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WELCOME  NEW EMPLOYEES!!! Associate Policy Manual  

This  handbook  outlines  policies,  programs,  and  benefits  of  Hugh  M. Cunningham, Inc.  or  questions  contact  the  Human  Resource Department  

2009

Human Resource Department Hugh M. Cunningham, Inc.  

7/24/2009 

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Table of Contents WELCOME NEW EMPLOYEES .................................................................................................... 4 

WHAT IS A REP ? ................................................................................................................................. 5 

EMPLOYMENT CATEGORIES ..................................................................................................... 8 

ACCESS TO PERSONNEL FILES .................................................................................................. 9 

EMPLOYMENT REFERENCE CHECKS ................................................................................... 9 

PERSONNEL DATA CHANGES ..................................................................................................... 9 

INTRODUCTORY PERIOD........................................................................................................... 10 

PERFORMANCE EVALUATION ................................................................................................. 10 

TIMEKEEPING .................................................................................................................................. 11 

PAYDAYS ............................................................................................................................................... 11 

EMPLOYMENT TERMINATION ............................................................................................... 11 

ADMINISTRATIVE PAY CORRECTIONS .............................................................................. 12 

PAY DEDUCTIONS AND SET OFFS .......................................................................................... 12 

TELEPHONE USE .............................................................................................................................. 13 

SMOKING............................................................................................................................................. 13 

MEAL PERIODS ................................................................................................................................. 13 

OVERTIME .......................................................................................................................................... 13 

EQUIPMENT USAGE ....................................................................................................................... 13 

EMERGENCY CLOSINGS ............................................................................................................. 14 

EMPLOYEE BENEFITS .................................................................................................................. 14 

BEREAVEMENT LEAVE ................................................................................................................. 15 

BENEFIT CONTINUATION (COBRA) ..................................................................................... 15 

JURY DUTY ........................................................................................................................................... 15 

JURY DUTY COMPENSATION .................................................................................................... 16 

MEDICAL LEAVE .............................................................................................................................. 17 

MATERNITY LEAVE ........................................................................................................................ 18 

SICK LEAVE POLICY ...................................................................................................................... 19 

VACATION POLICY ........................................................................................................................ 20 

HOLIDAYS ............................................................................................................................................ 21 

WORKER’S COMPENSATION INSURANCE ........................................................................ 22 

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MEDICAL / DENTAL INSURANCE ........................................................................................... 22 

LIFE INSURANCE ............................................................................................................................. 22 

401 K PLAN .......................................................................................................................................... 23 

VALWOOD PARK CREDIT UNION PAYROLL DEDUCTION ....................................... 23 

IMMIGRATION LAW COMPLIANCE ..................................................................................... 23 

ATTENDANCE POLICY ................................................................................................................. 24 

CONFLICTS OF INTEREST .......................................................................................................... 25 

OUTSIDE EMPLOYMENT ............................................................................................................ 26 

ELECTRONIC MAIL/VOICE MAIL POLICY ...................................................................... 26 

USE OF CELL PHONE WHILE AT WORK .............................................................................. 27 

SEXUAL HARASSMENT .................................................................................................................. 27 

OFFICE DRESS CODE .................................................................................................................... 28 

WAREHOUSE DRESS CODE ......................................................................................................... 28 

FORKLIFT TRAINING POLICY ................................................................................................. 29 

SAFETY POLICY ................................................................................................................................ 30 

EMPLOYEE RELATIONS .............................................................................................................. 32 

DISCIPLINARY POLICY ............................................................................................................... 32 

PROGRESSIVE COUNSELING .................................................................................................... 33 

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WELCOME NEW EMPLOYEES

On behalf of your colleagues, welcome to Hugh M. Cunningham, Inc. We, as a company, wish you every success here. We believe that each employee contributes directly to the growth and success of the Company and it is our desire that you will take pride in being a member of our team. The following documents are to set forth the expectations of our employees and to outline policies, programs and benefits available to eligible employees. You should familiarize yourself with the contents of this handbook, as it will answer many of your questions. It is the desire of Hugh M. Cunningham, Inc. that your experience here will be challenging, enjoyable and rewarding. Again, WELCOME! David A. Cunningham

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WHAT IS A REP ? Not long ago, I returned to my office and found a new issue of “The Pipeline”. I proceeded to do exactly what I always do – close my door and read it from cover to cover. It is a great publication and it keeps me connected to what is going on at Charlotte Pipe. However, it bothered me that there has been nothing in The Pipeline about your outside sales force – the manufacturer’s representatives. I called up and asked “why?” The response to my question was that there was no reason, and they also thought it would be a great idea to do an article about the representatives. So, here I am at the computer trying to give the employees of Charlotte Pipe some insight into who your “Reps” are and what they do. Your outside sales force is made up of independent manufacturer’s representatives. Independent means that we are not employees of Charlotte Pipe. We are not on the company payroll; we have no company benefits or any of the other programs that you as an employee enjoy. We work for our own companies and are paid a sales commission on the product we sell. The management of Charlotte Pipe decided years ago that utilizing an independent sales rep was the most cost effective way to sell their product. Using an independent sales rep means that Charlotte Pipe has no overhead cost associated with the sales process until something is actually sold. This is the way that many manufacturers sell their products. Charlotte Pipe, in my opinion, has the finest group of manufacturer’s reps in the plumbing industry. Many of these firms have represented Charlotte Pipe for decades. Each rep covers a specific geographic territory that can be as small as one state, or as big as several states. Charlotte Pipe currently has thirty-one rep agencies working for the company. These firms have over 400 outside and inside sales professionals calling on your customers, selling, promoting, and handling business for Charlotte Pipe. Some of these firms may have less than ten employees, and others may have over a hundred. Charlotte also has companies representing them in Canada, Mexico, and other foreign countries. What functions does a rep firm perform for Charlotte Pipe? The list is long, but here are some of the most important:

1. Customer Service: We take orders over the phone and enter them in the Charlotte system. We track shipments to see when they will arrive or why they did not, and we follow up on backorders and shortages. Handling credit requests, quoting prices and following up on jobs is a constant process. This is just the bare basics of what the sales people do for your customers. Some of you might ask why we do all of this when so much of this information is available on the Charlotte web site? The answer is that we deal with these customers multiple times each day; they become friends, and they are more comfortable calling us than using the web site or calling Charlotte Pipe direct.

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2. Inspectors and Engineers: Each rep deals with local plumbing inspectors to make sure the material we provide meets all the current code requirements. We also call on Specifying Mechanical Engineers to make sure they get the right type of Charlotte product for the jobs they are designing. If the rep can get an engineer to specify Charlotte Pipe by name it greatly increases their chance of getting the order.

3. Plumbing Wholesalers: Working with the plumbing wholesaler is one of our main jobs. The wholesaler is the customer who directly orders the product from Charlotte and pays the invoice. Most of our wholesalers stock Charlotte product. Some will buy a few items; many buy and sell our entire product line. The rep calls on each wholesaler to make sure they have everything they need to sell our products. We train their inside and outside sales force on why they should sell Charlotte Pipe products. Because Charlotte Pipe is the only manufacturer who makes both plastic pipe and fittings we bring some unique advantages to our customers – like the True-Fit system. It is our job to make sure they understand these advantages and use them to sell our products.

4. Contractors and Builders: The rep also calls on plumbing and mechanical contractors to promote our product. We “sell the system” to the contractor so they will ask for Charlotte pipe and fittings when they are doing a job. We also call on the builders and developers to promote the use of Charlotte products. We promote the “Quiet House” concept of using No Hub Cast Iron in conjunction with our DWV plastic to cut down on plumbing noise. We promote the use of Corzan CPVC and Flow Guard Gold CPVC to replace copper in residential and commercial buildings. Our goal is to have the “End User” ask for Charlotte products by name.

5. Training: This is a big job for every Charlotte representative. We must make sure that the contractor knows how our products should be installed. We show customers new products like our ChemDrain line of CPVC acid waste pipe and fittings. It is the responsibility of the rep to show the contractor how it works and how to properly install it. We even work with the wholesalers and contractors to find jobs where our products are needed and help them get the order. Because there is a constant turnover of employees with both the wholesaler and contractor our education and training responsibility never ends.

6. It is the reps job to be the “eyes and ears” for Charlotte Pipe in each of our markets. We are the first line of defense for Charlotte Pipe. If there is a new product or competitor, it is our job to let management know about it immediately. If an import product shows up in our market, it is our job to find out everything there is to know about it and get that information back to Charlotte Pipe so they can effectively fight it. If a customer gets upset about something concerning Charlotte Pipe or a Charlotte product we are there to find a solution and fix the problem. If there is a product failure it is our job to get to the jobsite and determine the extent of the problem. We make sure that the problem is actually a Charlotte problem and we try to limit any damage

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that might have been done. We report information like this immediately to Charlotte just in case we need additional technical assistance. In many cases it is more important that Charlotte Pipe gets “bad news” faster than “good news” when it comes to product problems. Charlotte Pipe has the reputation for standing behind its products and taking the necessary steps to resolve problems. The rep is the facilitator in resolving problems. Things a rep discovers in the field quickly lead to necessary product changes in the plants. Most new products come directly from field requests handled by the rep.

The most important job a Charlotte rep has is to maintain the relationship Charlotte has established with their customers. In some cases these relationships are over a hundred years old. Charlotte Pipe has the best plants, processes, and people, but the rep understands that our success is also based on maintaining a quality relationship with the customer. So our goal is to stay connected with the customer, be they wholesaler, contractor, builder or engineer, and to make sure they are asking for Charlotte Pipe products by name. Each rep firm has a Regional Manager from Charlotte assigned to its territory. We make sure that the regional manager travels with our salesmen to see these important customers on a regular basis so they have direct contact with someone from Charlotte Pipe. One of the most powerful relationship building tools the rep has is a plant visit to one of the Charlotte plants. When a customer understands the commitment Charlotte Pipe and its employees have to making the very best products available, it goes a long way towards strengthening a relationship. The reps that work for Charlotte Pipe are focused and committed to making sure we maintain the best relationship possible between the customer and Charlotte Pipe. “It’s not about an order, it’s about a relationship!”

I hope this article has given the employees of Charlotte Pipe better insight into their independent outside sales force. Even though we are not direct company employees like you, I can assure you that we are just as strongly committed to the health and future of Charlotte Pipe as anyone. The independent rep is part of the Charlotte Pipe family.

I would like to thank the Cunningham Agency, The Spirit Group and Smith and Stevenson for helping with the content of this article. Skipper Joyce President The Joyce Agency, Inc.

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EMPLOYMENT CATEGORIES Last Updated – September 2001

It is the intent of Hugh M. Cunningham, Inc. to clarify the definitions of employment classifications so that employees understand their employment status and benefit eligibility. These classifications do not guarantee employment for any specified period of time. Accordingly, the right to terminate the employment relationship at will at any time is retained by both the employee and Hugh M. Cunningham, Inc. Each employee is designated as either NONEXEMPT or EXEMPT from federal and state wage and hour laws. NONEXEMPT employees are entitled to overtime pay under the specific provisions of federal and state laws. EXEMPT employees are excluded from specific provisions of federal and state wage and hour laws. An employee’s EXEMPT and NONEXEMPT classification may be changed only upon written notification by Hugh M. Cunningham, Inc. management. In addition to the above categories, each employee will belong to one other employment category: REGULAR FULL-TIME employees are those who are not in a temporary or introductory status and who are regularly scheduled to work Hugh M. Cunningham, Inc.’s full-time schedule. Generally, they are eligible for Hugh M. Cunningham, Inc.’s benefit package, subject to the terms, conditions and limitations of each benefit program. PART-TIME employees are those who are not assigned to a temporary or introductory status and who are regularly scheduled to work less than forty (40) hours per week. While they do not receive all legally mandated benefits (such as Social Security and Workers’ Compensation Insurance), they are eligible to for all of Hugh M. Cunningham, Inc.’s other benefit programs. INTRODUCTORY employees are those whose performance is being evaluated to determine whether further employment in a specific position or with Hugh M. Cunningham, Inc. is appropriate. Employees who satisfactorily complete the introductory period will be notified of their new employment classification. TEMPORARY employees are those who are hired as interim replacements, to temporarily supplement the work force, or to assist in the completion of a specific project. Employment assignments in this category are of a limited duration. Employment beyond any initially stated period does not in any way imply a change in employment status. Temporary employees retain that status unless and until notified of a change. While temporary employees receive all legally mandated benefits (such as Workers’ Compensation Insurance and Social Security), they are ineligible for all of Hugh M. Cunningham Inc.’s other benefit programs.

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ACCESS TO PERSONNEL FILES Last Updated – September 2001

Hugh M. Cunningham, Inc. maintains a personnel file on each employee. The personnel file includes such information as the employee’s job application, resume, records of training, documentation of performance appraisals, salary increases and other employment records. Personnel files are the property of Hugh M. Cunningham, Inc., and access to the information they contain is restricted. Generally, only supervisors and management personnel of Hugh M. Cunningham, Inc. who have a legitimate reason to review information in a file are allowed to do so. With reasonable advance notice, employees may review their own personnel files in the office and in the presence of an individual appointed by Hugh M. Cunningham, Inc. to maintain the files. EMPLOYMENT REFERENCE CHECKS Last Updated – September 2001 To ensure that individuals who join Hugh M. Cunningham, Inc. are well qualified and have a strong potential to be productive and successful, it is the policy of Hugh M. Cunningham, Inc. to check the employment reference of all applicants. The Personnel Manager will respond in writing only to those reference check inquiries that are submitted in writing. Responses to such inquiries will confirm only dates of employment, wage rates and positions held. No employment data will be released without a written authorization and release signed by the individual who is the subject of the inquiry. PERSONNEL DATA CHANGES Last Updated – September 2001

It is the responsibility of each employee to promptly notify Hugh M. Cunningham, Inc. of any changes in personnel data. Personal mailing addresses, telephone number, number and name of dependents, individuals to be contacted in the event of any emergency, educational accomplishments and other such status reports should be accurate and current at all times. If any personnel data has changed, notify the Personnel Manager.

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INTRODUCTORY PERIOD Last Updated – September 2001

The introductory period in intended to give new employees the opportunity to demonstrate their ability to achieve a satisfactory level of performance and to determine whether the new position meets their expectations. Hugh M Cunningham, Inc. uses this period to evaluate employee capabilities, work habits, and overall performance. Either the employee or Hugh M. Cunningham, Inc. may end the employment relationship at will at any time during or after the introductory period, with or without cause or advance notice. All new and re-hired employees work on an introductory basis for the first ninety (90) calendar days after their date of hire. Any significant absence will automatically extend an introductory period by the length of the absence. If Hugh M. Cunningham, Inc. determines that the designated introductory period does not allow sufficient time to thoroughly evaluate the employee’s performance, the introductory period may be extended for a specified period. Upon satisfactory completion of the introductory period, employees enter the “REGULAR” employment classification. During the introductory period, new employees are eligible for those benefits that are required by law, such as Workers’ Compensation Insurance and Social Security. After becoming regular employees, they may also be eligible for other Hugh M. Cunningham, Inc. benefits program. Employees should read the information for each specific benefit program for details on eligibility requirements. PERFORMANCE EVALUATION Last Updated – September 2001

Supervisors and employees are strongly encouraged to discuss job performance and goals on an informal, day-to-day basis. A formal written performance evaluation will be conducted at the end of an employee’s initial period of hire, known as the introductory period. Additional formal performance evaluations are conducted to provide both supervisors and employees the opportunity to discuss job tasks, identify and correct weaknesses, encourage and recognize strengths, and discuss positive, purposeful approaches for meeting goals. Merit-based pay adjustments are awarded by Hugh M. Cunningham, Inc. in an effort to recognize truly superior employee performance. The decision to award such an adjustment is dependent upon numerous factors, including the information documented by this formal performance evaluation process.

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TIMEKEEPING Last Updated – September 2001

Accurately recording time worked is the responsibility of every nonexempt employee. Federal and state laws require Hugh M. Cunningham, Inc. to keep an accurate record of time worked in order to calculate employee pay and benefits. Time worked is all the time actually spent on the job performing assigned duties.

Nonexempt employees should accurately record the time they begin and end their work, as well as the beginning and ending time of each meal period. They should also record the beginning and ending time of any split shift or departure from work for personal reasons. Overtime work must always be approved before it is performed.

Altering, falsifying, tampering with time records, or recording time on another employee’s time record may result in disciplinary action, up to and including termination of employment. PAYDAYS Last Updated – September 2001

All employees are paid biweekly on every other Friday. Each paycheck will include earnings for all work performed through the end of the previous payroll period.

In the event that a regularly scheduled payday falls on a day off such as a weekend or holiday, employees will receive pay on the last day of work before the regularly scheduled payday.

If a regular payday falls during an employee’s vacation, the employee’s paycheck will be available upon his/her return from vacation. EMPLOYMENT TERMINATION Last Updated – September 2001

Termination of employment is an inevitable part of personnel activity within any organization, and many of the reasons of termination are routine. Below are examples of some of the most common circumstances under which employment is terminated.

RESIGNATION - Voluntary employment termination initiated by an employee.

DISCHARGE - Involuntary employment termination initiated by the employer.

LAYOFF - Involuntary employment termination initiated by the organization for non-disciplinary reasons.

RETIREMENT - Voluntary employment termination initiated by the employee meeting age, length of service, and any other criteria for retirement from the organization.

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Hugh M. Cunningham, Inc. will generally schedule an exit interview at the time of employment termination. The exit interview will afford an opportunity to discuss such issues as employee benefits, conversion privileges, repayment of outstanding debts to Hugh M. Cunningham, Inc., or return of company-owned property. Suggestions, complaints and questions can also be voiced. Since employment with Hugh M. Cunningham, Inc. is based on mutual consent, both the employee and Hugh M. Cunningham, Inc. have the right to terminate employment at will, with or without cause, at any time. Employee benefits will be affected by employment termination in the following manner: All accrued, vested benefits may be continued at the employee’s expense if the employee so chooses. The employee will be notified in writing of the benefits that may be continued and of the terms, conditions and limitations of such continuance.

ADMINISTRATIVE PAY CORRECTIONS Last Updated – September 2001

Hugh M. Cunningham, Inc. takes all reasonable steps to ensure that employees receive the correct amount of pay in each paycheck and that employees are paid promptly on the scheduled payday. In the unlikely event that there is an error in the amount of pay, the employee should promptly bring the discrepancy to the attention of the Personnel Manager so that corrections can be made as quickly as possible.

PAY DEDUCTIONS AND SET OFFS Last Updated – September 2001

The law requires that Hugh M. Cunningham, Inc. make certain deductions from every employee’s compensation. Among these are applicable federal, state and local income taxes. Hugh M. Cunningham, Inc. also must deduct Social Security taxes on each employee’s earnings up to a specified limit that is called the Social Security “Wage Base”. Hugh M. Cunningham, Inc. matches the amount of Social Security taxes paid by each employee. Hugh M. Cunningham, Inc. offers programs and benefits beyond those required by law. Eligible employees my voluntarily authorize deductions from their pay checks to cover the costs of participation in these programs. Pay setoffs are pay deductions taken by Hugh M. Cunningham, Inc., usually to help pay off a debt or obligation (such as shirts, shoes, safety lifting belts) to Hugh M. Cunningham, Inc. or others. If you have questions concerning why deductions were made from your paycheck or how they were calculated, your supervisor can assist in answering your questions.

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TELEPHONE USE Last Updated – September 2001 Employees will be required to reimburse Hugh M. Cunningham, Inc. for any charges resulting from their personal use of the telephone.

To ensure effective telephone communications, employees should always use the approved greeting and speak in a courteous and professional manner. Please confirm information received from the caller, and hang up only after the caller has done so.

SMOKING Last Updated – September 2001

In keeping with Hugh M. Cunningham, Inc.’s intent to provide a safe and healthful work environment, smoking is prohibited throughout the workplace.

This policy applies equally to all employees, customers and visitors. MEAL PERIODS

Last Updated – September 2001

All full-time regular employees are provided with one meal period each workday. Supervisors will schedule meal periods to accommodate operating requirements. Employees will be relieved of all active responsibilities and restrictions during meal periods and will not be compensated for that time. OVERTIME Last Updated – September 2001 When operating requirements or other needs cannot be met during regular working hours, employees may be scheduled to work overtime hours. When possible, advance notification of the mandatory assignments will be provided. All overtime work must receive the supervisor’s prior authorization. Overtime will be distributed as equally as practical to all employees qualified to perform the required work. Overtime compensation is paid to all nonexempt employees in accordance with federal and state wage and hour restrictions. Overtime pay is based on actual hours worked. Time off on sick leave, vacation leave or any leave of absence will not be considered hours worked for purposes of performing overtime calculations. EQUIPMENT USAGE Last Updated – September 2001

Equipment essential in accomplishing job duties is often expensive and may be difficult to replace. When using property of Hugh M. Cunningham, Inc., employees are expected to exercise care, perform required maintenance and follow all operating instructions, safety standards and guidelines.

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Please notify your supervisor if any equipment, machines, or tools appear to be damaged, defective, or in need of repair. Prompt reporting of damages, defective items, and the need for repairs could prevent deterioration of equipment and possible injury to employees or others. The supervisor can answer any questions about an employee’s responsibility for maintenance and care of equipment used on the job. The improper, careless, negligent, destructive or unsafe use or operation of equipment can result in disciplinary action, up to and including termination of employment. EMERGENCY CLOSINGS Last Updated – September 2001 At times, emergencies such as severe weather, fires, power failures, or earthquakes can disrupt company operations. In extreme cases, these circumstances may require the closing of a work facility. When operations are officially closed due to emergency conditions, the time off from scheduled work will be unpaid. However, with supervisory approval, employees may use available paid leave time, such as unused vacation benefits. Employees in essential operations may be asked to work on a day when operations are officially closed. In these circumstances, employees who work will receive regular pay. EMPLOYEE BENEFITS Last Updated – September 2001

Eligible employees at Hugh M. Cunningham, Inc. are provided a wide range of benefits. A number of the programs (such as Social Security, Workers’ Compensation, state disability and unemployment insurance) cover all employees in the manner prescribed by law. Benefits eligibility is dependent upon a variety of factors, including employee classification. Your supervisor can identify the programs for which you are eligible. Details of many of these programs can be found elsewhere in the employee handbook. Some benefit programs require contributions from employees, but most are fully paid by Hugh M. Cunningham, Inc. The benefit package for regular full-time employees represents an additional cost to Hugh M. Cunningham, Inc. of approximately thirty-five percent (35%) of wages.

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BEREAVEMENT LEAVE Last Updated – September 2001 Employees who wish to take time off due to the death of an immediate family member should notify their supervisor immediately. Up to three (3) days of paid bereavement leave will be provided to regular full-time employees. Bereavement pay is calculated based on the base pay rate at the time of absence and will not include any special forms of compensation, such as incentives, commissions, bonuses, or shift differentials. Bereavement leave will normally be granted unless there are unusual business needs or staffing requirements. Employees may, with their supervisor’s approval, use any available paid leave for additional time off as necessary. Hugh M. Cunningham, Inc. defines “immediate family” as the employee’s spouse, parent, child, sibling, spouse’s parent, child or sibling, employee’s child’s spouse, grandparents or grandchildren. BENEFIT CONTINUATION (COBRA) Last Updated – September 2001 The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees and their qualified beneficiaries the opportunity to continue health coverage under Hugh M. Cunningham, Inc.’s health plan when a “qualifying event” would normally result in the loss of eligibility. Some common qualifying events are resignation, termination of employment, or death of an employee; a reduction in an employee’s hours or a leave of absence, an employee’s divorce or legal separation; a dependent child no longer meeting eligibility requirements.

Under COBRA, the employee or beneficiary pays the full cost of coverage at Hugh M. Cunningham, Inc.’s group rate plus an administration fee. Hugh M. Cunningham, Inc. provides each eligible employee with a written notice describing rights granted under COBRA when the employee becomes eligible for coverage under Hugh M. Cunningham, Inc.’s health insurance plan. The notice contains important information about the employee’s rights and obligations. JURY DUTY Last Updated – September 2001

Hugh M. Cunningham, Inc. encourages employees to fulfill their civic responsibilities by serving jury duty when required. Employees in an eligible classification may request up to one week of paid jury duty leave over any one (1) year period.

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Jury duty pay will be calculated on the employee’s base pay rate times the number of hours the employee would otherwise have worked on the day of absence. All employees qualify for paid jury duty leave.

If an employee is required to serve jury duty beyond the period of paid jury duty leave, they may use any available paid time off (for example, vacation benefits) or may request an unpaid jury duty leave of absence.

Employees must show the Jury Duty Summons to their supervisor as soon as possible so that the supervisor may make arrangements to accommodate the absence. Of course, employees are expected to report for work whenever the court schedule permits.

Either Hugh M. Cunningham, Inc. or the employee may request an excuse from jury duty if, in Hugh M. Cunningham, Inc.’s judgment, the employee’s absence would create serious operational difficulties.

Hugh M. Cunningham, Inc. will continue to provide health insurance benefits for the full term of the jury duty absence.

Vacation, sick leave, and holiday benefits will continue to accrue during unpaid jury duty leave.

JURY DUTY COMPENSATION Last Updated – September 2001

When summoned for Jury Duty, an employee must present a copy of the summons to His/her supervisor.

An employee with less than one (1) year of service with Hugh M. Cunningham, Inc. will not be paid for the time missed for the jury duty and may keep the amount paid by the court for jury duty service.

An employee with one (1) year or more of service with Hugh M. C Cunningham, Inc. will be pays his/her regular rate of pay for a maximum of four days jury duty. An example of this would be a non-exempt employee making $5.00 per hour, would be paid $5.00 per hour for eight (8) hour per day that was missed for jury duty and up to four (4) days. An exempt employee would receive no reduction in his/her pay for up to four (4) days of jury duty.

Any employee being paid by Hugh M. Cunningham, Inc. for jury duty must endorse and turn over to Hugh M. Cunningham, Inc. the check which he/she receives for jury duty service.

After four (4) days of jury duty, Hugh M. Cunningham, Inc. will pay fifty percent (50%) of employee’s salary for up to thirty (30) days of jury duty and the employee may keep the amount paid by the Court for the jury duty service.

Hugh M. Cunningham, Inc. will not pay any portion of the employee’s salary beyond Thirty (30) days.

This Jury Duty Policy will be subject to exceptions when deemed appropriate by the Controller, Operations Manager, or President.

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MEDICAL LEAVE Last Updated – September 2001 Hugh M. Cunningham, Inc. provides medical leaves of absence without pay to eligible employees who are temporarily unable to work due to a serious health condition or disability. For purposes of this policy, serious health condition or disabilities include in-patient care in a hospital, hospice or residential medical care facility; and continuing treatment by a health care provider. Employees in the following employment classifications are eligible to request medical leave as described in this policy: REGULAR FULL-TIME EMPLOYEES

Eligible employees may request medical leave only after having completed three hundred sixty-five (365) calendar days of service. Exceptions to the service requirement will be considered to accommodate disabilities. Eligible employees should make requests for medical leave to their supervisor at least thirty (30) days in advance of foreseeable events and as soon as possible for unforeseeable events. A health care provider’s statement must be submitted verifying the need for medical leave and its beginning and expected ending dates. Any changes in this information should be promptly reported to Hugh M. Cunningham, Inc. Employees returning from medical leave must submit a health care provider’s verification of their fitness to return to work. Eligible employees are normally granted leave for the period of the disability, up to a maximum of six (12) weeks within any twelve (12) month period. Any combination of medical leave and family leave may not exceed this maximum limit. If the initial period of approved absence proves insufficient, consideration will be given to a request for an extension. Employees will be required to first use any accrued paid leave time before taking unpaid medical leave. Employees who sustain work-related injuries are eligible for a medical leave of absence for the period of disability in accordance with all applicable laws covering occupational disabilities. Subject to the terms, conditions and limitations of the applicable plans, health insurance benefits will be provided by Hugh M. Cunningham, Inc. until the end of the month in which the medical leave begins. At that time, employees will become responsible for the full costs of these benefits if they wish coverage to continue. When the employee returns from medical leave, benefits will again be provided by Hugh M. Cunningham, Inc. according to applicable plans. Benefit accruals, such as vacation, sick leave or holiday benefits will be suspended during the leave and will resume upon return to active employment.

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So that an employee’s return to work can be properly scheduled, an employee on medical leave is requested to provide Hugh M. Cunningham, Inc. with at least two (2) weeks advance notice of the date the employee intends to return to work. When a medical leave ends, the employee will be reinstated to the same position, if it is available, or to an equivalent position for which the employee is qualified.

If an employee fails to return to work on the agreed upon return date, Hugh M. Cunningham, Inc. will assume that the employee has resigned. MATERNITY LEAVE Last Updated – September 2001

Hugh M. Cunningham, Inc. provides maternity leave of absence without pay to all regular full-time employees who are temporarily unable to work due to a disability related to pregnancy, childbirth or related medical conditions.

Eligible employees may request maternity leave only after having completed three hundred sixty-five (365) calendar days of service.

Employees should make requests for maternity leave to their supervisors at least thirty (30) days in advance of foreseeable events and as soon as possible for unforeseeable events.

A health care provider’s statement must be submitted verifying the need for maternity leave and its beginning and expected ending dates. Any changes in this information should be promptly report to Hugh M. Cunningham, Inc. Employees returning from maternity leave must submit a health care provider’s verification of their fitness to return to work.

Employees are normally granted unpaid leave for the period of the disability, up to one week per year of service in addition to any accrued paid time off within any twelve (12) month period.

Subject to the terms, conditions and limitations of the applicable plans, Hugh M. Cunningham, Inc. will continue to provide health insurance benefits for the full period of the approved maternity leave.

So that an employee’s return to work can be properly scheduled, an employee on maternity leave is requested to provide Hugh M. Cunningham, Inc. with at least two (2) weeks advance notice of the expected return to work date.

When maternity leave ends, the employee will be reinstated to the same position, unless the job ceased to exist because of legitimate business reasons or means of preserving the job would substantially undermine the ability to operate Hugh M. Cunningham, Inc. safely and efficiently. If the same position is not available, the employee will be offered a comparable position in terms of such issues as pay, location, job content and promotional opportunities.

If an employee fails to report to work promptly at the end of the maternity leave, Hugh M. Cunningham, Inc. will assume that the employee has resigned.

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SICK LEAVE POLICY Last Updated – February 2002

An associate who is unable to report to work due to illness or injury should notify his/her supervisor before the start of the workday. The supervisor must also be contacted on each additional day of absence. If an associate is absent for three (3) or more consecutive days due to illness or injury, a physician’s statement must be provided verifying the disability and its beginning and expected ending dates. Such verification may be requested for other sick leave absences as well, and may be required as condition to receiving sick leave benefits. Hugh M. Cunningham, Inc. provides paid sick leave benefits to all eligible regular full-time associates who have completed one year of continuous employment and is calculated based on your anniversary date. A lapse in employment due to a leave of absence or a break in service may result in an adjustment of eligibility. Regular full-time associates will accrue three (3) days after completing one year’s service. Associates can request to use paid sick leave after their anniversary date of the year associate becomes eligible (i.e. a regular full time associate). Paid sick leave can be used in minimum increments of one-half (1/2) day. Eligible associates may use sick leave benefits for an absence due to their own illness or injury or that of a family member who resides in the associate’s household. Sick leave benefits will be calculated based on the associate’s base pay rate at the time of absence and will not include any special forms of compensation, such as incentives, commissions, bonuses, overtime, or shift differential. Unused sick leave benefits may be used as a flex vacation day at the end of the calendar year with the direct supervisor’s prior approval. Up to two days that are unused will be paid to the associate at their regular rate of pay on the second payday of the following year. Sick leave benefits are intended solely to provide income protection in the event of illness or injury, and may not be use for any other absence. Unused sick leave benefits will not be paid to associates upon termination of employment.

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VACATION POLICY Last Updated – February 2002

Vacation time off with pay is available to all regular full-time employees to provide opportunities for rest, relaxation, and personal pursuits. All regular full-time employees are eligible to earn and use vacation time as described in this policy.

Vacation time is earned only after completing one year of continuous employment and is calculated based on your anniversary date. A lapse in employment due to leave of absence or a break in service may result in an adjustment to vacation eligibility. Associates are advised to check with Human Resources if questions arise regarding vacation.

Once associates reach their anniversary date, they begin to earn paid vacation time. The amount of paid vacation time employees receive each year increases with the length of their employment as shown in the following schedule:

VACATION TIME SCHEDULE

YEARS OF SERVICE VACATION DAYS PER YEAR From 1 to 5 Years 10 Days

After 6 Years 11 Days After 7 Years 12 Days After 8 Years 13 Days After 9 Years 14 Days After 10 Years 15 days

Vacation time continues accruing at the rate of one additional day per year of service.

Earned vacation is available for use in the year following your anniversary date. Example: You begin employment on October 4, 2001; you are not entitled to any vacation time until after October 3, 2002. After October 3, 2002 you will have 10 days of vacation, which must be taken between October 4,2002 and October 3,2003. Paid vacation time can be used in minimum increments of one-half (1/2) day. To take vacation time, employees should complete and submit a “Vacation Request” to their supervisor at least two (2) weeks in advance. Requests will be reviewed based on a number of factors, including business needs and staffing requirements.

Vacation time off is paid at the employee’s base pay rate at the time of vacation. It does not include any special forms of compensation such as incentives, commissions, bonuses or shift differentials.

As stated above, employees are encouraged to use available paid vacation time for rest, relaxation and personal pursuits. In the event that available vacation is not used at the end of the benefit year, employees will forfeit the unused time.

Upon termination of employment, employees will forfeit any unused time.

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HOLIDAYS Last Updated – February 2002 Hugh M. Cunningham, Inc. will grant holiday time off to all associates on the holidays listed below: New Year’s Day January 1st Memorial Day Last Monday in May Independence Day July 4th Labor Day First Monday in September Thanksgiving Day Fourth Thursday in November Day After Thanksgiving Friday After Thanksgiving Christmas Day December 25th Hugh M. Cunningham, Inc. will grant paid holiday time off to all associates who have completed ninety (90) calendar days of service in an eligible employment classification. Holiday pay will be calculated based on the associate’s straight-time pay rate (as of the date of the holiday), times the number of hours the associate would otherwise have worked on that day. Eligible associate classification is all regular full-time employees. A recognized holiday that falls on a Saturday will be observed on preceding Friday. A recognized holiday that falls on a Sunday will be observed on the following Monday. If a recognized holiday falls during an eligible associates paid absence, (such as vacation), holiday pay will be provided instead of the paid time off benefit that would have been otherwise have applied. To be eligible for holiday pay, associates must work the last scheduled day immediately preceding and the first scheduled day following the holiday. If eligible non-exempt associate works on a recognized holiday, they will receive holiday pay plus wages at their straight-time rate for hours worked on the holiday. Part time off for holidays will be counted as hours worked for the purpose of determining whether overtime pay is owed. EXCEPTION: If an associate calls in sick the day before or the day after the holiday, a doctor’s note will be required to receive Holiday Pay.

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WORKER’S COMPENSATION INSURANCE Last Updated – January 2002

Hugh M. Cunningham, Inc. provides a comprehensive worker’s compensation insurance program at no cost to employees. This program covers any injury or illness sustained in the course of employment that requires medical, surgical or hospital treatment. Subject to applicable legal requirements, worker’s compensation insurance provides benefits after a short waiting period or, if the employee is hospitalized coverage begins immediately. Employees who sustain work-related injuries or illnesses should inform their supervisor immediately. No matter how minor an on-the-job injury may appear, it is important that it be reported immediately. This will enable an eligible employee to qualify for coverage as quickly as possible. Neither Hugh M. Cunningham, Inc. nor the insurance carrier will be liable for the payment of worker’s compensation benefits for injuries that occur during an employee’s voluntary participation in any off-duty recreational, social or athletic activity sponsored by Hugh M. Cunningham, Inc. MEDICAL / DENTAL INSURANCE Last Updated – January 2007

Insurance is provided to Hugh M. Cunningham, Inc. full-time employees. Employees are eligible to enroll at the 1st of each month following (90) days of service. Employee cost varies depending on plan choice. Fees are posted annually. There are several insurance plans available:

(1) Medical insurance with optical coverage; (2) Dental coverage; (3) Supplemental insurance thru AFLAC (4) A Cafeteria 125-C Flex coverage which covers non-reimbursed medical expenses. LIFE INSURANCE Last Updated – March 2007

Hugh M. Cunningham, Inc. provides a Basic Life Insurance policy of $10,000 for all full time employees. After (90) days of service, you have the option of purchasing additional coverage for you (and/or) your family.

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401 K PLAN Last Updated – March 2007

Hugh M. Cunningham, Inc. offers a 401 k retirement plan. There is pre-tax option and an after-tax option call Roth 401 k. You are eligible to enroll at open enrollment dates of (January 1 or July 1) after (6) months of service. Your contribution will be deducted from your paycheck each payroll period and deposited into your account. You can contribute a minimum of (1%) or up to IRS maximum. After two (2) years of employment, you become twenty percent (20%) vested. You will vest an additional twenty percent (20%) each year thereafter until your sixth (6th) year when you will become one hundred percent (100%) vested. VALWOOD PARK CREDIT UNION PAYROLL DEDUCTION Last Updated – January 2002

Hugh M. Cunningham, Inc. is a member of the Valwood Park Credit Union and offers a payroll deduction plan to employees with at least ninety (90) days of service. You may set up your own account at the Valwood Park credit Union, provide your account number to Human Resources, and specify the amount you wish the Company to deduct from each payroll period and deposit into your account. IMMIGRATION LAW COMPLIANCE Last Updated – September 2002

Hugh M. Cunningham, Inc. is committed to employing only United States citizens and aliens who are authorized to work in the United States and does not unlawfully discriminate on the basis of citizenship or national origin. In compliance with the Immigration Reform and Control Act of 1986, as a condition of employment, each new employee must complete the Employment Eligibility Verification Form I-9 and present documentation establishing identity and employment eligibility. Former employees who are re-hired must also complete the I-9 Form if they have not completed an I-9 Form with Hugh M. Cunningham, Inc. within the past three (3) years, if their previous I-9 Form is no longer retained in the file, or if any of the documents are expired. A prospective employee with questions or seeking more information on Immigration Law issues is encouraged to contact the Personnel Manager. An employee may raise questions or complaints about Immigration Law compliance without fear of reprisal.

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ATTENDANCE POLICY Last Updated – September 2001

Employees are required to report to work on time, as scheduled, and to work all scheduled hours. Specifically, this means that an employee is required to be ready to perform his/her duties at their work station at the scheduled time. Since excessive lateness and poor attendance disrupt service to our customers, such habits cannot be tolerated. When one member of the team is absent or late the whole team is affected and the CUSTOMER usually suffers.

There are times because of illness or other personal reasons arise when you may not be able to come to work. In such cases, a call must be made to your supervisor before the start of your shift.

Attendance issues will be tracked by occurrences. An occurrence can be: * Unscheduled absence - the employee misses the full day without prior scheduling with their manage.

* Late start - the employee clocks in after their scheduled time. * Long lunch - the employee takes longer than the scheduled lunch period. * Early leave - the employee leaves before their scheduled quitting time. * Failure to clock - If the employee fails to clock in or out 3 times in a 4 week period, it will count as on attendance occurrence.

We expect that employees should have no more than 3 occurrences in a month or 8 occurrences in a rolling three month period. Should this happen, the progressive counsel process will begin.

If you are unable to come to work, or will be late, you are expected to notify your manager prior to your next scheduled starting time.

It is assumed that an employee that misses 3 consecutively scheduled work days without calling in to their manage, has quit their job.

The following scales refer to all attendance occurrences and will be used in the employee’s evaluation.

NUMBER OF OCCURENCE

CO – CLEARLY OUTSTANDING 0 – 4 AE – ACCEEDES EXPECTIONS 5 – 12 ME – MEETS EXPECTIONS 13 – 31 BE – BELOW EXPECTIONS 32 – 39 CU – CLEARLY UNSATISFACTORY 40 OR MORE

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CONFLICTS OF INTEREST Last Updated – September 2001

Employees have an obligation to conduct business within guidelines that prohibit actual or potential conflicts of interest. This policy establishes only the framework within which Hugh M. Cunningham, Inc. wishes the business to operate. The purpose of these guidelines is to provide general direction so that employees can seek further clarification on issues related to the subject of acceptable standards of operation. Contact the human resources manager for more information or questions about conflicts of interest.

Transactions with outside firms must be conducted within a framework established and controlled by the human resources department. Business dealings with outside firms should not result in unusual gains for those firms. Unusual gain refers to bribes, product bonuses, special fringe benefits, unusual price breaks, and other windfalls designed to ultimately benefit the employer, the employee or both. Promotional plans that could be interpreted to involve unusual gain require specific approval of the human resources department.

An actual or potential conflict of interest occurs when an employee is in a position to influence a decision that may result in a personal gain for that employee or for a relative as a result of business dealings with Hugh M. Cunningham, Inc. For the purpose of this policy, a relative is any person who is related by blood or marriage, or whose relationship with the employee is similar to that of persons who are related by blood or marriage.

No “presumption of guilt” is created by the mere existence of a relationship with outside firms. However, if employees have any influence on transactions involving purchases, contracts or leases, it is imperative that they disclose to the human resources department as soon as possible the existence of any actual or potential conflict of interest so that safeguards can be established to protect all parties.

Personal gain may result not only in cases where an employee or relative has a significant ownership in a firm with which Hugh M. Cunningham, Inc. does business, but also when an employee or relative receives any kickback, bribe, substantial gift or special consideration as a result of any transaction or business dealings involving Hugh M. Cunningham, Inc.

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OUTSIDE EMPLOYMENT Last Updated – September 2001

An employee may hold a job with another organization as long as he/she satisfactorily performs his/her job responsibilities with Hugh M. Cunningham, Inc. All employees will be evaluated by the same performance standards and will be subject to Hugh M. Cunningham, Inc.’s scheduling demands, regardless of any existing outside work requirements.

If Hugh M. Cunningham, Inc. determines that an employee’s outside work interferes with the performance or the ability to meet the requirements of the Company as they modified from time to time, the employee may be asked to terminate the outside employment if he/she wishes to remain employed by Hugh Cunningham, Inc. Outside Employment will present a conflict of interest if it has adverse impact of Hugh Cunningham, Inc. ELECTRONIC MAIL/VOICE MAIL POLICY Last Updated – September 2001

All Hugh M. Cunningham, Inc. computing facilities, including Electronic Mail (E-Mail) and Voice Mail is intended for authorized business purposes only. Use of these facilities for non-business activities is prohibited. E-Mail and Voice Mail messages are not encrypted or secured and therefore must not be used of the exchange of confidential information. All messages sent over Hugh M. Cunningham, Inc. computer and communications systems are the property of Hugh M. Cunningham, Inc. To properly maintain and manage this property, management reserves the right to examine all data stored in or transmitted by these systems. Since Hugh M. Cunningham, Inc.’s computer and communications systems must by used for business purposes only, workers should have no expectation of privacy associated with the information stored in or sent through these systems. Messages sent over Hugh M. Cunningham, Inc.’s internal electronic or voice mail systems are not subject to the privacy provision of the Electronic and Communications Privacy Act of 1986 (which prohibits wiretapping), and therefore may be accessed by company management and system administrators. Hugh M. Cunningham, Inc. provides various computing equipment and internet access for the strict intent of business purposes only. The use of company equipment to obtain copies or distribute pornographic material is expressly forbidden. Such actions will result in disciplinary action and may result in termination.

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USE OF CELL PHONE WHILE AT WORK Last Updated – September 2007

The use of a personal cell phone or any audio device (ipod, mp3, etc.) while at work may present a hazard or distraction to the user and/or co-workers. This policy is meant to ensure that cell phone use and use of other audio devices while at work is both safer and does not disrupt business operations.

Unless otherwise authorized, employees may only use company cell phones for communication at work or an emergency; employees are not allowed to use or carry any cell phone or audio device into the warehouse. It has to be kept it your locker and can be used during lunch or break.

Discipline: Violation of this policy will subject an employee to disciplinary action up to and including termination.

1st – Verbal Warning. 2nd – Suspension Without Pay. 3rd – Termination

SEXUAL HARASSMENT Last Updated – September 2001

Title VII of the Federal Civil Rights Act of 1964 prohibits discrimination based upon an individual’s race, color, religion, sex or national origin. Racial, ethnic, sexual or religious jokes and slurs can be interpreted as a form of discrimination and may be considered violations of the Civil Rights Act. It has also been determined that sexual harassment constitutes discrimination on the basis of sex and is therefore a violation of the Act. Unwelcome sexual advances, jesting, requests for sexual favors and any other verbal or physical conduct of a sexual nature constitute sexual harassment when:

1. Submission to such conduct is made, either explicitly or implicitly, a term or condition of an individual’s employment;

2. Submission to or rejection of such conduct by an individual is used as a basis for employment decisions affecting such individual; or

3. Such conduct has the purpose or effect of substantially interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment.

The purpose of this document is to reiterate clearly the policy of Hugh M. Cunningham, Inc... The Company’s intention is to satisfy Title VII by providing equal employment opportunity to all employees, including a work environment free of such harassment. Any employee who feels he/she has been subject to such harassment, whether by fellow employees, supervisors or third parties should come and discuss the situation with management. Each situation will be treated with confidentiality and will be given top priority. If management is not made aware of the situation, they have no opportunity to resolve the same and keep the work environment a pleasant one for all employees.

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The nature of a smaller work environment lends itself to a more relaxed, friendly atmosphere. It is not the intention of Hugh M. Cunningham, Inc. to damage that environment by simple consideration of other employees, both in your verbal communication and physical conduct, Hugh M. Cunningham, Inc. will have a healthy, pleasant working environment free of harassment. OFFICE DRESS CODE Last Updated – June 2002

Hugh M. Cunningham requires casual business clothing on Monday through Thursday. Associates should always dress neat and professional. Friday is considered casual day.

Shorts – Shorts may worm in the summer on Fridays Only, unless otherwise specified by management. Golf / Walking shorts are preferred. Please no short shorts

Jeans – Blue Jeans may be worn on Fridays Only. Dress Jeans (black, white, or khaki) may be worn during the week. No sweat or wind pants.

Hats – May be worn on Fridays Only.

Skirts – Skirts should not be shorter than mid thigh.

Shirts – The selection should be such as to display a professional image.

Shoes – Sandals or Shoes. Beach Flips may be worn on Fridays Only.

On days when Hugh M. Cunningham is having either a client or a vendor visiting, men are required to wear shirts and ties and ladies should wear business dresses. WAREHOUSE DRESS CODE Last Updated – June 2002

One aspect of servicing our customers that we may not think about is the presentation that we make to them even before our communication begins. Whether we consider the look of our warehouse or our personal appearance, it is critical for our customers to identify a professional, neat and clean presentation. While the presentation of our warehouse is a TEAM effort, our own personal appearance is not. We are all responsible for how we dress and present ourselves to our customers.

DRESS CODE GUIDELINES

• Enable customers to quickly identify employees within the warehouse for prompt and efficient assistance.

• Present to our customers a professional, neat, clean appearance making our employees approachable and reinforcing the image that Hugh M. Cunningham, Inc. is the place to conduct business.

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• SHIRTS - The Company will supply all full-time and part-time employees with six (6) initial shirts. As they wear over a period of time, they must be returned before they will be replaced.

• PANTS - Any blue or khaki colored pants or shorts may be worn; cut-offs are not permissible.

• PERSONAL APPEARANCE - Hair should be kept neat and clean; any shoulder

length hair or longer must be tied back to prevent a potential safety hazard. Proper standards of personal hygiene must be followed at all times. Jewelry, including ear and nose rings, excessive and loose necklaces, wrist, and hand jewelry, is not permissible during working hours due to safety reasons.

• SAFETY BELTS - The Company will supply an adjustable size safety belt. They must be worn at all times when performing warehouse tasks. This is mandatory. If the belt if lost or stolen, the replacement cost will be $25.00 and will be paid in the form of a payroll deduction. As the belt wears over time, the Company will replace it at no cost to the employee.

• FOOTWEAR - It is mandatory that all full-time and part-time employees wear steel toe shoes. Most steel toe shoes may be purchased at a minimal cost. The Company will assist you in payment of the shoes. Hugh M. Cunningham, Inc. has an account set up with

WORK WEAR HY-TEST PROTECTIVE FOOTWEAR 11445 Emerald Street, Suite 102 Dallas, TX 75229 Hours: M-F 9:00 - 6:00; Sat. 10:00 - 4:30 (972) 243-4460 You can purchase the shoes of your choice from this Company and bring a copy

of the invoice to accounting and the cost will be divided into four (4) equal payments that will be taken out of your next four (4) paychecks or you can purchase the shoes of your choice, at the store of your choice on your own.

FORKLIFT TRAINING POLICY Last Updated – September 2001 All warehouse personnel driving a forklift must have a proper license. Employees will be required to attend the next available forklift training class. The expense of the class will ultimately be the responsibility of the employee. Hugh M. Cunningham, Inc. will pay Clarklift for the cost of the class and then deduct that amount from the employee’s check in installments set forth at time of hiring.

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SAFETY POLICY Last Updated – September 2001

I. STATEMENT OF PURPOSE Hugh M. Cunningham, Inc. is constantly striving for excellence in all areas of safety. The ultimate goal is “zero accidents” company-wide. This Safety Policy is designed with employee’s safety in mind. It is the responsibility of every employee to be safety conscious and to report any safety violations, unsafe acts, or conditions to his/her supervisor. This policy will be updated periodically, and additions and changes will be brought to the attention of all employees. Hugh M. Cunningham, Inc. encourages all employees to come forward with new ideas that will make the Company a safer place to work. II. GUIDELINES FOR BASIC SAFETY

1. Report any injury or accident to your supervisor at once. If injured--GET FIRST AID. Even small cuts can become serious if neglected. 2. Keep horseplay, roughhousing and practical jokes away from the work place. These activities can cause accidents and injuries. 3. Intoxicants and non-prescription drugs are absolutely not allowed in the work place. 4. Make good housekeeping part of the job. Keep materials orderly and avoid falling or shifting material problems. 5. Bend knees and keep the back straight when lifting. Leg muscles, not the back, should do the work. 6. Have electrical equipment properly grounded. Use only three (3) prong extension cords. 7. Do not run extension cords, computer lines or other cords where they will have to be stepped over. 8. Do no overload an extension cord or power strip. 9. When walking away from a drawer or file cabinet, regardless of how brief a time, close the drawer. 10. A seat belt must be worn when operating a company vehicle or any vehicle on Company business. 11. Be sure the safety bar is in place before operating/using the paper cutter. 12. Due to the lack of visibility, open doors slowly when coming to and from the warehouse.

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III. GUIDELINES FOR WAREHOUSE SAFETY All personnel must observe the following rules when in the warehouse.

1. No climbing to reach shelves. If an employee needs material on a higher shelf, he/she should use a ladder or forklift. 2. Back support belts, which are provided by the Company, must be worn at all times when handling materials or heavy objects. 3. Material handlers must wear steel-toed shoes at all times.

4. Be aware of what is going on around you. Watch for moving equipment and KEEP CLEAR.

IV. SAFETY GUIDELINES FOR OPERATING FORK LIFT TRUCK

1. Only authorized and trained personnel shall operate lift trucks. 2. Use the prescribed equipment for lifting, climbing and material handling. At no time are personnel to be lifted up on the forks or any unapproved devise with the lift truck. 3. Do not ride on lift trucks except as the operator and in the prescribed manner. 4. Safety procedures recommended by the manufacturer of the forklifts must be followed at all times. 5. Lift trucks and the electric carts are to be operated only at moderate speeds, not full throttle, and speed is to be reduced to slow when approaching within fifteen (15) feet of the end of the aisles and when turning. 6. Liquid propane gas tanks on gas lift trucks are to be turned off when not in use. 7. Liquid propane gas leaks are to be reported immediately to the manager. 8. Extreme caution is to be used when charging and servicing the batteries on electric lifts. Batteries emit explosive gas when being charged, therefore, the fan is to be turned on in the charging area to remove these gases when the lift is on the charger. IN THE EVENT AN EMPLOYEE DETECTS AN ACCUMULATION OF GAS IN THE CHARGING AREA, HE/SHE SHOULD TURN OFF THE CHARGER AND IMMEDIATELY NOTIFY HIS/HER SUPERVISOR. DO NOT DISCONNECT THE CHARGER.

REMEMBER: SAFETY IS EVERYONE’S RESPONSIBILITY.

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EMPLOYEE RELATIONS Last Updated – September 2001 Hugh M. Cunningham, Inc. believes that the work conditions, wages and benefits offered to employees are competitive with those offered by other employers in this area and industry. If employees have concerns about work conditions or compensation, they are encouraged to voice these concerns openly and directly to their supervisor. Experience has shown that when employees deal openly and directly with supervisors, the work environment can Be excellent, communication can be clear, and attitude can be positive. Hugh M. Cunningham, Inc. demonstrates its commitment to employees by responding effectively to employee concerns. DISCIPLINARY POLICY Last Updated – September 2001

The following is the Disciplinary Policy of Hugh M. Cunningham, Inc.; all associates are subject to these guidelines in regards to: (1) Tardiness; (2) Attendance; and (3) Job Performance Errors.

1. For the first ninety (90) days all associates are considered probationary. During that period of time it is expected that mistakes will be made as part of the learning process and this will be considered in all disciplinary actions taken during that time. However, any tardiness, absenteeism or error may result in immediate termination. No prior written or verbal warning will be required. 2. After the ninety (90) day probationary period, up to three (3) verbal warnings will be issued for each infraction. The fourth (4th) infraction will result in a written warning which the associate will sign. (A copy of same will be furnished to the associate.) 3. After the preceding steps have been taken, any further infractions may result in immediate termination or a written warning. 4. Extreme instances of fighting, stealing or refusing to carry out direct orders from his/her supervisor may result in immediate termination without any prior verbal and/or written warnings.

The final interpretation of this policy is with the Controller, Operations Manager or President.

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PROGRESSIVE COUNSELING Last Updated – September 2001

POLICY STATEMENT

Associates are expected to perform to acceptable standards and adhere to the company’s policies and procedures.

When an associate fails to achieve these expectations, the company will either use a progressive corrective counseling process or terminate the associate’s employment. The company, in its sole discretion, will determine when the progressive counseling is utilized and when separation will occur. For instance, in the case of policy violations or misconduct, progressive counseling may not be appropriate and separation should occur. Each situation should be looked individually and action consistent with this policy should be taken, While it is impossible to provide a “magical formula” to address every disciplinary situation, we offer the progressive counseling procedure as a guideline in determining disciplinary measures. The decision to determine an associate’s employment should be only made with the appropriate levels of management. Generally, the company does not use the suspensions as a part of the corrective counseling process. However, a suspension may occur when an event requires investigation and time is needed to conduct it or time is needed to review a termination recommendation. (See the suspension process that follows.) PROGRESSIVE COUNSELING PROCESS

Progressive counseling is a method of continuous counseling over a specific period of time. The counseling process involves three general levels of evaluations and discipline and is designed to provide an associate with an opportunity to improve his/her performance when company performance expectations are not being met. This is an opportunity for the associate to know what is expected of them and what the consequences of not meeting those expectations will be. In certain circumstances, the three level counseling processes are not appropriate. In some cases it may be appropriate to skip a level or termination. These situations will be handled on a case by case basis. The counseling period typically lasts 90 days; however, it may run shorter or longer depending on the associate’s length of service, type of performance to be corrected, prior work history, progress during the period, and goals to be achieved. During the process, it is important for the associate to receive regular feedback. (e.g., at 30 day intervals).

It is appropriate to use this process whenever a performance problem exists, clearly, when an associate receives a Below Expectations (BE) or Clearly Unsatisfactory (CU) evaluation, the progressive counseling should begin, starting with level II if it already hasn’t begun.

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LEVEL I : VERBAL DISCUSSION Level I, verbal discussion, involves a private meeting to discuss the problem with the associate and to bring the problem to the associate’s attention. The objective of the discussion is to review the company’s performance standards with the associate and to provide notification that a formal corrective counseling process will begin if performance improvement is not demonstrated. The supervisor should obtain input from the associate about how the problem will be corrected and establish target dates for assessing progress. This discussion should be documented and retained in the associate’s file. There may be one verbal counseling before continuing to Level II. LEVEL II : FORMAL DISCUSSION AND WRITTEN DOCUMENTATION Level II; if there is insufficient or no improvement following the verbal discussion as outlined in Level I or following a BE or CE performance evaluation, this formal step should be implemented.

In addition to discussing the performance issues, a written document indicating the problem, an agreed upon action plan, how long the process will last, and the consequences of lack of improvement should be prepared: * The recommended components of a document appear on page 37. The associate should be asked to sign the document - as acknowledgment that the discussion has taken place. If the associate refuses to sign the document, make a note of it on the counseling form. Copies of the document should be given to the associate and copy placed in the associate’s file. * Depending on the severity of the problem, this Level may be repeated by additional formal discussions and written documentation before moving to Level III and documenting a Final Formal Discussion. For example, once an associate receives a Formal Discussion it does not necessarily follow that the associate will immediately be given a Final Formal Discussion, if another problem arises. The circumstances may warrant additional Formal Discussions. On the other hand, it is possible to skip this Level, (as well as Level III), and go directly to termination if the Circumstances warrant. Again, this is decided on a case by case basis. LEVEL III : FINAL FORMAL DISCUSSION AND WRITTEN DOCUMENTATION Level III; if there is insufficient improvement performance is not sustained, a final corrective counseling meeting should occur. It should be made clear to the associate and noted in the documentation that if the problem is not corrected, the final disciplinary action, (e.g. termination) may occur, possibly within 30 days. The associate should be given a copy of the the documentation and a copy placed in the associate’s file. LEVEL IV : TERMINATION OF EMPLOYMENT The decision to terminate an associate should occur following a review of the associate’s file by the appropriate manager. This means reviewing the termination recommendation with the next Level of Management above the immediate supervisor.

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FORMAL WRITTEN DOCUMENTATION Providing an associate’s with a written document concerning issues with his/her performance has two purposes. First, it identifies the issues and states the expectations - it’s designed to improve performance. Secondly, it serves as a record of the issues and steps taken to correct them. These documents provide support for recommendation of more serious disciplinary action, (i.e., demotion or termination). The document should contain factual, objective details of the performance issues. It should include the following:

* Name of associate counseled. * Name of supervisor preparing the document. * Date of the counseling discussion. * Date of previous counseling discussion. * A description of the problem - citing specific occurrence of how/when the performance level was demonstrated as being Below Expectation and its impact on the business. * Clearly stated performance expectations, (i.e., the action plan), and the criteria that will be used for assessment - what goals must be achieved and by what dates. * Period during which improvement must be demonstrated, (e.g., how long the counseling process will last). * Date of the next Formal Discussion regarding the status of his/her performance. * The consequences, if ME (Meets Expectations) is not achieved. * On-going expectations, if ME performance is achieved, (e.g., sustaining of the improved performance and the consequences for failing to do so). * Signature of the supervisor and the associate, (if the associate refuses to sign, indicate this on the form).

SUSPENSION PROCESS Associates who commit serious infractions of company policy or procedure may be suspended to allow time for an investigation to be conducted or to allow for the facts of the situation to be reviewed with the appropriate levels o management. A suspension is usually done only when there is some aspect of risk associated with allowing the associate to remain at work, such as theft or violence. For example, a suspension may be appropriate when an associate assaults or uses violence against a co-worker or customer, or is suspected of theft. A suspension is not part of the progressive counseling process, and should only be used when termination of employment is likely and the violation warrants not having the associate remain at the work location.

Once a decision to suspend has been made, the manager and the appropriate next level of management should be contacted immediately prior to the suspension. At this time, following a review of the facts, a decision will be made regarding termination of the associate’s employment. This review should be completed as soon as possible.

The associate should be told not to report to work and that he/she will be notified of their employment status, pending possible termination. Depending on the determination, a decision will be made regarding payment during the suspension period. Generally, if the associate is returned to work following a suspension, he/she will be paid for the time away from work.

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GENERAL RESPONSIBILITIES IMMEDIATE SUPERVISOR’S * Inform the associate of performance issues: A) Provide constructive criticism that is performance based and objective B) Follow the corrective counseling process, when appropriate. * Document all counseling sessions and provide the associate with a copy. * Discuss the problem with your next level of management during the early stages of the process. * Obtain the appropriate management approval before terminating the associate. * Notify appropriate management when an associate is suspended. ASSOCIATE’S * Attempt to correct the problem: A) Accept feedback from supervisor. B) Discuss concerns. C) Seek feedback regarding progress. * Participate in the development of the Action Plan. * Leave the premises upon suspension. UPPER MANAGEMENT’S * Review documentation of the counseling process as it progresses when appropriate.

A) Review/Approve recommendations to suspend or terminate an associate.

* Coach and counsel the immediate supervisor regarding actual termination meeting. * When an associate is terminated for NO SHOW or other similar situation, the associate should be notified of the termination by certified mail or federal express, where the receipt can be verified. * Payment is based on actual work schedule, if it had been posted prior to the suspension, or the payment is based on the associate’s regular scheduled hours. * If the associate is terminated: A) Contact associate with the decision. B) Termination effective date becomes effective from the date the Suspension began, and he/she is not paid for the suspension period.

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Employee Warning Notice Employee Information

Employee Name: ________________________________ Date: _____________-____________-____________ Job Title: _______________________________________ Department: ________________________________

Type of Warning First Warning Second Warning Final Warning

Type of Offense Tardiness/Leaving Early Absenteeism Violation of Company Policies

Substandard Work Violation of Safety Rules Rudeness to Customers/Coworkers

Other:

Details Date of Infraction:

Description of Infraction:

Plan for Improvement:

Consequences of Further Infractions:

Acknowledgement of Receipt of Warning

By signing this form, you confirm that you understand the information in this warning. You also confirm that you and your manager have discussed the warning and a plan for improvement. Signing this form does not necessarily indicate that you agree with this warning.

Employee Signature Date

Manager Signature Date

Witness Signature (if employee understands warning but refuses to sign) Date

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DRUG AND ALCOHOL POLICY Last Updated – August 1997

I. PURPOSE Employees are the Company’s most valuable resource, and for that reason, their safety and health are of primary concern. This Company maintains a strong commitment to its employees to provide a safe workplace and to establish programs promoting high standards of safety and health. Consistent with the spirit and intent of this commitment, the Company expects employees to report to work in proper condition to perform their duties. The purpose of this Policy is to prevent the use and presence of drugs and alcohol in the working environment. Use of these substances poses a serious threat to the health and safety of all employees. Training has been provided to assist management in recognizing potential symptoms of drug or alcohol abuse that may cause a performance problem. II. PARTICIPATION AND ASSISTANCE

A. Employees experiencing problems with drugs or alcohol are urged to voluntarily seek assistance through their primary care physician. They, in turn, can refer you to the proper treatment facility provided for in the company group insurance policy to resolve such problems before they become serious enough to require management referral or disciplinary action.

B. Employees whose job performance deteriorates may be referred by management to their primary care physician for diagnosis of the performance problem.

C. Participation, by itself, for a drug or alcohol problem will in no way jeopardize an employee’s job. In fact, successful treatment will be viewed positively; however, participation will not:

1. Prevent normal disciplinary action for a violation which may have already occurred; nor 2. Relieve an employee of the responsibility to perform their assigned duties in a safe and efficient manner.

III. SCOPE All employees of the Company are covered by the terms of this policy. IV. DEFINITIONS

A. Drug and drug usage, as defined in this Policy, refer to the use of illegal drugs or other controlled substances such as marijuana, cocaine, PCP, LSD, heroin, hashish and other narcotics or the abuse of any prescription or nonprescription drugs that alter mood or consciousness, lead to abnormal behavior, or interfere with acceptable performance, attendance or behavior.

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B. Alcohol usage, as defined in this Policy, is the use of alcohol such that it interferes with acceptable performance, attendance or behavior. C. Company premises are all areas in which the Company operates including, but not limited to, its property, Company owned or leased equipment, lockers, desks, equipment, work space, parking lots and storage facilities.

V. DESCRIPTION OF POLICY

A. Discipline for Drug and Alcohol Abuse or Problems.

1. The illegal sale, possession, use or purchase of drugs or alcoholic beverages on Company premises or any location while performing job duties is against Company policy and is cause for immediate discharge. There are only two (2) exceptions. The first exception will apply to alcoholic beverages at Company-sponsored social functions; such exceptions must be authorized specifically by management. The second exception is for prescription drugs for which the employee has a valid prescription. All prescription drugs which might alter mood or behavior should be registered with the employee’s supervisor when the employee is taking them. Prescription drugs may not be abused and must be taken only according to the doctor’s instructions. 2. Off-the-job illegal selling, distributing or manufacturing of drugs or alcohol is also cause for discharge. 3. Illegal drug possession or use off Company property not during work hours will be treated the same as a positive drug test:

a. The employee will be suspended without pay and referred to their primary care physician. b. More severe action, up to and including discharge, may be taken depending upon the circumstances of each case.

4. It is also against Company policy to report to work or work under the influence of intoxicants such as alcohol or unprescribed drugs, as well as prescribed drugs which induce an unsafe mental or physical state. Employees who violate this policy will be subject to disciplinary action, up to and including discharge.

5. For purposes of this policy, an employee is conclusively presumed to be under the influence of alcohol or drugs if urinalysis, blood testing, or other accepted testing procedures show a scientifically measurable and verifiable quantity of alcohol, drugs, or alcohol or drug by-products.

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B. INVESTIGATION

1. Employees reasonably suspected of violating this policy may be suspended without pay pending an investigation of the circumstances. The Company will try to complete its investigation in a timely manner. 2. In order to protect the safety of all employees and the Company, the Company will take whatever appropriate measures are necessary to find out if alcohol or illegal drugs are located on or being used on Company property. These measures will not be taken unreasonably, but only when the Company believes them to be completely justified and necessary. The measures that may be used include, but are not limited to, the following:

a. Federal, State or local authorities may be called upon to assist in an investigation. b. Observation of employees. c. Searches of Company property, facilities, or equipment, including lockers. d. Searches of employees and their personal property located on Company property. Searches of employees and their personal property will not take place unless at least two (2) supervisors or other management personnel are present. In addition, searches of employees’ personal property will take place only in the employees’ presence. e. Searches of employees and their personal things cannot be conducted if the individual refuses to submit to a search. Upon refusal to submit to such a search the purpose of the requested search and the potential implications of refusal will be carefully explained to the employee. Further refusal to submit may result in discharge for insubordination.

3. The decision to search employees or their personal property on Company property must be approved by a Vice President or above except in the following situation: If time is critical to the success of the search, then such searches may be conducted with the approval of the Operations Manager in charge at the location. 4. Because the Company’s primary concern is the safety of its employees and their working environment, the Company will not normally prosecute in matters involving the above contraband; however, the Company may turn over all confiscated drugs or alcohol to the authorities.

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C. TESTING As a supplement to other means of detecting drug and alcohol use, blood and urine testing may be conducted. The following groups may be tested by the Company:

1. Applicants for full-time employment must be tested for drug usage and must pass such test before an offer of employment can be extended. Testing for alcohol abuse may also be conducted. Refusal of an applicant to submit to or cooperate with the administration of an alcohol or drug test will result in no further employment consideration being given to the applicant. Applicants who fail their drug or alcohol tests may reapply after one (1) year waiting period.

2. Drug tests will be conducted as a routine part of the promotion/transfer of all employees being considered for positions which may affect public or employee safety or which are considered sensitive from a security standpoint. If the drug test is positive, the employee will not be considered further for the position and will be suspended from service and referred to their primary care physician.

3. “For cause” testing may be required of any employee in the following circumstances:

a. Accidents or near accidents where safety precautions were violated or unusually careless acts were performed;

b. Irrational or unusual behavior, injury, gross negligence, carelessness, or damage to Company personnel or equipment; c. Disregard for the safety, life, or well-being of others on Company premises or at any location while the employee is performing job duties; d. Reporting to or remaining at work in an apparently unfit condition; and e. Where reasonable cause exists to suspend for possession of illegal drugs.

4. Should the employee refuse to submit to an alcohol or drug test the purpose of the requested test and the potential implications of refusal will be carefully explained to the employee. Further refusal to submit will result in immediate suspension from service and may result in discharge for insubordination. Any attempt to invalidate or circumvent an alcohol or drug test may also result in termination. 5. In the case of a first time positive result of a drug test, where no evidence exists of use on the job, the following steps will be taken:

a. The employee will be suspended from service without pay. b. The employee must visit their primary care physician to learn what drug counseling resources are available. The employee is then required to seek

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treatment for drug abuse through those resources. Refusal to do so will be viewed as insubordination and the employee will be subject to discharge. The employee will be required to cooperate in all phases during a period of six (6) weeks from the date of removal from service. In the event the employee fails to pass a drug test within this six (6) week period, the employee will be subject to discharge. If, after passing a drug test within such six (6) week period, an employee is unable to return to work for good reason (e.g., participation in a treatment program not yet completed) the time at which such employee shall return to work may be extended beyond the end of the six (6) week period.

d. Employees who have been suspended from service following a positive drug test and who have subsequently had a negative test result and returned to work will be subject to random drug testing for an indefinite period of time. A positive result on any subsequent drug test will result in immediate discharge.