Ph.D. in Food Science at Michigan State University. Dr. Clark brings to the Board extensive experience in the food and consumer packaged goods industries as well as an extensive background in food science, regulatory affairs, nutrition, and health policy. She also has experience in board governance, risk management and compliance.

Class III Directors (term to expire in 2017)

Edward A. Blechschmidt is a retired corporate executive. He was Chief Executive Officer of Novelis Corp. from 2006 until its sale to the Birla Group in 2007. Mr. Blechschmidt was Chairman, Chief Executive Officer and President of Gentiva Health Services, Inc., a leading provider of specialty pharmaceutical and home health care services, from 2000 to 2002. From 1999 to 2000, Mr. Blechschmidt served as Chief Executive Officer and a director of Olsten Corporation, the conglomerate from which Gentiva Health Services was split off and taken public. He served as President of Olsten from 1998 to 1999. Mr. Blechschmidt also served as President and Chief Executive Officer of Siemens Nixdorf America and Siemens Pyramid Technologies from 1996 to 1998. Prior to Siemens, he spent more than 20 years with Unisys Corporation, including serving as its Chief Financial Officer. Mr. Blechschmidt serves as a member of the board of directors of Lionbridge Technologies, Inc. and VWR Corporation. In addition, he served on the board of directors of Healthsouth Corp. from 2004 to 2012 and Colombia Labs from 2004 to 2014. He has a B.S. in Business Administration from Arizona State University and is a National Association of Corporate Directors (NACD) Board Leadership Fellow. Mr. Blechschmidt brings to the Board his extensive background in executive management, mergers and acquisitions, and his financial and accounting expertise.

R. Dean Hollis is a retired corporate executive. He was President and Chief Operating Officer of the Consumer Foods and International Division of ConAgra Foods, Inc. and served in that role from 2005 to July 2008. Mr. Hollis had management responsibility for ConAgra’s consumer and customer branded businesses consisting of over 40 global brands in 110 countries. During Mr. Hollis’ 21 years with ConAgra, he had a broad array of responsibilities, including Executive Vice President, Retail Products; President, Frozen Foods; President, Grocery Foods; President, Specialty Foods; and President, Gilardi Foods. Currently, Mr. Hollis is a Senior Advisor for Oaktree Capital Management, L.P. He also serves on the board of directors for AdvancePierre Foods, an Oaktree portfolio company, for which he is Chairman of the board of directors, Landec Corporation, for which he chairs the Compensation Committee and Boulder Brands, Inc., for which he serves as the lead independent director and as a member of the Audit Committee. Mr. Hollis is a graduate of Stetson University where he currently serves on the board of trustees. With over 20 years of experience in the food industry, Mr. Hollis provides the Board with significant expertise in marketing and sales of packaged foods, overall strategy development for food products and in-depth general management expertise for investing in food companies.

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Robert J. Zollars has served as Chairman of Vocera Communications, Inc., a provider of instant wireless communications solutions, since July 2014 and as an Operating Partner of Frazier Healthcare, a provider of growth equity and venture capital to emerging health care companies, since October 2014. From June 2013 to June 2014 he served as Executive Chairman of Vocera. From 2007 until June 2013, he served as Chairman and Chief Executive Officer of Vocera Communications. From 2006 to 2007, Mr. Zollars was President and Chief Executive Officer of Wound Care Solutions, LLC, a holding company that operates chronic wound care centers in partnership with hospitals in the U.S. From 1999 to 2006, Mr. Zollars was Chairman of the Board of Directors and Chief Executive Officer of Neoforma, Inc., a provider of supply chain management solutions for the healthcare industry. From 1997 to 1999, Mr. Zollars served as Executive Vice President and Group President of Cardinal Health, Inc., a healthcare products and services company. Earlier in his career, while employed at Baxter International, a healthcare products and services company, Mr. Zollars served as President of a dietary products joint venture between Baxter International and Kraft General Foods. Mr. Zollars serves as a member of the board of directors of Five9, Inc. and VWR Corporation. Mr. Zollars holds a B.S. from Arizona State University and an M.B.A. from John F. Kennedy University. Mr. Zollars brings to the Board his experience in serving as the chief executive of public companies and running businesses from $100 million to over $5 billion in revenue, and his expertise in general management, corporate strategy, and mergers and acquisitions.

Board of Directors Meetings and Committees

Each member of the Board is expected to attend all regularly scheduled meetings of the Board and of any committees on which the director serves, and our annual meeting of stockholders. Each director is expected to attend all special Board and committee meetings to the extent possible. During fiscal 2014, our Board met 11 times. No director attended fewer than 75% of the aggregate of the number of Board and committee meetings on which the director served during fiscal 2014. All members of the Board attended our January 2014 annual meeting of stockholders, with the exception of Dr. Clark who joined the Board in July 2014.

The Board has three standing committees: Audit Committee, Compensation Committee, and Nominating and Governance Committee. The membership and authority of each committee is described below, and the committee charters are available on our website at www.diamondfoods.com or upon written request to Diamond Foods, Inc., 600 Montgomery Street, 13^th Floor, San Francisco, CA 94111, attention: Investor Relations. Each of these Board committees has the authority and right, at the expense of the Company, to retain legal and other consultants, experts and advisers of its choice to assist the committee in connection with its functions.

Audit Committee

The principal functions of the Audit Committee are:

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The Audit Committee, which met eight times during fiscal 2014, is currently comprised of Ms. Davis, Mr. Hollis and Mr. Rees, with Mr. Rees serving as Chair of the committee. The Board has determined that each of our Audit Committee members qualifies as an “audit committee financial expert” as defined by SEC rules. All of the members of the Audit Committee are independent directors under applicable NASDAQ rules.

Compensation Committee

The principal functions of the Compensation Committee are:

The Compensation Committee, which met six times during fiscal 2014, is currently comprised of Ms. Davis, Mr. Zollars and Mr. Blechschmidt, with Ms. Davis serving as Chair of the committee. All of the members of the Compensation Committee are independent directors under applicable NASDAQ rules.

Risk Assessment. The Compensation Committee considers whether our compensation programs encourage unnecessary or excessive risk taking. Based on the committee’s most recent review in June 2014, we believe that our compensation programs do not encourage unnecessary or excessive risk taking. In particular, the executive compensation program is intended to reflect a balanced approach to compensation and uses both quantitative and qualitative assessments of performance to avoid undue emphasis on any single performance measure or time period of performance.

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Independent Compensation Consultant. The Compensation Committee retained Exequity to advise the committee on marketplace trends in executive compensation, management proposals for compensation programs, and executive officer and director compensation decisions. Exequity also evaluates equity and bonus compensation programs generally. Exequity is directly accountable to the Compensation Committee. To maintain the independence of the firm’s advice, Exequity does not provide any services for Diamond other than those described above. In addition, the Compensation Committee conducted a conflict of interest assessment by using the factors applicable to compensation consultants under SEC rules, and no conflict of interest was identified.

From time to time, Fenwick and West LLP, which currently advises the Company regarding various corporate and other matters, may advise the Compensation Committee. In connection with the engagement of Fenwick and West LLP, the Compensation Committee considered their independence and potential conflicts of interest.

Nominating and Governance Committee

The principal functions of the Nominating and Governance Committee are:

The Nominating and Governance Committee, which met two times during fiscal 2014, is currently comprised of Mr. Hollis, Dr. Clark, Mr. Blechschmidt and Mr. Zollars, with Mr. Blechschmidt serving as Chair of the committee. Dr. Clark joined the Nominating and Governance Committee in July 2014, in conjunction with her appointment to the Board. All of the members of the Nominating and Governance Committee are independent directors under applicable NASDAQ rules.

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Stock Ownership of Principal Stockholders and Management

The following table presents information regarding the beneficial ownership of our common stock as of November 21, 2014, by each of our directors, each of our named executive officers (as set forth in “Compensation Discussion and Analysis” below), all of our current directors and executive officers as a group and each stockholder known to us owning more than 5% of our common stock. The percentage of beneficial ownership for the table is based on 31,416,024 shares of our common stock outstanding as of November 21, 2014. To our knowledge, except under community property laws or as otherwise noted, the persons and entities named in the table have sole voting and sole investment power over their shares.

The number of shares beneficially owned by each stockholder is determined under the rules of the SEC and is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes those shares over which the stockholder has or shares voting or investment control and includes those shares that the stockholder has the right to acquire within 60 days after November 21, 2014 through the exercise of any stock option. The “Percentage of Common Stock” column treats as outstanding all shares underlying such options held by the named stockholder, but not shares underlying options held by other stockholders.

Stock Ownership Guidelines. Under our guidelines, our Board members and executive officers are required to hold shares as follows:

Shares that count toward satisfaction of these stock ownership guidelines include:

Board members and executive officers are expected to meet these ownership guidelines within the later of (i) five years after being appointed or elected a member of the Board or appointed to an executive position, as applicable, or (ii) five years from the adoption of the guidelines. The foregoing description of our stock ownership guidelines reflect changes adopted in October and November 2014 to increase the guidelines for executive officers, change the guidelines for directors to a dollar value, and exclude all options from shares that count toward satisfaction of our guidelines. All of our executive officers hold shares as required under our guidelines, except Ms. Jones who joined Diamond in October 2014.

In addition, pursuant to our insider trading compliance policy, our CEO and CFO are required to pre-clear all trading activity in Diamond securities with our Board Chair or Compensation Committee Chair. Furthermore, our executive officers and Board members may not purchase Diamond securities on margin, borrow against any account in which Diamond securities are held, or pledge Diamond securities as collateral for a loan without the express written consent of Diamond’s insider trading compliance officer, which may be provided in the compliance officer’s discretion.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Exchange Act requires our directors and officers, and persons who own shares representing more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. The SEC regulations also require these persons to furnish us with a copy of all Section 16(a) forms they file. Based solely on our review of the copies of the forms furnished to us and written representations from our executive officers and directors, we believe that all Section 16(a) filing requirements were met during fiscal 2014.

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Diamond Executive Officers

The following individuals are our executive officers:

Brian J. Driscoll has served as President and Chief Executive Officer of Diamond and as a member of our Board since May 2012. Prior to joining Diamond, Mr. Driscoll was Chief Executive Officer of Hostess Brands from June 2010 to March 2012, which filed for Chapter 11 bankruptcy protection in January 2012. From 2002 to June 2010, he held senior management positions at Kraft Foods, Inc., including as President, Sales, Customer Service and Logistics, Kraft North America from 2007 to June 2010. Mr. Driscoll joined Kraft Foods, Inc. as a result of Kraft’s acquisition of Nabisco Biscuits and Snacks, where he worked from 1995 to 2002, first as President of Sales and Integrated Logistics and later as the Senior Vice President, Biscuit Sales and Customer Service. Earlier in his career, Mr. Driscoll held sales and sales management positions of increasing responsibility at Nestlé USA and Procter & Gamble Company. Mr. Driscoll holds a B.S. degree from St. John’s University.

Raymond P. Silcock has served as our Executive Vice President and Chief Financial Officer since June 2013. Prior to joining Diamond, Mr. Silcock was Senior Vice President & Chief Financial Officer of the Great Atlantic & Pacific Tea Company (A&P) from its emergence from bankruptcy in March 2012 until February 2013 and previously was the Head of Finance from December 2011 to March 2012. He was an independent management consultant with clients including A&P and Palm Ventures LLC from December 2009 to December 2011 and from September 2009 to December 2009 was Executive Vice President & Chief Financial Officer of KB Home. Prior to that Mr. Silcock served as Senior Vice President & Chief Financial Officer of UST Inc. from July 2007 to April 2009 when it was acquired by Altria. Before joining UST he was Executive Vice President and Chief Financial Officer of Swift and Company from 2006 to 2007 when the company was sold. Prior to that he was Executive Vice President & Chief Financial Officer of Cott Corporation from 1998 until 2005, where he oversaw the restructuring and turnaround of that business. Earlier in his career, Mr. Silcock held a variety of progressively more responsible roles at Campbell Soup Company where he worked from 1979-1997. Mr. Silcock is a member of the Board of Directors of Pinnacle Foods Inc and is an Advisory Partner for Alliance Consumer Growth, a private equity company. He holds an M.B.A. from the Wharton School of the University of Pennsylvania and is a Fellow of the Chartered Institute of Cost & Management Accountants (UK).

Lloyd J. Johnson has served as our Executive Vice President and Chief Sales Officer since September 2008. From 2005 until August 2008, Mr. Johnson was a Senior Vice President for Expedia Inc., an online travel service company, during which time he managed various divisions within the Partner Services Group. Prior to joining Expedia, Mr. Johnson was employed at Kraft Foods, Inc., a food company, where he was Vice President, Sales and Customer Development, Kraft Canada from January 2005 to June 2005, and Customer Vice President, Kroger, from 2001 to 2004. Earlier in his career, Mr. Johnson held a variety of sales and sales management positions of increasing responsibility at Nabisco Biscuit Company and Ernest & Julio Gallo Winery. Mr. Johnson holds a B.A. from Eastern Washington University.

David J. Colo has served as Executive Vice President, Chief Operating Officer of Diamond since June 2013. From December 2012 until June 2013, Mr. Colo was our Executive Vice President, Global Operations and Supply Chain. From August 2009 to December 2012, Mr. Colo served as an independent industry consultant working on organizational optimization and strategic planning. From April 2005 through July 2009, Mr. Colo held leadership positions in ConAgra Foods, Inc.’s Consumer Products division, including as the Senior Vice President Operations (January 2007 to July 2009), Senior Vice President Enterprise Manufacturing (May 2006 to

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December 2006) and Senior Vice President Sales and Operations Planning (April 2005 to April 2006). From January 2003 to March 2005, Mr. Colo worked in ConAgra Foods’s Commercial Production division, with his last position in such division as President, ConAgra Food Ingredients. Earlier in his career, Mr. Colo held positions of increasing responsibility at Nestle-Purina, where he worked from 1986 to 2002. Mr. Colo holds a B.S. from Southern Illinois University.

Linda B. Segre has served as Executive Vice President and Chief Strategy and People Officer since March 2014. From October 2012 to March 2014, Ms. Segre served as Senior Vice President, Corporate Strategy and Human Resources. From August 2009 to October 2012, Ms. Segre served as Senior Vice President, Corporate Strategy. From 2006 until April 2009, Ms. Segre was a Managing Director at Google.org, the corporate philanthropy organization of Google Inc., where she oversaw the climate change and global development initiatives and managed all operational aspects of the organization. From 1995 until 2006, Ms. Segre was Vice President, Officer and Director at The Boston Consulting Group, a global management consulting firm, and served as the Managing Director of the San Francisco office from 2001 until 2005. She first joined The Boston Consulting Group in 1987 and worked in a number of roles with increasing responsibilities until she became a Vice President in 1995. During her tenure at Boston Consulting Group, she focused on serving clients in the consumer goods and financial services sectors. From 1981 until 1985, Ms. Segre was a touring golf professional in the United States, Europe and Asia. Ms. Segre holds a B.A. from Stanford University and an M.B.A. from the Stanford Graduate School of Business.

Isobel A. Jones has served as our Executive Vice President, General Counsel and Secretary since October 2014. From April 2013 to May 2014, Ms. Jones served as General Counsel and Secretary of Annie’s, Inc., a natural and organic food company, where she was the first general counsel of the newly public company. She was responsible for all legal matters, including SEC reporting and compliance, corporate governance, litigation management, contracts, intellectual property, employment matters and M&A. From January 2012 to March 2013, Ms. Jones was Vice President, General Counsel and Secretary of Peet’s Coffee and Tea, Inc. where she handled the acquisition of Peet’s by private investors. Prior to this role, from 2003 to January 2012, Ms. Jones was Associate General Counsel at Del Monte Foods, where she was responsible for SEC reporting and compliance and other general corporate matters. Ms. Jones also spent ten years at Cooley Godward LLP. Ms. Jones holds a J.D. from Harvard Law School and an A.B. from Harvard University.

Compensation Discussion and Analysis

Introduction

In this Compensation Discussion and Analysis (“CD&A”), we explain and analyze the material elements of the fiscal 2014 compensation arrangements for the individuals who served as our named executive officers during the year. The purpose of this discussion is to provide the context for the presentation of the specific compensation paid to our named executive officers, as shown in the tables and narrative disclosure that follow. During fiscal 2014, our named executive officers were:

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In this CD&A, we refer to non-GAAP financial measures that were used as performance metrics for our executive compensation. Please refer to Appendix A for a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

This CD&A is organized into eight sections:

Executive Summary

During 2014, Diamond made significant progress on its strategic initiatives, resulting in expansion in market share and gross margin in the Snack segment, stabilized walnut supply and a refinanced balance sheet providing financial flexibility for Diamond to further our growth strategy. However, we did not meet our original financial plan. Our results reflected significant increases in tree nut commodity costs, which resulted in lower gross margin in the Nuts segment and adversely impacted overall company performance. Diamond’s Annual Incentive Plan compensation for fiscal 2014 reflected our financial performance as measured by gross profit, which increased 1.3 percent, and adjusted EBITDA, which increased 3.3 percent, both of which were below the target level set by the Board of Directors entering the fiscal year.

Diamond made several changes to its executive compensation programs for the fiscal year, as follows:

Additionally, for fiscal 2015 compensation to be discussed in next year’s proxy statement, we:

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Our Compensation Philosophy

The objective of our executive compensation program is to attract, retain and motivate executives of exceptional ability who have the capability to provide strong leadership for Diamond and increase stockholder value. To that end, our executive compensation is designed to be competitive within our industry, taking into account performance and scope of responsibility, and to have a significant portion of each named executive officer’s total compensation “at-risk” through both near-term and long-term incentive compensation arrangements. We design these incentives to reward increases in stockholder value, accomplishment of corporate strategic objectives and accomplishment of individual goals.

Our philosophy is to analyze base salaries and equity grants in the context of the median of the peer group benchmarks, with consideration given to each individual’s historical compensation, skill set, performance, tenure, internal pay relationship to other executives and importance to the organization. This philosophy is intended to reflect the Committee’s view that all elements of compensation should be structurally in line with the relevant industry standards, with flexibility to recognize strong company and individual performance. With respect to cash incentives, our philosophy is to set target bonus amounts as a percentage of base salary in the context of the median of the peer group benchmarks, and to provide our executives significant upside opportunity for strong performance as incentive to achieve our strategic initiatives in support of our growth targets. Market pay information for the peer group is one of the many factors considered in determining individual executive officer compensation levels in addition to tenure, performance, organizational impact and internal equity with other executives.

Summary of Fiscal 2014 Compensation Matters

Fiscal 2014 marked the second year of a multi-year turnaround for Diamond. We continued to focus on driving profitable growth through innovation and executing against cost saving initiatives, and successfully refinanced our debt structure to reduce our interest costs, improve free cash flow and provide greater flexibility for Diamond. However, gross profit and adjusted EBITDA were below the targets established by our Board. This performance was reflected in executive compensation in line with our compensation policies.

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Compensation Decision Processes

Role of the Compensation Committee. The Compensation Committee (which we refer to in this section as the “Committee”) of our Board makes all decisions about compensation of our named executive officers other than our Chief Executive Officer. For decisions affecting the compensation of the Chief Executive Officer, the Board makes the ultimate compensation decision, taking into account the Committee’s recommendations.

Role of Independent Consultant. We believe that utilizing an independent compensation consultant is important in developing executive compensation programs that are reasonable and consistent with our objectives. The Committee continued to retain Exequity to serve as a third-party compensation consultant to assist in evaluating executive compensation programs and amounts of executive and director compensation. Exequity advised the Committee on the following during fiscal 2014:

In the course of fulfilling these responsibilities, a representative of Exequity attended Committee meetings and met with management from time to time to gather relevant information. The Committee’s executive compensation decisions, including the specific amounts paid to our executive officers, are made through the exercise of its own judgment and may reflect factors and considerations other than the information and recommendations provided by Exequity, including role and organizational impact, internal pay relationships and experience, tenure and sustained performance over time. Exequity has not provided any other services to us and has received no compensation other than with respect to the services described above.

Benchmark Data. At the beginning of fiscal 2014, Exequity recommended to the Compensation Committee to increase the size of the peer group of companies to be used as benchmarks for compensation of the named executive officers. To increase the peer group from twelve to fourteen companies, Exequity recommended adding Seneca Foods and National Beverage. These changes from U.S. public companies in the food manufacturing and consumer products industries with revenues of approximately $550 million to $3.0 billion, resulted in a peer group of fourteen companies with median annual revenue of $1.4 billion. For fiscal 2014, our total revenue was $865 million. While Diamond’s total revenue fell below the median of the peer group, there are a limited number of branded, public food and beverage companies similar enough to Diamond’s profile to serve as meaningful comparables, and as a result, we believe the peer group recommended by Exequity provided a sufficient basis in analyzing compensation for our named executive officers.

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Our fiscal 2014 peer group and trailing twelve-months revenue, as such information was provided by Exequity, was as follows:

In addition to the peer group information, Exequity analyzed information from the AON Hewitt Executive Compensation Survey using companies with revenue of less than or equal to $2.0 billion. To evaluate compensation levels for the CEO and CFO, those positions were matched to the comparable position in the peer group, with additional analytical support from the AON Hewitt Executive Compensation Survey data. In evaluating compensation levels for the other named executive officers, we primarily used the Executive Compensation Survey data given the limited number of proxy position matches in the peer group.

For fiscal 2015 compensation decisions, which will be discussed in next year’s proxy statement, Exequity recommended that we modify our peer group by dropping Monster Beverage Corporation and Church & Dwight Co. and adding Boulder Brands, Inc., Chiquita Brands Inc., and Cott Corporation to better align with Diamond in terms of company size.

Role of the Chief Executive Officer. Our CEO, in consultation with each of the other named executive officers, develops individual goal achievement plans that serve as a basis for bonuses under our annual incentive plan. After completion of the fiscal year, the CEO reviews executive officer performance relative to individual goals and makes recommendations to the Committee about the officer’s bonus achievement. Based on the analysis conducted by Exequity, the CEO also makes recommendations regarding possible increases in base salary. The Committee reviews the CEO’s recommendations for executives other than the CEO and makes determinations regarding bonus payments and base salary.

Components of Executive Compensation

The material elements of compensation for our named executive officers are base salaries, bonuses and equity incentives. Named executive officers also receive perquisites, termination benefits and participate in other employee benefit programs.

Base Salary. Base salary establishes the minimum compensation levels for our executive officers. Salary increases can be awarded in recognition of superior performance, organizational advancement and increasing levels of responsibility. Base salaries for our named executive officers are based on the Committee’s subjective determination of appropriate salary levels, taking into consideration peer group and survey information, the Chief Executive Officer’s recommendations (for named executive officers other than himself), the individual executive officer’s role in the organization, his or her performance during the prior fiscal year, and the individual’s skill set relative to business needs.

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Annual Cash Incentives. Bonus compensation helps us to attract and retain executive talent and to motivate our team to pursue strategic objectives by creating opportunities for additional compensation on an annual basis contingent on performance results. Annual cash incentives are intended to promote the achievement of our annual corporate financial goals, other corporate initiatives and individual goals under programs administered by the Committee.

Our bonus plan, which we refer to as the annual incentive plan, applies to all eligible employees, including executive officers. Under the annual incentive plan, eligible employees are assigned a target bonus (“Target Bonus”) and a maximum bonus (“Maximum Bonus”), each consisting of a specified percentage of the employee’s base salary. Actual bonuses paid depend upon both the level at which the annual incentive plan is funded for a particular year, which is determined by our performance, and the individual performance of each participant. The Committee selects one or more corporate financial objectives (“AIP Metrics”) and establishes the threshold, target and maximum levels of our performance with respect to those metrics that will apply to the annual incentive plan for that fiscal year. The AIP Metrics may be any one or more company-wide financial metrics, including without limitation revenue, gross margin, gross profit, operating margin, operating profit, earnings growth, EBITDA, and any per-share or non-GAAP calculations of any such metrics, as determined in the sole discretion of the Committee. The annual incentive plan will fund as follows:

The objectives against which an eligible employee may be measured may include, without limitation, corporate goals (such as revenue, gross margin, gross profit, operating margin, earnings growth, earnings per share, and non-GAAP calculations of any such metrics), departmental goals (such as category business team or functional goals relating to accomplishment of our strategic initiatives, brand or category financial performance, market share, revenue, profitability, cost efficiency, products, brand equity, human capital or other goals) or individual goals as determined in conjunction with the eligible employee’s manager.

Bonus award potential is based on both corporate financial objectives, representing 80 percent of incentive potential, and individual objectives, representing 20 percent of incentive potential. In the prior fiscal year, the weighting of corporate versus individual objectives shifted for fiscal 2014 from 60 percent and 40 percent respectively. Corporate and individual components of the award are not mutually dependent (although payout against achievement of individual objectives is scaled by the overall corporate performance level), and bonuses are capped at 200% of target. Target cash incentives for our named executive officers, as a percent of base salary, is linked to level in the organization. In fiscal 2014, target cash incentives for named executive officers were set at the following percentages of base salary:

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Equity Incentives. The Committee believes that equity awards are a key component of our executive compensation program because they help us attract, motivate and retain executive talent. Our 2005 Equity Incentive Plan enables us to grant stock options, stock appreciation rights, restricted stock, restricted stock units and other equity awards, and to subject those awards to vesting to promote a long-term perspective. The Committee believes that equity-based incentives help to align the interests of our executives with those of other stockholders by making a portion of the executive’s compensation and net worth dependent upon the performance of our common stock. The grant of stock options and restricted stock (or restricted stock units) creates general corporate performance incentives that are dependent on stock price performance, as stock options only have value if our stock price increases above the original grant price and restricted stock (or restricted stock units) have a value that may go up or down consistent with the stock value. These incentive grants are designed to reward long term sustained share price growth.

The Committee and Board make equity awards to named executive officers annually and may make additional equity awards for recruiting, retention or other purposes. The process we employ is as follows:

The Committee makes annual grants either at in-person meetings or by unanimous written consent, with the stock option exercise price equal to the closing price of our common stock on the date of the meeting, the date on which all of the written consents were signed or some other annual grant date as approved by the Committee. From time to time, the Committee has acted by unanimous written consent to approve new hire option grants for newly-hired officers, in which case the Committee’s practice has been to set the stock option exercise price equal to the closing price of our common stock on the date all written consents have been signed or the date of commencement of employment, if later.

Retirement Plans. Our named executive officers participate in the same 401(k) plan on the same terms provided to all administrative employees. We make a contribution of 3% of base salary into 401(k) accounts, up to a maximum set by IRS limits each year—specifically, $7,800 in calendar year 2014 and $7,650 in calendar year 2013.

Perquisites. We provide executive officers with perquisites and other personal benefits, such as payment of standard life and health insurance premiums, which we believe are consistent with our overall compensation program. The Committee periodically reviews the types of perquisites and other personal benefits provided to named executive officers, and does not consider perquisites a significant element of our executive compensation arrangements. Diamond does not provide tax gross up reimbursements for any perquisites.

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Compensation Decisions for Fiscal 2014

Annual Incentive Plan Funding

Under our annual incentive plan, a bonus pool for employees, including named executive offices, is funded to the extent the company achieves pre-determined financial metrics. For fiscal 2014, half the bonus pool opportunity was based on achievement against an adjusted EBITDA target and the other half was based on a gross profit target. To the extent the Company achieved adjusted EBITDA or gross profit of less than 90% of target, the pool would not fund with respect to such metric. The threshold, target and maximum funding targets for fiscal 2014 were as follows, with results interpolated in a straight line between Threshold and Target and in another straight line between Target and Maximum:

Adjusted EBITDA and Gross Profit Metrics

In fiscal 2014, Diamond reported $105.1 million in adjusted EBITDA and $208.2 million in gross profit. Taking this performance into account, the Committee approved funding of the annual incentive plan at 67.5% of target.

Fiscal 2014 Objectives Under the Annual Incentive Plan

For fiscal 2014, the bonus potential for all of our named executive officers, including Mr. Driscoll, under the annual incentive plan was based on two factors—achievement of the same adjusted EBITDA and gross profit metrics used for annual incentive plan funding and accomplishment against personal objectives. Together, the two financial metric components represented 80 percent of the bonus potential and personal objectives accounted for 20 percent of bonus potential.

Chief Executive Officer

Base Salary. In connection with his appointment as our President and CEO, Diamond entered into an employment agreement with Mr. Driscoll in May 2012, with an initial term of three years, pursuant to which we agreed to pay him a base salary of $825,000. For fiscal 2014, Mr. Driscoll’s base salary remained at $825,000.

Annual Cash Incentive. For fiscal 2014, Mr. Driscoll’s bonus was calculated as follows:

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As a result, Mr. Driscoll received a bonus for fiscal 2014 as follows:

Equity Grant. In September 2013, the Board approved an equity grant made to Mr. Driscoll for fiscal 2014 with a grant date fair value of $1.8 million half in the form of stock options and half in restricted stock.

In December 2012, a Performance Based Restricted Share grant was issued to Mr. Driscoll subject to a four-year cliff vest schedule with 100% of the shares vesting on the fourth anniversary of the date of grant. However, the grant may vest earlier upon the Board’s determination that adjusted EBITDA performance exceeded targets after two or three years, and provided that Mr. Driscoll remains in continuous service as an employee or consultant through such date. The Compensation Committee believed that the four-year cliff vesting aspect of the grants were appropriate to help retain the executive team while still incenting performance through the possible acceleration of vesting as the company reached its goals. The first accelerated vesting milestone evaluated adjusted EBITDA performance over the course of fiscal 2013 and fiscal 2014. It was determined that EBITDA performance did not exceed the established targets for each of fiscal 2013 and fiscal 2014, with no accelerated vesting of this grant occurring as a result.

Other Named Executive Officers

Base Salary and Annual Cash Incentive Targets. The base salaries and bonus potential for Mr. Colo, Mr. Johnson and Mr. Silcock did not increase in fiscal 2014. Exequity advised the Committee as to the salaries, based on market comparables and experience of all three individuals. The annual base salaries for Mr. Colo, Mr. Johnson and Mr. Silcock for fiscal 2014 were $450,000, $426,523, and $525,000 respectively. As executive vice presidents, Mr. Colo, Mr. Johnson and Mr. Silcock have a target bonus potential of 70% of base salary and a maximum bonus potential of 140% of base salary.

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In September 2013, the Committee approved increases in the base salaries of Mr. Kim and Ms. Segre, based on salary information at comparable companies and survey data provided by Exequity. The new salaries were $335,000 for each of Mr. Kim and Ms. Segre. As senior vice presidents at that time, Mr. Kim and Ms. Segre had a target bonus potential of 55% of base salary and a maximum bonus potential of 110% of base salary.

In April 2014, the Committee approved promotions for Mr. Kim and Ms. Segre to EVP, with increases in base salaries to $350,000 for each. In addition, as executive vice presidents, Mr. Kim and Ms. Segre both received an increase in target bonus potential to 70% of base salary and a maximum bonus potential of 140% of base salary.

Fiscal 2014 Annual Cash Incentive Payments. As noted above in “Compensation Decisions for Fiscal 2014—Annual Cash Incentive Plan Funding,” the Committee approved funding of the plan at 67.5% based on our performance against financial metrics. In accordance with our annual incentive plan, individuals are assigned an individual performance rating, which can impact the amount of the financial metric bonus and personal objective bonus received. A “Needs Improvement” individual performance rating will result in a 20% reduction in the financial metric bonus otherwise payable to the participant, while a lower rating will result in no payout. Set forth below for each of our named executive officers are the annual cash incentive payment amounts for fiscal 2014 attributable to financial metrics and personable objectives:

Mr. Silcock: Mr. Silcock received a financial metric bonus of $198,450, which represented 67.5% of the targeted amount. He also received $49,613 of bonus based on personal objectives, which represented 67.5% of his targeted amount, based on accomplishments related to the successful re-capitalization of the Company’s financial structure and support of the Company’s cost reduction initiatives. This payment reflected achievement of personal objectives at the 100% level, scaled by 67.5% based on overall plan funding.

Mr. Colo: Mr. Colo received a financial metric bonus of $170,100, which represented 67.5% of the targeted amount. He also received $42,525 of bonus based on personal objectives, which represented 67.5% of his targeted amount, based on accomplishments relating to profitably growing the Company’s brands, executing cost savings initiatives and implementing programs to increase walnut supply. This payment reflected achievement of personal objectives at the 100% level, scaled by 67.5% based on overall plan funding.

Mr. Johnson: Mr. Johnson received a financial metric bonus of $161,226, which represented 67,5% of the targeted amount. He also received $56,429 of bonus based on personal objectives, which represented 94.5% of his targeted amount, based on accomplishments relating to meeting net sales, trade spend and SG&A objectives, implementing Kettle Brand distribution plans and implementing route-to-market programs. This payment reflected achievement of personal objectives at the 140% level, scaled by 67.5% based on overall plan funding.

Ms. Segre: Ms. Segre received a financial metric bonus of $108,547, which represented 67.5% of the targeted amount. She also received $27,136 of bonus based on personal objectives, which represented 67.5% of her targeted amount based on accomplishments relating to driving strategic initiatives, completing investor relations activities, recruiting senior-level executives and implementing new human resources programs. This payment reflected achievement of personal objectives at the 100% level, scaled by 67.5% based on overall plan funding.

Mr. Kim: Mr. Kim received a financial metric bonus of $108,547, which represented 67.5% of the targeted amount. He also received $27,136 of bonus based on personal objectives, which represented 67.5% of his targeted amount based on accomplishments relating to successfully managing the securities class action, SEC and derivative suits, executing the re-capitalization of the Company’s financial structure and revising the Company’s corporate governance and compliance framework and approach. This payment reflected achievement of personal objectives at the 100% level, scaled by 67.5% based on overall plan funding.

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Equity Awards. During fiscal 2014, the Committee approved equity grants for the named executive officers as follows:

The Committee approved these grants, which had an aggregate value generally in line with the 50th percentile for equity awards in Diamond’s peer group survey data for fiscal 2014 and general industry survey data for fiscal 2014 for companies with revenues less than or equal to $2.0 billion, based on each individual’s contributions over their tenure with Diamond, the importance of their positions and the effort required to execute on the company’s strategic initiatives.

In December 2012, a Performance Based Restricted Share grant was issued to each of Mr. Johnson, Mr. Kim and Ms. Segre subject to a four-year cliff vest schedule with 100% of the shares vesting on the fourth anniversary of the date of grant. However, the grant may vest earlier upon the Board’s determination that adjusted EBITDA performance exceeded targets after two or three years, and provided that each officer remains in continuous service as an employee or consultant through such date. The Compensation Committee believed that the four-year cliff vesting aspect of the grants were appropriate to help retain the executive team while still incenting performance through the possible acceleration of vesting as the company reached its goals. The first accelerated vesting milestone evaluated adjusted EBITDA performance over the course of fiscal 2013 and fiscal 2014. The committee determined that EBITDA performance did not exceed the established targets for each of fiscal 2013 and fiscal 2014, with no accelerated vesting of this grant occurring as a result.

Tax and Accounting Considerations

In evaluating potential compensation alternatives, the Compensation Committee considers the possible impact of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). Section 162(m) of the Code places a limit of $1 million on the amount of compensation that we may deduct as a business expense in any year with respect to certain of our most highly paid executive officers unless, among other things, such compensation is performance-based and has been approved by stockholders. Generally, we have not designed our restricted stock grants and annual incentive plan to be eligible for deductibility to the extent permitted by Section 162(m) of the Code. Accordingly, a portion of the compensation to our named executive officers or covered employees may not be deductible.

If our stockholders approve the Diamond 2015 Plan at the Annual Meeting, we will have the opportunity, but not the obligation, to design performance-based awards that are eligible for deductibility under Section 162(m).

Accounting considerations also play an important role in the design of our executive compensation program. Accounting rules require us to expense the grant date fair values of our equity awards. Because of this stock-based expensing and the impact of dilution to our stockholders, we closely monitor the number and the fair values of the equity awards that are granted each year.

Compensation Recovery (“Clawback”) Policy

The Compensation Recovery Policy provides for the recoupment of incentive-based cash compensation awarded to the Company’s executive officers. The policy provides that if an executive officer engaged in fraud or intentional misconduct that materially contributed to the need for an accounting restatement, the officer shall be required to reimburse the full amount of any incentive-based cash compensation that resulted during the period of the restatement.

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Report of the Compensation Committee

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted by the members of the Compensation Committee of the Board of Directors.

Alison Davis, Chair

Edward A. Blechschmidt

Robert J. Zollars

Executive Compensation

Summary Compensation Table

The following table presents the compensation of our named executive officers for the fiscal years indicated. We also provide benefits to our executive officers that are generally available to all of our employees.

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2014 Grants of Plan-Based Awards

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2014 Outstanding Equity Awards at Fiscal Year End