Exhibit 99.1
SONOMAWEST
HOLDINGS INC
September 21, 2004
COMPLAINT PROCEDURE AND NONRETALIATION POLICY FOR ACCOUNTING,
SECURITIES AND SHAREHOLDER MATTERS
I. PURPOSE
SonomaWest Holdings, Inc. (the "Company") is committed to (i) complying
with all applicable securities laws and regulations, accounting standards,
accounting controls and audit practices, and (ii) providing a workplace
conducive to open discussion of its business practices. Accordingly, the Company
has adopted this Complaint Procedure and Nonretaliation Policy (the "Policy") to
(A) promote the efficient review and resolution of concerns and complaints
regarding potential violations of securities laws or other provisions of federal
or state law relating to fraud against shareholders by the Company or its
directors, officer or employees, and (B) assure that employees raising any such
concerns are protected.
II. SCOPE OF MATTERS COVERED BY PROCEDURES AND POLICY
The procedures and nonretaliation policy set forth below relate to
concerns and complaints involving the following matters:
o accounting, internal accounting controls, auditing matters or
disclosure practices;
o violations or possible violations of:
>> federal criminal law relating to securities fraud, mail
fraud, bank fraud, or wire, radio and television fraud;
>> any rule or regulation of the Securities and Exchange
Commission; or
>> any provision of federal or state law relating to fraud
against shareholders.
III. PROCEDURES FOR SUBMISSION OF REPORTS
In order to facilitate the reporting of concerns and complaints by
employees and others, the Company's Audit Committee has established the
following procedures for receiving, retaining and properly handling concerns and
complaints regarding the matters set forth in Section II above ("Reports"). The
Audit Committee has designated a Compliance Officer who is responsible for
administering this Policy and for receiving, collecting, reviewing, processing
and resolving Reports by employees and others.
A. SUBMISSION OF REPORTS
Employees are encouraged to discuss any Report with their supervisor,
who is in turn responsible for informing the Compliance Officer of any Reports
submitted. If the employee prefers not to discuss these sensitive matters with
his or her own supervisor, we encourage the employee to discuss any Report
with the Compliance Officer. This can be done on a confidential basis. The
Compliance Officer will review the Report and, if (s)he determines it
appropriate or is otherwise required by Board directive, (s)he will submit the
Report to the Board or an appropriate Committee of the Board.
The Company's Compliance Officer for purposes of the Company's
Complaint Procedure and Nonretaliation Policy is Mathew Ertman, who may be
reached at (213) 955-5579 or mertman@allenmatkins.com.
B. SUBMISSION OF REPORTS ON AN ANONYMOUS BASIS
The Company's Audit Committee has also established a procedure by which
employees may submit Reports involving the Company's accounting, auditing, and
internal auditing controls and disclosure practices anonymously within the
Company. Attached as EXHIBIT A to this Policy is a description of this anonymous
Report submittal procedure. Reports submitted through this procedure will be
evaluated and presented to the Audit Committee, which will oversee the
investigation and response to the Reports submitted, independent of Company
management. Any employee may utilize this confidential process either to submit
new Reports, or if (s)he feels that a Report previously submitted to a
supervisor or the Compliance Officer has not been appropriately handled.
C. RETENTION OF REPORTS
The Compliance Officer will maintain a log of all Reports, tracking
their receipt, investigation and resolution and will prepare a periodic summary
report thereof for the Audit Committee. Copies of Reports and the log will be
maintained in accordance with the Company's document retention policy. The Audit
Committee will maintain a log of all Reports that are submitted on an anonymous
basis directly to the Audit Committee using the submittal procedure set forth on
EXHIBIT A.
IV. NONRETALIATION POLICY AGAINST EMPLOYEES
It is Company policy to comply with all applicable laws that protect
employees against unlawful discrimination or retaliation by their employer as a
result of their lawfully reporting information regarding, or their participating
in, investigations involving corporate fraud or, for that matter, any other
violations by the Company or its agents of federal or state law. Specifically,
this Policy prevents any employee from being subject to disciplinary or
retaliatory action by the Company or any of its employees or agents as a result
of the employee:
o disclosing information to, filing a Report with, or
participating in an investigation conducted by, the employee's
supervisor or the Company's Compliance Officer regarding
accounting, internal accounting controls, auditing matters or
disclosure practices;
o disclosing information to a government or law enforcement
agency, where the employee has reasonable cause to believe
that the information discloses a violation or possible
violation of federal or state law or regulation;
o providing information, causing information to be provided,
filing, causing to be filed, testifying, participating in a
proceeding filed or about to be filed (with the knowledge of
the Company), or otherwise assisting in an investigation or
proceeding regarding any conduct that the employee reasonably
believes involves a violation of:
>> federal criminal law relating to securities fraud, mail
fraud, bank fraud, or wire, radio and television fraud;
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>> any rule or regulation of the Securities and Exchange
Commission; or
>> any provision of federal law relating to fraud against
shareholders;
where, with respect to investigations, such information or assistance
is provided to or the investigation is being conducted by a federal
regulatory agency, a member of Congress, or a person at the Company
with supervisory or similar authority over the employee.
V. LIMITATIONS
Employees who file reports or provide evidence which they know to be
false or without a reasonable belief in the truth and accuracy of such
information will not be protected by this Policy and may be subject to
disciplinary action, including termination of their employment. In addition,
except to the extent required by law, the Company does not intend this Policy to
protect employees who violate any applicable attorney-client privilege to which
the Company or its agents may be entitled under statute or common law
principles, or to protect employees who violate their confidentiality
obligations with regard to the Company's confidentiality or proprietary
information, the confidentiality or proprietary information of an employee's
former employer or other third party to the extent such information is subject
to an enforceable confidentiality or nondisclosure agreement between the
employee and such third party, or otherwise violate the provisions of applicable
law regarding the protection of customer third party confidential or proprietary
information. Employees considering providing information that may violate these
privileges, policies or statutes or reveal Company trade secrets are advised to
consult an attorney before doing so. Employees should also review the Company's
CODE OF BUSINESS CONDUCT AND ETHICS regarding disclosure of confidential and
proprietary information.
V. NONRETALIATION POLICY ENFORCEMENT
Employees found to have engaged in retaliatory behavior against any
person who submits a Report in accordance with this policy or participates in
any subsequent related investigation may be subject to discipline up to and
including termination.
VI. CORRECTIVE ACTIONS
The Compliance Officer and/or the Audit Committee will investigate
promptly all Reports received and will take prompt corrective action as deemed
appropriate. They will maintain confidentiality to the fullest extent possible,
consistent with the need to conduct an adequate review. If you believe you have
been subjected to any action that violates this Policy, you may submit a Report
with your supervisor or the Compliance Officer. If it is determined that you
have been subject to any action or conduct that violates the letter or spirit of
this Policy, we will correct the situation.
VII. CODE OF ETHICS
The Company has also adopted a CODE OF BUSINESS CONDUCT AND ETHICS
which provides more general guidelines and principles for the way in which
directors, officers and employees of the Company are expected to conduct daily
business with the Company's customers, vendors, shareholders and with each
other. Employees with complaints or concerns regarding issues not related to
those of the type set forth in Section II above should review the Code for the
Company's policy and procedures for resolution of such complaints or concerns.
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EXHIBIT A
ANONYMOUS REPORT PROCEDURES
Employees who prefer not to discuss complaints regarding accounting,
auditing, disclosure and securities fraud issues with his or her own supervisor
or with the Compliance Officer are encouraged to submit a Report or Reports on
an anonymous, confidential basis ("Anonymous Reports") using the following
Anonymous Report Procedures.
A. PREPARATION AND SUBMISSION OF ANONYMOUS REPORTS
Anonymous Reports must be in writing, and must contain a detailed
description of the nature of the complaint. Anonymous Reports must describe the
activity which is the subject of the complaint, and must identify the party or
parties involved. Anonymous Reports must contain enough specificity to allow the
Company to research and investigate the complaint. The Company has developed an
Anonymous Report Form that employees may use when submitting Anonymous Reports;
however, employees are not required to use the Anonymous Report Form, and may
submit an Anonymous Report an any form or in any format, so long as the
complaint is in sufficient detail. A copy of the Anonymous Report Form is
attached as Exhibit A-1.
Anonymous Reports must be placed in a sealed envelope marked "To Audit
Committee - CONFIDENTIAL," and placed in the Company's interoffice mail or
placed in U.S. mail addressed as follows:
SonomaWest Holdings, Inc.
2064 Highway 116 North
Sebastopol, CA 95472
Attention: Audit Committee - CONFIDENTIAL
Anonymous Reports must not be signed, and no name or return address
must appear on the envelope used to submit the Anonymous Report. All Anonymous
Reports received by the Company, shall be delivered, unopened, directly to the
Chairman of the Audit Committee of the Company's Board of Directors. The Company
shall adopt mail handling procedures sufficient to ensure that all envelopes
addressed directly to the Company's Audit Committee - whether received through
interoffice mail, U.S. mail or courier service - are not opened, and are
delivered promptly to the Chairman of the Audit Committee.
The Company's Audit Committee will review, research and investigate
promptly every Anonymous Report it receives that involves the Company's
accounting, auditing or disclosure practices, securities fraud issues or the
Company's internal auditing controls, and will take prompt corrective action as
deemed appropriate. If the Audit Committee determines it appropriate or is
otherwise required by Board directive, the Audit Committee shall submit the
Anonymous Report and the Audit Committee's findings to the Company's Board of
Directors.
Anonymous Reports received by the Chairman of the Audit Committee that
do not involve the Company's accounting, auditing or disclosure practices,
securities fraud issues or the Company's internal auditing controls shall be
referred to the appropriate Company officer or manager for handling.
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EXHIBIT A-1
ANONYMOUS REPORT FORM
(FOR USE BY SONOMAWEST HOLDINGS, INC. EMPLOYEES WHO WISH TO SUBMIT A COMPLAINT
ON AN ANONYMOUS, CONFIDENTIAL BASIS, RELATING TO THE COMPANY'S ACCOUNTING,
AUDITING OR DISCLOSURE PRACTICES, SECURITIES FRAUD ISSUES OR THE
COMPANY'S INTERNAL AUDITING CONTROLS.)
Describe nature of the complaint in detail (include specifics; identify the
party or parties involved, dates events occurred, etc.):
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o DO NOT SIGN THIS FORM.
o PLACE THIS FORM IN A SEALED INTEROFFICE ENVELOPE MARKED "TO AUDIT
COMMITTEE - CONFIDENTIAL"
OR
o PLACE THIS FORM IN A SEALED ENVELOPE AND MAIL IT VIA U.S. MAIL TO:
SonomaWest Holdings, Inc.
2064 Highway 116 North
Sebastopol, CA 95472
Attention: Audit Committee - CONFIDENTIAL
o THIS COMPLAINT WILL BE KEPT STRICTLY CONFIDENTIAL
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