Code of Business Conduct for Employees

4. Our Employees

     4.1. The Tully’s Workplace

          4.1.a. Tully’s recognizes the importance of our employees. We value the contributions of our employees and we treat each individual with respect. Accordingly, we respect our employees' points of view, encourage their participation and suggestions, and give their complaints prompt and sincere attention.

          4.1.b. We help and encourage our employees to develop themselves, and we make our best efforts to keep our employees informed about Company activities and plans that may affect them or their work. Tully’s is also committed to providing and maintaining a work environment that respects the rights of all employees; that is free of harassing, hostile, or offensive behavior; and that is safe and healthy.

          4.1.c. Tully’s and its employees strive to comply with all applicable labor laws and regulations including those related to hours, wages, breaks, benefits and employee leave. Employees are required to accurately report their work time and other hours in compliance with Company policies and applicable laws and regulations. In the event of any question related to such matters, employees should contact the Human Resources Department.

          4.1.d. Tully’s does not allow employees or customers to solicit or distribute materials not related to our business operations at any Tully’s location at any time.

     4.2. Tully’s is Committed to Equal Opportunity and Anti-Harassment

          4.2.a. Tully’s Coffee is an equal opportunity employer and believes that every employee has the right to work in surroundings that are free from all forms of unlawful discrimination. It is Tully’s policy that employees will not be subjected to unlawful discrimination, and we are committed to complying with all applicable laws providing equal opportunities to individuals regardless of race, ethnicity, color, creed, sex, religion, age, marital status, sexual orientation, national origin, the presence of sensory, mental, or physical disability, ancestry, veteran’s status or any other status protected by federal, state, local or provincial law.

          4.2.b. Tully’s expects all employees to accomplish their work in a professional and businesslike manner. Harassment of a sexual, religious, racial or ethnic nature is a form of unlawful discriminatory behavior and will not be tolerated. Sexual harassment includes any type of conduct based on one’s gender, whether intentional or not, that is unwelcome and has the purpose or effect of creating a work environment that is hostile, offensive or coercive to a reasonable person. Sexual harassment may consist of many elements, including but not limited to: sexual favoritism; unwanted sexual advances, invitations or comments; cartoons, posters, photographs, drawings or gestures; leering or staring; innuendos, jokes, comments or questions about an individual’s body, activity, prowess or deficiency.

          4.2.c. If an instance of such behavior occurs, inform the offender that the behavior is not welcome. If the behavior continues or you are uneasy confronting the offender, report the behavior immediately to your Manager. If the behavior is coming from your Manager, or you are uncomfortable speaking with your Manager, contact the next level of management (for example, a District Manager or Department Head) or Human Resources.

          4.2.d. If you feel that behavior or statements of any other employee may constitute harassment or weaken our assurance of equal employment opportunity, you are obligated to report the matter to your Manager or Human Resources immediately. Please provide a detailed written account to your Manager or Human Resources so that appropriate action may be taken.

          4.2.e. Every report of discrimination and harassment will be taken seriously and investigated thoroughly. To every extent possible, consistent with the need to investigate and reconcile the problem, we will protect the confidentiality of those involved. There will be no retaliation against any Tully’s employee attempting to comply with this policy.

          4.2.f. There may be disciplinary action up to and including termination of employment against those who violate this policy as well as against any others who condone such conduct.

     4.3. Workplace Health & Safety Shall be Promoted

          4.3.a. Tully’s is committed to protecting the health and well being of Tully’s employees in the workplace. We strive to protect our employees, customers, and the public from injury and illness through our health, quality and safety programs. Government standards and employee input are used to develop comprehensive health, quality and safety programs and work processes that are designed to promote safe workplaces and good health.

          4.3.b. Tully’s has established operating standards to provide for product quality and sanitary services to our customers. These include the operation of clean locations and equipment. All locations and employees are expected to comply with these requirements and with applicable requirements of federal, state and local authorities.

          4.3.c. Where mandated by law, employees working in Retail stores shall possess and maintain a valid “food worker card.”

          4.3.d. In addition to our own health and safety standards, Tully’s also is responsible for complying with applicable industry safety regulations and guidelines, including those issued by OSHA and other federal, state and local regulatory agencies. All employees are responsible for understanding and complying with our health and safety processes, procedures, and guidelines. When an unsafe condition, practice, or non-compliant action is identified, appropriate action must be taken promptly to correct the condition and to prevent it from happening again.

          4.3.e. To protect both your safety and the safety of your coworkers, successful completion of New Hire Barista Training is mandatory before operating our store equipment. If you are injured on the job, please seek medical attention immediately, and notify your Manager or Human Resources. Each Tully’s Coffee work location has a First Aid kit; if you are unable to locate the kit or its contents, please inquire of your Manager or Human Resources immediately. In the event of a major emergency, do not hesitate to call 911 or contact an emergency aid unit.

          4.3.f. Employees are required to promptly submit a written incident report to the Human Resources department to advise the Company of any accident, workplace injury, non-compliant incident, or any situation presenting a danger of injury. This information will help ensure that employees who need medical attention promptly receive it, and will assist in preventing additional injuries. Through investigation of such reports, we can identify contributing factors. Whether the issue is found to be an unsafe work process, a facility issue, or employee behavior, we are committed to finding and fixing hazards in the workplace.

          4.3.g. The Human Resources Department and our Safety Committee administer programs to ensure the safety of our employees, including, but not limited to, the OSHA Compliance guidelines, workplace violence procedures, and accident and injury investigations. All employees must fully comply with the requirements of these programs as part of regular job performance.

          4.3.h. If you encounter an intruder in your work location, do not endanger yourself, your coworkers, customers, or others; give the person what he or she demands.

               After the person leaves the work location, please follow these steps:

               1. Call 911 immediately

               2. Call your Manager, District Manager or Department Head, or any other Manager at the Home Office to report the intruder

               3. Ask all witnesses to wait for the arrival of the Police. If this is not possible, write down the names, addresses and phone numbers of those who cannot wait. Write a detailed description of the intruder and the events exactly as they occurred, including the date and time.

               4. In the event of an abusive, disruptive, or uncontrollable customer, follow the instructions above.

     4.4. Substance Abuse is Prohibited

          4.4.a. Individuals using alcohol or drugs in improper or illegal manners create an increased risk to the safety of themselves and their co-workers. As Tully’s employees, you are prohibited from any involvement with alcohol, drugs, or any other substance that may impair performance at work. This policy specifically forbids working while under the influence of alcohol or drugs, and prohibits the use, sale, manufacture, possession or illegal distribution of alcohol, or other controlled substances on company premises, while conducting company business, or during working time. In addition, this policy forbids reporting to work under the influence of alcohol or drugs, and for purposes of this policy, working time includes any breaks.

          4.4.b. Any Tully’s employees taking prescription drugs that may affect their ability to perform job duties in a safe and effective manner should discuss the situation with their Manager and satisfactorily resolve any potential safety or performance concerns before beginning work.

          4.4.c. If an employee appears to be under the influence of drugs or alcohol, Tully’s may require the employee to submit to appropriate tests, including urinalysis, breath or similar tests, to confirm the existence of such substance in his or her system. Failure to promptly permit such tests upon request by a member of Tully’s management team or any positive result from such a test shall be grounds for disciplinary action, including possible termination.

          4.4.d. Violation of this policy may result in disciplinary action, up to and including termination. Consuming alcohol or drugs in circumstances that might adversely affect Tully’s corporate image may also result in disciplinary action. This may include requiring you to participate sufficiently in a rehabilitation program. Tully’s reserves the right to view each case at its discretion depending on specific circumstances.

     4.5. Workplace Violence is Prohibited

          4.5.a. Tully’s is committed to a safe working environment, free of threats, intimidation and physical harm. All employees have a right to work in a safe environment and share the responsibility for assuring each other's safety. Tully’s has a workplace violence policy of zero tolerance.

          4.5.b. Tully’s prohibits menacing conduct including, but not limited to, physical assaults, pushing, shoving, hitting, fighting, threatening comments, intimidation, and the intentional destruction of any Company property, employee property, customer property or merchandise. Tully’s also prohibits possession of weapons in the workplace. Any comments or behavior that reasonably could be interpreted as intent to do harm to employees, customers or property will be considered a threat.

          4.5.c. Any employee who believes he or she may be the target of violence or threats of violence, or is aware of violent or threatening conduct by another individual, that could result in injury to a Tully’s employee or customer or the destruction of property, has a responsibility to immediately report the situation to his or her immediate supervisor or manager. If the employee is unable to or prefers not to contact an immediate supervisor or manager, the employee can call the President, Company Compliance Officer or the Human Resources Department.

     4.6. Conflicts of Interest Must be Avoided

          4.6.a. All Tully’s employees are expected to give undivided business loyalty to the Company when conducting our job-related duties. Accordingly, each employee must be careful to avoid conflicts of interest (situations where his or her private interests conflict, or even appear to conflict, with the interests of Tully’s as a whole). Therefore, employees should not place themselves in situations that might force them to choose between their own personal interests and the interests of Tully’s.

          4.6.b. Conflicts of interest sometimes arise, despite our best efforts to avoid them. These issues can generally be resolved by promptly notifying the Company. Each employee must therefore promptly notify his or her manager, the Company Compliance Officer, or the President of any actual or potential conflict of interest situation. Conflicts of interest that cannot be avoided will require a written waiver under the Tully’s Code of Business Conduct.

     4.7. Doing Business with the Company by Employees is Restricted

          4.7.a. A conflict of interest could arise if an employee or a close relative of the employee has a personal interest in a company that supplies or seeks to supply goods or services to Tully’s, is a Tully’s customer or potential customer, or competes with Tully’s. Accordingly, employees should comply with the following standards in such situations:

• If an employee or a close relative is an employee of, or has a significant interest in a business that provides or is seeking to provide goods or services to Tully’s, the employee should not attempt to use his or her position with Tully’s to influence the bidding process or negotiation in any way.
• If an employee or a close relative is an employee of, or has a significant interest in a business that provides or is seeking to obtain goods or services from Tully’s, the employee should not attempt to use his or her position with Tully’s to influence the bidding process or negotiation in any way.
• If an employee has a close relative or a friend who works for a competitor and, as a consequence of their respective positions, a potential conflict could exist, the employee should notify his or her manager of this situation and discuss the potential problems so that the Company can provide guidance on how best to resolve the conflict.

          4.7.b. The Tully’s Code of Business Conduct is not intended to restrict or prohibit retail purchases of merchandise from the Company by employees for personal use, when that purchase is made in compliance with the Company’s Employee Purchase Policy.

     4.8. Employment Outside the Company is Subject to Limitations

          4.8.a. Although employment outside of Tully’s is not necessarily a conflict of interest, depending upon his or her position with Tully’s and depending upon the identity of the other company or organization, a conflict could arise. Outside employment could also be a conflict of interest if it causes employees (in reality or in appearance) to choose between that interest and the interests of Tully’s. If such a situation arises, our undivided business loyalty requires that we resolve the conflict in favor of Tully’s.

          4.8.b. Tully’s employees generally should not serve as directors, officers or employees of, or consultants to, any organization that supplies goods or services to Tully’s, buys goods or services from Tully’s, or competes with Tully’s.

          4.8.c. In some cases, Tully’s employees may be involved in outside businesses that are not Tully’s competitors or suppliers, or may hold political office or serve on civic boards. These situations do not necessarily constitute a conflict of interest, but it is the employee's responsibility to ensure that this activity does not conflict with Tully’s interests.

          4.8.d. If an employee is involved with another employer, company or organization outside of his or her Tully’s employment, the employee is required to keep the two activities strictly separated by adhering to the following standards:

• Employees may not do work relating to other organizations on Tully’s time;
• Employees may not use Tully’s equipment and supplies, or the time of any Tully’s personnel for their outside work;
• Employees may not promote products or services from an outside business to other Tully’s employees during working hours or on Tully’s property;
• Employees may not use the fact of their Tully’s employment or their position in the Company to promote an outside business.

     4.9. Improper Investments May Create Conflicts of Interest

          4.9.a. At Tully’s, we recognize and respect the right of employees to engage in financial and business activities outside of their jobs. However, these activities must be lawful and must not conflict or even appear to conflict with the interests of Tully’s.

          4.9.b. Employee investments in a company with which Tully’s does or may do business (including customers, suppliers, and service providers) and in competitors of Tully’s can raise important compliance issues relating to insider trading, conflicts of interest and misuse of confidential information.

          4.9.c. Employees may not make an investment in such a company if the employee has direct or indirect responsibility, or are in the line of authority for Tully’s business relationship with another company, if it would conflict or even appear to conflict with the interests of Tully’s. Such an investment constitutes an improper conflict of interest that must be avoided.

          4.9.d. Employees may not accept an offer to participate in an IPO or a so-called "friends and family" program in a company when the offer to participate in such a program arises because of his or her job with Tully’s. Such an offer raises issues of conflicts of interest. This prohibition also applies to their dependents and those living in their household, even if not related.

          4.9.e. Investments in mutual funds, or similar investment vehicles in which employees do not directly influence the selection, sale, or purchase of a particular stock or security, and NAIC investment clubs will not typically present the same likelihood of a conflict of interest as a direct purchase and are generally permissible, provided that the indirect interest is not a significant portion of his or her personal financial holdings.

          4.9.f. If employees are sure his or her investment does not violate the standards relating to insider trading, employees should ask themselves the following questions to determine whether a particular investment is appropriate under Tully’s policy regarding conflicts of interest:

• What is the nature of the relationship between Tully’s and the other company?
• Given the nature of the employee’s job with Tully’s, could the employee’s actions as a Tully’s employee affect the value of the employee’s investment in the other company? Could the employee’s actions enhance the employee’s investment, even if it is a relatively modest one from the employee’s perspective?
• Given the nature of the employee’s job with Tully’s, could the disclosure of the employee’s investment result in the appearance of a conflict of interest?

     4.10. Gifts and Entertainment Must be Minimized and Properly Handled

          4.10.a. The proper handling of gifts is an important element of Tully’s business relationships and its reputation. Giving and receipt of gifts in a business relationship may have the appearance of impropriety even if that was not the intent.

          4.10.b. Before an employee gives any gift to any party in connection with Tully’s business, the employee should review it with his or her manager and consider whether the giving of the gift would be in compliance with the Tully’s Code of Business Conduct, and whether the receipt of the gift would be likely to create a problem for the recipient with respect to the code of conduct of his or her employer.

          4.10.c. The issue of gifts and gratuities has particular legal implications when any government employee or entity is involved, and serious consequences can result from mishandling these relationships.

          4.10.d. Business gifts and entertainment are courtesies designed to build goodwill and sound working relationships among business partners. We do not want to obtain (or to appear to obtain) business through improper means or use improper means to gain any special advantage in the relationship. Business gifts that compromise, or even appear to compromise, our ability to make objective and fair business decisions are not permitted.

          4.10.e. The guidelines on "gifts and entertainment" apply to anything given or received as a result of a business relationship for which the recipient does not pay fair market value, including things such as travel, lodging, goods, services, and entertainment. These guidelines apply at all times and do not change during traditional gift-giving seasons or because of some special event. Items of nominal value (such as pens or calendars) and nominal value product samples provided for bona fide testing are generally acceptable, but acceptance of even such nominal-value items can be improper if done on a frequent or regular basis, particularly if they come from a limited number of sources. For this purpose, nominal value means having a value under $25.00.

          4.10.f. Solicitation of gifts is never appropriate.

          4.10.g. The giving or offering of a business gift is not permitted if prohibited by law or regulation, prohibited by known policies of the intended recipient's employer, intended to improperly influence, or would have the appearance of improperly influencing the intended recipient. Offering or accepting bribes, kickbacks or pay-offs is always prohibited.

          4.10.h. All gifts and entertainment that are offered to or received by employees, including the aforementioned infrequent items of nominal value, must be disclosed to his or her manager. His or her manager can then provide guidance on how best to deal with the matter and will contact the Company Compliance Officer for guidance. Gifts and entertainment, other than the aforementioned infrequent items of nominal value, will require a written waiver under the Tully’s Code of Business Conduct.

          4.10.i. There may be cases where refusal of a gift would cause embarrassment or hurt to the person offering it. This is particularly likely if a gift is offered as part of a public occasion while employees are a guest in certain countries. In these cases, the best practice generally is to accept the gift on behalf of Tully’s and promptly report it to his or her manager so the Company can decide how to handle it.

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