This
Code of Business Conduct and Statement of Ethical Standards
(this “Code”) has been adopted by the Board of Directors
of Mendocino Brewing Company, Inc. (the “Company”) in
order to provide to the Company’s officers, directors, employees,
and consultants (“Company Personnel”) a generally applicable
statement of the basic standards and expectations that the Company
holds applicable to all Company Personnel in the conduct of
the Company’s business and affairs.
This Code is intended to qualify as a “code of ethics”
within the meaning of Section 406 of the Sarbanes-Oxley Act
of 2002 and the rules promulgated thereunder. All Company Personnel are expected to read
and become familiar with this Code and the standards it sets
forth, and may be required, from time to time, to affirm their
adherence to these standards by signing a Compliance Certificate.
I.
Compliance with Laws, Rules and Regulations
It
is the policy of the Company to comply with all laws and regulations
that are applicable to the Company’s business and other activities.
All Company Personnel must obey the law when acting within the
scope of their duties or otherwise on the Company’s behalf.
Specifically, the Company is committed to compliance
with all applicable laws, whether in the United States or abroad,
that are related to the conduct of the Company’s business, including
but not limited to laws and regulations relating to:
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1.
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Brewing practices
and all related health and safety laws and regulations; |
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2.
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Maintaining
a safe and healthy work environment; |
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3.
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Maintaining
a workplace that is free from all improper forms of discrimination
or harassment; |
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4.
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Competition,
marketing, and disclosure practices, including laws relating
to labeling of contents, unfair restraints of trade, and
other unfair trade practices; |
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5.
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Environmental
laws and standards; |
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6.
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Illegal payments
to any government officials or political party representatives
of any country; and |
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7.
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State and
federal corporate and securities laws. |
All
Company Personnel are prohibited from trading in the securities
of the Company or any other company while in possession of material
nonpublic information about the Company or such other company.
In addition, Company Personnel are strictly prohibited
from recommending, “tipping,” or suggesting that anyone else
trade in the securities of the Company or any other company
on the basis of material nonpublic information.
Violation of insider trading laws can result in fines
and criminal penalties, in addition to disciplinary action by
the Company.
II.
Conflicts of Interest; Corporate Opportunities
No
Company Personnel should be involved in any activity which creates
or gives the appearance of a conflict of interest between their
own personal interests and the interests of the Company or its
shareholders. In particular,
no Company Personnel may, without disclosure to and the explicit
prior consent of the Company's Board of Directors, as provided
in Section VI, below:
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1.
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Be a consultant
to, or an officer, director, or employee of, or otherwise
operate or have a material financial interest in, any outside
business that manufactures or markets products or services
in competition with the current or anticipated products
and services of the Company (a “Competitor”), supplier,
customer, or business partner of the Company; |
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2.
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Seek or accept
any personal loan or services from any Competitor, supplier,
customer, or business partner of the Company; |
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3.
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Be a consultant
to, or an officer, director, or employee of, or otherwise
operate, an outside business if doing so would materially
interfere with his or her responsibilities to the Company; |
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4.
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Use the Company’s
property, information, or position for personal gain; or |
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5.
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Pursue a business
opportunity that is in the Company’s line of business without
first presenting the opportunity to the Company. |
All
Company Personnel shall notify the Company’s Chief Executive
Officer or Chief Financial Officer of the existence of any actual
or potential conflict of interest.
III.
Confidentiality;
Protection and Proper Use of the Company’s Assets
All
Company Personnel shall maintain the confidentiality of information
entrusted to them by the Company (including by other Company
Personnel) or by its suppliers, customers, or business partners,
unless such disclosure has been duly authorized by the Company
or is legally required and an appropriate officer of the Company
has been previously notified that such disclosure has been requested
by an authorized person or governmental agency.
Information
coming within the limitations expressed above includes all of
the following, whether such information relates solely to the
Company or whether it relates to any Company customer, supplier,
or business partner:
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1.
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Information
marked “Confidential,” “Private,” “For Internal Use Only,”
or with similar legends; |
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2.
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Technical
or scientific information, and the results of any inspections,
tests, or surveys, relating to past, current, or anticipated
products, techniques, services, or research; |
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3.
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Business or
marketing plans, results, or projections; |
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4.
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Earnings and
other internal financial and production data; |
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5.
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Confidential
personnel information of every kind; |
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6.
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Information
about or relating to suppliers and customers, including
but not limited to price lists and lists of products and
services obtained, bid on, or requested; and |
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7.
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Other non-public
information that, if disclosed, might be (a) of use to competitors,
(b) harmful to the Company or to its suppliers, customers,
or other business partners, or (c) of use to investors in
making a decision to buy, hold, or sell the Company’s securities. |
All
Company Personnel are personally responsible for protecting
those Company assets that are entrusted to them and for helping
to protect the Company’s assets in general.
To ensure the protection of the Company’s assets, all
Company Personnel should:
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1.
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Exercise reasonable
care to prevent theft, damage, or misuse of Company property; |
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2.
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Promptly report
the actual or suspected theft, damage, or misuse of Company
property to a supervisor; and |
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3.
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Safeguard
all electronic programs, data, communications, and written
materials from inadvertent access by others. |
IV.
Good Faith and Fair Dealing
The
Company is committed to conducting its business with integrity
and in an honest and fair manner, and to sustaining a work environment
that fosters mutual respect, openness, and individual integrity.
Company Personnel are expected to deal honestly and fairly
with the Company’s customers, suppliers, Competitors, business
partners, and other third parties. To this end, no Company Personnel shall:
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1.
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Make false
or misleading statements about the Company or its Competitors
to customers, suppliers, business partners, or other third
parties; |
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2.
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Solicit or
accept from any person that does business with the Company,
or offer or extend to any such person, cash in any amount
or gifts, meals, or entertainment that could influence or
reasonably give the appearance of influencing the Company’s
business relationship with that person or go beyond common
courtesies usually associated with accepted business practice; |
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3.
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Solicit or
accept any fee, commission, or other compensation for referring
customers to third-party vendors; or |
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4.
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Otherwise
take unfair advantage of the Company’s customers or suppliers,
or other third parties, through manipulation, concealment,
abuse of privileged information, or any other unfair-dealing
practice. |
V.
Accurate and Timely Periodic Reports and
Other
Public Communications
Securities
laws and Company policy require the prompt disclosure of accurate
and complete information regarding the Company’s business, financial
condition, and results of operations. To this end, all Company Personnel should
promptly report evidence of improper financial reporting, which
may include:
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1.
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Financial
results that seem inconsistent with the performance of underlying
business transactions; |
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2.
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Inaccurate
Company records, such as overstated expense reports, or
erroneous time sheets or invoices; and |
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3.
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Requests to
circumvent ordinary review and approval procedures. |
The
Company’s senior officers and accounting employees have a special
responsibility to ensure that all of the Company’s financial
disclosures are full, fair, accurate, timely, and understandable. Such Company Personnel must:
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1.
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Maintain a
system of internal accounting controls that will ensure
that all transactions are properly recorded and that material
information about the Company is made known to management; |
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2.
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Maintain books
and records that accurately and fairly reflect the Company’s
transactions; |
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3.
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Prohibit the
establishment of any undisclosed or unrecorded funds or
assets; and |
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4.
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Comply with
generally accepted accounting principles and all standards,
laws, and regulations for accounting and financial reporting
of transactions, estimates, and forecasts. |
VI.
Reporting and Effect of Violations
All
Company Personnel must report, in person or in writing, any
known or suspected violations of this Code or of any applicable
laws to the Company’s Chief Executive Officer or Chief Financial
Officer. The Company
strictly prohibits any retaliation against any Company Personnel
who act in good faith in reporting any such violation.
The
Company’s Chief Financial Officer, or if so directed a Special
Committee of the Board of Directors, will investigate any reported
violations of this Code or of any applicable laws, and will
oversee an appropriate response, including proposing and implementing
corrective action and preventative measures.
Company Personnel who violate any laws, governmental
regulations, or this Code will face appropriate, case specific,
disciplinary action, which may include demotion or discharge.
The provisions of this Code may be waived only in extraordinary
circumstances and on a case-by-case basis:
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1. |
For directors
or executive officers, only by a resolution of the Company’s
Board of Directors or a committee of the Board authorized
to make such determinations; and |
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2. |
For all other
Company Personnel, only by the Chief Financial Officer or
a committee of the Board authorized to make such determinations. |
Any
waiver of this Code granted to a director or executive officer
will be publicly disclosed as required by the securities exchange
or association on which the Company’s securities are listed
for trading, as and to the extent required by the rules of such
exchange or association. Any
change in or waiver of this Code for senior financial officers
will be publicly disclosed as required by the Securities Exchange
Commission (the “SEC”), as and to the extent required
by the rules of the SEC.
VII.
Administration
The
Board of Directors has the primary responsibility for setting
the Company’s standards of business and ethical conduct, for
drafting and implementing the Code, and for reviewing them from
time to time as the Board deems appropriate in light of ongoing
changes in the Company’s legal and regulatory environment, evolving
business practices in the industry, and applicable business
and ethical standards in the United States and abroad. While
the Board of Directors has primary responsibility for administering
the Code, all Company Personnel are personally responsible for
their individual compliance with the Code.
