MODEL HANDBOOK

PANAMA CANAL ELEVATOR PARTS, INC.

EMPLOYEE HANDBOOK

DESIGNED BY THE LAW FIRM OF KOLLMAN & SAUCIER TO BE USED AS A GUIDEIN DESIGNING AN EMPLOYEE HANDBOOK. IF YOU HAVE QUESTIONS, CALL

FRANK KOLLMAN AT 410-727-4300.

TABLE OF CONTENTS

WELCOME TO PANAMA CANAL ELEVATOR PARTS, INC. -----------x-

HISTORY-------------------------------------------------------------------------------x-

ABOUT THIS HANDBOOK--------------------------------------------------------x-

EQUAL EMPLOYMENT POLICY------------------------------------------------x-

A. Policy of No Sexual Harassment-------------------------------x-B. Definition of Sexual Harassment-------------------------------x-C. Complaint Procedure----------------------------------------------x-

COMMUNICATIONS -- THE KEY TO A REWARDING JOB-------------x-

1. Talk to Your Supervisor-------------------------------------------x-2. Problem Resolution Procedure---------------------------------x-3. Open Door Policy---------------------------------------------------x-4. Bulletin Boards------------------------------------------------------x-5. Regular Employee Meetings------------------------------------x-

YOUR JOB-----------------------------------------------------------------------------x-

Employee Categories-------------------------------------------------------x-Regular Full-time Employees---------------------------------------------x-Temporary Employees-----------------------------------------------------x-

Orientation------------------------------------------------------------------x-Evaluation Period---------------------------------------------------------x-Working Hours-------------------------------------------------------------x-Overtime--------------------------------------------------------------------x-Evening Shift Differential-----------------------------------------------x-Time Clock-----------------------------------------------------------------x-Payroll Information-------------------------------------------------------x-Security Check------------------------------------------------------------x-

WAGES------------------------------------------------------------------------------x-

YOUR FRINGE BENEFITS----------------------------------------------------x-

Major Medical and Hospitalization Benefits-----------------------x-Life Insurance-------------------------------------------------------------x-Profit Sharing Retirement Plan---------------------------------------x-Disability--------------------------------------------------------------------x-Lost Time Benefit--------------------------------------------------------x-Social Security------------------------------------------------------------x-Breaks-----------------------------------------------------------------------x-Meals------------------------------------------------------------------------x-Picnic and Christmas Party--------------------------------------------x-

TIME OFF---------------------------------------------------------------------------x-

Vacation--------------------------------------------------------------------x-Holiday----------------------------------------------------------------------x-Personal Days------------------------------------------------------------x-Sick Leave-----------------------------------------------------------------x-Bereavement Leave----------------------------------------------------x-Jury Duty-------------------------------------------------------------------x-Work Reductions--------------------------------------------------------x-Illness Leave--------------------------------------------------------------x-Family and Medical Leave--------------------------------------------x-Military Leave-------------------------------------------------------------x-In Case of Accident-----------------------------------------------------x-Company Vehicles------------------------------------------------------x-Moonlighting--------------------------------------------------------------x-

WHAT WE EXPECT FROM YOU-------------------------------------------x-

Introduction to Standards of Conduct------------------------------x-Keep us up-to-date-----------------------------------------------------x-Keep Confidential Information Confidential----------------------x-Help Us Predict Our Needs------------------------------------------x-Major Offenses----------------------------------------------------------x-

Progressive Discipline - Minor Offenses--------------------------x-

DRUG POLICY-------------------------------------------------------------------x-

YOUR ATTENDANCE GUIDELINES---------------------------------------x-

Policy-----------------------------------------------------------------------x-Lateness------------------------------------------------------------------x-Attendance Records---------------------------------------------------x-Attendance/Lateness Incentive Program-------------------------x-

HEALTH AND SAFETY PRACTICES--------------------------------------x-

NO SOLICITATION-------------------------------------------------------------x-

OUR RESPONSIBILITY-------------------------------------------------------x-

FIRST DAY CHECKLIST------------------------------------------------------x-

RECEIPT FOR THE HANDBOOK------------------------------------------x-

Welcome to Panama Canal Elevator Parts, Inc.

The success of any company depends on its employees. Panama Canal ElevatorParts is no different. You were selected to work here because we believe you have thequalities to ensure our success in the future. By becoming an employee of PanamaCanal Elevator Parts, you have joined a company with a fine reputation for service,quality, and dedication.

Panama Canal Elevator Parts is dedicated to a program of two-way communicationbetween employees and management. You will find that we keep employees informedof new ideas, procedures, and business developments, and that we encourage yourinput. This Handbook was produced to give you the information you will need while anemployee here, including a description of our benefit and communication programs.

Take the time to read this Handbook. Ask questions of your supervisor if there isanything you do not understand. But most of all, feel free at any time to discuss yourconcerns with management -- it's the only way we'll ever know about them.

Welcome.

Robert F. JonesPresident

HISTORY

Panama Canal Elevator Parts, Inc., has been in the elevator contracting business since1926. It was founded that year by Allen Jones, the inventor of the titanium elevatorcable. The Company has been a licensed dealer of Tingle Elevator products since1948. In 1926, there were two employees. Today, there are over fifty, and each of themis devoted to maintaining the fine reputation Panama Canal Elevator Parts holds in theindustry.

ABOUT THIS HANDBOOK

This Handbook gives a brief, general description of the benefits and personnelpolicies of Panama Canal Elevator Parts, Inc. Obviously, we could not begin to explainevery Company policy in this Handbook, and some details and exceptions have beenomitted to keep it reasonably brief.

The Handbook, therefore, should not be considered the total official statement ofCompany policy. You should consult your supervisor or the office about any questionsyou have.

This Handbook is intended to be used as a guide.

There may be occasions when the Company must change rules or give current rules adifferent interpretation than previously made. The Company has the right to modifypolicies, both written and unwritten, as business requires. This Handbook is not anemployment contract, and both the employee and the Company understand thatemployment may be terminated by either party at any time, for any reason and withoutnotice.

EQUAL EMPLOYMENT POLICY

The Company supports the principle of Equal Employment Opportunity. It is our policynot to discriminate against any applicant for employment or employee because of race,color, religion, age, sex, national origin or ancestry, marital status, veteran's status, ordisability in accordance with applicable federal, state, and local law. Any incident thatyou believe involves discrimination or harassment should be brought to the immediateattention of your supervisor or management.

SEXUAL HARASSMENT POLICY

Policy of No Sexual Harassment

It is the policy of The Company that there shall be no harassment of any employeeon account of an employee's sex. The Company will not tolerate sexual harassment ofits employees by anyone - supervisors, other employees, clients, or customers. Persons

harassing others will be dealt with swiftly and vigorously. Anyone who violates thispolicy will be subject to disciplinary action up to and including discharge.

Definition of Sexual Harassment

Sexual harassment is behavior of a sexual nature which is unwelcome andpersonally offensive to its recipients.

Unwelcome sexual advances, requests for sexual favors and other verbal orphysical conduct of a sexual nature constitute "sexual harassment" when: submission tosuch conduct is made explicitly or implicitly a condition of an individual's employment;submission to or rejection of such conduct is used as a basis for an employmentdecision affecting the employee; or the harassment has the purpose of effect ofunreasonably interfering with the employee's work performance or creating anenvironment which is intimidating, hostile or offensive to the employee.

The following are examples of unlawful harassment:

1. Unwelcome sexual advances.

This means patting, pinching, brushing up against, hugging, kissing, fondling, orany other similar physical contact considered unwelcome by another individual

2. Requests for demands for sexual favors.

This includes subtle or blatant pressures or requests for any type of sexual favorsaccompanied by an implied or stated promise of preferential treatment or negativeconsequence concerning one's employment status.

Verbal abuse or kidding that is sex-oriented and considered unwelcome by anotherindividual. This includes commenting about an individuals body or appearance wheresuch comments are beyond mere courtesy, telling 'dirty jokes," that are clearlyunwelcome and considered offensive by others or any other tasteless, sexually-orientedcomments, innuendoes or actions that offend others.

Engaging in any type of sexually-oriented conduct that would reasonably interferewith another's work performance. This includes extending unwanted sexual attention tosomeone that reduces personal productivity or time available to work at assigned tasks.

Creating a work environment that is intimidating, hostile or offensive because ofunwelcome sexually-oriented conversations, suggestions, requests, demands, orphysical contacts.

Complaint Procedure

Any employee who feels that he or she has been sexually harassed shouldimmediately report the matter to his or her supervisor. If that person is unavailable orthe employee believes that it would be inappropriate to contact his or her supervisor, theemployee should contact the Human Resources Director.

Any supervisor or manager who becomes aware of any possible sexual harassmentshould immediately advise the Human Resources Director who will handle such mattersin a lawful manner to ensure that such conduct does not continue. All complaints ofsexual harassment will be investigated in as discreet and confidential a fashion aspossible. No person will be adversely affected in employment with the Company as aresult of bringing complaints of sexual harassment.

A WORD ABOUT UNIONS

At present, no group of employees at Panama Canal Elevator parts has chosen tobe represented by a union. We believe this decision is in the best interests of theemployees, the Company, and the customers. We have achieved substantial growthand personal achievement at Panama Canal Elevator Parts through a strong spirit ofcooperation and teamwork. Unions could weaken that spirit by turning employee againstemployee and encouraging confrontations in which everyone -- the employees, theCompany, and our customers -- loses.

As you review this Handbook, keep in mind that the benefits listed here -- healthinsurance, vacations, and holidays, to name just a few -- have all been obtained by theemployees without employees having to pay their well-earned wages for union dues.We also try hard to make sure that every employee is treated fairly, and have instituteda problem resolution procedure to give each employee the right to have decisions ofimmediate supervisors reviewed by higher levels of authority. In sum, unions are notneeded here.

COMMUNICATIONS -- THE KEY TO A REWARDING JOB

We want to hear from you, so we have established a communications program thatwill help our employees do just that. Here's how it works:

Talk to Your Supervisor.

Obviously, most employee concerns can be resolved by talking to your supervisorabout them. He should be able to help in most cases. If you do not feel comfortablediscussing the specific problem with your supervisor, you may set up a meeting with thePersonnel Director.

Problem Resolution Procedure.

Sometimes, questions or problems will arise concerning your personal situation. Wehave a 3-step procedure to deal with these problems. Here's how it works:

Step 1: Ask to talk to your immediate supervisor within one week of theproblem's occurrence.

Step 2: If the supervisor cannot resolve the problem to your satisfaction, youmay set up a meeting with the Personnel Director.

Step 3: If you are not satisfied with the Personnel Director's decision, you may askfor a conference with the President of the Company.

Open Door Policy.

While we hope that most concerns and problems will be resolved at Step 1, if youdo not feel your problem is being given adequate attention, you are always free to walkthrough the door of the President's office.

Bulletin Boards.

Check the bulletin boards. They contain important information for all of us.

Regular Employee Meetings.

Our President tries to meet with every employee at a group meeting at least four times ayear. Use these meetings to share your thoughts with management.

YOUR JOB

Employee Categories.

We have two classifications of employees at Panama Canal Elevator Parts:

Regular Full-time Employees.

Those employees who are regularly scheduled to work 40 hours per week.These employees are normally eligible for vacation, holiday pay, group life insurance,health insurance, and the profit sharing/retirement plan.

Temporary Employees.

These employees work on specific projects or for a maximum of four months percalendar year. Summer help are classified as temporary employees. Their employmentends upon completion of the project or period of time. They do not receive employeebenefits.

Orientation.

On your first day, your supervisor will go over your job duties and give you importantinformation about your job. A first-day checklist is provided in the front of this handbook.Some jobs require more detailed orientation.

Evaluation Period.

All employees serve an evaluation period to allow us to get acquainted anddetermine whether you are right for the job. In most cases, this period will be 90 daysfrom the date of hire, subject to extension at the discretion of your supervisor. Near theend of the 90-day period, your supervisor will give you a written evaluation. Your workperformance will be evaluated and, based on this appraisal, a decision will be madeabout granting you regular employee status, extending the evaluation period, orterminating the employment relationship. Once the evaluation period is successfullycompleted, and you have gained regular employee status, your seniority will beretroactive to the date of hire for the purpose of determining length of service.

Working Hours.

Normal working hours are 7:00 a.m. to 3:30 p.m., Monday through Friday. Officepersonnel work 8:00 a.m. to 5:00 p.m.

Overtime.

All hours actually worked in excess of 40 hours per week are compensated at therate of one and one-half times your regular hourly rate. Whenever possible, you will begiven advance notice as to overtime scheduling. Finally, Panama Canal Elevator Partstries to distribute overtime evenly, giving preference to qualified employees most willingto work it. On occasions when overtime hours cannot be filled on a voluntary basis,overtime work will be assigned by your supervisor.

Evening Shift Differential.

If you are required to work the evening shift, which is any shift beginning after 3:00p.m., you will be paid a premium of $.25 per hour for ear hour worked during that shift.Employees working a shift starting before 3:00 p.m. will not be paid a premium for anyhours they are held over past their regular shift. Time Clock. The time clock and yourcard are located near the lunch rooms. Never punch or make entries on the time card ofanother employee, or allow anyone else to make entries on or punch your time card.Moreover, you should not clock in more than five minutes before your scheduled shiftstarts or dock out more than five minutes after your scheduled shift ends, except withthe specific authorization of your supervisor.

Payroll Information.

Payday is Friday. The workweek runs from Thursday to the following Wednesday.We do not release payroll checks to anyone other than the employee, except with the

written authorization of the employee. Please recognize also that we are required by lawto make deductions from your paycheck for federal and state withholding (income)taxes, and for Social Security taxes (FICA). If you lose your check, you shouldimmediately contact your supervisor, who will notify the Office.

Security Check.

To insure that drugs, weapons, and other prohibit materials are not brought onto thepremises, we reserve the right to question, inspect, and search any employee or otherperson before he or she enters or leaves the facility. All vehicles, lockers, containers,handbags, parcels, and other belongs are subject to inspection. Refusal to comply isgrounds for immediate termination of employment.

WAGES

Panama Canal Elevator Parts pays wages that are competitive with othercompanies in the Silver Spring, Maryland area. In addition to a general wage reviewonce a year, the Company is always reviewing individual wage rates to see whethermerit increases are appropriate.

Panama Canal Elevator Parts also has incentive programs, which add to yourpaycheck. Bonuses may be given if justified by business conditions. We make everyeffort to recognize employee contribution to our success.

YOUR FRINGE BENEFITS

In addition to your paycheck, you receive many valuable benefits. These benefitsare discussed in more detail in the separate policy handbooks you will receivedescribing these benefit programs. In the event of any question or conflict, the terms ofthe actual plan policy will control.

Major Medical and Hospitalization Benefits.

All Full-time employees are eligible for hospitalization and medical insurancebenefits programs upon completion of the 90 day evaluation period. All premiums forthis insurance, which includes dependent coverage, are fully paid by the Company.

Life Insurance.

If your death should occur while you are an employee, the beneficiary you designatewill receive a death benefit. The amount of coverage is set forth in your insurancebooklet. In addition to this company-provided insurance, you can purchase additionallife insurance coverage at group rates.

Profit Sharing Retirement Plan.

The Company sponsors a profit sharing retirement plan. Eligible employees willreceive a summary plan description detailing their benefits. Disability. The Companycontributes to the insurance funds that provide you with Worker's Compensation in theevent of an on-the-job injury, and Unemployment Compensation to provide you withincome if you lose your job through no fault of your own. Please remember that a delayin reporting your work-related illness or injury could cause a delay in payment of yourmedical bills or weekly disability. You must report any injury to the Office.

Lost Time Benefit.

The Company provides a lost time benefit if you are unable to work due to illness orinjury occurring off the job. See you benefit booklet for detail.

Social Security.

The Company also contributes an amount equal to a percentage of your weeklysalary to your Federal Social Security account (FICA). This is in addition to yourpersonal paycheck every week. If you are under age 65 and your disability is expectedto last at least 12 months and you are unable to work, a Social Security DisabilityBenefit may be payable beginning with the sixth consecutive month of disability. Theamounts of these benefits vary and your social security office can help you indetermining the level of your benefit.

Breaks.

All employees receive two 20 minute breaks a day, which are scheduled by theirsupervisor.

Meals.

The Company provides all employees with one uncompensated thirty minute mealperiod per regular shift.

Picnic and Christmas Party.

The Company sponsors an annual picnic for employees and their families. At Christmastime, the Company sponsors a party prior to the holiday.

TIME OFF

Vacation.

We believe that you need a vacation each year to rest and refresh you. At PanamaCanal Elevator Parts all regular Full-time employees are eligible for paid vacation. Thevacation allotted for regular Full-time employees is based on a five-day work week asfollows:

Years of Service

Vacation Allowance

1 full year to 3 full years 1 week

3 full years to 8 full years 2 weeks

more than 8 full years 3 weeks

The vacation year is the twelve-month period beginning with the employee's firstemployment anniversary date, and each subsequent twelve-month period after that. Atthe beginning of the vacation year, each employee is credited with the vacationavailable to him under the above schedule, and may take that vacation at any timeduring the year, as long as you give adequate notice and your supervisor approves ofyour vacation schedule. An employee terminating employment for reasons other thandischarge (and who, in the case of voluntary resignation, has given the requisite twoweeks advance notice of resignation) will receive pay in lieu of any unused vacationallowance with which he was credited on his last employment anniversary date.VACATION MUST BE TAKEN WITHIN THE VACATION YEAR. IT CANNOT BECARRIED OVER TO THE NEXT YEAR. No payment will be made in lieu of vacationsnot taken except to terminating employees as described above.

YOUR VACATION MUST BE SCHEDULED AND APPROVED AT LEASTFOURTEEN DAYS IN ADVANCE BY YOUR SUPERVISOR. Approval of vacation at aparticular time may be denied due to business needs. Where business needs preventtwo or more employees from taking vacation at the same time, the supervisor willdetermine the schedule, taking into consideration the relative seniority of the employeesto the extent practicable. Subject to scheduling problems, employees may take anyamount of their vacation allowance at any one or more times, except that one full year'svacation may not be taken "back to back" with the next full year's vacation allowance.

Vacation pay may be received on the Friday immediately prior to the vacationperiod, if requested. You must request such prepayment three weeks in advance byusing a Request for Vacation Pay Form available from your supervisor.

If a designated holiday is observed during your vacation period, you will be eligiblefor additional time off with pay equal to the holiday time off for which you are eligible.You will not, however, receive additional vacation time off due to illness or disabilityoccurring while on vacation. Your vacation allowance for a vacation year will be reducedby one- twelfth for each full month of unpaid leave of absence during the previousvacation year.

Holiday.

All regular Full-time and part-time employees who have completed the evaluationperiod are eligible for "holiday pay" at their regular base pay for the following holidays:

New Year's Day

Labor Day

Memorial Day

Thanksgiving Day

Independence Day

Christmas Day

To qualify for holiday pay, you must work your last regularly-scheduled work daybefore the holiday, your first scheduled work day after the holiday, and one day of thework week in which the holiday occurs. If a holiday fails on a Sunday, Monday will bethe paid holiday; if the holiday falls on a Saturday, the preceding Friday will be the paidholiday unless the Company notifies you otherwise. If an employee gives 14 daysnotice, he will be allowed to take off the Monday after Thanksgiving without pay andwithout penalty.

If you work on one day of the holidays listed above, in addition to receiving yourholiday pay at your regular base pay rate, you will be paid one and one-half times yourregular base pay for the hours worked on the holiday.

Personal Days.

After completing the evaluation period, each regular Full-time employee is eligible toreceive 2 personal days with pay per year. The employee may use these days forpersonal business or emergencies. An employee may not use these personal dayseither before or after a paid holiday or a vacation. Whenever possible, three days noticeshould be given to your supervisor before taking a personal holiday.

Sick Leave.

Employees become eligible to take two days sick leave after six months ofcontinuous employment. After the six month period, employees become eligible to takeone day's sick leave for every ten weeks of continuous employment. After one year ofcontinuous employment, employees become eligible to take 5 sick days per year.

To qualify for sick leave, employees must call the office by 7:00 a.m. If no call ismade, no sick pay will be given. Failure to call the office when absent is also consideredan unexcused absence for purposes of discipline.

If an employee misses two consecutive days as a result of an illness, a doctor'sexcuse must be provided. In addition, the Company reserves the right to require anemployee to provide a doctor's excuse where it appears, in the Company's judgment,that the employee is abusing the sick leave privilege.

Finally, sick leave may be carried over from year to year. Because sick leave is forsickness, however, employees will not be paid for any unused sick leave upontermination, whatever the reason.

Bereavement Leave.

Regular Full-time employees who have completed the 90 day evaluation period willreceive time off with straight pay, for up to two of their regular scheduled work days,from the day of death until and including the day of the funeral in the case of the deathof a member of the immediate family. The "immediate family" includes parents,grandparents, step or foster parents, spouse, brother or sister, or children (includingstepchildren who live with the employee). Two days off without pay is available in thecase of the death of a stepbrother, stepsister, or stepchild who does not live with theemployee. It is your responsibility to notify your supervisor as early as possible torequest bereavement leave. Appropriate documentation is required by your supervisorto authorize bereavement pay.

Jury Duty.

Regular Full-time employees who have completed the probationary period and arerequired to be absent for jury duty will be granted paid time off for such duty. Allemployees called for jury duty must provide their supervisor with a copy of thesubpoena, jury certificate, or court order before leave is granted, and again upon theirreturn to work. If you are not required to serve as a juror on a particular day, you mustcontact your supervisor as soon as possible to report to work that day. Jury duty pay willbe calculated at the base rate of eight hours straight time for each day absent. Noovertime or holiday wages will be paid. All compensation received from the court,including travel expenses, will be set off against the base pay and the employee willreceive the difference.

Work Reductions.

There may be times when business conditions make it necessary to reduce staff. Inthe unlikely event this must happen, we will attempt to help you in every way we can.

If a staff reduction occurs, employees will be laid off according to length of servicebased on date of hire (seniority), provided that their job-related qualifications andabilities are relatively equal. If you are recalled from a staff reduction, your employmentwith Panama Canal Elevator Parts will terminate unless you return to work within threedays from the date of the recall notice. Your recall notice will either be given in person,by telephone, or by certified mail to your address currently on file with the Office.

Your benefits coverage will end on the last day worked prior to a staff reduction. Ifyou elect to continue coverage on your own, you should contact the Office forinformation.

Illness Leave.

If you have completed one year's service, you are eligible for an illness leave, in theCompany's discretion, for a maximum of 60 days. In order to qualify, you must submit aphysician's statement. A medical release must be obtained in order for you to return towork following the leave. The Company retains the right to require employees toundergo a medical examination by the doctor of the Company's choice at any time inorder to determine physical ability or inability to work. Such medical examinations mightbe required periodically during the leave. If an extension beyond 60 days is requestedprior to expiration of the original leave, you must receive the approval of the Presidentbefore the extension will take effect. A physician's statement is also required.

Premium for your group insurance will be paid by the Company for a period of 60days while you are on an approved illness leave of absence. Beyond 60 days, if youchoose to continue insurance, premium payments must be made by the employeedirectly to the Personnel Office.

Family and Medical Leave.

To be eligible for coverage, an employee must have been working for the Companyat least 12 months (cumulative) before the leave request and worked at least 1,250hours during that time. Temporary or part-time employees working less than 1,250hours per year are not eligible for family or medical leave.

Eligible staff are entitled to a total of 12 workweeks of unpaid leave during any12-month period when leave is taken for one or more of the following reasons:

Birth or adoption of a child of the employee, or placement of a child with theemployee for foster care.

To care for the spouse, son, daughter, or parent of the employee, if the familymember has a serious health condition.

A serious health condition is defined as an illness, injury, impairment, or physical ormental condition that involves inpatient care and/or continuing medical treatment.

A serious health condition will be supported by a timely certification from a qualifiedhealth care provider of the employee. The Company may require and pay for a secondor third opinion from qualified health providers of its choice.

Thirty days advance notice is required when the leave is foreseeable. In addition,when foreseeable leave is for planned medical treatment, a reasonable effort must bemade to schedule the treatment so as not to unduly disrupt the Company's operations.

Unused paid leave must first be applied before family/medical leave is available. forexample, unused vacation time will be applied before family leave is available. Unusedsick days and/or vacations days will be applied before medical leave to care for a familymember is available. Unused sick days, short term disability, and/or vacations days willbe applied before medical leave is available due to a serious health condition of theemployee. Family/medical leave may be used to make up the difference betweenavailable paid leave as described above and twelve weeks.

Subject to the preceding provision, employees may retain other previously accruedservice and benefits while on leave. However, they will not accrue additional service orbenefits (vacation or sick days) while on leave. Retirement contributions are not madeduring unpaid leave.

Employees returning from medical leave will provide certification that they are ableto resume work.

Upon expiration of the leave, employees can return either to their former position oran equivalent position with equivalent benefits, pay, and conditions of employment.However, the Company cannot guarantee job restoration to the former or an equivalentposition for employees who are among the highest paid 10% if the employee's absencewill cause substantial and grievous injury to the Company's operations.

Health insurance benefits can be continued during the leave under the sameconditions applicable to active employees. Employees will remit their portion ofinsurance premiums monthly. The Company may elect to recover any health insurancepremiums it pays if the employee fails to return to work after the leave for a reason otherthan (1) the continuation, recurrence, or onset of a serious health condition that wouldentitle the employee to leave, or (2) other circumstances beyond the employee's control.

Family/medical leave may not be taken on an intermittent or part-time basis. TheCompany will require an employee on leave to periodically report to his/her supervisorof his/her status and intention to return to work.

Family leave may not be initiated after the twelve month period following the birth,adoption, or placement of a foster child.

The Company reserves any and all rights and privileges granted to employers underthe laws mandating family and medical leave, even if not expressly set forth in thispolicy.

Military Leave.

If you leave Panama Canal Elevator Parts to enter military service, you will, uponrelease from the service, be considered to have been on military leave, provided youapply for re employment within 90 days after discharge.

An unpaid leave of absence will be granted to an employee called to active training.Available vacation time may be used in requesting a military leave of absence.

In Case of Accident.

An illness or injury on the job must be reported immediately to your supervisor. If theinjury or illness requires medical treatment, appropriate arrangements will be made. Inorder to help prevent accidents, it is your duty to immediately report to your supervisorany unsafe conditions you notice anywhere on the premises. Failure to report ajob-related injury is grounds for discipline.

Company Vehicles.

In some cases, employees will be assigned a company vehicle. That vehicle is notto be used for personal business. If you take the vehicle home at night, you may use itonly to drive home and to drive to work in the morning. Any unauthorized use of thevehicle is grounds for immediate discipline, up to and including discharge.

Moonlighting.

Moonlighting, either for a competitor or for yourself, in the construction business isstrictly forbidden by Panama Canal Elevator Parts, Inc. Moonlighting in non-HVAC jobsis discouraged, but not forbidden.

Employees who violate this rule should keep in mind that they are risking legal liability,as well as discharge. Unlicensed employees can be fined, and employees can be suedindividually by dissatisfied "customers."

WHAT WE EXPECT FROM YOU

Introduction to Standards of Conduct.

Obviously, whenever a large number of people work together, there must bestandards of conduct. It is impossible to define in detail every standard of conduct forevery circumstance, and the Company tries to keep rules to a minimum. During yourorientation, you were advised of some specific work rules affecting you, and we believethat your common sense will guide you as to the proper thing to do in most cases.

Keep us up-to-date.

Up-to-date personal information is necessary for a number of reasons, includingensuring the prompt and proper administration of your employee benefits. Therefore, it

is your responsibility to notify the Office immediately of any change of your address,telephone number, marital status, number of dependents, or beneficiary designation, oranything else that would affect your employee benefits or tax status.

Keep Confidential Information Confidential.

Any information concerning the business affairs of Panama Canal Elevator Parts,Inc., its customers, employees, or personnel associated with the Company isconfidential and restricted. You may not reveal any information except under thedirection or approval of your supervisor. If you have any doubt, refer inquiries to yoursupervisor or the Office.

Help Us Predict Our Needs.

Although we hope that no one will want to resign from employment with us, pleasedo us the courtesy of giving us at least two weeks advance notice if you intend to do so.The failure to give us sufficient notice will result in the loss of any vacation pay that youwere eligible to receive. Before your final paycheck can be released, you must contactthe Office for an exit interview. All Company property, including keys, uniforms,identification badges, etc., must be returned to the Office. Similarly, let us know as faras possible in advance if you are going to be absent from work or will arrive late or needto depart early. The Company has an answering service to record these calls between5:00 p.m. and 7:00 a.m. At the very least, you must contact the answering service noless than one hour prior to the scheduled beginning of your work day if you are going tobe absent or late on that day. Absences must be bona fide and reported daily, unlessother arrangements are made with your supervisor. Remember that this is yourresponsibility and that asking another employee, friend, or relative to give thisnotification is not sufficient, except under emergency conditions.

Major Offenses.

It is impossible to cover every standard of conduct for every circumstance, but thereare certain major offenses which could require an immediate penalty of two weekssuspension without pay or discharge in the Company's discretion, without recourse tothe progressive discipline procedure described below. Major offenses could require animmediate penalty of a two week suspension without pay or discharge in the Company'sdiscretion, without recourse to the progressive discipline procedure described below.The following are major offenses:

Failure or refusal to carry out orders or instructions.

Unsatisfactory work performance.

Failure to fulfill the responsibilities of the job to an extent that might or doescause injury to a person or substantial damage to or loss of product, machinery,equipment, facilities or other property.

Chronic or habitual absenteeism or lateness, under the company's separateattendance standards.

Violation of an established safety, fire prevention, health or plant security rule.

False, fraudulent or malicious statement or action involving relations with thecompany, another employee, or a customer, or any action disloyal to the company.

Falsification of hours worked or company records and/or omission of informationrequested on company records or documents.

Unauthorized use of, removal of, theft, or intentional damage to the property ofthe company, an employee, an independent contractor, or a customer.

Threatened or actual physical violence or profane or abusive language.

Carrying any weapon on company premises without authorization from thecompany.

Bringing onto company premises, having possession of, being under theinfluence of, or consuming on company premises or while on company business, anyintoxicant.

Violation of the company's drug policy.

Gambling, disorderly, or immoral conduct while on company premises orbusiness.

Performing work or services for a competitor of the company.

Excessive garnishments, to the extent permitted by law, except that noemployee will be discharged because of garnishments for any one indebtedness.

Absence from work for two (2) consecutive scheduled work days withoutnotifying the company during the absence of an illness or accident preventing theemployee from working (as evidenced by written certification of a medical doctor if requested by the company), or other satisfactory reason for such absence, as determinedby the company.

Failure to return to work within the three (3) consecutive scheduled work daysafter registered or certified mail notification of recall from layoff status by the companywithout notifying the company during such three (3) day period of an illness or accidentpreventing the employee from working (as evidenced by written certification of amedical doctor if requested by the company); or a minimum of two (2) weekstermination notice to another employer.

Failure to work for any reason for a period of three (3) months.

An arrest, the filing of a disorderly person or criminal complaint, or the return ofan indictment against an employee for any alleged wrongful activity may result in anindefinite suspension without pay, subject to discharge depending on the particularcircumstances and the offense charged. (All employees are obligated to cooperate withthe company by notifying their supervisor of any arrest or charges filed involving them,to provide and assist the company in obtaining all relevant information needed to enablethe company to consider the allegation, and to provide current status information on thearrest or allegations as required by the company.

Violation of company policy on removing property from the premises.

If any employee becomes subject to discharge for a major offense or cumulativeminor offenses, such employee may request a meeting with the President. This requestmust be made to the employee's supervisor at the time the employee is notified that heis being discharged.

If such a request is made, the meeting will be held promptly. The employeeinvolved, his immediate supervisor, and the President shall be present at the meeting.The employee will remain on suspension without pay, subject to discharge, until themeeting and decision. A final decision on the employee's employment status will begiven to the employee not later than five working days after the meeting.

Progressive Discipline - Minor Offenses.

Our procedure for handling misconduct other than a major offense is set out below.

Step 1: A separate written WARNING shall be given for the violation of eachCompany rule, policy, or practice.

Step 2: A written REPRIMAND shall be given to an employee for eachsubsequent offense, other than a major offense, in violation of any Company rule, policyor practice for which he has already received a written WARNING. REPRIMANDS forviolation of the same or different Company rules, policies and practices are cumulativetowards suspension and discharge.

Step 3: The THIRD REPRIMAND shall result in immediate suspension fromwork for a period of three scheduled work days.

Step 4: The FOURTH REPRIMAND shall result in immediate suspension, subject todischarge.

Progressive discipline is given for minor offenses such as lateness, absenteeism,unsatisfactory work performance, careless operation of company equipment, and otherinfractions that do not warrant immediate suspension or dismissal.

Copies of all warnings and reprimands shall be given to the employee involved and thesupervisor, and placed in the employee's personnel file. When an employee has workedfor a period of 12 consecutive months without receiving a reprimand or suspension,warnings, reprimands, and suspensions received prior to the 12 month period will not becounted for purposes of future discipline for minor offenses. Employees must sign allwritten warnings and reprimands.

DRUG POLICY

The use of drugs, both on and off the premises, can seriously affect an employee'sperformance. Moreover, drug use can endanger the safety of other employees and thecustomers we serve. Therefore, the Company has adopted the following policy:

Employees may NOT possess, bring onto Company property, be under theinfluence of, use, transfer, or attempt to sell any form of narcotic, depressant, stimulant,or hallucinogen, the possession, use, transfer, or sale of which is prohibited by law. Inaddition, employees must notify their supervisors if they are taking any prescription orover-the-counter medication, whether or not the prescription or medication could impairwork performance. Violation of this policy is grounds for immediate dismissal.

Employees may be asked at any time during their employment to submit to aurinalysis or blood test to screen for drug use. Normally, such a drug screen will berequested where there is reasonable suspicion that the employee is using drugs.Employees who refuse to submit to a drug screen will be discharged. If the results of thetest tend to show that the employee has used illegal drugs or otherwise violated theCompany's drug abuse policy, the employee will be subject to immediate dismissal.

The Company nevertheless sponsors an employee assistance program through whichemployees may receive confidential counseling concerning substance abuse.Employees are encouraged to use the program to help avoid the consequences ofviolating the Company's drug abuse policy.

YOUR ATTENDANCE GUIDELINES

Policy.

It is the responsibility of all employees to meet the Company's standards ofattendance as outlined below. Failure to do so is proper cause for discipline, includingsuspension, probation, and/or discharge. At the same time, it is the goal of theCompany to make every reasonable effort by means of this policy and procedure toassist employees in the control and correction of the causes of their absenteeism.

Each employee is expected to be present at work on all scheduled work days, andto report to work on time. If an employee is scheduled to work on a day "off," a holiday,or during a vacation period, such day(s) will be considered as scheduled work days.Absences in such situations will be counted towards disciplinary action.

Moreover, it is your obligation to notify your supervisor, as far as possible inadvance, whenever you will be late or absent, and to state the reason for such latenessor absence. Chronic or excessive absenteeism and lateness will not be tolerated.

Finally, no absence is automatically "excused". The only distinction is between thoseabsences which are counted for disciplinary action and those which are not counted.Absences which normally are not counted towards disciplinary action are: scheduleddays off, vacations, holidays, bereavement leave, jury duty, layoff for lack of work,leaves of absence granted in advance under the provisions of this Handbook, and twounpaid absences per year caused by illness.

All other absences are counted towards progressive discipline.

If an unreported incident of absence is of two or more scheduled work days'duration, unless the employee was prevented from calling in for medical reasons, theemployee will be considered to have voluntarily quit and employment will be terminatedas of the last day worked.

Lateness.

An employee is late if he punches in or reports for work one or more minutes afterhis scheduled reporting time, whether or not he is paid for the time.

Attendance Records.

Records of employee incidents of absenteeism and lateness shall be prepared andmaintained on a monthly basis, in accordance with this policy. The Company'spersonnel records shall contain the reasons/causes for an employee's absence orlateness and summaries of all discussions with the employee about the employee'sattendance. Copies of all disciplinary actions issued under this policy shall be given tothe employee involved and the Office, and shall also be filed in the employee'spersonnel record.

Attendance/Lateness Incentive Program.

Employees who are neither late nor absent for a period of four months established bythe Company (and who have no warning or reprimands for absenteeism or lateness forthe previous twelve months) shall be given an incentive bonus established by theCompany.

HEALTH AND SAFETY PRACTICES

The management of Panama Canal Elevator Parts is vitally interested in the health andsafety of each employee. It is a continuing, sincere desire of the Company to implementpositive and effective safety programs with the objective that every unsafe act, practice,or condition is detected and corrected in a timely manner.

NO SOLICITATION

Solicitation by non-employees on Company property is strictly prohibited at all times.

Solicitation by employees during working time is prohibited.

Distribution of literature in working areas is not permitted at any time.

OUR RESPONSIBILITY

All management functions and responsibilities and prerogatives entrusted to andconferred upon employers inherently or by law are retained and vested exclusively withPanama Canal Elevator Parts, Inc., including, but not limited to, the right to exercise ourjudgment to establish and administer policies, practices and procedures and changethem, and to take whatever action is necessary in our judgment to operate theCompany, direct and discipline our workforce and increase its efficiency, to set thehours and shifts to be worked, and to determine the standards of productivity andservices to be rendered. The failure in a particular way shall not be considered a waiverof the Company's right to exercise such prerogative or function or preclude it fromexercising that prerogative or function in some other way.

FIRST DAY CHECKLIST

Name:

Job Title:

Supervisor's Name:

Starting Time:

Quitting Time:

Lunch Hour:

Starting Rate:

Date Probationary Period Ends:

Phone Numbers to Call if Late or Sick:

RECEIPT FOR THE PANAMA

CANAL ELEVATOR PARTS, INC. HANDBOOK

__________________________________________________________Last Name First Name Middle Initial

(please print)

I have received a copy of the Panama Canal Elevator Parts, Inc., Handbook and willread it carefully. I agree to abide by all of its rules, policies, terms, and conditions. If Ihave any questions regarding any of the Employee Handbook's provisions, I will consultmy supervisor. I also understand and agree that my employment with the Company isterminable at will so that either the Company or myself are free to choose to end ourwork relationship, and that nothing in this Employee Handbook in any way creates anexpress or implied contract of employment between the Company and myself.

___________________ ______________________________ Date Employee'sSignature _______________ Employee Number

Prepared by:Kollman & Saucier, P.A.20 South Charles StreetBaltimore, MD 21201(410) 727-4300