Theo Chocolate, Inc. Employee Handbook · Theo developed this Employee Handbook to help you understand the basic points regarding your importance to the Theo team, employment with

Theo Chocolate, Inc.

Employee Handbook

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Theo Chocolate Employee Handbook © 2012 Theo Chocolate, Inc. rev 20121130

TABLE OF CONTENTS

TOPIC Page

WELCOME TO THEO CHOCOLATE......................................................................................... 4ABOUT THEO CHOCOLATE..................................................................................................... 5PURPOSE OF THE HANDBOOK .............................................................................................. 6I. POLICIES & PRACTICES....................................................................................................... 7

Equal Employment Opportunity .............................................................................................. 7Communication and Problem Solving ..................................................................................... 7Protected Concerted Activity................................................................................................... 8Working at Theo ..................................................................................................................... 9

Workweek/Scheduling ......................................................................................................... 9Breaks and Rest Periods ..................................................................................................... 9Recording Work Hours .......................................................................................................10Overtime.............................................................................................................................11Employee Meetings ............................................................................................................11Inclement Weather or Other Unforeseen Situations............................................................11

Pay Periods and Pay Distribution...........................................................................................12Job Changes .........................................................................................................................12Performance Feedback and Development .............................................................................13

II. CLASSIFICATION AND COMPENSATION...........................................................................15Employment Classifications ...................................................................................................15Compensation Philosophy .....................................................................................................15Pay Adjustments....................................................................................................................16Compensated Absences........................................................................................................17

Holidays .............................................................................................................................17Personal Time Off...............................................................................................................17

Unpaid Absences...................................................................................................................19Medical Leaves of Absence................................................................................................19Maternity Leave ..................................................................................................................20Military Leave .....................................................................................................................20Domestic Violence Leave ...................................................................................................20Miscellaneous Leaves of Absence......................................................................................21

III. BENEFITS ...........................................................................................................................22Medical Insurance..................................................................................................................23Annual Physical Examination & Influenza Vaccinations .........................................................23

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Disability Insurance................................................................................................................23Dental Insurance....................................................................................................................24Retirement Savings ...............................................................................................................24Bus Pass Program.................................................................................................................24Volunteer Activities ................................................................................................................24Employee Purchases.............................................................................................................24

IV. STANDARDS OF CONDUCT..............................................................................................25Attendance and Punctuality ...................................................................................................25Harassment ...........................................................................................................................25Personal Visitors....................................................................................................................26Equipment and Technology Use ............................................................................................26Theo Products .......................................................................................................................26Appropriate Dress in the Workplace.......................................................................................26Drug and Alcohol Use............................................................................................................27Non-Solicitation in the Workplace ..........................................................................................27Confidentiality ........................................................................................................................28Social Media ..........................................................................................................................28Weapons ...............................................................................................................................28Violence in the Workplace .....................................................................................................28Smoking.................................................................................................................................29

V. YOUR SAFETY ....................................................................................................................29Health and Safety ..................................................................................................................29Reporting Safety Issues.........................................................................................................29First Aid Stations....................................................................................................................30Fire Prevention ......................................................................................................................30Property and Equipment Care................................................................................................30Safety Gear ...........................................................................................................................30Safe Work Habits...................................................................................................................31Food Handling and Good Manufacturing Practices ................................................................31

VI. CONCLUSION.....................................................................................................................32NOTES: ....................................................................................................................................33

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WELCOME TO THEO CHOCOLATE

Welcome to Theo Chocolate, Inc. (“Theo”). We take great pride in our company, our mission,our products, and -- of course – our people.

Theo hopes to provide a stimulating work environment, opportunities for personal growth, andjob satisfaction. We strive to provide rewards and recognition for dedicated service and forperforming well on the job. Theo recognizes that team members are our most valuableresource.

At Theo, we believe it is important that we share common values. Foremost, we value respectfor one another. Second, we value high performance from both individual employees and theteams in which they work. We expect our team members to take pride in their work andrespond to our guests, customers and suppliers with the highest integrity.

On behalf of everyone here at Theo, we welcome you to our team. We hope you will find youremployment with us a rewarding and challenging experience.

Joseph WhinneyFounder and Chief Executive Officer

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ABOUT THEO CHOCOLATE

Our Mission:

We’re dedicated to making our world a better place. And we’re finding ways to do it through ourpassion—bringing out the best of the cocoa bean. We are all connected. We touch oneanother’s lives in incredible ways. And we are responsible to and for one another. From thecacao farmer in the Congo, to the truck driver in Seattle, to the chocolate lover in Philadelphia—there is a thread that runs through us all. Theo believes in celebrating those connections, instrengthening them and in finding inspiration within them—inspiration to change the world. Weknow that every action has a result. That the choices we make here in Seattle, Washingtontouch lives across the planet in real and lasting ways. That knowledge, and that responsibility, iswhat drives us to do things differently, to help make the world a better place. We think aboutevery choice we make, every action we take and how it will impact our interconnected world.

Theo Chocolate started in 2005 and we produced our inaugural batch of chocolate in 2006. Asthe first organic and Fair Trade “Bean to Bar” chocolate factory in the United States, Theocarefully selects ingredients to ensure they meet our standards for not only quality, but alsosocial and environmental responsibility. Theo’s standards and practices include:• Using only pure ingredients that are grown as sustainably as possible. We source our

ingredients locally whenever possible.• Partnering with our growers by ensuring that they have the tools to produce the highest

value cocoa, have access to markets that fairly value their crop and have access toeducation for their families.

• Respecting our employees and suppliers.• Ensuring our product has high quality and integrity. We do this by controlling every step

of our own manufacturing process.• Continuing to reach for positive environmental impact of our own operation.• Using sustainable packaging and printing methods wherever possible.• Educating everyone we touch about social responsibility and environmental

accountability.

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PURPOSE OF THE HANDBOOK

At Theo we pride ourselves on being nimble rather than relying on a bookshelf of thick manualsto direct every step we take. We operate to a simple, overriding principle: “Do the right thing”.Of course, as creative, engaged and energetic individuals, Theo team members mightsometimes hold different views of what is the “right thing”. Also, as any group of people growslarger, there’s value in writing down a few things.

Theo developed this Employee Handbook to help you understand the basic points regardingyour importance to the Theo team, employment with our company, and general expectations ofTheo employees. This Handbook also presents an overview of the policies, benefits, and workenvironment provided by Theo Chocolate.

Please read the Handbook carefully. It’s important that you familiarize yourself with your rightsand responsibilities as a Theo Chocolate employee. Failure to follow Theo policies andstandards, or meet expectations, may result in review and disciplinary action, up to, andincluding termination of employment. So, if you have any questions, please request clarification. . . ask your immediate manager, Human Resources or any Theo executive.

This Handbook is not designed to cover all conceivable situations or answer every possiblequestion. If you wish more detailed information on any of these policies or have otherquestions, please feel free to ask your immediate manager, Human Resources, or any companyexecutive. As a company, Theo is committed to continually improving things to the extentpossible. Your comments, questions, concerns and ideas are important ingredients in helpingTheo Chocolate grow in the right direction.

Legal Stuff - - - The guidelines and policies contained in this Handbook are not designed to be,nor do they create, a contract for employment. Laws and other regulatory expectations oftenevolve over time, as does the business climate in which Theo operates. Accordingly, as abusiness, Theo Chocolate reserves the right to amend, modify, or discontinue any benefit orpolicy at its sole discretion, with or without prior notice. Employees will be informed of anychanges to this Handbook. As Washington is an “at will” employment state, both you andTheo Chocolate have the right to terminate the employment relationship at any time with orwithout reason. The provisions of this handbook take precedence over all other verbal andwritten representations that may have been made by Theo Chocolate representatives. Norepresentative of the company, other than the Chief Executive Officer, in writing, has theauthority to enter into any agreement contrary to the above.

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I. POLICIES & PRACTICES

Equal Employment OpportunityTheo Chocolate is an equal opportunity employer that makes employment decisions on thebasis of merit and business needs. As a matter of policy and practice, Theo Chocolate does notdiscriminate against employees and applicants on the basis of color, race, age, sex, nationalorigin, marital status, military status, veteran status, religion, sexual orientation, gender identity,genetic information, the presence of any sensory, mental or physical disability, political ideology,or other legally protected status or characteristic protected by local, state or federal law, with therespect to recruitment, hiring, training, promotion and other terms and conditions ofemployment. All employment decisions shall be consistent with the principle of equalemployment opportunity.

Theo employs only those individuals who are lawfully authorized to work in the United States.In order to comply with federal immigration laws, we obtain information and documentation fromeach employee to verify their authorization to be employed. Employees must complete a FormI-9 and provide evidence of identity and authorization to work in the United States on the firstday of employment. These documents must be completed prior to starting work. Thisdocumentation will be used for compliance with federal laws only and will not be used to makeany other employment related decisions. If your work authorization changes or terminates afteryou have begun working at Theo, please immediately inform either your immediate manager, orHuman Resources.

Communication and Problem SolvingTheo Chocolate, its employees, managers and shareholders all understand that a large part ofthe company’s success depends on the skill, creativity, diligence and dedication of the teammembers employed at Theo. Demonstrating respect and appreciation for team members is notonly the right thing to do, and linked to the company’s mission, it’s a competitive advantage forTheo Chocolate.

Theo is a fast-paced company that values nimbleness as a competitive advantage. Althoughour environment is fast paced, Theo wants to ensure that employees have opportunities toshare their views with other employees, including management and company executives. Thecompany has various mechanisms to help foster and encourage communication.

All employee meetings – scheduled gatherings of all team members to share informationand provide the opportunity for questions.Theo Link – a process that provides the opportunity for Theo employees to collaborate,discuss issues or concerns, and share ideas to create new innovations and fostercommunity within the company. These ideas are presented and discussed with Theo’sexecutives for honest consideration and response. If a decision is made to take action onan idea, that initiative proceeds with the sponsorship and support of Theo’s executiveteam.“Open door” – Granted, Theo has no offices with doors, but we value openness andtransparency. Any team member can communicate directly with any company manager orexecutive to ask questions, share concerns present ideas, etc. If you are having anyproblems, if you're just wondering about something, or if there is a subject you want to talkabout, we want to listen and to discuss it with you. You can talk to anyone in thiscompany, including the Chief Executive Officer. All Theo managers and executivessupport this “Open Door” policy.

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As with other relationships, effective communication at Theo is a shared responsibility betweenemployees and the company’s managers. Employees are encouraged to approach Theomanagers and those managers are expected to listen. Employees can raise matters inconversation or written form. Your immediate manager is the best person to talk to about job-related concerns, problems or grievances. If he or she is unable to provide a workable solutionto your concern, problem or grievance, or if you are simply not comfortable discussing thesubject with your immediate manager, you may consult with the next level of management,Human Resources, or any company executive. In doing so, please be clear if you are only“looking for an ear to listen”, or if you are requesting assistance solving the matter. Theoexpects employees to share their concerns, problems, grievances and/or ideas; and in return,the company expects managers to listen and respond. Employees can raise matters withoutconcern of retaliation from management or other employees.

While effective communication does not mean that all team members will agree with alldecisions, Theo believes such communication is the best way to positively raise concerns,influence change, and support the goals of both the company and employees. Opencommunication is a core value of the company. Theo Chocolate, its managers and executivessupport employees who communicate openly and honestly. Such communication improves ourcompany and is encouraged.

Protected Concerted ActivityThe National Labor Relations Act guarantees the right of employees to organize and bargaincollectively with their employers, and to engage in other protected concerted activity. TheoChocolate respects its employees’ rights under the law and expects that, consistent with thelaw, any such activity would be done on non-working time in non-working areas. Theo alsoexpects employees to respect one another’s rights under the law.

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Working at Theo

Workweek/Scheduling The typical Theo workweek starts on Sunday morning and runs through Saturday night.

“Regular hours” vary based on the business needs of different company functions. Regular business office operating hours are Monday through Friday 9:00am -5:00pm. Production hours may vary according to business demands; they can start early morning

and run to late evening, or even longer. While production days are generally Mondaythrough Friday, they can also extend to weekend days depending on demand for Theoproducts.

Regular retail store hours are seven days 10:00am - 6:00pm, subject to seasonaladjustments.

Accordingly, regular work hours are generally as follows: Office: sales and administrative functions: 8:30am – 5:00pm or 9:00am – 5:30pm Production: usually run staggered shifts throughout the day and evening, and shifts often

vary among different groups within Production (chocolate making, depositing, kitchen,etc.). As business needs require, Theo can add extra shifts, up to and including 24hours / day. The company typically pays additional compensation for hours worked onthe second and third production shifts.

Retail: varies, based on store and events schedule.From time to time, business might require Theo to ask you to work a different shift thanoriginally assigned. For example, production hours will change according to business demandsand you may be asked to change from one shift to another. Office hours might need to extendto cover periodic business increases. Theo understands the inconvenience a changedschedule imposes on team members, works to minimize these situations, and provides as muchnotice as possible.

Breaks and Rest PeriodsStated simply: no matter how busy we might find ourselves, Theo employees need to takebreaks. This is not only required by law, it’s the right thing to do. Here are Theo expectationsaround breaks:Rest breaks

A 15 minute rest break will be scheduled at an agreed upon time, as near as possible tothe midpoint of each 4 hour work period. If breaks can be better taken on an informalbasis throughout the day, and the employee and manager agree on this approach, thenthe break schedule can be flexible.

Rest breaks may not be declined in order to leave work early or arrive late, and restbreaks cannot be combined to extend a meal break.

Rest breaks are considered time worked for pay purposes; you need not clock out duringrest breaks.

You should use your rest break to handle personal issues, return a personal phone callor just relax.

Given the importance of regular rest, the law requires --- and Theo expects --- teammembers to take their rest breaks. Any employee feeling pressure to skip his or herbreak should share that concern with a company manager, Human Resources or anexecutive.

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Meal breaks Employees working the minimum of a five hour shift will receive a 30 minute, unpaid

meal break. Meal breaks are not considered time worked for overtime purposes. You must clock-out

during meal breaks. Given the importance of food and rest, Theo expects employees to take their meal

breaks. Any employee feeling pressure to skip his or her meal break should share thatconcern with a company manager, Human Resources or an executive.

If any employee wants to skip a meal break in order to leave early, that is allowableunder the following circumstances:

o this is the employee’s request, not the company’s, ando the company’s business needs can accommodate the employee’s request, ando the arrangement is approved – in advance – and documented in writing (form

available from Human Resources).

Effect of shifts exceeding eight hoursIf an employee is working a shift exceeding eight hours, the break schedule must reflect thelonger hours.

Regardless of shift, no employee should work more than three hours without a restperiod.

Likewise, employees should not work more than five consecutive hours without a mealbreak.

Please remember to wash your hands before returning to work from a break.

Recording Work HoursTheo needs team members dressed for work and ready to begin their shifts by the scheduledstart time. Here are the expectations around time reporting:

Each team member is responsible for accurately reporting her/his time. Hourlyemployees use a time recording system to record their time worked and must use thisdevice. Handwritten time cards are only acceptable if the time recording system is notfunctioning.

You should report the hours you work, no more and no fewer. Employees are expectedto properly record their time; this is a fundamental expectation of employees.

If you make a mistake in recording your time, please let your immediate manager knowas soon as you become aware of the problem. Your manager is responsible forreviewing and correcting the reported hours.

Under no circumstance should a team member ask another person to record their hours,and no team member should ever record hours worked for another.

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OvertimeTheo intends to minimize overtime hours worked by employees because such hours can bothburden team members and increase the company’s expenses. Still, due to seasonal – or othertemporary -- situations, there may be times when team members are asked to work extra hours.Although the law allows “mandatory” overtime, working overtime is not mandatory at Theo.There are often employees who welcome the opportunity to work additional hours. Here arethe expectations around overtime:

Overtime is for temporary or seasonal circumstances; employees are not expected towork overtime for an extended period of time.

Each employee is guaranteed at least 3 days off within any 21 day period. Overtime should not be worked without the prior authorization of your manager. Non-exempt employees will be compensated with overtime pay for any hours worked

over 40 hours in a workweek in accordance with Federal and State laws. InWashington, overtime is measured on a workweek – not individual day – basis.

Overtime pay is calculated at 150% of the regular hourly rate. Holidays, Personal Time Off (PTO), volunteer time, jury duty, or time away from work

due to a job-related injury are not considered time worked when calculating overtime.No Theo manager should request a non-exempt employee to work “off the clock” and noemployee should ever feel obligated to do so. Any employee feeling pressure not to charge hisor her time should share that concern with a company manager, Human Resources orexecutive.

Employee MeetingsCommunication is valuable and it’s important that team members are informed of companyprogress, business developments and current activities. Theo periodically holds meetings forgroups of employees, including company-wide meetings. These provide a forum for thecompany’s management to share information and an opportunity for employees to askquestions, express concerns, and share ideas.

The company will attempt to schedule these meetings at times that best accommodate theavailability of as many team members as possible. Considering the significance of retail andfactory operations, these meetings might be held at the start or end of a typical work day.Given the importance of Theo meetings, employees are expected to attend these meetings andnon-exempt employees will record and be paid for their attendance.

Beyond “official” meetings, Theo employees sometimes host unofficial gatherings such asholiday parties, movie nights, and other events. While all employees are welcome at theseactivities, and these can be fun as team members apply their trademark creativity and energy,attendance is not mandatory nor is it compensated.

Inclement Weather or Other Unforeseen SituationsOn rare occasion weather, or other conditions, may create a situation where Theo operationsare curtailed. In such cases, there will be a formal communication starting from a companyexecutive. This will typically be made via email (or telephone), so employees are encouragedto check their email in such circumstances.

Individual commutes can vary based on location, distance and mode of travel. Given thevariability of weather conditions, it is possible that while Theo operations are functioning tosome extent, some employees might not be able to travel to work on a particular weatheraffected day. Theo wants employees to remain safe. As each team member knows his or her

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own situation and is in the best position to decide how to operate, the company leaves individualcommute decisions to each employee. As is the case with any absence, employees decidingto remain at home need to promptly communicate with their immediate manager or, as analternatives, an alternative member of management or Human Resources.

Pay Periods and Pay DistributionTheo has 26 pay periods per calendar year. Employees are paid bi-weekly on Friday for hoursworked through the previous Saturday. A pay period begins 12:01am on Sunday and ends atmidnight on the second Saturday that follows.

“Direct deposit” is the best and easiest way to receive your pay. The money is in your bankaccount and available for your use sooner, and this method is simpler for Theo. The payrolladministrator can provide you with the forms needed to establish direct deposit.

Theo makes every effort to avoid errors in your paycheck. If you believe an error has beenmade, please promptly notify your immediate manager or the payroll administrator. Suchmessages can be sent electronically to [email protected]. The payroll administratorwill promptly take the necessary steps to quickly research the problem, inform you of the resultand promptly process any indicated corrections.

Job ChangesTheo understands that many team members have interest in developing their skills and careersby taking new positions within the company. The company respects and encourages thisinterest; an employee commitment to such development will help Theo Chocolate grow and besuccessful. Theo has a policy of providing employees the opportunity for moving to otherpositions within the company. Regardless of whether a job change is a lateral move or apromotion, mobility can be positive for individual team members and the company as a whole.As a Theo employee, you own your career.

Job changes are driven by the company’s business needs and a decision to move or promotean employee to a new role depends upon factors, including performance in their currentposition, skills, training, and likelihood of success in the new role.Theo also considers qualified, external candidates when making staffing decisions.

When filling a job opening, Theo follows this process:1. The hiring manager prepares a written description of the position.2. That description is reviewed and approved by Theo’s CEO. In the CEO’s absence, the

CFO reviews and approves.3. The position is posted within the company (bulletin boards and email) and externally if

the hiring manager concludes that is appropriate. In selected situations, as describedbelow, the company might elect to not post a new position.

4. The hiring manager, as well as any other appropriate team members, meets withcandidates. References are checked, and background checks are completed, asneeded.

5. After considering all available information, the hiring manager selects the best candidatefor the position. That decision is approved by the second level manager (hiringmanager’s manager).

6. If the position is posted internally, it must remain open for five business days beforebeing offered to a candidate.

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7. After a decision has been made and employment offer accepted, the hiring manager willcommunicate with any Theo employee who applied for but was not selected for theposition to share the basis of the hiring decision.

There can be situations in which a position is filled without a formal posting. For example, thehiring manager may have concluded that no current employee, or only one employee, has theskills needed to successfully fill the role. As a company, Theo values honest communication.Accordingly, if the hiring manager concludes that posting the job and interviewing internalcandidates would be done simply for “appearance’ sake,” the hiring manager can fill thisposition without a formal posting, providing s/he follows these steps:

Theo’s CEO reviews and approves the decision to search for or fill a position withoutinternal job posting. In the CEO’s absence, the CFO will carry out this review.

After the position is filled, the hiring manager meets with any employee who hasquestioned not being considered for the role. That hiring manager listens to theemployee’s concern and explains the basis on which the staffing decision was made.

The hiring manager will also follow-up with the employee’s manager to provide thisinformation.

Employment decisions such as hiring, job changes, promotions, compensation, terminationsare made without regard to color, race, age, sex, national origin, marital status, military status,veteran status, religion, sexual orientation, gender identity, genetic information, the presence ofany sensory, mental or physical disability, political ideology, or other legally protected status orcharacteristic protected by local, state or federal law.

Performance Feedback and DevelopmentEffective and meaningful feedback is important to employees who are committed to developingtheir skills, increasing their contributions to Theo, and enhancing their value as individuals in themarketplace.

While Theo Chocolate relies on myriad strengths to help its business, there is a simple truth.More than anything else, Theo’s success depends on the collective talents and dedication of itsemployees. The company emphasizes performance and relies on sustained results fromindividuals and teams.

Understanding that employees may be hired at different times of the year, change roles, or shiftresponsibilities, performance expectations may need to be revised or updated. Nevertheless,Theo strives to provide clear and useful performance feedback to its employees by conductingan annual performance appraisal process. The major steps to this process follow:

1. The employee and manager develop goals and expectations for the coming year. Theseare driven by Theo’s business needs, documented in writing or discussed in-personwhen an individual begins his/her employment.

2. During the review period, employee and manager operate to these goals. Given Theo’ssize, growth and nimbleness, it is possible (even likely) the goals will change during theperformance period. If so, the employee and manager should update goals to reflectthis shift.

3. If an employee moves into a new position during the review period, the manager andemployee should review performance and development to date and then set new goalsand expectations to reflect the changes.

4. At the end of the review period, employee will review results and development during theperiod and provide a self-assessment to the manager.

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5. Manager will assess the employee’s results and development during the period basedon various information sources (such as the employee’s self-assessment, manager’sobservations, feedback from other team members working with the employee, etc.).Manager will draft a written performance appraisal which will be reviewed by HumanResources.

6. Managers, Human Resources and Theo executives participate in “Calibration Sessions”where employees’ performance is discussed and appraisal ratings are “calibrated” tohelp ensure consistency and fairness across the company.

7. Second level manager reviews and approves final document and includes comments asappropriate.

8. Employee and manager review performance appraisal form in a 1:1 discussion. Anyobservations and comments the employee thinks should be included are added to theappraisal. Note – such discussion only covers performance, compensation is notdiscussed at that time.

9. If the employee has an unresolved question or concern regarding the performancefeedback document, they can share that with the second level manager, a companyexecutive or Human Resources. The employee can raise such issues in good faithwithout concern of consequences.

10. Employee and manager develop goals and expectations for the next year.11. Manager returns the signed copy of document to Human Resources for filing, and

provides a copy to employee.

Theo’s goal: finalize and communicate performance feedback and goal setting before August-end each year.

While an employee’s compensation is linked to performance, pay adjustments are reviewed in adifferent process and are not part of the performance feedback. The performance appraisalprocess does not alter the employment at-will relationship.

In addition to our annual performance appraisal process, employee and manager will participatein a mid-year goal check-in to discuss performance, review goals, and set new ones as needed.Theo recognizes that effective feedback is an ongoing process, not an event. The annual andmid-year performance appraisal process is intended to be a tool that facilitates ongoingcommunication about performance and development.

The Company expects employees and managers to have regular discussions regarding topicssuch as performance to date and development opportunities. Both employee and managerhave a shared interest in these discussions and such interim reviews are a shared responsibilitybetween employee and manager. If an employee believes s/he is not receiving adequateperformance feedback, they should express this concern with the manager. If not addressed tothe employee’s satisfaction, Theo encourages the employee to raise the issue with the secondlevel manager, Human Resources or a company executive. The employee can raise suchissues in good faith, without concern of consequences.

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II. CLASSIFICATION AND COMPENSATION

Employment ClassificationsAt the time a job is filled, that position is classified as “Eligible for benefits” or “Part-time”. Inaddition, the position is classified as either “Exempt” or “Non-exempt”. Job classification isdetermined by responsibilities as defined in the job description, with reference to legal and otherrequirements. Also, positions are classified as “Regular” or “Seasonal.” While most Theopositions are “Regular”, with the seasonality inherent in the chocolate business, the companysometimes hires “Seasonal” employees for assignments of limited duration (typically less thanthree months). If you are unsure of which job classification applies to your position, please askyour immediate manager or Human Resources.

Classification for Employee BenefitsEmployee Eligible for Benefits: Although the traditional definition of full time is 40 hours, and inmost organizations working 40 hours is the basis for receiving employee benefits, Theo followsa more generous standard. An employee who is regularly scheduled to work a consistentschedule of 28 or more hours per week is considered eligible for all employee benefit programs.Part-time Employee: An employee who is regularly scheduled to work fewer than 28 hours perweek or who works sporadic shifts is considered a part-time employee for the purposes ofeligibility for employee benefit programs. An employee in this classification is considered part-time for the purpose of eligibility for employee benefit programs.Seasonal Employees: To help meet peak staffing needs of limited duration, Theo sometimeshires employees on a seasonal basis. These assignments typically last for less than threemonths and such employees are eligible for selected benefits during this time.

Classification under Wage/Hour LawsNon-Exempt Employee: An employee who is eligible for overtime based on the job theyperform, rate of pay, and primary responsibilities as set forth in the Fair Labor Standards Act.Non-exempt employees who work more than 40 hours in a work week are compensated forovertime calculated at 150% of their regular hourly wage rate. Any overtime should beapproved in advance by your immediate manager.Exempt Employee: An employee who is paid a specific salary annually or for each pay periodand is not required to record time worked for payroll purposes. Salaried employees who areclassified as exempt are not eligible to receive overtime payment.Employees will be informed of their employment classifications and their status of exempt ornon-exempt at the time of hire and will be informed of any later changes in classification.

Compensation PhilosophyTheo’s goal is to provide its employees compensation that is competitive with other similarcompanies in the local market place. We strive to offer total compensation that is fair, equitableand positively motivates employees. In developing compensation and benefit plans, Theobalances these programs with the company’s business condition and financial resources. TheoChocolate complies with all legal requirements regarding pay.

Several factors may influence your rate of pay. Some of the items brought into considerationare the nature and scope of job responsibilities, market pay for comparable jobs (externalequity), what Theo pays other employees in comparable positions (internal equity), and --- mostimportantly --- your individual performance. The financial performance of Theo as a companyalso has an influence over individual pay. In summary: Compensation can vary based onperformance of both the individual employee and overall company.

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Pay AdjustmentsTheo Chocolate reviews the compensation of each employee at least annually. Such reviewstake place on a “focal” basis, which means the company reviews the pay of all employees at thesame time. In general, the company strives to complete these reviews in the month ofSeptember, with the expectation of sharing information with employees in October.

The major steps to the annual compensation review follow:1. The performance of each employee is assessed in accordance with the performance

appraisal process (please refer to that section) and shared with the employee. This istypically completed in the August-September time period.

2. Each year the company obtains external market compensation information and generaltrends, and uses this information to review Theo’s wage and salary ranges.

3. Theo assesses market conditions, the company’s business situation and availablefinancial resources and then develops budgets for total compensation without regard toindividual circumstances or departmental considerations.

4. The company develops a range of compensation changes that are consistent with theavailable budget dollars and compensation philosophy.

5. Managers propose individual wage and salary adjustments for each employee based ona set of guidelines.

6. The proposed changes are totaled company-wide, considered in light of the guidelines,assessed for reasonableness, reviewed against the budgets and Theo’s financialposition. Adjustments are made and the approved changes are communicated tomanagers.

7. Managers communicate the wage or salary change, along with the basis of the change,to each employee. To help employees understand the underlying basis of theircompensation, this communication also includes information about the salary range forthe employee’s job and where the employee’s pay places them within this range.

This process will be followed for all regular (not seasonal) employees who have been employedfor more than three months at the time of the annual compensation review. The majority ofcompensation reviews and adjustments, if indicated, will be made as part of the annual Octoberprocess. Company management will complete a summary, mid-cycle check (March - April) toconsider any additional adjustments.

To the extent a compensation review leads to a compensation adjustment, those are effectiveon the first pay period beginning after 1 April and / or 1 October. Please note – a compensationreview does not guarantee or imply a compensation adjustment. Some reviews can indicatethat an employee’s current compensation is appropriate.

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Compensated Absences

HolidaysTheo observes the following holidays:

New Year’s Day Memorial Day 4th of July Labor Day Thanksgiving Day Christmas Day Personal floating holiday (timing chosen by employee, approved by employee’s

manager).Theo pays eligible employees for each of these holidays.

If business needs require that you work on a holiday, you will receive an additional personalfloating holiday. If the observed holiday falls on an employee’s regular day off that employeewill receive an additional floating holiday.

Personal Time OffTheo offers all employees personal time off (PTO). You choose how to use this time: it can beused for vacation, sick, personal absence or any other reason of your choice. Employees startearning PTO on their hire date and become eligible to use this time after 90 days ofemployment.The following charts provide examples of how annual PTO is calculated and the number ofhours earned per pay period. Exact figures depend on the number of hours worked.

Years of Service PTO Hours Earned0 – 5 1 hour for every 17.33 hours worked

6 and on 1 hour for every 13.00 hours worked

PTO – Illustrative Examples . . . An employee’s balance based on regular hours worked20 Hour Week 28 Hour Week 34 Hour Week 40 Hour Week

Years ofService

AnnualPTO

Hrs EarnedPay Period

AnnualPTO


AnnualPTO


AnnualPTO


0 – 5 60 hours 2.31 hours 86 hours 3.23 hours 104 hours 3.92 hours 120 hours 4.62 hours6 and on 80 hours 3.08 hours 112 hours 4.31 hours 136 hours 5.23 hours 160 hours 6.15 hours

As demonstrated in the examples above, employees accumulate PTO throughout the year.Theo wants to allow flexibility when scheduling PTO; so, employees can use PTO beforeearning it, if the time off is approved by the employee’s immediate manager. For example, if it’searly in the year and you want to take off 80 hours, but only have accumulated 46 hours of PTO,you can do so. Please note a couple important points:

You can only take PTO in advance of hours earned in the current calendar year. Ifyou’ve already used all of a calendar year’s PTO (either earned or to be earned), youcannot take additional paid time off.

If your employment with Theo ends before you’ve earned hours you’ve already taken(i.e., you have a negative PTO balance), consistent with the law, Theo can, require youto pay back any unearned balance.

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Taking a break to rest, relax or recharge is important – so, employees are expected to use theirPTO each year. If an employee cannot use all PTO hours in a given year, they may carryforward a maximum of 56 PTO hours into the following year. An employee may accumulate nomore than 56 hours above the yearly maximum. For example – an employee working 40 hourseach week, with six years’ employment can accumulate no more than 216 hours (160 hourscurrent PTO, plus 56 hours carried from prior years).

Theo’s PTO policy exceeds the minimum requirements specified by the Seattle Paid Sick andSafe Time Ordinance.

Requesting PTOIf you require time off for a doctor’s appointment, family care or another similar need, pleasenotify your manager as soon as possible. You do not need to share the specific nature of suchrequests. If you take time off due to an illness or emergency, inform your immediate manager ora company executive in a timely manner.

To request PTO for vacation, please request, in writing, your manager’s approval three weeksahead of the days you want to take. Because Theo is a small company, your attendance isimportant to the success of fellow team members and the company as a whole. There may bebusiness demands that prevent your manager from approving PTO for planned vacations.

An employee who is absent from work for two or more consecutive shift days without informingtheir immediate manager or a company executive will be considered to have voluntarilyresigned his or her position with Theo.

Employees leaving the company’s employ receive no payment or compensation for unusedPTO days.

Bereavement LeaveTheo will grant employees up to three paid days of leave in the event of a death in theimmediate family. Immediate family members are defined as spouse, registered domesticpartner, parent, child, sibling, brother or sister in-law, grandparent and grandchild. Only theChief Executive Officer (or the CFO in the CEO’s absence) can approve exceptions to thispolicy.

To arrange for bereavement leave, please notify your immediate manager of your situation.Either your manager or Human Resources will contact you directly to discuss a schedule. If youneed more than three days, and your manager approves the extended absence, unused PTObalance may be used for the additional time. If more time is needed, an employee may requestan unpaid leave. This request will be evaluated on the same basis as other unpaid leaves(please see section on “Leaves of Absences”). Theo reserves the right to request verification ordocumentation of the need for the Bereavement Leave.

Jury/Witness DutyTheo considers jury and witness duty a civic responsibility and the company supports teammembers summoned to serve as a juror or witness. All regular full-time and part-timeemployees with at least 90 days of service, who are summoned by the court to serve on a juryor to be a witness, are eligible for up to one week of jury duty pay per calendar year. Yourimmediate manager should be notified in the event that jury duty is to exceed the one-weekapproved leave. Your immediate manager or a company executive may authorize an extensionor initiate a leave of absence on behalf of the employee.

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Jury duty pay is the difference between the employee’s regular wage and the compensationreceived as a juror for each working day missed because of the summons. The employee isrequired to give his/her immediate manager as much advance notice as possible and provide acopy of the jury/witness duty notice. When your jury is not in session, we ask that you report forwork as usual. Upon completion of jury/witness duty, the employee must present a statementsigned by the officer of the court stating dates and times the employee served and the amountof the compensation. Appropriate documentation will be placed in the employees file.

If your jury duty service would make it difficult for us to serve our customers/clients or meet ourcommitments, the company may request the court defer you from jury duty.

Unpaid Absences

Medical Leaves of AbsenceConsistent with appropriate federal and state family and medical leave laws, including theFamily Medical Leave Act (FMLA), Theo provides eligible employees up to 12-weeks of unpaidleave during a 12-month period to care for a newborn or newly-adopted/foster child, to care for aspouse or domestic partner, child or parent with a serious health condition, or for your ownserious health condition when you are unable to perform the functions of your job. A “serioushealth condition” is an illness, injury or other physical or mental condition that involves anovernight stay in a medical care facility, or continuing treatment by a health care provider, forexample, more than 3-consecutive days absent, chronic conditions, etc.

If you are the spouse, child, parent or next of kin of a military service member who has a seriousillness or injury from active duty service, Theo provides up to 26-weeks of leave under thefederal FMLA while the service member is undergoing medical treatment, recuperation, therapy,or is otherwise in outpatient status, or on the temporary disability retired list. This form of leavealso applies to eligible family members of veterans for up to five years after the veteran leavesservice for a serious illness or injury incurred during active duty. This 26-week maximum isavailable only during a single 12-month period starting from the first day that such leave istaken, and is combined with other FMLA leaves taken during the same period.

In addition, leave under this policy may also be taken for a “qualifying exigency” when yourspouse, son, daughter, or parent is on or called to active duty in support of the U.S. ArmedForces from the Reserves, National Guard or from retirement, or for other reasons (illness,injury) relating to an active-duty service member.

The following are the major points of Theo’s medical leave practices.

** Qualification for a Leave of Absence - You must have been employed for at least 12 monthsat the time the leave commences, although the 12 months need not be consecutive. In addition,you must have also worked at least 1,250 hours during the 12-month period immediatelypreceding the commencement of the leave. The 12-month period for determining family ormedical leave entitlement is calculated from the first day leave is taken looking forward 12months

** Compensation and Benefits while on Leave - All employees are allowed to use their PTO atany time during their medical leave as needed. Theo also encourages employees to apply forShort Term Disability in the events they will be absent for more than eight days in case of illnessor one day in case of accident. Please see HR for information on how to apply for Short Term

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Disability. You will not continue to accrue PTO or receive holiday pay while on a leave ofabsence.

** Health Insurance - If you participate in any company sponsored health insurance plans, Theowill continue to pay its company contribution to the cost of your insurance premiums during themedical leave. Employees are still responsible for their share of the health insurance premiumsand will need to reimburse Theo for this cost during the leave period.

** Requesting a Medical Leave of AbsenceYou are required to give a minimum 30-day written notice requesting leave for reasons of abirth, adoption/foster placement, or planned medical treatment for a serious health condition.Whenever a 30-day notice is not possible, you are required to inform Theo Chocolate as soonas practicable by notifying your immediate manager or Human Resources.

Maternity LeavePregnancy disability leave is granted to all pregnant employees upon receipt of a physician’scertification stating that they are unable to work due to pregnancy. Employees on leave areexpected to keep the company informed of their expected return date.

Beyond the time a woman may need off due to disability arising from pregnancy and childbirth,in compliance with Washington State laws, she may use her 12 week family & medical leaveentitlement to care for and bond with the new baby. Please contact Human Resources forinformation.

An employee on authorized maternity leave (both disability and family & medical) will return tothe job she left unless the company is unable to return the employee because of businessnecessity. If this is necessary, the employee will be offered the first available job of like statusand pay, or if none is available, a job of lower status and pay. If an employee chooses to waitfor the first job of like status and pay, this reinstatement right will continue for one year.

Military LeaveTheo Chocolate complies with the Uniformed Services Employment and Re-Employment RightsAct of 1994 regarding any employee who is inducted into or enlists in the armed forces of theUnited States or who serves as a member of a reserve component of the armed forces. Theoalso complies with the Washington State Military Family Leave Act (MFLA). This states thatemployees who are spouses of armed service workers and who work an average of 20 hoursor more per week may take up to 15 days of unpaid leave when their spouse is about to becalled up to active duty, or are home from deployment during times of military conflict declaredby the President or Congress. For more information on this, please discuss with yourimmediate manager or Human Resources.

Domestic Violence LeaveIf you or your family member (child, spouse, domestic partner, parent, parent-in-law,grandparent, or person with whom you have a dating relationship) is a victim of domesticviolence, sexual assault or stalking, Theo may offer a reasonable period of leave, intermittentleave or a reduced schedule to seek legal or law enforcement assistance, counseling or medicaltreatment.

Although the leave is without pay, you can choose to use available PTO. Theo HumanResources will request written verification of the need for leave. Any information you provide todetermine eligibility or continuation for this leave will be treated as confidential by Theo and only

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disclosed by the company if you request or consent to its disclosure, or in response to a court oradministrative order, or as otherwise required by federal or state law.

Your health insurance benefits under Theo plans will continue at the level and conditions thatwould have been provided had you remained continuously employed. Upon completion of yourleave, you may be restored to the same job or an equivalent position with equivalent pay,benefits, and conditions of employment.

Miscellaneous Leaves of AbsenceEmployees may wish to take an extended break from work at Theo to pursue various interests.In such cases, the employee should first discuss the possibility with his or her immediatemanager and then formally request a leave.

Requesting a Miscellaneous Leave of AbsenceIf you wish to take a miscellaneous leave of absence, you must provide the company with awritten request at least 30 days in advance and make a reasonable effort to schedule your leaveso as not to unduly disrupt the company’s operations. Your written request should include:• requested start date for the leave,• date you expect to return from leave,• reason for leave of absence.The company will review the request and consider this in the context of Theo’s current and likelybusiness needs, ability to cover the employee’s absence, and the employee’s job performance.You will be notified, in writing, within two weeks of the status of your request. Theo cannotguarantee the employee a position will be available at the end of the leave. However, if thecompany approves the employee’s request for leave Theo will make a good faith effort to find asuitable position for the employee when they return. Failure to return to work at the conclusionof the approved leave will be considered a voluntary resignation.

You will not continue to accrue PTO or receive holiday pay while on a leave of absence.If you participate in any company sponsored health insurance plans, payment of the premiumsfor these plans becomes your responsibility during the leave.

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III. BENEFITS

Theo provides specific benefits to all eligible employees. The level of these benefits depends onemployment classifications. Unless specifically noted otherwise, benefits require employees towork a regular and consistent schedule of 28 or more hours per week. Theo Chocolatereserves the right to alter or amend these benefits in its sole discretion.

The following grid summarizes Theo’s benefits and employees’ eligibility by classification. If youhave further questions about your eligibility, contact Human Resources.

Benefits Eligibility by Classification

Benefit Regular(+28 hrs/wk)

Regular(<28 hrs/wk) Seasonal

Paid Holidays

Personal Time Off (PTO)

Medical Insurance

Life Insurance Paid time for annual physical &Reimbursement for influenza vaccinations

Short-term Disability Insurance

Long-term Disability Insurance

Dental Insurance (employee paid)

Retirement Savings (401k) varies variesBus Pass Discount

Paid Volunteer Time ("Theo Match")

Theo Chocolate Product Discount

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Medical InsuranceTheo provides two comprehensive medical insurance plans options to those regular employeeswho are eligible for benefits.

The company pays most of the employee’s premiums for the “base” plan and alsocontributes to the premiums for any covered dependents.

Employees wanting an insurance plan with lower deductibles can select an “upgrade”plan. Theo will contribute the same dollars as for the “base” plan and employees areresponsible for the balance of the insurance premiums.

Employees are not required to participate in this plan, but those who wish to participate mustenroll within 30 days of becoming eligible. Employees can review and change their selectionsduring the annual renewal and “open enrollment” period. Please contact Humans Resourcesto learn more information on this insurance or obtain enrollment forms.

Annual Physical Examination & Influenza VaccinationsThe company understands the value of preventative health care and the Theo-sponsoredmedical insurance provides for annual physical examinations. While an employee’s medicalsituation is a private matter governed by personal choice, and Theo respects an individual’sprivacy, the company encourages all employees to obtain annual physicals. In connection withthis, Theo will pay employees for the time needed to obtain an annual physical --- up to twohours --- as well as reimburse the employee up to $25 for the plan co-pay, if any, associatedwith the office visit. This benefit is available to all Theo employees, not just those eligible forcompany sponsored medical insurance.

In addition, annual influenza vaccinations can be an effective way to lower an individual’s risk ofcontracting flu. Theo will reimburse the cost (if not covered by insurance) of an annual fluvaccination. This benefit is available to all Theo employees, not just those eligible for companysponsored medical insurance.

Please contact Human Resources for additional information and the needed forms for both ofthese benefits.

Disability InsuranceTheo values a safe workplace and follows a safety program to reinforce a safety culture. If anemployee is injured on the job, that employee is covered by workers’ compensation insurance.

However, Theo understands that employees could become ill or injured while away from work.To help employees cope with the potential financial impact of being unable to work due toillness or injury, the company provides two different disability income plans to those employeeswho are eligible for benefits. These plans provide partial pay to employees who are unable towork due to illness or injury.

Short-term disability pays benefits after a defined waiting period (1 day foraccidents/injury and 8 days for illness) and provides such benefits for up to 26 weeks.

Long-term disability benefits begin after the short-term benefits expire and typically paybenefits until age 65.

This insurance is provided by Theo at no cost to eligible employees.

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Dental InsuranceIn response to the request of many team members, Theo sponsors a voluntary group dentalinsurance plan. Employees eligible for benefits can elect to participate in this plan. Participatingemployees pay the cost for this dental coverage, and enrollment is open to those employeeswho participate in the Theo medical insurance program. Please contact Human Resources tolearn more information on this insurance or obtain enrollment forms.

Retirement SavingsTheo sponsors a 401(k) plan to help employees save for their retirement. This plan helps Theoemployees save money on their current income tax bills while saving and investing funds forretirement in a simple way that spares them from paying taxes on these savings until the moneyis later withdrawn.

Eligibility requirements around participating in the 401(k) plan come from the United StatesInternal Revenue Code and are not based on the Theo criteria of working 28 or more hoursweekly. Theo employees should refer to the specifics contained within the 401(k) planinformation to assess their eligibility.

The company pays all the administrative, recordkeeping and custodial fees for the plan.

Bus Pass ProgramTheo provides employees with the opportunity to purchase bus passes on a pre-tax basis. Thetax savings, coupled with a company contribution to the cost of the bus pass, allow employeesto obtain bus passes at a net discount. Employees can load a monthly pass or set amount eachmonth; whatever they choose. This benefit is available to all Theo employees. Theo’s payrolladministrator can provide additional information and the forms needed to claim this benefit.

Volunteer ActivitiesConsistent with the company’s mission and culture, Theo encourages employees to activelycontribute to the community in a manner each employee feels comfortable with.

The company supports the employee’s efforts by providing paid time off through “Theo Match”.For every two hours an employee volunteers for a charitable organization, Theo will pay for theemployee for an hour, up to a total of twelve paid hours each calendar year. For example, if anemployee contributes 24 volunteer hours to a charitable organization, Theo will pay theemployee 12 hours of regular pay. These paid hours are excluded from calculations ofovertime.

The charitable group is of the employee’s choosing. The only requirements:1. The organization is recognized as a registered 501(c)(3) charity.2. The employee attests s/he has worked the hours.

Theo’s payroll administrator can provide employees with the forms needed to claim this benefit.This benefit is available to all Theo employees.

Employee PurchasesAll Theo employees receive a generous discount on purchases of Theo product. To receive thisdiscount, employees must make their purchases in the Theo Factory Store. Employees arewelcome to use their discount on product for their own use or gifts to others. Employeepurchases cannot be resold.

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IV. STANDARDS OF CONDUCTAll workplaces have requirements regarding how employees should conduct themselves.While Theo Chocolate enjoys a unique culture that embraces a diverse set of team members,the company still holds some basic expectations for its employees. In general, Theo expectsemployees to exercise good judgment and operate to common sense. The following items arespecific examples, not an all-inclusive list. In each case, failure to follow these standards ofconduct may result in disciplinary action, up to, and including termination of employment.

Attendance and PunctualityTheo needs you to promptly report to work on each scheduled workday unless illness or otherunavoidable circumstances make it impossible to do so, or unless your manager previouslyapproved the absence. All employees are responsible for good attendance and punctuality.

We understand that an unforeseen and infrequent circumstance could arise to cause you to belate or absent from work. We expect you to promptly call-in regarding any absence or latearrival so that alternate staffing can be arranged. Such notice needs to be made directly to yourimmediate manager or an alternative member of management, not to other Theo staff.

Please understand that an employee’s tardiness imposes burdens on other team members andthe company as a whole. Repeated tardiness can lead to review and disciplinary action,including termination of employment. Also, any employee who is absent from work for two ormore consecutive shift days without informing management will be considered to havevoluntarily resigned their position with Theo.

HarassmentWhile the next paragraph is long, the concept is simple: Theo Chocolate does not tolerateharassment.

Harassment on the basis of an employee's color, race, age, sex, national origin, marital status,military status, veteran status, religion, sexual orientation, gender identity, genetic information,the presence of any sensory, mental or physical disability, political ideology, or other legallyprotected status or characteristic protected by local, state or federal law is a violation of Theo’spolicy. Prohibited harassment includes comments, slurs, jokes, innuendoes, cartoons, pranks,physical harassment, etc. that are derogatory on the basis of the employee’s protected classmembership, or that are promoted by the employee's protected class. Harassment also includesnegative actions based upon an employee's participation and activities identified with orpromoting the interest of a protected group. Sexual harassment includes unwelcome sexualadvances, requests for sexual favors and other verbal or physical contact of a sexual nature.An employee has the right to use a language other than English and to adhere to culture andethnic customs without being subjected to harassment.

Employees have the right to be free from such harassment on the job, from co-workers,supervisors, or managers. If you believe that you have been the object of harassment, reportany such incident to your immediate manager or Human Resources. If your immediatemanager or Human Resources is the cause of the problem or seems unwilling to resolve theissue, then contact any company executive.

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Every reported incident of employee harassment will be thoroughly and promptly investigated byHuman Resources with the cooperation of the employee and support of Theo executives. Everycomplaint will be kept confidential to the maximum extent possible. The concerned employeewill be afforded protection from retaliation, and the results of any investigation of allegedharassment shall promptly be communicated to the employee. Where charges of employeeharassment are substantiated, appropriate corrective action will be taken. Appropriate actionoften varies based on the circumstances but can include termination of employment.

Personal VisitorsWe’re proud of Theo Chocolate and understand our team members share this pride andsometimes like to share their company. Visitors should always be accompanied by anemployee and that employee accepts full responsibility for the visitors’ behavior and safety.Appropriate safety standards and good manufacturing practices must be followed. Forexample, all visitors wear hairnets, are appropriately attired, and no person can bring drinks orfood into kitchens or production areas.

Equipment and Technology UseTheo provides team members with useful technology to support their work activities. In thisregard, the company has installed specialized production equipment, office equipment andcomputers. Technology equipment is provided first for accomplishing necessary work-relatedtasks.

Employees are expected to demonstrate care for all company equipment and use thisequipment safely and properly. For example, production machines must be cared for andoperated only to specification. Failure to do so can lead to negative outcomes such as unsafework conditions for employees, poor product quality and damage to the machinery. Under nocircumstances should an employee start or run a piece of equipment which they have not beentrained to operate. Employees must demonstrate proper care of company premises andequipment.

Please note: those who use Theo’s office equipment are subject to the company’s policiesregarding computer and other equipment usage. It is important to remember that any files orcommunications created on Theo equipment or transmitted through the Theo network or serversare not private and may be screened, viewed, listened to, retrieved or copied by the company atany time.

Theo ProductsIn addition to the benefit of receiving generous discounts on Theo products, Theo employeesare often allowed the opportunity to have free chocolate (for example, the “Chocolate Vault” ,various samples, surplus chocolate, expiring confections, etc.). In all such cases, theseproducts are for the personal enjoyment of the employee, and their friends and family. Theproducts are not to be sold, bartered or otherwise transacted for personal gain or benefit.

Appropriate Dress in the WorkplaceWe’re fortunate that our company culture allows flexibility in our dress policy, and employeesare welcome to wear casual clothes. All Theo employees need to recognize that regardless oftheir position within the company, it is very likely that they will often be visible to the company’scustomers, guests and business partners. There are some general guidelines: no bare feet, noopen-toed shoes in production or kitchen areas, and no attire with rips, tears, holes or obscenelanguage are permitted. Employees should not wear clothing with advertising or solicitations. If

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one employee believes that another employee’s dress is inappropriate, that employee can sharehis or her concerns directly or raise these with a member of management. If you are offendedby another employee’s attire, it is your responsibility to tell him or her and/or raise the issue withyour immediate manager. We ask everyone’s cooperation to allow Theo to continue with thisflexible approach.

Production employees must be attired as described in Theo’s production guidelines.

Drug and Alcohol UseOut of consideration of workplace safety, employees are required to notify their immediatemanager of any impairment caused by prescription medication they are taking. Employeesneed only inform of the impairments, and not the underlying medical condition or the name ofthe specific medications. The manager will consider the need for any work adjustments inresponse to the impairment.

Theo policy prohibits the unlawful possession, use, or distribution of illicit drugs andunauthorized use of alcohol by employees on company property and/or other work sites. Noemployee may be on company premises while under the influence of any illicit drug orunauthorized use of alcohol.

No production employee or store staff is to consume or to be under the influence ofunauthorized alcoholic beverages or drugs during working time. Under no circumstance is anemployee to operate any piece of company production or kitchen equipment after consumingalcohol or drugs. Theo Retail staff who are on duty and assigned to work an event are not toconsume alcohol at that event, even if the event’s organizers provide it to their guests and offerit to Theo employees. An employee assigned to lead a tasting session (chocolate and analcoholic beverage such as wine, beer or scotch) at an event can consume the alcoholcommensurate with the role they play in the event.

There may be infrequent situations where a small group of employees associated with productdevelopment and sensory tasting could be asked to taste alcoholic beverages (for example -liqueurs, wine, spirits and beer) in connection with a specific product formulation or pairing. Insuch cases, the quantity of beverage tasted should be limited to the extent possible. Also, thetiming of the activity must be scheduled so no participant subsequently operates any piece ofcompany production or kitchen equipment.

Non-Solicitation in the WorkplaceIn order to maintain an orderly workplace, to avoid intrusion upon employees at their work, andto preserve employee safety and security of funds, supplies, records, and confidentialinformation, selling and solicitation on company premise must be carefully regulated.Accordingly, the following rules will be enforced:

Non-employees are not allowed to enter our premises for any form of solicitation orliterature distribution. Solicitation includes soliciting for or on behalf of any organization,support for membership, or subscriptions or pledges to that organization.

Employees are prohibited from distributing any form of literature or other materialsduring working time and in work areas.

Employees are also prohibited from soliciting for any cause during their assignedworking time or soliciting other employees during their assigned working time. Theseprohibitions on employee solicitation and literature distribution do not apply duringemployees' non-working time such as meal or rest breaks.

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Theo provides a separate bulletin board for employees to post personal employeeannouncements, or present information on charitable organizations. This board cannot includesolicitations made on behalf of third-parties that are not charities (groups classified as a501(c)(3) charitable organizations).

As noted earlier in this Handbook, Theo respects its employees’ rights under the National LaborRelations Act.

ConfidentialityTheo values transparency and openness and strives to demonstrate it through many of its dailypractices. Throughout one’s employment at Theo, employees may learn Theo trade secrets,proprietary information, financial data and other sensitive or confidential information. It isimportant for employees to recognize that sometimes sharing this information may be harmful tothe company. Please review the Non-Disclosure Agreement included in employee orientationmaterials for further details.

Any employee receiving an inquiry from media should direct that to one of the companyexecutives or a manager within the Marketing department. Employees should not speak tothe media on Theo’s behalf without first obtaining approval from a manager within theMarketing Department or a company executive.

Social MediaTheo respects employees’ right to participate and express themselves through social media, butalso expects employees to refer to and follow the company’s Social Media Policy. ContactHuman Resources for more information about this policy and the general expectations outlined.

WeaponsTheo prohibits all persons who enter the premises from carrying a handgun, firearm, or otherprohibited weapon of any kind, regardless of whether the person is licensed to carry the weaponor not. Small pocket / utility knives (blades less than two inches in length) are allowed and willnot be considered a weapon unless used as one.

Violence in the WorkplaceTheo has no tolerance for workplace violence. Acts, or threats of physical violence, includingintimidation, harassment and/or coercion, which involve or affect Theo or any of its employeesor which occur on company premises / property will not be tolerated.Acts of violence include conduct that is sufficiently severe, offensive, or intimidating to alter theemployment conditions at Theo or to create a hostile, abusive, or intimidating work environmentfor one or more employees. Examples of workplace violence include, but are not limited to, thefollowing:

1. All threats or acts of violence occurring on Theo premises, regardless of the relationshipbetween Theo Chocolate and the parties involved.

2. All threats or acts of violence occurring off Theo premises involving someone who isacting in the capacity of a representative of Theo Chocolate.

Employees should report any existing anti-harassment orders, restraining orders and/or pendingdomestic violence orders which name the employer as the employee’s workplace.If violence or a threat of violence occurs it is your responsibility to promptly notify yourimmediate manager, another member of management or company executive.

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SmokingConsistent with Washington State laws, Theo does not allow smoking on premises. If you aresmoking outside, you must be least 25 feet away from all doorways, windows that open, and airintakes to the building, as required by law.

V. YOUR SAFETY

Health and SafetySafety is everyone’s responsibility. Both the safety of the Theo work environment and thesafety of Theo products are very important. Theo strives to provide a safe work environment forall employees, and the company must consistently deliver product of a very high quality. Theowill maintain safety and health practices consistent with the needs of our industry.

Theo has an established employee safety committee to help guide the company’s efforts aroundworkplace safety. The company also has separate safety guidelines. Employees should readthose guidelines because this Employee Handbook reinforces, not replaces, those SafetyGuidelines. Also, all employees are expected to participate in any safety drills or practiceprocedures that occur while they are working at Theo.

Theo managers consider employee and product safety to be a very important part of theirregular management duties. Maintaining a safe work environment, however, requires thecontinuous cooperation of all employees.

If you are ever in doubt about how to safely perform a job, it is your responsibility to ask yourimmediate manager for direction. Please, do not hesitate to ask. Beyond that, pleaseimmediately report any conditions you suspect are unsafe.

Employees should not be asked to perform any task that may be dangerous to their health,safety, or security. If you think a task may be dangerous, please inform your manager at onceso the situation can be reviewed. Similarly, if you ever have a question about Theo’s productionprocesses or the safety of Theo’s product, please do not hesitate to ask your manager oranother member of the company’s management team.

Reporting Safety IssuesPlease immediately report all accidents, injuries, potential safety hazards, safety suggestions,health, and safety related issues your manager. If you or another employee is injured, youshould contact outside emergency response agencies, if needed. You will be asked tocomplete an Incident Report Form as soon as possible, or as soon as you are physically able. Ifan injury does not require medical attention, an Incident Report Form must still be completedand your manager needs to be made aware of the incident in case medical treatment is laterneeded and to insure that any existing safety hazards are corrected. If you have an accidentwhile in a company vehicle, fill out an accident form for collisions and call a member ofmanagement immediately.

If you receive medical treatment for an on-the-job injury, you should complete an Employee’sClaim for Worker’s Compensation Benefits Form. Your doctor will provide you with the form. Asgoverned by the State Department of Labor and Industries, pay for missed work time beginsafter three days. If you want to use PTO, contact your manager or the payroll administrator.

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The Federal Occupational Safety and Health Administration (OSHA) require that Theomaintains records of all illnesses, injuries, and accidents that occur at the workplace. TheWashington State Worker’s Compensation Act also requires that you report any workplaceillness or injury. OSHA also provides you with the right to know about any health hazards thatmight be present on the job. Given the importance of safety, it is important that any workplaceillness, injury or accident be promptly reported. Theo expects all employees to comply with thisexpectation and notes that employees can report any safety issue with honesty and withoutconcern about retaliation. If you have any questions or concerns, please contact your immediatemanager for more information.

First Aid StationsThere are first aid kits in multiple locations throughout our facility. Every team member shouldfamiliarize him or herself with the location of the first aid kits. Also, if you see a first aid kit thatis missing items or incomplete please immediately inform a member of management.

Fire PreventionPlease know the location of the fire extinguisher(s) in your work area and make sure theseareas remain clear at all times for accessibility. Notify your immediate manager if anextinguisher is used or if the seal is broken. Keep in mind that extinguishers that are rated ABCcan be used for paper, wood, or electrical fires. Make sure that all flammable liquids, such asalcohol, are stored in appropriately labeled safety containers and are not exposed to any ignitionsource.

Property and Equipment CareIt is your responsibility to understand the equipment needed to perform your duties. Good careof any equipment that you use during the course of your employment, as well as theconservative use of supplies, will benefit you and Theo. If you find the equipment is not workingproperly or in any way appears unsafe, please notify your immediate manager immediately sothat repairs or adjustments may be made. If your immediate manager is unavailable, pleasereport your concern to any other manager or company executive. Under no circumstancesshould you start or operate any equipment you deem unsafe, nor should you adjust or modifythe safeguards provided.

Safety GearTheo will provide safety gear and equipment to protect you from potential injuries, as necessaryor as requested. We expect you to wear the appropriate gear at all times when performingdangerous tasks. Please speak with your immediate manager if you have any questions orconcerns about safety gear and equipment. If your immediate manager is unavailable, pleaseshare your question or concern with another manager or company executive.

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Safe Work Habits No Running Clean up spills promptly. Watch yourself especially on freshly mopped floors. Use warning signage when

mopping floors. Do not hurry while carrying a load. Keep work areas clear of clutter. Dispose of garbage, and store tools and work papers

in appropriate locations. Pick up after yourself! Keep personal items in employee restroom/locker room or your

desk area. When lifting heavy loads, remember to lift with your legs and not your back. If it’s too

heavy, get someone to help you. If you see an unsafe condition or behavior, it is a responsibility of your job to report the

condition to your manager or another member of management. Do not operate any piece of equipment until you have been trained in its proper

operation.

Food Handling and Good Manufacturing PracticesTheo must comply with regulations to ensure the food we produce is safe. We must take carethroughout the production process to avoid contamination. There are three kinds ofcontamination:

1. Chemical (for example - dishwasher soap or cleaning agents),2. Microbial (such as molds and bacteria), and3. Physical (for example - jewelry and pens).

Please be aware of the Theo food safety procedures and requirements, provided to allemployees, and make sure to comply with those that affect you and your job.All employees, regardless of their role within Theo, are expected to understand and follow foodhandling policies and “Good Manufacturing Practices” (GMP). These are explained in aseparate company document.

It is very important that each Theo employee follow GMP.

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VI. CONCLUSION

This handbook --- indeed no set of guidelines --- can cover every possible situation. Pleasespeak up if you have any question or concern, and ask your immediate manager or anycompany executive.

If you have an idea on how to make Theo Chocolate a better company, please offer it. Much ofour company’s success depends on the skill, creativity, diligence and dedication of the manyteam members employed at Theo. Collectively, as a team we are an important competitiveadvantage for Theo Chocolate.

Thank you for being a valued team member, and thank you for your contributions to ourcompany!

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NOTES:

Documents

Theo Chocolate, Inc. Employee Handbook · Theo developed this Employee Handbook to help you understand the basic points regarding your importance to the Theo team, employment with