Code of Business Conduct for Employees

7. Our Assets

     7.1. Protecting the Assets in Our Care

          7.1.a. The assets of Tully’s have been entrusted to our employees’ care by our shareholders. All employees are obligated to protect Tully’s assets and also the assets of others with which we are entrusted. These assets include physical property as well as intellectual property, such as confidential or proprietary information, copyrighted works of authorship, and trademarks. Asset protection includes the maintenance and security of such assets, and also includes the accurate maintenance of the related records and documents.

     7.2. Company Property and Services are Assets

          7.2.a. Tully’s prohibits the unauthorized use of Company time, labor, supplies, equipment, tools, buildings, or other assets for personal benefit of employees. If permission for use is granted, then employees are required to pay for personal use of our property and services (employees must not use Tully’s property for any purpose not related to Tully’s business without prior authorization from the appropriate manager).

          7.2.b. Collectively, Tully’s employees are responsible for safeguarding and making proper and efficient use of Tully’s property, including:

• Company time;
• Cash, checks and credit card documents received from customers, suppliers or others;
• Checks, promissory notes, stock certificates and other valuable documents;
• Charge cards provided by the Company;
• Land, buildings, and equipment (including vehicles, fax machines, copiers, computers and telephones);
• Inventories, materials and supplies (including office supplies);
• Computer hardware and software; and
• Information assets, including electronic data and intellectual property.

          7.2.c. Tully’ employees have an obligation to protect Tully’s property from loss, misuse, theft, and damage. Every employee who operates equipment in connection with his or her job is responsible for understanding its proper use.

     7.3. Intellectual Property and Trademarks are Company Assets

          7.3.a. The Company depends on intellectual property, such as information, processes, and technology. It is the responsibility of every Tully’s employee to help protect Tully’s intellectual property.

          7.3.b. Tully’s intellectual property includes confidential Tully’s business information, trade secret technology (such as computer software and systems), patented inventions and processes, trademarks, and copyrighted works of authorship.

          7.3.c. Tully’s trademarks (marks used in connection with goods) and service marks (marks used in connection with a service) that have been registered with the U.S. Patent and Trademark Office or with corresponding authorities in other nations should appear in print and other visual media with the appropriate registration notice. The Marketing Department should be consulted for proper usage of these notices. Incorrect usage of our trademarks should be reported to the Company Compliance Officer or the Marketing Department.

     7.4. Electronic Communications and Computer Systems are Company Assets

          7.4.a. Tully’s is committed to the use of appropriate technologies in its business operations. These tools expand the information available to us and enhance our ability to communicate with each other, our business partners, vendors, and customers. There are serious risks associated with the misuse of Tully’s electronic communications systems (e-mail, voice mail, faxes and telephone) and its computer systems.

          7.4.b. Employees may not reveal their passwords, user ID’s or other access information related to these systems to any person, without appropriate management authorization and a valid business reason. Employees are required to periodically update their passwords in accordance with Company policies.

          7.4.c. Employees shall not leave Company-provided computers, laptops or other equipment where it could be easily stolen or misused by unauthorized personnel.

          7.4.d. Employees may not download computer games, shareware, or freeware (unauthorized use could subject Tully’s to liability for copyright infringement or to viruses).

          7.4.e. Employees may not display, transmit, distribute, or make available information that could be abusive, obscene, defamatory, harassing, discriminatory, derogatory, offensive, or threatening. Employees may not use profanity or send jokes.

          7.4.f. Employees may not display, transmit, distribute, access, or make available information that could offend others based on race, religion, sexual orientation, military status, pregnancy, age, political belief, gender, disability, or national origin.

          7.4.g. Employees must exercise caution in handling of email messages from unfamiliar persons, with unusual content, unusual subject matter lines, attachments or Internet links. Attachments and Internet links in such emails may contain computer viruses or offensive materials. Generally, it is not advisable to open such attachments or follow such Internet links or to reply to such messages.

          7.4.h. Employees shall not use Company-provided systems or equipment to request, view or transmit illegal, pornographic or other materials that are offensive or are otherwise prohibited under the Tully’s Code of Business Conduct. If employees receive such materials from another Tully’s employee, instruct the other employee to immediately stop this activity and then report the employee’s violation of the Tully’s Code of Business Conduct. If an employee receives such materials from someone outside the Company, the employee should notify his or her manager.

          7.4.i. Employees may not interfere with or disrupt the normal operation of any Tully’s computer system or communications network without proper authorization.

          7.4.j. Employees may not use Tully’s electronic communications systems or computer systems to pursue personal profit or advancement of a non-Tully’s business interest.

          7.4.k. Employees may not engage in communications that are not directly related to their Tully’s business responsibilities (infrequent and minor incidental use of email, telephone, voicemail and faxes for personal communications that are otherwise compliant with the Tully’s Code of Business Conduct is permitted but is discouraged).

          7.4.l. Employees may not use Company-provided computers or Internet connections for web surfing or to visit web sites that are not directly related to their Tully’s business responsibilities (infrequent and minor incidental use that is otherwise compliant with the Tully’s Code of Business Conduct is permitted but is discouraged).

          7.4.m. Employees may not engage in any activity using these systems that is prohibited by any Tully’s policy, rule, or guideline.

     7.5. Confidential and Proprietary Information is a Company Asset

          7.5.a. Information is a valuable Tully’s asset. Open and effective dissemination of information is critical to our success. However, much information about Tully’s business activities is confidential or proprietary. Confidential information is information that Tully’s considers private and which is not common knowledge outside the Company. Proprietary information is information Tully’s owns, develops, purchases, or to which it otherwise has an exclusive right.

          7.5.b. All Tully’s employees are required to sign a Nondisclosure/Confidentiality Agreement at the time of hire, and may, at the Company’s option, be required to sign updated agreements as a condition of continued employment.

          7.5.c. Confidential and/or proprietary information includes (among other things):

• Pricing and rate information, including unpublished information about past, current, and future prices;
• Documents, records, or other information concerning Tully’s sales and marketing plans or activities;
• Documents, records, and other information concerning Tully’s strategies, business results, real estate plans, proposed new products or services, and financial data;
• Customer, supplier, shareholder and employee records and information;
• Data entrusted to us by a customer or supplier, or any party with whom the Company has a mutual nondisclosure or confidentiality agreement;
• Software and systems developed by Tully’s;
• Tully’s research and development, inventions, patents, recipes, formulae, ingredients, processes, procedures, trademarks and know-how; and
• Any other information that could place Tully’s at a competitive disadvantage.

          7.5.d. Safeguarding this information is the responsibility of all Tully’s employees. If employees gain access to Company proprietary or confidential information during the course of their employment, these employees must be careful not to share it with others, including fellow employees, unless they need to know it for a legitimate business reason that will not violate any policy, law or regulation. If employees not usually privy to confidential information as a part of their job responsibilities request that information from an employee with access to such data, that employee should consult with his or her manager or the Company Compliance Officer prior to divulging the requested information.

          7.5.e. Employees must also guard against unintentionally disclosing proprietary or confidential information. Employees must be sensitive when discussing confidential or proprietary information in public, when using public or mobile phones, when working with sensitive information on laptop computers in public, and when transmitting such information. The obligation to protect Tully’s confidential and proprietary information continues even after an employee leaves the Company.

          7.5.f. Just as Tully’s values and protects its own confidential and proprietary information, it is our policy and practice to respect the confidential and proprietary information of others.

     7.6. Sound Records Management Practices Protect Company Assets

          7.6.a. Many Tully’s employees record or prepare some type of information during our workday, such as financial reports, accounting records, governmental reports, expense reports, time cards, and so on. Many people inside and outside Tully’s depend on these reports to be accurate and truthful for a variety of reasons. These people include other employees, government agencies, our independent auditors, and the communities in which we operate. No employee may deviate from Tully’s requirement to record information accurately and truthfully.

          7.6.b. Properly maintaining corporate records is very important. To address this concern, records are maintained for required periods as defined in the Tully’s Records Retention Schedule. These controls are set forth in the Tully’s policies and procedures which should be followed consistently.

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