employee manual for harley marine services, …paf.harleymarine.com/images/employee manual -...

Employee Manual

For

HARLEY MARINE SERVICES, INC.

& SUBSIDIARIES

2-1

Welcome to Harley Marine Services, Inc.

Thank you for joining Harley Marine Services, Inc. (HMS)! We trust that you will make a great contribution to the maritime industry by joining the HMS family, and that you will find your employment at HMS a rewarding experience. We look forward to the opportunity of working together to create a more successful company. We also want you to feel that your employment with HMS will be a mutually beneficial and gratifying one. You have joined an organization that has established an outstanding reputation for quality. Credit for this goes to everyone in the organization. We hope you will find satisfaction and take pride in your work here. As a member of HMS’s team, you will be expected to contribute your talents and energies to further improve the environment and quality of the company. This Employee Manual should provide answers to most of the questions you may have about HMS's benefit programs, as well as company policies and procedures. You are responsible for reading and understanding this Employee Manual. If anything is unclear, please discuss the matter with your Human Resources Department. For union employees covered under a Collective Bargaining Agreement, the Collective Bargaining Agreement will apply in situations in which there is a conflict between the Employee Manual and the Collective Bargaining Agreement. I extend to you my personal best wishes for your success and happiness at Harley Marine Services, Inc. Sincerely,

Harley V. Franco Harley V. Franco, Chairman Harley Marine Services, Inc.

2-2

Notice This Employee Manual has been prepared to inform you of Harley Marine Services, Inc. and its’ subsidiaries' history, philosophy, employment practices, and policies, as well as the benefits provided to you as a valued employee. Some Things You Must Understand The policies in this Employee Manual are to be considered as guidelines. - HMS, at its option, may change, delete, suspend or discontinue any part or

parts of the policies in this Employee Manual at any time without prior notice as business, employment legislation, and economic conditions dictate.

- Any such action shall apply to existing as well as to future employees. - Employees may not accrue eligibility for monetary benefits that they have not

become eligible for through actual time spent at work. - Employees shall not accrue eligibility for any benefits, rights, or privileges

beyond the last day worked. - No one other than Chief Executive Officer of HMS may alter or modify any of

the policies in this Employee Manual. Any alteration or modification of the policies in this Employee Manual must be in writing.

- No statement or promise by a supervisor, manager, or department head, past

or present, may be interpreted as a change in policy nor will it constitute an agreement with an employee.

- This Employee Manual will be for the non-union employee’s usage only. The

provisions and policies in the manual do not apply to the employees under collective bargaining contracts.

Should any provision in this Employee Manual be found to be unenforceable and invalid, such finding does not invalidate the entire Employee Manual, but only that particular provision. Employment laws may vary from state to state, but HMS policies will be in compliance with the laws of each state in which it operates. To the extent that any of these policies conflict with specific laws, the local, state or federal law will control. This Employee Manual replaces (supersedes) any and all other or previous HMS Employee Manuals, or other HMS policies whether written or oral.

3-1

Table of Contents

Welcome to Harley Marine Services, Inc. ...................................................... 2-1 Notice ................................................................................................................. 2-2 AN OVERVIEW OF HMS .................................................................................. 3-5 EMPLOYMENT.................................................................................................. 4-1 At-Will Employment ............................................................................................ 4-1 Equal Employment Opportunity ......................................................................... 4-1 Employment Eligibility ........................................................................................ 4-2 Certification of Crew Members ........................................................................... 4-2 New Employee Orientation ................................................................................ 4-2 Introductory Period ............................................................................................. 4-2 Anniversary Date ............................................................................................... 4-3 Work Schedule................................................................................................... 4-3

Office Personnel ............................................................................................. 4-3 Maritime Personnel ......................................................................................... 4-3

Meal and Break Periods—Office Personnel ....................................................... 4-4 Meal Room Facility ............................................................................................ 4-5 Attendance ......................................................................................................... 4-5

When make-up time may be used .................................................................. 4-5 Employment Classifications ............................................................................... 4-6

Non-Exempt Employees ................................................................................. 4-6 Exempt Employees ......................................................................................... 4-6 Full-Time Employees ...................................................................................... 4-6 Part-Time Employees ..................................................................................... 4-7 Regular Employees ........................................................................................ 4-7 Temporary Employees.................................................................................... 4-7

Uniforms ............................................................................................................ 4-8 Office Supplies ................................................................................................... 4-8 Performance Evaluation ..................................................................................... 4-8 Disciplinary Actions ............................................................................................ 4-9 Formal Complaint Process ............................................................................... 4-10 Personnel Records and Administration ............................................................ 4-11

Medical Records ........................................................................................... 4-12 Outside Employment ........................................................................................ 4-12 COMPENSATION .............................................................................................. 5-1 Payroll Cycle ...................................................................................................... 5-1 Payroll Direct Deposit ........................................................................................ 5-1 Payroll Deductions ............................................................................................. 5-1 Payroll Advance ................................................................................................. 5-2 Error in Pay ........................................................................................................ 5-2 Overtime ............................................................................................................ 5-2

Exempt Employees ......................................................................................... 5-2 Non-Exempt Employees (Shop & Office)........................................................ 5-3 Maritime Employees ....................................................................................... 5-3 Shore Based Tankermen ................................................................................ 5-3

3-2

Work Performed on Company Holidays (Office & Shop Personnel) ............... 5-3 Holiday Pay (Crew Members) ......................................................................... 5-3 Holiday Pay (Tankermen Personnel) .............................................................. 5-3

On Call Pay ........................................................................................................ 5-4 Company and Department Meetings ................................................................. 5-4 After-Hours Work ............................................................................................... 5-4 Payroll Records.................................................................................................. 5-5 Business Travel & Expense Reimbursement ..................................................... 5-5 Wage Garnishments .......................................................................................... 5-6 Compensation Reviews ..................................................................................... 5-6 Promotion and Transfer Policy ........................................................................... 5-7 BENEFITS ......................................................................................................... 6-1 Eligibility for Benefits .......................................................................................... 6-1 Insurance Coverage ........................................................................................... 6-2

Group Insurance ............................................................................................. 6-2 Life and Accidental Death Dismemberment Insurance ................................... 6-2

Retirement Plan—401(k) Retirement Savings Plan ........................................... 6-3 Employee Assistance Program (EAP) ............................................................... 6-3 Education Assistance/ Reimbursement ............................................................. 6-4 Other Benefits .................................................................................................... 6-5

Optional Life Insurance, Short-Term & Long-Term Disability .......................... 6-5 LEAVES ............................................................................................................ 7-1 Paid Leaves ....................................................................................................... 7-1

Holidays .......................................................................................................... 7-1 Other holiday observances ............................................................................. 7-2 Vacations ........................................................................................................ 7-2 Sick Leave ...................................................................................................... 7-4 Funeral (Bereavement) Leave ........................................................................ 7-5

Unpaid Leaves ................................................................................................... 7-6 Jury Duty ........................................................................................................ 7-6 Family and Medical Leave .............................................................................. 7-7

Eligibility ...................................................................................................... 7-7 Types of absences covered......................................................................... 7-7 Benefits and protections .............................................................................. 7-8 When to request leave ................................................................................ 7-9 Notifications and certifications ..................................................................... 7-9 Pay during leave ........................................................................................ 7-10 Returning to work ...................................................................................... 7-10 Fitness for duty .......................................................................................... 7-10

Military Leave of Absence ............................................................................. 7-11 Notification................................................................................................. 7-11 Benefits ..................................................................................................... 7-11 Health Insurance ....................................................................................... 7-12 Reinstatement ........................................................................................... 7-12

Personal Leave of Absence .......................................................................... 7-13 Accruing Paid Leave Benefits While on Leave ................................................ 7-14

3-3

Insurance Premium Payment during Leaves of Absence ................................ 7-14 Accepting Other Employment or Going into Business While on Leave of Absence ......................................................................... 7-15 SAFETY ............................................................................................................. 8-1 Designated Person Ashore (DPA) ..................................................................... 8-1 Personal Injury and Marine Accident Reporting ................................................. 8-2

PERSONAL INJURY REPORT. ..................................................................... 8-2 MARINE ACCIDENT/INCIDENT REPORT. .................................................... 8-2 Shoreside Personnel. ..................................................................................... 8-3

OSHA Log .......................................................................................................... 8-3 Security .............................................................................................................. 8-3

ID badges/cards ............................................................................................. 8-3 Temporary access changes ............................................................................ 8-3

Security Checks (Searches & Inspections) ........................................................ 8-4 Restricted Areas ................................................................................................ 8-4 Visitors ............................................................................................................... 8-4 Parking Lot ......................................................................................................... 8-5 Fire Prevention................................................................................................... 8-5

In Case of Fire ................................................................................................ 8-5 First Aid .............................................................................................................. 8-6 Emergency Evacuation ...................................................................................... 8-6 Safety Hazards .................................................................................................. 8-6 Property and Equipment Care ........................................................................... 8-7 Smoking/ Tobacco Use ...................................................................................... 8-7 SEPARATION OF EMPLOYMENT ................................................................... 9-1 Termination of Your Employment....................................................................... 9-1 Layoff and Work Reductions .............................................................................. 9-1 Insurance Conversion Privileges ....................................................................... 9-2 Exit Interviews .................................................................................................... 9-2 Return of Company Property ............................................................................. 9-2 Former Employees ............................................................................................. 9-2

Reinstatement of Benefits (Bridging) .............................................................. 9-2 Post-Employment Inquiries ................................................................................ 9-3 WORK PLACE POLICIES ............................................................................... 10-1 Open Communication Policy ............................................................................ 10-1 Company Information Communications ........................................................... 10-1 Media Contact Policy ....................................................................................... 10-1 Suggestions ..................................................................................................... 10-2 Anti-Discrimination/ Harassment Policy ........................................................... 10-2

Definition of harassment ............................................................................... 10-3 Responsibility ............................................................................................... 10-3 How to report harassment ............................................................................ 10-4 Investigation process .................................................................................... 10-4

Workplace Violence ......................................................................................... 10-5 Contraband Policy ............................................................................................ 10-6 Alcohol/ Drug-Free Workplace Policy .............................................................. 10-6

3-4

Dress Code and Personal Appearance ............................................................ 10-8 Office Environment ....................................................................................... 10-9 Non-Office Environment ............................................................................... 10-9 Scented Products ....................................................................................... 10-10

Housekeeping ................................................................................................ 10-10 Offices and workstations............................................................................. 10-10 Personal items ............................................................................................ 10-11 Appliances .................................................................................................. 10-11 Conference rooms ...................................................................................... 10-11 Company grounds and parking areas ......................................................... 10-12

Recycling ....................................................................................................... 10-12 Personal Decorations ..................................................................................... 10-12 Computer Software (Unauthorized Copying) ................................................. 10-13 Computers, Electronic Mail, and Voice Mail Usage Policy ............................. 10-13 Social Networking Policy ................................................................................ 10-15 Cell Phone Use .............................................................................................. 10-18 Use of Company Vehicle ............................................................................... 10-18 Personal Use of Company Property ............................................................... 10-19 Personal Mail and Packages ......................................................................... 10-20 Relatives ...................................................................................................... 10-211 Severe Weather and Emergency Conditions ................................................. 10-21 WORKPLACE CONDUCT .............................................................................. 11-1 Standards of Conduct ...................................................................................... 11-1 Unacceptable Activities .................................................................................... 11-1 Confidential Information ................................................................................... 11-3 Customer Relations ......................................................................................... 11-4 Representing the Company During Travel ....................................................... 11-4 Employee Activities During Off-Duty Hours ..................................................... 11-5 Community Involvement .................................................................................. 11-5 Gifts ................................................................................................................. 11-6 Receipt and Acknowledgment Of HMS Employee Manual ......................... 12-1

3-5

AN OVERVIEW OF HMS

About Harley Marine Services

In 1987, Harley Franco established Olympic Tug and Barge, Inc. and went into business transporting bunker fuel and refined products in Puget Sound and along the Columbia River. Since then, the company has expanded to operate vessels on the West & East Coast of the United States, with offices in Seattle, Portland, Alameda, Wilmington and Bayonne. Harley Marine’s corporate philosophy is focused in the safety of its employees, customer satisfaction, high quality equipment and community involvement.

The Harley Marine Services, Inc. Family of Companies

Company Name

Serving Area

Business

Harley Marine Gulf Gulf Coast Bunkering Petroleum Transportation Terminal Transfers

Harley Marine NY, Inc. NY/NJ Harbor

Bunkering Ship Assist

Millennium Maritime, Inc. Los Angeles, CA Long Beach, CA

Ocean Towing Petroleum Transportation Ship Assist Tanker Escort

Olympic Tug and Barge, Inc. Puget Sound Columbia River

Bunkering Petroleum Transportation Tug and Barge Service

Pacific Coast Maritime, Inc. Alaska Ocean Towing Ship Assist

Public Service Marine, Inc. California Coast Petroleum Transportation

Pacific Terminal Services, Inc. Seattle, WA Portland, OR

Oil Terminal Operation

Starlight Marine Services, Inc. San Francisco, CA Oakland, CA

Petroleum Transportation Ship & Barge Assist Ship & Barge Escort

Westoil Marine Services, Inc. Los Angeles, CA Los Beach, CA

Bunkering Petroleum Transportation Ship & Barge Assist Ship & Barge Escort

4-1

CHAPTER 1 EMPLOYMENT

At-Will Employment

Your employment with HMS is at-will. This means that neither you nor HMS has entered into a contract regarding the duration of your employment or that you will receive specific treatment in any given situation. You are free to terminate your employment with HMS at any time, with or without reason. Likewise, HMS has the right to terminate your employment. No employee of HMS can enter into an employment contract for a specified period of time, or make any agreement contrary to this policy without written approval from the Chairman or the President.

Equal Employment Opportunity

It is the policy of HMS to provide equal employment opportunity to all individuals regardless of race, creed, color, religion, sex, age, national origin, disabilities, veteran status, sexual orientation, marital status, military status, or any other characteristic protected by state or federal law. HMS is strongly committed to this policy, and believes in the concept and spirit of the law. HMS believes in and practices equal opportunity. The Human Resources Department serves as the Equal Opportunity Coordinator and has overall responsibility for ensuring compliance with this policy. All employees are responsible for supporting the concept of equal opportunity and assisting the company in meeting its’ objectives. HMS complies with the law regarding reasonable accommodation for handicapped and disabled employees. HMS's chairman has issued the following policy stating HMS's views on this matter. It is the policy of HMS to comply with all the relevant and applicable provisions of the Americans with Disabilities Act (ADA). HMS will not discriminate against any qualified employee or job applicant with respect to any terms, privileges, or conditions of employment because of a person's physical or mental disability. HMS will also make reasonable accommodation wherever necessary for all employees or applicants with disabilities, provided that the individual is otherwise qualified to safely perform the essential duties and assignments connected with the job and provided that any accommodations made do not impose an undue hardship on HMS. Equal employment opportunity notices are posted near employee gathering places as required by law. Additionally, they are posted on lunchroom bulletin

4-2

boards. These notices summarize the rights of employees to equal opportunity in employment and list the names and addresses of the various government agencies that may be contacted in the event that any person believes he or she has been discriminated against. Any employees, including managers, involved in discriminatory practices will be subject to termination.

Employment Eligibility

All offers of employment are contingent on verification of your right to work in the United States. On your first day of work you will be asked to provide original documents verifying your right to work and, as required by federal law, to sign Federal Form I-9, Employment Eligibility Verification Form. If you at any time cannot verify your right to work in the United States, HMS may be obliged to terminate your employment.

Certification of Crew Members

Harley Marine Services, Inc. will hire only qualified experienced personnel in positions of authority and responsibility. Employees must have a current license, rating, or endorsement as required for their assigned position. Each employee is personally responsible for maintaining currency of his or her qualifications. It is also the employees’ responsibility to update Human Resources with copies of new or renewed documents.

New Employee Orientation

On your first working day, you will be asked to complete employment paperwork and orientation review. Please feel free to ask your colleagues any questions not answered during your orientation.

Introductory Period

Your first ninety (90) days of employment at HMS are considered an Introductory Period, and during that period you will not be eligible for benefits described in this Employee Manual unless otherwise required by law. This Introductory Period is a "getting acquainted" time for both you, as an employee, and HMS, as an employer. During this time, HMS will evaluate your suitability for employment, and you can evaluate HMS as well. However, completion of the Introductory Period does not guarantee continued employment, as employment is always at-will. At the end of the Introductory Period, your immediate supervisor will discuss your job performance with you. This review will be similar to the job performance review that is held for regular full-time or part-time employees on an annual basis.

4-3

A former employee who has been rehired after a separation from HMS of more than one (1) year is considered an introductory employee during their first ninety (90) days following rehire.

Anniversary Date

The first day you report to work is your "official" anniversary date. Your anniversary date is used to compute various conditions and benefits described in this Employee Manual.

Work Schedule

It is the policy of HMS to establish regular hours of business operation from 8:00 am to 5:00 pm, Monday through Friday. Within this framework, individual departments may follow different operational schedules, as well as varied workweek schedules based on the need for different shifts, to maintain production or efficiency. Work schedules may be changed from time to time based on business needs. Office Personnel

Your particular hours of work and the scheduling of your meal period will be determined and assigned by your supervisor. Most employees are assigned to work a forty (40) hour workweek. Should you have any questions concerning your work schedule, please ask your supervisor. For overtime purposes, the work week begins at 12:00 a.m. (midnight) on Monday morning and ends at 11:59 p.m. on Sunday night. Since a workweek is defined as seven consecutive 24-hour periods (or workdays) each workday also begins at midnight and ends at 11:59 p.m. the same calendar day. All employees are expected to report to work during assigned working hours. The company will consider modification of work schedules on an individual basis as a reasonable accommodation for employees with disabilities, or to accommodate an employee’s religious beliefs, unless making that accommodation results in undue business hardship. Maritime Personnel

Maritime personnel shall be available for duty for a period of twenty-four hours each day they are assigned to a vessel, whether the vessel is underway or moored. Marine personnel shall remain onboard at all times, except with prior approval of the Duty Scheduler. Normal work hours onboard the tugs are divided into watches. Licensed personnel shall not work more than twelve (12) hours in a twenty-four (24) hour period. It is company policy that crewmembers should not work more than fifteen (15) hours in twenty-four (24) hours, or more than forty-

4-4

two (42) hours in seventy-two (72) hours except in an emergency. Tankermen shall not work more than fifteen (15) hours on a barge in any twenty-four (24) hour period or more than thirty-six (36) hours on a barge(s) in any seventy-two (72) hour period. They normally work a job straight through to completion or until their work hours expire. The Duty Scheduler provides relief tankermen for jobs expected to extend beyond established work hour limits. If a job will unexpectedly extend beyond fifteen (15) hours, it is incumbent upon the tankermen to notify the Duty Scheduler to provide a relief in a timely manner. Work hours are monitored on a regular basis by the Captains for persons onboard the tugs and the scheduler for the tankermen. In addition, all hours worked each day are reported on a weekly basis to the payroll department for reconciliation where they are also scrutinized by operations and safety management personnel to ensure maximum work hour limits are not being exceeded.

Meal and Break Periods—Office Personnel

You are entitled to two (2) fifteen (15) minute paid breaks for each eight (8) hour work day. Other breaks will confirm with state law. Normally these breaks will be scheduled at two different intervals, one prior to your meal period and one after your meal period. These breaks should be scheduled with your immediate supervisor. If you work in a department where breaks are not directly assigned, please coordinate with your co-workers to maintain adequate coverage at all times.

MARITIME PERSONNEL: The Master will determine meal times. If you work longer than four (4) hours, you will be given an unpaid meal period. The time when meal periods are scheduled varies among departments, depending on the needs of each department. You are requested not to perform any work during your regularly scheduled meal period. It is important to return to work on time at the end of your meal period.

Meal Room Facility

For your convenience and comfort, HMS may provide a meal room. This area is for everyone's use. It is your responsibility to do your share in keeping this facility clean and sanitary. Please remember to use containers with reliable seals and label your food with your name and date. Food stored in the refrigerator for a period of more than seven (7) days will be disposed of.

4-5

Attendance

You are expected to report on time each day you are scheduled to work. Unexcused absence or tardiness places an extra burden on your coworkers, and may result in disciplinary action. Unexcused absence is defined as failure to report for and remain at work as scheduled. This includes late arrival at work, and leaving early. Attendance is one of the factors rated in performance evaluations. HMS is aware that emergencies, illnesses, or pressing personal business that cannot be scheduled outside your work hours may arise. Sick days and vacation have been provided for this purpose. If you are going to be absent, you should contact your immediate supervisor before your regular start time, if at all possible. Make every effort to speak to your supervisor directly rather than leave a phone message. You must notify your supervisor each day you are absent unless it is understood you will be absent for a specific number of days. Additionally, the company recognizes that, due to unforeseen circumstances, you may be late getting to work. Whenever possible, call your supervisor to advise him/her that you will be late, the reason, and the approximate time you anticipate getting to work. If you are absent because of an illness for three (3) or more successive days or there are reasons to question the absences, your immediate supervisor may request that you submit written documentation from your doctor stating you are able to resume normal work duties before you will be allowed to return to work. If you are absent five (5) or more days because of an illness or injury, you could be eligible for the state disability insurance program. Absences for three consecutive workdays, without calling in, may result in termination for job abandonment. All expected and unexpected absences must be documented on the Personnel Action Form (PAF).

When make-up time may be used

You may be allowed to make up time with the approval of your immediate supervisor. All make-up time must be scheduled during the same workweek the work time was missed. Make-up time is not allowed during lunchtime. You must take your normally scheduled lunch break. Make-up time is not allowed for unexcused absences.

4-6

A consistent pattern of questionable absences can be considered excessive and may be cause for concern. In addition, excessive lateness or leaving early without letting your immediate supervisor know will be considered a "lateness pattern" and may carry the same weight as an unexcused absence. Other factors, like the degree and reason for the lateness, will be taken into consideration. Your immediate supervisor will make a note of any absence or lateness and their reasons in your personnel file. Be aware that excessive absences, lateness or leaving early may lead to disciplinary action, including possible dismissal.

Employment Classifications

It is the policy of HMS to provide definitions of employee classifications to minimize confusion about compensation and other terms of employment. At the time you are hired, you are classified as full-time, part-time or temporary. In addition, you are classified as either non-exempt or exempt. All other policies described in this Employee Manual and communicated by HMS apply to all employees, with the exception of certain wage, salary and time off limitations applying only to "non-exempt" employees. If you are unsure of which job classification your position fits into, please ask your supervisor. Non-Exempt Employees

An individual eligible for overtime pay according to the Fair Labor Standards Act. Note: See Wage and Salary Policies in the section of this Employee Manual titled "Compensation" for a full description of overtime payment policies.

Exempt Employees

An individual not eligible for (exempt from) overtime pay as defined by the Fair Labor Standards Act. The company has established (as examples) the following categories of exempt employees:

Executive o Directors, officers, owners

Professional o Accounting, technical, outsides sales representative

Administrative o Managers, certain supervisors

If you are an exempt employee, you will be advised that you are in this classification at the time you are hired, transferred or promoted. Full-Time Employees

4-7

An employee who has successfully completed her/his introductory period (see the Introductory Period Policy for a specific definition) and who works at least thirty (30) hours per week is considered a full-time employee. Unless otherwise specified, the benefits described in this Employee Manual apply only to full-time employees. If you were a full-time employee and were laid off, you will be considered a full-time employee upon return to work, provided that you were not laid off for longer than one (1) year. If you were a full-time employee and have been on an approved leave of absence, upon return you will be considered a full-time employee, provided you return to work as agreed in the provisions of your leave. Part-Time Employees

It is the policy of the company to define a regular part-time employee as one who is regularly scheduled to work less than 30 hours during each work week. Area managers and supervisors will develop work schedules for part-time employees, and will ensure that part-time employees receive orientation training, safety and health training, and training in all aspects of the job. Regular part-time employees will adhere to all company policies that apply. Unless otherwise specified or as required by law, regular part-time employees are not eligible for the employee benefits described in the Employee Manual, except as granted on occasion, or to the extent required by provision of state and federal laws. Regular Employees

Employees hired to work on a regular basis for an indefinite period of time are classified as "regular" employees. Such employees may be either full- or part-time. Temporary Employees

From time to time, HMS may hire employees for specific periods of time or for the completion of a specific project. An employee hired under these conditions will be considered a temporary employee. The job assignment, work schedule and duration of the position will be determined on an individual basis. Normally, a temporary position will not exceed six (6) months in duration, unless specifically extended by a written agreement. Summer employees, interns and seasonal employees are considered temporary employees. A temporary employee does not become a regular employee by virtue of being employed longer than the agreed upon specified period.

4-8

Temporary employees are not eligible for benefits described in this Employee Manual, except as granted on occasion, or to the extent required by provision of state and federal laws. Those temporary employees classified as "non-exempt" (see the section titled "Non-Exempt and Exempt Employees") who work more than forty (40) hours during any workweek will receive overtime pay.

Uniforms

We provide uniforms which certain employees must wear while at work. Upon termination of employment, the uniforms must be returned or the cost will be deducted from your final paycheck. Please consult your immediate supervisor for more information.

Office Supplies

HMS provides and maintains a stock of basic office supplies (such as pens, paper clips, staples, note pads, etc.) for your business use. The office supply storage area is located in the reception/ administrative area. If you need a particular item which is not stocked, you can make a request through the receptionist. Office supplies are for business use only and should not be removed from the company premises for non-business use. Violations of this policy may result in discipline, up to and including termination.

Performance Evaluation

It is the policy of HMS to conduct performance evaluations for all employees on a periodic basis. The evaluation process documents each individual’s performance during the prior year. New employees may be reviewed near the end of their Probationary Period. A review may also be conducted in the event of a promotion or change in duties and responsibilities. Your evaluation date is your anniversary date. Your supervisor or manager will conduct the performance evaluation. Your performance evaluation may include, but is not limited, to the following areas:

The quality and quantity of work

Strengths and areas for improvement

Attitude and willingness to work

Initiative and teamwork

Attendance

4-9

Customer service orientation

Problem solving skills

Ongoing professional growth and development Additional areas may also be reviewed as they relate to a specific job. Employees will not be evaluated while off work due to a leave of absence. If an employee starts a leave of absence before his or her evaluation date, the effective date will be the date he or she returns to work from leave. Future evaluations dates will continue to be based on the original evaluation date.

Disciplinary Actions

It is the policy of the company to take appropriate disciplinary action when employees are found to have violated company policies, procedures, work rules, or otherwise conduct themselves in an unprofessional or inappropriate manner. Appropriate disciplinary action may involve progressive disciplinary measures; or may result in immediate discharge. The company’s policies, procedures, and work rules outlined in this employee handbook are not all-inclusive and may be changed periodically at the company’s sole discretion. You are required to periodically sign copies of company policies, procedures, and or work rules, including environmental, safety, and fire prevention rules. If you commit any of the actions listed below, or any other action not specified but similarly serious, you will be suspended without pay pending an investigation of the situation. Following the investigation you may be terminated without any previous disciplinary action having been taken.

Theft

Falsification of HMS's records and other forms of dishonesty

Failure to follow safety practices

Breach of Confidentiality Agreement

Threat of, or the act of, doing bodily harm

Willful or negligent destruction of property

Use and/or possession of intoxicants, drugs or narcotics, weapons, guns or knives

You have the right to appeal or question any disciplinary action by written notification to Human Resources.

4-10

The provision of this Disciplinary Policy is not a guarantee of its use. Nothing in this policy changes the at-will nature of the employment relationship. Additionally, HMS reserves the right to prosecute any employee for any of the above infractions.

Formal Complaint Process

It is the policy of the company to provide a Formal Complaint Process for all employees to voice concerns, problems, and/or complaints. Any formal complaint brought to the attention of management through this process will be investigated thoroughly and resolved. The Formal Complaint Process is intended to be used for issues such as conflicts with supervisors or co-workers, concerns about policies or discipline, and so on. You do not need to follow this process to report discrimination, harassment, or illegal activity. Step 1

Employees — Fill out a formal complaint form and submit it to Human Recourses who will provide the complaint to your immediate supervisor for response. If the conflict involves the immediate supervisor, you may begin the complaint process with Step 2.

Immediate Supervisor — Within ten (10) workdays, notify the employee in writing of the decision, or notify the employee of additional time needed to investigate further.

Step 2

Employees — If unsatisfied with the immediate supervisor’s response, add remarks and send the report within five (5) workdays to Human Resources who will provide the complaint to next higher level of management in the area.

Higher Level of Management — Within five (5) workdays, notify the employee in writing of the decision, or notify the employee of additional time needed to investigate further.

Step 3

Employee - If unsatisfied with the reply from the next higher level of management, request that Human Resources forward the issue be to the corporate office.

Corporate Office — The corporate officer will render a decision in writing, or may call a meeting to discuss the matter. The decision reached at this step is final. All parties will be fully informed of the final action taken.

4-11

NOTE: If you feel uncomfortable presenting a matter at a particular step because the person responsible for receiving complaints at that step is directly involved in the matter, you may bypass that step or you may contact Human Resources directly at any time during the process. The Formal Complaint forms are available from Human Resources. Reports must be fully completed and signed to be officially considered. In cases of extenuating circumstances and in the interest of adequate answers or solutions, time limits may be extended. Should the complaint form be used to express disagreement with a company policy or practice, you will be expected to comply with the disputed policy or practice until the disagreement is resolved or the policy or practice is changed. You will not be penalized for properly using the Formal Complaint Process. The complaint process must not be used for unfounded complaints, or as a means to harass a co-worker or supervisor.

Personnel Records and Administration

The task of handling personnel records and related personnel administration functions at HMS are the responsibility of the Human Resources Department. Questions regarding benefits, wages, and interpretation of policies may be directed to Human Resources or your immediate supervisor. As personnel records are confidential files, they are available only to:

the Employee (by appointment)

the Employee’s Supervisor

the CEO

the Vice President

the General Manager

the Personnel Officer You may see information which is kept in your own personnel file in accordance with state regulations. Personal information concerning an employee, or the employee’s personnel file, will be released only with the employee’s permission or through a valid and lawful subpoena. No original documents will be removed from employee files without the approval of a company officer. Personnel records will not be released to any subsequent employer or person to whom an employment application has been made without the written consent of the employee and only upon the employee signing a release granting a full indemnity to HMS. Please make arrangements with the Human Resources Department.

4-12

It is the policy of the HMS to maintain current contact information on all employees. Notify the Human Resources Department when there are changes to the following:

Legal name

Home address and/ or mailing address

Home telephone number

The person to notify in an emergency

Marital status

Number of dependents

Change of beneficiary – life insurance, 401(k) plan, optional LTD and/ or STD

Tax form W-4 changes

Driving record or status of driver's license, if you operate any OTB vehicles

Professional License

Training Certificates

Military or draft status Upon experiencing a family status change, please notify Human Resources within 30 days for benefit modifications, if necessary. Failure to notify the company of changes to your contact information may create delays in providing certain benefits. Medical Records

All medical records, if any, will be kept in a separate confidential file. HMS maintains this information in the strictest confidence and may not use or disclose medical information about an employee without the employee first having signed an authorization form permitting such use or disclosure.

Outside Employment

Employees may not take an outside job, either for pay or as a donation of her/his personal time, with a customer or competitor of HMS; nor may they do work on their own if it competes in any way with the services we provide our customers. If your financial situation requires you to hold a second job, part-time or full-time, or if you intend to engage in a business enterprise of your own, HMS would like to know about it. Before accepting any outside employment you are requested to discuss the matter with your immediate supervisor or Human Resources Department.

5-1

CHAPTER 2 COMPENSATION

It is the policy of the company to establish compensation levels and ranges for each position based on job requirements, responsibilities, company affordability, and what similar companies in size and function pay for comparable positions (market trends). The goal of HMS's compensation program is to attract potential employees, meet the needs of all current employees and encourage well-performing employees to stay with the organization. HMS applies the same principles of fairness to all employees, regardless of organizational level, race, color, citizenship status, national origin, ancestry, gender, sexual orientation, age, religion, creed, physical or mental disability, marital status, veteran status, political affiliation, or any other factor protected by law. Compensation matters are to be treated as confidential information.

Payroll Cycle

It is the policy of HMS to issue employee paychecks semi-monthly; no later than 5 business days after the close of a pay period. The pay periods are the 1st through the 15th and the 16th through the end of the month. If you have direct deposit you will receive a notice your account has been credited. If you do not have direct deposit, your paycheck/stub will be mailed to your place of residence.

Payroll Direct Deposit

Payroll direct deposit is the automatic deposit of pay into the financial institution accounts of an employee’s choice. Employees are encouraged to contact Payroll or Human Resources for details and the necessary authorization forms.

Payroll Deductions

FICA, federal, state, and local income taxes are deducted from paychecks according to the law. Other deductions can only be made with your authorization. These deductions may include, but are not limited to, the following:

401(k) contributions;

Group health and/or dental plan premiums;

Flexible spending account premiums;

Dependent care program;

Voluntary life insurance premiums;

5-2

Voluntary LTD and/or STD premiums

Union dues and/or initiation fees; Court-issued wage assignment or garnishments are deducted according to court order.

Payroll Advance

In emergency situations, HMS may grant an advance on the next payroll. As this is for emergencies only; advances will only be granted only once per year to those employees with at least one prior year of continuous service. All advances must be pre-approved through your immediate supervisor and Human Resources. Maximum amount of advance will be the amount of one gross payroll check for a two week pay period. The repayment period for advances shall not exceed two months (four pay periods). Should your employment terminate before the repayment period is complete HMS will deduct repayment amount from final payroll.

Error in Pay

Every effort is made to avoid errors on paychecks. If an error has been made, employees should contact their supervisor immediately. He/she will take the necessary steps to research the problem and to assure that any necessary correction is made promptly.

Overtime

It is the policy of HMS to comply with all federal and state regulations pertaining to overtime compensation. It is also the policy of the company to require mandatory overtime as needed to meet business needs. The company will attempt to give as much advance notice as possible for mandatory overtime. However, you may be required to work overtime without advance notice. Vacation days, sick days, paid holidays, funeral leave, and other paid absences do not count as hours worked for overtime purposes. Non-mandatory overtime hours must be approved in advance by a supervisor or manager. Exempt Employees

Employees who are classified as exempt do not receive overtime or compensatory (“comp”) time. They are paid to fulfill all responsibilities of their jobs, regardless of the hours required.

5-3

Non-Exempt Employees (Shop & Office)

Employees who are classified as non-exempt from the Fair Labor Standards Act will be paid overtime for straight-time hours worked over 40 in one workweek at the rate of one and one-half (1.5) times their normal, straight-time rate of pay. (Per state regulations, CA employees will be paid overtime for straight-time hours worked over 8 in a day at the rate of one and one-half (1.5) times their normal, straight-time rate of pay.) Vacation, sick leave, holidays and other paid time off work, as well as hours paid at time and one-half (1.5) are not considered for the purpose of calculating overtime pay. Maritime Employees

Employees in this classification do not receive overtime for work aboard tugs or barges. Vessel crews shall be available for duty for a period of twenty-four hours each day they are assigned to the vessel, whether it is underway or moored. Shore Based Tankermen

Employees in this classification receive overtime after twelve (12) consecutive hours on the job at the rate of 1.5 times their normal hourly wage. Work hours for pay purposes include travel time per the standard travel allowance table and assigned operating base. Travel time at the end of an assignment shall be considered an extension of time worked for pay purposes and paid at the overtime rate if it exceeds the 12th hour. Work Performed on Company Holidays (Office & Shop Personnel)

Full-time "non-exempt" employees who work on a company holiday are considered to have worked overtime on that day and will be paid time and a half (1.5) for all hours worked, regardless of the number of hours worked during that same work week. (Per state regulations, CA employees will be paid overtime for straight-time hours worked over 8 in a day at the rate of one and one-half (1.5) times their normal, straight-time rate of pay.) Vacation, sick leave, holidays and other paid time off work, as well as hours paid at time and one-half (1.5) are not considered for the purpose of calculating overtime pay. Holiday Pay (Crew Members)

All crewmen working on holidays will be paid time and a half (1.5) times their regular rate. Holiday Pay (Tankermen Personnel)

Tankermen will be paid time and a half (1.5) for the first twelve (12) hours and double time (2) for anything over and above. Note: Please see the Holiday Schedule in the section titled "Leaves" of this Employee Manual for further information.

5-4

On Call Pay

Occasionally, departments may ask employees to return to work after they have left the premises for the day, or they may even be asked to work on weekends or holidays. If this occurs, crewmen, maintenance personnel, terminal personnel, and office personnel will be guaranteed a minimum of four (4) hours of pay, tankermen are guaranteed a minimum of four (4) hours if already dispatched and job is canceled, or eight (8) hours if on the job, or the actual time worked, whichever is greater. It is expected that any employee contacted who is not fit to respond to the need to resolve a problem either by phone or by coming on-site will advise the caller of that fact. The caller will then need to contact another employee. An employee may not be the assigned on-call person if he or she is not working due to a pre-planned absence, such as vacation or a leave of absence.

Company and Department Meetings

On occasion, we may request that you attend a company sponsored meeting. If this is scheduled during your regular working hours, your attendance is required. If you are a non-exempt employee and attend a meeting held during your non-working hours, you will be paid for the travel time to and from the meeting, as well as for time spent at the meeting.

After-Hours Work

It is the policy of HMS to comply with all state and federal wage and hour laws. The company is required to compensate you for all work performed. The company understands that you may need to work late or otherwise work outside of scheduled hours. For non-exempt employees such work should only be performed with the approval of a supervisor or manager. You are required to record all such hours worked. If you work outside of regularly scheduled hours without authorization, or work unauthorized overtime, you may be subject to discipline for failing to follow company procedures by requesting approval in advance, or for working unauthorized overtime. The company reserves the right to change work schedules or to require mandatory overtime, with or without advanced notice. If you need to work after hours or work overtime, you must request approval from your immediate supervisor. If the company requires you to work outside of normally scheduled hours, or to work mandatory overtime, you will be given as much notice as possible.

5-5

Advanced notice may not be possible in all cases, but these scheduling changes are considered mandatory working hours. If you refuse to work required hours, you may be subject to discipline. The company will strive to accommodate your needs when conflicts arise between mandatory after-hours work and personal obligations. However, accommodations will not be made if they create an undue burden on other employees.

Payroll Records

It is the policy of HMS to keep an accurate record of all hours worked by employees for benefit and compensation programs. You are required to accurately record all hours worked using the appropriate payroll codes. You must account for all hours you are regularly scheduled to work each day. Hours are to be rounded to the nearest fraction of an hour, i.e., quarter hour. Your supervisor must sign-off on your payroll report. Misrepresentation of time is subject to disciplinary action, up to and including termination.

Business Travel & Expense Reimbursement

It is the policy of the company that all personal expenses incurred when traveling on business are the employee’s responsibility. However, the company will reimburse legitimate business expenses. Business expenses should be charged on company credit card if provided, a personal credit card or paid in cash, with the exception of air fare or car rental which are direct-billed to the company. Upon return from the business trip, you must submit all eligible expenses by completing a reimbursement form, accompanied by receipts, and sending them to the Accounting Department. Questions about eligible expenses should be directed to your direct supervisor. Expense reports are due monthly. Eligible expenses include but are not limited to:

Lodging (in-room movies and use of hotel gym, massage services, or similar services will not be reimbursed).

Taxi fares and parking fees.

Mileage or other transportation.

Meals and entertainment (when traveling overnight, employees will be reimbursed for meal expenses).

5-6

Telephone (including cell phone) and internet charges for business purposes.

Gifts (if approved). Unusual or excessive expenses may not be reimbursed. You are expected to limit expenses as much as possible. The company reserves the right to limit reimbursement to reasonable expenses. In case of financial hardship, an advance for travel may be granted. You must complete a check request and have it authorized by your immediate supervisor. When submitting an expense report upon return, you must deduct the advance from the total expenses and submit a check for any amount remaining (if any) due to the company. The company reserves the right to withhold reimbursement while it investigates expense report items. If you are asked to conduct company business using your personal vehicle, you will be reimbursed at the current IRS Standard Mileage Rate. Please submit this expense on your weekly expense report or voucher.

Wage Garnishments

HMS hopes employees will manage their financial affairs so that they will not be obligated to execute any court-ordered wage garnishments. However, when court-ordered deductions are to be taken from your paycheck, you will be notified. HMS acts in accordance with the federal Consumer Credit Protection Act, which places restrictions on the total amount that may be garnished from your paycheck. Employees whose pay is garnished by three or more separate creditors during a twelve (12) month period may be terminated. HMS reserves the right to charge a processing fee for any and all court-ordered wage garnishments.

Compensation Reviews

An individual's pay will depend on how consistently he/she performs over a given period of time. During the review, significant performance events that occurred throughout the year will be discussed. The overall performance rating will influence the compensation adjustment. Any applicable compensation increase will appear in the pay period ending after the date granted. Compensation increases may be retroactive in the case of late reviews. Having compensation reviewed does not necessarily mean an individual will be given an increase due to his/her or company performance.

5-7

In addition to individual job performance reviews, HMS periodically conducts a review of job descriptions to ensure that we are fully aware of any changes in the duties and responsibilities of each position and those changes are recognized and adequately compensated.

Promotion and Transfer Policy

HMS has a policy to provide employees with every opportunity of advancing to other positions within the company. Approval of promotions or transfers depends largely upon training, experience, and work record. Promotions and transfers are made without regard to race, color, citizenship status, national origin, ancestry, gender, sexual orientation, age, religion, creed, physical or mental disability, marital status, veteran status, political affiliation, or any other factor protected by law. However, HMS will continue to look outside the company for potential employees as well.

6-1 Employee Manual

Rev. 04/01/09

CHAPTER 3 BENEFITS

HMS is committed to sponsoring a comprehensive benefits program for all eligible employees. In addition to receiving an equitable salary and having an equal opportunity for professional development and advancement, employees may be eligible to enjoy other benefits that will enhance their job satisfaction. The benefits program described in this Employee Manual represents a very large investment by HMS. A good benefits program is a solid investment in HMS's employees. HMS will periodically review the benefits program and will make modifications as appropriate to the industry conditions, as well as the company’s. HMS reserves the right to modify, add or delete the benefits it offers.

Eligibility for Benefits

Regular full-time employees will enjoy all of the benefits described in this Employee Manual as soon as they meet the eligibility requirements for each particular benefit. Coverage is available to them and their dependents as defined in the benefit summary plan descriptions. The minimum work hours required for medical benefit eligibility is 30 hours per week. The hours will be averaged over the length of the calendar month so that if on schedule, employees will not have to worry about coverage. They will also be given full credit for vacation and sick leave benefits. Below is a sample schedule that satisfies company paid benefits requirements:

Week 1 0 hours 0 days Week 2 84 hours 7 days Week 3 0 hours 0 days Week 4 60 hours 5 days

144 hours 12 days If employees work less than the minimum number of hours, they will be eligible for continued benefits at their own expense on a month-to-month basis through COBRA. Notification will be sent to employees in this category during the first week of each month following a month in which minimum hour requirements are not achieved. Vacation and sick leave benefits will be accrued each pay period based on hire date. (See Ch. 7 “Leaves” for more information.) Eligibility for 401(k) retirement plan participation may also be adjusted as a result of not meeting minimum hour requirements. “Hours worked” includes all paid hours, approved vacation time, approved leaves (i.e. sick leave, bereavement leave, etc.) and time spent at approved schools for continuing education.

6-2 Employee Manual

Rev. 04/01/09

Part-time employees will enjoy only those benefits specifically required by law, provided that they meet the minimum requirements set forth by law and in the benefit plan(s). Temporary employees are not eligible for benefits. No benefits are available to employees during their Introductory Period, except as otherwise provided by law. Note: Please see "Introductory Period" in the Employment section of this Employee Manual for further information.

Insurance Coverage

Group Insurance

HMS is dedicated to the health and well being of both you and your family. A comprehensive, quality insurance program is available to you and your family. You become eligible for coverage at the beginning of the month, after the first three (3) months of employment. You must enroll in the health plan within 30 days of your eligibility or you forfeit coverage. Upon enrolling, employees will obtain summary plan descriptions describing benefits in detail. According to the federal Consolidated Omnibus Budget Reconciliated Act (COBRA) of 1985, in the event of termination of employment with HMS or loss of eligibility to remain covered under our group health insurance program, employees and their eligible dependents may have the right to continued coverage under our health insurance program for a limited period of time at their own expense. Consult Human Resources for details. Life and Accidental Death Dismemberment Insurance

HMS provides this benefit at no cost for all regular, full-time employees. For further details on coverage information, please refer to the Summary Plan Description. Questions about the employer-paid life insurance plan or to file a claim should be directed to Human Resources. Additional Information Premium costs for more than $50,000 of life insurance are also reported on W-2 forms in line with IRS regulations, and appear on your paystub.

6-3 Employee Manual

Rev. 04/01/09

Retirement Plan—401(k) Retirement Savings Plan

It is the policy of HMS to provide a 401(k) retirement savings plan to help you prepare for retirement. The plan allows you to elect the amount of your wages or salary to contribute and to direct the investment of your funds. The company matches up to 5% of your contribution. To be eligible to join the 401(k) Plan, you must be at least 21 years of age and have 1 year of service (12-consecutive months). Upon becoming eligible, you may join the plan during the 2 open enrollment periods, January 1st or July 1st of every year. Shortly before eligibility, you will be given the Summary Plan Description for review and all necessary forms to complete to participate. Further details regarding eligibility, contributions, vesting, investments and administration are provided in the Summary Plan Description. As with other benefits provided by the company, this policy is not a binding agreement. The Summary Plan Description and the Plan itself govern. Additional Information Note that IRS limits on annual deferrals apply and that contributions to this plan, when combined with other plans in which you participate, may not exceed those IRS limits. You may contact Human Resources for information on the current IRS limits and for information other plans subject to these limitations.

Employee Assistance Program (EAP)

Another great benefit HMS offers is the employee assistance program (EAP) to all employees and their dependents. The EAP is designed to offer confidential consultation and counseling services to employees and their dependents who are experiencing problems which may be impacting their life at work and/or at home. Some of these problems may include, but are not limited to: family, marital, alcohol/drug, emotional distress, and job-related, legal, or financial difficulties. The company will pay the EAP provider for a maximum of up to three sessions for each situation. Employees who receive referral counseling/treatment not covered by insurance or other benefits are responsible for payment of those services. EAP services are provided by Magellan Health Services. To schedule an appointment, call (800) 523-5668. Questions about the EAP should be directed to Human Resources.

6-4 Employee Manual

Rev. 04/01/09

Confidentiality is one of the most important aspects of this program. For individuals that contact the Employee Assistance Program directly, no one in the company will know unless the individual tells them. No information concerning the nature of problems will be released without written consent.

Education Assistance/ Reimbursement

We feel an individual who possesses a desire to continue their education, in addition to performing their full-time job, shows a commitment to improving themselves and their position within the company. To encourage and reward these individuals, HMS offers an Education Assistance benefit. Full-time employees may continue their education in a related field and HMS may reimburse all or part of the registration and tuition costs. All courses must be pre-approved by a supervisor. Once the course is completed, a certified transcript of grades with receipts for expenses must be submitted. HMS will reimburse individuals as described below for the portion of the fees that were pre-approved. This may include fees for registration, tuition, books, and additional lab fees. Reminder: If taking a pre-approved seminar that offers continuing education credit, employees must give their supervisor a copy of the Continuing Education Credit Certificate (or other document) to include in their personnel file. In order to qualify for this Education Assistance benefit an employee must: 1. Advise his/her supervisor, prior to enrolling for the class that he/she intends to

take a particular course. Supervisors will let the employee know if the course qualifies for the Education Assistance Program.

2. The course must be job-oriented and offered by an approved educational

institution. 3. The amount of course reimbursement is based on the final grade of C or

above. If grades are not applicable, certificate of completion will be required for reimbursement.

4. He/she must have at least one (1) year of full-time service with HMS.

5. He/she must sign a contract to remain with HMS for one (1) year following reimbursement or the full amount of the educational assistance shall be deducted from his/her final check. And, should employment terminate for any reason within two (2) years after completing the course half of the tuition and any related expenses will be deducted from his/her final check.

6. If an employee is eligible to receive educational benefits from other alternate

sources HMS may not reimburse his/her educational expenses.

6-5 Employee Manual

Rev. 04/01/09

In addition to educational assistance for formal education, HMS may arrange training programs that enable employees to progress in their technical knowledge of our business. If employees become aware of a particular seminar that they believe is appropriate for enhancing their skills and/or those of other employees, please bring it to the attention of management. Since these seminars are usually offered only at specified times within a geographical area, please be sure to notify designated company representatives as far in advance as possible. This way, he/she can attempt to schedule workloads to accommodate individual (and/or other employees') desires to attend the seminar. Department budget restrictions may have an impact on obtaining approval.

Other Benefits

Optional Life Insurance, Short-Term & Long-Term Disability

HMS provides regular, full-time employees with the option of purchasing Optional Life Insurance, Short-Term Disability (STD) and Long-Term Disability (LTD) benefits, at their own expense. Further details regarding eligibility, rates, benefit payments and administration are provided in the Summary Plan Description for each selected option. As with other benefits provided by the company, this policy is not a binding agreement. The Summary Plan Description and the Plan itself govern. Questions can be directed to Human Resources.

Employee Manual Rev. 04/09/2013

7-1

CHAPTER 4 LEAVES

Both paid and unpaid time off may be granted to eligible employees, according to the following leave policies. Please consult the Human Resources Department for further information.

Paid Leaves

In the interest of maintaining a healthy balance between work and home, HMS offers eligible regular full-time employees paid time off. Time off is paid at the employee’s base hourly rate, excluding shift premiums and overtime compensation, if any. Holidays

HMS recognizes ten (10) paid holidays during the year for eligible employees. They are: New Year's Day Martin Luther King, Jr. Day President's Day Memorial Day Independence Day Labor Day Veteran’s Day Thanksgiving Day Day After Thanksgiving Christmas Day All full-time, regular employees are eligible for holiday pay. There is no waiting period. Part-time, temporary, seasonal, and contract employees are not eligible for holiday pay. In order to qualify for holiday pay, employees must be in pay status immediately before and after the holiday. Only excused absences will be considered exceptions to this policy. Full-time regular employees will receive pay for eight hours. Paid holiday hours do not count as hours worked for purposes of overtime calculations. If a holiday occurs during a scheduled vacation, employees are eligible for holiday pay. Crewmembers and tankermen must work the holiday to qualify for holiday pay, see Ch. 2 “Compensation” under “Holiday Pay” for further details.


7-2

Other holiday observances

If you wish to observe other holidays or personal religious holidays, you may request time off. If available, a full day of unused vacation leave must be used for this purpose, or it will be unpaid. Time off must be scheduled with the employee’s supervisor at least two (2) weeks in advance. If any designated holiday falls on a Saturday, it will be observed on the preceding Friday. When it falls on a Sunday, the holiday will be observed on the following Monday (unless the nation schedules otherwise.) Each year, Human Resources prepares of list of paid holidays based on the date of the holiday. This list is available from the Human Resources Department. Employees are not eligible to receive holiday pay when they are on an unpaid leave of absence. Vacations

Vacations are granted in recognition of employee service so that employees may enjoy a time of rest and relaxation. All employees are encouraged to take a vacation each year. Full time employees are eligible for vacation with pay after continuous employment for one year. Part-time, temporary or seasonal employees do not accrue vacation. Exceptions require the approval of the General Manager. Vacation benefits will accumulate on all hours worked following one year’s continuous employment. After one year’s continuous employment, vacation will accrue at a percentage rate based on years of service to the company. However, vacation will never accrue beyond the maximums set, so employees must use it by their anniversary date. Vacation will be paid out at the primary rate of pay of the employee. Marine personnel may cash out accrued vacation hours at any time. Administrative personnel accrue as follows:

Years of Continuous Service

Equivalent Annual Vacation

(Based on 2080 hours/year)

Vacation Earning Rate

Maximum Vacation Carry-over

1 – 5 Years 80 hours 3.33 hours/ pay

period 120 hours


period 160 hours


7-3


period 200 hours

More than 15 years 200 hours 8.33 hours/ pay

period

240 hours

Marine personnel (crews & dispatch) accrue as follows:

Years of Continuous Service

Equivalent Annual Vacation

(Based on 2080 hours/year)

Vacation Earning Rate

Maximum Vacation Carry-over

Upon 1 Year Anniversary Date

40 hours 1.67 hours/ pay

period 80 hours

2 - 5 Years 80 hours 3.33 hours/ pay

period 120 hours

6 - 10 Years 120 hours 5.00 hours/ pay

period 160 hours


period

200 hours

More than 15 Years 200 hours 8.33 hours/ pay

period 240 hours

**If an employee has not worked at least 2,080 hours; their vacation accrual will not be at the maximum amount. A paid holiday falling within a vacation is counted as a holiday, not a vacation day. Vacation days are normally paid in eight (8) hour increments, however marine personnel can choose to be paid for 12-hour vacation days, but they will have fewer days off with pay. Employees will not be allowed to take vacation days before they are earned or “go in the negative.” A positive vacation balance must be large enough to cover the requested leave before a paid leave will be approved.

HMS will always try to let an employee use his/her vacation time as desired, but vacations cannot interfere with his/her department's operation. Therefore, an employee’s supervisor must approve a vacation at least two weeks in advance.


7-4

Any conflicts that may arise in vacation requests will be handled on a case-by-case basis. An employee’s supervisor must approve specific vacation dates. Supervisors have the responsibility of maintaining adequate staffing levels and the authority to limit the approval of vacation requests in order to meet operational needs. Requests will normally be granted as long as the employee’s absence will not seriously affect HMS's operations. Usually, only one employee may be out on a vacation day in a department at any one time. If you are on an approved leave of absence for less than thirty (30) days, your vacation eligibility will not be affected. Any unused vacation days accrued upon termination of employment with HMS will be paid out at an employee’s regular base hourly rate. Sick Leave

Sick leave for all regular, full-time employees will accrue at the rate of two (2) hours per pay period (equal to 48 hrs or 6 days a year). Sick leave may be used for:

Personal illness

Illness of a family member

Doctor/dental appointments

Other pre-approved requests HMS may, in its sole and absolute discretion, require a doctor's certificate verifying the necessity for absence(s) and the specific illness, injury, or other disability to which the absence is attributed. Sick leave accruals will commence immediately with employment. Regular, full-time employees may use accrued sick leave after completing the probationary period of employment and accumulate up to a maximum of 240 hours (30 days). If your classification changes during the business year, the appropriate adjustment/payout will be made to your balance. Part-time employees do not accrue sick leave. If an employee is on an approved leave of absence for less than thirty (30) days, his/her sick leave eligibility will not be affected. Any accrued sick leave will be paid at the time the leave begins. Non-exempt employees may use their sick leave in units of no less than two (2) hours at any one time and no more than eight (8) hours for each missed work day. (NOTE: Maritime Personnel may use sick leave in units of twelve (12) hours,


7-5

if requested.) Employees need to let their supervisor know if they will be absent from work due to illness as early as possible. Normally, only accrued sick leave may be taken. Sick leave is allowed for use during regularly scheduled work days. You cannot use sick leave while on vacation or when observing a holiday. Sick leave is not allowed for tardiness, and cannot be used as additional vacation days. Sick leave hours are not included in determining actual hours worked when overtime is computed. Sick leave may be carried over and accumulated from year to year, up to a maximum of thirty (30) days. Once the full bank of two hundred forty (240) hours has accumulated, additional accrued sick leave will be paid out as straight-time pay at your current rate of pay on an annual basis. Sick leave requests must be documented on a PAF (Personnel Action Form). If you call in sick, the form must be completed upon return to work for approval or denial of the time. Make-up time may be allowed, based on business needs and when authorized by a supervisor or manager. In certain areas or departments, it is not feasible to authorize make-up time due to business workload and other constraints. In the event of an illness or injury that is covered by workers' compensation insurance, this Sick Leave Policy will not apply, but will defer to state statutes. If the company determines that an employee is abusing the sick leave program, that employee will be subject to appropriate disciplinary action. Employees who terminate employment with the company for any reason will not receive pay for unused hours. Funeral (Bereavement) Leave

It is the policy of HMS to grant paid funeral/bereavement leave to eligible employees. Full-time regular employees may take up to three (3) working days (24 hours) off (not charged to other leave time) with management approval for the death of a:

Spouse/domestic partner

Child/step-child

Parent/in-law/step-parent

Sibling/in-law/step-sibling

Son/daughter in-law

Grandparent/in-law/step-grandparent


7-6

Grandchild/step-grandchild With a supervisor’s approval, an employee may take up to one full day without pay to attend funerals of other relatives and friends. Unused personal leave or a day of accrued vacation may be used for this purpose. Funeral leave will only be paid to employees for actual time spent away from work to attend the funeral or its arrangements. For example, if the death occurs at a time when work is not scheduled, payment will not be made. If you are on vacation when a death in the immediate family occurs, you will have the option to request a reclassification of vacation time to funeral leave. You must notify your supervisor, who will advise Human Resources. You may take additional time off either as paid vacation or time off without pay with management approval when extenuating circumstances exist (i.e., distance required to travel).

Unpaid Leaves

Occasionally, for medical, personal, or other reasons, employees may need to be temporarily released from the duties of their job with HMS. It is the policy of HMS to allow its eligible employees to apply for and be considered for certain specific leaves of absence. For non-exempt employees time off for any reason during a working day will count first against your allotted vacation days, as appropriate, in hourly increments. Once you have used all of your accrued vacation days, the time may be counted against your accrued sick time. Thereafter, unless specifically accepted, any time off will be without pay. Failure to return to work as scheduled from an approved leave of absence or to inform a supervisor of an acceptable reason for not returning as scheduled will be considered a voluntary resignation of employment. All requests for leaves of absence shall be submitted in writing to your supervisor for review. Each request shall provide sufficient detail such as the reason for the leave, the expected duration of the leave, and the relationship of family members, if applicable. Jury Duty

It is the policy of HMS to cooperate with local, state, and federal courts in allowing employees to serve on juries and as witnesses. If you receive a summons to serve as a juror, you must notify your supervisor within forty-eight (48) hours of receipt of the jury summons.


7-7

You will be expected to report to work on any day that you are excused from jury/witness duty and there are four (4) hours or more remaining in your regular work schedule. From time to time, employees may be required to appear in court as witnesses in their own personal legal matters, or in the matters of other parties. If you are required to appear in court for a legal matter, you may take vacation or leave without pay.

Family and Medical Leave

It is the policy of Harley Marine Services, Inc. to provide family and medical leave in accordance with the federal Family and Medical Leave Act (FMLA) and state law. If your absence qualifies as FMLA leave under both state and federal laws, you will use your entitlement under each law at the same time, to the extent permitted by law. If one law provides a greater benefit, you will receive the greater benefit. For purposes of this manual, federal FMLA is covered. For state specifics, please contact Human Resources. If you are not eligible for FMLA leave, use up your FMLA leave, or wish to take leave for a purpose that does not qualify for FMLA, you should consult the company’s other leave policies to determine if other leave might be available.

Eligibility

To be eligible for FMLA leave, you must have worked at least 12 months for the company, been employed for at least 1,250 hours during the 12 months preceding the commencement of leave, and must be employed at a worksite where at least 50 employees are employed within 75 miles of the worksite.

Types of absences covered

Under the FMLA, eligible employees may take up to 12 weeks of unpaid leave in the designated 12-month period for any of the following:

For incapacity due to pregnancy, prenatal medical care, or child birth;

To care for the your child after birth, or placement for adoption or foster care;

To care for the your spouse, son or daughter, or parent, who has a serious health condition;

For a serious health condition that makes you unable to perform your job; or


7-8

For a qualifying exigency, as described below. NOTE: A serious health condition is an illness, injury, impairment, or physical or mental condition that involves either an overnight stay in a medical care facility, or continuing treatment by a health care provider for a condition that either prevents you from performing the functions of your job, or prevents the qualified family member from participating in school or other daily activities. Subject to certain conditions, the continuing treatment requirement may be met by a period of incapacity of more than three consecutive calendar days combined with at least two visits to a health care provider or one visit and a regimen of continuing treatment, or incapacity due to pregnancy, or incapacity due to a chronic condition. Other conditions may meet the definition of continuing treatment. Eligible employees with a spouse, son, daughter, or parent on active duty or call to active duty status in the National Guard or Reserves in support of a contingency operation may use their 12-week leave entitlement to address certain qualifying exigencies. Qualifying exigencies may include attending certain military events, arranging for alternative childcare, addressing certain financial and legal arrangements, attending certain counseling sessions, and attending post-deployment reintegration briefings. In addition, an eligible employee may take up to 26 weeks of unpaid leave during any single 12-month period to care for a spouse, son, daughter, parent, or next of kin who is a covered military service member and incurred a serious injury or illness in the line of military duty. A covered service member is a current member of the Armed Forces, including a member of the National Guard or Reserves, who has a serious injury or illness incurred in the line of duty on active duty that may render the service member medically unfit to perform his or her duties for which the service member is undergoing medical treatment, recuperation, or therapy; or is in outpatient status; or is on the temporary disability retired list. You do not need to use your leave entitlement in one block. Leave may be taken intermittently or on a reduced leave schedule when medically necessary. You must make reasonable efforts to schedule leave for planned medical treatment so as not to unduly disrupt the employer’s operations. Leave due to qualifying exigencies may also be taken on an intermittent basis.

Benefits and protections

During FMLA leave, HMS must maintain your health coverage under any group health plan on the same terms as if you had continued to work. Upon return from FMLA leave, you must be restored to your original or equivalent position with equivalent pay, benefits, and other employment terms. Use of FMLA leave cannot result in the loss of any employment benefit that accrued prior to the start of FMLA leave.


7-9

You will be informed whether you are eligible under FMLA. If you are, HMS must specify any information required and explain your rights and responsibilities. If you are not eligible, HMS must provide a reason for the ineligibility. You will be informed if leave will be designated as FMLA-protected and the amount of leave counted against your leave entitlement. If the leave is not FMLA-protected, you will be notified of that fact.

When to request leave

Where leave is foreseeable, you should make a request for leave at least 30 days in advance. Foreseeable leave should be scheduled so that it does not unduly disrupt the employer’s operations. Where 30 days advance notice of the need for leave is not possible, you must provide notice as soon as practicable and generally must comply with normal call-in procedures. If the circumstances change such that the amount of leave needed changes, you should provide notice of the change within two business days.

Notifications and certifications

When requesting leave, you must provide sufficient information to permit a determination of whether the leave may qualify for FMLA protection and the anticipated timing and duration of the leave. You also must indicate if the requested leave is for a reason for which FMLA leave was previously taken or certified. After requesting leave or indicating a need for leave, you will be given a “Notice of Eligibility” and a “Rights and Responsibilities” notice explaining your eligibility and expectations. You may also be required to provide certification supporting the need for leave. You will have 15 calendar days to return a complete and sufficient certification. When a complete and sufficient certification has been returned (or when you have otherwise provided sufficient information to designate the absence as FMLA), HMS will provide you with a “Designation Notice” that indicates whether your leave qualifies for FMLA and, if so, describes the conditions of the leave and the requirements for returning to work. The company reserves the right to require a second or even third medical opinion, at the company’s expense. You also may be required to provide periodic recertification supporting the need for leave, and may be required to report periodically on your status and intent to return to work.


7-10

Pay during leave

Generally, family and medical leave absences are unpaid, but you may request to use paid leave (vacation, sick leave, PTO, etc.) while taking FMLA. The company reserves the right to require that you use paid leave during FMLA leave. In order to use paid leave, you must comply with normal paid leave policies. You may be eligible for compensation under a benefit program or other entitlement such as short-term disability, workers’ compensation, and so on. If you are receiving such benefits during FMLA leave, you cannot be required to substitute company paid leave (vacation, PTO, etc.). However, where state law permits, you and the company may agree to have paid leave supplement the disability plan benefits (i.e., where those benefits are less than your regular wages or salary).

Returning to work

You will be reinstated to the same job or an equivalent position upon completion of FMLA leave, except where denial of restoration is permitted by the FMLA. If you have exhausted all available leave and are still unable to return to work, you no longer have any job restoration rights under FMLA. However, each situation will be reviewed on a case-by-case basis to determine whether you may be eligible for rights and protections under other laws or company policies.

Fitness for duty

You are expected to return to work when released by a health care provider. You will need to provide a Fitness for Duty certification before returning to work if this requirement was indicated in the Designation Notice. The Fitness for Duty certification must be signed by a health care provider. If you are released for light duty work and are offered a light duty job but refuse, any short-term disability benefits you may be receiving may cease, depending on the terms of the plan. However, you may still use your FMLA entitlement to unpaid leave. Additional information If you suffer a work-related injury that is covered under workers’ compensation, and you are eligible for family and medical leave, any absences due to the injury may qualify for FMLA leave. Termination of employment may occur if you fail to return from leave at the time agreed upon (barring circumstances which required an extension of available leave) or if you are found to have taken leave on a fraudulent basis.


7-11

If your job evaluation date passes while on FMLA leave, you will receive the performance evaluation upon return, and the results of the evaluation (such as pay raises) will be effective as of the date of return to work. You will not continue accruing vacation time or other PTO during FMLA leave, consistent with company policy. If your annual vacation eligibility date (the date on which an annual vacation allotment is made available) passes while you are on FMLA leave, provision of the vacation allotment will be delayed until you return to work. Upon return, your “bank” of available vacation time will be credited with those hours. FMLA makes it unlawful for HMS to interfere with, restrain, or deny the exercise of any right provided under FMLA; or to discharge or discriminate against any person for opposing any practice made unlawful by FMLA or for involvement in any proceeding under or relating to FMLA. You may file a complaint with the U.S. Department of Labor or may bring a private lawsuit against HMS. FMLA does not affect any Federal or State law prohibiting discrimination, or supersede any State or local law or collective bargaining agreement which provides greater family or medical leave rights.

Military Leave of Absence

HMS may grant leaves of absence to certain eligible employees serving in the uniformed services, including but not limited to the United States Armed Forces or National Guard and Reserves, for periods of active service (including voluntary or involuntary service). It is also company policy to comply with the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA) and any applicable state laws.

Notification

Notice of uniformed service and the need for leave must be given in writing to Human Resources at the earliest possible date, but must be given prior to the beginning of the service. This notification requirement also applies if you serve in the National Guard and/or Reserves and will miss work for regular monthly training. National Guard and Reserve employees should provide notification of their monthly training schedule for the year as soon as it is available.

Benefits

Human Resources will determine and notify you of the benefit rights in accordance with all applicable laws.


7-12

Health Insurance

If you choose, health insurance coverage may continue in one of two ways. Coverage can continue under the federal law known as COBRA. Coverage can also continue under the federal law known as USERRA. COBRA generally provides coverage for 18 months, although this period can be extended in certain circumstances. USERRA is available only for individuals who qualify under this military leave policy. USERRA provides for up to 24 months of coverage after the uniformed service leave commences. If both COBRA and USERRA are elected, they run concurrently (i.e., at the same time) and not consecutively (i.e., not back-to-back). For the first 30 days of uniformed service, you will be required to pay your normal share of any premium. For uniformed service of 31 days or more, you will be required to pay 102% of the total cost of coverage (employer share plus your share), if you elect to continue coverage. If you will be on uniformed service leave of 31 days or more, you must notify Human Resources prior to the commencement of uniformed service that (1) you will be out on uniformed service; and (2) whether you elect to continue health insurance coverage. If you fail to satisfy both requirements because advance notice was not possible, was unreasonable, or was prevented by military necessity, plan coverage will be reinstated retroactively upon your election to continue coverage and payment of all amounts due. In this situation, your election and payment must occur within 30 days after is becomes possible for you to make the election. While on leave of up to 30 days, you may have your health insurance coverage continued without the need for notification. If health insurance coverage is cancelled because of uniformed service leave, such coverage may be reinstated upon your reemployment.

Reinstatement

HMS will comply with all federal and state military and/or uniformed service leave laws and reinstate employees who have been on a uniformed service leave of absence, provided: 1. You provide advance notice of your service; 2. You return to work or apply for reemployment in a timely manner after

conclusion of service; 3. You have five years or less of cumulative uniformed service while with the

company; and 4. You have not been separated from service with disqualifying discharge or

under other than honorable conditions.


7-13

Whenever possible, you will be returned to your former position. In some circumstances, such as if the position no longer exists, you will be given positions comparable in status and pay to the previous positions. You will retain seniority rights as if employment had been continuous and had not been interrupted by uniformed service. You will be eligible to participate in all benefit programs in which you would have participated had you not been on leave of absence. In certain instances, you may be required to undergo fitness-for-duty examinations prior to returning to work. Time limits for returning to work depend, with the exception of fitness-for-duty examinations, on the duration of the uniformed service. Service of 1 to 30 days

You must report to work by the beginning of the first regularly scheduled work day that would fall eight hours after the end of the calendar day on which service ended. Service of 31 to 180 days

You must submit an application for reemployment no later than 14 days after completion of uniformed service. Service of 181 or more days

You must submit an application for reemployment no later than 90 days after completion of uniformed service. Contact Human Resources for more information on the Military Leave of Absence policy and for information on planning a return to work after military leave or service.

Personal Leave of Absence

HMS may grant a personal leave of absence due to extenuating circumstances, but never for taking employment elsewhere or going into business for one’s self. Full-time, regular employees who have successfully completed the orientation period are eligible for an approved leave of absence. This leave may be used for personal needs, with approval, in addition to other types of leave provided by the company or as required by law.


7-14

All earned vacation time must be used prior to taking a personal leave. A leave of absence may not exceed a maximum of 30 days per calendar year. If you need to take a leave of absence due to personal reasons, submit your request to your immediate supervisor as far in advance as possible. If approved, the company will grant you an unpaid personal leave of absence for up to 30 days. If personal leave is extended for more than thirty (30) days, vacation and other benefits will no longer be in effect. Failure to return from a leave on the date approved will be considered a resignation. Holidays occurring during a personal leave of absence will not be paid. Additional information If your vacation eligibility date or performance evaluation date passes while on a personal leave of absence, you would become eligible for vacation or receive the performance evaluation effective on the date of return.

Accruing Paid Leave Benefits While on Leave

It is the policy of HMS to allow employees who are on certain types of leave to continue accruing paid leave benefits. While you are on paid leave, including vacation, sick leave, or other paid time off earned through company policies, you will continue to accrue paid leave benefits. You will not continue accruing paid leave benefits if you:

are on unpaid leave, or

are receiving income replacement benefits such as short-term disability, long-term disability, or workers’ compensation benefits.

If you take leave under the Family Medical Leave Act (FMLA), the terms for continued accrual depend on whether you are using paid company leave. During FMLA leave, you will continue accruing paid leave as long as you are using paid leave benefits as described above. If you use up all paid leave, the remainder of the FMLA leave will be unpaid. During the period of unpaid FMLA leave, you will not continue to accrue paid leave.

Insurance Premium Payment during Leaves of Absence


7-15

HMS will continue to pay its share of insurance premiums for employee coverage and dependent coverage for a maximum of three (3) months while an employee is on an FMLA-related leave of absence. While the employee is on any other type of unpaid leave of absence from HMS, he/she will be responsible for paying the total premiums for his/her coverage and that of his/her dependents. Failure to do so may result in loss of coverage and possible refusal by the insurance carrier to allow his/her coverage to be reinstated. Please consult the Human Resources Department personnel to set up a payment schedule.

Accepting Other Employment or Going into Business While on Leave of Absence

If an employee accepts any employment or goes into business while on a leave of absence from HMS, he/she will be considered to have voluntarily resigned from employment with HMS as of the day on which he/she began his/her leave of absence.

8-1

CHAPTER 5 SAFETY

HMS is committed to the safety and health of all employees and recognizes the need to comply with regulations governing injury and accident prevention and employee safety. Maintaining a safe work environment, however, requires the continuous cooperation of all employees. HMS will maintain safety and health practices consistent with the needs of our industry. If you are ever in doubt about how to safely perform a job, it is your responsibility to ask your immediate supervisor for assistance. Any suspected unsafe conditions and all injuries that occur on the job must be reported immediately. Compliance with these safety rules is considered a condition of employment. Therefore, it is a requirement that each supervisor make the safety of employees an integral part of her/his regular management functions. It is the responsibility of each employee to accept and follow established safety regulations and procedures. HMS strongly encourages you to communicate with your Safety Department regarding safety issues.

Designated Person Ashore (DPA)

The DPA’s are your direct link to top management in matters of Safety and

Environmental Protection.

In addition to their other responsibilities and authorities, as Management

Representatives and Designated Persons Ashore (DPAs), they have the

following specified responsibilities and authorities related to our Quality and

Safety and Environmental Management System:

Acting as liaison between the vessels and the highest level of

management for safety, quality and environmental protection.

Ensuring that sufficient resources and shore-based support are available

for the effective functioning of our Quality, Safety and Environmental

Management System.

Ensuring that processes needed for our Quality, Safety and Environmental

Management System are established, implemented, and maintained.

Ensuring both vessel and shore-based audits and management reviews of

our Quality, Safety and Environmental Management System are carried

out.

8-2

Ensuring that incident investigations and non-conformities are addressed

and, when applicable, lessons learned and corrective actions are

implemented.

Reporting on the performance of our Quality, Safety and Environmental

Management System to other Management personnel, including any need

for improvement.

Ensuring the promotion and awareness of customer requirements

throughout our organization.

Ensuring qualified personnel are assigned to support our Quality, Safety

and Environmental Management System.

Personal Injury and Marine Accident Reporting

All Employees: All accidents, injuries, potential safety hazards, safety suggestions and health and safety related issues must be reported immediately to your immediate supervisor and Safety Department. A PERSONAL INJURY REPORT is required any time you or another employee is injured, regardless of its severity. You should contact outside emergency response agencies, if needed. If you sustain any injury the report must be completed in case medical treatment is later needed and to insure that any existing safety hazards are corrected. A MARINE ACCIDENT/INCIDENT REPORT is used for any Damage, Collision Allision, Grounding, Fire, Oil Spill (to water or deck), Man Overboard, Broken Line, Lost Barge, etc. Shoreside Personnel: the Employee's Claim for Worker's Compensation Benefits Form must be completed in all cases requiring medical attention. Federal law (Occupational Safety and Health Administration) requires that we keep records of all illnesses and accidents which occur during the workday. Alaska, Washington, Oregon, and California states Workers' Compensation Act also requires that you report any workplace illness or injury, no matter how slight. If you fail to report an injury, you may jeopardize your right to collect workers' compensation payments as well as health benefits. OSHA also provides for your right to know about any health hazards which might be present on the job. Should you have any questions or concerns, contact the Safety Department for more information.

8-3

OSHA Log

HMS keeps a log of all injuries which are considered reportable by OSHA, as required by OSHA regulations. The injury log is maintained by the Safety Department. Employees, former employees, their personal representatives, and their authorized employee representatives have the right to access the OSHA injury and illness records, with some limitations. The company is obligated to provide a copy of the OSHA log by the end of the business day following the request. You can review the OSHA log by contacting the Safety Department.

Security

The company maintains a security system and plan that covers company buildings 24 hours a day. If you have any security-related questions or problems, notify your immediate supervisor. ID badges/cards

You are issued access cards so you can enter company buildings at certain times through locked doors. If you enter the building through an unlocked reception area, you will be required to show your ID/access card. You are required to display your ID badge/card on your person at all times while on company property. If your ID badge/card is lost or stolen, notify Human Resources immediately. Failure to notify immediately may result in disciplinary action. In the event of a lost or stolen ID badge/card, HMS will replace it free of charge for the first occurrence. However, any additional cards will be replaced at $4.00 per occurrence. If you are unable to enter the building using you ID badge/card, notify your supervisor or Human Resources. Temporary access changes

If you need to come into work earlier than usual, or come into work on a weekend, you may need a temporary security access change. Your immediate supervisor must contact Human Resources for any changes. Violations of the company’s security policy will result in disciplinary action.

8-4

Security Checks (Searches & Inspections)

To ensure security, the company reserves the right to conduct searches of company property, including workstations, desks, file cabinets, lockers, and similar areas. This also extends to computers (e-mail and internet) and telephones (voice messages). The company may search company areas at any time, either randomly or when there is a reason to believe that prohibited items may be present. The company reserves the right to conduct searches of your personal possessions, including lunchboxes, briefcases, backpacks, packages, or other items carried onto company property. For purposes of this policy, “personal possessions” does not include items of clothing being worn or employee vehicles. However, a visual inspection of vehicles may be performed from outside (i.e., looking through the windows). The company reserves to right to deny entrance to any employee who refuses to cooperate with a request to search personal possessions. Employees who refuse to cooperate may be subject to discipline. Any search will be conducted in compliance with all federal, state, local, or other laws. Anyone who feels they have been mistreated under this policy should report their concerns to their supervisor, or to Human Resources.

Restricted Areas

In the interest of safety and security, certain portions of HMS's facilities may be restricted to authorized personnel only. Such areas will be clearly marked. Some areas may be designated no smoking areas as well.

Visitors

In the interests of security, all visitors to the facility (including, but not limited to, vendors, contractors, and friends or family members of employees) must check in at the Reception Desk when they arrive, and check out when they leave. In case of an evacuation situation (such as a fire), the company needs an accurate head count of all people within a building. If you will be expecting a visitor, (for example, a vendor, client, customer, or family member) contact the receptionist to let them know in advance. Follow the guidelines listed below:

Shall register with the General Manager, an operations manager or the safety manager prior to entering a work area, dock area, or visiting a vessel.

They must be informed and given all proper safety gear needed

8-5

Parking Lot

You are encouraged to use the parking areas designated for our employees. Please keep in mind that the parking spaces in front of our building are for customers and visitors only. Remember to lock your car every day and park within the specified areas. Courtesy and common sense in parking will help eliminate accidents, personal injuries, and damage to your vehicle and to the vehicles of other employees. If you should damage another car while parking or leaving, immediately report the incident, along with the license numbers of both vehicles and any other pertinent information you may have, to your designated company representative. HMS cannot be and is not responsible for any loss, theft or damage to your vehicle or any of its contents. Vehicles parked on company property are subject to search if reasonable suspicion exists that activities are being conducted in violation of company policy or law.

Fire Prevention

Know the location of the fire extinguisher(s) in your area and make sure they are kept clear at all times. Notify the Safety Department if an extinguisher is used or if the seal is broken. Keep in mind that extinguishers that are rated ABC can be used for paper, wood, or electrical fires. Make sure all flammable liquids, such as alcohol, are stored in approved and appropriately labeled safety cans and are not exposed to any ignition source. In Case of Fire

If you are aware of a fire, you should:

Dial 911 or the local fire department.

If possible, immediately contact the Safety Department. Evacuate all employees from the area.

If the fire is small and contained, locate the nearest fire extinguisher. This should only be attempted by employees who are knowledgeable in the correct use of fire extinguishers.

If the fire is out of control, leave the area immediately. No attempt should be made to fight the fire.

When the fire department arrives, direct the crew to the fire. Do not re-enter the building until directed to do so by the fire department.

8-6

First Aid

HMS provides basic first aid supplies for employee use. First aid supplies are available from the Safety Department and kits are located throughout the facility. If the contents of the box need to be replenished, please report this to the Safety Department. Any injury, no matter how minor, should be reported to a supervisor or to the Safety Department. Eye wash stations are provided in areas where there is a chance for eye injuries from chemicals or flying objects. If you use an eye wash station, you should report it to your supervisor immediately.

Emergency Evacuation

If you are advised to evacuate the building, you should:

Stop all work immediately.

Contact outside emergency response agencies, if needed.

Shut off all electrical equipment and machines, if possible.

Walk to the nearest exit, including emergency exit doors.

Exit quickly, but do not run. Do not stop for personal belongings.

Proceed, in an orderly fashion, to a parking lot near the building. Be present and accounted for during roll call.

Do not re-enter the building until instructed to do so.

Safety Hazards

You are expected to keep your work area neat and orderly at all times - it is a required safety precaution. If you spill a liquid, clean it up immediately. Do not leave tools, materials, or other objects on the floor which may cause others to trip or fall. Keep aisles, stairways, exits, electrical panels, fire extinguishers, and doorways clear at all times. Office areas present their own safety hazards. Please be sure to:

Leave desk, file or cabinet drawers firmly closed when not in use.

Open only a single drawer of a file cabinet at a time.

Arrange office space to avoid tripping hazards, such as telephone cords or calculator electrical cords.

Remember to lift things carefully and to use proper lifting techniques. Easily accessible trash receptacles and recycling containers are located throughout the building. Please put all litter and recyclable materials in the

8-7

appropriate receptacles and containers. Always be aware of good health and safety standards, including fire and loss prevention. Please report anything that needs repairing or replacing to your immediate supervisor or the Safety Department immediately.

Property and Equipment Care

It is your responsibility to understand the machines needed to perform your duties. Good care of any machine that you use during the course of your employment, as well as the conservative use of supplies, will benefit you and HMS. If you find that a machine is not working properly or in any way appears unsafe, please notify your direct supervisor immediately so that repairs or adjustments may be made. Under no circumstances should you start or operate a machine you deem unsafe, nor should you adjust or modify the safeguards provided. Do not attempt to use any machine or equipment you do not know how to operate, or if you have not completed training on the proper use of the machine or equipment.

Smoking/ Tobacco Use

It is the policy of HMS to prohibit the smoking or use of tobacco products within the company buildings and outside visitor or vendor entrances at any time. Company receptionists must politely inform visitors who are smoking of the company’s no smoking and no tobacco use policy. Smoking and/or using tobacco is also not allowed when evacuating a building in any alarm situation. Smoking and/or use of tobacco products is prohibited:

Inside company buildings

Inside any entry way/vestibule

Outside the company’s main visitor/vendor entrances

In all company vehicles Smoking/use of tobacco products is allowed only in designated areas during authorized lunch periods, before or after employees' scheduled work hours, or at scheduled break times. Smoking/use of tobacco products is allowed:

At designated outside smoking areas

In employee parking lots

8-8

Smoking waste disposal receptacles have been placed in the designated smoking areas for employees’ convenience and must be used for proper disposal. Additional Information Any disputes arising as a result of this policy should be resolved by area supervisors or management, or by Human Resources. Employees who violate this policy will be subject to disciplinary action, up to and including discharge. Smokers who wish to quit are encouraged to contact Human Resources for information on smoking cessation options available to them. Remember to conform to our customer's smoking policies when working at a customer's site. All employees are expected to abide by this policy while at work. Maritime Personnel: Please reference additional smoking rules in the Marine Operations Manual (MOM), section 02-160. For additional Safety Rules regarding Vessel, Oil Barge and Maintenance work, please refer to the Marine Operations Manual (MOM).

9-1

CHAPTER 6 SEPARATION OF EMPLOYMENT

HMS operates under the principle of at-will employment. This means that neither you nor HMS has entered into a contract regarding the duration of your employment. You are free to terminate your employment with HMS at any time, with or without reason. Likewise, HMS has the right to terminate your employment, or otherwise discipline, transfer, or demote you at any time, with or without reason, at the discretion of HMS. HMS hopes and expects that you will give at least two (2) weeks notice in the event of your resignation. Any accrued but unused vacation time will be paid out at the time of employment termination.

Termination of Your Employment

You may be terminated for poor performance, misconduct, excessive absences, tardiness, discrimination, harassment or other violations of HMS policies. However, your employment is at-will, and you and HMS have the right to terminate your employment for any or no reason. HMS will consider you to have voluntarily terminated your employment if you do any of the following:

Resign from HMS,

Fail to return from an approved leave of absence on the date specified by HMS, or

Fail to report to work or call in.

Layoff and Work Reductions

Although HMS attempts to schedule work assignments to avoid layoffs, situations do occur where layoffs and other forms of work reduction may be necessary. HMS reserves the right to take appropriate actions, including but not limited to:

reduction in work hours or work weeks

mandatory use of accrued vacation

mandatory unpaid leave

office or department closures for specific periods Within specific departments, upper management may decide to institute layoffs or reductions in hours or days of work. Selection of employees to be affected will be made on the basis of company needs.

9-2

Insurance Conversion Privileges

According to the federal Consolidated Omnibus Budget Reconciliated Act (COBRA) of 1985, in the event of your separation of employment with HMS or loss of eligibility to remain covered under our group health insurance program, you and your eligible dependents may have the right to continued coverage under our health insurance program for a limited period of time at your own expense. At your exit interview or upon separation of employment, you will learn how you can continue your insurance coverage and any other benefits you currently have as an employee who is eligible for continuation. Consult the Human Resources Department for additional details.

Exit Interviews

In the event of a separation of employment, HMS management would like to conduct an exit interview to discuss your reasons for leaving and any other impressions that you may have about HMS. During the exit interview, you can provide insights into areas for improvement that HMS can make. Every attempt will be made to keep all information confidential.

Return of Company Property

Any HMS property issued to you, such as product samples, computer equipment, keys, parking passes or company credit card must be returned to HMS at the time of your separation. You will be responsible for any lost or damaged items. The value of any property issued and not returned may be deducted from your paycheck, and you may be required to sign a wage deduction authorization form for this purpose.

Former Employees

Depending on the circumstances, HMS may consider a former employee for re-employment. Such applicants are subject to HMS's usual pre-employment procedures. To be considered, an applicant must have been in good standing at the time of their previous separation of employment with HMS. Reinstatement of Benefits (Bridging)

If you were an employee of HMS with at least twelve (12) months of continuous employment, and were rehired within twelve (12) months of your separation date, you will be eligible to continue your benefits at the level you enjoyed at the time of your termination of previous employment with HMS.

9-3

Post-Employment Inquiries

HMS does not respond to oral requests for references. All requests to provide a reference to potential employers must be submitted through Human Resources and will only be considered, if you have completed and signed a release form. As an employee of HMS, do not under any circumstances respond to any requests for information regarding another employee unless it is part of your assigned job responsibilities. If it is not, please forward the information request to Human Resources.

10-1

CHAPTER 7 WORK PLACE POLICIES

Open Communication Policy

HMS encourages you to discuss any issue you may have with a co-worker directly with that person. If a resolution is not reached, please arrange a meeting with your manager to discuss any concern, problem, or issue that arises during the course of your employment. Any information discussed in an Open Communication meeting is considered confidential. Retaliation against any employee for appropriate usage of Open Communication channels is unacceptable. Please remember, it is counterproductive to a harmonious workplace for employees to create or repeat corporate rumors or office gossip. It is more constructive for an employee to consult his/her manager immediately with any questions.

Company Information Communications

Successful working conditions and relationships depend upon successful communication. Not only do you need to stay aware of changes in procedures, policies and general information, you also need to communicate your ideas, suggestions, personal goals or problems as they affect your work. In addition to the exchanges of information and expressions of ideas and attitudes which occur daily, make certain you are aware of and utilize all HMS methods of communication, including this Employee Manual, bulletin boards, discussions with your immediate supervisor, memoranda, staff meetings, newsletters, training sessions, and company e-mail and intranet. You will receive other information booklets, such as your insurance booklets, from time to time. You may take these booklets home so that your family may know more about your job and your benefits. In addition, you may receive letters from HMS. There is no regular schedule for distribution of this information. The function of each letter is to provide you and your family with interesting news and helpful information which will keep you up-to-date on the events here at HMS.

Media Contact Policy

It is HMS’s policy to respond to media inquiries as soon as possible. Individuals designated to speak as company representatives include:

Chief Executive Officer

Chief Financial Officer

Vice-President, HR, Quality Systems and Admin

10-2

Vice-President, Marine Operations No one other than these individuals, or any specially designated spokesperson, has permission to represent the company to the media. Any unauthorized individual who makes public comments or addresses the media as an apparent representative of the company may be subject to discipline, up to and including termination. All media inquiries, whether verbal or written, are to be directed to the Vice-President, HR, Quality Systems and Admin, who will respond to the request directly or forward it to the appropriate individual(s). Any media contact not made initially through the Vice-President, HR, Quality Systems and Admin should be immediately reported to this individual.

Suggestions

We encourage all employees to bring forward their suggestions and good ideas about how our company can be made a better place to work, our products improved, and our service to customers enhanced. When you see an opportunity for improvement, please talk it over with your designated company representative. She/he can help you bring your idea to the attention of the people in the company who will be responsible for possibly implementing it.

Anti-Discrimination/ Harassment Policy

It is the policy of HMS to neither condone nor tolerate harassment of any type. This includes harassment due to race, color, religion, sex, sexual orientation, national origin, disability, age, or any other protected characteristic under state or federal law. HMS follows state and federal laws in prohibiting discrimination and harassment in the workplace. The work environment is not limited to HMS or its’ subsidiaries premises, and includes company functions, business travel, and other work-related activities. This policy applies to all employees and all non-employees, including: customers/clients, visitors, suppliers, vendors, contractors, temporary workers, or other individuals with whom an HMS employee comes into contact during the daily performance of his/her job. It is understood that any of these individuals listed may be a victim or a violator under this HMS policy. Employees and all others in the workplace are expected to conduct themselves professionally, in a manner befitting the work environment and with respect for one another.

10-3

Definition of harassment

At HMS, harassment is defined as a single incident or a pattern of behavior which entails verbal, physical, or psychological harassment and/or abuse of any nature. It may be, but is not limited to, words, signs, offensive jokes, cartoons, pictures, posters, e-mail jokes or statements, pranks, intimidation, physical assaults or contact, or violence. Harassment is not necessarily sexual in nature. It may also take the form of other vocal activity including derogatory statements not directed to the targeted individual but taking place within their hearing. Other prohibited conduct includes written material such as notes, photographs, articles of a harassing or offensive nature, and taking retaliatory action against an employee for discussing or making a harassment complaint. Sexual harassment may include unwelcome sexual advances, requests for sexual favors, or other verbal or physical contact of a sexual nature when such conduct creates an offensive, hostile and intimidating working environment and prevents an individual from effectively performing the duties of their position. It also encompasses such conduct when it is made a term or condition of employment or compensation, either implicitly or explicitly and when an employment decision is based on an individual's acceptance or rejection of such conduct. It is important to note that sexual harassment crosses age and gender boundaries and cannot be stereotyped. Among other perceived unconventional situations, sexual harassment may even involve two women or two men. Generally, two categories of sexual harassment exist. The first, "quid pro quo," may be defined as an exchange of sexual favors for improvement in your working conditions and/or compensation. The second category, "hostile, intimidating, offensive working environment," can be described as a situation in which unwelcome sexual advances, requests for sexual favors, or other verbal or physical contact of a sexual nature when such conduct creates an intimidating or offensive environment. Examples of a hostile, intimidating, and offensive working environment includes, but is not limited to, pictures, cartoons, symbols, or apparatus found to be offensive and which exist in the workspace of an employee. This behavior does not necessarily link improved working conditions in exchange for sexual favors. It is also against HMS policy to download inappropriate pictures or materials from computer systems. Responsibility

All HMS employees, and particularly managers, have a responsibility for keeping our work environment free of harassment. Any employee who becomes aware of an incident of harassment, whether by witnessing the incident or being told of it, must report it. When management becomes aware of the existence of harassment, it is obligated by law to take prompt and appropriate action, whether or not the victim wants the company to do so.

10-4

How to report harassment

If you believe you have been the subject of sexual harassment or other harassment, you should bring your complaint to management without fear of retaliation. Reporting an incident quickly will allow the company to immediately address the complaint. However, complaints will be accepted regardless of any delay in reporting. The report should be made to:

A management individual with whom you feel comfortable; or

Any individual in the Human Resources Department. If you witness or suspect sexual harassment or other harassment, you must immediately convey the information regarding that incident to Human Resources. Investigation process

All complaints will be promptly and thoroughly investigated by the Human Resources staff, who will conduct a fair and impartial investigation. Interim measures may be taken pending full investigation and resolution of the complaint, such as temporary reassignments or separating the alleged violator and the complainant. Complaints will remain confidential except where circumstances require that information be shared in order to conduct a thorough investigation. Results of the investigation will be communicated to the individual who files the complaint. If the investigation reveals that an employee has engaged in harassment, that individual will be subject to disciplinary action up to and including discharge. Additional Information If you bring a complaint and do not feel that the matter has been satisfactorily resolved, you many bring the complaint to the Vice President of Human Resources and Admin for further investigation. The company will not tolerate any form of retaliation toward employees who come forward with harassment complaints. Any retaliation incidents must be reported to Human Resources. Individuals who present a knowingly false or frivolous claim that is proven to be untrue could be subject to civil repercussions from the falsely-accused party. HMS accepts no liability for harassment of one employee by another employee. The individual who makes unwelcome advances, threatens or in any way

10-5

harasses another employee is personally liable for such actions and their consequences. HMS may or may not provide legal, financial or any other assistance to an individual accused of harassment if a legal complaint is filed.

Workplace Violence

HMS prohibits violence in the workplace, and makes every attempt to maintain a safe workplace. The workplace is not limited to company premises, but includes all environments where work-related activities are performed, such as off-site meeting locations and business travel. For purposes of this policy, “violence” includes physically harming another, shoving, pushing, harassing, intimidating, coercing, brandishing weapons, and threatening or talking of engaging in those activities. This policy applies to all employees, all non-employees including customers/clients, visitors, suppliers, vendors, contractors, temporary workers, and other individuals with whom company employees come into contact with during work duties. Any of these individuals may be a victim or a violator under company policy. Verbal threats or physical actions will not be tolerated. Employees are expected to promptly and accurately report all violent incidents, whether or not physical injuries have resulted, to Human Resources. To ensure security, the company reserves inspection rights for all company and associates’ property located on its premises, including workstations, desks, file cabinets, and lockers. This right extends to desks, computers (e-mail and internet) and telephones (messages). Human Resources can search or authorize a search of company property. In cases of workplace violence, Human Resources may contact and involve local law enforcement authorities as necessary. The company will not tolerate any form of retaliation toward an employee who reports workplace violence. Any retaliatory incident must be reported to Human Resources. Retaliatory incidents will result in disciplinary action, up to and including termination. Failure to adhere to the established company policies and procedures will result in disciplinary action, up to and including termination. The company provides an employee assistance program (EAP) to assist employees with work or personal problems. Employees are encouraged to make use of these confidential services if they feel they need help with problems in their work or personal lives. The company does not receive any specific information about individual contacts with the EAP.

10-6

Contraband Policy

Harley Marine Services is committed to providing the safest possible working environment for its employees and others who work on its property and or vessels. A contraband policy and inspection program is but one facet of the company’s overall safety program intended to eliminate contraband items from the workplace. Contraband is defined as any item which is contrary to the safety of any given operation or to the interests of Harley Marine Services and its employees and contractors. Examples of contraband are:

Firearms

Weapons designed to cause bodily harm, including but not limited to, bats,

axe handles, knives (unless pre-approved for job use), brass knuckles,

nunchucks, stun guns, pepper spray, other martial arts items, and etc.

Hazardous materials

Explosives

Explosive materials

Drug paraphernalia

Impairment causing illegal drugs

Alcohol

Prescriptions or over-the counter drugs, not authorized by a physician

Impairment causing legally prescribed drugs, not reported to Harley

Marine Services HR

Unauthorized possession of company property

Entry onto Harley Marine Services owned or controlled premises, vehicles or vessels is considered consent to being inspected. All individuals on company owned or controlled premises are subject to inspection for contraband. This includes vehicles, personal property, lockers, sleeping quarters and work areas. Inspections may include the use of specially trained canine teams and qualified vendors who generally perform focused contraband inspections. Inspections may be unannounced. Participation in inspections is a term and condition of employment for Employees and a function of contract for Contractors. Failure to cooperate and/or participate in an inspection will result in immediate denial of entry or removal from company property, and may result in discipline up to and including termination and permanent disqualification of access to any and all Harley Marine Services company properties.

Alcohol/ Drug-Free Workplace Policy

HMS is committed to achieving and maintaining a safe and productive work environment for all employees. This includes providing a drug-free, healthful, safe, and secure work environment. The company will not tolerate the use of

10-7

alcohol or drugs on premises, nor will the company allow employees to work while they are under the influence of alcohol or drugs. You expected and required to report to work in an appropriate mental and physical condition to perform your assigned duties. To help ensure a safe and healthful working environment, you may be asked to provide samples (such as urine, saliva, hair, or breath tests) to identify the illicit or illegal use of drugs and alcohol. The company performs drug tests in the following situations:

Pre-employment,

Random,

Marine accident/ incident or personal injury,

Reasonable cause,

Under contractual stipulations. The company reserves the right to conduct random, no-notice testing of current employees at any time it feels such actions are appropriate. Refusal to submit to drug testing may result in disciplinary action, up to and including termination of employment. Any employee with drug or alcohol problem is encouraged to come forward to seek help at any time. You are required to sign a release authorization giving the company access to the results of the required tests. Refusing to sign the release may result in termination, as may a refusal to be tested or attempting to adulterate specimens or provide fraudulent specimens (not your own). The following are examples of reasonable suspicion situations in which employees may be required to submit to testing:

An employee’s behavior matches an accepted profile of being under the influence of alcohol or drugs.

An employee is involved in a self-inflicted injury requiring medical attention.

An employee causes the injury of another worker who requires medical attention.

An employee causes a non-injury property accident. Any employee who is observed coming to or returning to the job in an obviously impaired condition will be removed from the workplace at once. Any employee who tests positive will be put on suspension until an alcohol/drug evaluation is completed and said employee is cleared. Employees who test positive and who

10-8

believe the test was in error may request a re-test of the original specimen. The HMS alcohol threshold is .02. It is the goal of HMS to maintain a drug-free workplace. To that end, and in the spirit of the Drug-Free Workplace Act of 1988, HMS has adopted the following policies:

The unlawful manufacture, possession, distribution, or use of controlled substances is prohibited in the workplace. It is also a violation to report for work or to be working while under the influence of any intoxicant

Employees who violate this prohibition are subject to corrective or disciplinary action as deemed appropriate, up to and including termination.

As an on-going condition of employment, employees are required to abide by this prohibition and to notify, in writing and within five (5) days of the violation, her/his manager of any criminal drug statute conviction they receive.

If an employee receives such a conviction HMS shall take appropriate personnel action against the employee, up to and including termination.

HMS provides information about drug counseling and treatment.

HMS reserves the right to search and inspect for the maintenance of a safe workplace.

Questions concerning this policy or its administration should be directed to the Human Resources Department. The company recognizes that alcohol/drug addiction is a treatable illness and will make every effort to support an employee in need of treatment. Acceptance of such treatment will not hinder employment at the company unless job performance is unsatisfactory. Any positive test results will be cause for immediate termination. The Employee Assistance Program (EAP) provides confidential counseling and referral services to employees with such problems as drug and/or alcohol abuse or addiction. It is your responsibility to seek assistance from the EAP prior to reaching a point where judgment, performance, or behavior has led to imminent disciplinary action. Participation in the EAP after the disciplinary process has begun may not preclude disciplinary action, up to and including termination of employment.

Dress Code and Personal Appearance

It is the policy of HMS to project a professional image to customers, clients, visitors, and coworkers. The company expects you to arrive for work with a well-groomed and professional appearance. In line with this, the company requires that employees dress appropriately in clothing which:

10-9

Is suitable for their job responsibilities and work environment;

Meets the requirements established for safety reasons; and

Complies with the company’s dress code requirements. Each employee represents the company to customers, clients, and other visitors. For that reason, the company expects all employees to dress appropriately for the job, both on-site and when conducting company business off-site, and comply with the company’s dress code requirements. Each location or department will provide a specific policy on hair length, jewelry and clothing or attire that would apply to that facility. Office Environment

The company’s year-round dress code is business casual Monday through Thursday. Each Friday is a company-wide casual dress day. The company reserves the right to cancel a casual dress day based on business necessity. Office Environment

Slacks

Dress shirts

Dresses/skirts

No jeans with holes

Shoes must be worn at all times Non-Office Environment

Full-length jeans or slacks with an appropriate work-shirt are required.

Loose clothing should not be worn to prevent the possibility of entanglement in moving machinery.

Shirts that have tails must be worn with the tails tucked in.

Hair that extends past the ear lobes must be tied back and up if possible, if department management deems it to be a hazard.

Watches and post/stud earrings may not be worn. Necklaces must be worn inside clothing.

Safety shoes and other personal protective equipment as required A neat, tasteful appearance contributes to the positive impression you make on our customers. You are expected to be suitably attired and groomed during working hours or when representing HMS. A good, clean appearance bolsters your own poise and self-confidence and greatly enhances our company image. When working at a customer's site, please dress appropriately according to their corporate culture. Personal appearance should be a matter of concern for each employee. If your immediate supervisor feels your attire and/or grooming is out of place, you may be asked to leave your workplace until you are properly attired and/or groomed.

10-10

Employees who violate appearance standards may be subject to appropriate disciplinary action. Keep in mind the discomfort your immediate supervisor would feel if she/he had to address this issue with you. Scented Products

The company discourages the excessive use of strongly scented products such as perfume and cologne that may distract others or create sensitivity to these products among employees or customers. The company recognizes that certain products may have a strong scent or create an odor, and this policy is not intended to preclude the use of such products by employees who need to use such products. Human Resources or your immediate supervisor will address an employee’s appearance or use of a scented product in the event of a concern or complaint. The company understands that certain products or medical conditions may create an odor and will discuss possible solutions with the voluntary participation of the employee. If the issue has a medical basis, confidentiality must be maintained, and the employee may be referred to Human Resources for consultation. The well-being of the employee will be the primary concern. Violations of this policy may result in disciplinary action. Violations do not include situations where the issue has a legitimate medical basis.

Housekeeping

It is the policy of HMS to provide a pleasant, clean, professional, healthy, and safe work environment to promote productivity and effectiveness. You are expected to cooperate with cleaning and maintenance services to help reduce costs. The company also expects you to be responsible and clean up after yourself. Offices and workstations

Work related items and personal items should be organized on shelves or work surfaces within each workstation/office. To ensure safety and maintain a professional work area, items should not be left on the floor outside an office at any time. Personal items must be in good taste and only displayed within your workstation/office. Printers, calculators, PC monitors, and approved electrical items must be turned off each evening. All work surfaces should be cleaned and organized before departing. All individual workstation lights must be turned off each evening.

10-11

Food and beverages may be consumed in offices and workstations. Food containers, eating utensils, dishes and trays must be removed or cleaned and stored at the end of the workday. Note: Dishes, eating utensils, and trays borrowed from the lunchroom should be returned each day by the end of the day. Waste materials and recyclables should be disposed of properly in designated containers. Personal items

Items that may be displayed on office walls include framed pictures, certificates/awards, calendars, posters, schedules, and other personal hanging artwork. The company reserves the right to require the removal of offensive or inappropriate personal items. The company is not responsible for personal items that are stolen or broken. Appliances

Personal radios and similar devices with headphones are permitted during business hours in administrative departments. Use of these items must not interfere with business activities. Appliances such as hot plates, toasters, small electrical grills, space heaters, lamps, fans, coffee mug warmers, or any other items that fit the definition of a household appliance are not approved for use in a commercial setting and are not allowed. NOTE: If a department holds a special food event day, you may bring in appliances such as crock pots and roasters just for that day. They must be removed at the end of the day. The company may approve fans for workstations if they meet certain requirements. The Safety Department must inspect and approve each fan. Due to concerns about fire hazards, you are not allowed to bring in personal heating devices. Only company-provided personal heaters are allowed. Conference rooms

At the completion of a meeting, the meeting leader is responsible for seeing that all materials used are removed and the room is picked up for the next meeting. Conference rooms are not to be used for eating meals. However, on special occasions (i.e., holiday lunches, special recognition, etc.), you may use area conference rooms for food set-up/meals as approved by area management.

10-12

Company grounds and parking areas

Do not litter the grounds and parking areas. Discard cigarettes in the appropriate containers. Do not discard cigarettes on the grass, company roads, or parking lots. All emergency exits, fire-fighting equipment (hoses, extinguishers), fire alarm pull stations, and electrical panels must be kept accessible at all times.

Recycling

HMS is committed to protecting the environment by examining methods to improve waste reduction and recycling. You are expected to comply with the HMS recycling program by separating waste as required. Waste and recyclable materials should be placed in properly designated containers. Recycling containers are located throughout the facility, and indicate the appropriate material.

Personal Decorations

It is the policy of HMS to allow employees to display personal decorations or items in their work areas within the restrictions of this policy. Personal decorations must not be offensive to a reasonable person. Examples of acceptable items or decorations may include family photographs, cartoons of a tasteful nature, small plants, and similar items. Examples of prohibited items may include sexually explicit material, profanity, or other material which is derogatory. Personal appliances such as coffee makers and space heaters are prohibited due to the potential fire hazard. Your supervisor or manager will determine if personal items are not appropriate in the workplace. If you disagree with a request to remove a particular item, contact Human Resources for a final decision. Certain areas within the company have more contact with customers and other non-employees, and the company reserves the right to restrict the display of personal items in such areas. Employees in violation of this policy may be subject to disciplinary action, up to and including termination.

10-13

Computer Software (Unauthorized Copying)

HMS does not condone the illegal duplication of software. The copyright law is clear. The copyright holder is given certain exclusive rights, including the right to make and distribute copies. Title 17 of the U.S. Code states that "it is illegal to make or distribute copies of copyrighted material without authorization" (Section 106). The only exception is the users' right to make a backup copy for archival purposes (Section 117). The law protects the exclusive rights of the copyright holder and does not give users the right to copy software unless a backup copy is not provided by the manufacturer. Unauthorized duplication of software is a federal crime. Penalties include fines up to and including $250,000, and jail terms of up to five (5) years. Even the users of unlawful copies suffer from their own illegal actions. They receive no documentation, no customer support and no information about product updates.

HMS licenses the use of computer software from a variety of outside companies. HMS does not own this software or its related documentation and, unless authorized by the software manufacturer, does not have the right to reproduce it.

With regard to use on local area networks or on multiple machines, HMS employees shall use the software only in accordance with the software publisher's license agreement.

HMS employees learning of any misuse of software or related documentation within the company must notify their designated company representative or HMS legal counsel immediately.

According to the U.S. Copyright Law, illegal reproduction of software can be subject to civil damages and criminal penalties, including fines and imprisonment. HMS employees who make, acquire or use unauthorized copies of computer software shall be disciplined as appropriate under the circumstances. Such discipline may include termination.

Computers, Electronic Mail, and Voice Mail Usage Policy

HMS makes every effort to provide the best available technology to those performing services for HMS. In this regard, HMS has installed, at substantial expense, equipment such as computers, electronic mail, and voice mail. This policy is to advise those who use our business equipment on the subject of access to and disclosure of computer-stored information, voice mail messages and electronic mail messages created, sent or received by HMS's employees with the use of HMS's equipment. This policy also sets forth policies on the proper use of the computer, voice mail, and electronic mail systems provided by HMS.

10-14

HMS property, including computers, electronic mail and voice mail, should only be used for conducting company business. Incidental and occasional personal use of company computers and our voice mail and electronic mail systems is permitted, but information and messages stored in these systems will be treated no differently from other business-related information and messages, as described below. The use of the electronic mail system may not be used to solicit for commercial ventures, religious or political causes, outside organizations, or other non-job related solicitations. Furthermore, the electronic mail system is not to be used to create any offensive or disruptive messages. Among those which are considered offensive, are any messages which contain sexual implications, racial slurs, gender-specific comments, or any other comments that offensively address someone's age, sexual orientation, religious or political beliefs, national origin, or disability. In addition, the electronic mail system shall not be used to send (upload) or receive (download) copyrighted materials, trade secrets, proprietary financial information, or similar materials without prior authorization. Although HMS provides certain codes to restrict access to computers, voice mail and electronic mail to protect these systems against external parties or entities obtaining unauthorized access, employees should understand that these systems are intended for business use, and all computer information, voice mail and electronic mail messages are to be considered as company records. For various business and legal reasons, HMS must and does, maintain the right and the ability to enter into any of these systems and to inspect and review any and all data recorded in those systems. Because HMS reserves the right to obtain access to all voice mail and electronic mail messages left on or transmitted over these systems, employees should not assume that such messages are private and confidential or that HMS or its designated representatives will not have a need to access and review this information. Individuals using HMS's business equipment should also have no expectation that any information stored on their computer - whether the information is contained on a computer hard drive, computer disks or in any other manner - will be private. HMS has the right to, but does not regularly monitor voice mail or electronic mail messages. HMS will, however, inspect the contents of computers, voice mail or electronic mail in the course of an investigation triggered by indications of unacceptable behavior or as necessary to locate needed information that is not more readily available by some other less intrusive means. The contents of computers, voice mail, and electronic mail, properly obtained for some legitimate business purpose, may be disclosed by HMS if necessary within or outside of HMS.

10-15

Given HMS's right to retrieve and read any electronic mail messages, such messages should be treated as confidential by other employees and accessed only by the intended recipient. HMS's President will review any request for access to the contents of an individual's computer, voice mail, or electronic mail prior to access being made without the individual's consent. Any employee who violates this policy or uses the electronic communication systems for improper purposes may be subject to discipline, up to and including termination.

Social Networking Policy

Harley Marine Services (HMS) takes no position on your decision to start or maintain a blog or participate in other social networking activities. However, it is the right and duty of the company to protect itself from unauthorized disclosure of information. HMS’s social networking policy includes rules and guidelines for company-authorized social networking and personal social networking and applies to all executive officers, board members, management and staff. General Provisions

Blogging or other forms of social media or technology include but are not limited to video or wiki postings, sites such as Facebook and Twitter, chat rooms, personal blogs or other similar forms of online journals, diaries or personal newsletters not affiliated with HMS. Unless specifically instructed, employees are not authorized and therefore restricted to speak on behalf of HMS. Employees may not publicly discuss clients, products, employees or any work-related matters, whether confidential or not, outside company-authorized communications. Employees are expected to protect the privacy of HMS and its employees and clients and are prohibited from disclosing personal employee and nonemployee information and any other proprietary and nonpublic information to which employees have access. Such information includes but is not limited to customer information, trade secrets, financial information and strategic business plans. Employer Monitoring

Employees are cautioned that they should have no expectation of privacy while using the Internet. Your postings can be reviewed by anyone, including HMS. HMS reserves the right to monitor comments or discussions about the company, its employees, clients and the industry, including products and competitors, posted on the Internet by anyone, including employees and non-employees. HMS uses blog-search tools and software to monitor forums such as blogs and

10-16

other types of personal journals, diaries, personal and business discussion forums, and social networking sites. Employees are cautioned that they should have no expectation of privacy while using company equipment or facilities for any purpose, including authorized blogging. HMS reserves the right to use content management tools to monitor, review or block content on company blogs that violate company blogging rules and guidelines. Reporting Violations

HMS requests and strongly urges employees to report any violations or possible or perceived violations to supervisors, managers or the HR department. Violations include discussions of HMS and its employees and clients, any discussion of proprietary information and any unlawful activity related to blogging or social networking.

Discipline for Violations

HMS investigates and responds to all reports of violations of the social networking policy and other related policies. Violation of the company’s social networking policy will result in disciplinary action up to and including immediate termination. Discipline or termination will be determined based on the nature and factors of any blog or social networking post. HMS reserves the right to take legal action where necessary against employees who engage in prohibited or unlawful conduct.

Acknowledgment

Employees are required to sign a written acknowledgement that they have received, read, understood and agreed to comply with the company’s social networking policy and any other related policy.

Authorized Social Networking

The goal of authorized social networking and blogging is to become a part of the industry conversation and promote web-based sharing of ideas and exchange of information. Authorized social networking and blogging is used to convey information about company products and services, promote and raise awareness of the HMS brand, search for potential new markets, communicate with employees and customers to brainstorm, issue or respond to breaking news or negative publicity, and discuss corporate, business-unit and department-specific activities and events. When social networking, blogging or using other forms of web-based forums, HMS must ensure that use of these communications maintains our brand identity, integrity and reputation while minimizing actual or potential legal risks, whether used inside or outside the workplace.

10-17

Personal Blogs

HMS respects the right of employees to write blogs and use social networking sites and does not want to discourage employees from self-publishing and self-expression. Employees are expected to follow the guidelines and policies set forth to provide a clear line between you as the individual and you as the employee. HMS respects the right of employees to use blogs and social networking sites as a medium of self-expression and public conversation and does not discriminate against employees who use these media for personal interests and affiliations or other lawful purposes. Bloggers and commenters are personally responsible for their commentary on blogs and social networking sites. Bloggers and commenters can be held personally liable for commentary that is considered defamatory, obscene, proprietary or libelous by any offended party, not just HMS. Employees cannot use employer-owned equipment, including computers, company-licensed software or other electronic equipment, nor facilities or company time, to conduct personal bogging or social networking activities. Employees cannot use blogs or social networking sites to harass, threaten, discriminate or disparage against employees or anyone associated with or doing business with HMS. If you choose to identify yourself as an HMS employee, please understand that some readers may view you as a spokesperson for HMS. Because of this possibility, we ask that you state that your views expressed in your blog or social networking area are your own and not those of the company, nor of any person or organization affiliated or doing business with HMS. Employees cannot post on personal blogs or other sites the name, trademark or logo of HMS or any business with a connection to HMS. Employees cannot post company-privileged information, including copyrighted information or company-issued documents. Employees cannot post on personal blogs or social networking sites photographs of other employees, clients, vendors or suppliers, nor can employees post photographs of persons engaged in company business or at company events. Employees cannot post on personal blogs and social networking sites any advertisements or photographs of company products, nor sell company products and services. Employees cannot link from a personal blog or social networking site to HMS’s internal or external web site.

10-18

If contacted by the media or press about their post that relates to HMS business, please refer to the company Media Contact Policy. If you have any questions relating to this policy, your personal blog or social networking, ask your manager or supervisor.

Cell Phone Use

It is company policy to prohibit personal cell phone use within company buildings. While indoors, your personal cell phone ringer must be turned off at all times. You are allowed to make personal calls on your cell phone in break rooms and outdoor areas during regular break periods. In addition, drivers or other employees who operate company vehicles are prohibited from using cell phones while driving, unless provided with a hands-free device. The company recognizes that some cell phones have the capability to take photographs. Because this capability could allow for theft of trade secrets or expose confidential information, you are prohibited from taking photographs anywhere on company grounds without prior company approval. Employees who violate this policy will be subject to disciplinary action, up to and including termination.

Use of Company Vehicle

It is the policy of HMS to maintain a fleet of vehicles for business use, to control the use of those company vehicles, and to handle the assignment of unassigned vehicles. You must sign out a vehicle and obtain approval for each use. Individuals who are assigned a vehicle for long-term projects do not need to obtain approval each day. To maintain our smoke-free environment and as a courtesy to other users/passengers, smoking is prohibited in company-owned vehicles. Eligibility and Authorization

Only authorized employees are permitted to operate company vehicles. In order to be eligible to drive a company vehicle, you must meet the following requirements:

All drivers of company vehicles must be age 18 or older

Hold a valid driver’s license

10-19

HMS provides insurance on company vehicles, however, you will be considered completely responsible for any accidents, fines, moving or parking violations incurred

You are responsible for following all the manufacturer's recommended maintenance schedules to maintain valid warranties, and for following the manufacturer's recommended oil change schedule

Persons not authorized or employed by HMS cannot operate or ride in a company vehicle.

Approval by Human Resources is required for all company vehicle drivers ages 18-20. You must agree to notify Human Resources of the following:

Any restrictions placed on your driver’s license;

If your driver’s license is suspended or revoked;

Any traffic violations for which you are cited while operating a company-owned vehicle.

Changes to items on the driver agreement/eligibility form may result in loss of your authorization to operate company vehicles. You are responsible for ensuring that your driver’s license is current. Request and Approval Procedure

Contact your direct supervisor or Dispatch to request a vehicle for business use. Provide information regarding the business purpose, destination, number of traveling employees, special needs, date and time the vehicle is needed, and the date and time the vehicle will be returned. Accident Procedures

If you are involved in an accident while driving a company vehicle, you should immediately contact your direct supervisor or the Safety Department. It is also important that the driver report the accident promptly to the local police department. If a company vehicle is not available, you can use a personal vehicle and submit for mileage reimbursement.

Personal Use of Company Property

The assets of HMS are intended to be used in a way that benefits our organization. Employees must preserve these assets and use them wisely. To protect the physical and intellectual property of the company from loss, damage, theft, vandalism, unauthorized use, copying, disclosure, or disposal, the

10-20

company must ensure proper business use only of company property and facilities. This applies to the company’s property located at any facility. The use of company facilities, equipment, supplies, or other property for personal purposes is strictly prohibited without prior management approval. HMS is not liable for personal injury incurred during the use of company property for personal projects. As an HMS employee, you must accept full responsibility for any and all liabilities for injuries or losses which occur, or for the malfunction of equipment used in personal business. You are expected to take proper care of any company-provided equipment, tools, uniforms, or other property. Any such property must be returned in good repair. If damage has occurred through no fault or negligence on your part, the company will bear the cost of repair or replacement. If loss or damage was due to fault or negligence, you may be asked or required to reimburse the company for the cost of repair or replacement, either through payroll deductions or other means, according to applicable state laws. Where state law does not allow recovery through these means, the company may initiate legal action for the loss or damage. If you leave the company, either voluntarily or by termination, you are expected to return any company property in your possession. Failure to return company property may result in a deduction from the final paycheck (where allowed under state law) or legal action. Violations of this policy may result in discipline, up to and including termination. Nothing in this policy is intended to conflict with the company’s legal obligation to provide certain accommodations as required by state and federal laws. Nothing in this policy is intended to prevent or discourage employees from requesting such accommodations.

Personal Mail and Packages

It is the policy of the company to allow employees to send personal mail or packages through the company mail center. Personal mail for which postage has already been paid may be sent out with company mail by bringing the envelope to the mail center. Personal mail will only be sent out if postage is attached. Personal packages of any type will only be accepted during business hours, Monday through Friday, 8 am to 5 pm.

10-21

Relatives

Employees may not supervise other family members employed by HMS or work in the same department without informing the Human Resources Department and prior approval from the Chief Executive Officer (CEO). If family members are unable to develop a workable solution, the CEO of HMS will decide which employee may be transferred in such situations. Family members include the employee's spouse, child, parent, parent-in-law, grandparent, grandparent-in-law, granddaughter, grandson, daughter-in-law, son-in-law, step-parent, domestic partner (a person with whom the employee's life is interdependent and with whom the employee shares a mutual residence), brother, sister, brother-in-law, sister-in-law, daughter or son of the employee's spouse or domestic partner, and any relative living in the household of the employee or domestic partner. Should two employees who work together or supervise each other become romantically involved, one or both employees may be transferred.

Severe Weather and Emergency Conditions

In the event of severe weather conditions or other emergencies, the company may set alternative work hours or may decide to close HMS for the remainder of the day. As such, your immediate supervisor will notify you as soon as possible.

11-1

CHAPTER 8 WORKPLACE CONDUCT

HMS expects employees to conduct themselves in a professional manner at all times. The company understands that coworkers affect each other’s performance and strives to provide an environment that stimulates productivity and overall satisfaction. You are expected to act in a professional manner at the workplace. This extends to behavior around customers, and includes all times you are engaged in work-related activities, whether on company property or at another location.

Standards of Conduct

Harley Marine Services is a company that stresses both corporate and personal integrity. We not only comply with laws and applicable regulations; but we also strive to conduct our affairs according to the highest ethical standards. HMS employees are expected to be honest and forthright in dealings with managers, subordinates and with one another – as well as with clients, suppliers, and government agencies. HMS employees must maintain the highest level of personal integrity and encourage it in others; they must not lie, cheat, steal or do anything that would bring dishonor upon themselves or the company. It is imperative that we conduct our professional and business activities with complete integrity, fair dealing and in a manner that inspires confidence and trust.

Unacceptable Activities

Generally speaking, we expect each person to act in a mature and responsible way at all times. If you have any questions concerning any work or safety rule, or any of the unacceptable activities listed below, please see your immediate supervisor for an explanation. Note that the following list of Unacceptable Activities does not include all types of conduct that can result in disciplinary action, up to and including termination. Nothing in this list alters the at-will nature of your employment; either you or HMS may terminate the employment relationship with or without reason, and in the absence of any violation of these rules.

Violation of any company rule; any action that is detrimental to HMS's efforts to operate profitably.

Violation of security or safety rules or failure to observe safety rules or HMS safety practices; failure to wear required safety equipment; tampering with HMS equipment or safety equipment.

Negligence or any careless action that endangers the life or safety of another person.

11-2

Being intoxicated or under the influence of a controlled substance while at work; use, possession or sale of a controlled substance in any quantity while on company premises, except medications prescribed by a physician which do not impair work performance. Prescribed drugs need to be reported to a supervisor.

Unauthorized possession of dangerous or illegal firearms, weapons or explosives on company property or while on duty.

Engaging in criminal conduct or acts of violence, or making threats of violence toward anyone on company premises or when representing HMS; fighting, or provoking a fight on company property.

Insubordination or refusing to obey instructions properly issued by your manager pertaining to your work; refusal to help out on a special assignment.

Threatening, intimidating or coercing fellow employees on or off the premises at any time, for any purpose.

Engaging in an act of sabotage; negligently causing the destruction or damage of company property, or the property of fellow employees, customers, suppliers, or visitors in any manner.

Theft or unauthorized possession of company property or the property of fellow employees; unauthorized possession or removal of any company property, including documents, from the premises without prior permission from management; unauthorized use of company equipment or property for personal reasons; using company equipment for profit.

Dishonesty; falsification or misrepresentation on your application for employment or other work records; lying about sick or personal leave; falsifying reason for a leave of absence or other data requested by HMS; alteration of company records or other company documents.

Violating the non-disclosure agreement; giving confidential or proprietary HMS information to competitors or other organizations or to unauthorized HMS employees; working for a competing business while an HMS employee without informing supervisor; breach of confidentiality of personnel information.

Spreading malicious gossip and/or rumors; engaging in behavior which creates discord and lack of harmony; interfering with another employee on the job; restricting work output or encouraging others to do the same.

Immoral conduct or indecency on company property.

Conducting a lottery or gambling on company premises.

Unsatisfactory or careless work; failure to meet production or quality standards as explained to you by your designated company representative.

Any act of harassment, sexual, racial or other; telling sexist or racist jokes; making racial or ethnic slurs.

Leaving work before the end of a workday or not being ready to work at the start of a workday without approval of your designated company representative; stopping work before time specified for such purposes.

Sleeping or loitering during working hours.

11-3

Excessive use of company telephone for personal calls.

Smoking in restricted areas or at non-designated times, as specified by department rules. Designated areas are listed in the operations manual.

Creating or contributing to unsanitary conditions.

Posting, removing or altering notices on any bulletin board on company property without the permission of an officer of HMS.

Failure to report an absence or late arrival; excessive absence or lateness.

Buying company merchandise for resale.

Obscene or abusive language toward any manager, employee or customer; indifference or rudeness towards a customer or fellow employee; any disorderly/antagonistic conduct on company premises.

Speeding or careless driving of company vehicles.

Failure to immediately report damage to, or an accident involving, company equipment.

Soliciting during working hours and/or in working areas; selling merchandise or collecting funds of any kind for charities or others without authorization during business hours, or at a time or place that interferes with the work of another employee on company premises.

Failure to use your timesheet; alteration of your own timesheet or records or attendance documents; punching or altering another employee's timesheet or records, or causing someone to alter your timesheet or records.

Engaging in acts of misconduct while off-duty which reflect negatively or adversely on the company.

Confidential Information

Upon accepting employment with HMS, you may be asked to sign a Confidentiality Agreement which generally provides that you will not disclose or use any HMS confidential information, either during or after your employment. We sincerely hope that our relationship will be long-term and mutually rewarding. However, your employment with HMS assumes an obligation to maintain confidentiality, even after you leave our employ. Additionally, our customers and suppliers entrust HMS with important information relating to their businesses. The nature of this relationship requires maintenance of confidentiality. In safeguarding the information received, HMS earns the respect and further trust of our customers and suppliers. If you are questioned by someone outside the company or your department and you are concerned about the appropriateness of giving them certain information, you are not required to answer. Instead, as politely as possible, refer the request to your immediate supervisor.

11-4

No one is permitted to remove or make copies of any HMS records, reports or documents without prior management approval. Disclosure of confidential information could lead to termination, as well as other possible legal action.

Customer Relations

The success of HMS depends upon the quality of the relationships between HMS, our employees, customers, suppliers and the general public. Our customers' impression of HMS and their interest and willingness to purchase from us is greatly formed by the people who serve them. In a sense, regardless of your position, you are HMS's ambassador. The more goodwill you promote, the more our customers will respect and appreciate you, HMS and HMS's products and services. Below are several things you can do to help give customers a good impression of HMS. These are the building blocks for our continued success.

Act competently and deal with customers in a courteous and respectful manner.

Communicate pleasantly and respectfully with other employees at all times.

Follow up on orders and questions promptly, provide businesslike replies to inquiries and requests, and perform all duties in an orderly manner.

Take great pride in your work and enjoy doing your very best. These policies apply to all areas of employment, including recruitment, hiring, training and development, promotion, transfer, termination, layoff, compensation benefits, social and recreational programs, and all other conditions and privileges of employment in accordance with applicable federal, state, and local laws.

Representing the Company During Travel

If you engage in company travel, whether traveling within the community or to other destinations, remember that you are representing HMS at all times, and you must act accordingly. At a minimum, you should implement the same standards of professionalism, dress, and punctuality as you are held to in an office environment. You must also be aware that some situations during travel may require even higher standards of dress or behavior. Do not travel without first becoming familiar with the dress code and standards of your destination(s). You should refrain from speaking or taking action on behalf of HMS without the approval of your immediate supervisor. If you choose to openly take a position that is inconsistent with the policy or practice of the company, you must clarify that your personal remarks and opinions are not representative of HMS.

11-5

The company does not intend to place restrictions on your personal activities outside of working hours or obligations. During travel, you might stay in hotels, go out for meals, or engage in other activities on your own time. During such personal activities, you should refrain from wearing clothing with a company logo if such activities could be detrimental to the company’s image, reputation, and/or interests.

Employee Activities During Off-Duty Hours

HMS recognizes the importance of outside activities. However, your outside activities (including other employment) should not affect your ability to perform your job duties in a satisfactory manner. In addition, your outside activities should not be detrimental to the company’s image, reputation, and/or interests. The company reserves the right to take disciplinary action when off-duty activities are found to jeopardize company or employee interests. Secondary employment must not be conducted or solicited from the company’s facilities or while using company-owned equipment or supplies. Apparel bearing the company’s identification must not be worn while engaging in outside employment activities.

Community Involvement

HMS recognizes the importance good citizenship plays in enriching the surrounding communities in which employees live and work. You are encouraged to become involved in your community by lending voluntary support to programs that positively impact the quality of life within your community. The following guidelines are for HMS employees who serve as volunteers in community programs that are either of personal interest or are corporate-sponsored initiatives. Volunteer time should not conflict with the peak work schedule or other work-related responsibilities, create a need for overtime, or cause conflicts with other employees’ schedules. Volunteer time for personal interests may occur any time outside of scheduled work hours. Personal volunteer activities should not conflict with work schedules. The company may sponsor a volunteer or community activity, such as Cystic Fibrosis, Juvenile Diabetes Foundation, NW Harvest, community youth activities and so on.

11-6

Gifts

It is the policy of HMS to enforce this policy to avoid any actual or apparent conflicts of interest in professional business relationships. You may not accept gifts (whether in the form of cash, services, or any other nature) from a customer, client, supplier, or other business, other than an ordinary social amenity. An ordinary social amenity is a gift of incidental value (i.e., de minimis per the IRS), which could not possibly suggest that it was given or received in order to influence your judgment. You may not accept anything that may be construed as a bribe or kickback. A bribe or kickback includes any item intended to improperly obtain favorable treatment. If another business or representative offers a gift that could be construed as a bribe or kickback, you must report the attempt to your manager or another member of management. You are permitted to accept infrequent gifts of a restaurant meal or other items of equivalent value, as long as you exercise good judgment in accepting them. If you are unsure about the gift or service offered, you must explain that company policy prohibits accepting the gift or service. You are expected to conduct yourself with honesty and integrity, and comply with the provisions of this policy. All applicable laws, rules and regulations of federal, state, provincial and local governments, and other appropriate private and public regulatory agencies, must be followed. Additionally, employees are not permitted to give unauthorized gifts to customers or suppliers, except for certain promotional "premiums" (such as t-shirts, coffee mugs, pens or key chains) imprinted with the HMS logo or sales information.

12-1

Receipt and Acknowledgment Of HMS Employee Manual

Please read the following statements, sign below and return to your supervisor. Understanding and Acknowledging Receipt of HMS Employee Manual I have received and read a copy of the HMS Employee Manual. I understand

that the policies and benefits described in it are subject to change at the sole discretion of HMS at any time.

At-Will Employment I further understand that my employment is at will, and neither myself nor

HMS has entered into a contract regarding the duration of my employment. I am free to terminate my employment with HMS at any time, with or without reason. Likewise, HMS has the right to terminate my employment, or otherwise discipline, transfer, or demote me at any time, with or without reason, at the discretion of HMS. No employee of HMS can enter into an employment contract for a specified period of time, or make any agreement contrary to this policy without the written approval from the Chairman.

Confidential Information I am aware that during the course of my employment confidential information

will be made available to me, for instance, product designs, marketing strategies, customer lists, pricing policies and other related information. I understand that this information is proprietary and critical to the success of HMS and must not be given out or used outside of Harley Marine Services, Inc.'s premises or with non-HMS employees. In the event of termination of employment, whether voluntary or involuntary, I hereby agree not to utilize or exploit this information with any other individual or company.

______________________________ _________________________ Employee's Printed Name Position

______________________________ _________________________ Employee's Signature Date

employee manual for harley marine services, …paf.harleymarine.com/images/employee manual -...

Documents