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Case 1:09-cv-07504 Document 1 Filed 12/03/2009 Page 1 of 20

IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DIAMOND FOODS, INC., )


a Delaware Corporation, )
)
Plaintiff, ) Case No.
)
v. )
)
JAMES M. BARKER, )
)
Defendant. )

VERIFIED COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Plaintiff Diamond Foods, Inc. (“Diamond”), by and through its attorneys, and for its

Verified Complaint for Injunctive and Other Relief against Defendant James M. Barker

(“Barker”), states as follows:

NATURE OF THE CASE

1. Diamond brings this suit to recover the confidential and trade secret information

that Barker, its former employee, wrongfully obtained from Diamond, currently possesses, and

has already disclosed to at least one third party. Specifically, on November 30, 2009, Barker

illegally transmitted highly confidential customer, sales and pricing and forecasting information

to an outside financial analyst. As Barker candidly admits in his cover email, this information is

“not public” and was obtained by Barker from a “friend inside” Diamond. Other information

illegally transmitted by Barker appears to have been improperly retained by Barker after he

resigned from Diamond. Diamond, therefore, brings this action for immediate and permanent

injunctive relief to prevent further irreparable harm from the continuing possession and

disclosure of Diamond’s confidential and trade secret information by Barker, and from Barker’s

related (i) breach of his confidentiality obligations to Diamond, (ii) violations of the Illinois
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Uniform Trade Secrets Act, 765 ILCS 1065/1, et seq., and Computer Fraud and Abuse Act, 18

U.S.C. §1030, (iii) inducement of other Diamond employees to breach their confidentiality,

fiduciary and loyalty obligations to Diamond, and (iv) conversion of Diamond’s confidential

property.

THE PARTIES

2. Diamond is a corporation organized under the laws of Delaware, and it maintains

its principal place of business in California.

3. Barker is a citizen of Illinois and resides in Palos Heights, Illinois. Barker is a

former employee of Diamond and is currently employed as the Vice President of Sales for Vita

Foods Products, Inc. (“Vita Foods”) in Chicago, Illinois.

JURISDICTION AND VENUE

4. This Court has personal jurisdiction over Barker because he is a natural person

domiciled in the State of Illinois and because he committed the tortious acts in question in

Illinois.

5. This Court has federal question jurisdiction over this action pursuant to 28 U.S.C.

§§1331, 1332 and 1367. Diamond’s claims arise, in part, under federal law, specifically the

Computer Fraud and Abuse Act, 28 U.S.C. §1030, et seq. The amount in controversy in this

action exceeds $75,000 exclusive of interest and costs, and Diamond is not a citizen of the same

state as Barker; thus complete diversity of citizenship exists. All of the claims are so related to

each other that they form part of the same case or controversy.

6. Venue is appropriate in this Court pursuant to 28 U.S.C. §1391 because Barker

resides in this judicial district; the claim arises out of incidents occurring in this district; and

because the property in question, upon information and belief, is situated in this district.

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FACTUAL BACKGROUND

Diamond’s Business

7. Diamond is the premier processor and marketer of culinary, in-shell snack and

ingredient nuts, as well as popcorn products in the United States. Diamond’s brands include

well-known household items Diamond of California® culinary nuts, Emerald® nut snacks, and

Pop Secret® popcorn.

8. Diamond sells its products to major retail stores and grocers throughout the

United States and internationally. Diamond sells its products through direct marketing and sales

functions, as well as through independent brokers whose sales of Diamond products are

supervised by Diamond’s sales operation.

9. The nut, snack nut and popcorn markets in the United States are serviced by a

small number of highly-competitive processors and marketers. As such, Diamond closely tracks,

forecasts and budgets sales to individual customers – especially its top customers – in order to

maintain and grow its competitive advantage in the market. Diamond devotes substantial time,

effort and expense to marketing its products to customers, and to negotiating favorable terms and

pricing for its products.

10. Information concerning Diamond’s sales and customers is highly valuable

competitive information, the confidentiality of which is strictly maintained by Diamond. A

competitor with access to Diamond’s trade spend, production capacity, sales tracking, budgeting

and forecasting information, could harm and undermine Diamond’s sales success with its top

customers through insights the information provides as to sales trends and Diamond’s strategic

customer initiatives.

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11. Such access by a competitor could cause Diamond to suffer millions of dollars in

damages through lost sales, and certainly in excess of $75,000.

Barker’s Employment At Diamond

12. By letter dated December 6, 2005 (the “Offer Letter”), Diamond offered Barker

the position of Senior Business Director for Eastern Sales, and an accompanying generous

compensation and benefits package. Barker was offered a base salary of $175,000 per year, a

$75,000 signing bonus, stock options, participation in an incentive bonus program, and health,

welfare and pension benefits. On December 16, 2005, Barker accepted Diamond’s offer by

countersigning the Offer Letter. (A true and correct copy of Barker’s signed Offer Letter is

attached hereto as Exhibit A.) Barker began work at the beginning of 2006.

13. Barker resigned on or about October 9, 2009. At the time of his resignation,

Barker was the VP of Strategic Accounts, with responsibility for some of Diamond’s most

important and valuable customers.

14. By signing his Offer Letter, Barker understood and explicitly agreed (i) that

Diamond’s documents and records were Diamond’s exclusive property, (ii) not to remove

Diamond’s property from the Diamond’s facilities without written consent; and (iii) that he

would acquire confidential, proprietary and trade secret information as a result of his

employment with Diamond, and that such information was also the sole and exclusive property

of Diamond.

15. As a condition of his employment with Diamond, Barker executed an

Acknowledgment of Obligation Agreement (“Acknowledgment”) in which he again agreed to

maintain the confidentiality of Diamond’s sensitive information. (A true and correct copy of

Barker’s signed Acknowledgment is attached hereto as Exhibit B.)

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16. In the Acknowledgment, Barker expressly agreed that he would not:

disclose or use, directly or indirectly, at any time, any information


as above defined [information, knowledge or data related to
specifications, documents, inventions, methods, processes,
products or operations of Diamond], unless such disclosure or use
is in the course of my employment by Diamond or has been
expressly authorized in writing by Diamond. Except as required in
the ordinary course of my duties, I shall not remove any writings
containing information from the premises or possession of
Diamond . . . unless I have obtained express authorization in
writing by Diamond to do so.

Diamond Safeguards Its Confidential and Trade Secret Information

17. Diamond has implemented security measures to ensure that its confidential and

trade secret information is not used or disclosed outside of Diamond. For example, information

stored in Diamond’s computer systems is password protected, and access is limited to employees

on a need-to-know basis. Remote access to Diamond’s network is also password protected and

is permitted only through a secured connection.

18. Diamond further protects confidential computer information with a mandatory 15-

minute lock out on company computers. This system operates so that if an employee leaves his

or her computer unattended for 15 minutes, the computer will lock, and access can be restored

only through entry of a password. Diamond also automatically includes confidentiality notices

as a footer to all company e-mails notifying the recipients that the contents of the e-mail should

be considered confidential.

19. In connection with being hired by Diamond, employees with access to

confidential and/or trade secret information are required to enter into confidentiality agreements

with Diamond, like Barker did in his Offer Letter and Acknowledgment. As described above,

these agreement restrict the use of Diamond’s confidential information.

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20. Diamond employees also receive training concerning their confidentiality

obligations concerning Diamonds’ confidential, proprietary and trade secret information.

21. Part of this employee training includes a review of Diamond’s Code of Conduct

and Ethics, which explicitly addresses and reinforces employees’ confidentiality obligations to

Diamond. (A true and correct copy of Diamond’s Code of Conduct and Ethics is attached hereto

as Exhibit C.)

22. Diamond’s Code of Ethics provides, in relevant part:

As a condition of employment with Diamond, each employee is


required to sign a confidentiality agreement. This agreement
imposes an obligation upon each and every employee to protect
Diamond’s proprietary information, which includes such things as
business, financial, research and development, engineering
marketing and personnel information.

Confidential information also includes any proprietary information


shared with Diamond by its customers and business partners, or
information that has been acquired by an employee during the
course of working for a former employer. Diamond employees
have an equal obligation to protect against the unauthorized
disclosure or misuse of such third party confidential information.
Anyone who has had access to confidential Company information
must keep it confidential at all times, both while working for
Diamond and after employment ends.
* * *
Employees must not share confidential Company information, or
any confidential information of a customer, distributor, supplier,
service provider or business partner, with anyone who has not been
authorized to receive it, except when disclosure is authorized or
legally mandated. An employee’s unauthorized use or distribution
of this information is extremely serious; it would violate his or her
Confidential Information and Invention Assignment Agreement
and could be illegal, resulting in civil liability or criminal penalties.

23. Diamond employees must sign an acknowledgment of receipt of the Code of

Conduct and Ethics and expressly must agree to be bound by, and to adhere to, all of the

principles and standards contained in the Code. Barker, like other Diamond employees, received

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the Code of Conduct and Ethics, and signed at least one acknowledgment wherein he agreed to

be bound to the confidentiality obligations under the Code. (A true and correct copy of Barker’s

signed Code of Conduct and Ethics acknowledgement, dated May 30, 2006, is attached hereto as

Exhibit D.)

Barker’s Resignation and Subsequent Illegal Acts

24. On or about October 9, 2009, Barker voluntarily resigned his employment from

Diamond, citing health reasons for his desire to cease employment.

25. After his resignation and exit interview, Barker returned two company-issued

laptops that were in his possession to Diamond’s Chicago field sales office. The laptops were

sent to Diamond’s operations headquarters in Stockton, California, and were inspected by

Diamond’s IT personnel as part of the normal inspection and archiving protocol Diamond

undertakes when an employee leaves the company.

26. The inspection of Barker’s laptops revealed that Barker had intentionally deleted

all data from one of the laptops and scrubbed his hard drive before returning the computer to

Diamond. While Diamond’s investigation continues, Diamond is concerned that Barker may

have utilized an external software program to scrub the hard drive of data. Barker’s deletion of

data from his computer has not only hampered Diamond’s investigation into Barker’s

wrongdoing, but also may deprive the company of valuable business information that Barker, as

a highly-ranked sales executive, maintained as part of his job for Diamond.

Barker Wrongfully Obtains and Discloses Highly-Sensitive Diamond Information

27. On November 30, 2009, Barker sent a series of four (4) e-mails to Timothy

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Ramey, a financial analyst with D.A. Davidson & Co. who covers Diamond.1

28. The body of these e-mail messages purports to disclose significant inside and

confidential information concerning Diamond’s finances and operation, company priorities and

strategies, and performance. In addition to the written content in the e-mail messages, Barker

attached several files and reports revealing confidential Diamond information.

29. At least two of reports transmitted by Barker – one entitled “Diamond Foods Top

Customer Report,” and the other “North American Retail Daily Sales Report” (together,

“Diamond Sales Reports” – contain non-public, highly-proprietary Diamond information

concerning Diamond’s top 27 customers and all national sales, specific sales data, trends and

forecasts (by customers and product line), and, critically, Diamond’s 2010 sales budgets.

30. Diamond has a competitive advantage from the information in the Diamond Sales

Reports not being generally or publicly known. Moreover, it would be impossible for a

competitor or other third party to recreate the entirety of the reports by lawful means; what

information in the reports that could be recreated could only be accomplished through significant

expense, time and resources.

31. Information like that contained in the Diamond Sales Reports can be accessed

only by select Diamond employees and brokers in Diamond’s sales and marketing operations

and high-level company executives. In addition, in meetings at which such information and data

is discussed, the confidentiality and sensitivity of the information is further reinforced to meeting

attendees by verbal statements and confidentiality warnings.

32. The sensitivity of the Diamond Sales Reports was not lost on Barker. In the e-

mail to which these particular two reports were attached, Barker warned: “This is not public data

1 Neither Mr. Ramey nor D.A. Davidson & Co. (“Davidson”) are accused of any wrongdoing in this
matter. In fact, it was Davidson that brought Barker’s conduct to Diamond’s attention.

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but a friend inside sent it to me. If you use it please keep your source confidential.” (A true and

correct copy of this e-mail is attached hereto as Exhibit E. Confidential Diamond information

has been redacted from the document.)

33. Several of the reports and files disclosed by Barker include financial reports

prepared by the A.C. Nielsen Company, which are made available by Nielsen through a paid

subscription service. Barker had access to Diamond’s Nielsen reports, through Diamond’s paid

subscription, as part of his job at Diamond.

34. Upon information and belief, several of the Nielsen reports transmitted by Barker

were received by Barker as part of his job at Diamond, and were wrongfully retained by him

after his resignation from the company.

35. Diamond never consented or approved of Barker’s disclosure of Diamond

information to Mr. Ramey or any other third party.

Barker Induces a Diamond Employee to Provide Diamond’s Confidential Information

36. Barker’s admission in the above e-mail reveals yet another wrongful act. The

Diamond Sales Reports that accompanied this particular e-mail were created on or after

November 20, 2009 – long after Barker left Diamond’s employ. Barker indicates that “a friend

inside” Diamond sent these reports to Barker.

37. While Diamond’s investigation continues, Barker, upon information and belief,

induced a Diamond employee who formerly reported to Barker, to provide these highly-

confidential reports to him.

38. Diamond has determined that on November 30, 2009 – the same day Barker sent

the reports to Mr. Ramey – the Diamond employee in question sent e-mails from his Diamond e-

mail account to his personal Google e-mail account which contained, among other files and

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reports, the very Diamond Sales Reports that Barker sent to Ramey.

39. The Diamond employee in question has resigned his employment with Diamond,

to be effective December 4, 2009, and has indicated that he will be going to work with Barker at

Vita Foods.

Barker Is Shopping Diamond Inside Information for Personal Profit

40. At least part of Barker’s motivation for illegally disclosing high-sensitive

Diamond information to Mr. Ramey, and perhaps others, is apparent from Barker’s own e-mail –

Barker is trying to personally profit from trade in Diamond information.

41. In one of his November 30 e-mails to Mr. Ramey, Barker makes explicit his fee-

for-information offer: “I would like to keep in touch and if your company allows it, possibly

setup some type of consulting arrangement for an agreed upon fee where I can be helpful.” (A

true and correct copy of this e-mail is attached hereto as Exhibit F. Confidential Diamond

information has been redacted from the document.)

42. Diamond’s investigation has revealed that Barker may have shopped inside

Diamond information to financial analysts prior to the November 30, 2009 e-mails to Mr.

Ramey, and possibly while he was still working for Diamond. Barker recently bragged to a

Diamond employee that he had negotiated a consulting arrangement with one analyst whereby he

was being paid $1,000 per day for information.

43. During his employment with Diamond and thereafter, Barker was prohibited from

discussing confidential Diamond matter with analysts or any other third party.

44. Moreover, in order to comply with SEC rules and regulations, Diamond’s

communications with analysts was and is limited to select Diamond executives and officers, and

is made available to all Diamond analysts equally.

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45. If the information Barker wrongfully possesses, and that he has already illegally

disclosed to at least one outside analyst, were to be misused and/or improperly relied upon by an

analyst, Diamond would suffer unwarranted harm to its goodwill and market value in an amount

far in excess of $75,000.

COUNT I
VIOLATION OF THE COMPUTER FRAUD AND ABUSE ACT
18 U.S.C. §1030

46. Diamond realleges and restates paragraphs 1-45 as if fully restated herein.

47. The Computer Fraud and Abuse Act (“CFAA”) provides for a private right of

action against anyone who “intentionally accesses a computer without authorization or exceeds

authorized access, and thereby obtains information from any protected computer if the conduct

involved an interstate or foreign communication.” 18 U.S.C. §§1030(a)(2)(C), (g).

48. The CFAA provides for a private right of action against anyone who (i)

intentionally transmits a program, code or command to a protected computer, and as a result of

such conduct either recklessly causes damage or causes damages and loss, or (ii) who accesses a

protected computer without authorization and, as a result of that conduct, causes damage and/or

loss. 18 U.S.C. §§1030(a)(5), (g).

49. Diamond’s computers are used to conduct interstate communications and

commerce and are thus “protected computers” within the meaning of the CFAA, which includes

a computer “used in or affecting interstate or foreign commerce or communication.” 18 U.S.C.

§§1030(e)(2).

50. On information and belief, Barker intentionally transmitted commands to his

Diamond computer to cause the all of the Diamond information and data contained thereon to be

deleted and rendered inaccessible to Diamond. Diamond is concerned that Barker accomplished

this mass deletion through the intentional transmission of a computer program or code designed

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to erase and obscure data on computer hard drives.

51. At the time Barker deleted the files and data on his Diamond computer, Barker

did not have authorization or entitlement to access his Diamond computer because he had, upon

information and belief, already resigned and/or breached his fiduciary and loyalty duties to

Diamond.

52. Upon information and belief, Barker intentionally and improperly transferred

Diamond confidential and proprietary files to external storage devices for personal use prior to

the mass deletion of such materials from Diamond’s computer.

53. Diamond has suffered damage and loss as the result of Barker’s actions.

Diamond has suffered and/or will with reasonable certainty suffer losses exceeding $5,000.

Diamond’s investigations into Barker’s illegal conduct has just begun and Diamond is in the

process of retaining outside computer forensic experts to discover the extent and consequences

of Barker’s unauthorized activities and damage to the integrity of the Diamond’s data.

COUNT II:
VIOLATION OF ILLINOIS TRADE SECRETS ACT
765 ILCS 1065/1 et seq.

54. Diamond realleges and restates paragraphs 1-53 as if fully restated herein.

55. As set forth above, Barker had access to and is currently in the possession of

certain confidential and proprietary information constituting “trade secrets” as defined by the

Illinois Trade Secrets Act, 765 ILCS 1065/1 et seq., including the pricing and other strategic

financial data concerning Diamond’s sales, sales plans, trends and budgets, and top customers.

56. This information is sufficiently secret to derive economic value from not being

generally known to other persons or entities who can obtain economic value from its disclosure

or use.

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57. This information is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy or confidentiality.

58. Barker’s illegal disclosure and current possession of, and refusal to return,

Diamond’s trade secret information is being done without Diamond’s authorization or

permission. Barker has also used and disclosed Diamond’s confidential and trade secret

information with full knowledge that this information was acquired under circumstances giving

rise to a duty to maintain its secrecy or limit its use.

59. Barker’s unauthorized possession, use, and/or disclosure of Diamond’s trade

secret information, actual and threatened, violates the Illinois Trade Secrets Act.

60. As a result of the foregoing and as long as Barker possesses Diamond’s trade

secret information, Diamond has no adequate remedy at law and has suffered and will continue

to suffer an imminent risk of further irreparable harm, unless Barker’s activities are enjoined by

the Court and Barker is required to cease any and all disclosure of Diamond information, to

return Diamond’s documents and information and to provide a complete accounting of all

Diamond’s documents and information (both hard and electronic copies) that he removed or

obtained from Diamond and/or disclosed to third parties.

61. Diamond has been damaged and continues to be damaged by the

misappropriation, use, and/or disclosure of its trade secrets by Barker.

COUNT III:
BREACH OF CONTRACT

62. Diamond realleges and restates paragraphs 1-61 as if fully restated herein.

63. Barker’s executed Offer Letter, Acknowledgment and Code of Conduct and

Ethics constitute valid and enforceable contracts.

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64. Diamond has fully performed all of its obligations to Diamond under these

agreements.

65. Barker breached these agreement by, among other wrongful acts: (i) retaining

Diamond property and confidential information following his resignation from Diamond; (ii)

obtaining additional Diamond confidential information after his employment with Diamond

ceased; and (iii) purposefully and disclosing confidential and trade secret Diamond information

to third parties, both during and after his employment with Diamond.

66. Diamond has no adequate remedy at law and will suffer irreparable harm unless

Barker’s activities are enjoined by the Court and Barker is required to immediately cease

disclosing other otherwise using Diamond’s information to third parties, to return Diamond’s

documents and information and to provide a complete accounting of all Diamond’s documents

and information (both hard and electronic copies) that he removed or obtained from Diamond.

COUNT IV:
CONVERSION

67. Diamond realleges and restates paragraphs 1-66 as if fully restated herein.

68. The property at issue is Diamond’s confidential and trade secret information in

any form, such as the electronic documents or files containing such information that are currently

possessed by Barker.

69. Diamond is the rightful owner of this property. Diamond is lawfully entitled to

the possession thereof, and it has an absolute and unconditional right to the immediate

possession of the property.

70. Barker has wrongfully and without authorization obtained and retained control,

dominion, and/or ownership of this property. After his employment was terminated, Barker no

longer had any right to possess or obtain this property.

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71. Diamond has demanded the return of this property, and Barker has failed to return

it.

72. Barker’s possession and retention of this property now constitutes conversion and

has harmed Diamond.

COUNT V:
BREACH OF FIDUCIARY DUTY

73. Diamond realleges and restates paragraphs 1-72 as if fully restated herein.

74. Barker, as an employee and high-ranking executive of Diamond, owed fiduciary

duties to Diamond. These fiduciary duties include the obligation not to disclose Diamond’s

confidential information to third parties without Diamond’s authorization.

75. Barker breached his fiduciary duties to Diamond by, inter alia, disclosing

Diamond’s confidential information to Mr. Ramey and, upon information and belief, to other

analysts and third parties.

76. By reason of the foregoing, Barker has directly and proximately caused injury to

Diamond, and Diamond has suffered, and continues to suffer, substantial injury as a result of

Barker’s actions.

COUNT VI:
INDUCING BREACH OF FIDUCIARY/LOYALTY DUTY

77. Diamond realleges and restates paragraphs 1-76 as if fully restated herein.

78. Barker, being fully aware and in complete disregard of another employee’s

employment with Diamond, and fiducial and loyalty duties to Diamond, actively encouraged,

induced, and persuaded that employee to breach his fiduciary duties to Diamond.

79. By reason of the foregoing, Barker has directly and proximately caused injury to

Diamond, and Diamond has suffered, and continues to suffer, substantial injury as a result of

Barker’s actions.

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PRAYER FOR RELIEF

WHEREFORE, Diamond requests that judgment be granted in its favor and against

Barker, and that Diamond be granted:

(a) a preliminary and permanent injunction against Barker and anyone acting in

concert with him, prohibiting them from using or disclosing Diamond’s confidential and

proprietary information (including trade secrets);

(b) an order mandating that Barker: (i) immediately return any and all copies,

reproductions, summaries, or notes made from any confidential or proprietary information

(including trade secrets) that came into his possession through his employment with Diamond, or

obtained by him thereafter; and (ii) immediately produce for inspection his personal computer(s)

and any other electronic storage media in Barker’s possession, custody, or control, so that they

may be inspected for Diamond information;

(c) compensatory and punitive damages;

(d) reasonable attorneys’ fees and court costs; and

(e) such other relief as this Court deems just and proper.

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Dated: December 3, 2009 Respectfully submitted,


DIAMOND FOODS, INC.

By: __/s/ John M. Dickman______________


One of Its Attorneys
John M. Dickman (jdickman@winston.com)
Shane W. Blackstone (sblackstone@winston.com)
Marlén Cortez Morris (mcmorris@winston.com)
WINSTON & STRAWN LLP
35 West Wacker Drive
Chicago, Illinois 60601
(312) 558-5600
(312) 558-5700 (fax)

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IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DIAMOND FOODS, INC., )


a Delaware corporation, )
)
Plaintiff, )
)
vs. ) Case No.
)
JAMES M. BARKER, )
)
Defendant. )
)

INDEX OF EXHIBITS TO PLAINTIFF’S VERIFIED


COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Description Exhibit No.

Offer Letter Signed by James M. Barker ............................................................................A

Acknowledgment of Obligation Agreement Signed by James M. Barker..........................B

Diamond Foods, Inc.’s Code of Conduct and Ethics..........................................................C

Acknowledgment Signed by James M. Barker of Diamond Foods, Inc.’s


Code of Conduct and Ethics ...............................................................................................D

E-mail from James M. Barker dated November 30, 2009, sent at 1:32 PM....................... E

Email from James M. Barker dated November 30, 2009, sent at 1:28 PM ........................ F
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Exhibit A
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Exhibit B
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Exhibit C
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DIAMOND FOODS, INC.


CODE OF CONDUCT AND ETHICS
FOR EMPLOYEES, OFFICERS AND DIRECTORS

1. Introduction

Diamond Foods, Inc., a Delaware corporation (“Diamond” or “Company”) has adopted


this Code of Conduct and Ethics (this “Code”) to set high standards of ethical business conduct
and provide guidance applicable to every employee, including every officer, and director of the
Company.

1.1 Scope

This Code shall apply to all Diamond employees and directors. This Code is intended to
supplement and not to replace existing Company policies and procedures. Diamond may modify
or update these more specific policies and procedures from time to time and adopt new company
policies and procedures in the future.

Nothing in this Code is intended to alter the existing legal rights and obligations of
Diamond or any of its employees or directors, including “at will” employment arrangements or
the terms of any employment-related agreements.

1.2 Responsibility

It is every employee’s and director’s responsibility to read and understand this Code, and
to use it as a guide to the performance of his or her responsibilities for the Company. This Code
cannot address every ethical issue or circumstance that may arise, so, in complying with the
letter and spirit of this Code, employees and directors must apply common sense, together with
high personal standards of ethics, honesty and accountability, in making business decisions
where this Code has no specific guideline. In complying with this Code, employees and
directors should also consider the conduct of their family members and others who live in their
household.

Diamond expects all of its directors, executives, managers and other supervisory
personnel to help foster a sense of commitment to this Code among all of its employees, and to
foster a culture of fairness, honesty and accountability within the Company. Diamond also
expects such personnel to ensure that Diamond’s agents and contractors conform to Code
standards when working on Diamond’s behalf.

1.3 Compliance

Any employee that needs help understanding this Code, or how it applies to conduct in
any given situation should contact his or her supervisor or the Compliance Officer designated by
the Company. In addition, employees should be alert to possible violations of this Code by
others and should report suspected violations, without fear of any form of retaliation, as
described in Section 13.

2. Applicable Documents

24579/00018/DOCS/1506861.3
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This Code is intended to supplement and not to replace existing Company policies and
procedures, including without limitation those set forth in the Company’s Employee Handbook,
as it may exist from time to time.

3. General Legal and Ethical Obligations

Diamond’s success depends upon each employee and director performing his or her
Company duties in compliance with applicable laws and in cooperation with governmental
authorities. It is essential that employees and directors know and understand the legal and
regulatory requirements that apply to Diamond’s business and to their specific area of
responsibility. While employees and directors are not expected to have complete mastery of
these laws, rules and regulations, they are expected to be able to recognize situations that require
them to consult with others to determine the appropriate course of action. To address questions
in the area of legal compliance, employees should approach their supervisor or the Compliance
Officer immediately.

Legal compliance is only a part of Diamond’s ethical responsibility, however, and should
be viewed as the minimum acceptable standard of conduct. Diamond strives to act with the
utmost integrity, not just in its most important corporate decisions, but also in the actions taken
every day by its employees and directors. Ethical conduct is a high ideal, but often just means
exercising common sense and sound judgment. Acting ethically will help Diamond become a
better company, a better commercial partner for other companies, and a better corporate citizen.

3.1 International Business Laws

Employees and directors are expected to comply with all applicable laws wherever they
travel on Company business, including laws prohibiting bribery, corruption or the conduct of
business with specified individuals, companies or countries. Diamond also expects employees
and directors to continue to comply with U.S. laws, rules and regulations governing the conduct
of business by U.S. citizens and corporations outside the United States.

These U.S. laws, rules and regulations, which extend to all of Diamond’s activities
outside the United States, include:

x The Foreign Corrupt Practices Act, which prohibits any corrupt offer, payment,
promise to pay, or authorization to pay any money, gift, or anything of value (made
directly or through intermediaries) to any foreign official, or foreign political party,
candidate or official, in order to obtain or retain business for anyone or direct
business to anyone, and requires the maintenance of accurate books of account, with
all company transactions being properly recorded;

x U.S. embargoes, which restrict or, in some cases, prohibit U.S. persons, corporations
and, in some cases, foreign subsidiaries from doing business with certain countries,
groups or individuals;

x Export controls, which restrict travel to designated countries or prohibit or restrict


the export of goods, services and technology to designated countries, identified

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Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 12 of 31

persons or entities from the United States, or the re-export of U.S.-origin goods from
the country of original destination to such designated countries or identified
companies or entities; and

x Anti-boycott compliance, which prohibits U.S. companies from taking any action
that has the effect of furthering any unsanctioned boycott of a country friendly to the
United States.

Employees and directors who have questions as to whether an activity is restricted or


prohibited should contact the Compliance Officer before taking any action.

4. Conflicts of Interest

Although employees and directors are generally free to engage in personal financial and
business transactions, this freedom is not without constraints. Every employee and director must
avoid situations where loyalties may be divided between Diamond’s interests and the employee's
or director’s own interests. Employees and directors should also seek to avoid the appearance of
a conflict of interest. If an employee is considering engaging in a transaction or activity that may
present a conflict of interest or the appearance of a conflict of interest, the employee should
disclose the matter to the Compliance Officer, so that, if appropriate, the Compliance Officer
may disseminate such information and/or obtain approvals before the employee engages in such
transaction or activity.

In evaluating whether an actual or contemplated activity may involve a conflict of


interest, an employee or director should consider:

 Whether the activity would appear improper to an outsider;

 Whether the activity could interfere with the job performance or morale of a
Company employee;

 Whether the employee or director involved in the activity has access to confidential
Company information or influence over significant Company resources or decisions;

 The potential impact of the activity on the Company’s business relationships,


including relationships with customers, suppliers and service providers; and

 The extent to which the activity could benefit the employee or director or his or her
relative, directly or indirectly.

A few examples of activities that could involve conflicts of interests include:

 Aiding Diamond’s competitors. Aiding Diamond’s competitors can include


without limitation passing confidential Company information to a competitor or
accepting payments or other benefits from a competitor.

 Participating in any company that does business with Diamond or seeks to do


business with Diamond. Employment by or service on the board of a customer,

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distributor, supplier or vendor is generally discouraged and employees and directors


must seek approval in advance if they plan to have such a relationship.

 Owning a significant financial interest in a competitor or a company that does


business with Diamond or seeks to do business with Diamond. In evaluating such
interests for conflicts, both direct and indirect interests that an employee or director
may have should be considered, along with factors such as the following:

¾ The size and nature of the interest;

¾ The nature of Diamond’s relationship with the other entity;

¾ Whether the employee or director has access to confidential Company


information; and

¾ Whether the employee or director has an ability to influence Company decisions


that would affect the other entity.

Any employee or director who has or wishes to acquire a significant financial interest
in a competitor; or in a customer, supplier or vendor with which he or she has direct
business dealings (or approval responsibilities) must consult with the Compliance
Officer. Similarly, any employee or director who experiences a change of position or
seniority that results in direct business dealings with a customer, supplier or vendor in
which he or she already has a significant financial interest must consult with the
Compliance Officer.

 Having authority on behalf of Diamond over a co-worker who is also a family


member, or transacting business on behalf of Diamond with a family member.
Any employee who may be involved in such a situation should consult with his or
her supervisor and the Compliance Officer to assess the situation and an appropriate
resolution.

 Soliciting or accepting payments, gifts, loans, favors or preferential treatment


from any person or entity that does or seeks to do business with Diamond. See
Section 4.1 for further discussion of the issues involved in this type of conflict.

 Taking personal advantage of corporate opportunities. See Section 4.2 for


further discussion of the issues involved in this type of conflict.

Employees must avoid these situations (and others like them), whenever their loyalty to
Diamond could be compromised. Employees who believe they are involved in a potential
conflict of interest are expected to discuss it with the Compliance Officer.

Like employees, members of the Board of Directors should also seek to avoid conflicts of
interest with their obligations to Diamond. To that end, any director who confronts a conflict of
interest in connection with a decision to be made by the Board, or otherwise, should take such
steps as are necessary to avoid the conflict of interest, including notifying the Chairman of the

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Board and Chief Executive Officer and, if appropriate, recusing himself or herself from
discussions by the Board which could be perceived to create such a conflict.

4.1 Gifts and Entertainment.

Building strong relationships with customers, distributors and suppliers is essential to


Diamond’s business. Socializing with customers, distributors and suppliers is an integral part of
building those relationships. However, good judgment should be exercised in providing or
accepting business meals and entertainment or inexpensive gifts, so that all such conduct is
consistent with customary and prudent business practices.

While individual circumstances differ, the overriding principle concerning gratuities is


not to give or accept anything of value that could be perceived as creating an obligation on the
part of the recipient (whether a Diamond employee, a customer, a distributor or a supplier) to act
other than in the best interests of his or her employer or otherwise to taint the objectivity of the
individual's involvement. It is the responsibility of each employee to ensure that providing or
accepting a gratuity is appropriate under the circumstances.

This principle applies to Diamond’s transactions everywhere in the world, even if it


conflicts with local custom. Under some statutes, such as the United States Foreign Corrupt
Practices Act, giving anything of value to a government official to obtain or retain business or
favorable treatment is a criminal act subject to prosecution and conviction. Employees should
discuss any uncertainties about proposed entertainment or gifts with the Compliance Officer.

4.2 Corporate Opportunities

Employees and directors may not compete with Diamond or take personal advantage of
business opportunities that Diamond might want to pursue. Employees and directors who are
interested in the use of Company property or information, or in pursuing an opportunity that they
discovered through their Company position should consult with the Compliance Officer to
determine an appropriate course of action. Even opportunities that are acquired through
independent sources may be questionable if they are related to the Company’s existing or
proposed lines of business. Employees and directors owe a duty to Diamond to advance its
legitimate business interests when opportunities arise. Accordingly, participation in an outside
business opportunity that is related to Diamond’s existing or proposed lines of business is
prohibited.

4.3 Employee Loans

Loans to employees or their family members by Diamond, or guarantees of their loan


obligations, could constitute an improper personal benefit to the recipients of such loans or
guarantees. Accordingly, Company loans and guarantees for executive officers and directors are
expressly prohibited by law and Company policy. Any loans to employees require the prior
approval of the Board of Directors.

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4.4 Related Party Transactions

A related party transaction includes any transaction, or series of similar transactions,


since the beginning of the Company’s last fiscal year, or any currently proposed transaction or
series of similar transactions, where: (i) the Company or its subsidiary is a party, (ii) the amount
involved exceeds $60,000 in aggregate, and (iii) in which any of the following persons had or
will have a direct or indirect material interest: any director or director nominee; any executive
officer; any holder of more than five percent of the Company’s common stock; or any member of
the immediate family of such persons. Through its Compliance Officer, Diamond will conduct a
review of all related party transactions for potential conflicts of interest situations. All related
party transactions must be approved by the Audit Committee of the Board of Directors or
another independent body of the Board of Directors.

5. Insider Trading

In the course of doing business for Diamond, or in discussions with one of its customers,
distributors or suppliers, Diamond employees and directors may become aware of material non-
public information about Diamond or another organization. Information is considered “material”
if it might be used by an investor to make a decision to trade in the public securities of the
company. Employees may only use such information for the purpose of conducting Company
business.

Federal law and Company policy prohibit employees and directors, directly or indirectly
through their families or others, from purchasing or selling Company stock while in the
possession of material, non-public information concerning Diamond. This same prohibition
applies to trading in the stock of other publicly held companies on the basis of material, non-
public information.

If an employee or director is considering buying or selling a stock because of inside


information he or she possesses, he or she should assume that such information is material. It is
also important for the employee or director to keep in mind that if any trade he or she makes
becomes the subject of an investigation by the government, the trade will be viewed after-the-
fact with the benefit of hindsight. Consequently, employees and directors should always
carefully consider how their trades would look from this perspective.

If an employee's or director’s family or friends ask for advice about buying or selling
Diamond stock, the employee or director should not provide it. Federal law and Company policy
also prohibit the employee or director from “tipping” family or friends regarding material, non-
public information that the employee or director learns about Diamond or any other publicly
traded company in the course of employment or service on the Board. The same penalties apply,
regardless of whether the employee or director derives any benefit from the trade.

Because of the sensitive nature of and severe penalties associated with insider trading and
tipping, employees and directors must exercise the utmost care when in possession of material
inside information. All employees and directors shall follow the guidelines and policies on
securities trading issued by Diamond and should review Diamond’s insider trading policy.

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6. Competition and Fair Dealing

Diamond strives to compete vigorously and to gain advantages over its competitors
through superior business performance, not through unethical or illegal business practices. No
employee may through improper means acquire proprietary information from others, possess
trade secret information, or induce disclosure of confidential information from past or present
employees of other companies. Employees that have obtained information of this variety by
mistake or have any questions about the legality of future actions must consult the Compliance
Officer, as described in Section 13.

All employees are expected to deal fairly and honestly with Diamond customers,
suppliers, employees and anyone else with whom they have contact in the course of performing
their Company duties. Making false or misleading statements about Diamond’s competitors is
prohibited by this Code, inconsistent with Diamond’s reputation for integrity and harmful to
Diamond’s business. Employees may not take unfair advantage of anyone through misuse of
confidential information, misrepresentation of material facts or any other unfair business
practice.

6.1 Policies Specific to Procurement

Employees involved in procurement have a special responsibility to adhere to principles


of fair competition in the purchase of products and services by selecting suppliers based
exclusively on normal commercial considerations, such as quality, cost, availability, service and
reputation, and not on the receipt of special favors.

6.2 Policies Specific to Sales

Employees involved in sales have a special responsibility to abide by all Company


policies regarding selling activities, including policies relevant to revenue recognition by the
Company.

6.3 Antitrust Laws

Antitrust laws are designed to protect customers and the competitive process. These laws
generally prohibit the Company from establishing:

 Price fixing arrangements with competitors;

 Arrangements with competitors to share pricing information or other competitive


marketing information, or to allocate markets or customers;

 Agreements with competitors or customers to boycott particular suppliers, customers


or competitors; and

 A monopoly or attempted monopoly through anticompetitive conduct.

Some kinds of information, such as pricing, production and inventory, should never be
exchanged with competitors, regardless of how innocent or casual the exchange may be, because

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even where no formal arrangement exists, merely exchanging information can create the
appearance of an improper arrangement.

Noncompliance with the antitrust laws can have extremely negative consequences for
Diamond, including long and costly investigations and lawsuits, substantial fines or damages,
and adverse publicity. Understanding the requirements of antitrust and unfair competition laws
of the jurisdictions where Diamond does business can be difficult, so employees and directors
are urged to seek assistance from the Compliance Officer whenever they have a question relating
to these laws.

7. Maintenance of Corporate Books, Records and Accounts; Financial Integrity;


Public Reporting

Diamond strives to maintain complete integrity of its records and public disclosure.
Diamond’s corporate and business records, including all supporting entries to its books of
account, must be completed honestly, accurately and intelligibly. Company records are
important to investors and creditors. They serve as a basis for managing Company business and
are important in meeting its obligations to customers, suppliers, creditors, employees and others
with whom Diamond does business. Diamond depends on its books, records and accounts
accurately and fairly reflecting, in reasonable detail, its assets, liabilities, revenues, costs and
expenses, as well as all transactions and changes in assets and liabilities.

To help ensure the integrity of its records and public disclosure, Diamond requires that:

 No entry be made in Diamond books and records that is intentionally false or


misleading;

 Transactions be supported by appropriate documentation;

 The terms of sales and other commercial transactions be reflected accurately in the
documentation for those transactions and all such documentation be reflected
accurately in Company books and records;

 Employees comply with Diamond’s system of internal controls and be held


accountable for their entries;

 Any off-balance sheet arrangements of the Company be clearly and appropriately


disclosed;

 No cash or other assets be maintained for any purpose in any unrecorded or “off-the-
books” fund;

 Assets and liabilities of the Company shall be recognized and stated in accordance
with Diamond’s standard practices and generally accepted accounting principles
(“GAAP”); and

 Records be retained or destroyed according to the Company’s records retention


policy.

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Diamond’s disclosure controls and procedures are designed to help ensure that
Diamond’s public disclosures are full, fair and accurate, that they fairly present its financial
condition and results of operations, and that they are timely and understandable. Employees who
collect, provide or analyze information for or otherwise contribute in any way to preparing or
verifying these reports should adhere to all disclosure controls and procedures and generally
assist the Company in producing financial disclosures that contain all of the information about
the Company that is required by law and would be important to enable investors to understand
Diamond’s business and its attendant risks. In particular:

x No employee may take or authorize any action that would cause Diamond’s financial
records or financial disclosures to fail to comply with GAAP, the rules and
regulations of the SEC or other applicable laws, rules and regulations;

x All employees must cooperate fully with Diamond’s finance department, as well as
Diamond’s independent public accountants and counsel, respond to their questions
with candor and provide them with complete and accurate information to help ensure
that the Company’s books and records, as well as its reports filed with the SEC, are
accurate and complete; and

x No employee shall knowingly make (or cause or encourage any other person to make)
any false or misleading statement in any of the Company’s reports filed with the SEC
or any third party or knowingly omit (or cause or encourage any other person to omit)
any information necessary to make the disclosure in any of such reports accurate in
all material respects.

If any employee becomes aware that Diamond’s public disclosures are not full, fair and
accurate, or if any employee becomes aware of a transaction or development that he or she
believes may require disclosure, he or she should report the matter immediately to the
Compliance Officer.

8. Records Management

The Compliance Officer has companywide responsibility for developing, administering


and coordinating the record management program, and issuing retention guidelines for specific
types of documents. Records should be maintained to comply with applicable statutory,
regulatory or contractual requirements, as well as those pursuant to prudent business practices.
Employees can contact the Compliance Officer for specific information on record retention

9. Political Contributions and Gifts

Diamond reserves the right to communicate its position on important issues to elected
representatives and other government officials. It is Diamond’s policy to comply fully with all
local, state, federal, foreign and other applicable laws, rules and regulations regarding political
contributions. Accordingly, it is Company policy that no corporate funds may be used to make
political contributions of any kind to any candidate, political party or to intermediary
organizations such as a political action committee (“PAC”), provided that this policy does not
prohibit the formation of a PAC sponsored by Diamond and the use of corporate funds to defray

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the administrative expenses of the operation of such a PAC in accordance with appropriate
federal and state laws. This general prohibition covers not only direct contributions but also
indirect assistance or support of candidates or political parties through the purchase of tickets to
special dinners or other fund-raising events, and the furnishing of any other goods, services or
equipment to political parties or committees. Political contributions or activities by individuals
on their own behalf are, of course, permissible. Employees should not make such contributions
in a way that might appear to be an endorsement or contribution by Diamond. No person may be
reimbursed directly or indirectly by the Company for any political contribution either to a
candidate or a PAC or for the cost of attending any political event.

10. Confidentiality

As a condition of employment with Diamond, each employee is required to sign a


confidentiality agreement. This agreement imposes an obligation upon each and every employee
to protect Diamond’s proprietary information, which includes such things as business, financial,
research and development, engineering marketing and personnel information.

Confidential information also includes any proprietary information shared with Diamond
by its customers and business partners, or information that has been acquired by an employee
during the course of working for a former employer. Diamond employees have an equal
obligation to protect against the unauthorized disclosure or misuse of such third party
confidential information. Anyone who has had access to confidential Company information
must keep it confidential at all times, both while working for Diamond and after employment
ends.

10.1 Sharing Information with Third Parties

Employees must not share confidential Company information, or any confidential


information of a customer, distributor, supplier, service provider or business partner, with anyone
who has not been authorized to receive it, except when disclosure is authorized or legally
mandated. An employee’s unauthorized use or distribution of this information is extremely
serious; it would violate his or her Confidential Information and Invention Assignment
Agreement and could be illegal, resulting in civil liability or criminal penalties.

10.2 Precautions

Employees must take precautions to prevent unauthorized disclosure of confidential


information. Accordingly, employees should also take steps to ensure that business-related
paperwork and documents are produced, copied, faxed, filed, stored and discarded by means
designed to minimize the risk that unauthorized persons might obtain access to confidential
information. Employees should not discuss sensitive matters or confidential information in
public places, and they should avoid discussing confidential information on cellular phones to
the extent practicable. Employees may not discuss Company business in any Internet “chat
room,” regardless of whether they use their own name or a pseudonym, or otherwise post
Company information on the Internet. All Company emails, voicemails and other
communications are presumed confidential and should not be forwarded or otherwise
disseminated outside of the Company, except where required for legitimate business purposes.

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Employees are required to observe the provisions of any other specific policy regarding
privacy and confidential information that the Company may adopt from time to time.

11. Protection and Proper Use of Company Assets

All employees and directors are expected to protect Diamond’s assets and ensure their
efficient use for legitimate business purposes. Theft, carelessness and waste have a direct impact
on Diamond’s profitability. Company property, such as computer equipment, buildings,
furniture and furnishings, office supplies and products and inventories, should be used only for
activities related to employment, although incidental personal use is permitted. Employees
should bear in mind that Diamond retains the right to access, review, monitor and disclose any
information transmitted, received or stored using Company electronic equipment, with or
without an employee’s or third party’s knowledge, consent or approval. Employees must
immediately report any misuse or suspected misuse of Company assets to their supervisor or the
Compliance Officer.

12. Media Contacts and Public Communications

It is Diamond’s policy to disclose material information concerning Diamond to the public


only in accordance with its communications and disclosure guidelines and policies, in order to
avoid inappropriate publicity and to ensure that all such information is communicated in a way
that is reasonably designed to provide broad, non-exclusionary distribution of information to the
public. All inquiries or calls from the press, investors and financial analysts should be referred to
the Chief Financial Officer (“CFO”). Diamond has designated its Chief Executive Officer
(“CEO”), CFO, Chief Operating Officer (“COO”) and investors relations staff as its official
spokespersons for financial matters and for marketing, technical and other related information.
These persons are the only ones who are authorized to communicate with the press, investors or
financial analysts on behalf of the Company, unless a specific exception has been made by the
CEO, CFO or COO.

13. Compliance Standards and Procedures

13.1 Compliance Resources

Diamond has an obligation to promote ethical behavior. Every employee is encouraged


to talk to his or her supervisor, managers and other appropriate personnel when in doubt about
the application of any provision of this Code.

In addition to fielding questions with respect to interpretation or potential violations of


this Code, the Compliance Officer is responsible for:

x Investigating possible violations of this Code;

x Training new employees in Code policies;

x Conducting annual training sessions to refresh employees’ familiarity with this Code;

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Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 21 of 31

x Updating this Code as needed, with approval of the Board of Directors, to reflect
changes in the law, Company operations and recognized best practices, and to reflect
Company experience with this Code; and

x Otherwise promoting an atmosphere of responsible and ethical conduct.

The most immediate resource available to employees for matters related to this Code is
their supervisor. The supervisor may have the information requested or may be able to refer the
question to another appropriate source. There may, however, be times when employees prefer
not to go to their supervisor. In these instances, employees should feel free to discuss their
concerns with the Compliance Officer. If an employee is uncomfortable speaking with the
Compliance Officer because he or she works in that employee’s department or is one of his or
her supervisors, the employee may contact the Chairperson of the Audit Committee of the Board
of Directors.

13.2 Clarifying Questions and Concerns; Reporting Possible Violations

(a) Employee Reporting

If an employee becomes aware of or suspects that unethical or illegal conduct has


occurred or is about to occur, the employee should discuss the matter promptly with his or her
supervisor or the Compliance Officer; even the appearance of impropriety could be very
damaging to the Company. Employees that are aware of a suspected or actual violation of Code
standards by others have a responsibility to report it.

All information regarding suspected ethical violations or unlawful activity will be


received on a confidential basis. While complete confidentiality cannot be guaranteed,
confidentiality will be maintained to the extent possible in conducting internal investigations
and, where action is warranted, in carrying out disciplinary measures. Employees are assured
that they may report unethical conduct without fear of retribution. Diamond will not tolerate
adverse actions being taken against an employee for reporting violations of law or Company
policies, or for participating in internal investigations.

(b) Compliance Officer Investigation

Supervisors must promptly report any complaints or observations of Code violations to


the Compliance Officer. The Compliance Officer will investigate all reported possible Code
violations promptly and with the highest degree of confidentiality that is possible under the
specific circumstances. Employee cooperation in the investigation will be expected. As needed,
the Compliance Officer will consult with outside counsel, the Human Resources department, the
Audit Committee, and the full Board of Directors if necessary.

(c) Response to Violations

If the investigation indicates that a violation of this Code may have occurred, Diamond
will take such action as it deems appropriate under the circumstances. If Diamond determines
that an employee is responsible for a Code violation, he or she will be subject to disciplinary
action up to, and including, termination of employment and, in appropriate cases, civil action or

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referral for criminal prosecution. Appropriate action may also be taken to deter any future Code
violations.

13.3 Identification of Responsible Parties; Anonymous Reporting Procedures

Employees are responsible for promptly reporting any issue or concern that they believe
in good faith may constitute a violation of this Code or any other Company policy. To report a
violation of this Code, or of any other Company policy, employees should contact the
Compliance Officer, who is the Company’s General Counsel, at skim@diamondnuts.com or
(209) 932-5640. Anonymous letters may be sent to: Attn: General Counsel, 1050 South
Diamond Street, Stockton, CA 95201.

To address any concerns regarding accounting, internal accounting controls or auditing


matters relating to Diamond or other issues that should be brought to the attention of the Audit
Committee, employees may contact the Audit Committee of the Board of Directors directly:

x By email to auditcommittee@diamondnuts.com or

x Employees that prefer to maintain anonymity may send correspondence to the Audit
Committee at the following outside mailing address: c/o Steve Neil, 1855 Gateway
Boulevard, Suite 700, Concord, CA 94520.

14. Waiver and Amendment

Any waiver or amendment of this Code that applies to any of Diamond’s directors or
executive officers must be in writing, must be authorized only by the Board of Directors and
must be promptly disclosed to stockholders, along with the reasons for the waiver. Any such
amendment or waiver will be disclosed as required by applicable laws, rules and regulations.

15. No Rights Created

This Code is a statement of fundamental principles, policies and procedures that govern
Diamond employees, officers and directors in the conduct of Diamond business. It is not
intended to and does not create any legal rights for any customer, supplier, competitor,
stockholder or any other person or entity.

16. Modifications

This Code shall be reviewed periodically by the Board of Directors and the Nominating
and Governance Committee of the Board of Directors and shall be updated as deemed
appropriate or necessary by the Board and/or the Nominating and Governance Committee.
Company management shall obtain written acceptance of this Code and maintain records thereof
from each employee and director. A copy of this Code and any subsequent updates hereto shall
be made available to the public on the Company’s website.

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Exhibit D
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 24 of 31
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 25 of 31

Exhibit E
Page 1 of 2
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 26 of 31

REDACTED

From: Jim Barker [mailto:jbarker@vitafoodproducts.com]


Sent: Monday, November 30, 2009 1:32 PM
To: Tim Ramey
Subject: FW: Diamond Sales Reports Through 11/20/09

Tim

YoumayormaynotwantthisdatabutIwillletyoudecide.Thisisnotpublicdatabutafriendinsidesentittome.Ifyouuseitpleasekeepyoursource
confidential.Thisisaninternaldocumentthatshowsgrosssalesrevenuebycustomerasfollows:

NorthAmericanTopCustomerSalesThrough11/20/09
NorthAmericanRetailDailySalesforEachregionThrough11/20/09

Thefirstfilecontainsthefollowinginformation:
x YTDgrosssalesrevenuedataforthetop27customersandentireretailcustomerbaseasanaggregate
o ThisisbrokendownbyYTD,QTDandMTDwith%changeversussameperiodpreviousyear
x TheFY2010forecastforeachcustomerbrokendownbybrandforyear,quarterandcurrentmonth

12/2/2009
Page 2 of 2
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 27 of 31
x Herearesomehighlights:













 REDACTED

















Thesecondfilesjustgivesthistoyoubydifferentbusinessunitsandregions

Acoupleofquestionstoaskmayinclude:






 REDACTED






Justtryingtobehelpful.Letmeknowifyouneedanythingelse.JMB

JimBarker
VicePresidentSales
VitaFoodProducts,Inc.

This email and any attachments thereto may contain private, confidential, and privileged material for the sole use of the intended recipient. Any review,
copying, or distribution of this email (or any attachments thereto) by anyone other than the intended recipient is strictly prohibited. If you are not the
intended recipient, please contact the sender immediately and permanently delete the original and any copies of this email and any attachments thereto.

12/2/2009
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 28 of 31

Exhibit F
Page 1 of 3
Case 1:09-cv-07504 Document 1-2 Filed 12/03/2009 Page 29 of 31

REDACTED

From: Jim Barker [mailto:jbarker@vitafoodproducts.com]


Sent: Monday, November 30, 2009 1:28 PM
To: Tim Ramey
Subject: FW: Analysis -- Snack Nut Baking Nut and MWPC Categories on Diamond
Importance: High
Sensitivity: Confidential

Tim,

It was good speaking to you today. As a follow-up to our call a few minutes ago, here is updated consumption sales data from Nielsen you can review. Here are
some toplines comments by brand and category. These are all pulled from the excel file “Nielsen Exec Team Monthly Updates 10-31-09. For more in depth
information down to the customer level, please refer to the other attached files.

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I would like to keep in touch and if your company allows it, possibly setup some type of consulting arrangement for an agreed upon fee where I can be helpful.
Let me know what else I can provide to you for the category, brand or company as you prepare for the earnings call.

Jim Barker
Vice President Sales
Vita Food Products, Inc.
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12/2/2009