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Published by jerrod, 2016-03-10 15:44:19

Handbook

Handbook

TABLE OF CONTENTS

PAGE
1. INTRODUCTION ...................................................................................................... 1

Purpose of Employee Handbook..................................................................... 1
Mission and Core Values ................................................................................ 1

2. DIVERSITY............................................................................................................. 3
Equal Employment Opportunity Policy ............................................................ 3
Equal Employment Opportunity – Manager’s Responsibilities ......................... 4
Policy Against Harassment ............................................................................. 4

3. WORKPLACE ENVIRONMENT .................................................................................. 6
Open-Door Policy............................................................................................ 6
Violence in the Workplace............................................................................... 6
Health and Safety............................................................................................ 6
Alcohol and Drugs in the Workplace ............................................................... 7
Solicitation and Distribution ............................................................................. 8
Smoke-Free Workplace................................................................................... 8

4. TERMS OF EMPLOYMENT ........................................................................................ 9
At-Will Employment......................................................................................... 9
Introductory Period.......................................................................................... 9

5. COMPENSATION .................................................................................................. 10
Compensation Policy .................................................................................... 10
TYpes of Employees ..................................................................................... 10
Job Classifications ........................................................................................ 10
Overtime ....................................................................................................... 10
Payroll Periods.............................................................................................. 11

6. TIME AND LEAVE ................................................................................................. 12
Working Hours .............................................................................................. 12
Time-Keeping................................................................................................ 12
Holidays ........................................................................................................ 12
Paid Time Off ................................................................................................ 13
Emergency Time Off ..................................................................................... 14
Personal Leave of Absence .......................................................................... 14
Bereavement................................................................................................. 15
Jury Duty....................................................................................................... 15
Travel Time ................................................................................................... 15
Military Duty .................................................................................................. 15

7. EMPLOYEE BENEFITS ........................................................................................... 17
Introduction to Benefits ................................................................................ 17

Health and Disability Insurance Programs ................................................... 17
Retirement Benefits ..................................................................................... 18
Cobra – Continuation of Health Coverage ................................................... 18
Worker’s Compensation............................................................................... 19

8. CONDUCT STANDARDS ........................................................................................ 20
Attendance and Punctuality ......................................................................... 20
Attire and Grooming .................................................................................... 20
Electronic Mail, Internet Usage and Electronic Devices ............................... 20
Blogging and Social Networking Policy ........................................................ 21
Business Conduct........................................................................................ 22
Company Property....................................................................................... 23
Phone System and Cell Phones .................................................................. 23
Violation of Company Conduct Standards ................................................... 23

9. CONFIDENTIALITY ................................................................................................ 24
Confidential Information ............................................................................... 24
Employee Privacy Policy.............................................................................. 24

10. PERFORMANCE EVALUATIONS, PROMOTIONS AND DISCIPLINARY ACTION ............. 27
Evaluations .................................................................................................. 27
Promotions .................................................................................................. 27
Corrective or Disciplinary Action .................................................................. 27
Progressive Discipline ................................................................................. 28

11. TERMINATIONS................................................................................................... 30

12. SEARCHES AND VIDEO SURVEILLANCE POLICY .................................................... 31
Searches ..................................................................................................... 31
Video Surveillance Policy............................................................................. 31

13. OTHER POLICIES ................................................................................................ 32
Car Allowance and Mileage ......................................................................... 32
Company Related Travel and Entertainment ............................................... 32
Inclement Weather....................................................................................... 34
Outside Employment ................................................................................... 34
References and Requests for Information.................................................... 35

14. CLOSING WORDS ............................................................................................... 36

15. ACKNOWLEDGEMENT AND DISCLAIMER ............................................................... 38

1. INTRODUCTION

PURPOSE OF EMPLOYEE HANDBOOK
This handbook has been prepared to help you understand the policies and practices of
our Company, although it is not intended to be a complete list. Nothing in this handbook
is intended to create a contract of employment with the Company (express or implied); to
modify or add to any contract of employment with the Company; or to create any
expectation of continued employment for any specified term with the Company. Also,
the handbook is not intended to create any legally enforceable obligations on the part of
the Company or its employees.

Each employee is responsible for reading and following the guidelines in this handbook.
If at any time you have questions regarding the application of the Company’s policies,
we encourage you to speak with your supervisor.

The Company reserves full discretion to add, modify or delete provisions of this
handbook, or the policies and procedures on which it is based, at any time without any
advance notice. For this reason, we urge you to check with your manager to obtain
current information regarding the status of any particular policy, procedure or practice.

No management personnel or representative of the Company, other than the principles
of Don Basch Jewelers, has any authority to enter into any agreement for employment
for any specified period of time or to make any agreement that is contrary to or that
modifies the provisions in this employee handbook. Any such agreements that are
made must be in writing and signed by the principles of Don Basch Jewelers.

This handbook supersedes and replaces all previous employee handbooks.

MISSION AND CORE VALUES
The Company’s mission is to provide high quality customer service and to gain the trust
of our customers, suppliers and partners. Our approach to our work and to each other is
guided by a set of core values that help us realize success and attain our goals. All
employees are evaluated on the results they achieve, on how they further the
Company’s progress, and how they reflect the Company’s values:

 Positive Attitude – We approach opportunities with positive ideas

 Teamwork – We maintain a friendly environment and work in the spirit of
cooperation and collaboration.

 Accountability – We take responsibility for our actions and adhere to the highest
standards of business ethics in all interactions.

 Surpass Expectations – We ensure our future success by exceeding the
expectations of our customers.

 Integrity – We strive to be an organization characterized by high levels of
integrity, and commitment to the laws that govern our industry.

1

 Communication – We actively communicate with our clients and each other to
determine needs and provide excellent results.

 Diversity – We foster a work environment committed to cultural diversity al all
levels.

2

2. DIVERSITY

EQUAL EMPLOYMENT OPPORTUNITY POLICY
The Company provides equal employment opportunity to all employees and applicants
regardless of a person’s race, religion, color, sex, age, national origin, medical condition,
marital status, sexual orientation, veteran status, disability, perceived disability, personal
appearance or any other legally protected status.

This policy applies to all conditions of employment including, but not limited to,
recruitment, selection, placement, transfer, promotion, training, compensation, benefits
and termination. All decisions regarding conditions of employment must be based on the
individual’s overall qualifications and his or her ability to meet the requirements of the
position.

If you believe you have witnessed or been subjected to any form of discrimination
immediately report the circumstances, individual(s) involved, and names of witnesses to
the Human Resources Manager. If the Human Resources Manager is the source of the
at-issue discrimination, or if you are uncomfortable speaking with the Human Resources
Manager for any reason please contact your direct supervisor. Your complaint is
important to us and must be promptly reported.

The Company will promptly investigate and appropriate corrective action will be taken.
Any individual who has violated the Company’s policies prohibiting discrimination or who
has engaged in conduct that could be construed as discrimination will be subject to
disciplinary action up to and including termination.

The Company makes reasonable accommodation for the known physical or mental
disabilities of an otherwise qualified applicant or employee, unless undue hardship would
result. Any individual who requires accommodation in order to perform the essential
functions of his or her job should advise us of this in writing as soon as possible after the
need for accommodation arises. The individual should identify what accommodation he
or she believes is needed in order to perform the essential functions of the job. The
Company will then evaluate whether a reasonable accommodation exists which will not
impose an undue hardship upon the Company.

Retaliation
Employees are protected by law from retaliation for opposing discriminatory practices,
for having in good faith reported discrimination to their employer, for having assisted
another employee to report discrimination, for filing a discrimination complaint with an
administrative or regulatory agency, or for otherwise participating in any related legal
proceeding. Retaliation will not be tolerated. Retaliation against an employee or
independent contractor or consultant will result in discipline, up to and including
termination. The company cannot promise confidentiality for people who make
retaliation complaints, however identities will be revealed only on a “need to know” basis.

3

EQUAL EMPLOYMENT OPPORTUNITY – MANAGER’S RESPONSIBILITES
Promoting and achieving work-force diversity at all levels are the responsibilities of each
manager at the Company. Managers are expected to:

 Carry out the Company’s commitment to diversity and equal opportunity.

 Take an active role in coaching and developing employees.

 Maintain a work environment that promotes dignity, courtesy and respect for the
individual.

 Provide reasonable accommodations to employees with disabilities unless undue
hardship would result.

POLICY AGAINST HARASSMENT
Our Company has a zero-tolerance policy toward discrimination and all forms of unlawful
harassment, including, but not limited to, sexual harassment. This zero-tolerance policy
means that no form of unlawful discrimination or harassing conduct by or towards any
employee, vendor, or other person in our workplace will be tolerated. The Company is
committed to enforcing its policy at all levels within the Company. Any officer, director,
manager, supervisor, or employee who engages in prohibited discrimination or
harassment will be subject to discipline, up to and including termination.

Conduct Covered by this Policy
This policy applies to and prohibits all forms of illegal harassment and discrimination.
Accordingly, the Company absolutely prohibits harassment or discrimination based on
sex, age, disability, perceived disability, marital status, personal appearance, sexual
orientation, race, color, religion, national origin, veteran status, medical condition or any
other legally protected characteristic.

Sexual Harassment
Sexual harassment may take many forms, including the following:

 Offensive and unwelcome sexual invitations, whether or not the employee agrees
to the invitation, and particularly when a spoken or implied exchange for sexual
favors is a benefit of employment or continued employment;

 Offensive and unwelcome conduct of a sexual nature, including sexually graphic
spoken or suggestive comments; offensive comments transmitted by e-mail or
another messaging system; offensive or suggestive images or graphics whether
physically present in the workplace or accessed over the Internet; or the
possession or use of sexually suggestive objects; and

 Offensive and unwelcome physical contact of a sexual nature, including the
touching of another’s body; the touching or display of one’s own body, or any
similar contact.

4

Computer Messaging and Information Systems
Employees are cautioned that the use of e-mail, voice mail, or other electronic
messaging systems, or the Internet, may give rise to liability for harassment. Employees
may not generate, should not receive, and must not forward, any message or graphic
that might be taken as offensive based on sex, gender, or other protected characteristic.
This includes, for example, the generation or forwarding of “humor” which contains
offensive terms.

Any employee receiving offensive messages or graphics over the Company’s computers
or other electronic devices should report those messages to his or her supervisor or the
Human Resources Manager. Employees are reminded that the Company’s computers or
other electronic devices and the data generated on, stored in, or transmitted to or from
the Company’s computers remain the property of the Company for all purposes. The
Company retains the right to monitor its computers, computer systems, and networks to
ensure compliance with this requirement.

Procedures in Cases of Harassment
Any Company employee who believes that she or he has been subjected to unlawful
harassment of any kind has the responsibility to report the harassment immediately to
her or his supervisor. No action can be taken on this prohibited conduct if it is unknown
or not reported. If the employee is uncomfortable reporting the harassment to her or his
immediate supervisor (whether because the supervisor has committed the harassment,
or for any other reason whatsoever), the employee must report the harassment to the
next higher level of management above the immediate supervisor or, if the employee
prefers, to the President.

Every report of harassment will be investigated promptly and impartially, with every effort
to maintain employee confidentiality. The complainant and the accused will be informed
of the results of the investigation. If the Company finds that its policy has been violated,
it will take appropriate corrective and remedial action, up to and including discharge of
offending officers or employees, and/or similarly appropriate action toward offending
vendors or contractors.

Reporting Without Fear of Retaliation
No Company employee will be retaliated against for reporting harassment, nor is any
Company employee permitted to retaliate against an employee who reports harassment.
Retaliation against an employee for exercising his or her rights under this policy or for
participating in an investigation is a very serious violation of this policy which will not be
condoned or tolerated. This no-retaliation policy applies whether a good faith complaint
of harassment is well founded or ultimately determined to be unfounded.

5

3. WORKPLACE ENVIRONMENT

OPEN-DOOR POLICY
We have an open-door policy because we value your input and want you to feel free to
raise issues of concern. Work-related problems, questions or complaints can best be
resolved by frank and prompt discussion. Accordingly, the Company promotes the
following practices:

 You are encouraged to express your views on Company policies to your
immediate supervisor. You can also contact any other member of management.

 Your complaints, questions, problems or suggestions should be raised as soon
as possible.

 Even though you have raised an issue, you will still be responsible for consistent
compliance with the Company’s rules of conduct, policies and practices.

You are encouraged to use this Open-Door policy and may do so without fear of reprisal
or retaliation for any issue or complaints raised in good faith.

VIOLENCE IN THE WORKPLACE
We are committed to providing a safe and healthful workplace. In this regard, the
Company strictly prohibits employees, anyone on our premises, or anyone engaging in a
Company-related activity from behaving in a violent or threatening manner. As part of
this policy, the Company reserves the right to deal with behavior that may lead to
violence prior to any violent behavior occurring.

Threats or acts of violence against Company persons and/or property will not be
tolerated. Any employee who commits or threatens any violent act against any person
while at work, either on company premises or off-site, will be subject to immediate
termination. Responding to a threat or act of violence against persons and/or property
should be given the highest priority. The Company’s employees must report any
potential threat or act of violence to a Company manager.

HEALTH AND SAFETY
It is the Company’s policy to preserve the health and safety of our employees. To
achieve our goal of maintaining a safe workplace, everyone must be safety conscious at
all times. Every employee is responsible for the safety of him or herself as well as others
in the workplace. Every worker is expected to report unsafe conditions and avoid
unnecessary risks.

Safety Rules

 All employees must be attentive to the existence of fire hazards and take steps to
prevent them. Employees are required to familiarize themselves with the location
of fire alarms, extinguishers and exits.

 Chemicals and other hazardous materials must be properly stored and disposed
of at all times.

6

 Know the dangers involved with any of the chemicals or hazardous materials you
use, and the protective measures that are available to prevent injury. Carefully
review container labels and material safety data sheets concerning those
chemicals.

 Safety glasses, gloves and aprons and other safety items are located with the
equipment requiring their use. Use this equipment whenever necessary.

 Report worn or damaged safety equipment to your supervisor.

 Place trash and food in proper containers. Do not allow dust or dirt to
accumulate.

 Know the locations of first-aid kits, available on Company premises.

 Do not wear clothing, accessories or jewelry that are safety hazards. Unsafe
footwear is not to be worn by employees.

 Horseplay and practical jokes in work areas will not be tolerated.

ALCOHOL AND DRUGS IN THE WORKPLACE
Our Company seeks to prevent accidents and injuries resulting from the misuse of
alcohol and/or controlled substances. For this reason we have established a drug and
alcohol free workplace policy. This policy applies to all employees, including managers
and supervisors.

The following rules and standards apply both on the Company’s property during the
workday, and during off-site Company-sponsored business events. The Company strictly
prohibits the following:

 The improper use of alcohol or any illegal or controlled substance during the
workday;

 The consumption of alcoholic beverages during working hours, including meal
and break periods, except for alcohol served under the authorization of the
Company at Company-sponsored events;

 Driving a Company vehicle while under the influence of alcohol or an illegal or
controlled substance;

 Distribution, dispensation, sale, solicitation or purchase of alcohol or an illegal or
controlled substance on Company property or on Company time; and,

 Unlawful manufacture, possession, dispensation or use of alcohol or an illegal or
controlled substance.

Legally prescribed controlled substances are excluded from this policy and permitted
only to the extent that the use of such substances does not adversely affect the
employee’s work ability, job performance, or workplace safety.

7

The Company occasionally serves alcohol at Company events. Employees are
responsible for appropriate alcohol consumption.

We encourage employees to seek assistance before drug and/or alcohol use renders
them unable to perform their job function or jeopardizes their health and safety, or the
health and safety of others.

SOLICITATION AND DISTRIBUTION
In the interest of maintaining a proper business environment and preventing interference
with work and inconvenience to others, employees may not distribute literature or printed
materials of any kind, sell merchandise, solicit financial contributions, or solicit for any
other cause during their working time. Employees who are not on working time (e.g.,
those on lunch hour or breaks) may not solicit employees who are on working time for
any cause or distribute literature of any kind to them. This policy also prohibits
solicitations via e-mail and other telephonic communication systems during the sender’s
or recipient’s working time. Furthermore, employees may not distribute literature or
printed material of any kind in working areas at any time. Non-employees are likewise
prohibited from distributing material or soliciting employees on the Company’s premises
at any time. Please report any solicitation or distribution to the Human Resources
Manager.

SMOKE-FREE WORKPLACE
To contribute to the health and well-being of all employees, our workplace is entirely
smoke-free. Smoking is prohibited in all enclosed areas within the Company, without
exception. The purpose of this policy is to ensure the comfort of all employees in the
workplace and to comply with state law governing workplace smoking. Accordingly,
smoking is permitted only in the designated outside smoking area. This policy extends
to the use of e-cigarettes as well.

Smoke breaks are considered part of your allowed break times. Please be aware that
non-smokers and smokers are allowed the same amount of break time.

Any violations of this policy should be reported to your direct supervisor. No employee
shall be retaliated against for exercising his or her rights under this policy.

8

4. TERMS OF EMPLOYMENT

AT-WILL EMPLOYMENT
Unless otherwise provided in writing, all employees of the Company are employed on an
“at will” basis. This means employees have the right to terminate their employment at
any time, for any reason, and the Company can also terminate the employment at any
time with or without cause and with or without notice. This Handbook does not constitute
a contract between the Company and the employee. All policy statements, procedures,
manuals or documents as well as statements by an employee or representative shall not
in any way modify this at will status.
INTRODUCTORY PERIOD
The first 90 days of employment will be an introductory period. This get-acquainted
period allows us to determine whether you are right for us and whether the Company is
right for you. If you are retained after this period, your length of service will be calculated
from your first day of work. Completion of this period is not a guarantee of continued
employment. Contact the Human Resources Manager with any questions.

9

5. COMPENSATION

COMPENSATION POLICY
It is the Company’s policy to compensate employees fairly and equitably in ways that
recognize the responsibility of individual assignments and overall contributions to
company performance and objectives. All compensation decisions are made at the sole
discretion of the Company.

TYPES OF EMPLOYEES
Regular Full-Time Employees are those who are regularly scheduled to work forty (40)
or more hours per week. Regular full-time employees are eligible for Company benefits.

Regular Part-Time Employees are those who are regularly scheduled to work less than
forty (40) hours per week. Regular part-time employees will receive Emergency Time
OFF (ETO) based on hours worked. Qualification for health insurance benefits vary
depending on policy details. Some Employees working less than 40 hours may be
covered. Check with the Human Resources Manager for coverage details.

Temporary Employees are those who are hired for a limited time period. Temporary
employees are not eligible for Company benefits.

JOB CLASSIFICATIONS
For the purposes of overtime pay, all positions are classified into one of the following two
categories, depending on the nature of the job duties and responsibilities. You will be
informed as to which category your position is assigned.

1. Non-exempt Positions - Associates covered by the overtime provisions of federal and
state wage and hour laws. These associates are entitled to overtime pay for work in
excess of forty (40) hours in a workweek.

2. Exempt Positions – Employees classified as exempt pursuant to federal and state
wage and hour laws. Generally, executives, administrative, sales and professional
employees qualify as exempt. These employees are not entitled to receive overtime pay.

OVERTIME
Our normal hours of operation are from 9:00 a.m. to 8:30 p.m. Tuesday and Thursday,
9:00 a.m. to 6:30 p.m. Wednesday and Friday and 9:30 to 5:30 on Saturday. We are
closed on Sundays and Mondays. Generally, an employee is expected to work 40 hours
per week. Your immediate supervisor will determine your schedule based on the needs
of your department.

Like most companies, we can experience periods of extremely high activity. When they
occur, additional work, including overtime, is required from all of us. We appreciate and
expect your cooperation. Your supervisor will notify you whenever overtime is
necessary. Efforts will be made to provide you with advance notice. If you are a non-
exempt employee, you will receive time and one-half for all hours you work over forty in
any one week. All overtime work must have the prior approval of your supervisor.
Overtime worked without approval of your supervisor is subject to the disciplinary
process.

10

Weekend work does not automatically qualify for compensation at a premium rate of
pay. Hours worked on Sundays and/or Mondays qualify for premium pay only if they
qualify as overtime hours.
Paid days such as holidays, Paid Time Off and Emergency Time Off shall not be
considered as hours worked in calculating eligibility for overtime pay.
PAYROLL PERIODS
All employees are paid on a monthly basis occurring on the Second working day of each
month. If a payday falls on a Saturday, Sunday or Monday employees will be paid on the
next working day. If a payday falls on a holiday, employees will be paid on the next
working day.
It is company policy that employee paychecks will only be given personally to that
employee or mailed to his/her home address.
Employees may be paid by check or through direct deposit of funds to either a savings
or checking account at the financial institution of their choice.

11

6. TIME AND LEAVE

WORKING HOURS

Our normal hours of operation are from 9:00 a.m. to 8:30 p.m. Tuesday and Thursday,
9:00 a.m. to 6:30 p.m. Wednesday and Friday and 9:30 to 5:30 on Saturday. Hours may
vary, however, according to individual job requirements. A normal working schedule for
regular full-time employees consists of 40 hours each workweek. An employee’s
standard work schedule is set by his or her supervisor and in accordance with the job
and customer requirements. Whatever the hours an employee is scheduled to work,
punctuality and consistent attendance are important and are a condition of employment.

TIME-KEEPING
Employees are required to record all hours worked each day within the pay period. The
time clock software can be accessed from any register inside the store. At the
completion of a pay period, employees must sign and submit the time sheet to the
Payroll Manager

To ensure compliance with the law, no work is to be conducted “off the clock”.

HOLIDAYS
The Company grants four paid holidays to all full-time employees if the holiday falls on a
regularly scheduled work day, for example Tuesday through Saturday. The Company
will be closed on the following designated holidays unless an announcement to the
contrary is made:

January: New Year’s Day

July: Independence Day

November: Thanksgiving Day

December: Christmas Day

If a recognized holiday falls within a regular full-time employee’s paid time off (PTO), the
holiday is not considered a PTO day.

For each holiday, regular full-time employees are paid a full day’s wages. Regular part-
time employees will be paid for scheduled hours if the Company paid holiday falls on a
regularly scheduled workday.

If employees are required to work on a holiday outside of their normal schedule, they will
be compensated as follows:

 Non-exempt employees will receive premium pay for the hours actually worked.

 Exempt employees will receive one day of time off for each holiday worked. The
alternate day must be used within 365 days of the Company holiday.

Employees must receive approval from their manager prior to working on a holiday.

12

Employees on an unpaid leave of absence are not eligible to be paid for holidays that
occur during the leave period.

PAID TIME OFF (PTO)
Authorization and Scheduling
PTO may be taken with management approval. PTO requests must be submitted to your
supervisor at least three weeks in advance. Your supervisor will determine whether
adequate coverage can be maintained during your requested PTO. Conflicting requests
will be decided by date of request. If requests are submitted at the same time they will
be decided based on seniority of requesting employees. There may be circumstances
when the Company may ask employees to use PTO at specified times due to holidays or
workflow issues.

PTO Accrual
Full-Time Employees – Regular full time employees who have completed their
introductory period, accrue PTO time for each hour of regular employment worked equal
to a percentage of their annual benefit, based on the following schedule:

Paid Time Off

Tenure PTO Hours Earned
Accrued Per Year
0 years 1 years per Hour (AVG)
1 years 2 years 0.0231 60
2 years 3 years 0.0288 60
3 years 4 years 0.0346 72
4 years 5 years 0.0375 78
5 years 6 years 0.0404 84
6 years 7 years 0.0433 90
7 years 8 years 0.0462 96
8 years 9 years 0.0490 102
0.0519 108
9 years 10
10 years years 0.0548 114

- 0.0577 120

Part-Time Employees – All regular part-time employees (employees who are regularly
scheduled for less than 40 hours) do not earn any PTO time.

PTO Accrual Maximums
The maximum PTO accrual is as follows:

 1.5 times the maximum accrual rate for years of service. Ex. For 6-7 years of
service is 144 hours.

13

Financial compensation is not available in lieu of taking accrued PTO time.

Employees will not be paid for PTO time not used. Employees may carry over ½ of
accrued time for a given year which then expires 1 year from carry over date. For
example, if an employee has 60 hours of PTO for 2015, they may carry over up to 30
hours to 2016, which they would then lose if they did not use by the end of 2016.

Employees accrue PTO time during their first year of employment, but may not use it
until their one year anniversary. If termination occurs before the end of the first year, all
accrued PTO time is forfeited. PTO does not count as a day worked in calculating
overtime for the week.

Temporary employees do not earn PTO; they may take vacation time on an unpaid basis
by arrangement with and approval by their supervisor. Overtime hours are not counted
toward accrual of PTO Hours.

Payment for Unused PTO Time upon Termination
Should an employee leave the Company for any reason, accrued and unused PTO pay
will be paid at the time of termination.

EMERGENCY TIME OFF (ETO)
The Company provides its regular full-time employees with up to 40 hours of ETO
Emergency Time Off per calendar year for absences due to personal illness or injury, or
to care for an ill immediate family member. The Company provides its regular part-time
employees with up to 25 paid ETO hours per calendar year for absences due to
personal illness or injury, or to care for an ill immediate family member.

For full-time employees, ETO shall be paid at the employee’s base pay rate at the time
leave is taken. For part-time employees, ETO shall be paid at the employee’s base pay
rate for regularly scheduled hours at the time leave is taken.

After all ETO has been used, PTO, if available, will be applied to any absence, and three
unexcused absences are grounds for disciplinary action. Unused ETO will be paid at the
employee’s base pay rate at the end of the calendar year as yearly reliability bonus.

The Company reserves the right to ask for a doctor’s written statement of illness or
disability. In addition, the Company may require an employee who takes leave to provide
a fitness for duty certification signed by a health care provider before returning to work. If
requested, an employee may not resume work until he or she provides such a written
statement or certification.

Should an employee leave the Company for any reason, unused ETO pay will be
forfeited at the time of termination.

PERSONAL LEAVE OF ABSENCE
Employees who require time off in addition to PTO and ETO may request a personal
leave of absence without pay for up to a maximum of 30 days. An extension may be
approved in limited circumstances.

14

All regular employees employed for a minimum of 90 days are eligible to apply for an
unpaid personal leave of absence. Job performance, absenteeism, scheduling and
departmental requirements will all be taken into consideration before a request is
approved.

Please contact Human Resources for more information on request procedures.

The employee must return to work on the scheduled return date or be considered to
have voluntarily resigned from his or her employment. Extensions of leave will only be
considered on a case-by-case basis.

BEREAVEMENT
In the event of the death of a member of an employee’s immediate family, paid
bereavement leave will be granted for up to three consecutive workdays. Immediate
family is defined as: spouse, domestic partner, child, parent or legal guardian, brother,
sister, grandparent, grandchild or mother-, father-, sister-, brother-, son- or daughter-in-
law.

JURY DUTY
If you are a full-time regular employee who is summoned for jury duty you must notify
your supervisor and submit to him/her the Notice of Jury Duty that you received. When
you return to work you must present the court record of your service. The Company
does not pay for time off for Jury Duty.

MILITARY DUTY
The Company grants U.S. military leave and re-instatement to eligible employees in
compliance with the U.S. Uniformed Services Employment and Reemployment Rights
Act (USERRA) and any other applicable federal or state law.

The Company will grant U.S. military leave to regular employees in the “uniformed
services” who request time away from work for voluntary or involuntary: (1) active duty;
(2) active duty for training; (3) initial active duty for training; (4) inactive duty training; (5)
National Guard duty or training; (6) an examination to determine the employee’s fitness
for any of the preceding types of duty, or (7) an absence for funeral honors performed by
National Guard or Reserve members.

The “uniformed services” include the Armed Forces (Army, Navy, Air Force, Marines and
Coast Guard), the Army National Guard, the Air National Guard, the commissioned
corps of the Public Health Service, the reserve components of each of these services,
and any other category of persons designated by the President in time of war or national
emergency. Except as otherwise required by law, a military leave may extend to a period
of up to five years.

USERRA does not cover state service in the Army National Guard or the Air National
Guard.

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Employees requiring military leave should give their supervisors as much advance notice
as possible so that necessary staffing arrangements can be made. Employees, at their
discretion, may elect to apply accrued PTO time to their military leave.

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7. EMPLOYEE BENEFITS

INTRODUCTION TO BENEFITS
The Company offers a wide variety of health, welfare and retirement benefits for eligible
employees and their dependents, which become effective after the introductory period,
unless other effective dates apply. This handbook provides only a brief description of the
benefit plans and programs that are offered at the time of publication. The Company
reserves the right to modify, change or eliminate any of its benefits at any time.
Employees are provided copies of summary plan descriptions and other relevant
information at the time of hire and during the Company’s open enrollment period in
December for the new benefit year in January. Any questions regarding coverage should
be directed to the Human Resources Manager.

Group Health Insurance
Full-time employees are eligible for group insurance benefits. The benefit effective date
will be 30 days following the date of hire. Participation in these plans is available to all
full-time employees who meet the criteria set forth in the Summary Plan Descriptions.
Group insurance is available to those who meet the minimum work schedule
requirements specified. All eligible employees may elect or decline enrollment in any or
all of the following group health or disability insurance plans:

 Medical Insurance
 Dental Insurance
 Vision Insurance

Employer contributions and payments of employee premiums are in accordance with
current programs and the limits set by Company policy. At this time, the Company will
pay a maximum annual sum of 50% of total premium towards an individual health
coverage policy and a maximum annual sum of 50% of the total premium towards family
health coverage. Costs and contribution rates may vary from year to year.

The company will pay 100% of the total premium for Dental Insurance and Vision
Insurance. Costs and contribution rates may vary from year to year.

Please consult your insurance plan open enrollment materials and booklets for full
details concerning participation, coverage, and filing of claims.

When required, it is your responsibility to file claims properly and promptly. Delay may
result in your claim being ineligible for payment.

Employee Status Changes
Eligibility for benefits is determined by your employee status. A status change may affect
your participation in the Company’s benefits. For example, if your status changes from
full-time or part-time to temporary, you will lose eligibility and your participation in the
Company’s benefits will end. If you lose insurance coverage as a result of a status
change, you may be eligible to continue health insurance coverage under COBRA (see
below). The following are examples of other status changes that may affect your
participation: marriage, divorce, newborn, or loss of coverage under a spouse’s or
domestic partner’s benefit plan.

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RETIREMENT BENEFITS
To provide financial assistance in your retirement years, the Company offers an
additional benefit—a Simple IRA designed to assist you with long-term financial security.
Please see the plan documents, available through the Human Resources Manager for
information about eligibility, benefits and withdrawals. The Company will match
maximum annual contribution of 3% of employee’s salary towards the retirement benefit.

COBRA – Continuation of Health Coverage
If you resign or are terminated from Company employ, or if your work hours are reduced,
and if this event makes you or your dependents no longer eligible to participate in our
group health insurance plan, you and your eligible dependents may have the right to
continue to participate for up to eighteen (18) months at your (or your dependents’)
expense. If you are determined to be disabled under the Social Security Act at the time
your termination or reduction in hours occurs, you may be entitled to continuation
coverage for up to twenty-nine (29) months.

Your eligible dependents may also extend coverage, at their expense, for up to thirty-six
(36) months in our group health insurance plan in the event of your death, divorce, legal
separation, or enrollment for Medicare benefits, or when a child ceases to be eligible for
coverage as a dependent under the terms of the plan. The eighteen (18) month
continuation coverage period provided in the event of your termination or reduction in
working hours may be extended to thirty-six (36) months for your spouse and dependent
children if, within that eighteen (18) month period, you die or become divorced or legally
separated, or if a child ceases to have dependent status. In addition, if you enroll in
Medicare during the eighteen (18) month period, your spouse and dependent children
may be entitled to extend their continuation period to thirty- six (36) months, starting on
the date that you become eligible for Medicare.

Please note that a child who is born to or placed for adoption with the covered employee
during a period of COBRA coverage will be eligible to become a qualified beneficiary.
Such child can be added to COBRA coverage upon proper notification to the Plan
Administrator of the birth or adoption.

If you or your eligible dependents elect to continue as members of the Company’s plan,
you will be charged the applicable premium charged the Company by our insurance
carrier plus an additional two percent. Employees, or other qualified beneficiaries, with
disabilities, however, will be charged an additional 50 percent of the applicable premium
during the nineteenth through twenty-ninth months of continuation coverage. The
premium is subject to change if the rates which are being charged to the Company
increase or decrease. If this election for continuation coverage is made, you have the
right to convert this coverage to an individual policy with our insurance carrier at the end
of the continuation period.

Continuation coverage may end, however, if any of the following events occur: failure to
make timely payments of all premiums; assumption of coverage under another group
health plan, which does not exclude or limit coverage to you on account of a preexisting
medical condition; or the Company’s termination of its group health plan. If you enroll for
Medicare, you will no longer be eligible for continued coverage, but, as noted earlier in
this statement, your spouse and dependent children may be entitled to extend their
continuation coverage.

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Our plan administrator will contact you concerning these options at the time termination
occurs or your work hours are reduced. The plan administrator will contact your qualified
beneficiaries in the event of your death or enrollment for Medicare benefits. However, in
the event that you become divorced or legally separated, or one of your dependents
ceases to be eligible for coverage under our group health insurance plan, you and/or
your dependents are responsible for contacting the General Manager and the plan
administrator to discuss continuation/conversion rights. You and your qualified
beneficiaries are also responsible for notifying the General Manager within sixty (60)
days of qualifying for social security disability benefits.
For further details regarding continuing or converting your group health insurance
benefits, please contact the Human Resources Manager.
WORKERS’ COMPENSATION
Should you suffer a work-related injury, disease, or illness, you will receive benefits
under our Workers Compensation insurance policy. Benefits coverage is governed by
state law. To ensure your physical well being and the correct processing of these claims,
you must notify your supervisor immediately about any injury occurring during and as a
result of employment. Check with your supervisor for further information regarding
workers’ compensation coverage.

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8. CONDUCT STANDARDS

ATTENDANCE AND PUNCTUALITY
The Company plans its business activities with the expectation that employees will
report to work as scheduled. Regular, prompt attendance is an essential requirement of
all positions with the Company.

When an employee is going to be absent, the supervisor should be notified as soon as
possible and at least 2 weeks prior to the scheduled reporting time. In the event of
illness or injury, employees are expected to notify their supervisor by telephone call at
least one-half hour before they are scheduled to report to work or as far in advance as
possible. In the event of an emergency or unusual occurrence preventing employees
from getting to work, employees should notify their supervisor as soon as possible. If
employees fail to so notify their supervisor without reasonable explanation, their absence
will be deemed unexcused. Unexcused absences will be unpaid. If employees do not
report to work or contact their supervisor for three consecutive work days, they will be
considered to have voluntarily abandoned their job.

The reasons for an absence or tardiness, whether excused or unexcused, the duration
and the number of absences and/or times tardy are all considered in determining
whether an employee’s attendance record is satisfactory.

In the case of illness or injury, the Company reserves the right to require a doctor’s
certification of illness.

ATTIRE AND GROOMING
It is important for all employees to project a professional image while at work by being
appropriately attired. Don Basch Jewelers, Inc. employees are expected to be neat,
clean and well groomed while on the job. Clothing must be consistent with the standards
for a business environment and must be appropriate to the type of work being
performed.

All employees must be covered from shoulders to knees at all times (no see-through or
sleeveless clothing is permitted at any time). Natural and artificial scents may become a
distraction from a well-functioning workplace and are also subject to this policy. Jewelry
and piercing’s must also follow this policy

Don Basch Jewelers, Inc. is confident that employees will use their best judgment
regarding attire and appearance. Management reserves the right to determine
appropriateness. Any employee who is improperly dressed will be counseled or in
severe cases may be sent home to change clothes. Continued disregard of this policy
may be cause for disciplinary action, which may result in termination.

ELECTRONIC MAIL, INTERNET USAGE AND ELECTRONIC DEVICES
All Company communication services and equipment, including messages transmitted or
stored by devices, are the sole property of the Company. Employees should only use
these systems for legitimate Company purposes, to advance the Company’s interests,
and not for their own personal use.

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All messages and materials transmitted by, retrieved from, or stored within the
Company’s communication systems shall be regarded as non-personal, Company
communication. Employees have no privacy rights in such electronic communications.
The Company shall access and monitor employee electronic communications and files
as it considers appropriate, including previously deleted messages from email or
voicemail.

All Company-owned electronic devices that the Company permits employees to use,
including laptop computers, cell phones and PDA’s, are for the purpose of furthering the
interests of the Company. Employees are required to limit their non-business use of
Company electronic devices to emergency circumstances. The employee is solely
responsible for any expense or liability that may arise from any non-business use of
Company electronic devices. The Company at all times retains ownership of all
electronic devices provided to employees. The Company also retains ownership of the
data contained on such devices. The Company may inspect, at any time, any data
contained in its electronic devices.

If you are issued electronic devices, the Company expects you to take proper care of
this equipment. An employee who damages or loses Company electronic devices
through negligence or by an intentional act is responsible for repair or replacement
costs. The employee has the duty to report lost or stolen devices immediately.

The Company strictly prohibits the download, duplication or use of any software product
in violation of applicable state and federal law. Only software purchased or licensed by
the Company should be installed on Company computers. Do not, under any
circumstances, download any applications on a company device without the express
consent of the company.

Company communication services and equipment may not be used for any harassing,
offensive, demeaning, insulting, defaming, intimidating, or sexually suggestive messages
or data. All e-mail and Internet use will be subject to periodic, random monitoring to
ensure proper business. Do not, under any circumstances open any links in unsolicited
emails.

Except as part of conducting one’s job (e.g., exchanging materials with vendors or
customers), the Company’s email system may not be used for distribution of proprietary,
confidential or non-public information to persons or entities outside the Company. Non-
exempt employees should not access job related emails or conduct other business
outside of regular working hours.

BLOGGING AND SOCIAL NETWORKING POLICY
The Company recognizes that social networking (such as personal web sites, blogs,
Facebook, MySpace, Twitter, online group discussions, text messaging, message
boards and chat rooms) may be used by employees for personal as well as business
purposes. The Company also understands how the use of internet social network sites
and blogs can shape the way the public views us. The Company respects the right of
any employee to maintain a blog or post a comment on social networking sites.
However, the Company is also committed to maintaining its identity, integrity, and
reputation. Therefore, the Company has established the following rules and guidelines
regarding social networking forums:

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Personal Blogging or Social Networking on Company Time
Employees may not post on a personal blog or web page or participate in a personal
social networking site during working time or at any time with Company equipment or
property.

Disclosure
Employees must clearly and conspicuously disclose their employment relationship with
the Company when posting a comment regarding our services or products.

Disclaimer
Any employee who mentions the Company on a personal blog or social networking
account must include a disclaimer that specifically states that the opinions expressed are
those of the employee alone and may not be the same as those of the Company.

Identification
Employees not authorized by the Company to engage in social media on behalf of the
Company must use a personal email address, not a Company email address, as a
means of identification.

Proprietary and Confidential Information
All Company rules and policies regarding disclosure of sensitive, proprietary, financial or
confidential information apply in full to blogs and social networking sites. This includes,
but is not limited to, information about trademarks, customers, products, finances,
company strategies and any other information not previously publicly released by the
Company. Company logos or trademarks may not be used on any personal blog or
social networking account without permission from the Company.

Discrimination and Harassment
All Company rules and policies regarding discrimination and harassment apply in full
force to blogs and social networking sites. Any conduct which is impermissible under the
law if expressed in any other form or forum is also impermissible if expressed through
blogs or social networks.

Right to Monitor
The Company reserves the right to monitor all public blogs and social networking forums
for the purpose of protecting its interests and monitoring compliance with Company
policies. If activity is found to be compromising, insubordinate or adverse to the
Company’s legitimate business interests, the Company may require cessation and
removal of any detrimental commentary or postings or may request that you temporarily
confine your blog or social media commentary to topics unrelated to the Company .

Employee Rights
This policy is not intended to restrict an employee’s right to discuss wages and working
conditions with co-workers or in any way limit employees’ right under the National Labor
Relations Act.

BUSINESS CONDUCT
The Company is committed to the highest ethical and legal standards and to full
compliance with the laws and regulations that govern the jewelry industry. We expect
that you will be aware of the laws and regulations that apply to your job and recognize

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issues that require guidance from your supervisor. If you have any questions concerning
your activities on behalf of the Company, it is important that you seek direction from your
supervisor. No conduct that is dishonest, unethical, illegal or in violation of company
policy will be tolerated. The Company requires that employees adhere to lawful and
ethical business practices at all times.
COMPANY PROPERTY
The Company’s properties, facilities, office furniture, equipment, supplies, and other
Company-owned items must be maintained according to Company rules and regulations
and are to be used only for business-related purposes. The Company reserves the right
to inspect all Company property at any time, without notice to the employee and/or in the
employee’s absence. Inspections can include, without limitation, the examination of
physical files, computer files, e-mail, voice mail, other electronic devices and systems,
desks, work stations, lockers and storage areas.
PHONE SYSTEM AND CELL PHONES
Company telephones and cell phones are to be used for business purposes in serving
the interests of our company, and in the course of normal company operations. Be sure
to answer all calls promptly and courteously. On occasion, personal calls may be
necessary, but we ask your cooperation in limiting them to essential personal business.
All Company rules and policies regarding discrimination and harassment apply in full
force to phone conversations.
VIOLATION OF COMPANY CONDUCT STANDARDS
Violation of Company Conduct Standards, or any policy of the company, may subject an
employee to disciplinary action. This may consist of an oral or written warning,
suspension, or immediate discharge, depending upon the nature of the offense.
Either the employee or the Company may terminate the employment relationship at will,
at any time, without cause or advance notice. Violation of a specific policy or rule is not
required.

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9. CONFIDENTIALITY

CONFIDENTIAL INFORMATION
Employees of the Company may gain access to Confidential Information regarding the
Company, its customers, personnel and operations. For the purposes of this policy,
Confidential Information includes, but is not limited to, Company financial and strategic
planning information, marketing strategies, research and development information,
product plans, services, customer lists and other customer related information, market
information, software, inventions, designs, and similar business information relating to
the Company’s operations that is not generally available to the public.

Such Confidential Information shall be kept confidential and shall not be disclosed, used,
copied or removed from Company premises, except as necessary to perform the duties
of the job or as specifically directed by Company management. Such Confidential
Information may be disclosed to other employees only on a need-to-know basis. This
obligation to maintain the confidentiality of the Company’s Confidential Information
applies both during and after employment with the Company. If an employee is unsure
as to whether certain information is Confidential Information, it is the employee’s
responsibility to obtain a determination from the employee’s supervisor regarding the
status of the information and its use. Upon termination of employment, all Company
property, including, but not limited to, Confidential Information, must be returned to the
Company.

Confidential Information must be protected from inadvertent disclosure or dissemination.
A policy of carefully filing documents containing Confidential Information must be
stringently adhered to. Never leave Confidential Information lying open on your desk,
especially after hours. Take appropriate measures to protect Confidential Information,
such as storing it in a locked cabinet and/or logging off from any computers containing
Confidential Information when you are not at your desk. Never share personal computer
codes or passwords unless requested to do so by management.

EMPLOYEE PRIVACY POLICY
Employee Personal Data
The privacy and security of the personal data collected from you is a priority to us. It is
equally important to us that you understand how we handle this data. By your
employment, you expressly acknowledge that you have read, understand and agree to
all of the terms of this Privacy Statement, as outlined below and as it may be modified by
us from time to time without prior notice.

Collection of Employee Data
To conduct business and comply with government regulations (employment, tax,
insurance, etc.), we collect various personal and other data depending on your
employment responsibilities, citizenship, location of employment, and other factors. Such
data may include your name, phone numbers, email address, mailing addresses,
banking and other financial data, government identification numbers (such as social
security numbers, tax payer ID’s, and driver’s licenses) and any other necessary data.

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Use of the Employee Data we Collect
We may use your data as follows:

 To identify you personally
 To communicate with you
 To comply with human resources requirements
 To comply with government regulations
 To provide employee benefits (including compensation and health insurance)

Disclosure of Employee Personal Data

We promise that we will not disclose, sell or otherwise distribute to any third party any of
your personally identifiable data without your prior permission except under the following
circumstances:

 Legal requests and investigations – We may disclose any data about you when,
in our opinion, such disclosure is necessary to prevent fraud or to comply with a
law or court order

 Agents and third-party service providers – We may, from time to time, outsource
some or all of the operations of our business to agents and third-party service
providers. In such cases, it will be necessary for us to disclose your data to those
service providers. These entities have access to your personal data to the extent
required to perform their functions, but may not use it for other purposes.

 Business Transfers – As we continue to develop our business, we might sell or
buy companies, subsidiaries, or business units. In such transactions, data
generally is one of the transferred business assets but remains subject to the
promises made in any pre-existing privacy statement. Also, in the unlikely event
that the Company or all of its assets are acquired, your data may be one of the
transferred assets.

 Protection of Company and Others – We release data when we believe release
is appropriate to comply with the law; enforce or apply our policies and
agreements; or protect the rights, property or safety of the Company, employees,
or others. This does not include selling, renting, sharing or otherwise disclosing
personally identifiable data from employees for commercial purposes in violation
of the commitments set forth in this Privacy Statement.

Updating and Accessing Employee Personal Data
Although you may update your personal data on file with us, we may maintain prior data
about you. Therefore, you should not expect that all of your historical data will be
removed from our databases at the time you notify us of changes.

Your Personnel and Benefits Files
The company maintains a personnel file on each employee that contains documents
used to determine qualifications for employment, promotion, compensation and
disciplinary action. Such documents include employment applications, offer letters,
employment contracts, hire papers, performance evaluations, corrective action memos
and employee responses, salary actions and similar documents. Personnel files are the

25

property of the Company and not the individual employees. The Company also
maintains a separate employee file containing benefits-related information.
Pursuant to this policy, information recorded in an employee’s personnel and benefits
files is confidential and is made available only to authorized Company employees and
those who have a legitimate need to review the files. Upon reasonable notice, and
during working hours, an employee may review his or her personnel file and may obtain
copies of any documents in the personnel file that were signed by the employee.
Security of Personal Data
We employ reasonable security measures and technologies, such as password
protection, encryption and physical locks to ensure the confidentiality of all personal
data, including that of employees, customers, vendors and business partners. If you are
authorized to have access to the personal data of others, it is important that you take the
appropriate steps to protect this personal data. Paper and other hard copies containing
personal data should be secured in a locked location when not in use. Computers should
be secured when not in use by logging out or locking. Passwords and user ID’s should
be guarded and not shared. When no longer necessary for business purposes, paper
and hard copies containing personal data should be immediately destroyed using paper
shredders or other approved devices. Do not leave copies in unsecured locations waiting
to be shredded or otherwise destroyed. Do not make or distribute unauthorized copies of
documents and other tangible medium containing personal data. Electronic files
containing personal data should only be stored on secured computers and not copied or
otherwise communicated to unauthorized individuals within or outside of Company.
Unsolicited Data
Anyone sending unsolicited data to the Company by any means explicitly consents to
storage, destruction, processing, disclosure and/or any other use by the Company or
any other party to the unsolicited data.
Compliance with this Privacy Policy is important to the Company. Any violation or
potential violation of this privacy policy should be reported to your supervisor.

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10. PERFORMANCE EVALUATIONS, PROMOTIONS
AND DISCIPLINARY ACTION

EVALUATIONS
The Company seeks to ensure thorough two-way communication between the
supervisor and the employee on an annual basis. We do so by defining performance
standards, setting goals, conducting annual reviews, preparing annual performance
evaluations and describing areas where improvement is necessary.

The annual performance evaluation allows for communication between the employee
and the supervisor regarding performance standards, goals and employee development
within the company. It also provides an opportunity for the employee to express his or
her thoughts concerning the job. The purpose of the evaluation is to check the extent to
which goals have been achieved and to determine the steps necessary to further reach
these goals. It is also to set new goals for performance and employee development,
focusing on the coming year.

The factors that are considered in evaluations include, but are not limited to: knowledge
of work, quality of work, initiative, performance, productivity, education and training,
attendance and punctuality, cooperation, conduct, disciplinary record, customer
relations, experience and length of service.

There is no guarantee of a salary increase based on the evaluation.

PROMOTIONS
The factors that will be considered in promotions include, but are not limited to:
knowledge of work, quality of work, initiative, performance, productivity, education and
training, attendance and punctuality, cooperation, conduct, disciplinary record, customer
relations, experience and length of service.

Employees should constantly strive to upgrade their skills in their present job, and to
learn other areas of our operation to be qualified for promotions when such occasions
arise.

There is no guarantee of a salary increase in connection with a promotion.

CORRECTIVE OR DISCIPLINARY ACTION
Employees are provided with measurable performance goals upon hire and annually as
part of the annual performance review process. Employees are evaluated on their level
of achieving these performance goals.

The Company is dedicated to ensuring that discipline, up to and including dismissal, is
administered fairly and uniformly. An employee who does not perform his or her job or
whose behavior is not consistent with Company expectations, policies and expressed
standards may be given a warning and an opportunity, within a specified period of time,
to improve. Depending upon the particular circumstances, corrective or disciplinary
action may necessary.

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This Policy is not intended to, should not be construed as, and does not create a term of
employment and does not limit or modify the Company’s right to terminate your
employment or to alter the terms and conditions of your employment, at any time and for
any reason, with or without any cause or advance notice.

PROGRESSIVE DISCIPLINE
Every employee has the duty and the responsibility to be aware of and abide by existing
rules and policies. Employees also have the responsibility to perform his/her duties to
the best of his/her ability and to the standards as set forth in his/her job description or as
otherwise established.

Don Basch Jewelers, Inc. supports the use of progressive discipline to address issues
such as poor work performance or misconduct. Our progressive discipline policy is
designed to provide a corrective action process to improve and prevent a recurrence of
undesirable behavior and/or performance issues. Our progressive discipline policy has
been designed consistent with our organizational values, HR best practices and
employment laws.

Outlined below are the steps of our progressive discipline policy and procedure. Don
Basch Jewelers, Inc. reserves the right to combine or skip steps in this process
depending on the facts of each situation and the nature of the offense. The level of
disciplinary intervention may also vary. Some of the factors that will be considered are
whether the offense is repeated despite coaching, counseling and/or training; the
employee's work record; and the impact the conduct and performance issues have on
our organization.

The following outlines Don Basch Jeweler’s progressive discipline process:

 Verbal warning: A supervisor verbally counsels an employee about an issue of
concern, and a written record of the discussion is placed in the employee's file for
future reference.

 Written warning: Written warnings are used for behavior or violations that a
supervisor considers serious or in situations when a verbal warning has not
helped change unacceptable behavior. Written warnings are placed in an
employee’s personnel file. A written warning will contain the following
information:

 Description of the problem with examples

 Description of desired performance

 Plans for improvement

 Specific period of time in which to improve

You may respond to the warning in writing. The consequences of not meeting
standards are set forth in the warning, and may include termination.

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 Performance improvement plan: Whenever an employee has been involved in
a disciplinary situation that has not been readily resolved or when he/she has
demonstrated an inability to perform assigned work responsibilities efficiently, the
employee may be given a final warning or placed on a performance improvement
plan (PIP). PIP status will last for a predetermined amount of time not to exceed
90 days. Within this time period, the employee must demonstrate a willingness
and ability to meet and maintain the conduct and/or work requirements as
specified by the supervisor and the organization. At the end of the performance
improvement period, the performance improvement plan may be closed or, if
established goals are not met, termination may occur.

Don Basch Jewelers, Inc. reserves the right to determine the appropriate level of
discipline for any inappropriate conduct, including oral and written warnings, suspension
with or without pay, demotion and termination.

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11. TERMINATIONS

Unless otherwise provided in writing, in accordance with the Company’s at-will policy,
either you or the Company may terminate the employment relationship at any time and
for any reason, with or without any cause or advance notice.
Should you decide to leave your employment with us, we ask that you provide your
immediate supervisor with at least two weeks’ advance notice and a signed letter of
resignation. This will be appreciated and will be noted favorably should you ever wish to
reapply for employment with the Company. Depending on the circumstances of the
resignation and the employee’s position, the Company shall determine whether the
resigning employee will be expected to work for the notice period or will be separated
from the Company immediately.
An employee who voluntarily resigns or fails to report to work for three consecutively
scheduled workdays without notice to, or approval by his or her supervisor, will be
considered to have voluntarily terminated employment with the Company.
Infractions of Company policies, rules and regulations, or poor job performance may
result in discharge from employment. Termination for misconduct or poor performance
will result in forfeiture of all benefits except those required by law. Final paychecks for
resigning or terminated employees will be made available on the next regular payday or
sooner, consistent with applicable law.
All Company-owned property must be returned immediately upon termination of
employment.
When you leave the company, you may be asked to participate in an exit interview. In
the exit interview, the Company will review the status of your benefits and the reason
you are leaving, and will solicit constructive feedback regarding the Company and its
policies, work environment and management structure.

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12. SEARCHES AND VIDEO SURVEILLANCE POLICY

SEARCHES
The Company may conduct searches to monitor compliance with its safety policies, to
ensure the security of company property and to prevent theft. The Company may search
Company premises, as well as employees, their work areas, lockers, personal vehicles if
driven or parked on Company property and other personal items such as bags, purses,
briefcases, backpacks, lunch boxes and other containers. In conducting a search, the
Company is by no means accusing anyone of theft, some other crime or improper
conduct.

If an employee uses a locker or other storage area at work, including locking a desk
drawer or locking a cabinet, the Company will either furnish the lock and keep a copy of
the key or combination, or else will allow the employee to furnish a personal lock, but the
employee must give the company the combination or a copy of the key. The areas
described above may be searched at any time, with or without the employee being
present. As a general rule, with the exception of items relating to personal hygiene or
health, no employee should ever bring anything to work or store anything at work that he
or she would not be prepared to show to Company officials.

All of the areas listed above, and all employees, are subject to search at any time.
However, any given search may be restricted to one or more specific individuals or their
work or storage areas, depending upon the situation. Searches may be done on a
random basis or based upon reasonable suspicion. Any search under this policy will be
done in a manner protecting employees’ privacy, confidentiality, and personal dignity to
the greatest extent possible. The Company will respond severely to any unauthorized
release of information concerning individual employees.

No employee will ever be physically forced to submit to a search. However, an employee
who refuses to submit to a search request from the Company that is consistent with this
policy will face disciplinary action, up to and possibly including immediate termination.

AUDIO AND VIDEO SURVEILLANCE POLICY
In order to promote the safety of employees and company visitors, the security of its
facilities and for quality assurance and training purposes, the Company may conduct
audio and video surveillance of any portion of its premises at any time, the only
exception being private areas of restrooms. Video cameras and microphones will be
positioned in appropriate places within and around Company premises. In general,
employees should assume that what they do while on duty or on the Company premises
is not private.

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13. OTHER POLICIES

CAR ALLOWANCE AND MILEAGE
It is the Company’s policy to compensate associates for the use of privately-owned
vehicles, gas and mileage for company business. Compensation may include a monthly
automobile allowance or mileage reimbursement. To receive compensation, the
following is required:

 The individual’s job duties require business usage of a personal vehicle.
 Proof of a current driver’s license and a clean driving record for the last five years

with no DUI’s.
 Proof of current insurance showing minimum liability coverage for the state in

which the vehicle will be operated.
 An employee receiving a monthly car allowance is expected to maintain a late

model dependable vehicle
 Employees must keep a record of company-related mileage when requesting

reimbursement.

Mileage is reimbursed at the current Company-approved mileage rate for business-
related use. Employees receiving a monthly auto allowance are not eligible for mileage
reimbursement.

COMPANY RELATED TRAVEL AND ENTERTAINMENT

Personal Travel
The Company will not pay any incremental expenses resulting from personal travel
before, during or after a business trip. You may, with the prior approval or your
supervisor, arrange to include personal or PTO time with the normal itinerary provided
that:

 The Company does not incur a resulting higher expense.
 The employee pays for all charges beyond those directly related to the business

portion of the trip.
 Additional personal time does not interfere with the normal, expected conduct of

business.

Mileage Points and Bonus Programs
The employee may keep all awards or rewards gained through membership in an
airline’s frequent flyer or similar programs. The Company, however, will not pay any
costs associated with such memberships.

Out-of-Pocket Expenses
Should you incur an out-of-pocket expense while on Company travel you will be
reimbursed from petty cash if the total amount is less than $100 per trip. Amounts
greater than $100 will be paid by check in the normal Accounts Payable cycle. Expense
Reports must be received no later than five business days prior to the close of the
Accounts Payable cycle in order for payments to be made in that cycle.

Per Diem Travel Allowance
The Company does not pay a per diem travel allowance.

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Reimbursement for Meals and Gratuities
Meals are to be commensurate with ordinary and necessary living costs relative to the
locale visited. Gratuities should be reasonable in relation to the locale visited and the
service(s) performed. Charges related to in-room mini-bars should be kept to a
minimum, due to the high cost of this service. All reported meal expenses should be
supported by an original receipt. In no case will the Company reimburse any
entertainment or meal expense which is not supported by a receipt.

Employees Traveling Together
Whenever possible, employees traveling together should pay for and report their meals
independently of each other. When this is impractical, the senior employee should pay
for the entire expense and report this expense on his or her Expense Report.

Entertainment
Employees should not entertain other employees. Where necessary entertainment is
attended by more than one employee, the most senior employee is required to pay the
cost and report the expense, supported by an original receipt. Necessary and
reasonable business entertainment will be reimbursed when itemized in detail on the
Expense Report, including a description of the business purpose, along with the names
of those for whom payment was made.

Air and other Travel
All domestic travel must be booked on the most economical class of service available.
International travel, outside of North America, may be booked as Business Class. To
ensure receipt of the lowest fair, travel requests should be submitted as far in advance
as possible. Employees must promptly submit unused airline tickets for refunds.

An employee may travel other than by air, provided that the cost (including mileage) of
the alternate means (such as train, bus, or personal or rental car) is not greater than the
most economical airline fare available, and that additional travel time does not interfere
with the employee’s normal work schedule.

Lodgings
All reservations are to be made “guaranteed late arrival.” Employees must ensure that
cancellations, if necessary, are made in a timely fashion to avoid “no show” charges.
Employees should obtain confirmation numbers for all cancellations, and report those
numbers on Expense Reports for that week.

Travel Advances
Employees may request a cash advance against expected travel expenses. These
requests must be made to the Comptroller and should include the employee’s name, the
nature and duration of the planned trip, the special circumstances requiring advance
cash payment and the estimated cash needed.

Upon approval of the Comptroller, the employee will be required to sign a receipt
acknowledging payment of the funds and the reporting requirements. The employee
receiving a cash advance assumes responsibility for that cash should it be lost or stolen.

All cash advances that are not settled within five days of completion of the business trip
may be deducted from gross earnings.

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Non-Reimbursable Expenses
Employees will not be reimbursed for the following expenses:

 Personal travel appended to the business itinerary.
 Fines related to traffic or parking tickets.
 Rental or purchase of personal items, including airline headsets, reading material

and grooming expenses.
 Personal entertainment.
 Loss of cash advance money, airline tickets or personal funds.
 Excess baggage charges for personal items.
 Gifts for co-employees.
 Air travel insurance or other personal travel insurance.

Reporting Expenses
Employees must submit a Company Expense Report within five working days of
completion of a business trip. The Report must be reviewed by the comptroller for
accuracy and conformance to Company policy. By signing the Expense Report, the
comptroller acknowledges that the review has been completed and that no exceptions to
the policy have been found in the Report.

INCLEMENT WEATHER
In the event of inclement conditions, all associates are expected to make a good faith
effort to report to work on time. However, associates should use good judgment in
determining whether it is possible to safely travel to work. This includes, but is not limited
to, allowing sufficient travel time and using alternate routes or alternate methods of
transportation. Employees unable to report to work due to extreme weather conditions
may request to use available accrued ETO or PTO time.

As you are provided an option to remain home during inclement weather, the Company
will not be responsible for any personal injuries or property damage if you attempt to
arrive at work. You must use your best judgment in deciding whether it is reasonable for
you to attempt to get to work.

OUTSIDE EMPLOYMENT

We recognize that, occasionally, an employee may also work for himself or someone
else outside the Company. This is acceptable as long as such activities do not interfere
with the proper performance of the employee’s regular duties or prevent the employee
from working the hours for which he or she is normally required to work for the
Company. Use of Company equipment and materials by the employee to perform
outside work is strictly prohibited.

Employees may not engage in employment that will result in a conflict of interest.
Examples of such conflicts are: working for a competitor, or engaging in activities that
result in competition for a customer. Employees planning to engage in outside work
should first discuss the matter with their supervisor.

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REFERENCES AND REQUESTS FOR INFORMATION
Any reference request from another company should immediately be referred to the
Human Resources Manager for handling. The Human Resources Manager will answer
such requests by supplying the following information:

 Dates of employment
 Position(s) held or most recent job title.
Additional information will be provided only if the employee provides specific written
authorization to release additional information.

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14. CLOSING WORDS

This handbook is intended to give you a brief look at the Company and its policies. From
time to time, we may modify terms and procedures. If you have any questions at any
time regarding the Company or its policies, ask your supervisor. We welcome you with
the sincere hope that our association will be a successful and rewarding one. Together,
we can look forward to mutual prosperity.

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ACKNOWLEDGMENT AND DISCLAIMER

I acknowledge receipt of this employee handbook of Don Basch Jewelers, Inc. (the
“Company”). I also acknowledge that this handbook does not create any kind of written
or implied employment agreement, contract or guarantee of continued employment by
the Company. I further acknowledge that this handbook supersedes all prior oral or
written statements by the Company concerning its employment policies, guidelines and
benefits. I understand and agree that:

1) My employment is governed by the policies described in this handbook and it is
my responsibility to familiarize myself with these policies;

2) I understand that unless otherwise provided in writing, my employment is “at-will,”
meaning it is not for a specified period of time and that it may be terminated at
any time and for any reason, with or without any cause or advance notice, by
either me or the Company. I further understand that no agreement to the contrary
has been made with me;

3) “At-will” employment status cannot be modified or changed in any manner
except by a writing signed by the President that specifically states an intention to
make such modification or change;

4) I understand that, except for the provisions relating to the at-will nature of my
employment, the Company has the right to change my job duties, title and
compensation, and revise, supplement or rescind the policies described in the
handbook or to modify or deviate from them at any time with or without prior
notice to me or other employees, in the Company’s sole discretion. The
Company intends to make such revisions in writing and provide them to its
employees within a reasonable time;

5) I acknowledge that the Company shall monitor my electronic communications,
and that I have no right to privacy in the use of same. I hereby consent to the
employer’s monitoring of my electronic communications, including email, Internet,
voicemail, etc., over its system.

6) Immediately upon the termination of my employment with the Company, I must
return all Company-owned property, including, but not limited to, confidential or
proprietary business information of the Company, computer files, documents
(electronic or otherwise), computer databases, manuals, computer equipment,
computer software, files, keys, credit cards, handbooks, financial and other
reports, notes and all other information or property obtained or used by me in the
course of my employment; and

7) This acknowledgement must be signed and returned to the Human Resources
Manager within seven days of my start date or receipt of the handbook,
whichever is later.

I have received and read this ACKNOWLEDGEMENT AND DISCLAIMER.

_________________________ _________________________ __________

Employee Name (please print) Employee Signature Date

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