ASEC · 1.3 Employee/Employer Relationship ... 5.9.6.1 Project Manager/Program Manager Bonus ... 6.18.5 Employee Status and Benefits during Leave

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ASEC

Aviation Systems Engineering Company

EMPLOYEE HANDBOOK Corporate Policies, Rules, and Guidelines for All Employees V.5 20170401

Aviation Systems Engineering Company EMPLOYEE HANDBOOK

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Table of Contents

1 INTRODUCTION ............................................................................................................................ 1 1.1 Welcome New Employee! .......................................................................................................... 1 1.2 Purpose of the Handbook ........................................................................................................... 1 1.3 Employee/Employer Relationship ............................................................................................... 1 1.4 Employment-At-Will .................................................................................................................... 1

2 COMPANY OVERVIEW ................................................................................................................. 2 2.1 Mission Statement and Values ................................................................................................... 2

3 DIVERSITY .................................................................................................................................... 3 3.1 Equal Employment Opportunity and Affirmative Action Statement Policy ................................... 3

4 Recruiting .................................................................................................................................... 4 4.1 Job Posting ................................................................................................................................ 4 4.2 Employee Referral Policy ........................................................................................................... 5

4.2.1 Eligibility....................................................................................................................... 5 4.2.2 Procedure .................................................................................................................... 5 4.2.3 Award Processing ........................................................................................................ 6

4.3 Background and Reference Checks ........................................................................................... 6 4.4 Immigration and Employment ..................................................................................................... 6 4.5 Employee Onboarding ................................................................................................................ 7 4.6 Orientation ................................................................................................................................. 7

5 EMPLOYMENT .............................................................................................................................. 7 5.1 Employee Classification Categories under Fair Labor Standards Act (FLSA) ............................. 7

5.1.1 Non-Exempt Employees .............................................................................................. 8 5.1.2 Exempt Employees ...................................................................................................... 8

5.2 Employment Types .................................................................................................................... 8 5.2.1 Regular Full-Time ........................................................................................................ 8 5.2.2 80% Employee............................................................................................................. 8 5.2.3 Regular Part-Time ....................................................................................................... 8 5.2.4 Temporary ................................................................................................................... 9 5.2.5 Internship ..................................................................................................................... 9

5.3 Furlough .................................................................................................................................... 9 5.4 Telecommuting Employees ........................................................................................................ 9 5.5 Transfers .................................................................................................................................... 9 5.6 Changes to Job .......................................................................................................................... 9

5.6.1 Employee Action Notice (EAN) .................................................................................. 10 5.7 Recordkeeping/Keeping Information Current ............................................................................ 10 5.8 Performance Reviews .............................................................................................................. 10 5.9 Compensation .......................................................................................................................... 10

5.9.1 Payment of Wages .................................................................................................... 11 5.9.1.1 Pay Days ................................................................................................................... 11 5.9.1.2 Direct Deposit ............................................................................................................ 11 5.9.1.3 Deductions ................................................................................................................. 11 5.9.1.4 Conflicts ..................................................................................................................... 12 5.9.1.5 Assignment of Wages ................................................................................................ 12 5.9.1.6 Lien for Unpaid Wages Act (Maryland Law) ............................................................... 13

5.9.2 Overtime .................................................................................................................... 13 5.9.3 Hazardous Duty Pay .................................................................................................. 13 5.9.4 Flight Qualifications and Pay ...................................................................................... 13 5.9.5 Extended Workweek (EWW) ...................................................................................... 14

5.9.5.1 Eligibility..................................................................................................................... 14 5.9.5.2 Procedure .................................................................................................................. 14


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5.9.6 Bonuses, Performance, Annual and Recognition ....................................................... 14 5.9.6.1 Project Manager/Program Manager Bonus ................................................................ 14

5.10 Uniformed Services Employment and Reemployment Rights Act (USERRA ............................ 14 5.10.1 Eligibility..................................................................................................................... 14 5.10.2 Satisfactory Completion of Service ............................................................................ 15 5.10.3 Job Qualifications ...................................................................................................... 15 5.10.4 Prior Misconduct ........................................................................................................ 15 5.10.5 Temporary Positions .................................................................................................. 15 5.10.6 Time to Apply ............................................................................................................. 15 5.10.7 Similar Position .......................................................................................................... 16 5.10.8 Waiver ....................................................................................................................... 16 5.10.9 Seniority and Other Benefits ...................................................................................... 16 5.10.10 Reinstatement Offer ................................................................................................... 17 5.10.11 Physical Examinations ............................................................................................... 17 5.10.12 Changed Circumstances ............................................................................................ 17 5.10.13 Discharge and Demotion ........................................................................................... 17 5.10.14 Vacation Leave .......................................................................................................... 17 5.10.15 Discrimination ............................................................................................................ 17 5.10.16 Review ....................................................................................................................... 17 5.10.17 Exceptions ................................................................................................................. 17 5.10.18 Coordination with Other Policies ................................................................................ 18

6 EMPLOYEE BENEFITS ............................................................................................................... 18 6.1 Benefits Plan ............................................................................................................................ 18 6.2 Summary Plan Descriptions ..................................................................................................... 19 6.3 Qualifying Event ....................................................................................................................... 19 6.4 Open Enrollment ...................................................................................................................... 19 6.5 Insurance ................................................................................................................................. 20

6.5.1 Medical/Dental/Vision ................................................................................................ 20 6.6 Health Savings Account ........................................................................................................... 20

6.6.1 ASEC’s HSA Payment Schedule ............................................................................... 20 6.6.2 Max Contributions ...................................................................................................... 21 6.6.3 Funding and Eligibility ................................................................................................ 21 6.6.4 HSA Restrictions ........................................................................................................ 21 6.6.5 Dependent Eligibility .................................................................................................. 22 6.6.6 Tax Reporting ............................................................................................................ 22

6.7 Flexible Spending Accounts ..................................................................................................... 22 6.8 Life Insurance........................................................................................................................... 22 6.9 Disability Insurance .................................................................................................................. 23

6.9.1 Short Term Disability Insurance ................................................................................. 23 6.9.2 Long Term Disability Insurance .................................................................................. 23

6.10 Benefits Continuation – COBRA .............................................................................................. 24 6.11 Holidays .................................................................................................................................. 24 6.12 Vacations/Paid Time Off ........................................................................................................... 24

6.12.1 Buy-Back Policy ......................................................................................................... 25 6.13 Paid Time Off (PTO) Donation Policy ....................................................................................... 25

6.13.1 Eligibility..................................................................................................................... 25 6.13.2 How it Works ............................................................................................................. 26 6.13.3 Procedures ................................................................................................................ 26

6.14 Bereavement Leave ................................................................................................................. 26 6.14.1 Immediate Family Member ........................................................................................ 26 6.14.2 Non-immediate Family Member ................................................................................. 26 6.14.3 Additional Time Off .................................................................................................... 27


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6.15 Jury or Witness Duty ................................................................................................................ 27 6.16 Leave Without Pay ................................................................................................................... 27 6.17 Unpaid Leave of Absence ........................................................................................................ 28 6.18 Family Medical Leave Act (FMLA) ........................................................................................... 28

6.18.1 General Provisions .................................................................................................... 28 6.18.2 Eligibility..................................................................................................................... 28 6.18.3 Type of Leave Covered .............................................................................................. 28 6.18.4 Amount of Leave ........................................................................................................ 31 6.18.5 Employee Status and Benefits during Leave .............................................................. 31 6.18.6 Employee Status after Leave ..................................................................................... 32 6.18.7 Use of Paid and Unpaid Leave .................................................................................. 32 6.18.8 Intermittent Leave or a Reduced Work Schedule ....................................................... 32 6.18.9 Certification for the Employee’s Serious Health Condition ......................................... 33 6.18.10 Certification of Qualifying Exigency for Military Family Leave ..................................... 33 6.18.11 Certification for Serious Injury or Illness of Covered Service Member for Military

Family Leave ............................................................................................................. 33 6.18.12 Recertification ............................................................................................................ 33 6.18.13 Procedure of Requesting FMLA Leave ...................................................................... 34 6.18.14 Designation of FMLA Leave ....................................................................................... 34 6.18.15 Intent to Return to Work from FMLA Leave ................................................................ 34

6.19 Military Leave ........................................................................................................................... 34 6.19.1 Types of Military Leave .............................................................................................. 34 6.19.2 Flex Drills ................................................................................................................... 35 6.19.3 Returning from Military Leave .................................................................................... 35

6.20 Military Active Duty Benefits ..................................................................................................... 35 6.21 Deployment of Family Members in the Armed Services Act (Maryland Law) ............................ 36 6.22 Return to Work/Reemployment ................................................................................................ 36

6.22.1 Reorientation ............................................................................................................. 36 6.23 401(k) Plans ............................................................................................................................. 36

6.23.1 401(k) Loans .............................................................................................................. 38 6.24 Employee Stock Ownership Plan (ESOP) ................................................................................ 38

6.24.1 Background ............................................................................................................... 38 6.24.2 How Does the Plan Work ........................................................................................... 39

6.25 Moving Expenses/Relocation ................................................................................................... 39 6.26 Tuition Reimbursement ............................................................................................................ 39 6.27 Charity Committee ................................................................................................................... 40 6.28 Employee Recognition Program ............................................................................................... 41

7 ATTENDANCE, TIME REPORTING ............................................................................................ 41 7.1 Attendance Policy .................................................................................................................... 41 7.2 Hours of Work ......................................................................................................................... 41

7.2.1 Flextime ..................................................................................................................... 41 7.2.2 Breaks ....................................................................................................................... 41 7.2.3 Break Time for Nursing Mothers ................................................................................ 41

7.3 Time Reporting ......................................................................................................................... 42 7.3.1 Time Reporting Policy and Procedures ...................................................................... 42 7.3.2 Timecards .................................................................................................................. 42 7.3.3 Time Periods ............................................................................................................. 42 7.3.4 Timecard Training ...................................................................................................... 42 7.3.5 Recording Time ......................................................................................................... 42 7.3.6 Travel Time ................................................................................................................ 43 7.3.7 Timecard Changes .................................................................................................... 43 7.3.8 Timecard Completion ................................................................................................. 43


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7.3.9 Timecard Submission ................................................................................................ 43 7.3.10 Timecard Approval ..................................................................................................... 43 7.3.11 Responsibilities .......................................................................................................... 43 7.3.12 Time Reporting Violations .......................................................................................... 44 7.3.13 Adherence to Time Reporting Policy .......................................................................... 45 7.3.14 Penalties .................................................................................................................... 45 7.3.15 Carry Over Hours ....................................................................................................... 45

8 WORKPLACE SAFETY ............................................................................................................... 45 8.1 Drug-Free Workplace Policy ..................................................................................................... 45

8.1.1 Purpose and Goal ...................................................................................................... 45 8.1.2 Applicability ................................................................................................................ 46 8.1.3 Prohibited Behavior ................................................................................................... 46 8.1.4 Notification of Convictions .......................................................................................... 46 8.1.5 Consequences ........................................................................................................... 46 8.1.6 Return-to-Work Agreements ...................................................................................... 46 8.1.7 Assistance ................................................................................................................. 47 8.1.8 Confidentiality ............................................................................................................ 47 8.1.9 Shared Responsibility ................................................................................................ 47 8.1.10 Communication .......................................................................................................... 47

8.2 Workplace Bullying ................................................................................................................... 48 8.3 Violence in the Workplace ........................................................................................................ 48 8.4 Safety .................................................................................................................................. 49 8.5 Accident Reports ...................................................................................................................... 49 8.6 Emergencies ............................................................................................................................ 49 8.7 Inclement Weather/Emergency Closings .................................................................................. 49 8.8 Fire Prevention ......................................................................................................................... 50 8.9 Communicable Diseases .......................................................................................................... 50 8.10 Motor Vehicle Safety ................................................................................................................ 51 8.11 Workers’ Compensation Insurance ........................................................................................... 51 8.12 Smoke-Free Workplace ............................................................................................................ 51

9 TRAVEL POLICY ......................................................................................................................... 51 9.1 Travel Authorization ................................................................................................................. 51 9.2 Travel Procedures .................................................................................................................... 52 9.3 Travel Arrangements ................................................................................................................ 52 9.4 Per Diem Rates ........................................................................................................................ 52 9.5 Travel Expenses ...................................................................................................................... 52

9.5.1 Transportation............................................................................................................ 53 9.5.2 Airfare ........................................................................................................................ 53 9.5.3 Car Rental ................................................................................................................. 53 9.5.4 Company Rental Car Insurance Information .............................................................. 54 9.5.5 Car Rental OCONUS ................................................................................................. 54

9.6 Privately Owned Vehicle .......................................................................................................... 54 9.7 Lodging, Meals, and Incidental Expenses ................................................................................ 54

9.7.1 Lodging ...................................................................................................................... 54 9.7.2 Meals ......................................................................................................................... 55 9.7.3 Incidental Expenses ................................................................................................... 55 9.7.4 Miscellaneous Expenses ........................................................................................... 55

9.8 Unallowable Expenses ............................................................................................................. 56 9.9 Travel Expense Report ............................................................................................................. 56 9.10 Canceled Travel ....................................................................................................................... 57

10 SECURITY .................................................................................................................................. 57 10.1 Security Rules and Regulations ............................................................................................... 57


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10.1.1 Security Incident Reporting Procedures ..................................................................... 57 10.1.2 Security Prevention Procedures ................................................................................. 57 10.1.3 Facilities Security ....................................................................................................... 58 10.1.4 Visitors ....................................................................................................................... 58 10.1.5 Security Clearance .................................................................................................... 58

11 WORKPLACE EXPECTATIONS .................................................................................................. 58 11.1 Company Ethical Standards ..................................................................................................... 58

11.1.1 Code of Ethics ........................................................................................................... 59 11.1.2 Organizational Conflicts of Interest ............................................................................ 59 11.1.3 Inter-Company Relations ........................................................................................... 59 11.1.4 Outside Employment.................................................................................................. 60

11.2 Whistleblower/Retaliation Policy ............................................................................................... 60 11.2.1 Reporting Responsibility ............................................................................................ 61 11.2.2 Acting in Good Faith .................................................................................................. 61 11.2.3 Confidentiality ............................................................................................................ 61 11.2.4 No Retaliation ............................................................................................................ 61

11.3 Attire and Grooming Policy ....................................................................................................... 61 11.3.1 Reasonable Accommodation of Religious Beliefs ...................................................... 62 11.3.2 Addressing Workplace Attire and Hygiene Problems ................................................. 62

11.4 Solicitation ................................................................................................................................ 63 11.5 Telephone Use ......................................................................................................................... 63 11.6 Employees’ Cell Phones/Personal Communications Devices ................................................... 63 11.7 Company/Government Equipment, Facilities and Network Computer Use ............................... 64 11.8 Information Technology Acceptable Use Policy ........................................................................ 65

11.8.1 Acceptable Use .......................................................................................................... 65 11.8.2 Privacy ....................................................................................................................... 65 11.8.3 Sharing of Access ...................................................................................................... 65 11.8.4 Classified Material ..................................................................................................... 65 11.8.5 Internet/Email ............................................................................................................ 65 11.8.6 Personal Internet Use ................................................................................................ 65 11.8.7 Appropriate Workplace Internet Use .......................................................................... 65 11.8.8 Email Privacy ............................................................................................................. 66 11.8.9 Social Media Guidelines ............................................................................................ 66 11.8.10 Know and follow the rules .......................................................................................... 66 11.8.11 Retaliation is Prohibited ............................................................................................. 67 11.8.12 Software .................................................................................................................... 67 11.8.13 Purchasing ................................................................................................................. 67 11.8.14 Licensing ................................................................................................................... 67 11.8.15 Software Standards ................................................................................................... 67 11.8.16 Downloading Software ............................................................................................... 68 11.8.17 Hardware ................................................................................................................... 68 11.8.18 Purchasing ................................................................................................................. 68 11.8.19 Outside equipment ..................................................................................................... 68 11.8.20 Violations and Penalties ............................................................................................. 68

11.9 Non-Fraternization Policy ......................................................................................................... 68 11.10 Confidentiality of Information ........................................................................................... 69

11.10.1 Proprietary Information .............................................................................................. 70 11.10.2 Employee Privacy ...................................................................................................... 70 11.10.3 Social Security Numbers ............................................................................................ 70 11.10.4 Access to Personnel Files .......................................................................................... 71 11.10.5 Verification of Employment ........................................................................................ 71

11.11 Privacy Policy .................................................................................................................. 71


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11.12 Business Ethics Policy ..................................................................................................... 72 11.12.1 Ethics Committee ....................................................................................................... 73 11.12.2 Reporting Ethics Violations ........................................................................................ 73 11.12.3 Complaint Notifications .............................................................................................. 74 11.12.4 Complaints Filed Against You .................................................................................... 74 11.12.5 Response to Complaint .............................................................................................. 74 11.12.6 Employee Status during Adjudication Process ........................................................... 75 11.12.7 Response Submission ............................................................................................... 75 11.12.8 Adjudication Process Timeline ................................................................................... 75 11.12.9 Insufficient Evidence .................................................................................................. 75 11.12.10 Appealing an EC Decision ......................................................................................... 75 11.12.11 Insufficient Evidence of Violation ............................................................................... 76 11.12.12 EC’s Final Decision Notification ................................................................................. 76 11.12.13 Questions and Further Information ............................................................................. 76 11.12.14 Applicability ................................................................................................................ 76 11.12.15 Training...................................................................................................................... 77 11.12.16 Required Signature .................................................................................................... 77

11.13 ASEC’s Anti-Harassment Policy and Complaint Procedure ............................................. 77 11.13.1 Definitions of Harassment .......................................................................................... 77 11.13.2 Individuals and Conduct Covered .............................................................................. 78 11.13.3 Complaint Process ..................................................................................................... 78

11.14 Americans with Disabilities Act (ADA) and the ADA Amendments Act (ADAAA) .............. 78 12 COMMUNICATIONS .................................................................................................................... 79

12.1 Open Door Policy ..................................................................................................................... 79 12.1.1 Arbitration and Grievance Procedures ....................................................................... 79 12.1.2 Procedure .................................................................................................................. 79

12.2 Photography, Videotaping, and Recording Devices .................................................................. 80 12.3 Purchasing (Purchase Orders) ................................................................................................. 80

13 REASONABLE ACCOMMODATION ........................................................................................... 80 13.1 Requests for Reasonable Accommodation ............................................................................... 80 13.2 Confidentiality of Medical Information ....................................................................................... 81 13.3 Internal Review of Decisions Denying Reasonable Accommodations ...................................... 81

14 PROGRESSIVE DISCIPLINE ....................................................................................................... 81 14.1 Corrective Action Procedures ................................................................................................... 82

14.1.1 Step 1: Counseling and Verbal Warning .................................................................... 82 14.1.2 Step 2: Written Warning ............................................................................................. 82 14.1.3 Step 3: Probation ....................................................................................................... 83 14.1.4 Step 4: Suspension and Final Written Warning .......................................................... 83 14.1.5 Step 5: Recommendation for Termination of Employment ......................................... 83

14.2 Appeal Process ........................................................................................................................ 83 14.3 Performance and Conduct Issues Not Subject to Progressive Discipline .................................. 84 14.4 Documentation ......................................................................................................................... 84 14.5 Restricted Forms of Behavior ................................................................................................... 84

15 SEPARATION OF EMPLOYMENT .............................................................................................. 85 15.1 Resignation .............................................................................................................................. 85 15.2 Retirement ............................................................................................................................... 85 15.3 Job abandonment .................................................................................................................... 85 15.4 Involuntary Termination (Layoff and Dismissal) ........................................................................ 85

15.4.1 Involuntary Termination of Employment Agreement (Furloughs or Changes in Contract Terms) ......................................................................................................... 86

15.4.2 Termination ................................................................................................................ 86 15.4.3 Ability to Rescind a Resignation ................................................................................. 87


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15.5 Return of Company Property .................................................................................................... 87 15.6 Exit Interviews .......................................................................................................................... 87 15.7 Rehire ...................................................................................................................................... 87

16 EMPLOYEE HANDBOOK DISCLAIMER ..................................................................................... 89


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1 INTRODUCTION

1.1 Welcome New Employee! We welcome you and wish you every success at Aviation Systems Engineering Company (ASEC). We believe each employee contributes directly to ASEC’s growth and success, and we take pride in you being a member of our team. We hope that your experience here will be challenging, enjoyable, and rewarding.

1.2 Purpose of the Handbook This handbook is a collection of policies and procedures designed to help employees understand what is expected of them and what they can expect from the company. We believe that clear communication can answer, many administrative questions increasing employee productivity and reducing confusion, turnover, and legal issues that may result from any misunderstanding. The procedures, practices, policies, and benefits described here may be modified or discontinued from time to time. We will try to inform you of any changes as they occur. ASEC is furthermore not contractually bound to apply the policies and procedures in this handbook and may choose any method or mode of action it deems appropriate.

This handbook is not intended to address all of the possible applications of (or exceptions to) the general policies and procedures described. For example, we know that some cities and states have specific requirements that may require us to adjust our policies accordingly. For that reason, if you have any questions concerning eligibility for a particular benefit or the applicability of a policy or practice to you, you should contact Human Resources (HR).

Finally, this handbook and the information in it should be treated as confidential and proprietary. No portion of this handbook should be disclosed to others, except ASEC employees and others affiliated with ASEC whose knowledge of the information is required in the normal course of business.

1.3 Employee/Employer Relationship We strive to provide high quality services to our employees. This includes payroll processing, workers’ compensation benefits, workplace safety programs, and an employee benefit program.

We believe the working conditions, wages, and benefits offered to our employees are not only competitive, but are often superior to those offered by other employers in all of ASEC’s locations and this industry. If you have concerns about work conditions or compensation, you are strongly encouraged to voice these concerns openly and directly with your supervisor or another member of the management team.

Our experience has shown that when employees deal openly and directly with supervisors, the work environment is more productive, communications are clearer, and job satisfaction is higher. We believe ASEC amply demonstrates its commitment to you as an employee by responding to your concerns.

Policies set forth in this handbook do not constitute an expressed or implied contract of any nature, and cannot be construed to constitute a contractual obligation of ASEC to any employee. The provisions of this handbook have been developed at the discretion and direction of management and, except for its policy of employment-at-will, may be amended or canceled at any time, at ASEC’s sole discretion, with or without notice to employees.

1.4 Employment-At-Will Employment with ASEC is voluntarily; you are free to resign at will, at any time, with or without cause. Similarly, ASEC may terminate the employment relationship at will, at any time, with or without notice, so long as there is no violation of applicable federal or state law.



2 COMPANY OVERVIEW ASEC was conceived and built upon a commitment to provide a highly qualified, dedicated workforce to meet our customers’ requirements. We have proven ourselves to not only our customers, but also to our employees.

The boards of directors of ASEC are responsible for the stewardship of the Company. The Board is composed of the following members:

• Vincent Bellezza • David Bennett • Doug Desrochers • Denny Roderick • Mike Marrinan • Rob Spohnholtz

ASEC offers opportunities throughout the United States. Our corporate office is located in Lexington Park, MD with a branch office in, Jacksonville; FL. Additional employees are located in Seattle, WA, Washington DC, and Dallas, TX.

ASEC’s Engineering department specializes in providing developmental and operational aviation systems engineering services with a focus on aviation electronics (avionics) in both manned and unmanned aircraft. Our aviation systems engineering expertise extends to mission systems and sensors, development of operational concepts and prototypes, performance-based requirements definition of new and modified avionics, testing of new and modified avionics, systems training, maintenance, and life-cycle support.

Our Flight Operations department offers a full spectrum of flight services supporting research and development of new airborne technologies using affordable, stable, reliable, reconfigurable airborne platforms. We also conduct test-bed aircraft studies, provide payload integration and certification, and conduct full systems’ flight-testing. Our aircrews are experienced operational and developmental test pilots/crewmembers covering a wide variety of fixed, rotary, and unmanned aircraft.

ASEC’s Training Department is comprised of an experienced and professional team of subject matter experts (SME) and instructional systems designers (ISD). We offer a variety of training services and expertise including front-end and performance analyses, curriculum and courseware design and development, and delivery and management of interactive computer-based and instructor-led training programs. We deliver classroom, simulator, and flight line training to active duty members of the armed services and develop curriculum and courseware for the next generation of advanced weapon systems. Our instructors are entrusted with training the U.S. Navy’s test and evaluation aircrew, aircrew instructors, maintenance instructors, and Fleet operators.

ASEC’s Technical Publication department offers a variety of services to fit customers’ electronic publication needs. We provide a wide range of products and support, from XML data updates and publishing solutions to comprehensive development of Class 4 Interactive Electronic Technical Manuals (IETM). Whether developing IETM from legacy data or logistics support analysis data, ASEC has the innovation and technology to support a variety of projects. Our teams of avionics and aircraft systems technical writers are aviation subject matter experts from multiple platforms including P-8A, BAMS/Triton UAV, P-3C, EP-3, H-60R, and 737 aircraft. We possess unique expertise as aircraft operators, maintainers, and aviation managers. These skills give our teams the abilities to not only author data to the skill level our customers desire, but also to perform verification processes on the aircraft.

2.1 Mission Statement and Values ASEC is a veteran-owned company focused on providing best value, innovative aviation systems solutions in the areas of development, analysis, test, and training for the military and civilian aviation



community. ASEC is committed to providing highly qualified, task-specific personnel boasting in-depth aircrew operational and test experience. Our workforce includes hands-on experts in military avionics and software test and evaluation. ASEC’s core values are the guides by which we live. How the mission is achieved is as important as the mission itself. Our mission includes three core values:

People Are Our Greatest Asset

We hire highly motivated and dedicated professionals who strive to provide the best quality of service to our customers. To attract and retain these professionals, ASEC’s loyalty to our employees is paramount and enduring. We aspire to provide an environment that allows for continued professional growth and one that supports personal well-being.

Customer Commitment

We believe that success comes from a committed partnership with our customers, focused on operational excellence. We instill this commitment in our personnel by requiring that they deliver the highest levels of ethics, honesty, integrity, and trust.

Technical and Professional Excellence

We are committed to providing our customers with experienced operators, engineers, and aircrew who are leaders in their profession. We offer educational benefits and training to encourage our employees to stay abreast of advances in their areas of expertise.

3 DIVERSITY

3.1 Equal Employment Opportunity and Affirmative Action Statement Policy It is ASEC’s policy not to discriminate or allow the harassment of employees or applicants on the basis of sex, gender identity, sexual orientation, race, color, religious creed, national origin, physical or mental disability, protected veteran status, or any other characteristic protected by law with regard to any employment practices (including recruitment, advertising, job application procedures, hiring, upgrading, training, promotion, transfer, compensation, job assignments, benefits, and/or other terms, conditions, or privileges of employment), provided the individual is qualified, with or without reasonable accommodations, to perform the essential functions of the job. This policy applies to all jobs at the company. The company will continue to ensure that individuals are employed, and that employees are treated during employment, without regard to their sex, gender identity, sexual orientation, race, color, religious creed, national origin, physical or mental disability, protected veteran status, or any other characteristic protected by law in all employment practices as follows:

Employment decisions at the company are based on legitimate job related criteria. All personnel actions or programs that affect qualified individuals (e.g., employment, upgrading, demotion, transfer, recruitment, advertising, termination, rate of pay or other forms of compensation, and selection for training) are made without discrimination because of any basis protected by law. Employees may choose to voluntarily disclose their sex, race, national origin, disability, and protected veteran status at any time by contacting Human Resources. Such information will be maintained in a confidential manner and will not be used against an individual when making any employment decisions. Employees and applicants with disabilities and disabled veterans are encouraged to inform Human Resources if they need a reasonable accommodation to perform a job for which they are otherwise qualified. The company makes, and will continue to make, reasonable accommodations to the known physical or mental limitations of an otherwise qualified applicant or employee to promote the employment of qualified individuals with disabilities and disabled veterans, unless such accommodations would impose an undue hardship on the operations of the company’s business.

Our affirmative action programs include an audit and reporting system, which uses metrics and other information to measure the effectiveness of our programs. The Affirmative Action Officer has been assigned responsibility for periodically reviewing progress in the compliance and implementation of the



policy of affirmative action. In accordance with public law, the company’s program of affirmative action for qualified individuals with disabilities and the program of affirmative action for protected veterans are available for inspection in the Human Resources department upon request.

In addition, employees and applicants will not be subjected to harassment, intimidation, threats, coercion, or discrimination because they have engaged in, or may have engaged in, filing a complaint, assisting or participating in an investigation, compliance review or hearing, or other activity related to the administration of Section 503 of the Rehabilitation Act of 1973, the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, Executive Order 11246, all as amended, and/or any other federal, state, or local law or regulation regarding Equal Employment Opportunity, opposing any act or practice made unlawful, or exercising any other right protected by such laws or regulations. ASEC, Inc. will not discharge or in any other manner discriminate against employees or applicants because they have inquired about, discussed, or disclosed their own pay or the pay of another employee or applicant. However, employees who have access to the compensation information of other employees or applicants as part of their essential job functions cannot disclose the pay of other employees or applicants to individuals who do not otherwise have access to compensation information, unless the disclosure is (a) in response to a formal complaint or charge, (b) in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or (c) consistent with the contractor's legal duty to furnish information.

4 RECRUITING

4.1 Job Posting ASEC is committed to employing the best candidates for approved positions. ASEC engages in effective recruitment and selection practices in compliance with all applicable employment laws and believes in promoting from within whenever possible. We provide equal employment opportunity to all applicants and employees. The hiring manager and the Human Resources (HR) department may elect not to post certain positions when there are lawful, nondiscriminatory bases for doing so and with the approval of the Executive Management.

The purpose of the Job Posting policy is to ensure all employees are aware of open positions and have the opportunity to apply for those for which they qualify. Once an open position is approved for recruitment, HR will generate job announcements electronically. External recruitment sources will vary depending on the vacancy and will be determined by HR and the hiring supervisor.

ASEC has established a policy of internally posting all job vacancies below the senior management level so that qualified employees with an interest in the posted positions may apply. In addition, vacancies will be advertised externally on the website at www.asec.aero and on state websites and/or job boards where the position is located to satisfy state and federal job posting regulations.

Job postings generally will include the job title, minimum eligibility requirements, and essential job functions.

• In order to be considered for an open position, you must: • Meet the minimum eligibility requirements for the posted job. • Be able to perform the essential functions of the posted job with or without reasonable

accommodation. • Notify your supervisor and the Human Resources department of your wish to be considered for

any open position before the closing date.

ASEC encourages employees to nominate themselves for open positions of interest. It is your responsibility to notify Human Resources for any job for which you are qualified and for which you wish to be considered. Neither ASEC nor any of its supervisors has any obligation to notify employees when jobs for which they might qualify are posted on the web site. If you are interested in an opening, you will submit your most recent resume to Human Resources via the ASEC website, and they will keep you

http://www.asec.aero/



advised regarding the status of your potential opportunity. In the event that you are hired for a posted position, Human Resources will work with you and your current and prospective supervisor to ensure a smooth transition.

When a position has been advertised, ASEC will review the credentials of all qualified applicants and choose the most qualified applicant without regard to that person's status as an employee or outside applicant. This posting program is designed to ensure that a current employee has the same opportunity to apply for positions as a non-employee. Favoritism toward any applicant will not be tolerated. Furthermore, the posting program does not create an obligation on the part of ASEC to fill any posted position with a current employee.

Recruiting involves sourcing and/or finding candidates through any or all of the following:

• ASEC’s website • Employee referrals (see Employee Referral Policy) • Self-nominations (i.e., current employee applicants) • Job boards • State websites

All applicants and potential candidates will be instructed to complete an employment application through ASEC’s website to ensure consistent hiring procedures take place, applicant data retention is obtained, thus allowing for equal employment opportunity.

4.2 Employee Referral Policy As part of ASEC’s comprehensive recruitment strategy, we encourage employees to identify qualified candidates who may be interested in employment with ASEC. Listed below is the bonus payout, which is paid in increments:

Administrative Position Part-Time: $375

Administrative Position Full-Time: $750

Professional Position Part-Time: $750

Professional Position Full-Time: $1,500

4.2.1 Eligibility All Job Requisitions are eligible for a referral award with the exception of:

• Requisitions for Temporary and Internship positions • Requisitions associated with a transfer in contracts

All ASEC employees are eligible for the Employee Referral Program with the exception of:

• Part-time temporary employees whose labor is limited to isolated periods throughout the year. • Executive Management, Human Resources personnel, and supervisors with hiring authority over

the referred candidates. • Employees whose referrals were identified through their participation in recruiting programs (e.g.,

job fairs, college-recruiting events). • Employees who terminate from ASEC prior to the time of award payout.

4.2.2 Procedure The Employee Referral Bonus form must be submitted to Human Resources within 45 days of the new employee’s start date. The form must include the new employee’s name for approval. Both the referring employee and the new employee must be active employees at ASEC at the time of award payout. If the employee who referred the candidate is no longer an employee, the referral award cannot transfer to



another employee. If multiple ASEC employees are listed on the new employee’s application, a divided bonus payout may occur.

4.2.3 Award Processing The bonus is paid in increments; half is paid six months after the new employee’s start date; the remainder is paid at the new employee’s one-year anniversary provided the new employee has remained an ASEC employee. If the employee terminates his/her employment prior to either of these dates, no additional bonus will be paid.

If a part-time employee becomes a full-time employee within a year of the employee’s original part-time hire date, the initial bonus (i.e., the 6 month payout) will be half of the part-time amount, but the balance of the referral bonus (i.e., the one year anniversary payout) will be half the full-time amount. This balance will be awarded at the one-year anniversary of the new employee’s original part-time hire date. For example, if a professional part-time employee becomes a full-time professional employee within a year of his/her original hire date; the referring employee will receive the 6-month bonus based on the part-time status (i.e., $375 or half of $750). The referring employee will receive the second and final referral bonus based on the new employee’s full-time status (i.e., $750 or half of $1,500).

In the event that a part-time employee changes position categories when he/she becomes a full-time employee, (i.e., from an administrative position to a professional position or vice versa) the amount of the referral bonus will be based upon the full-time employment position category. For example, a part-time administrative position referral bonus would initially be $375/2 (Administrative Position Part-Time at the six-month point of employment). Then at the one-year anniversary, if the employee is now a full-time professional, the referral bonus is $750 (professional position full-time, $1,500/2). The converse is also true: for a part-time professional who becomes a full-time administrative employee, the referral bonus initially is $750/2 and then will be $750/2 at the one-year anniversary.

The bonus amount and eligibility factors are subject to change based on ASEC’s business needs, as circumstances dictate.

4.3 Background and Reference Checks ASEC strives to hire and promote the best-qualified individuals, and background and reference checks are an important part of these processes. When a background or reference check is needed with respect to hiring or other employment decisions, the company conducts such checks in compliance with applicable federal, state, and local laws, including the Fair Credit Reporting Act. This includes requiring the following:

• Applicants or employees will be provided with appropriate written notice of the company’s intention to obtain information by way of a background check and will give applicants and employees the opportunity to obtain a free copy of any report obtained.

• Applicants and employees will be asked to authorize a background check before such check is performed.

4.4 Immigration and Employment ASEC is committed to employing United States citizens and aliens who are authorized to work in the United States. ASEC does not discriminate based on citizenship or national origin.

In compliance with the Immigration Reform and Control Act of 1986, you, as a condition of employment, must complete the Employment Eligibility Verification Form I-9 and present documentation establishing identity and employment eligibility.



4.5 Employee Onboarding After the candidate has accepted the terms and conditions presented in the offer letter, he/she will receive a notification to complete on-boarding forms prior to his or her first day at ASEC. At this time, employees are given the opportunity to voluntarily disclose self-identification information to help ASEC comply with state and federal reporting requirements.

To ensure ASEC is in compliance with the Immigration Reform and Control Act of 19861, all new employees must complete the Employment Eligibility Verification Form I-9 and present documentation establishing identity and employment eligibility. ASEC is an E-Verify employer. ASEC does not use E-Verify to discriminate against any job applicant or new hire based on his or her national origin, citizenship, or immigration status. E-verify are used to verify employment eligibility and are not used to pre-screen applicants for employment.

4.6 Orientation At ASEC, we believe that each new employee is to be welcomed as a part of the team from the first day. We seek to make the new employee's adjustment to the job and to the work environment as rapid and pleasant as possible.

For these reasons, we strive to:

• provide new employees with all the information they need. • inform employees on all matters of company policy and company action that might involve or

affect them. • maintain open communication so employees can obtain information and discuss concerns openly

with supervisor, Human Resources associates, and the Executive Management of the company. • ensure that employee expectations and needs are coinciding with ASEC’s expectations and

needs.

All employees will receive a new hire orientation outlining company policies, procedures, and benefits.

Onboarding for all new employees consists of two phases, and is important that each phase be completed thoroughly.

Phase I: Administrative (HR, IT, Payroll, Security)

Phase II: Departmental

New employees will be given a department orientation where the supervisor is encouraged to discuss goals for the first 90 days of employment.

5 EMPLOYMENT

5.1 Employee Classification Categories under Fair Labor Standards Act (FLSA) All employees are classified as either nonexempt or exempt employees based on the Fair Labor Standards Act (FLSA), state, federal wage, and hour laws. The following definitions are provided to help employees understand FLSA employment classifications, employment status and benefit eligibility. These classifications do not guarantee employment for any specified period.

1 8 USC 1324a – 1324b Immigration Reform and Control Act of 1986



5.1.1 Non-Exempt Employees Non-exempt employees are employees whose work hours are covered by the Fair Labor Standards Act (FLSA) 2. As a non-exempt employee, if you work more than 40 hours in a workweek, you qualify for overtime at one and a half times your regular rate of pay.

5.1.2 Exempt Employees Exempt employees are exempt from the minimum wage and overtime provisions of the FLSA. Exempt employees hold jobs that meet the standards and criteria established under the FLSA by the U.S. Department of Labor. These employees are generally managers or professional, administrative, or technical staff. Most ASEC employees providing direct support to customers are considered professional and therefore exempt from overtime pay. However, overtime may be approved (paid at the employee’s straight-time rate), depending upon special circumstances and subject to advance supervisor approval. For more information, please reference the overtime section.

5.2 Employment Types

5.2.1 Regular Full-Time Employees not assigned to a temporary status and who are regularly scheduled to work ASEC’s full-time schedule are considered regular full-time employees. Full-time employees are eligible for ASEC’s benefit package, subject to the terms, conditions, and limitations of the benefit program.

5.2.2 80% Employee Employees not assigned to a temporary status, and who are regularly scheduled to work ASEC’s full-time schedule, but at 80% of a timecard period, are considered 80% employees. Although these employees are generally eligible for ASEC’s benefit package (subject to the terms, conditions, and limitations of the benefit program), their salary reflects the reduced workweek. The standard workday for an 80% employee is 6.4 hours (vice 8 hours for regular full-time employees) but hours may be altered to meet employee and customer needs. If hours exceed more than 40 hours in a workweek, and the employee is a non-exempt employee, the employee will qualify for overtime at one and a half times their regular rate of pay. The employee’s supervisor must preapprove overtime. The HR department will provide further instructions for 80% employees. The following benefits are based on this reduced work schedule: Vacation (PTO), holidays, leave without pay, military leave, and jury duty are based on a 6.4-hour working day vice an 8-hour working day. Thus, on a time card, a day of vacation (or any of the above listed benefits) for an 80% employee is logged as 6.4 vice 8 hours.

An 80% employee receives the same health care, FSA, company paid term insurance, AD&D, and STD as the regular full-time employees subject to the terms, conditions, and limitations of the benefit program.

5.2.3 Regular Part-Time Employees not assigned to a temporary status, who are regularly scheduled to work less than 32 hours per week, are considered regular part-time employees. These employees receive all legally mandated benefits (e.g., Social Security, Workers' Compensation insurance, and possibly— if they average over 30 hours/week during the 12 month measurement period—medical insurance), but are generally ineligible for ASEC’s other benefit plans. The employee can participate in ASEC’s 401(k) plan and Employee Stock Ownership Plan (ESOP), if they meet the eligibility requirements.

2 29 CFR 531 Wage Payments Under the Fair Labor Standards Act of 1938



5.2.4 Temporary Employees holding jobs of limited or specific duration arising out of special needs, position vacancy pending appointment, the absence of a position incumbent, abnormal workloads, emergencies, or other reasons established by ASEC, are considered temporary employees. Temporary employees may work either full- or part-time work schedules. Temporary employees may be eligible for ASEC’s benefit package, subject to the terms, conditions, and limitations of the benefit program. Please see the Human Resources Department for more details.

5.2.5 Internship ASEC may host summer student internships each year. These internships are designed to be a short exposure to the workplace to aid the student in selecting a career in our industry. Summer interns are temporary employees. Interns must meet all qualifying criteria to receive 401(k) benefits, one of which is to be over the age of 21. Internships generally are offered from June through August to students attending college majoring in a technical science field such as engineering. These positions are paid positions, entitled to minimum wage as stated by Executive Order 13658. Interns will receive reimbursement for out-of-pocket business expenses if and when applicable. Transfer and housing expenses will not be reimbursed. Interns will be expected to abide by all company policies set forth in this handbook. Additionally, interns who may be granted security clearances and base access are expected to honor all security measures that they have been briefed upon after their temporary work has concluded at ASEC and they have returned to school, or until a time when they have permanently severed their ties with the company. Personnel records will be maintained (including required, signed acknowledgements of all company policies) in the Human Resources department in the event of rehire. Interns are not entitled to a job at the conclusion of the internship.

5.3 Furlough In the event of Federal Government mandated, one-day-a-week-furloughs for contractors, ASEC’s policy is as follows:

• the employee can choose to use PTO until it is exhausted, then become an 80% employee working 32 hours a week until the furlough period is over OR

• the employee may become an 80% employee immediately when the furlough period begins in order to save PTO

In either case, benefits generally remain constant, with the exception of PTO (See 80% Employee for details). Employees should contact your PM for more details regarding furloughs.

5.4 Telecommuting Employees Telecommuting must be approved in advance. The PM and Contracts department will assist reviewing contract conditions and requirements to ensure proper procedure is followed and documentation is obtained.

5.5 Transfers Transfers within the company, whether initiated by the company, or by the employee shall be negotiated on an as-required basis.

5.6 Changes to Job Occasionally, changes may be made to an employee’s position with regard to job classification, hours, compensation, locations, leave status, and/or job description. Management will initiate these changes based on the needs of the company. Once all changes have been agreed upon, an Employee Action



Notice will require signatures of approval and notification. These forms are available in the Human Resources department and records will be kept in the employee’s personnel record.

5.6.1 Employee Action Notice (EAN) Employee action notices (EANs) are created and signed by the employee, supervisor, and President/Vice-President to indicate a change in employment status. Please see Human Resources for an EAN form.

5.7 Recordkeeping/Keeping Information Current It is your responsibility to promptly notify ASEC of changes in personal addresses, telephone numbers, social security numbers, names of dependents and beneficiaries, individuals who should be contacted in the event of an emergency, additional training, and other information relative to your employment.

5.8 Performance Reviews Performance reviews are conducted during the employee’s first 90 days or 240 work hours, and on an annual cycle. During the employee’s first 90 days, an informal discussion to evaluate employee performance will be held with your supervisor. The discussion will touch on capabilities, work habits, and performance and will provide a forum for feedback from the employee. The supervisor will provide his/her feedback in the form of a written evaluation for the employee.

Employees will receive an annual performance review on the established date each year. The performance appraisal will be discussed, and both the employee and supervisor will sign the form to ensure that all strengths, areas for improvement, and job goals for the next review period have been clearly communicated. Performance evaluation forms will be retained in the employee’s personnel file.

During the Performance Review period, employees are required to update their job description and resume.

Merit increases are based on the company’s performance and financials, and are not guaranteed. A performance review does not always result in an automatic salary increase. Supervisor will evaluate the employee’s overall performance and salary level relative to his/her position responsibilities to determine if a salary increase is warranted.

Budget allocations for merit increases are planned for and allocated before the start of each fiscal year. The annual salary increase program is designed to assist management in planning and allocating merit and promotional increases that reward individual performance, are competitive, and are equitable.

Salary adjustments are occasionally requested or warranted at times other than the employee’s scheduled annual salary reviews. The company’s President and Vice President must preapprove out-of-cycle salary increases.

5.9 Compensation It is ASEC’s policy to provide compensation programs consisting of base pay, benefits, and/or bonus/cash awards that attract and retain the best-qualified talent and provide growth and development opportunities for employees. The objectives of these compensation programs are to:

• promote internal job compensation equity by properly evaluating all jobs within ASEC to establish their relationship to other jobs in similar businesses outside of ASEC

• ensure competitiveness with companies in the same geographic area, industry, and/or labor markets;

• compensate demonstrated performance; • ensure compliance with all appropriate federal, state, and local laws; and



• ensure that ASEC's expenditures for compensation are in line with its business objectives at the business unit and corporate level.

ASEC always strives to ensure accurate payment for your work. If you ever have questions or concerns regarding your compensation, please bring it to the attention of the Accounting department, Human Resources department, or your supervisor. If errors have occurred, ASEC will take appropriate corrective action.

5.9.1 Payment of Wages

5.9.1.1 Pay Days ASEC employees will be paid semi-monthly, on the 15th and 30th day of the month. In the event that a regularly scheduled payday falls on a weekend or holiday, you will be paid on the last workday prior to the regularly scheduled payday.

The first pay you receive will be on the second regularly scheduled payday after your start date. The Accounting department requires two weeks to process payroll and verify its accuracy. For example, if you start work on the first of the month, your first paycheck will be on the 30th of that month, not on the 15th.

5.9.1.2 Direct Deposit Employees are preferably paid through direct deposit to either a savings or checking account at the financial institution of their choice. You are strongly encouraged to have your pay deposited directly into your bank account after providing advance written authorization to ASEC.

You can obtain your Statement of Wages by logging on to iSolved, ASEC’s employee benefit, and compensation website.

5.9.1.3 Deductions All deductions from an employee's wages shall be in accordance with applicable law and, when required, the employee's consent.

After federal income taxes, Social Security taxes, state and city tax withholding deductions, and state unemployment insurance taxes have been deducted from an employee's paycheck, the remaining balance is considered disposable earnings for the period. From this amount, the company will withhold as follows:

• Federal tax levy: the total amount will be withheld. • Child support order by a court: the amount over 50 percent of disposable earnings if an

obligated parent has a second family, or 60 percent if there is no second family, will be withheld. These limits are each increased by 5 percent if payments are in arrears for a period equal to 12 weeks or more.

• Garnishment: the amount subject to garnishment may not exceed either 25 percent of disposable earnings for that week or the amount by which the employee's disposable earnings exceed 30 times the federal minimum hourly wage. ASEC is required by law to follow the guidelines stipulated in a garnishment order. Different limits are set on different types of garnishment. The most common types of garnishment and wage assignments are court order for a federal bankruptcy, court order for child support, federal or state tax levy, student loan, creditor garnishment, or employee wage assignment. Upon receipt of a garnishment notice, Payroll will notify the employee when the garnishment will take effect and any other necessary instructions. Considering the garnishment requirements, Payroll will determine the employee's "disposable wages" (i.e., gross wages less taxes and other deductions required by law). A payroll deduction will commence and continue until ASEC receives notification from the court or government agency



that the garnishment is discharged. Contact Payroll directly with any questions about garnishments or wage assignments.

Caution: You are to review the garnishment order carefully in the event that state law provides for some other formula for withholding.

Deductions will be made from an employee’s wages in the following order:

1. Social Security taxes 2. Federal and state income taxes 3. Amounts owed to the company 4. Child support 5. Garnishment 6. Assignment of wages (Voluntary and if allowed under state law)

No deduction from an employee's wages for any period shall cause the employee's wages for any such period to be less than the wage required to be paid by the company pursuant to applicable law.

Deductions not taken for any pay period may be carried over to succeeding pay periods and deducted from the wages due in the succeeding pay period to the extent allowed by law.

Accounting will notify employees of all deductions.

If an employee's marital status changes or the number of exemptions previously claimed increases or decreases, a new Form W-4 must be submitted to the Human Resources department.

If the employee objects to a deduction, such as a garnishment or child support order, the employee should seek legal counsel. Employees must consent in writing to the following deductions:

• Payment of group health insurance • Contributions to a retirement plan • Repayment of purchases made on credit from the company • Repayment of payroll advances, and/or overpayments • Educational loans

The above limitations apply to the employee's earnings per week, regardless of the pay cycle. The obligations of the statements above do not constitute legal advice.

5.9.1.4 Conflicts When the company receives a garnishment notice from more than one source, the monies will be paid (to the extent that they are available) to each of the creditors in the order in which notification was received.

Child support orders take precedence over garnishments due to debts, judgments, or other attachment orders.

5.9.1.5 Assignment of Wages Assignment of wages is permitted in Maryland, but is restricted in scope. The employee should furnish the employer with a copy of the assignment at the time it is executed. An assignment of wages is an agreement between an employee and his or her creditors in which the employee voluntarily assigns the creditor a portion of his or her wages for repayment of a debt. Wage assignments differ from garnishments in that garnishment is a procedure which takes place because the employee has not paid his or her debts voluntarily. In Maryland, wage assignments in retail installment sales contracts and for the repayment of loans under $6,000 are illegal. Other assignments of wages are legal if they cover only wages that will be earned up to six months from the date they are signed. In addition, wage assignments must be:

• in writing;



• signed and acknowledged by the assignor/employee (and spouse if married) before a notary public for the county in which the assignor lives;

• entered in the county court docket by the court clerk on the same day; • have an interest rate of no more than 6 percent; and • served on the assignor’s employer within 3 days of the signing and acknowledgment (MD

Commercial Law Code sec. 15-301 et seq.).

5.9.1.6 Lien for Unpaid Wages Act (Maryland Law) The Lien for Unpaid Wages Act (Maryland Law), modeled after the Maryland Contract Lien Act, provides a mechanism for an employee to file a lien for unpaid wages on ASEC’s real or personal property before a lawsuit is filed in court. In addition, the law creates an expedited process by which a court must determine whether to issue an order establishing a lien for unpaid wages within 45 days after the date on which the complaint is filed. Under the new wage law, ASEC must file a complaint setting forth its defenses within 30 days of service of the notice of lien in the circuit court for the county where the real or personal property is located. The complaint must include an affidavit containing a statement of facts that support any defenses raised. The complaint should also request an evidentiary hearing. The employee, however, still must prove his or her case based on a preponderance of the evidence. If the employee succeeds, the employee is entitled to court costs and reasonable attorney's fees. In addition, if ASEC fails to file the complaint within 30 days after notice is served, the lien for unpaid wages is formally established.

5.9.2 Overtime Employees are required to work the hours normally scheduled for your employment category and position. You may be required to work beyond your normal shift, which generally totals 8 hours per day and 40 hours per week. In the case of exempt employees, you are not normally paid overtime unless special conditions exist and your supervisor approves the overtime. In the case of a non-exempt (i.e., hourly) employee, ASEC defines its overtime policy as follows:

• Work Week. The amount of time worked during a given week (Sunday—Saturday). This time period includes holiday time, paid time off (PTO), or any other paid benefit and is normally 40 hours.

• Overtime. Any time worked by a non-exempt employee during the defined workweek that is in excess of 40 hours. This time will be paid at a rate of one and a half times the employee’s regular rate.

• Unauthorized Overtime. Unauthorized overtime is any overtime worked by an employee without prior approval from his or her immediate supervisor.

5.9.3 Hazardous Duty Pay Employees who work in a Hazardous Duty zone (due to work requirements levied by the customer) are eligible for additional pay (i.e., hazardous duty pay). The rate of hazardous duty pay will be determined on a case-by-case basis. Management is responsible for determining whether the additional pay is warranted.

5.9.4 Flight Qualifications and Pay Employees who volunteer to be project specialists or NATOPS-qualified aircrew and who fly aircraft in the performance of their work must attain and maintain currency in accordance with the ASEC Flight Procedures. Qualified project specialists and NATOPS-qualified aircrew may be eligible for additional pay (i.e., flight pay) if specified by the working contract. The rate of flight pay will be determined on a case-by-case basis.



5.9.5 Extended Workweek (EWW) This defines the policy for payment of supplemental pay for exempt employees.

The salaries established for positions exempt from the overtime provisions of the Fair Labor Standards Act and Service Contracts Act are based on the attainment of work objectives and not on the hours spent performing the work. Exempt salaried employees are expected to work beyond regular hours when necessary to meet schedules, to write proposals, for staff development, and for the general betterment of themselves and the company.

In circumstances in which a customer or a supervisor requires and authorizes extended hours from exempt staff and the indirect account or the contract provides reimbursement of those hours, the employee’s salary will be supplemented accordingly. These circumstances, for example, could be accelerated project schedule or work in circumstances in which the employee cannot dictate his/her personal work schedule (e.g., shipboard testing, testing driven by test equipment availability). The salary supplement will be equivalent to their annual hourly rate multiplied by the number of hours charged to the EWW pay type (OS1).

5.9.5.1 Eligibility Salaried employees whose standard workweek is defined as at least 40 hours are eligible for extended workweek. The policy is not applicable to unscheduled professionals and consulting employees who are paid on an hourly basis, or salaried employees whose standard workweek is fewer than 40 hours.

5.9.5.2 Procedure The procedure can be viewed on the shared drive.

5.9.6 Bonuses, Performance, Annual and Recognition When an employee is recognized for outstanding performance and/or has assumed non-routine responsibilities beyond their regular duties, s/he may be eligible for a bonus. In addition to intermittent bonuses for performance recognition, employees may be eligible for a bonus during the annual performance review period in October. An annual End of Year (EOY) bonus may be given out at the end of the year. The amounts are determined by the Board of Director’s approval.

5.9.6.1 Project Manager/Program Manager Bonus Employees who are given, and accepts the added responsibility of being a Junior Project Manager, Project Manager, or Program Manager may be given a bonus on a bi-annual basis. In addition to their regular duties, these employees have undertaken tasks associated with the Project Manager/Program Manager job descriptions, which can be found on the shared drive.

5.10 Uniformed Services Employment and Reemployment Rights Act (USERRA)

5.10.1 Eligibility Uniformed Services Employment and Reemployment Rights Act (USERRA) applies to persons who perform duty, voluntarily or involuntarily, in the "uniformed services," which include the Army, Navy, Marine Corps, Air Force, Coast Guard, and Public Health Service commissioned corps, as well as the reserve components of each of these services. Federal training or service in the Army National Guard and Air National Guard also gives rise to rights under USERRA. In addition, under the Public Health Security and Bioterrorism Response Act of 2002, certain disaster response work (and authorized training for such work) is considered "service in the uniformed services." Uniformed service includes active duty, active duty for training, inactive duty training (e.g., drills), initial active duty training, and funeral honors duty performed by National Guard and reserve members. This



also includes the period for which a person is absent from a position of employment for the purpose of an examination to determine fitness to perform any such duty.

5.10.2 Satisfactory Completion of Service To be eligible for reemployment, the individual must have satisfactorily completed his or her service. This means that the following persons are not eligible:

• Those with discharges of "other than honorable" or "undesirable" • Those who have been dropped from the rolls for being absent for more than 3 months • Those who are imprisoned by a civilian court • Those who are absent due to court martial

5.10.3 Job Qualifications To be entitled to reinstatement to the same job, the individual must still be qualified to perform the required functions of the position. If the individual needs to acquire or practice job skills, a reasonable time will be granted for this purpose.

5.10.4 Prior Misconduct If an employee were being terminated, prior to entering the military, he or she would not be eligible for rehire. For example, an investigation of the conduct had been completed and the decision to fire had been made, but the individual left for service prior to attending the meeting at which he/she would have been fired. This employee would not be eligible for rehire.

5.10.5 Temporary Positions Individuals who held temporary positions are not eligible for rehire under this policy.

5.10.6 Time to Apply Individuals should apply for reemployment based on the following schedule:

Period of service Required notice time to return to work Fewer than 31 days First full, regularly scheduled work period following completion of the

service (with an eight-hour period for safe transportation). More than 30 days but fewer than 181 days

Fourteen days after the completion of service (or if impossible or unreasonable through no fault of the person, the next first full calendar day when application becomes possible).

More than 180 days Not later than 90 days after the completion of service. A person who is hospitalized or convalescing

Reporting or application deadlines are extended up to two years for persons who are hospitalized or convalescing.

Individuals are to be re-employed according to the following schedule:

Period of service Job Placement Fewer than 91 days Qualified: The individual is to be placed in the job that person

would have had if employment had not been interrupted by service, not the job held when the service began, assuming the person is qualified to perform those job duties (e.g., a person may have to be promoted).



Not Qualified: If the person served for fewer than 91 days and is not qualified to perform the duties of the job that person would have had if there had not been any service and the company has made reasonable efforts to qualify the person for the job, then this individual is to be reinstated in the job held on the date service began.

More the 90 days Qualified: If the service was for more than 90 days, the person is to be placed in the job the person would have had if employment had not been interrupted (e.g., a promoted position) or a position in which the person is qualified to perform, with similar seniority status and pay.

Not Qualified: If the person served more than 90 days and is not qualified to perform the job which that person would have had if not for service, and the company has made reasonable efforts to qualify the person for the job, then the person is to be placed in the job that was held on the date the service commenced.

• In the case of a person with a disability and, who after reasonable efforts by the employer to accommodate the disability, is not qualified to be employed in the proper positions required by this Act, the person is to be employed in any other position that is equivalent in seniority status and pay, if the person is qualified to perform those duties with or without reasonable efforts by the company.

• If an individual is not qualified to hold any of the positions as required by the Act, the person is to be placed in any other position of lesser status and pay for which the person is qualified to perform with full seniority.

• If two or more persons are entitled to the same job under this law, the one who left the position first shall have the prior right to reemployment.

5.10.7 Similar Position If the individual is not qualified for his or her former position (e.g., required job skills have changed or the individual has a disability), then the person may attempt to qualify for a similar job. For example, if a person needs to acquire additional skills to perform his or her former job, he/she can apply for a similar job, and then acquire the skills needed for the former position within a reasonable amount of time. If those skills are acquired, the person can then move to the former position.

5.10.8 Waiver Veterans and others may waive both their leave of absence rights and their benefits not based on seniority by signing a written waiver. They may not waive other rights and benefits that a person may be entitled to under the law, particularly reemployment rights after service. For more information, please contact Human Resources.

5.10.9 Seniority and Other Benefits Individuals eligible for rehire are entitled to seniority from the date of hire prior to the military service, and all benefits will be calculated based on that date (e.g., cost-of-living raises, health insurance, life insurance, etc.). If the employee is eligible for 401(k) benefits, ASEC will make up the Safe Harbor and company match contributions upon your return. Please note, to receive the company match, you must make up your contributions to your 401(k) once you return subject to USERRA guidelines. (See Military Active Duty Benefits). Merit increases and promotions that would have occurred “with reasonable



certainty” had the employee not been away on military service would be entitled to such an increase upon return... However, circumstances may justify exceptions to this rule.

5.10.10 Reinstatement Offer Except with respect to persons who have a disability incurred in or aggravated by military service, the position into which a person is reinstated is based on the length of a person’s military service.

5.10.11 Physical Examinations Like all employees returning from a leave of absence lasting more than four weeks, persons eligible for rehire under this policy may also be asked to undergo a medical examination if their leave lasts more than four weeks. Such a medical examination and its results will be conducted in accordance with the Americans with Disabilities Act.

5.10.12 Changed Circumstances If the company's circumstances have changed, making it impossible or unreasonable to reemploy a veteran, then the person may be denied a job. For example, if the individual's old job has been abolished, and if he/she had been employed at the time, he/she would have been discharged. Employers are excused from making efforts to qualify returning service members or from accommodating individuals with service-connected disabilities only when doing so would be of such difficulty or expense as to cause “undue hardship.” [Section 4312 (d) (1)/ CFR 1002.139 (b) / 20 CFR 1002.5 (n)]

5.10.13 Discharge and Demotion An individual entitled to reemployment under this policy and actually reemployed may not be discharged or demoted except for cause based on the following schedule:

• Within one year, if the person's service was more than 180 days; or • Within 180 days, if the person's period of service was more than 30 days but less than 181 days.

5.10.14 Vacation Leave An individual who has accrued paid time off (PTO) (e.g., personal days and vacation days) may use such accrued paid time toward any military duties. Service members are permitted, at their request, to use accrued PTO instead of unpaid military leave.

5.10.15 Discrimination The company does not discriminate against a person who:

• is a member of; • applies to be a member of; • performs; • has performed; • applies to perform; or • has an obligation to perform service in a uniformed service

5.10.16 Review To ensure compliance with applicable law, ASEC will review this policy at least annually.

5.10.17 Exceptions The HR Director and Executive Management may make exceptions to this policy to provide more benefits to the returning individual.



5.10.18 Coordination with Other Policies This policy will be coordinated with all other policies, including (but not limited to) pay during military leave, discharge, demotion, transfer, pay increases, promotions, fitness for duty, physical examinations, and benefits.

6 EMPLOYEE BENEFITS As an eligible employee of ASEC, you are provided a wide range of benefits. A number of the programs (such as Social Security, workers' compensation, state disability, and unemployment insurance) cover all employees in the manner prescribed by law. For more information on eligibility, please reference Employment Classifications.

6.1 Benefits Plan ASEC’s medical insurance is offered to employees working more than an average of 30 hours a week. All other benefits in ASEC’s benefits plan are available for full-time employees. The plan provides comprehensive benefits for a wide variety of individual and family situations. ASEC and its employees share the cost of most benefit options. Some benefits are voluntary to the employee. Depending on the elected benefits, premium contributions will be made on either a before-tax or after-tax basis. Please contact the HR department for additional details.

The following benefit programs are available:

• Medical Insurance, including prescription drugs • Tuition Reimbursement • Dental Insurance • Military Leave • Vision Insurance • Bereavement Leave • 401(k) Plan • Unpaid Leave of Absence • Employee Stock Ownership Plan (ESOP) • Workers’ Compensation Insurance • Term Life Insurance • Benefits Continuation (COBRA) • Additional Term Life Insurance • Holidays • Accidental Death and Dismemberment (AD&D)

Insurance • Paid Time Off for Vacation/Sick

Leave • Long Term Disability Insurance (LTD) • Short Term Disability Insurance • Health Savings Account (HSA) • Flight Qualifications Pay • Family and Medical Leave (FMLA) • Hazardous Duty Pay • Flexible Spending Account (FSA) • Leave for Jury Duty • Dependent Care (FSA) • Employee Referral Bonus

ASEC and new employees have limited time to process an enrollment. New employees should make their enrollment decisions within five (5) days of starting employment with ASEC. This will allow time for processing and follow-up inquiries, all while ensuring all enrollment paperwork is correct before the insurance carrier’s deadline. Missing this deadline may result in a wait until the open enrollment period to make election options.

Employees are strongly encouraged to enroll in Long Term Disability (LTD) during the initial benefits enrollment. Waiting to enroll will result in medical screening requirements and a physician’s examination (which may include fees) prior to approval. Not only will the processing time be extended, but also the insurance carrier’s approval of your application is no longer a certainty. Your initial check-in to ASEC or employment eligibility changes is the only time approval of your LTD application is guaranteed.

Health Savings Account (HSA), Life insurance, LTD, and 401(k) contributions can be changed or stopped at any point throughout the year.



Under section 125 of the Internal Revenue Code, a cafeteria plan is a separate written plan maintained by the employer for employees to have an opportunity to receive certain benefits on a pretax basis. According to rules governing cafeteria benefit plans, once employees make their benefit elections for the year, these elections must remain in effect for the remaining plan year. However, there are special times when employees can change their benefit elections midyear if they experience a qualifying event.

6.2 Summary Plan Descriptions Summary Plan Descriptions (SPDs) are available to all ASEC employees and are located on the ASEC shared drive. Any modifications to an Employee Retirement Income Security Act (ERISA) covered retirement or health benefit plan will be reflected in an updated SPD and will be made available to participants free of charge.

6.3 Qualifying Event A qualifying event is a personal change in status, which may allow you to change your benefit elections. If you experience a qualifying event, you must request a change to your benefits from the Human Resources department within 30 calendar days of the event and provide required documentation. If you do not request the change within 30 calendar days, the next opportunity you will have to make changes to your benefits will be during the next open enrollment period. Examples of qualifying events include, but are not limited to, the following:

• Change in Legal Marital Status. Includes marriage, divorce, legal separation, annulment, or death of a spouse.

• Change in Number of Dependents. Includes birth, death, adoption, placement for adoption, and award of legal guardianship.

• Change in Employment Status of the Employee’s Spouse or Employee’s Dependent. Includes switching from part-time to full-time employment status, switching from full-time to part-time, termination or commencement of employment, a strike or lockout, and commencement of or return from an unpaid leave of absence that results in employee/dependent becoming ineligible for coverage.

• Dependent Satisfies or Ceases to Satisfy Eligibility Requirement. Includes dependent reaching 26 years of age for medical coverage. Includes dependents reaching age 19 for dental and vision coverage, or until the end of the month that the child reaches age 26 if he/she is a full-time student at an accredited educational institution and chiefly reliant upon the Certificate Holder for maintenance.

Any questions on qualifying events should be directed to the Human Resources department.

6.4 Open Enrollment Employees can enroll, change, or terminate medical, dental, and/or vision benefits without a qualifying event during open enrollment. ASEC’s annual open enrollment period occurs in June. New plan years start on July 1st and end the following June 30th.

All employees are strongly encouraged to review their personal requirements in light of the benefits offered by ASEC and to invest in supplemental benefits as necessary to fulfill their needs.



6.5 Insurance

6.5.1 Medical/Dental/Vision ASEC offers one HSA medical plan, one dental plan, and a vision plan. Information is available on the ASEC shared drive. Please contact the Human Resources department for additional information. The plan providers are:

• Cigna Open Access with HSA - Available to employees working more than 30 hours a week on average - Offered to eligible employees, their spouse, and their dependents up to age 26.

• United Concordia - Offered to full-time employees, their spouse and dependents. - Dependents over age 19 must be full-time students to be eligible

• Group Vision Service – Under EyeMed - Offered to full-time employees, their spouse, and their dependents. - Dependents over age 19 must be full-time students to be eligible.

The costs of these plans are shared with the employee.

Eligible employees who elect not to use the ASEC medical plan will receive a payment to help offset their insurance costs through a semi-monthly payroll contribution and a Flex Spending Account (FSA) contribution.

ASEC follows Federal and State regulations pertaining to the definition of a dependent (i.e., spouse, domestic partner, child, etc.) For the Medical plan, a dependent child is defined as an individual who:

• is the natural child, stepchild, adopted child, or grandchild of the insured or a child placed with the insured for legal adoption;

• satisfies the requirements to be a dependent of the insured that apply for Internal Revenue Code Secs. 104, 105, and 106, and any regulations that apply to these sections; and

• is under the age of 27 years (coverage through age 26)

6.6 Health Savings Account A Health Savings Account (HSA) is a tax-advantaged medical savings account available to employees who are enrolled in a High Deductible Health Plan (HDHP). An HDHP is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. Being covered by an HDHP is also a requirement for having an HSA.

The funds contributed to the account are not subject to federal income tax at the time of deposit. Funds may be used to pay for qualified medical expenses at any time without federal tax liability. Withdrawals for non-medical expenses are treated very similarly to those in an IRA account in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier.

The employee’s HSA is used to pay the high deductible; the deductible must be met before the medical plan begins to pay ofr a percentage of covered expenses (this is called coinsurance). ASEC’s individual deductible is $1,500; the family deductible is $3,000. As an employee benefit, ASEC will pay the deductible amount of $1,200 per individual or $2,400 per family. These pre-tax funds are prorated over the plan year and deposited into the employees’ HSA. Employees will have to cover the difference in ASEC’s contributions and the deductible amount. The employee can make semi-monthly payroll deductions to the HSA or pay out of pocket when the charges occur.

6.6.1 ASEC’s HSA Payment Schedule Beginning July 1, 2015, the ASEC HSA will be funded according to the following schedule:

http://en.wikipedia.org/wiki/Tax

http://en.wikipedia.org/wiki/High_Deductible_Health_Plan



• For currently eligible employees, the pro-rated ASEC HSA payment is equal to $1200 per individual (or $2,400 per family) divided by 24 (the number of pay periods in the plan year)

• For currently eligible employees, the HSA is funded with the first pro-rated payment on the first payday after the start of the plan year (i.e., July 15th). Assuming eligibility continues throughout the plan year, twenty-four equal payments will be made, $50 per paycheck for individuals and $100 per paycheck for families

• For newly eligible employees, the prorated ASEC HSA payment schedule will be based on the number of pay-periods remaining in the plan year once the employee is eligible for medical insurance. Once eligible for medical insurance, the same payment schedule will apply; $50 per individual/paycheck and $100 per family/paycheck

• For newly eligible employees, the first ASEC deposit into your HSA will occur on the 15th of the month in which your benefit eligibility begins. Benefit eligibility begins the first of each month. If your hire date is the first of the month, your benefit eligibility begins on that day. If, however, you have a hire date of any day after the first of the month, your benefit eligibility begins on the first of the following month. For example, an employee hired on November 1st, your benefits begin that day. The benefits of an employee hired on November 2nd, on the other hand, do not begin until December 1st. If you were hired on November 1st, you first prorated HSA deposit from ASEC will be in your first paycheck in November, which is November 30th. If you were hired on November 2nd, your first prorated HSA deposit from ASEC will be on the first payday in December (i.e., the 15th).

6.6.2 Max Contributions Please visit www.irs.gov for HSA maximum contributions since they may be updated each year.

6.6.3 Funding and Eligibility Maximum contributions were originally tied to the amount of the annual health plan deductible, with only a pro-rated amount allowed for the number of months enrolled in the health plan. HSA regulations now allow members to fund up to the maximums mentioned on the IRS website above, regardless of the size of the deductible and regardless whether he/she was eligible for the health plan for the entire year. This eliminates the limitation of prorated amounts for the number of months enrolled in the plan. However, this new rule comes with a limitation of its own. New regulations state that a member, as long as he/she is at least eligible by December 1st of a given year may contribute the entire year’s maximum to the account for that year. However, doing so requires the member to maintain eligibility for an HSA-credible HDHP for the entire calendar year after that. This rule does not require the member to fund additional amounts into the account the following year, only that eligibility for the HDHP exists for that full next year. If the member does not maintain eligibility for a HDHP, then the maximum amount funded from the previous year is reduced back to the prorated amount of the numbers of months eligible for the health plan.

Excess funding amounts at that point may be removed without a 10% tax penalty by filing a Request to Return Excess Contribution with the financial institution holding the account. Ordinary income taxes still apply, but the IRS 10% penalty does not. If the member fails to remove excess contributions by April 15th of the following calendar year, then the overage amounts are indeed subject to taxes and penalty.

6.6.4 HSA Restrictions Members are reminded that it is not permissible to enroll in an HSA and a medical flexible spending account (FSA) at the same time. An HSA member may participate in a limited FSA for purposes of dental and vision benefits only. Many employees have spouses covered elsewhere, which raises the FSA issue because IRS allows dependent medical expenses to be paid through a family FSA, just like dependent expenses may be paid through the HSA.

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Members may elect to transfer FSA balances to their HSA under a one-time transfer rule permissible now by the IRS. This transfer depends upon the language in the employer’s FSA plan document.

6.6.5 Dependent Eligibility Members are reminded that dependents do not have to be covered under the same health plan for their expenses to be paid through the HSA. A member covered as a single with the employer plan is considered single as far as the insurance company and the deductible are concerned. As far as the IRS is concerned, however, the member is a family from an HSA standpoint, if he/she is married or has dependents on the tax return. For example, John Smith is covered as a single on the HDHP through his employer. He has a $1,200 deductible. His wife is covered elsewhere and has a $250 deductible. John can contribute up to the allowable maximum to his HSA because the IRS views him as a family. He only has a single deductible with his plan, but he can still use the dollars in his HSA to pay for his wife’s deductible and/or other out of pocket expenses, because she is a family member, even though she is covered elsewhere, regardless of the size of her deductible.

Note: HSA eligibility is limited to those who do not have other low deductible coverage. That is, if you are covered by your spouse’s plan that is not considered a credible HDHP, then you may not invest in an HSA. You can still have high deductible coverage, but you are ineligible to contribute to an HSA by IRS rule. Using the above example, John could not be covered under his wife’s medical plan and still be eligible to fund an HSA.

6.6.6 Tax Reporting Employees are reminded that neither ASEC, Inc.; Willis Towers Watson, Inc. (ASEC’s benefits broker); nor any of ASEC’s representatives are in the business of financial or legal accounting, and do not provide tax advice or counsel. It is suggested employees contact their own tax counsel for more detailed tax information.

6.7 Flexible Spending Accounts ASEC provides a flexible spending program with funded limits set by ASEC that allows an employee to set aside a portion of his/her income on a pre-tax basis for the payment of the following:

• expenses not reimbursed by the medical/dental plans and other qualifying medical expenses to the maximum as stated by the IRS and

• expenses for dental and vision only, if the employee has an ASEC HSA. If the employee has an ASEC HSA, he/she can legally have a Limited FSA if the funds in that Limited FSA are only used for dental and vision expenses. Employees should be extremely careful when accounting for those FSA funds... dependent/child care as defined under IRS Code Section 129 for the case of children up to the age of 13 or for the care of a mentally or physically disabled qualifying dependent to a maximum of $5,000.

Employees eligible for the company contribution to this plan are those employees not receiving company contributions into their HSA healthcare plan. An annual contribution of $250 will be made into the eligible employee’s FSA. For new FSA eligible employees: if the employee began work with ASEC during the first six months of the plan year (i.e., July 1–December), the company contributes $250. If the employee starts work with ASEC in the seventh or subsequent month of the Plan Year (i.e., January 1 - June 30), the company contribution is $125.

6.8 Life Insurance Employees are provided with term life insurance equal to the amount of their salary (up to $125,000), paid at ASEC’s expense. The term life benefit also has an Accidental Death and Dismemberment (AD&D) feature. This feature equals the amount of the term-life benefit in the event of death. In addition, there



are provisions outlined in the benefit to cover you in the event you lose the use of multiple appendages or your vision. The premium for this benefit is paid on your behalf by ASEC.

The employee may purchase additional insurance (i.e., Voluntary Supplemental Term Life).

6.9 Disability Insurance

6.9.1 Short Term Disability Insurance ASEC provides Short Term Disability (STD) benefits when a covered employee (i.e., regular full-time or 80%) is unable to earn ASEC income for an extended period of time (more than seven consecutive calendar days) due to a non-work-related illness, injury, or disability as confirmed by the employee’s attending health care provider. Compensation is 60% of base salary up to $1,400 per week. STD benefits cease upon your physician’s release for your return to work or for a maximum of 12 weeks. Based on our contract, there is a return to work incentive so that you may collect the STD benefit and work part-time to earn up to 100% (not exceed) your pre-disability salary. Your STD benefit will be reduced by 50% of your work earnings. For example, if you are working 20% and get $200 in work earnings (still disabled but able to work PT), Standard will reduce your STD benefit by 50% of the work earnings. Therefore, if your STD benefit is $1,000 for example, Standard reduces your STD benefit to $900.

The first seven (7) calendar days of missed work are charged to the employee’s PTO or accrued leave accounts. If accrued leave is not available, leave is charged to Leave Without Pay (LWOP). Keep in mind, if employee is exempt status LWOP may only be taken in full workweek increments (i.e., Sunday – Saturday). The disability benefit begins on the eighth (8) calendar day of missed work for which the disability claim is filed. STD benefit payments are typically paid weekly, unless documentation and verification is delayed and there is a lump sum payment.

Medical disabilities related to pregnancy are a short-term disability benefit. The benefit period is six weeks (not 12 as non-maternity related benefits are, unless medically needed) beginning from the date of delivery provided the 7 day waiting period has elapsed. If the employee works until the day of the delivery, that day starts the 7 day waiting period and reduces the length of time the employee will receive disability unless medically necessary (Instead of 6 weeks of paid disability, the time is reduced to 5 weeks). If the employee needs to go on leave prior to her due date or delivery because of medical necessity, the treating physician needs to document that it is medically necessary to be part of the STD benefit. If there were some sort of complication that would require the employee to be out more than the standard six weeks, medical documentation would again be required.

Benefits that accrue while earning income as a full-time employee, such as PTO, earned holidays, 401(k) vesting time, seniority accrual and the ability to make 401(k) contributions are suspended while on disability, either Short Term Disability or Long Term Disability.

6.9.2 Long Term Disability Insurance Employees are strongly encouraged to enroll in Long Term Disability (LTD) during the initial benefits enrollment. Waiting to enroll will result in medical screening requirements and a physician’s examination (which may include fees) prior to approval. Not only will the processing time be extended, but also the insurance carrier’s approval of your application is no longer a certainty. A guarantee issue is only provided during your new hire orientation or when you experience an employment status change. Late applications will require approval of medical underwriting which could include requesting additional information from you, copies of medical records from your physician and/or a paramed exam. Long Term Disability (LTD) is available to employees by election through the ASEC benefits plan. Employees are strongly encouraged to purchase LTD during initial check-in to ASEC, thus avoiding the medical exams and additional expenses required by the insurance company for late election of this benefit.

LTD coverage is based on 60% of your base salary with a monthly maximum up to $7,000. Since the employee with after-tax contributions pays for this optional benefit, all received benefits are tax-



free. Costs and benefits are based on age and salary. The LTD benefit duration may vary depending on your age. Please see the Summary Plan Description (SPD) for additional details.

If you are able to return to work on a part-time basis, a return to work incentive is available to you to make up the other 40% of your salary. Under the return to work incentive, you can receive 100% of your salary by combining your disability benefit and part-time earnings for the first year while you are on LTD claim. After the first 12 months, your LTD benefits will be reduced by 50% of your work earnings. LTD benefits are paid out in monthly installments. Benefits that accrue while earning income as a full-time employee (e.g., such as PTO, earned holidays, 401(k) vesting time, seniority accrual and the ability to make 401(k) contributions) are suspended while on Short Term or Long Term Disability.

6.10 Benefits Continuation – COBRA 3 The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives you and your qualified beneficiaries the opportunity to continue health insurance coverage under ASEC’s Health Plan when a qualifying event would normally result in the loss of eligibility. Some common qualifying events are resignation, termination of employment, or death of an employee; a reduction in an employee's hours or a leave of absence; an employee's divorce or legal separation; and/or a dependent child no longer meeting eligibility requirements.

Under COBRA, you or your beneficiary pays the full cost of coverage at ASEC group rates plus an administration fee. A third party hired by ASEC will provide you with a written notice via mail describing rights granted under COBRA. The notice contains important information about your rights and obligations including an application for coverage, which must be completed in a timely manner.

6.11 Holidays ASEC will grant paid holiday time off to all eligible, regular full-time employees and 80% employees (prorated).To be eligible for a paid holiday, you must be an ASEC employee on the day prior and the day after the observed holiday. The nine paid holidays are listed below:

New Year’s Day Independence Day Veteran’s Day Martin Luther King Day Labor Day Thanksgiving Memorial Day Columbus Day Christmas

Holiday pay will be calculated based on your straight-time pay rate (as of the date of the holiday) multiplied by the number of hours you would have otherwise been scheduled to work on that day.

A recognized holiday that falls on a Saturday will generally be observed on the preceding Friday; a recognized holiday that falls on a Sunday will generally be observed on the following Monday. The Board of Directors may make a different determination if the holiday change causes the holiday to be in a different calendar year and that holiday has not been budgeted for the new calendar year.

An employee may request to work on a holiday and “bank” the holiday to use in an 8 hour (or 6.4 for 80% employees) increment later in the calendar year. Ample work must be available to justify working on the holiday, and work must be pre-approved by management. Banked holidays cannot be rolled over from year to year. Employees shall not use a holiday before the holiday has occurred. The holiday may be banked and used later if the number of hours worked during the time period in which the holiday falls will fulfill the required hours of the time period.

6.12 Vacations/Paid Time Off Paid Time Off (PTO) is an all-purpose time off policy for eligible employees, which combines traditional vacation, sick, and personal leave plans into one flexible, paid time-off policy. All regular full-time

3 Consolidated Omnibus Budget Reconciliation Act



employees are eligible to accumulate and use PTO as described in this policy. On the other hand, 80% employees, those employees who work a 32-hour week vice 40, accrue PTO at 80% of the full-time rate.

ASEC acknowledges there may be budgetary circumstances that support the requirement for an employee to use PTO. ASEC reserves the right to require an employee to use PTO at the company’s discretion. Accrual and eligibility begins on your first day of employment. PTO may be used in minimum increments of 0.1 hours. You may only use available PTO to supplement time up to a maximum of 8 hours per day.

PTO accrues each pay period for Regular FULL-TIME employees in accordance with the following schedule:

Years of Service PTO Earned Each Year < 4 120 hours = 4 or > 4 160 hours

PTO is accrued at the following rate for 80% employees:

Years of Service PTO Earned Each Year < 4 96 hours = 4 or > 4 128 hours

Non-exempt, full-time, hourly employees may use accrued PTO if hours worked in a pay period are less than the required amount. For example, if there are 96 hours in a pay period and employee does not work the full 96 hours, PTO or unpaid hours will account for the remainder. If the employee elects unpaid hours, then PTO accumulation will be adjusted for those hours where PTO is not earned.

If an employee has no PTO and wants to go “in-the-hole” for any reason, he/she may do so with the concurrence of the employee’s supervisor up to 16 hours. If the “in-the-hole” PTO will exceed 16 hours, the employee and supervisor must get the concurrence of the president or vice president. An employee may not go “in-the-hole” for holiday time.

6.12.1 Buy-Back Policy An employee may carry over PTO from year-to-year, subject to a maximum carryover of 240 hours (i.e., 30 days at 8 hours each). If PTO accumulated by an employee exceeds 240 hours at the end of September, the excess amount will be cashed out and paid to the employee in their October 15th paycheck.

6.13 Paid Time Off (PTO) Donation Policy This policy enables an employee to donate his/her PTO to another employee in need of time off from work. The PTO Donation Policy provides ASEC employees with the opportunity to assist another employee who has exhausted his/her leave but needs additional hours for personal reasons. This policy allows employees to donate a combined maximum of 80 hours of accrued PTO to an employee in need. This means that the recipient of the donated PTO can receive a maximum of 80 hours in a rolling 12-month period.

6.13.1 Eligibility

• This policy applies to active, full-time employees. • This policy may not be used if the employee has an illness or injury covered by Short-term

disability (STD), Long-term disability (LTD), or Worker’s Compensation benefits. • Employees who donate time must have sufficient time in their PTO bank, and after donation may

not fall below 40 hours PTO. This will safeguard generous employees from unexpected personal needs of their own.



• Employees receiving PTO must have exhausted their own PTO and have zero hours of PTO to accept a donation.

6.13.2 How it Works

• An employee can donate a minimum of 4 hours and a maximum of 80 hours to another employee. Donations must be made in 1-hour increments.

• Only previously accrued PTO may be donated, future PTO cannot. Donations must be made in the form of time off from work and cannot be cashed out for the equivalent dollar value of that time off.

• All donations must be approved by the President or Vice-President and acknowledged by the HR department.

• Donated PTO time will be transferred on a dollar-to-dollar calculation rather than hour-to-hour based on current rate of pay at the time of transfer. (For example, the employee donating gives 4 hours, which is multiplied by his/her hourly rate of $10/hour for a donation equivalent of $40. The receiving employee’s hourly rate is $8/hour. The donation equivalent of $40 is divided by the receiving employee’s hourly rate. The recipient gets 5 hours of PTO time because of the dollar-to-dollar conversion). This conversion will be used to determine how many hours the employee can accept without going beyond the 80-hour maximum.

• Donated time cannot be used retroactively (i.e., for pay periods prior to receiving the donation). • Donated time off cannot be cashed out. • Donated PTO must be used concurrently with Family Medical Leave (if applicable). In other

words, donated PTO cannot be banked to be used after Family Medical Leave is exhausted. • The receiver pays the taxes on the used donated hours; the donor does not. • Employees cannot borrow against future PTO to donate. • The receiving employee has up to 90 days to use the donated PTO after his/her PTO balance

reaches zero; after the 90 days, unused PTO is returned to the donating employee.

6.13.3 Procedures PTO Donation and Receiving forms can be found in the Human Resources department. The procedure can be found on the shared drive.

6.14 Bereavement Leave

6.14.1 Immediate Family Member When a death occurs in an employee’s immediate family, all regular full-time employees may take up to three days off with pay to attend the funeral or make funeral arrangements. These days do not count against the employee’s PTO. The pay for time off will be prorated for 80% employees. Part-time employees are not eligible for this benefit. The supervisor should confirm that the time is recorded accurately on the timecards. ASEC may require verification of the need for the leave.

Immediate family members are defined as an employee’s spouse, parents, stepparents, siblings, children, stepchildren, grandparents, fathers-in-law, mothers-in-law, brothers-in-law, sisters-in-law, sons-in-law, daughters-in-law, or grandchildren.

6.14.2 Non-immediate Family Member All regular, full-time employees may take up to one day off with pay to attend the funeral of a close, non-immediate family member (e.g., aunts, uncles, cousins, other in-laws, or extended family members). This time off will be considered by the employee's supervisor on a case-by-case basis. The pay for time off will be prorated for an 80% employee. Part-time employees are not eligible for this benefit. The supervisor



should confirm that the time is recorded accurately on the timecards. The company may require verification of the need for leave.

6.14.3 Additional Time Off ASEC understands the deep impact that death can have on an individual or a family; therefore, additional unpaid time off may be granted. The employee may arrange with his or her supervisor for an additional four unpaid days off in the instance of the death of an immediate family member. Additional unpaid time off may be granted depending on the circumstances such as distance and the individual’s responsibility for funeral arrangements. An employee’s PTO may also be used.

6.15 Jury or Witness Duty4 ASEC encourages you to fulfill your civic responsibility by serving jury duty when required. Full-time and 80% employees may request up to three days of paid jury duty leave over a calendar year. No deduction is made from your salary for jury duty. If you are required to serve jury duty beyond the three-day paid period of paid jury duty leave, you may use any available PTO or may request leave without pay or extended leave of absence.

You must show the jury duty summons to your supervisor as soon as possible so that your supervisor may arrange to accommodate your absence. Of course, you are expected to report for work whenever the court schedule permits. Upon your return, you must submit your Certification of Jury Duty form to Accounting. This will in no way affect your salary if you serve up to three days of jury duty. ASEC will continue to provide health insurance benefits for the full term of the jury duty absence subject to the terms, conditions, and limitations of the applicable plans.

6.16 Leave Without Pay5 Leave Without Pay (LWOP) is a temporary, unpaid status and absence from work that may be granted after an employee’s PTO is exhausted. In most instances, LWOP for exempt employees may only be taken in full workweek increments. Granting LWOP is a matter of supervisory discretion, approved in advance, and may be limited by company internal policy to five days. Employees, however, have an entitlement to LWOP in the following situations:

• The Family and Medical Leave Act of 1993 (FMLA) (Public Law 103-3, February 5, 1993) provides covered employees with an entitlement to a total of up to 12 weeks of unpaid leave (i.e., LWOP) during any 12-month period for certain family and medical needs.

• The Uniformed Services Employment and Reemployment Rights Act of 1994 (Pub.L. 103-353) provides employees with an entitlement to LWOP when employment with an employer is interrupted by a period of service in the uniformed service. (See 5 CFR 353.106.)

• Executive Order 5396, July 17, 1930, provides that disabled veterans be entitled to LWOP for necessary medical treatment.

• Employees may not be in a pay status while receiving workers' compensation payments from the Department of Labor.

Employees should be aware that LWOP affects their entitlement to or eligibility for certain federal benefits. Employees using LWOP beyond the five-day limit will be considered for an unpaid leave of absence on a case-by-case basis.

Please see the HR department if you have additional question regarding the use of LWOP.

4 28 USC 1875 Protection of Jurors’ Employment 5 5 CFR part 630, subpart L



6.17 Unpaid Leave of Absence Unpaid leaves of absence may be granted for business, family, personal, or educational reasons. They are available to employees who are in good standing and obtain proper management approval, and who have worked for at least 12 continuous months and for at least 1,250 hours during the previous year (i.e., an average of 25 hours per week for 50 weeks).

Healthcare benefits such as medical, dental, and vision cease at the end of the month in which the Leave of Absence begins. Eligible employees can continue these benefits through COBRA. Time-off accruals, life insurance, Short Term Disability (STD), and Long Term Disability (LTD) eligibility will terminate on the last day of employment. Please be aware that ASEC cannot guarantee that the job you fill will be available for you at the end of the unpaid leave except under certain specified circumstances.

6.18 Family Medical Leave Act (FMLA) 6

6.18.1 General Provisions The federal Family and Medical Leave Act of 1993 (FMLA) entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Under this policy, ASEC will grant up to 12 weeks during a 12-month period to eligible employees. This leave may be extended for up to 26 weeks of military caregiver leave (i.e., to care for a covered service member with a serious injury or illness). This leave may be paid, unpaid, or a combination of paid and unpaid leave depending on the circumstances of the leave ad as specified in this policy.

6.18.2 Eligibility To qualify to take family medical leave under this policy, the employee must meet all of the following conditions:

(1) The employee must have worked for the company for 12 months or 52 weeks. The 12 months or 52 weeks need not have been consecutive. Separate periods of employment will be counted, if the break in service does not exceed seven years. Separate periods of employment will be counted if the break in service exceeds seven years due to National Guard or Reserve military service obligations or when there is a written agreement, including a collective bargaining agreement, stating the employer’s intention to rehire the employee after the service break. For eligibility purposes, an employee will be considered to have been employed for an entire week even if the employee was on the payroll for only part of a week or if the employee is on leave during the week.

(2) The employee must have worked at least 1,250 hours during the 12-month period immediately preceding the commencement of the leave. The 1,250 hours do not include time spent on paid or unpaid leave. Consequently, these hours of leave should not be counted in determining the 1,250 hours eligibility test for an employee under FMLA.

(3) The employee must work in a worksite where the company within 75 miles of that office employs 50 or more employees or worksite. The distance is to be calculated by using available transportation by the most direct route.

6.18.3 Type of Leave Covered To qualify as FMLA leave under this policy, the employee must be taking leave for one of the reasons listed below:

6 29 CFR 825.301 - Employer Designation of FMLA leave.



(1) The birth of a child, in order to care for that child. (2) The placement of a child for adoption or foster care, in order to care for the newly placed child. (3) To care for a spouse, child or parent with a serious health condition (described below). (4) The serious health condition of the employee, as described below.

An employee may take leave because of a serious health condition that makes the employee unable to perform the functions of the employee's position.

A licensed health care provider defines a serious health condition as a condition that requires inpatient care at a hospital, hospice, or residential medical care facility, including any period of incapacity or any subsequent treatment in connection with such inpatient care or a condition that requires continuing care.

This policy covers illnesses of a serious and long-term nature, resulting in recurring or lengthy absences. Generally, a chronic or long-term health condition that would result in a period of three consecutive days of incapacity with the first visit to the health care provider within seven days of the onset of the incapacity and a second visit within 30 days of the incapacity would be considered a serious health condition. For chronic conditions requiring periodic health care visits for treatment, such visits must take place at least twice a year.

Employees with questions about what illnesses are covered under this FMLA policy are encouraged to consult with Human Resources.

If an employee takes paid time off for a condition that progresses into a serious health condition and the employee requests unpaid leave as provided under this policy, the company will designate all or some portion of related leave taken as leave under this policy, to the extent that the earlier leave meets the necessary qualifications.

(5) Qualifying exigency leave for families of members of the National Guard or Reserves or of a regular component of the Armed Forces when the covered military member is on covered active duty or called to covered active duty.

An employee whose spouse, son, daughter, or parent either has been notified of an impending call or order to covered active military duty or who is already on covered active duty may take up to 12 weeks of leave for reasons related to or affected by the family member’s call-up or service. The qualifying exigency must be one of the following:

a. short-notice deployment b. military events and activities c. child care and school activities d. financial and legal arrangements e. counseling f. rest and recuperation g. post-deployment activities, and h. additional activities that arise out of active duty provided that the employer and employee

agree. This includes agreeing on timing and duration of the leave.

Eligible employees are entitled to FMLA leave to care for a current member of the Armed Forces, including a member of the National Guard or Reserves. This leave also extends to caring for a member of the Armed Forces, the National Guard, or Reserves who is on the temporary disability retired list due to a serious injury incurred in the line of duty on active duty for which he/she is:

• undergoing medical treatment, recuperation, or therapy; • in outpatient status; or • on the temporary disability retired list.



Eligible employees may not take leave under this provision to care for former members of the Armed Forces, former members of the National Guard and Reserves, or members on the permanent disability retired list.

In order to care for a covered service member, an eligible employee must be the spouse, son, daughter, parent, or next of kin of a covered service member.

(a) A “son or daughter of a covered service member” means the covered service member’s biological, adopted, or foster child, stepchild, legal ward, or a child for whom the covered service member stood in loco parentis, and who is of any age.

(b) A “parent of a covered service member” means a covered service member’s biological, adoptive, step or foster father or mother, or any other individual who stood in loco parentis to the covered service member. This term does not include parents “in law.”

(c) Under the FMLA, a “spouse” means a husband or wife, including those in same-sex marriages, which were made legal in all 50 United States as of June 26, 2015.

(d) The “next of kin of a covered service member” is the nearest blood relative, other than the covered service member’s spouse, parent, son, or daughter, in the following order of priority:

a. blood relatives who have been granted legal custody of the service member by court decree or statutory provisions

b. siblings c. grandparents d. aunts and uncles e. first cousins

When there are multiple family members with the same level of relationship to the covered service member, all such family members shall be considered the covered service member’s next of kin, and they may take FMLA leave to provide care to the covered service member, either consecutively or simultaneously. When such designation has been made, the designated individual shall be deemed the covered service member’s only next of kin. For example, if a covered service member has three siblings and has not designated a blood relative to provide care, all three siblings would be considered the covered service member’s next of kin. Alternatively, where a covered service member has a sibling and designates a cousin as his or her next of kin for FMLA purposes, then only the designated cousin is eligible as the covered service member’s next of kin. An employer is permitted to require an employee to provide confirmation of covered family relationship to the covered service member pursuant to § 825.122(k).

“Covered active duty,” means:

(a) “Covered active duty” for members of a regular component of the Armed Forces, means duty during deployment of the member with the Armed Forces to a foreign country.

(b) “Covered active duty” or “call to covered active duty status” in the case of a member of the Reserve components of the Armed Forces means duty during the deployment of the member with the Armed Forces to a foreign country under a federal call or order to active duty in support of a contingency operation, in accordance with 29 CR 825.102.

The leave may commence as soon as the individual receives the call-up notice. (Son or daughter for this type of FMLA leave is defined the same as for child for other types of FMLA leave except that the person does not have to be a minor.) This type of leave would be counted toward the employee’s 12-week maximum FMLA leave in a 12-month period.

(6) Military caregiver leave (also known as covered service member leave) to care for an injured or ill service member or veteran.

An employee whose son, daughter, parent ,or next of kin is a covered service member may take up to 26 weeks in a single 12-month period to take care of leave to care for that service member.



Next of kin is defined as the closest blood relative of the injured or recovering service member.

The term “covered service member” means:

(a) a member of the Armed Forces (including a member of the National Guard or Reserves) who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness; or

(b) a veteran who is undergoing medical treatment, recuperation, or therapy, for a serious injury or illness and who was a member of the Armed Forces (including a member of the National Guard or Reserves) at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.

The term “serious injury or illness” means:

(a) in the case of a member of the Armed Forces (including a member of the National Guard or Reserves), means an injury or illness that was incurred by the member in line of duty on active duty in the Armed Forces (or existed before the beginning of the member’s active duty and was aggravated by service in line of duty on active duty in the Armed Forces) and that may render the member medically unfit to perform the duties of the member’s office, grade, rank, or rating; and

(b) in the case of a veteran who was a member of the Armed Forces (including a member of the National Guard or Reserves) at any time during a period when the person was a covered service member, means a qualifying (as defined by the Secretary of Labor) injury or illness incurred by a covered service member in the line of duty on active duty that may render the service member medically unfit to perform the duties of his or her office, grade, rank or rating.

(c) Outpatient status, with respect to a covered service member, means either the status of a member of the Armed Forces assigned to a military medical treatment facility as an outpatient; or a unit established for providing command and control of members of the Armed Forces receiving medical care as outpatients.

6.18.4 Amount of Leave An eligible employee can take up to 12 weeks for the FMLA circumstances (1) through (5) above under this policy during any 12-month period. The company will measure the 12-month period as a rolling 12-month period measured backward from the date an employee uses any leave under this policy. Each time an employee takes leave, the company will compute the amount of leave the employee has taken under this policy in the last 12 months and subtract it from the 12 weeks of available leave, and the balance remaining is the amount the employee is entitled to take at that time.

An eligible employee can take up to 26 weeks for the FMLA circumstance (6) above (military caregiver leave) during a single 12-month period. For this military caregiver leave, the company will measure the 12-month period as a rolling 12-month period measured forward. FMLA leave already taken for other FMLA circumstances will be deducted from the total of 26 weeks available.

If spouses both work for the company and each wishes to take leave for the birth of a child, adoption or placement of a child in foster care, or to care for a parent (but not a parent "in-law") with a serious health condition, the spouses may only take a combined total of 12 weeks of leave. If spouses both work for the company and each wishes to take leave to care for a covered injured or ill service member, the spouses may only take a combined total of 26 weeks of leave.

6.18.5 Employee Status and Benefits during Leave While an employee is on leave, the company will continue the employee's health benefits during the leave period at the same level and under the same conditions as if the employee had continued to work.



If the employee chooses not to return to work for reasons other than a continued serious health condition of the employee or the employee's family member or a circumstance beyond the employee's control, the company will require the employee to reimburse the company the amount it paid for the employee's health insurance premium during the leave period.

Under current company policy, the employee pays a portion of the health care premium. ASEC will continue to pay your premiums; however, you are required to reimburse your share (i.e., the amount that is usually taken out of your paycheck) upon return. If the employee does not return to work, he/she is required to reimburse ASEC for the unpaid balance of your health care premiums within 30 days after the termination of your leave period.

ASEC will provide notification 15 days prior to the employee’s loss of coverage.

Accrual of benefits, PTO, and time toward seniority is suspended when you are out on leave. Contributions to your 401(k), Health Savings Accounts (HSA), and Flexible Spending Account (FSA) are prohibited while you are on leave because you are not receiving a paycheck from ASEC and cannot contribute pre-tax dollars.

6.18.6 Employee Status after Leave An employee who takes leave under this policy may be asked to provide a fitness for duty (FFD) clearance from the health care provider. This requirement will be included in the employer’s response to the FMLA request. Generally, an employee who takes FMLA leave will be able to return to the same position or a position with equivalent status, pay, benefits, and other employment terms. The position will be the same or one, which is virtually identical in terms of pay, benefits, and working conditions. The company may choose to exempt certain key employees from this requirement and not return them to the same or similar position.

6.18.7 Use of Paid and Unpaid Leave An employee who is taking FMLA leave because of the employee’s own serious health condition or the serious health condition of a family member will have their PTO run concurrently with FMLA leave.

Disability leave for either the birth of the child or for an employee’s serious health condition, including workers’ compensation leave (to the extent that it qualifies), will be designated as FMLA leave and will run concurrently with FMLA. For example, if an employer provides six weeks of pregnancy disability leave, the six weeks will be designated as FMLA leave and counted toward the employee's 12-week entitlement. The employee will be required to substitute accrued (or earned) paid leave as appropriate before being eligible for unpaid leave for what remains of the 12-week entitlement. An employee who is taking leave for the adoption or foster care of a child must use all paid leave prior to being eligible for unpaid leave.

An employee who is using military FMLA leave for a qualifying exigency must use all paid leave prior to being eligible for unpaid leave. An employee using FMLA military caregiver leave must also use all paid leave prior to being eligible for unpaid leave.

6.18.8 Intermittent Leave or a Reduced Work Schedule The employee may take FMLA leave in 12 consecutive weeks, may use the leave intermittently (i.e., take a day periodically when needed over the year) or, under certain circumstances, may use the leave to reduce the workweek or workday, resulting in a reduced hour schedule. In all cases, the leave may not exceed a total of 12 workweeks (or 26 workweeks to care for an injured or ill service member over a 12-month period).

The company may temporarily transfer an employee to an available alternative position with equivalent pay and benefits if the alternative position would better accommodate the intermittent or reduced schedule, in instances of when leave for the employee or employee's family member is foreseeable and



for planned medical treatment, including recovery from a serious health condition or to care for a child after birth, or placement for adoption or foster care.

For the birth, adoption, or foster care of a child, the company and the employee must mutually agree to the schedule before the employee may take the leave intermittently or work a reduced hour schedule. Leave for birth, adoption, or foster care of a child must be taken within one year of the birth or placement of the child.

If the employee is taking leave for a serious health condition or due to the serious health condition of a family member, the employee should try to reach agreement with the company before taking intermittent leave or working a reduced hour schedule. If this is not possible, then the employee must prove that the use of the leave is medically necessary.

6.18.9 Certification for the Employee’s Serious Health Condition The company will require certification for the employee’s serious health condition. The employee must respond within 15 days of the request or provide a reasonable explanation for the delay. Failure to provide certification may result in a denial of continuation of leave. Medical certification will be provided using the DOL Certification of Health Care Provider for Employee’s Serious Health Condition.

The company may directly contact the employee’s health care provider for verification or clarification purposes. The company will not use the employee’s direct supervisor for this contact. Before the company makes this direct contact with the health care provider, the employee will be a given an opportunity to resolve any deficiencies in the medical certification. In compliance with HIPAA Medical Privacy rules, the company will obtain the employee’s permission for clarification of individually identifiable health information.

The company has the right to ask for a second opinion if it has reason to doubt the certification. The company will pay the employee to get a certification from a second doctor, which the company will select. If necessary to resolve a conflict between the original certification and the second opinion, the company will require the opinion of a third doctor. The company and the employee will mutually select the third doctor, and the company will pay for the opinion. This third opinion will be considered final. The employee will be provisionally entitled to leave and benefits under the FMLA pending the second and/or third opinion. The company may deny FMLA leave to an employee who refuses to release relevant medical records to the health care provider designated to provide a second or third opinion.

6.18.10 Certification of Qualifying Exigency for Military Family Leave The company will require certification of the qualifying exigency for military family leave. The employee must respond to such a request within 15 days of the request or provide a reasonable explanation for the delay. Failure to provide certification may result in a denial of continuation of leave. This certification will be provided using the DOL Certification of Qualifying Exigency for Military Family Leave.

6.18.11 Certification for Serious Injury or Illness of Covered Service Member for Military Family Leave

The company will require certification for the serious injury or illness of the covered service member. The employee must respond to such a request within 15 days or provide a reasonable explanation for the delay. Failure to provide certification may result in a denial of continuation of leave. This certification will be provided using the DOL Certification for Serious Injury or Illness of Covered Service Member.

6.18.12 Recertification The company may request recertification for the serious health condition of the employee or the employee’s family member no more frequently than every 30 days unless:

• Circumstances have changed significantly



• The employer receives information casting doubt on the reason given for the absence • The employee seeks an extension of his or her leave.

Otherwise, the company may request recertification for the serious health condition of the employee or the employee’s family member every six months in connection with an FMLA absence. The company may provide the employee’s health care provider with the employee’s attendance records and ask whether need for leave is consistent with the employee’s serious health condition.

6.18.13 Procedure of Requesting FMLA Leave All employees requesting FMLA leave must provide verbal or written notice of the need for the leave to Human Resources and their supervisor. Within five business days after the employee has provided this notice, Human Resources will complete and provide the employee with the DOL Notice of Eligibility and Rights.

When the need for the leave is foreseeable, the employee must provide the employer with at least 30 days' notice. When an employee becomes aware of a need for FMLA leave less than 30 days in advance, the employee must provide notice of the need for the leave either the same day or the next business day. When the need for FMLA leave is not foreseeable, the employee must comply with the company’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances.

6.18.14 Designation of FMLA Leave Within five business days after the employee has submitted the appropriate certification form, the HR Director or designee will complete and provide the employee with a written response to the employee’s request for FMLA leave using the DOL Designation Notice.

6.18.15 Intent to Return to Work from FMLA Leave The company may require an employee on FMLA leave to report periodically on the employee’s status and intent to return to work on a basis that does not discriminate against employees on FMLA leave.

6.19 Military Leave Military leave will be granted to employees who are absent from work because of service in the U.S. uniformed services in accordance with the Uniformed Services Employment and Reemployment Rights Act (USERRA). This includes a leave of absence to participate in an honor guard for veterans’ funerals. Written or oral advance notice of military service is required, unless military necessity prevents such notice or it is otherwise impossible or unreasonable. An email to the employee’s supervisor is sufficient to satisfy the notice requirement.

Contact your supervisor or the HR Department for more information or questions concerning military leave.

6.19.1 Types of Military Leave ASEC’s current policy is to ensure regular pay, up to ten working days (not including weekends), per military fiscal year for reserve active duty (AT), active duty training, and inactive duty training. If military base pay is less than ASEC pay, the difference in pay between ASEC pay and military base pay will be paid to the employee for a maximum of ten working days per military fiscal year (i.e., October 1 - September 30). Employees must submit a Military Pay Worksheet form to calculate the pay difference at the conclusion of active duty along with a copy of orders and pay sheets. Military leave may be used in one-hour increments throughout the year, not to exceed employees’ regular hours on a typical workday. Alternatively, employees use any available PTO during the ten working day AT absence in order to retain both civilian and military pay.



Reserve Aircrew often has the opportunity to fulfill their Reserve AT yearly requirement in piecemeal fashion throughout the year. (i.e., not ten consecutive working days) Employees may request a flexible work schedule to accommodate intermittent Reserve AT. The employee’s flexible work schedule must be pre-approved by the employee’s immediate supervisor and the schedule should not interfere with supporting the customer. If there is a conflict, the employee may simply use their ten working days of military leave as needed throughout the year, and not work for ASEC on those days.

If your active duty extends beyond ten consecutive working days, you may go on a Leave of Absence and/or exhaust your PTO; see the paragraph labeled USERRA and the Benefits Supplement for Reservists for details on your rights and obligations. Altering your full-time status to part-time may be considered at your request and under extenuating circumstances if your customer and ASEC management consider the continued work while on active duty to be beneficial. Such a change of status would be at the employee’s request and voluntarily entered into. Hours worked must be less than 30 hours during the Sunday to Saturday workweek. Contact your supervisor to discuss the details of this change.

For active duty extending beyond 30 days, if you elect not to take the provided TRICARE, you can continue ASEC healthcare by paying both the employer’s cost and the employee’s cost plus a two percent fee for up to 24 months. Please see the Military Active Duty Benefits table below for additional details on your ASEC benefits while on active duty.

6.19.2 Flex Drills Many reserve units offer additional Flex Drills. These are optional extra drills beyond the normal annual active duty Reserve requirement for the year. These drills or Inactive Duty Training (IDT) periods could be completed on the weekend, but generally occurs during the normal workweek in order to better support the Active Duty component. If an employee opts for a Flex drill, he/she may request a flex workweek, or use PTO to accommodate the Flex Drill schedule. Leave without pay (LWOP) is not an option for exempt employees. (Employees who are exempt from the Fair Labor Standards Act (FLSA) rules, such as non-hourly professionals whom ASEC employs and known as exempt employees, must be paid their full salary if they log any time on their timecards regardless of the number of hours for that time period. This FLSA rule constricts ASEC's ability to allow Reservists to work for their customer while on Reserve military duty.) A flexible work schedule must be pre-approved by the employee’s immediate supervisor and their work schedule shall not interfere with support of the government customer. For detailed information, on Military Leave qualifications contact your supervisor.

6.19.3 Returning from Military Leave Employees returning from military leave will be placed in the position they would have attained had they remained continuously employed or a comparable one depending on the length of military service in accordance with USERRA. (USERRA guarantees up to five years of unpaid military leave for which a job will still be available.) The employee will be treated as though he/she was continuously employed for purposes of determining benefits based on length of service.

6.20 Military Active Duty Benefits Duration of Active Duty

Health Insurance

Life Insurance/

ADD

STD/LTD

401(k) ESOP Eligibility

Job Reinstatement

Seniority

10 days or less 1 1 1 1 2 2 3 More than 10, but less than 31 days

4 4 4 4 2 2 3



More than 30 days, but less than 181 days

5 6 6 7 2 2 3

More than 180 days

5 6 6 7 2 2 (up to 5 years)

3

Military Active Duty Benefits Table Legend

1. Benefit continues; premiums deducted from semi-monthly payroll contributions. 2. Yes. 3. Continues from hire date. 4. Benefit continues; employee must pay his/her share (USERRA rule) throughout their absence or

upon their return. 5. ASEC benefit stops; Group Healthcare coverage available at the employer’s cost, plus 2% admin

cost for up to 24 months. 6. Benefit ceases when employee status is other than full-time. 7. Benefit continues upon employee reinstatement; employee may make-up missed contributions:

ASEC will match those contributions up to 2%. If an employee wants to make up missed employee contributions, the employee must make these contributions within the period that is the lesser of the following: three times the period of military service just completed, or five years from the date of reemployment.

6.21 Deployment of Family Members in the Armed Services Act (Maryland Law) Employees who have worked for ASEC for at least one year and at least 1,250 hours during the previous 12 months have the opportunity to take unpaid leave, if s/he so choose, to spend time with his or her immediate family member (i.e., spouse, parent, stepparent, child, stepchild, or sibling) on the day he or she leaves for, or returns from, active duty outside the United States. The employee will not be required to use sick, vacation, or other "paid time off" leave when taking leave under this law. An employee requesting leave must submit "proof to the Human Resources department verifying that the leave is being taken" for the purpose of deployment or returning from active duty.

6.22 Return to Work/Reemployment

6.22.1 Reorientation ASEC understands that the circumstances of your leave of absence may vary. Whether your leave was short-term or long-term, your supervisor should be able to assist you through the process as you make the shift back to work at ASEC.

However, to ensure a smooth transition, you may have to reorient yourself throughout multiple departments such as:

• Human Resources. HR will help you complete any change forms necessary to reinstate health care coverage, insurance coverage, beneficiary information, retirement benefits, and tax information. HR will also help you receive any annual training that may have been missed.

• Payroll. Payroll will reinstate your payroll, timesheet, and expense account status. • IT. IT will provide you with a computer and educate you on any procedural or software changes. • Security. Upon your return to work from a leave of absence, check with your supervisor to

familiarize yourself with any changes that may have been made with regard to security procedures. To reinstate base access, you must coordinate with your Facility Security Officer.

6.23 401(k) Plans ASEC offers a 401(k) Plan to its eligible employees. Employees may elect to invest a portion of their income in the plan thus reducing their current tax burden while directing savings into a fully vested



account. These employee deferrals, along with company matching and/or profit sharing contributions, and earnings are not taxed until withdrawn at some future date and may then be eligible for favorable tax treatment. Varieties of investment options are available through mutual fund investments with John Hancock. Because the IRS regulates 401(k) plans, withdrawals are only allowed at retirement, termination, disability, or death, which are outlined in detail in the plan document.

Effective 01 January 2012, the employee will become a participant, on the first day of each plan quarter coincident with or next following the date you attain age 21 and you complete 500 hours of service in a twelve month period (such period will commence on your Employment Commencement Date and the service requirement will be deemed met at the time the specified number of hours of service are completed) provided, that you are an eligible employee at the end of that period.

The eligible employee should fill out an enrollment form and make investment selections. If the employee does not make an investment selection (via an investment change form or the John Hancock website or call center) prior to the transfer/deferral of assets, the employee will be default invested into the Qualified Default Investment Alternative (QDIA) fund selected by the plan trustees. This QDIA will be designated as the default for all investment contributions (both employer and employee). You will receive annual notification about the current QDIA fund. The employee can subsequently change the investment fund.

Overview - ASEC provides a Safe Harbor Plan in which ASEC contributes three percent (3%) of an eligible employee’s compensation into a fully vested account. Additionally, ASEC provides a dollar-for-dollar company matching contribution of up to two percent (2%) into a match account that is subject to a vesting schedule for the first two percent (2%) of employee salary deferral contributions. In total, ASEC contributes up to a maximum of five percent (5%) if an eligible employee is contributing 2% of pay.

The ASEC 401(k) Profit Sharing Plan and Trust is a 401(k) Safe Harbor Plan. The safe harbor aspect of the plan is the portion of the plan that needs no long-term vesting before the enrolled employee is eligible for the funds. The enrolled employee then is 100% vested in the safe harbor portion of the plan upon enrollment. Vesting at 100% means he/she can access all the funds in the account when eligible (i.e., when the employee reaches age 59 ½, dies, becomes disabled, or separates from employment).

The safe harbor portion of the plan is listed in your online John Hancock 401(k) account as Safe Harbor Non-Elective contributions. This represents the 3% of your compensation that ASEC contributes to eligible employees regardless of their salary deferral contributions.

The second contribution source for your 401(k) is the employee salary deferral contribution listed in the online John Hancock 401(k) account as Elective Deferral contribution. This is the amount the employee (you) elects to defer into the 401(k) on a by-paycheck basis.

For 2017, for example, the dollar amount is limited to $18,000 for participants under the age of 50. For those 50 and over, there is an additional catch-up contribution of $6,000. Again, with this portion of the 401(k), the employee is 100% vested at all times. The employee has the option for their contribution to be deducted pre-tax into a Traditional 401(k) and/or on an after-tax basis into a Roth 401(k). The pre-tax contribution option is not taxed in the year of contribution but upon withdrawal. The after-tax Roth contribution is taxed at today’s rate, but upon retirement all qualified distributions from this account are not taxed upon withdrawal. Please refer to www.irs.gov for the most current information.

A third source in your 401(k) is a dollar-for-dollar matching contribution (up to two percent) that ASEC will provide if the eligible employee elects to contribute part of his/her salary via the salary reduction contribution. If you put 2% of your salary into the 401(k), ASEC will match it. This is listed in the online John Hancock 401(k) account as Employer Matching contribution. There is a vesting schedule associated with this portion of the 401(k), however. It is based on calendar years of service beginning with your actual hire date, not the number of year’s seniority you may have negotiated when you were hired. In order to qualify as a year of service, you must have worked 1,000 hours or more in that calendar year.

http://www.irs.gov/



Years of Vesting Service % Vesting Less than 2 Years 0% Vested 2 Years but less than 3 Years 20% Vested 3 Years but less than 4 Years 40% Vested 4 Years but less than 5 Years 60% Vested 5 Years but less than 6 Years 80% Vested 6 Years or More 100% Vested

This schedule means that if you leave ASEC before you are 100% vested, you forfeit that portion of the account in which you are not vested. For example, if you leave after completing four (4) full years of employment, you will take 60% of that portion of your 401(k) with you. The other 40% is forfeited.

In summary, there are three possible contribution routes into your 401(k):

• Employee deferral contributions (100% vested) • ASEC Safe Harbor 3% contribution (that is free money – 100% vested) • ASEC matching contribution up to 2% (more free money – vesting per above schedule).

6.23.1 401(k) Loans The 401(k) plan also includes a loan provision. If you are an active employee, you may apply for a loan from your 401(k). Loans will only be made to those who the plan administrator determines have the ability to repay the loan. You may not receive a loan if the sum of your new loan and the outstanding balance of all of your other loans would exceed the lesser of the following:

(1) $50,000 minus the difference between the highest outstanding balance of loans in the past 12 months and the outstanding balance of loans from the plan on the date the loan is made, or

(2) Greater than 50% of the vested account balance under the plan.

Loans must be repaid over a period not extending beyond five years from the date of the loan. You must repay a loan in accordance with the repayment schedule or you may make a full or partial prepayment. You may not refinance your loan. The loan will become payable in full on your termination of employment. The maximum number of loans outstanding at any one time is two. The minimum loan amount is $1,000. If you are married, you must obtain the consent of your spouse before obtaining a loan from the plan. Payments will be made through payroll deduction from each regular paycheck.

Loan fees may be charged against the account of the employee to whom the loan is granted and the plan administrator may adopt any administrative rules or procedures that it deems necessary or appropriate with respect to the granting and administering of loans. Please see the Human Resources if you would like more information regarding taking a loan from the plan. Notwithstanding the foregoing, if your loan agreement was made prior to October 15, 2013 and you have subsequently terminated employment, you may continue to make the scheduled loan repayments by check or other method prescribed by the plan administrator. The plan administrator must receive payments on a timely basis.

Please see the Human Resources department for the John Hancock loan paperwork.

6.24 Employee Stock Ownership Plan (ESOP)

6.24.1 Background As of January 1 2011, ASEC has adopted an Employee Stock Ownership Plan (ESOP). This plan is designed to make all eligible employees part owners of ASEC without any deductions from your paychecks and at no other cost to you.

The employee will become a participant, eligible to participate in the ESOP on the first day of each plan quarter coincident with, or next following the date you attain age 21, and you complete 500 hours of service in a twelve month period (such period will commence on your Employment Commencement Date



and the service requirement will be deemed met at the time the specified number of hours of service are completed) provided, that you are an eligible employee at the end of that period. Annual participation requires 1,000 hours or more of service during a plan year (January 1 -December 31) to sustain eligibility. You must be employed on December 31 in order to receive a contribution for that plan year.

Company contributions to the ESOP may be made in cash, company stock, or any combination thereof. The company’s Board of Directors will determine the amount of the company’s contribution prior to the due date for filing the company's federal income tax return, including any extensions of such date.

You will be eligible to receive a distribution of the vested plan benefit allocated to your accounts beginning sometime after your separation from employment with ASEC. The ESOP vesting schedule is the same as the six-year vesting schedule as listed above for the 401(k).

The exact timing of your distribution and the portion of your accounts to which you are entitled will depend on whether you separate from employment prior to reaching normal retirement age, your death or disability. In addition, the length of your employment with ASEC will play a part in determining your total plan benefit.

6.24.2 How Does the Plan Work Under the plan, there is an Employee Stock Ownership Trust, which holds the investments of the ESOP. Each year the company may contribute to the trust in company stock or cash. The trust may also enter into loans for purchasing company stock. The investments are held by the trust for your benefit. The company stock will gain or lose value, as determined annually by an independent appraiser, based on the financial performance of the company. Your share of the company’s contributions and your share of forfeitures from the accounts of employees who leave before they are fully vested will increase your accounts under the plan. During any year in which the company has elected to be treated as a Subchapter S Corporation, the trust may also receive its share of any distribution of earnings (referred to as S Corporation Distributions) paid to the company’s shareholders. Contributions to the plan are tax-deductible by the company. You pay no tax on any amounts allocated to your accounts until they are distributed to you. This tax treatment enables the ESOP to combine the company’s interest with yours by allowing the company to finance its growth while building your beneficial ownership.

Participants will receive an ESOP account certificate on an annual basis (after the independent appraisers valuation and plan audit, usually around September/October) which will list the individual participant’s account status as of the end of that calendar year (i.e., Company Stock Account, other investments, last year’s balance, this year’s contribution, cash value, # stock shares/value, share of forfeitures, and vesting %/value). Of course, there are never any guarantees that the value of investments, even investments in company stock, will increase. However, the plan provides you with an opportunity to influence this growth. By working efficiently and effectively, you may help increase the value of your plan accounts.

For a complete description, see the ASEC Employee Stock Ownership Plan’s Summary Plan Description located on the shared drive or contact Human Resources for a copy.

6.25 Moving Expenses/Relocation Relocation reimbursement will be judged on a case-by-case basis by senior management. If granted, terms and conditions will be outlined in the employee’s offer letter.

6.26 Tuition Reimbursement As an incentive to pursue job-related or career-related education, the ASEC Tuition Reimbursement Program provides financial support for approved educational activities on a reimbursement basis. This



reimbursement program is for tuition only and excludes fees, books and other expenses, even if they are related to the course. Fees, books and other expenses are the responsibility of the employee.

ASEC full-time employees may undertake coursework to improve skills required to perform present job assignments, remain current with innovations and emerging trends in their field, improve administrative and management skills, or prepare for positions that may be attained through promotion. Please keep in mind that additional education does not automatically increase your rate of pay, but may increase your opportunities in the future.

The following highlights describe key elements of the program:

• The program is based on approval of individual courses. All coursework must be approved for reimbursement prior to enrollment. If the Tuition Reimbursement form is not submitted prior to course registration or enrollment, reimbursement will be denied.

• To qualify for reimbursement, coursework must be directly job-related or more broadly career-related. Reimbursement for coursework approved as career-related may be subject to federal taxes.

• Both credit and non-credit coursework offered by approved schools and organizations are eligible for reimbursement.

• Covered tuition expenses are reimbursed at the rate of 100 percent, up to a maximum annual calendar year reimbursement of $2000 for undergraduate courses and $2800 for graduate courses. The calendar year for which reimbursement is made is the year in which the course commences. Once the maximum for a calendar year is reached, no carryover reimbursement to the next year is made. For example, if the reimbursement maximum is reached for calendar year 2017 with $200 remaining on the tuition bill that has not been reimbursed, the $200 cannot be carried over to calendar year 2018 for reimbursement. A new reimbursement cycle will commence with the new calendar year.

• Reimbursement is a supplement to other financial assistance for which employees may be eligible. Employees are required to explore and report amounts of alternate financial assistance.

• Reimbursement is based on satisfactory completion of each course. Satisfactory completion is attainment of a grade of at least C for all course work at the undergraduate level, and B at the graduate level.

Once the employee has received a reimbursement, he/she is obligated to remain with ASEC for one year unless the reimbursement amount is refunded to ASEC. Once the employee has refunded the full amount of the reimbursement, the obligation is negated.

6.27 Charity Committee The Charity Committee is made up of employees from all sites and chaired by a company officer. The committee’s mandate is to decide how the charitable giving budget should be allocated. The budget is not a fixed amount annually. The amount in the budget varies by year and has been reallocated when fiscal policy so dictates. ASEC’s focus has been and continues to be to fund organizations that are aligned with two core areas:

• charities that support the Navy specifically and the military in general • charities that are well-supported by ASEC volunteers

Vacations for Vets, the USO, Fleet Reserve Association, and the Navy League are all associated with ASEC’s and our customers. The committee will consider each employee’s request as to how it relates to ASEC’s core giving, that is, Navy/military charities and employee funded/supported charities, and how much budget is available.



6.28 Employee Recognition Program Employees are recognized for service at the completion of five and ten years with a service award. All employees are annually recognized during company-sponsored events such as the anniversary dinner, the annual employee recognition event and/or company picnic.

7 ATTENDANCE, TIME REPORTING 7.1 Attendance Policy You are required to work the hours normally scheduled for your position and employment category.

It is your responsibility to personally notify your supervisor when you are going to be absent or late. Excessive unexcused absences and/or tardiness may result in corrective action. In the event an employee fails to show for his or her work and does not call, corrective action, up to and including termination, may result.

7.2 Hours of Work 7 Generally, most positions in the company are 40 hour/week jobs consistent with the general office hours of 8:00 a.m. to 5:00 p.m. with one unpaid hour off for lunch. However, supervisors may alter these general hours based on the needs of the company, customer, department, or employee. These needs may include business, economic, or other conditions with respect to the needs of the company or the family and individual needs of the employee.

7.2.1 Flextime With prior supervisor and customer approval, provided normal business operations are not compromised, flextime is permitted. Flextime is defined as working a varying number of hours per day within a normal pay period, provided the total hours worked, equal the total number of hours in the normal workweek for non-exempt employees, and in the normal pay period for exempt employees.

7.2.2 Breaks ASEC follows federal and state regulations covering meal and rest breaks. Generally, employees are not to work through lunch to make up for arriving late or leaving early unless they have prior approval for a given day from their supervisor. Meals that are not work-related are not compensable work time.

7.2.3 Break Time for Nursing Mothers As part of our family-friendly policies and benefits, ASEC supports breastfeeding mothers by providing reasonable break times to express breast milk for her child. ASEC has designated rooms in both the Pax and Jax offices for this purpose. A refrigerator for storage of breast milk is available. Any breast milk stored in the refrigerator must be labeled with the name of the employee and the date of expression. Any nonconforming products stored in the refrigerator may be disposed of. Employees storing milk in the refrigerator assume all responsibility for the safety of the milk and the risk of harm for any reason, including improper storage, refrigeration and tampering. Containers with expressed milk with no date or with no name will be removed. Containers with expressed milk with dates over 10 days old will be removed.

A nursing mother who returns to work full-time may take breaks for lactation purposes. Generally, the amount of time for breaks will be the same as under the break policy. The timing of the break can be altered to best accommodate the nursing mother and her work schedule.

7 29 CFR 785.11 - Hours Worked



A nursing mother may request a flexible work schedule that better accommodates breastfeeding her child. The flexible work schedule policy will be used to determine whether the other criteria for flextime are met. Employees who work offsite or in other locations, will be accommodated under the federal and state laws on breastfeeding in the workplace. The federal requirements shall not preempt a state law that provides greater protections to employees.

7.3 Time Reporting ASEC is required to keep accurate records of employees’ working hours to meet requirements under federal and state law, and to comply with DCAA regulations. Accordingly, all employees are required to keep accurate records and report their working hours on a timecard. Timecards represent a claim against the United States government, a matter to be taken very seriously. False claims have severe penalties as stated in the False Claims Act.

7.3.1 Time Reporting Policy and Procedures It is the policy of ASEC to comply with all labor laws, government regulations, and accounting standards and principles. The compliance requirements are set forth in various publications including: Cost Accounting Standards (CAS), Federal Acquisition Regulations (FAR), Generally Accepted Accounting Principles (GAAP), Department of Labor Regulations, and the Fair Labor Standards Act (FLSA).

ASEC’s time reporting policy is the foundation for the recording of hours worked, collection of labor costs, a determination if labor costs can be recovered under federal government contracts, and time (cost) allocation to government cost objectives (contracts or bid and proposal costs). Reported labor hours are the basis for the company is billing/claims to its customers. Accordingly, time-collection data must be current, accurate, complete, and in full compliance with this policy. Compliance with this policy requires adhering to proper time reporting procedures, maintaining adequate systems of internal control, and providing an employee training program.

ASEC is subject to audit by the Department of Labor and Defense Contract Audit Agency (DCAA).

7.3.2 Timecards Each employee must maintain a current and accurate timecard. Timecards are filled out electronically on a daily basis via ASEC’s Deltek web site: https://mail.asec-incorporated.com/time. The timecard must be electronically signed by the employee and submitted at the conclusion of each timecard period.

7.3.3 Time Periods ASEC reports time on a semi-monthly basis. The first semi-monthly timecard period covers the first calendar day of the month through the fifteenth. The second timecard period covers the sixteenth through the end of the month.

7.3.4 Timecard Training Employees are trained on ASEC’s time reporting policy and the use of Deltek Time & Expense upon hire as a part of their onboarding. In addition, employees are required to complete annual timecard training.

7.3.5 Recording Time Electronic timecards are available to each employee through Deltek Time and Expense. Employees must enter timecard charges on the electronic timecard each day by noon the following day, and then submit the timecard at the end of each timecard period. In the event an employee is unable to access their electronic timecard, he/she is required to log their time on paper. Once access to the electronic timecard is regained, the employee must update the electronic timecard to include the charges that were recorded on paper.

https://mail.asec-incorporated.com/time



ASEC practices Total Time Accounting. This means that each employee’s timecard should reflect every hour that he/she has worked. Partial hours worked are to be measured and recorded to the nearest tenth of an hour. All time must be charged to the direct Job Order Number (JON) or indirect account for the task completed. JONs are provided when an employee has been approved to work on a contract; details pertaining to the charging of a JON and the work performed are available from the employee’s supervisor or the contract PM.

7.3.6 Travel Time Reportable travel time includes all time spent en route, from time of departure at the point of origin to time of arrival at the destination. Reportable travel time should be charged to the contract or indirect charge number for which the travel is performed. Reportable travel time must be reasonable and usually will not exceed 8 hours per day. Normal commuting time is not considered reportable travel time.

7.3.7 Timecard Changes Changes made to an employee’s original timecard must be accompanied by an explanation for the change. The explanation must be concise and accurately portray the circumstances or cause for the change. Changes made to a timecard with a status of “processed” require the employee to notify his/her supervisor and the accounting department to ensure approval and processing of the change.

7.3.8 Timecard Completion Under normal circumstances, only the employee may complete his/her timecard. If an employee is unable to complete or make necessary changes to a timecard in time to process for payroll, the employee’s supervisor may complete the timecard with approval by ASEC’s executive management. The supervisor’s name of the employee will appear in red until the employee is able to access his/her timecard to review and sign.

7.3.9 Timecard Submission Timecards are to be signed and submitted for review/approval before noon on the 1st and 16th of each month. This ensures that the supervisor is able to approve the timecard for payroll processing. Employees expecting to be absent on personal leave when timecards are due should complete, sign, and submit their electronic timecards prior to leaving. By signing a timecard employees certify that, to the best of their knowledge and belief, the timesheet is complete, all hours worked have been reported (as required under total time accounting), and the accounts charged are correct and accurately reflect the work performed.

7.3.10 Timecard Approval The approving authority shall normally be the employee’s direct supervisor or the supervisor’s manager. Only authorized personnel shall approve timecards. Supervisors may appoint other supervisors or program managers to approve when necessary. The approving authority must have knowledge of the hours worked, the tasks performed, the accuracy of the charge numbers, the appropriateness of the cost allocation, and have gained this knowledge through observation of the employee’s activities or through daily communication with the employee. By signing the timecard, the approving supervisor is certifying that, to the best of their knowledge and belief, the number of hours and accounts charged accurately reflect the work performed by the employee.

7.3.11 Responsibilities It is the responsibility of every employee, every supervisor, and the company to ensure full compliance with this policy. Any individual that suspects abuse of or noncompliance with this policy should immediately report the suspected violation to human resources or ASEC’s executive management.



ASEC is responsible for the following:

• maintaining accurate records of employee time worked; • providing employees with a timecard each semi-monthly reporting period; • providing employees with approved charge numbers (i.e., JON or indirect account); and • providing each employee with timecard training upon hire.

Each employee is responsible for the following:

• making a daily record of his/her hours worked (by noon on the next day); • submitting a timecard at the end of each semi-monthly period or in advance of the deadline if

they plan to be on leave the day timecards are due; • accurately recording ALL hours worked to the nearest tenth of an hour; • charging the appropriate charge numbers with the time actually worked, including holidays*,

PTO, military or bereavement leave, LWOP and jury duty; • charging the appropriate pay type (regular, overtime, OS1, OSF); • providing required documentation for necessary leave types

− bereavement: notating the deceased’s relationship to the employee in a comment; − jury duty: provide name of court issuing the summons, the duration of jury duty and a

copy of the summons to accounting; − military leave: military pay worksheet, copy of orders and pay sheet; if special

circumstances exist with a particular contract: contacting your supervisor or contract PM and/or timecard administrator to review these special procedures with you; and

• complying with these responsibilities or be subject to corrective action up to and including termination

Supervisors are responsible for the following:

• verifying the Job Order Number (JON) for the appropriate project(s) or task(s) has been charged with the amount of time worked; and

• checking entry of time and attendance information each pay period and verifying that this information is correct.

Note: Salaried employees who work 80% time (i.e., an average of 32 hours per week rather than 40) shall record 6.4 hours per holiday on their timecard rather than 8 hours.

Note: All employees should be aware that under the false statements provisions of PL 18, USC 1001 employees are legally liable or responsible through criminal punishment for all entries made on their individual timesheets. All corrections must be justified using the explanation block of the electronic timesheet.

7.3.12 Time Reporting Violations Violations of ASEC’s Time Reporting Policy could result in false claims against the government. These violations are deemed the most serious, and could warrant immediate termination, and possible disclosure of an employee’s actions to the appropriate government officials. Violations include:

• Falsifying time worked. • Knowingly or recklessly charging time worked on one contract to another contract. • Knowingly or recklessly charging time worked on one task to another task. • Knowingly or recklessly charging time worked on one contract to a bid and proposal (B&P),

overhead, or G&A account • Knowingly or recklessly charging time worked on a bid and proposal (B&P), overhead, or G&A

account to a contract. • Knowingly or recklessly approving timesheets that included any of the above incorrect charging



• Knowingly or recklessly ordering a staff member to deliberately incorrectly charge time

7.3.13 Adherence to Time Reporting Policy ASEC’s Time Reporting Policy applies to all ASEC employees. Every employee must make a concerted effort to comply fully with the company’s stated time reporting policy and procedures. Cases of non-compliance by an employee will result in disciplinary action. See the Penalties section for details.

7.3.14 Penalties Employees, who are found to be offenders of this policy, or have neglected to fill out their time card for four consecutive days, shall be subject to corrective action at the discretion of their supervisor and vice president as follows:

(1) First time offenders shall be: a) counseled to ensure that time reporting requirements are understood; b) advised of the consequences of further infractions; and c) provided with a copy of this policy and acknowledge receipt that it has been communicated and

understood. (2) Second time offenders shall be:

a) given a written warning in their personnel file; b) subject to spot checks by his/her supervisor during the 30-day period following the infraction; c) required to attend the next scheduled training session on time reporting and re-acknowledge

understanding of this policy; and d) required to meet with their supervisor and vice president to be advised that this infraction will be

noted in the employee’s next annual performance appraisal. (3) Third time offenders shall have their case presented by the supervisor to the company president for

review of rehabilitative/punitive actions up to and including termination. Within its discretion, management may decide to skip one or all steps.

7.3.15 Carry Over Hours In the event of an exceptional circumstance (e.g., an extended aircraft detachment), a project manager (PM) may authorize the carryover of excess hours to the next time period under the following conditions:

• advance PM approval; • employee meets all customer expectations regarding job duties; • hours are flexed within a single ASEC accounting cycle, that is, the same calendar month; and • total hours worked meet customer expectations of total work hours in the accounting cycle.

There is no double dipping (the act of getting compensation from two divisions of the company for the same time worked) and no change to full-time labor accounting policies.

8 WORKPLACE SAFETY

8.1 Drug-Free Workplace Policy

8.1.1 Purpose and Goal ASEC is committed to protecting the safety, health, and well-being of all employees and other individuals in our workplace. We recognize that alcohol abuse and drug use pose a significant threat to our company’s goals, our employees’ efficiency, and our nation’s security. In keeping with the spirit and intent of the Drug-Free Workplace Act of 1988, we have established a drug-free workplace program that



balances our respect for individuals with the need to maintain an alcohol and drug-free environment. This organization encourages employees to voluntarily seek help with drug and alcohol problems.

8.1.2 Applicability Our drug-free workplace policy is intended to apply whenever anyone is representing or conducting business for the organization. Therefore, this policy applies during all working hours, whenever conducting business or representing the organization, while on organization property and at company-sponsored events.

The employee use of alcohol in the workplace is prohibited. There are rare, pre-approved exceptions when the company at a company-sponsored function (e.g., the Annual Recognition Event) may provide alcohol.

8.1.3 Prohibited Behavior It is a violation of our drug-free workplace policy to use, possess, sell, trade and/or offer for sale alcohol, illegal drugs or intoxicants.

Prescription and over-the-counter drugs are not prohibited when taken in standard dosage and/or according to a physician's prescription. Any employee taking prescribed or over-the-counter medications will be responsible for consulting the prescribing physician and/or pharmacist to ascertain whether the medication may interfere with safe performance of his/her job. If the use of a medication could compromise the safety of the employee, fellow employees or the public, it is the employee's responsibility to use appropriate personnel procedures (e.g., call in sick, use leave, request change of duty, notify supervisor and/or notify HR ) to avoid unsafe workplace practices.

The illegal or unauthorized use of prescription drugs is prohibited. It is a violation of our drug-free workplace policy to intentionally misuse and/or abuse prescription medications. Appropriate disciplinary action will be taken if job performance deteriorates and/or other accidents occur.

8.1.4 Notification of Convictions Any employee who is convicted of a criminal drug violation must notify the organization in writing within five calendar days of the conviction. The organization will take appropriate action within 30 days of notification. Federal contracting agencies will be notified when appropriate.

8.1.5 Consequences One of the goals of our drug-free workplace program is to encourage employees to voluntarily seek help with alcohol and/or drug problems. If, however, an individual violates the policy, the consequences are serious.

Applicants who violate the drug-free workplace policy may have the offer of employment withdrawn. In this scenario, the applicant may not reapply for the position.

Current employees who violate the policy will be subject to disciplinary action and may be required to enter rehabilitation. An employee required to enter rehabilitation that fails to successfully complete it and/or repeatedly violates the policy will be terminated from employment. Nothing in this policy prohibits the employee from being disciplined or discharged for other violations and/or job performance problems.

8.1.6 Return-to-Work Agreements Following a violation of the drug-free workplace policy, an employee may be offered an opportunity to participate in rehabilitation. In such cases, the employee must sign and abide by the terms set forth in a Return-to-Work Agreement as a condition of continued employment.



8.1.7 Assistance ASEC recognizes that alcohol and drug abuse and addiction are treatable illnesses. We also realize that early intervention and support improve the success of rehabilitation. To support our employees, our drug-free workplace policy:

• encourages employees to seek help if they are concerned that they or their family members may have a drug and/or alcohol problem;

• encourages employees to utilize the services of qualified professionals in the community to assess the seriousness of suspected drug or alcohol problems and identify appropriate sources of help;

• offers all employees and their family members’ assistance with alcohol and drug problems through the Employee Assistance Program (EAP) (Contact qualified professionals at Standard at 1-888-296-6948, or access the website at www.eapbda.com. Website login username is standard, password eap4u.); and

• allows the use of accrued paid leave while seeking treatment for alcohol and other drug problems.

Treatment for alcoholism and/or other drug-use disorders may be covered by the employee benefit plan. However, the ultimate financial responsibility for recommended treatment belongs to the employee.

8.1.8 Confidentiality All information received by the organization through the drug-free workplace program is confidential communication. Access to this information is limited to those who have a legitimate need to know in compliance with relevant laws and management policies.

8.1.9 Shared Responsibility A safe and productive drug-free workplace is achieved through cooperation and shared responsibility company wide. Both employees and management have important roles to play.

All employees are required to absent themselves from the work site and refrain from performing work duties while their ability to perform these duties is impaired due to on- or off-duty use of alcohol or other drugs.

In addition, employees are encouraged to:

• be concerned about working in a safe environment; • support fellow workers in seeking help; • use the Employee Assistance Program and community resources; and • report dangerous behavior to their supervisor.

It is the supervisor's responsibility to:

• inform employees of the drug-free workplace policy; • observe employee performance; • investigate reports of dangerous practices; • document negative changes and problems in performance; • counsel employees as to expected performance improvement; • refer employees to the Employee Assistance Program; and • clearly state consequences of policy violations.

8.1.10 Communication Communicating our drug-free workplace policy to both supervisors and employees is critical to our success. To ensure all employees are aware of their role in supporting our drug-free workplace program:

• All employees will receive a written copy of the policy.

http://www.eapbda.com/



• The policy will be reviewed in orientation sessions with new employees.

8.2 Workplace Bullying ASEC defines bullying as “repeated inappropriate behavior, either direct or indirect, whether verbal, physical, or otherwise, conducted by one or more persons against another or others, at the place of work and/or in the course of employment.”

The purpose of this policy is to communicate to all employees (including supervisors, managers and executives) that the company will not tolerate bullying behavior. Employees found in violation of this policy will be disciplined up to and including termination.

Bullying may be intentional or unintentional. However, it must be noted that where an allegation of bullying is made, the intention of the alleged bully is irrelevant and will not be given consideration when meting out discipline. As with sexual harassment, it is the effect of the behavior upon the individual that is important. ASEC considers the following types of behavior examples of bullying:

• Verbal bullying: Slandering, ridiculing, or maligning a person or his/her family; persistent name calling that is hurtful, insulting, or humiliating; using a person as the butt of jokes; making abusive and offensive remarks.

• Physical bullying: Pushing, shoving, kicking, poking, tripping, assault, or threat of physical assault; damage to a person’s work area or property.

• Gesture bullying: Nonverbal threatening gestures or glances that convey threatening messages.

Exclusion: Socially or physically excluding or disregarding a person in work-related activities.

8.3 Violence in the Workplace All employees, customers, vendors, and business associates must be treated with courtesy and respect at all times. Employees are expected to refrain from conduct that may be dangerous to others.

Conduct that threatens intimidates or coerces another employee, customer, vendor, or business associate will not be tolerated. ASEC resources may not be used to threaten, stalk, or harass anyone at the workplace or outside the workplace. ASEC treats threats coming from an abusive personal relationship as it does other forms of violence.

Indirect or direct threats of violence, incidents of actual violence, and suspicious individuals or activities should be reported as soon as possible to a supervisor, security personnel, Human Resources or any member of senior management. When reporting a threat or incident of violence, the employee should be as specific and detailed as possible. Employees should not place themselves in peril, nor should they attempt to intercede during an incident.

Employees should promptly inform the Human Resources department of any protective or restraining order that they have obtained that lists the workplace as a protected area. Employees are encouraged to report safety concerns with regard to intimate partner violence. ASEC will not retaliate against employees making good-faith reports. ASEC is committed to supporting victims of intimate partner violence by providing referrals to ASEC’s employee assistance program (EAP), community resources, and providing time off for reasons related to intimate partner violence.

ASEC will promptly investigate all reports of threats of violence or incidents of actual violence and of suspicious individuals or activities. The identity of the individual making a report will be protected as much as possible. ASEC will not retaliate against employees making good-faith reports of violence, threats, or suspicious individuals or activities. In order to maintain workplace safety and the integrity of its investigation, ASEC may suspend employees suspected of workplace violence or threats of violence, either with or without pay, pending investigation.



Anyone found to be responsible for threats of or actual violence or other conduct that is in violation of these guidelines will be subject to prompt disciplinary action up to and including termination of employment.

ASEC encourages employees to bring their disputes to the attention of their supervisors or Human Resources before the situation escalates. ASEC will not discipline employees for raising such concerns.

8.4 Safety It is the responsibility of each employee to conduct all tasks in a safe and efficient manner complying with all local, state, and federal safety and health regulations and program standards, and with any special safety concerns for use in a particular area or with a client.

Although most safety regulations are consistent throughout each department and program, each employee has the responsibility to identify and familiarize him/herself with the emergency plan for his/her working area. Each facility shall have posted an emergency plan detailing procedures in handling emergencies such as fire, weather-related events, and medical crises.

It is the responsibility of the employee to complete an Accident and Incident Report for each safety and health infraction that occurs by an employee or that the employee witnesses. Failure to report such an infraction may result in employee disciplinary action, including termination.

Furthermore, management requires that every person in the organization assume the responsibility of individual and organizational safety. Failure to follow company safety and health guidelines or engaging in conduct that places the employee, customer, or company property at risk can lead to employee disciplinary action and/or termination.

8.5 Accident Reports In the case of accidents, which result in injury, regardless of how insignificant the injury may appear, you should immediately notify the Human Resources department and your supervisor. Such reports are necessary to comply with laws and initiate insurance and workers' compensation benefits procedures.

8.6 Emergencies ASEC has prepared an Emergency Action Plan (EAP) and reviews this plan quarterly. A copy of the EAP is located at each exit and covers multiple emergencies relevant to our area and environment. Police and emergency phone numbers are listed within this plan, as well as an updated list of employees that will need to be accounted for in the event that an emergency should have employees evacuated from the premises.

8.7 Inclement Weather/Emergency Closings In the event of inclement weather, all employees are expected to report to work unless major thoroughfares have been closed. Quite often, bad weather conditions are localized in our area and, simply by waiting, you may be able to safely arrive at work later in the day. Under these circumstances, you should call your immediate supervisor to advise them of the poor weather conditions in your area and your expected time of arrival. Depending upon the circumstances, your supervisor may tell you simply to remain at home that day.

If you believe that inclement weather conditions are occurring in the overall area, you should try to contact your supervisor or the office to determine if the ASEC office is to be closed. If the customer’s facility (e.g. NAS Patuxent River, NAS Jacksonville, Dallas, and Boeing Kent WA) is closed or as having a delayed opening, you will typically find that ASEC follows their lead.

On occasion, bad weather occurs during the day after you have arrived at work. Depending upon the circumstances, you may be directed to a place of safety within the building or you may be told to leave. As an example, if there is a tornado warning, you should proceed to the safest location, as marked in the



Emergency Action Plan. On the other hand, if an ice storm is threatening, the office may be closed early to allow you additional time to get home before the storm arrives. In the event that the office is opened late or closed early because of hazardous weather, you will be allowed to utilize our flextime policy in order to reach your hours needed for the week. If you are aware of impending bad weather conditions, you also have the option to work from home with your personal computer connectivity, if possible.

You should use your best judgment in deciding whether it is reasonable for you to attempt to get to work.

The government has provided direction if a crisis, emergency or inclement weather or similar event prevents you from working. The government issued statement is, “In the event the contractor is prevented from performance as the result of an Executive Order or an administrative leave determination that applies to the using activity, such time may be charged to the contract as a direct cost provided such charges are consistent with the contractor’s accounting practices.” What this means is that if you are restricted from working and the contract under which you work provides for administrative leave, then you may charge that contract as leave. If your contract does not have a provision for administrative leave, you cannot charge the contract for time not worked. You either make other arrangements to work (flextime or work remotely) if that is allowable under the contract or you may take PTO.

8.8 Fire Prevention Fire Prevention involves elimination or control of conditions or substances that could ignite or fuel a fire. Maintenance of a clean and orderly workplace is an essential element of fire prevention. Every employee should routinely inspect the workplace to identify fire ignition and fuel hazards and then take appropriate steps to eliminate them, including notifying the safety officers of the fire hazard.

Fire ignition hazards include open flames, some chemical agents, sparks, and heat producing equipment or materials. Electrical systems and equipment, including wiring and switches, are major sources of fire ignition sparks or heating hazards.

Overloaded, damaged, or flawed electrical circuits generate heat in wiring that can reach a temperature sufficient to ignite adjacent materials.

8.9 Communicable Diseases ASEC seeks to maintain a healthy workplace by endeavoring to appropriately protect the health and well-being of all employees. The company is also committed to compliance with applicable laws, such as the ADA, GINA, FMLA, and workers’ compensation.

An employee is required to report any exposure to a contagious disease that might pose a direct threat to health or safety in the workplace. An employee who fails to do so is subject to corrective action, up to and including discharge.

The company may remove or reassign an infected or contagious employee or co-worker if a secondary infection would pose a higher than usual risk to the employee, co-workers, or others. The company may require the employee to take a medical leave of absence, undergo a fitness-for-duty examination, provide a fitness-for-duty certificate from a physician, or state the risk of exposure in the workplace with regard to his or her contagious illness. An employee who is at risk of exposure to blood borne or contagious diseases will follow a system of “universal precautions” to limit the spread of infection in the workplace. Supervisors will instruct employees about any special precautions necessary in individual work areas.

An employee concerned about being infected with a contagious disease while in the workplace should convey this concern to his or her supervisor. An employee who refuses to work with or perform services for a person known or suspected to have a contagious disease that does not present a current direct threat in the workplace is subject to corrective action, up to and including discharge.



8.10 Motor Vehicle Safety Safe driving is a high priority. Your first responsibility is to pay attention to your driving. Many employees will be working on military installations, which may carry their own laws and regulations for motor vehicle safety. It is the employee’s responsibility to understand and comply with those rules of the road, though you will often see company-wide emails that will update any new regulations with regard to motor vehicle operation and safety. Always buckle up. Keep your hands on the wheel and your eyes on the road. Seat belts are mandatory in most states and on all military installations. Communicating on hand-held cell phones via text message, email, talking, etc. while driving is not authorized on military installations or in the state of Maryland without the use of a hands-free device. Check your state laws for current rules on cell phone use on public roadways. Texting while driving is also a Maryland state law violation.

8.11 Workers’ Compensation Insurance All employees are covered by workers’ compensation insurance, which compensates an employee for lost time, medical expenses, and loss of life or dismemberment from an injury arising out of or in the course of work. Employees must immediately report any accident or injury to their supervisor and the Human Resources department so that the necessary paperwork may be completed. You should inform your supervisor and HR immediately if you sustain a work-related injury or illness no matter how minor an on-the-job injury may appear this will enable you to qualify for coverage as quickly as possible.

Neither ASEC nor the insurance carrier will be liable for the payment of workers' compensation benefits for injuries that occur during an employee's voluntary participation in any off-duty recreational, social, or athletic activity.

For those employees who are eligible, workers’ compensation absences will be designated FMLA leave under the provisions of the Family Medical Leave Act.

8.12 Smoke-Free Workplace ASEC premises and offices are designated as “No Smoking” areas. Employees who smoke may do so outside of the ASEC office spaces away from the office main entrance. Customer’s areas may or may not have the same designation and all employees must strictly follow all customer rules and regulations.

9 TRAVEL POLICY ASEC employees may be required to travel on behalf of the company in support of a customer or the company. To be reimbursed, all travel must be authorized by the employee’s supervisor and/or the contract PM prior to departure. PMs should understand contract requirements before approving travel. Additionally, all travel connected with a government contract must be justified and in accordance with contract terms.

ASEC’s policy for reimbursement of costs incurred for travel is governed by the rules set forth in the Federal Acquisition Regulation (FAR) Part 31.205-46. Therefore, employees will follow per diem guidelines set by the Federal Travel Regulations, set by the General Services Administration (GSA) for domestic travel, Joint Travel Regulation (JTR) for travel to Hawaii, Alaska and outlying areas of the United States, and the Standardized Regulations (SR) for foreign travel.

9.1 Travel Authorization To qualify as “travel” the distance traveled must exceed a 50-mile radius (one-way) from the company office. For example, those destinations on a map that lie beyond 50 miles from the Lexington Park office qualify as travel. ASEC uses the NAVAIR clause 5252 232-9509 to clarify when expenses can be incurred for travel. According to the clause, travel expenses are authorized for travel beyond a 50-mile radius of the contractor’s regular work site. The contractor shall not be paid for travel expenses for contractor personnel who reside in the metropolitan area in which the tasks are being performed. Travel performed



for personal convenience, in conjunction with personal recreation, or daily travel to and from work at the contractor’s regular work site will not be reimbursed.

Departing without proper approvals will result in a rejection of travel claims.

9.2 Travel Procedures Prior to travel, employees should complete an electronic Expense Authorization (located in Deltek Time and Expense) which provides pertinent trip information (i.e., name, phone number, destination, dates of travel, and brief purpose of travel, charge number, and hotel information). Upon signature, the Expense Authorization will automatically be forwarded to the administrative assistant for retention throughout the duration of the travel.

If a classified or unclassified Visit Request is required, all necessary information must be provided to ASEC’s Facility Security Officer in sufficient time for the Visit Request to be processed.

If an employee will be traveling overseas, the employee is required to notify ASEC’s Facility Security Officer prior to departure. This policy extends beyond business travel. Employees taking personal travel overseas must also inform the Facility Security Officer.

Upon return from travel, employees must complete and submit an expense report for reimbursement of travel costs. See Travel Expense Report for details.

9.3 Travel Arrangements When possible, employees should plan and schedule trips as early as practical to minimize costs. Employees may utilize company-recommended travel services, or make their own reservations for lodging and transportation.

9.4 Per Diem Rates Per Diem, rate guidelines are set forth in the applicable GSA, JTR, or SR publication. Per Diem expenses are reimbursable for travel exceeding 12 hours. Meals and incidental expenses (M&IE) on the first and last day of travel are reimbursed at 75% of the per diem rate. An employee traveling 12 hours or less in a single day will not be reimbursed for M&IE.

ASEC employees are expected to make a good-faith effort to stay within applicable per diem rates. If exceeding per diem is unavoidable, coordination and approval by the appropriate contract PM and/or employee supervisor is necessary before departure. When completing the expense report, an explanation of the overage must be included, and the supervisor’s signature of approval will be required for reimbursement.

Applicable per diem rates are determined based on the authorized location to perform work. Thus, if an employee chooses to stay outside the work location (e.g., an employee stays the night at a hotel closer to the airport due to an early morning flight) per diem cannot exceed the allowable per diem for the work location. If an employee travels to multiple locations within the same day, the applicable per diem rate is based on the work location where the employee stays for the night.

9.5 Travel Expenses Employees should utilize personal credit cards or cash to pay for travel. In special circumstances, an employee may be issued a corporate credit card for travel expenses. Corporate credit card issuance will be determined on a case-by-case basis. In some circumstances, cash advances are allowed.



9.5.1 Transportation

9.5.2 Airfare Employees should request the least expensive fare for all airline travel. Any fare higher than economy/coach airfare must be justified and approved by the government customer and/or ASEC management as appropriate. Approval should be obtained prior to departure and on a case-by-case basis.

Additional fees for priority seating (e.g., aisle, window, exit row, or bulkhead seats) must be justified and approved prior to travel. Additional fees and upgrades that have not been approved may be purchased at the employee’s personal expense.

Under the Fly America Act (49 U.S.C. 40118) employees are required to use United States air carriers for all travel when available.

Note: The above guidelines are also applicable to other methods of travel (i.e., train, ship, etc.).

9.5.3 Car Rental Employees should rent compact. Limited exceptions for the use of other than compact size cars may be authorized. See FTR 301-10.450 for details. Explanation of use of other than compact cars should be included in the description box provided for car rental expense within the expense report.

ASEC has arrangements with AVIS for rental discounts. Your AVIS corporate account will be identified with the AVIS Worldwide Discount (AWD) number V061414. Using this corporate discount number guarantees the following program benefits:

• Low, competitive corporate rates and discounts on promotional rates. • Automatic tracking of points towards free rental days. • Complimentary membership in Preferred® Service, allowing you to skip lines and paperwork and

go directly to the rental car.

As employees are covered by company insurance while traveling on company business, all car rental agency insurance coverage should be DECLINED when picking up a car from a domestic car rental agency. For overseas travel, however, collision damage waiver and theft coverage should be attained.

Employees should decline the use of toll passes (i.e., E-ZPass, SunPass) provided through the rental company to avoid excess service charges.

Non-reimbursable expenses include the following:

• Additional insurance coverage • Car upgrades • GPS Systems • Frequent Flyer Surcharge (i.e., fee charged by rental car companies to participate in frequent

flyer programs).

Employees should always refuel rental cars before returning them to the rental agency to avoid being assessed expensive service charges, which are not reimbursable. The employee should check to be sure that a refueling fee has not been charged after filling the tank. Receipts for gasoline should be retained for inclusion with the expense report.

If the employee is utilizing the rental car for personal reasons along with business, the cost must be pro-rated for business only.



9.5.4 Company Rental Car Insurance Information When renting a car within the Contiguous United States (CONUS), additional insurance is not necessary and employees are required to opt-out.

In the event that an employee is involved in an accident with their rental car, the employee will need to:

(1) Provide authorities with ASEC’s insurance policy number (a) Effective 2/5/17: Federal Insurance Co. Policy Number (17) 7355-61-28 (b) The parenthetical number is the effective start year. Effective date is February 5th of the

parenthetical number / effective start year and valid for one year from the effective date (midnight February 4th). For example, as of 2-5-2018 the insurance policy number will be (18) 7355-61-28.

(2) Contact the insurance administrator at Raley Watts Insurance Co. (301-863-6625) with the following information: (a) Date of Accident (b) Location of Accident (c) Vehicle information(year/make/model)/ Rental office information (contact

person/address/phone number) (d) Vehicle damage description (e) Drivers information (Name/ Contact info) (f) Police report information, if applicable

9.5.5 Car Rental OCONUS ASEC insurance does not extend to non-US countries other than the United States. Therefore, when renting an automobile outside the Contiguous United States (OCONUS), additional insurance will be necessary. Additional insurance will come in the following categories:

• Liability: Not reimbursable • Personal Accident: Not reimbursable; covered through medical insurance • Collision Damage Waiver: Reimbursable • Theft Protection: Reimbursable

These insurances are generally offered by the rental agency, but can sometimes be covered by your personal credit card if used to pay for the rental. Check with your credit card agency about the specific policies governing auto rentals and insurance outside of the US. This expense is contract billable.

9.6 Privately Owned Vehicle Use of a Privately Owned Vehicle (POV) for business travel may be approved if it is determined to be in the best interest of the government customer. Under such circumstances, reimbursement will be authorized for mileage up to the total constructive cost of common carrier transportation (coach fare) plus per diem.

Note: Travel qualifications must be met to be reimbursed for POV mileage, see Travel Authorization.

9.7 Lodging, Meals, and Incidental Expenses

9.7.1 Lodging Travelers are allowed up to the GSA, JTR, or SR destination per diem rate for lodging. Taxes on lodging for CONUS travel are not included in the per diem rate but are claimed and reimbursed separately. Lodging taxes for travel outside OCONUS, including Alaska and Hawaii, are included in the foreign per diem rate.



For travel in support of a government customer, the employee should always request a government hotel rate and check the hotel bill to verify the government rate has been charged.

Lodging exceeding the per diem rate must be justified and approved. The employee will be required to enter an explanation of the overage when completing his/her expense report and should be able to provide backup for their justification.

9.7.2 Meals Claimed meals should correspond appropriately with the current applicable GSA, JTR, or SR per diem destination rate. Employees may either charge the actual price for meals up to per diem or per diem.

Any cost for alcoholic beverages (and associated gratuity tax) is strictly unallowable and must be removed from the claimed meal expenses.

Note: If claiming M&IE employees’ timesheets should support the claim verifying that travel exceeded 12 hours

9.7.3 Incidental Expenses The following items are considered “incidental expenses” and are included in the per diem rate. They cannot be claimed separately:

• Fees and tips to the following: - porters - baggage carriers - bellhops - hotel maids - stewards or stewardesses - transportation (commercial or courtesy) - other service personnel

• ATM fees • Laundry/Dry Cleaning services • Communication Services (including cell phone) related to government business

9.7.4 Miscellaneous Expenses The following allowable expenses are not included in per diem, but may be claimed with authorization and approval:

• Internet connection charges • Processing expenses (equipment and/or services) directly related to business (e.g., computers,

printers, scanners, typists, data processors, etc.) • Conference center rooms for official business • Parking fees at the transportation terminal • Parking fees at work site • Fuel for rental car • Tolls (e.g., bridges, roads, tunnels, etc.) • Baggage expenses, including:

- Transportation charges for authorized excess - Necessary charges for transferring baggage - Necessary charges for storage of baggage when such charges are the result of official

business - Charges for the first checked bag. Additional baggage may be reimbursable to meet

Government requirements. See FTR 301-70-300, 301-70.301 for details. • Special expenses of foreign travel, including:



- Passport and/or visa fees - Commissions on conversion of foreign currency - Photographs for passports and visas - Foreign country exit fees - Birth, health, and identity certificates - Inoculations that cannot be obtained through a federal dispensary.

Note: Other miscellaneous expenses not listed above may also be reimbursable on a case-by-case basis. When in doubt about the legitimacy of any expense, the employee should refer to the FTR/JTR and obtain appropriate approval prior to incurring the cost.

9.8 Unallowable Expenses The following expenses are defined as unallowable and are not reimbursable:

• Alcoholic beverages • Airline headsets • Health club facilities • Clothing/clothing repair (unless damage is work related) • Transportation for personal reasons • Medical expenses • Personal trip expenses (i.e., phone calls, taxis) • Personal toiletries • Subscription movies (in-room) • Laundry charges • Traffic or parking fines, including towing charges • Valet parking • Automobile insurance • GPS system for rental cars • Frequent Flyer Surcharge (i.e., fee charged by rental car companies to participate in frequent flyer

programs) • ATM transaction fees • Expenses incurred due to accompaniment of members of the traveler’s family or guest.

9.9 Travel Expense Report The employee must complete an expense report (located in Deltek Time and Expense) within five days of completion of travel. Once the expense report is complete, the employee should sign the report electronically and submit a hard copy of the Receipt Traveler (with attached receipts) to the administrative assistant. Original receipts are preferred for all expenses but are required for the following items:

• Airfare tickets • Lodging • Car rental • Gas for rental car • Parking/taxi • Miscellaneous expenses

Note 1: Unless specified by the contract original receipts are required for all expenses exceeding $75.

Note 2: Any charge not supported by an original receipt will require a certified statement from the employee stating the circumstances for the missing receipt.

Note 3: Credit card and/or bank statements do not qualify as an original receipt.



After an expense report has been submitted to the administrative assistant, it will be forwarded to the employee’s supervisor and to Accounting. Once approved by all parties, Accounting will process the expense report for reimbursement. The Accounting department processes employee reimbursement requests on a weekly basis. All expense reports approved and processed by Accounting before close of business on Mondays, will be reimbursed on the following Thursday. Approved and processed expense reports received Tuesday through Friday will be submitted for reimbursement on Monday, and reimbursed on the following Thursday.

9.10 Canceled Travel Canceled travel where expenses have been incurred (i.e., airline tickets, lodging) need to be submitted in a travel expense report along with supporting documentation (i.e., email) from the government customer acknowledging that the previously approved trip has been canceled and incurred expenses are authorized for reimbursement.

10 SECURITY Security problems and violations cannot be handled in a constructive manner unless company management is aware of them. Our security policy, therefore, places a strong emphasis on reporting security-related incidents so that the proper action can be taken.

10.1 Security Rules and Regulations

10.1.1 Security Incident Reporting Procedures Written reports should be prepared by department heads (or appropriate personnel) and submitted to the security manager immediately after a security-related incident has occurred or been discovered. The report must cover all information relating to the incident, including details on who, what, when, where, why, and how. If time is a critical factor, the report can be made first via telephone, cell phone, pager, email, or text messaging and later confirmed in writing.

The following types of incidents must be reported:

• Bomb threats via telephone, email, mail, etc., or actual bomb incidents. • Suspicious letters or packages that may contain biological agents or explosives. • Actual or suspected espionage or subversive activity. • Natural or man-made disasters. • Any acts of violence or threats of violence. • Theft or misappropriation of company assets. • Shortages of stored materials, especially hazardous materials, pesticides, fertilizer, etc. • Loss, theft, or suspected theft of proprietary information, any inadvertent or unauthorized

disclosure of proprietary data. • Any breach of the company's contraband policy. • Criminal acts on company property, including gambling, and the possession or use of narcotics. • Damage to company property or an employee's personal property while on company premises

involving actual or suspected mischief, vandalism, or criminal negligence. • Attempts by persons to misrepresent themselves as employees or agents. • Any illegal action proposed by a purchasing agent or contractor representative. • Any breach of computer security. • Any intoxication.

10.1.2 Security Prevention Procedures Employees who violate security rules are subject to corrective action up to and including discharge.



Supervisors are responsible for training employees regarding security matters such as evacuations, securing doors, and turning on alarm systems.

The company reserves the right to use any lawful means to investigate a breach of security or its policies.

Employees are expected to cooperate with any investigation. Employees who fail or refuse to cooperate may be counseled, which may include discharge.

Any employee who provides false information or omits information during an investigation is subject to corrective action, including discharge.

10.1.3 Facilities Security ASEC building facilities are equipped with an alarm system and a surveillance system throughout the facility in order to protect our employees, information, and equipment. During your orientation, you will be walked through the security procedures for entering and exiting the building(s) and given the alarm codes and a demonstration on how to operate the system. You are expected to keep these codes confidential.

10.1.4 Visitors All visitors and vendors wishing to conduct business with us or visit employees at our facilities must sign the logbook in ink.

All visitors and vendors will be issued an identification tag to be displayed. This tag is to be worn during the visitor's stay and is to be returned upon his/her departure.

With the preceding procedures completed, the receptionist will then advise the employee hosting the visitor vendor. The employee host is required to escort the visitor/vendor physically to his or her destination.

No one is permitted beyond the immediate access door without an escort. This is necessary as a matter of common courtesy to our guest, but particularly necessary for security and safety reasons.

If a visitor/vendor wishes to visit with others while in the building, the original employee host will escort him/ her to the next host employee, who will in turn escort the visitor/vendor back to the reception area upon completion of the visit. A visitor/vendor must have an escort at all times while in the building.

10.1.5 Security Clearance Please refer to the ASEC Security Standard Practice and Procedures manual. One manual covers ASEC Headquarters in Pax River and a separate manual covers the ASEC Jacksonville Office. Please see the site FSO to review each.

11 WORKPLACE EXPECTATIONS

11.1 Company Ethical Standards It is ASEC policy to observe the highest standards of ethics, honesty, and integrity. Employees are required to uphold these standards, including the following:

• They must not have any personal interest that conflicts in any way with the interest of the company or its shareholders.

• They must not act to cause conflicts for others with whom the company does business. • They must obey all applicable laws.

Not every instance of a violation of this standard can be anticipated. When in doubt about whether a particular matter violates this standard, seek guidance from your supervisor, the Executive Management



and/or the Human Resources department. Each employee is expected to review and understand the ASEC policy on Business Ethics and complete an annual refresher training provided by Human Resources.

11.1.1 Code of Ethics The integrity, reputation, and effectiveness of ASEC ultimately depend upon the individual actions of each employee. Each of us is expected to ensure the prosperity of the group by conducting our business in an ethical and forthright manner at all times. ASEC is committed to the highest standards of ethics and business conduct in relationships with customers, suppliers, and communities in which we operate, as well as with each other as employees at every organizational level. We must deal with suppliers, customers, and others doing business with ASEC in a manner that avoids even the appearance of conflict between personal and ASEC interests.

Employees should never directly or indirectly disseminate, disclose, lecture upon, or publish articles concerning information not generally known in the relevant trade or industry that is considered confidential, proprietary, or a trade secret. This includes any information that may have been disclosed or known because of or through employment. Failure to adhere to the ethics and conduct policy may result in corrective action up to and including discharge from employment.

If an employee is aware of any possible violation or unsure as to whether they may be in violation, he/she should discuss the subject with his/her immediate supervisor or a supervisor, member of management or Human Resources.

11.1.2 Organizational Conflicts of Interest ASEC is committed to avoiding and mitigating potential Organizational Conflicts of Interest (OCI). ASEC’s OCI Management Policy establishes practices and procedures to identify, avoid, neutralize, and mitigate OCI in providing contractor support services (CSS) to the U.S. Government. The success of an OCI program is based upon the early identification of potential OCI issues and timely, appropriate communication between potentially impacted corporate business entities, corporate headquarters, prime contractors, subcontractors, and government customers.

ASEC employees must comply with established ASEC OCI Management Policy and Procedures. Employees should be especially cautious of potential OCIs if a particular procurement opportunity will:

• require setting or influencing the requirements or terms for a future opportunity in which ASEC might have an interest in bidding;

• include work for which ASEC provided systems engineering and technical direction, prepared specifications or work statements, provided evaluation services, or obtained access to proprietary information;

• result in ASEC evaluating or recommending its own products and services or those of its competitors; and

• afford ASEC access to proprietary or other nonpublic information about its competitors.

ASEC employees are required to immediately report all OCI issues and concerns that they become aware of or observe. Employees can report OCI issues or concerns through your immediate supervisor, the ASEC PM, ASEC Contracts Manager, or the Ethics Hotline.

11.1.3 Inter-Company Relations ASEC is committed to creating and maintaining harmonious relationships with all companies and government organizations within the business community. Although financial incentives will stimulate the addition of new ASEC employees, soliciting the employees of other companies has the potential to damage business relationships that could harm not only the reputation of ASEC, but also the contractual basis of our business; therefore, soliciting the employees of other companies is strictly prohibited. If the



business acquaintance approaches us, however, we can at that point become ASEC ambassadors and inform the person about ASEC employment if that business acquaintance has no contractual restrictions that would prevent such employment.

This policy statement should in no way discourage you, the employee, from expressing your satisfaction or dissatisfaction in working at ASEC. You may certainly recommend ASEC as an employer and/or affirm your loyalty to your employer.

11.1.4 Outside Employment You may hold outside employment as long as you meet the performance standards of your job with ASEC, no conflict of interest is present, and you inform your supervisor of the exact nature of the employment. Do consider the ethical bounds you may be overreaching when considering additional employment. Activities and conduct away from the job must not compete with, conflict with, compromise the company interests, or adversely affect job performance and the ability to fulfill all job responsibilities. Employees are prohibited from performing any services for customers on nonworking time that are normally performed by ASEC. This prohibition also extends to the unauthorized use of any company tools or equipment and the unauthorized use or application of any confidential information. In addition, employees are not to solicit or conduct any outside business during paid working time.

All employees are subject to ASEC scheduling demands, regardless of any existing outside work requirements.

It is prohibited for ASEC employees to receive any income or material gain for performing substantially the same services, which ASEC performs.

11.2 Whistleblower/Retaliation Policy ASEC requires employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. As employees and representatives of ASEC, we must practice honesty and integrity in fulfilling our responsibilities and comply with all applicable laws and regulations.

A whistleblower as defined by this policy is an employee of ASEC who reports an activity that he/she considers to be illegal or dishonest to one or more of the parties specified in this policy. The whistleblower is not responsible for investigating the activity or for determining fault or corrective measures; appropriate management officials are charged with these responsibilities.

Examples of illegal or dishonest activities are:

• violations of federal, state, or local laws;

• billing for services not performed or for goods not delivered; and

• other fraudulent financial reporting.

The Sarbanes-Oxley Act of 2002 is a federal statute passed because of the Enron debacle and other corporate scandals. It is an expansive act with a number of financial, audit, and professional conduct sections most recently implemented (and to some extent reinterpreted) by the Securities and Exchange Commission (SEC). Much of Sarbanes-Oxley affects employers in specific professions, such as accountants and attorneys. However, a number of sections affect all employers whose stock is registered with the SEC, however large or small. The act makes it illegal for a public stock company to discharge or in any way discriminate against an employee because the person provides information or assists in an investigation by a federal regulatory or law enforcement agency, member of Congress, company supervisor, or investigator regarding conduct the employee reasonably believes violates federal fraud law or SEC rules and regulations. The civil whistleblower provisions of the act also extend liability to any officer, employee, contractor, subcontractor, or agent of the company.



11.2.1 Reporting Responsibility This Whistleblower Policy is intended to encourage and enable employees and others to raise serious concerns internally so that ASEC can address and correct inappropriate conduct and actions.

11.2.2 Acting in Good Faith If an employee has knowledge of or a concern of illegal or dishonest fraudulent activity, the employee is to contact his/her immediate supervisor or the Human Resources Director. The employee must exercise sound judgment to avoid baseless allegations. Any allegations that prove to be unsubstantiated and made maliciously will be viewed as a serious disciplinary offense.

11.2.3 Confidentiality Whistleblower protections are provided in two important areas—confidentiality and against retaliation. Insofar as possible, the confidentiality of the whistleblower will be maintained. However, identity may have to be disclosed to conduct a thorough investigation, to comply with the law, and to provide accused individuals their legal rights of defense.

11.2.4 No Retaliation It is contrary to the values of ASEC for anyone to retaliate against any employee who in good faith reports an ethics violation, or a suspected violation of law, such as a complaint of discrimination, suspected fraud, or suspected violation of any regulation governing the operations of ASEC. An employee who retaliates against someone who has reported a violation in good faith is subject to discipline up to and including termination of employment.

The right of a whistleblower for protection against retaliation does not include immunity for any personal wrongdoing that is alleged and investigated.

Compliance with the Defend Trade Secrets Act (DTSA) includes, "Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing:

(1) Immunity—An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that—(A) is made—(I) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(2) Use of Trade Secret Information in Anti-Retaliation Lawsuit—An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual—(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order."

All reports of illegal and dishonest activities will be promptly submitted to the Executive Management who is responsible for investigating and coordinating corrective action Employees with any questions regarding this policy should contact the Director of Human Resources.

11.3 Attire and Grooming Policy ASEC prides itself on professionalism, quality, and excellence. We wish to project that image to outside companies, businesses, and individuals in the community. When you are, attending ASEC sponsored functions such as meetings, seminars, dinners, and other recreational functions, keep in mind that you represent ASEC and you need to speak, act and dress accordingly.

Our policy regarding appropriate dress is based on the safety of employees and providing a professional image. Employees are expected to dress appropriately based upon personal needs, but clothing should



be considered (at a minimum) to be business casual. On occasion, when presenting proposals or when meeting with other business/government officials, a suit/sport-coat and tie, or women’s dress/suit equivalent, may be required.

Bathing suits, tank and halter-tops, and other “beach” or “gym” attire (including T-shirts or your most comfortable faded and ripped jeans) are never appropriate during working hours. On “Casual Fridays” (when not representing ASEC with a customer or some other professional function) clean, attractive jeans are acceptable in the office spaces. A collared shirt or blouse will complement the ensemble; remember, T-shirts are never appropriate unless at a picnic or similar function.

Any employee who does not meet the attire or grooming standards set by ASEC standards will be required to take corrective action, (e.g., leaving the premises to change clothing). Hourly employees will not be compensated for any work time missed because of failure to comply with designated workplace standards.

The following chart will serve as a guideline for appropriate attire:

Appropriate Inappropriate Slacks

• Khakis or corduroys • Sweatpants, leggings (alone), exercise wear

• Jeans (must be clean, free of rips, tears, fraying and may not be excessively tight or revealing)

• Shorts, Low Rise or Hip Hugger pants or jeans

• Capris Shirts

• Polo collar knit or golf shirts • Shirts with slang, offensive, or inappropriate writing

• Shirts must be clean, and may not be excessively tight or revealing • Distressed, ripped, torn, or frayed material.

• Oxford shirts • T-shirts or sweatshirts • Company Logo Wear • Beachwear • Blouses • Exercise wear

• Turtlenecks • Crop Tops, midriff , spaghetti straps, tube tops

• Blazers or sport coats • Low-cut necklines • Jackets or sweaters

11.3.1 Reasonable Accommodation of Religious Beliefs ASEC recognizes the importance of individually held religious beliefs to persons within its workforce. ASEC will reasonably accommodate an employee religious belief in terms of workplace attire unless the accommodation creates an undue hardship. Accommodation of religious beliefs in terms of attire may be difficult in light of issues of safety for the particular employee as well as co-workers. An employee requesting a workplace attire accommodation based on religious beliefs should be referred to the Human Resources department.

11.3.2 Addressing Workplace Attire and Hygiene Problems Violations of the policy can range from inappropriate clothing items to offensive perfumes and body odor.



If an employee’s poor hygiene or excessive perfume/cologne usage is an issue, the supervisor should discuss the problem with the employee in private and should point out the specific areas to be corrected. If the problem persists, the supervisors should follow the normal corrective action process.

11.4 Solicitation ASEC prohibits the solicitation, distribution and posting of materials on ASEC property by any employee or non-employee, except as permitted by this policy. The only exceptions to this policy are charitable and community activities supported by ASEC’s management and company-sponsored programs related to ASEC’s products and services.

Non-employees may not solicit employees or distribute literature of any kind on ASEC’s premises at any time. Employees may only admit non-employees to work areas with management approval or as part of an ASEC-sponsored program. These visits should not disrupt workflow. The ASEC employee must accompany the non-employee at all times.

Employees may not solicit other employees during work times, except in connection with an ASEC approved or sponsored event. Employees may not distribute literature of any kind during work times, or in any work area at any time, except in connection with a company-sponsored event

All posted materials or electronic announcements must be approved by Human Resources. Violation of this policy should be reported to Human Resources.

11.5 Telephone Use Communication is a vital part of ASEC’s work environment and is instrumental when conducting our daily business. You are a representative of ASEC; therefore, how you interact with our internal and external customers is a reflection on ASEC, your work department, colleagues, and yourself. It is important that all ASEC employees maintain excellent communication with internal and external customers when using the telephone.

It is everyone’s responsibility to answer company telephones. When communicating by telephone, a warm, welcoming, and professional tone should be used. While personal telephone calls are not prohibited, their frequency, duration, and volume should not interfere with on-going work duties nor distract fellow employees. Employees are not permitted to make personal long-distance telephone calls using the company’s telephones.

Your telephone’s voicemail greeting should be current. For example, if you are on vacation and leave a greeting advising the caller that you are on vacation, that greeting should be immediately removed upon your return. You are expected to access your voice mail at least two times a day. Your supervisor may instruct you to access your voice mail more often depending upon your job requirements. This includes both incoming and outgoing telephone calls.

11.6 Employees’ Cell Phones/Personal Communications Devices Employees are expected to exercise discretion in using personal cellphones and PDAs, similar to the behavior outlined for the use of company phones. Excessive personal calls during the workday, regardless of the phone used, can interfere with employee productivity and be distracting to others. Employees are encouraged to make any personal calls on nonworking time when possible and to ensure that friends and family members are aware of ASEC’s policy.

The use of camera phones, PDAs, or other audio or video recording-capable devices within the company may constitute an invasion of employees’ personal privacy and may breach the confidentiality of ASEC’s trade secrets or other protected information. Therefore, the use of camera or other video recording-capable devices on company premises is prohibited without the express prior permission of senior management and of the person(s) present at the time. Phones and other devices with cameras or recording capabilities are strictly prohibited in all work areas that contain proprietary information or



confidential documents. Camera phones and other devices with photographic or recording capabilities may not be brought into restrooms, locker rooms, or other private areas in the workplace. Violation of this policy may result in corrective action, up to and including termination of employment.

11.7 Company/Government Equipment, Facilities and Network Computer Use All ASEC-provided equipment (e.g., computers, printers, fax machines, etc.,) is to be used for company or/government business only. Government-provided equipment is only to be used for the contract-related business activities for which it has been authorized. The use of government-provided equipment for other contracts must have prior government authorization.

Unethical, unauthorized, or illegal use of company/government equipment will not be tolerated and will result in corrective action up to and including possible termination of employment. This includes personal abuse of company/government equipment.

Use of company-owned software on computers other than ASEC-owned computers is strictly forbidden without the express written permission of the company President or Vice President. The signed authorization form granting permission to load company-purchased or company-developed software onto non ASEC-owned, personal computers will become part of the employee’s personnel folder.

This policy shall serve as notice that all company equipment may be monitored without further notice. At any time and without prior notice, ASEC reserves the right to examine email, personal file directories, and other information stored on company computers and equipment. Employees should have no expectation of privacy concerning internet history, email messages, or voice mail messages located on the business equipment of the company/government. While employees may be provided with passwords for computer, email, or voice mail access to maintain the confidentiality of certain records, the password does not provide absolute privacy or complete confidentiality for access by the company or government for audit or review purposes.

This policy is not meant to violate any employee’s legitimate right to personal privacy; however, the employee should not expect personal privacy with regard to the matters addressed in this policy.

ASEC authorizes the use of its electronic and technological media only during the course of business. ASEC expects employees to exercise the same degree of good judgment and professionalism as they would in the normal course of work. For example, when sending email messages, employees should always use the same safeguards and precautions as they would when sending a fax or letter. Similarly, employees should exercise proper judgment with regard to Internet sites they visit.

Employees who use US Government NMCI computers and networks are responsible for following the rules and regulations as defined by NMCI.

Employees who use ASEC computer resources assume the following responsibilities:

• Only software that has been authorized and purchased by ASEC may be loaded or used on any ASEC computer.

• ASEC or vendor software and software manuals may not be duplicated or reproduced in any manner. Such actions are in violation of license agreements ASEC and its employees are obligated to honor.

• ASEC-provided software is not to be altered in any manner, including but not limited to, de-compiling, disassembling, and cross compiling, reverse engineering, or creating derivative works.

Neither the internet, email system, nor voice mail system may be used in a way that may be disruptive, offensive to others, or harmful to morale. This includes sexually explicit images, messages, cartoons, ethnic slurs, racial epithets, or anything that could be construed as harassment or disparagement of others.



ASEC also reserves the right to disclose employee Internet records, email messages or voice mail messages to law enforcement, governmental officials or other third parties, without notification or permission from the employees sending or receiving the messages.

11.8 Information Technology Acceptable Use Policy

11.8.1 Acceptable Use This policy defines the boundaries for the acceptable use of ASEC’s electronic resources, including software, hardware devices, and network systems. Hardware devices, software programs, and network systems purchased and provided by the company are to be used only for creating, researching, and processing company-related materials unless otherwise indicated. By using the company’s hardware, software, and network systems, you assume personal responsibility for their appropriate use and agree to comply with this policy and other applicable company policies, as well as city, state, and federal laws and regulations.

11.8.2 Privacy E-mail and other electronic communications transmitted by ASEC equipment, systems, and networks are neither private nor confidential; they are the property of the company. Therefore, ASEC reserves the right to examine, monitor and regulate e-mail and other electronic communications, directories, files and all other content, including internet use transmitted by or stored in its technology systems whether onsite or offsite.

11.8.3 Sharing of Access Computer accounts, passwords, and other types of authorization are assigned to individual users and are not to be shared with others. The assigned user is responsible for any use of the account. Sharing of a computer account constitutes an inappropriate use and may lead to termination of that account.

11.8.4 Classified Material At no time will classified material be generated, transmitted, or stored on company resources (except in systems specifically designated for handling classified material).

11.8.5 Internet/Email Employee must ensure that accessing the internet and other electronic resources (including software, hardware devices, and network systems) does not interfere with or disrupt other users. All questions and concerns should be reported to the Chief Technology Officer (CTO), HR, or any member of management.

11.8.6 Personal Internet Use ASEC allows limited personal use of the internet. However, employees are reminded that use of all company property is primarily for the purpose of company business. Any personal use of the internet is expected to be on the user’s own time and is not to interfere with the person’s job responsibilities.

11.8.7 Appropriate Workplace Internet Use Employees with authentication to access ASEC technology systems or networks for purposes of the Internet or other use understand that at any time and without prior notice, company management reserves the right to examine e-mail, personal file directories, internet use history, and other information stored on company computers. This examination helps ensure compliance with internal policies, supports the performance of internal investigations, and assists the management of information systems. As such, the system administrator may monitor access to the internet. Use of the internet constitutes acceptance of such monitoring.



This policy should be read and interpreted in conjunction with all other ASEC policies, including policies prohibiting harassment, discrimination, offensive conduct, or inappropriate behavior. Employee-users are prohibited from accessing the internet for any unethical purposes, including pornography, violence, gambling, racism, harassment, or any illegal activity. Employee-users should not use language or images that would be offensive to the reasonable person when posting electronic mail via the internet or posting to public forums (i.e., newsgroups).

The employee must abide by all federal and state laws with regard to information sent through the internet.

Employee-users are also prohibited from using internet access through ASEC systems for any other business, profit-making activities. However, nothing contained in this policy should be construed as restricting or prohibiting employees’ rights under applicable federal, state, or local laws.

11.8.8 Email Privacy ASEC maintains an e-mail system to assist in the conduct of business within the company. The e-mail system hardware is the property of ASEC. Additionally, all messages composed, sent or received on the e-mail system are and remain the property of the company. They are not the private property of any employee. Nothing in this policy is intended to contravene any applicable federal, state, or local law.

The e-mail system may not be used to solicit or proselytize for commercial ventures or charitable organizations, religious or political causes, outside organizations, or other non-job-related solicitations. The e-mail system is not to be used to send (upload) or receive (download) any offensive, disruptive, or harassing messages or images. Messages or images that contain sexual language or implications, racial slurs, gender-specific comments, or any other comment or image that offensively addresses someone’s age, race, sex, sexual orientation, religious or political beliefs, national origin, or disability will be considered in violation of this policy. E-mail should not be used to send (upload) or receive (download) copyrighted materials, trade secrets, proprietary financial information or similar materials without prior authorization. The e-mail system should not be used to send (upload) or receive pornography.

The company reserves and intends to exercise the right to review, audit, intercept, access and disclose all messages created, received, or sent over the e-mail system for any purpose. The contents of e-mail properly obtained for legitimate business purposes may be disclosed within the company without the permission of the employee. The company does not ensure the confidentiality of e-mail messages. Even when a message is erased, it is still possible to retrieve and read that message. Further, the use of passwords for security does not guarantee confidentiality. Any employee who violates this policy or uses the e-mail system for improper purposes should be subject to discipline, up to and including discharge.

11.8.9 Social Media Guidelines At ASEC, we understand that social media is a way to share your life and opinions with family, friends and co-workers around the world. The use of social media presents certain risks and carries with it certain responsibilities. To assist you in making responsible decisions about your use of social media, we have established the following definition of social media.

According to ASEC, social media includes all means of communicating or posting information or content of any sort on the internet (including your own or someone else’s blog, journal, diary, personal website, social networking or affinity website, web bulletin board, chat room) regardless of the affiliation with ASEC.

11.8.10 Know and follow the rules Employees may not use ASEC’s internet, e-mail, or any other electronic communications to transmit, retrieve, store or post any communications or other content of a defamatory, discriminatory, harassing, or pornographic nature. No messages with derogatory or inflammatory remarks about an individual’s



race, age, disability, religion, national origin, physical attributes, or sexual preference may be transmitted. Harassment of any kind is prohibited. Inappropriate postings that may include discriminatory remarks, harassment, and threats of violence or similar inappropriate or unlawful conduct will not be tolerated and may subject you to disciplinary action up to and including termination.

Employees must respect all copyright and other intellectual property laws for ASEC’s protection and for your own. This includes the laws governing copyright, fair use for copyrighted material owned by others, trademarks, and other intellectual property (including ASEC’s own copyrights, trademarks, and brands).

11.8.11 Retaliation is Prohibited ASEC prohibits taking negative action against any employee for reporting a possible deviation from this policy or for cooperating in an investigation. Any employee who retaliates against another associate for reporting a possible deviation from this policy or for cooperating in an investigation will be subject to disciplinary action, up to and including termination.

11.8.12 Software All software acquired for or on behalf of the company or developed by company employees or contract personnel on behalf of the company is and shall be deemed company property. All such software must be used in compliance with applicable licenses, notices, contracts, and agreements.

11.8.13 Purchasing All purchasing of company software shall be centralized within the Information Technology department to ensure that all applications conform to corporate software standards and are purchased at the best possible price. All requests for corporate software must be submitted to the Information Technology department, which will determine the standard software that best accommodates the desired request.

11.8.14 Licensing Each employee is individually responsible for reading, understanding, and following all applicable licenses, notices, contracts, and agreements for software that he/she uses or seeks to use on company computers. Unless otherwise provided in the applicable license, notice, contract, or agreement, any duplication of copyrighted software (except for backup and archival purposes) may be a violation of federal and state law. In addition to violating such laws, unauthorized duplication of software is a violation of the company’s Acceptable Use Policy.

11.8.15 Software Standards The following list (which may be updated at any time by ASEC) shows the standard suite of software installed on company computers that is fully supported by the Information Technology department:

• Microsoft Windows 7 Professional • Microsoft Office 2010, 2013, and 2016 (Excel, OneNote, Outlook, PowerPoint, Publisher, Word) • Internet Browsers:

- Microsoft Internet Explorer - Google Chrome - Mozilla Firefox

• Adobe Reader DC • Symantec Endpoint Protection • SonicWall Global VPN Client



Employees needing software other than those programs listed above must request such software from the Information Technology department. Each request will be considered on a case-by-case basis in conjunction with the software-purchasing section of this policy.

11.8.16 Downloading Software Employees are prohibited from downloading software or other program files or online services from the Internet without prior approval of the CTO or his/her designate. Downloading of any executable files or programs that change the configuration of an employee’s system by anyone other than information systems personnel is prohibited.

The employee should take extreme caution when downloading approved software or files from the Internet. All files or software must be passed through virus protection programs prior to use. Failure to detect viruses could result in corruption or damage to files or unauthorized entry into company systems and networks. Additionally, compliance with copyright and trademark laws when downloading material from the Internet is mandatory.

If the employee finds that any damage occurred because of downloading software or files, the incident should be reported immediately to the system administrator or the CTO.

11.8.17 Hardware All hardware devices acquired for or on behalf of the company or developed by company employees or contract personnel on behalf of the company is and shall be deemed company property. All such hardware devices must be used in compliance with applicable licenses, notices, contracts, and agreements.

11.8.18 Purchasing All purchasing of company computer hardware devices shall be centralized with the Information Technology department to ensure that all equipment conforms to corporate hardware standards, and is purchased at the best possible price. All requests for corporate computing hardware devices must be submitted to the Information Technology department, which will then determine standard software that best accommodates the desired request.

11.8.19 Outside equipment No outside equipment may be plugged into the company’s network without the Information Technology department’s permission.

11.8.20 Violations and Penalties Violations of this or any other ASEC policy subjects the employee to immediate revocation of system privileges and may result in further disciplinary action, up to and including termination of employment.

11.9 Non-Fraternization Policy Consistent with the company's policies on conflicts of interest, non-discrimination in general, and sexual harassment in particular, the company has adopted a non-fraternization policy. In establishing this policy, the company is not interested in learning about or regulating the private lives of our employees. Our concern is how relationships between supervisors and subordinates may adversely affect our workplace. As such, the company prohibits the following relationships:

• Intimate relationships between a supervisor and a subordinate • Relationships that interfere with work or disrupt the harmony of the workplace

The company also discourages intimate relationships between coworkers in the same department.



If an intimate relationship in violation of this policy develops between a supervisor and a team member, the supervisor must immediately contact Human Resources. Where an intimate relationship exists in violation of this policy, the company will take whatever actions it deems necessary to eliminate any actual, potential, or perceived conflict of interest. In all cases, the company will work with the employees involved to resolve the situation in a manner that does not require the termination of either employee. However, in the event no solution satisfactory to the company can be achieved without the termination of one of the employees, the company may determine that a termination of one or both employees is necessary.

11.10 Confidentiality of Information The protection of Confidential Business Information (CBI) and trade secrets is vital to the interests and the success of ASEC. CBI is defined as all information disclosed to or known by you because of your employment with the company that is not generally known to people outside the company. This includes information about the company’s:

• business; • marketing and sales strategies and plans; • finances; • operations; • employees; • methods and processes; • compositions; • machines; • computer software; • research projects; • customers names, accounts, information,

reports, and finances; • product information and reports;

• suppliers; • accounts; • billing methods; • pricing data; • sources of supply; • business methods; • production or merchandising systems or

plans;any and all information entrusted to the company in confidence by third parties; and

• all information defined as trade secrets under the Uniform Trade Secrets Act.

CBI may be contained in written manuals, verbal communications, unwritten knowledge, unwritten knowledge of other employees, and/or any other tangible method of expression including hard disk and soft disk drive mechanisms. Examples of CBI include, but are not limited to, the following:

• Employee Handbook • Employee compensation data • Computer system passwords and

security codes • Research results not yet published

including manuscripts and correspondence

• Budgetary, departmental or company planning information

• Litigations pending or in process • Employee capabilities • Vendor identities • Vendor capabilities • Financial information

• Labor relations strategies • Marketing development information • New materials research • Pending projects and proposals • Customer lists • Customer preferences • Customer relations information • Customer interviewing procedures • Proprietary production processes • Research and development strategies • Sales meeting information • Technological data • Technological prototypes • Trade pricing and promotion information.

All employees may be required to sign a Confidentiality Agreement as a condition of employment. Due to the close proximity in which employees work, any information overheard or seen while in the course of their duties should be considered CBI and should not be revealed or discussed with family, friends, or anyone else without prior written approval from management.



CBI should be kept in safe and secure places and not accessible to public view. Paper files should be kept in secured file cabinets. Computerized records should have limited user access, and computer terminals should not be accessible to anyone other than authorized users.

Unauthorized disclosure of CBI may lead to corrective action including immediate termination.

Employees should consult with the Director of Human Resources when in doubt about the handling and disclosure of CBI.

11.10.1 Proprietary Information We have cultivated our own proprietary techniques that distinguish our products and services from others on the current market and respect the importance of confidentiality. Therefore, ASEC and its employees have the responsibility to protect proprietary information.

ASEC’s proprietary information will not be provided in publicly available records or documents, and will not be disclosed without the consent of the company President and Vice-President. Furthermore, ASEC never discloses any client’s confidential information. We fully understand and comply with our clients’ privacy policies, and understand the importance of these policies in maintaining successful business relationships.

As an ASEC employee, you are responsible to adhere to the same confidentiality policy as ASEC management. Forms and other documents marked with proprietary information shall not be disclosed to others outside of the company unless the executives have given approval.

Unauthorized disclosure of proprietary information may lead to corrective action including immediate termination.

11.10.2 Employee Privacy Employees who are hired into positions that require the handling of confidential employee information are expected to use discretion when dealing with such information.

Inquiries from the press, radio, and television regarding company employees or confidential information should be neither confirmed nor denied. Refer inquiries to the President.

All inquiries from attorneys should immediately be referred to the Human Resources department.

Inquiries from other outside agencies regarding company employees or confidential information should be referred to the Human Resources department. Such agencies include but are not limited to the following:

• Government agencies ( e.g., the FBI, Social Security Administration, EEOC) • Police or other law enforcement agencies • Credit bureaus • Mortgage companies

Information regarding an employee's salary, length of service or performance, medical history, and other personnel information is confidential and will not be released without the employee’s written consent unless required by law.

11.10.3 Social Security Numbers Social security numbers are on file with the Human Resources department and every effort will be made to maintain the employee’s privacy. When relaying social security information, verbal communication is acceptable and written communication is not. If a business, necessity arises that requiring the transmission of SSN via email, password protected encryption via Word, Excel, or Adobe software is acceptable.



11.10.4 Access to Personnel Files Your personnel file is owned by ASEC and is maintained by the Human Resources department in a secure location. As required by law, some records pertaining to employees are maintained in separate files relating to medical issues and internal investigations. Employees may request access to their basic personnel file. Employees are not permitted to remove any documents from the personnel file but may provide a written response to any document in the personnel file. Written responses will be attached to the original document in the personnel file. Please be advised that this policy may be subject to state requirements, depending on the employee’s work location.

Representatives of government or law enforcement agencies, in the course of their duties, may be allowed access to file information. This decision will be made at the discretion of the company or the Human Resources department in response to the employee’s request, a government special investigator working an employee’s security clearance, a valid subpoena, or valid court order.

11.10.5 Verification of Employment Prospective employers, financial institutions, and residential property managers routinely contact employers requesting information on a former or current employee’s work history and salary. All such requests of this type shall be referred to and completed by the Human Resources department. For written requests, information will entered on the form provided only when it is accompanied by a former or current employee has signed authorization to release the information. The request form will be returned directly to the requesting party. Telephone requests will be directed to fax or email the request showing the employee has signed authorization before information is released.

11.11 Privacy Policy Privacy in the workplace requires a delicate balancing act between the right of employers to control their workplaces and employees’ expectation of privacy. Although many employees claim a right to privacy for their individual workstations, computer files, telephone conversations, and email, employers often have the legitimate right to monitor such activity and to inspect and review all related records. In fact, for employers that are engaged in particularly sensitive or competitive industries, such as the development of national defense systems, monitoring and investigating employees’ workplace and after-hours activities may be both compelling and lawful. The increased role and use of computers in the workplace has also presented employers with an entire set of new problems to worry about in the form of identity theft and security breaches.

With this in mind, it is the company's goal to respect the dignity of its employees. This respect for dignity includes a respect for individual privacy. Included in individual privacy is that of the employee’s personal address. Personal addresses will not be released without the express permission of the individual employee. Addresses will be available to ASEC administrative personnel in order for them to perform their job’s responsibilities. If permission is received from the employee, their address can be released to other employees.

In general, ASEC will endeavor to keep these personal addresses private unless authorized by the individual to release it.

In spite of the company’s efforts to maintain employee privacy, occasions may arise when the actions of another employee must be reviewed in order to protect the dignity of one employee or guest. Employees will be requested to cooperate voluntarily with such reviews.

Employees will always be afforded an opportunity to explain their actions. Whenever any employee perceives that his or her dignity has not been respected in the course of a review, he/she should immediately contact the Human Resources department or any officer of the company. As part of the investigation, a second neutral and management-level employee will be included as part of any search, interview session, or investigation procedure to ensure full documentation of every inquiry.



Employees are expected to make use of company or customer facilities only for the business purposes of the company or the customer. For example, computers are not to be used to play personal computer games. Accordingly, materials that appear on computer, email, voice mail, facsimiles, and the like are presumed to be for business purposes; the work product belongs either to the company or to the customer, and all the materials are subject to review by the company or the customer at any time without notice to the employee. Employees are not to have any expectation of privacy with respect to any material on company or customer property. This includes desks, company-provided computer storage bags, file cabinets, and/or safes. If it becomes necessary to conduct a workplace inspection (accomplished by the HR administrator and a neutral company officer), the employee accepts and understands this practice and acknowledges it by signing an annual policy statement to that fact.

11.12 Business Ethics Policy It is ASEC policy to observe the highest standards of ethics, honesty, and integrity. Employees are also required to uphold these standards. They must not have any personal interest that conflicts in any way with the interest of the company or its owners. They must not act to cause conflicts for others with whom the company does business. They must obey all applicable laws.

Not every instance of a violation of this standard can be anticipated. When in doubt about whether a particular matter violates this standard, seek guidance from the Ethics Committee (EC). Listed here are specific examples of conflicts with this standard:

• Giving or receiving gifts in connection with company business relationships. This is not intended to restrict gifts of token value or routine business meals and entertainment that do not exceed $5.

• Owning, directly or indirectly, a financial interest in suppliers, customers, or competitors except for publicly traded securities where the employee's percentage of ownership is less than 1 percent. Financial interest includes loans, stock, contracts, joint ventures, and the like.

• Deriving personal gain (directly or indirectly) from purchases or sales made by the company, other transactions to which the company is a party, use of company assets, use of company facilities, or use of company personnel.

• Using a previous employer’s or clients’ patented/trademarked/copyrighted intellectual property or trade secrets.

• Borrowing money from or lend money to a supplier, customer, company employee, or competitor. Normal personal and mortgage loans from banks and other financial institutions are permitted.

• Serving as a director; officer; employee; contractor; or consultant of a supplier, customer, or competitor or receiving income from these sources. Outside directorships may be permitted in limited circumstances, but only with the written approval of the president of the company.

• Indicating (directly or indirectly) that any supplier or customer must purchase anything from or give anything to the company or any company employee in order to remain a supplier or customer.

• Violating applicable law pursuant to the instructions or direction of anyone, including a company employee.

• Accepting outside compensation for work that is already being paid for by the company, or accepting outside employment that interferes in any way with the employee's position with the company.

• Recruiting, soliciting, or hiring (or assisting others to do so) any company employee to work for a non-related entity except as part of an approved written outplacement plan.

• Selling, utilizing, or disclosing ASEC confidential business information except in the pursuit of the best interests of the company as defined and approved by the company officers via a formal Non-Disclosure Agreement between the company and the party receiving the confidential (proprietary) information.

• Competing with the company. • Buying stock or securities of a company with which the company is conducting or contemplating

conducting acquisition negotiations.



• Buying or selling real estate or mineral interests that the company is considering or in the same area as the company.

• Buying or selling commodities, supplies, or products of a same or similar type as the company's business.

• Entering into option agreements with respect to commodities, supplies, or products the same as the company's.

• Using insider information to trade in company stock. • Using insider information to buy or sell anything. • Violating any applicable federal or state security or stock law.

Unauthorized disclosure of internet information about the company can cause serious problems for the company and the employee. Employees should not discuss internal matters with anyone outside the company, except as required in the performance of regular duties. This prohibition applies specifically (but not exclusively) to inquiries about the company that may be made by the financial press, investment analysts, or others in the financial community. It is important that all such communications on behalf of the company be through an appropriately designated officer under carefully controlled circumstances. Unless the employee is expressly authorized to the contrary, any employee who receives inquiries of this nature, should decline comment and refer the inquirer to the President.

Because of ASEC’s size and complexity, it is impossible to list every circumstance in which the interests of employees and the interest of the company may conflict. Employees are required to observe the letter as well as the spirit of this policy and to report any potential conflict, however minor, in writing to the EC without exception. This obligation extends not only to conflicts personal to the employee, but also to all conflicts known or suspected by him/her. No exceptions or modifications to the conflict of interest policy will be made unless approved in writing by the EC.

Whenever an employee leaves ASEC, the company expects the employee to continue to comply with those obligations that continue, such as the duty of loyalty and the duty not to trade on insider information.

The company expects the strictest compliance with these procedures by all personnel at every level. Failure to observe them may result in serious legal difficulties for both the employee and the company. An employee who fails to follow these procedures will be considered a matter of extreme seriousness and may result in immediate termination of employment.

11.12.1 Ethics Committee An ethics committee (EC) will be established to deal with ethical violations. The committee shall be comprised of the company’s president, vice president, Human Resources administrator, and a full-time employee. Each member of the committee is specifically assigned (in writing) for a term of one year. Each January, a new rotating ethics committee member will be designated. The committee will meet on an as-needed basis to investigate alleged ethics violations.

11.12.2 Reporting Ethics Violations Employees are required to observe both the spirit and the letter of this policy and to report any conflict situation and/or overpayment, however minor, in writing in a timely manner to the EC without exception. It is incumbent upon the EC to investigate and report to the government whenever violations occur and to do so expeditiously. Disclosures must be made to the contracting agency’s Office of the Inspector General with a copy sent to the Contracting Officer. In addition, the EC will provide full cooperation with any government agencies responsible for audits, investigations, or corrective actions.

Anyone who believes that an ASEC employee has violated the Code of Ethics may file a complaint against that individual. Complainants may be filed against the following:

• ASEC employees • ASEC sub-contractors



• ASEC teaming partners • Government employees.

In addition, the Ethics Committee (EC) itself can initiate a complaint based on information that is part of a public record, such as actions taken against an individual by courts or regulatory bodies and information published in advertisements, newspapers, and websites.

Complaints of alleged violations of the Code of Ethics can be submitted anonymously through the confidential reporting hotline at (301)862-1732 ext. 215 or online at http://www.asec-incorporated.com/EmploymentPacket/EthicsViolation/. Complaints can also be submitted in person or in writing to the EC.

11.12.3 Complaint Notifications Once a complaint is submitted in accordance with the complaint filing procedures and is determined to be within the jurisdiction of the EC, the Human Resources Director sends a notification letter, on behalf of the EC, to the individual named in the complaint (i.e., the Respondent) along with a summary of the complaint and all attachments submitted by the initiator of the complaint (i.e., the Complainant) and a copy of the Code of Ethics.

11.12.4 Complaints Filed Against You You, as the Respondent in the matter, will have 45 days to submit a response to the complaint. It is very important that you submit a response to ensure that the EC has all of the relevant information it needs in order to adjudicate the matter fairly. Even if you acknowledge that you violated the code, submitting a response indicating your awareness of the matter and, if appropriate, an explanation of any possible mitigating factors will help the EC determine the appropriate sanction if it determines that there was a code violation.

Failure to respond to a complaint may be construed as a violation ASEC’s Code of Ethics.

11.12.5 Response to Complaint Your response should address each allegation (stated or implied) made by the Complainant. If you do not believe that you violated the code, you should provide any documentation that you believe would refute the Complainant's claims. If you acknowledge that you did violate the code, you should let the EC know of any circumstances that led to the violation and/or what steps you have taken to ensure that it will not happen again.

The EC relies on the information provided by the Complainant and Respondent in each case. Therefore, it is imperative that you provide the EC with all the facts and evidence you have to support your response and wish the EC to consider in its deliberations.

Facts and evidence to be provided in your response may include, but are not limited to, the following:

• Your response to each allegation made by the Complainant.

• Descriptions and copies of any communications with the Complainant and others regarding this incident.

• Signed and dated witness statements.

• Copies of all other materials and evidence that refute the Complainant's claims and/or corroborate and support your response.

• Descriptions and dates of actions taken, if any, to try to mitigate or rectify the situation.

Note: If any documents containing confidential information (e.g., client/employment records) are submitted to substantiate your response, be sure to redact all identifying information (e.g., names,

http://www.asec-incorporated.com/EmploymentPacket/EthicsViolation/

http://www.asec-incorporated.com/EmploymentPacket/EthicsViolation/



social security numbers). If you need to refer to a specific record, you may assign letter or number codes in place of the redacted identifying information (e.g., Client A, Employee B).

Send your response and accompanying documentation in an envelope marked CONFIDENTIAL, to the following address below:

Human Resource Department 21801 N. Shangri-La Drive, Suite F Lexington Park, MD 20653

11.12.6 Employee Status during Adjudication Process There is no change in your ASEC employment status during the time the matter is being adjudicated. A sanction affecting your ASEC status will not go into effect until the EC issues its final decision in the matter, nor does the EC provide any information about the complaint to any individuals, organizations, or agencies until after the EC’s final decision is issued. (See EC’s Final Decision Notification for more information.)

11.12.7 Response Submission The complaint and your response will be provided to all members of the EC for consideration at the next scheduled EC meeting. The EC will consider all evidence submitted by the Complainant and the Respondent and reach an initial determination, which will be sent to you shortly after the meeting. The determination may be that there was insufficient evidence that a violation of the code occurred or that there was a violation.

11.12.8 Adjudication Process Timeline The provision of due process will be addressed immediately and resolution will be made in a timely fashion assuming an appeal to ASEC’s Board of Directors is not involved. The EC issues its final decision after all appeals are either exhausted or waived.

11.12.9 Insufficient Evidence If the EC determines that there was insufficient evidence to support a finding that a code violation occurred, you, your legal counsel (if applicable), and the Complainant will be notified of the EC's determination as a final decision, and the matter will be considered closed.

11.12.10 Appealing an EC Decision If the EC determines that a violation occurred, it will specify which rules of ethics were violated and propose one of the following sanctions:

• Warning • Suspension • Termination of employment

You will be notified of the EC’s decision shortly after the meeting, and you will then have 30 days to submit a request for a Further Consideration Hearing (i.e., first-level appeal).

If you request further consideration, the hearing will be conducted within 30 days of the request. You may submit a brief and any additional evidence and documentation for the EC's consideration, and you have the opportunity to participate in the hearing by telephone or in person. Participating in the hearing, (either by phone or in person) allows the EC to ask specific questions of you that may help them with their decision. If you wish to retain legal counsel at your sole expense, the attorney may submit the brief on your behalf and participate with you at the hearing. The EC will then conduct deliberations on the matter



and either affirm its initial determination or amend its finding regarding the code provisions violated and/or the proposed sanction.

The further consideration determination will be mailed to you shortly after the meeting. If you do not request further consideration within 30 days of the date of the initial determination, the initial determination will be issued as a final decision.

11.12.11 Insufficient Evidence of Violation If the information presented at the further consideration hearing results in the EC amending its initial determination and finding that there was insufficient evidence to support a finding that a code violation occurred, you and the Complainant will be notified of the EC's determination as a final decision, and the matter will be considered closed.

If the information presented at the further consideration hearing results in the EC affirming its initial determination and proposed sanction, or amending its initial finding regarding the code provisions violated and/or the proposed sanction, you will be notified of the EC's decision shortly after the meeting.

If you believe that, the EC did not follow its procedures and/or that its decision was arbitrary and capricious and without any evidentiary basis, you may appeal the EC further consideration decision to ASEC's Board of Directors (i.e., the final appeal). The request for this appeal must be received by the EC within 30 days after the date of the further consideration decision. The Board of Directors Appeals Panel will not receive or consider any evidentiary matters that were not included in the official record of the further consideration decision. If the Board of Directors Appeal Panel determines that the EC did follow its procedures and that the decision was not arbitrary and capricious, the further consideration decision will become final. If the Board of Directors Appeal Panel determines that the EC did not follow its procedures and/or its decision was arbitrary and capricious, the matter will be sent back to the EC for reconsideration.

If you do not request an appeal to the Board of Directors within 30 days of the date of the further consideration decision, the further consideration decision becomes final, and a copy of the final decision will be provided to you.

11.12.12 EC’s Final Decision Notification If the final decision is a finding that there was insufficient evidence to support a finding that a violation occurred, the decision is only provided to you, your legal counsel (if applicable) and the Complainant.

If the final decision is a finding that a violation occurred and the sanction is a warning, it will be disclosed only to you, your legal counsel (if applicable), the Complainant, and (when appropriate) to staff and ASEC legal counsel (if applicable). All of these parties shall be advised that the decision is strictly confidential.

If the EC finds that a violation occurred, suspension or termination of employment will occur.

11.12.13 Questions and Further Information If you have questions about the specific complaint filed against you or the overall complaint adjudication process, please contact the HR department at (301) 862-1732. General questions can be directed to the Human Resources department or a member of ASEC’s Ethics Committee. Please see Human Resources for the current contact information for ASEC’s Ethics Committee members.

11.12.14 Applicability The complaint process does not create a contractual obligation on behalf of ASEC to follow the above procedures. At all times, and in all instances, management may elect to take any appropriate actions (including immediate suspension or termination) without the necessity of a hearing and there shall be no appeal for that decision.



11.12.15 Training Ethics training is mandated for all employees. New employees are provided with ASEC’s Business Ethics Policy to read and sign stating they have read and understand the expectations of the policy.

11.12.16 Required Signature

Annual refresher training will be conducted for all employees. The refresher requires that employees will watch an interactive online course on Business Ethics and will sign the standard of conduct acknowledgment.

11.13 ASEC’s Anti-Harassment Policy and Complaint Procedure ASEC is committed to a work environment in which all individuals are treated with respect and dignity. Each individual has the right to work in a professional atmosphere that promotes equal employment opportunities and prohibits unlawful discriminatory practices, including harassment. Therefore, ASEC expects that all relationships among persons on or off site will be business-like and free of bias, prejudice, and harassment.

It is the policy of ASEC to ensure equal employment opportunities without discrimination or harassment based on race, color, religion, gender, sexual orientation, gender identity, national origin, age, disability, genetic information, marital status, amnesty, or status as a covered veteran. ASEC prohibits any such discrimination or harassment.

ASEC encourages reporting of all perceived incidents of discrimination or harassment. It is the policy of ASEC to promptly investigate such reports. ASEC prohibits retaliation against any individual who reports discrimination or harassment or any individual who participates in an investigation of such reports.

11.13.1 Definitions of Harassment Sexual harassment constitutes discrimination and is illegal under federal, state, and local laws. For the purposes of this policy, sexual harassment is defined (as in the Equal Employment Opportunity Commission Guidelines) as unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature when, for example:

a) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment;

b) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual; or

c) such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment.

Sexual harassment may include a range of subtle and not-so-subtle behaviors and may involve individuals of the same or different gender. Depending on the circumstances, these behaviors may include unwanted sexual advances or requests for sexual favors; sexual jokes and innuendo; verbal abuse of a sexual nature; commentary about an individual's body, sexual prowess, or sexual deficiencies; leering, whistling, or touching; insulting or obscene comments or gestures; display in the workplace of sexually suggestive objects or pictures; and other physical, verbal, or visual conduct of a sexual nature.

Harassment based on any other protected characteristic is also strictly prohibited. Under this policy, harassment is defined as verbal, written, or physical conduct that denigrates or shows hostility or aversion toward an individual because of his/her race, color, religion, gender, sexual orientation, national origin, age, disability, marital status, citizenship, genetic information, or any other characteristic protected by law or that of his/her relatives, friends or associates, and that:

a) has the purpose or effect of creating an intimidating, hostile or offensive work environment;



b) has the purpose or effect of unreasonably interfering with an individual's work performance; or

c) otherwise adversely affects an individual's employment opportunities.

Harassing conduct includes epithets, slurs, or negative stereotyping; threatening, intimidating, or hostile acts; denigrating jokes; and written or graphic material that denigrates or shows hostility or aversion toward an individual or group and that is placed on walls or elsewhere on the employer’s premises or circulated in the workplace, on company time, or using company equipment via e-mail, phone (including voice messages), text messages, tweets, blogs, social networking sites, or other means.

11.13.2 Individuals and Conduct Covered These policies apply to all applicants and employees, whether related to conduct engaged in by fellow employees or someone not directly connected to ASEC (e.g., an outside vendor, consultant, or customer).

Conduct prohibited by these policies is unacceptable in the workplace and in any work-related setting outside the workplace, such as during business trips, business meetings, and business-related social events.

11.13.3 Complaint Process Individuals who believe they have been the victims of conduct prohibited by this policy statement or who believe they have witnessed such conduct should discuss their concerns with their manager, Human Resources, or any member of management.

When possible, ASEC encourages individuals who believe they are being subjected to such conduct to promptly advise the offender that his or her behavior is unwelcome and request that it be discontinued. Often this action alone will resolve the problem. ASEC recognizes, however, that an individual may prefer to pursue the matter through complaint procedures.

ASEC encourages the prompt reporting of complaints or concerns so that rapid and constructive action can be taken before relationships become irreparably strained. Therefore, although no fixed reporting period has been established, early reporting and intervention have proven to be the most effective method of resolving actual or perceived incidents of harassment.

Any reported allegations of harassment, discrimination, or retaliation will be investigated promptly. The investigation may include individual interviews with the parties involved and, where necessary, with individuals who may have observed the alleged conduct or may have other relevant knowledge.

Confidentiality will be maintained throughout the investigatory process to the extent consistent with adequate investigation and appropriate corrective action.

Retaliation against an individual for reporting harassment or discrimination or for participating in an investigation of a claim of harassment or discrimination is a serious violation of this policy and, like harassment or discrimination itself, will be subject to disciplinary action. Acts of retaliation should be reported immediately and will be promptly investigated and addressed. Misconduct constituting harassment, discrimination, or retaliation will be dealt with appropriately.

If a party to a complaint does not agree with its resolution, that party may appeal to ASEC’s Board of Directors.

False and malicious complaints of harassment, discrimination, or retaliation may be the subject of appropriate disciplinary action.

11.14 Americans with Disabilities Act (ADA) and the ADA Amendments Act (ADAAA) The Americans with Disabilities Act (ADA) and the Americans with Disabilities Amendments Act (ADAAA) are federal laws that prohibit employers with 15 or more employees from discriminating against applicants and individuals with disabilities. These laws also require that, when needed, employers must provide



reasonable accommodations to applicants and employees who are qualified for a job, with or without reasonable accommodations, so that they may perform the essential job duties of the position.

It is the policy of ASEC to comply with all federal and state laws concerning the employment of persons with disabilities and to act in accordance with regulations and guidance issued by the Equal Employment Opportunity Commission (EEOC). Furthermore, it is our company policy not to discriminate against qualified individuals with disabilities concerning application procedures, hiring, advancement, discharge, compensation, training or other terms, conditions and privileges of employment.

The company will reasonably accommodate qualified individuals with a disability so that they can perform the essential functions of a job unless doing so causes a direct threat to these individuals or others in the workplace and the threat cannot be eliminated by reasonable accommodation and/or if the accommodation creates an undue hardship to ASEC. To request an accommodation, please reference the Reasonable Accommodation policy for more information.

12 COMMUNICATIONS

12.1 Open Door Policy It is ASEC policy to encourage communication throughout all levels of the organization. To that end, the doors of management are open to all employees no matter what situation may be.

12.1.1 Arbitration and Grievance Procedures It is ASEC policy that all employees have the right to voice their complaints.

We recognize the meaningful value and importance of full discussion in resolving misunderstandings and preserving good relations between management and employees. Accordingly, we believe that the following procedure will ensure that complaints receive full consideration.

Should a condition exist that an employee feels is unsatisfactory, it is important that he/she bring it to the attention of the appropriate person in the proper manner. Normally that person is the employee's immediate ASEC supervisor. If the supervisor is the source of the complaint (e.g., unlawful harassment), the employee is to contact Human Resources.

12.1.2 Procedure 1. Following the initial report of the grievance to the supervisor and the passage of time to consider

alternative actions has occurred, the supervisor notifies the employee of the action to be taken to correct the situation. If the supervisor believes no action is warranted or possible, the employee should receive an explanation as to the reasoning of such a decision. Generally, the supervisor should reply to the employee within three working days.

2. In the event the employee feels the problem remains unresolved after discussions with the supervisor, the employee may submit the complaint in writing for reconsideration. A written complaint is to be submitted to the Human Resources department. Upon reviewing the complaint, HR will normally render a decision in writing within three days after receipt of the written complaint.

In certain cases, HR and the supervisor may wish to meet personally with the employee to provide a fuller explanation of the action taken.

Normally, complaints will be resolved at this step of the grievance procedure.

3. An employee who feels the complaint has not received adequate attention in Step 2 may direct the complaint to the Director of Operations.

Such complaints are to be made in writing within three days of receiving the answer provided in Step 2. The Director of Operations will review the complaint with HR and arrange a meeting with



the employee within three days of receiving the complaint. At this step, the President may be consulted for a final decision in the matter.

Our open door policy, providing for a review by management, is a safeguard against any possible inequitable treatment. All employees may therefore be assured that every effort will be made to resolve problems to their satisfaction. Under no circumstances will an employee be penalized or retaliated against for presenting a good-faith complaint to the supervisor or to management.

12.2 Photography, Videotaping, and Recording Devices In the event where photography, videotaping, and recording devices must be used, employees must first gain permission of the subject through a Photograph and Audio Visual Release form. The surveillance system used at ASEC is an exception.

Failure to obtain permission prior to taking photographs, videotaping, and/or recording may lead to corrective action including immediate termination.

12.3 Purchasing (Purchase Orders) Each time an ASEC employee purchases an item, that employee must generate a purchase order. The employee’s supervisor must approve all purchases prior to purchasing the item. Failure to obtain proper approval will result in forfeiture of reimbursement. A completed purchase order worksheet is required each time an employee purchases an item. Purchase orders should be submitted to the administrative assistant. Reimbursement can be expected within 7-14 days.

The procedure for Purchase Orders can be found on the shared drive.

13 REASONABLE ACCOMMODATION ASEC’s policy is to fully comply with the reasonable accommodation requirements of the Americans with Disabilities Act and other applicable federal, state, and local laws. ASEC is committed to providing reasonable accommodations to qualified individuals with known disabilities to enable them to perform the essential functions of the position held or desired, to participate in the application process, or to enjoy equal benefits and privileges of employment as are enjoyed by employees without disabilities. To obtain a reasonable accommodation, an applicant or employee should inform ASEC of the existence of a disability, the disability related limitation(s) or workplace barrier(s) that need to be accommodated, and if known, the desired reasonable accommodation.

13.1 Requests for Reasonable Accommodation A request for reasonable accommodation may be oral or written. All requests for reasonable accommodation should be submitted to the Human Resources Department or to the employee's supervisor. For recordkeeping purposes, the Company requires that all employees requesting reasonable accommodations complete and return an accommodation request form to Human Resources. The processing of requests will not be delayed while an employee completes these forms.

ASEC may request and review reasonable documentation, including medical documentation, in support of a request for reasonable accommodation. Documentation will be requested if the disability and need for accommodation is not obvious, where sufficient information regarding the disability and need for accommodation has not been provided, to confirm that a reasonable accommodation is medically appropriate, or to identify alternative accommodations that may be sufficient. Any request for medical documentation will be specific and limited to documentation of the individual's disability, its expected duration, the functional limitations for which reasonable accommodation is sought, and information about medically appropriate accommodations.

Employees should submit any requested medical documentation to Human Resources, not their supervisor. Employees are responsible for providing complete, timely, and sufficient documentation,



generally within one week of the Company's request. If it is not practical to do so within this time period, despite the employee's diligent efforts, the employee must inform Human Resources of (1) the efforts the employee has made to date; (2) the reasons the employee has been unable to obtain the requested information; and (3) a date by which the employee expects to be able to provide the requested information. ASEC may waive its right to obtain timely, complete and/or sufficient documentation whenever it deems it appropriate to do so and may deny a request for accommodation where employees unreasonably fail to timely provide complete and/or sufficient documentation.

Requests for accommodation will be considered on a case-by-case basis and as expeditiously as possible. The Company is not required to provide an employee's requested accommodation and reserves the right to provide an alternative accommodation that is equally effective. A requested accommodation may be rejected when not required by law, such as when, for example, it would impose an undue hardship on the Company, or if it would not be sufficient (or not necessary) to enable the employee to perform the essential functions of the job.

13.2 Confidentiality of Medical Information All requests for reasonable accommodation, related documentation, and any medical or disability-related information provided to the Company will be treated as confidential medical records and maintained in a separate medical file by Human Resources. Individuals who have access to this information may not disclose it, except as follows:

• Managers and supervisors who need to know may be told about any necessary work restrictions and accommodation(s)

• Government officials may be given information necessary to investigate the Company's compliance with applicable law

• The information may be disclosed to workers' compensation or insurance carriers in certain circumstances

• Emergency or first aid personnel may be given access to the information when medically necessary; and

• Company employees may be provided the information for recordkeeping, affirmative action purposes, or to evaluate the Company's processing of reasonable accommodation requests

Employees who fail to maintain the confidentiality of the medical records or information of other employees will be subject to disciplinary action, up to and including termination of employment.

13.3 Internal Review of Decisions Denying Reasonable Accommodations Employees may request that any decision to deny a request for reasonable accommodation be informally reviewed. To request reconsideration, employees should submit a written request to Human Resources within 10 business days of the initial decision. The request should explain the reasons the employee believes the request should be granted.

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

ASEC supports the use of progressive discipline to address issues such as poor work performance or misconduct. Our Progressive Discipline policy is designed to provide corrective action process to improve and prevent a recurrence of undesirable behavior and/or performance issues. Our Progressive Discipline



policy has been designed consistent with our organizational values, HR best practices, and employment laws.

The guidelines and policies of such behavior are outlined in this section.

14.1 Corrective Action Procedures Breaking company policy, misrepresenting working hours, falsifying signatures or information on a time record, tampering with your timesheet or other employees’ time records are extremely serious offenses. Employees found to have engaged in any of these prohibited activities are subject to immediate corrective action at the sole discretion of management up to and including termination of employment and, in some instances, criminal prosecution.

Corrective action measures are generally a last resort and should be used only when all other options have been exhausted. The best corrective action measures come from good leadership, supervision, and examples set for employees at all levels.

ASEC's own best interest lies in ensuring equitable, consistent, prompt, and impartial corrective action for unsatisfactory conduct and/or poor performance in the workplace for all employees. The major purpose of any corrective action is to correct the problem, prevent recurrence, and prepare the employee for satisfactory performance in the future.

Corrective action may call for any one of five steps depending on the severity of the problem and the number of occurrences: verbal warning, written warning, probation, suspension, and/or termination of employment.

The steps of ASEC’s Progressive Discipline policy and procedure are outlined below. ASEC reserves the right to combine or skip steps depending on the facts of each situation and the nature of the offense. The level of disciplinary intervention may also vary. Some of the factors that will be considered include whether the offense is repeated despite coaching, counseling or training, the employee’s work record, and the impact the conduct and performance issues have on the organization.

14.1.1 Step 1: Counseling and Verbal Warning Step 1 creates an opportunity for the immediate supervisor to schedule a meeting with an employee to bring attention to the existing performance, conduct, or attendance issue. The supervisor should discuss the nature of the problem or the violation of company policies and procedures with the employee. The supervisor is expected to clearly describe expectations and steps the employee must take to improve performance or resolve the problem.

The supervisor will prepare written documentation of the Step 1 meeting.

14.1.2 Step 2: Written Warning Although ASEC hopes that the employee will promptly correct any performance, conduct or attendance issues that were identified in Step 1, we recognize that this may not always occur. The Step 2 written warning involves a formal documentation of the performance, conduct, or attendance issues, and consequences.

During Step 2, the immediate supervisor will meet with the employee to review any additional incidents or information about the performance, conduct or attendance issues, as well as any prior relevant corrective action plans. The supervisor and Human Resources will outline the consequences for the employee of his or her continued failure to meet performance or conduct expectations.

A formal performance improvement plan (PIP) requiring the employee’s immediate and sustained corrective action may be issued. A warning outlining that the employee may be subject to additional discipline up to and including termination if immediate and sustained corrective action is not taken may be included in the written warning. The employee will be asked to sign this document to demonstrate his



or her understanding of the issues and the corrective action. All signed copies will be placed in the employee’s personnel file.

14.1.3 Step 3: Probation The probationary period is for use when an employee’s performance or behavior has fallen below acceptable standards. Its purpose is to provide a structured environment for constructive criticism and change. Probationary status shall include a good faith effort to correct the performance deficiencies. A written description of expectations and necessary corrective actions will be provided to the staff member. The probationary period is normally 60 to 90 days, but may vary in length depending on the severity of the issue. Supervisors are responsible for determining and communicating the probationary status in writing. They shall consult with HR prior to any communication of probationary status to the employee. During this period, regular feedback must be given to the employee. At the end of the probationary period, the employee is returned to regular status if the problem is resolved. The employee must continue to meet the expectations required or termination may result (depending upon the amount of time since probation ended). If the issue is not resolved, the probation may be extended or employment may be terminated.

14.1.4 Step 4: Suspension and Final Written Warning There may be performance, conduct, or safety incidents so severe and harmful that the most effective action may be the temporary removal of the employee from the workplace. When immediate action is necessary to ensure the safety of the employee or others, the immediate supervisor may suspend the employee pending the results of an investigation.

Suspensions that are recommended as part of the normal progression of this progressive discipline policy and procedure are subject to approval from an executive officer and HR.

Depending on the seriousness of the infraction, the employee may be suspended without pay in full-day increments consistent with federal, state, and local wage-and-hour employment laws. Nonexempt/hourly employees may not substitute or use an accrued paid vacation or sick day in lieu of the unpaid suspension. Due to Fair Labor Standards Act (FLSA) compliance issues, unpaid suspension of salaried/exempt employees is reserved for serious workplace safety or conduct issues. HR will provide guidance so that the discipline is administered without jeopardizing the FLSA exemption status.

Pay may be restored to the employee if an investigation of the incident or infraction absolves the employee.

14.1.5 Step 5: Recommendation for Termination of Employment The last and most serious step in the progressive discipline procedure is a recommendation to terminate employment. Generally, ASEC will try to exercise the progressive nature of this policy by first providing warnings, a final written warning, and/or suspension from the workplace before proceeding to a recommendation to terminate employment. However, ASEC reserves the right to combine and skip steps depending on the circumstances of each situation and the nature of the offense. Furthermore, employees may be terminated without prior notice or disciplinary action.

The supervisor’s recommendation to terminate employment must be approved by HR and the President.

14.2 Appeal Process Employees will have the opportunity to present information that may challenge information management has used to issue disciplinary action. The purpose of this process is to provide insight into extenuating circumstances that may have contributed to the employee’s performance or conduct issues while allowing for an equitable solution.



If the employee does not present this information during any of the step meetings, he or she will have five business days after the appeal to present such information.

14.3 Performance and Conduct Issues Not Subject to Progressive Discipline Employee behavior that is illegal may not be subject to progressive discipline, but instead be subject to immediate termination of employment. Illegal behavior may be reported to local law enforcement authorities.

Similarly, theft, substance abuse, intoxication, fighting, and other acts of violence at work may not be subject to progressive discipline and instead be grounds for immediate termination.

14.4 Documentation The employee may request copies of all progressive discipline documentation, including all Performance Improvement Plans. The employee will be asked to sign copies of this documentation attesting to his or her receipt and understanding of the corrective action outlined in these documents.

Copies of these documents will be placed in the employee’s official personnel file.

Important Note: Nothing in this policy provides any contractual rights regarding employee discipline or counseling, nor should anything in this policy be read or construed as modifying or altering the employment-at-will relationship between ASEC and its employees.

14.5 Restricted Forms of Behavior The following list is intended to serve as general guidelines. Individual circumstances are evaluated in consultation with the Human Resources department when considering corrective action. Therefore, a fully inclusive listing of all the reasons that will justify corrective action and/or termination is not possible. The infractions listed are merely examples of the types of unacceptable conduct that could result in corrective action or discharge.

• Theft or inappropriate removal or possession of ASEC property • Falsification of time-keeping records • Working under the influence of alcohol or illegal drugs • Illegal, unauthorized use or abuse of prescription drugs in the workplace • Possession, distribution, sale, transfer, or use of alcohol or illegal drugs in the workplace while on

duty, or while operating employer-owned vehicles or equipment • Fighting or threatening violence in the workplace • Boisterous or disruptive activity in the workplace • Negligence or improper conduct leading to damage of employer-owned or customer-owned

property • Cursing and/or chronic use of vile or obscene language, directly or indirectly in the performance

of one's duties at the workplace or the customer’s location • Insubordination or other disrespectful conduct • Verbal insulting or demeaning treatment of employees, including racial and/or religious slurs • Violation of safety or health rules • Excessive absenteeism, tardiness, or any absence without notice • Unauthorized disclosure of ASEC’s business secrets, company proprietary or competition-

sensitive information • Misuse of ASEC’s electronic information systems • Sexual/Discriminatory Harassment • Sleeping on the job • Falsification of Employment Application or other necessary data requested during the

employment process



• Failure to meet job standards • Bringing weapons or any article, which could be construed as a weapon of any kind onto ASEC’s

premises or to the customer’s workplace • Material violations of the Code of Ethics • Failure to comply with ASEC policies and rules

15 SEPARATION OF EMPLOYMENT

15.1 Resignation Although we hope your employment with us will be a mutually rewarding experience, we understand that varying circumstances cause employees to resign voluntarily. Resigning employees are encouraged to provide two weeks’ notice, preferably in writing, to facilitate a smooth transition out of the organization. Management reserves the right to provide an employee with two weeks’ pay in lieu of notice in situations where job or business needs warrant such action. Employees may not use PTO to extend the notice period, unless approved by management. The last day of employment must be a standard working day, not a holiday.

15.2 Retirement Employees who wish to retire are required to notify their manager and the Human Resources department in writing at least one month before the planned retirement date.

15.3 Job abandonment Employees who fail to report to work or contact their manager for three consecutive workdays shall be considered to have abandoned the job without notice, effective at the end of their normal shift on the third day. The manager shall notify the Human Resources department at the expiration of the third workday and initiate the paperwork to terminate the employee. Employees who are separated due to job abandonment are ineligible to receive accrued benefits and are ineligible for rehire.

15.4 Involuntary Termination (Layoff and Dismissal) In every case of termination of employment by being laid-off, it shall be the company’s objective to make the separation as amicable as possible for both the employee and the company. It is best that the laid-off employee leave with a feeling of goodwill toward the company regardless of the circumstances of the termination.

Nothing in this policy alters, or should be interpreted as altering the at-will employment relationship between the company and its employees. Employees are free to terminate their employment at any time and for any reason, and the company retains the same right.

Should layoffs of personnel become necessary, the company will consider contractual funding issues, business conditions, identification of strategic departments, critical skill sets, as well as all factors of an employee's performance including competency, future work potential, and attendance.

When it has been determined that an employee is to be laid-off, the HR department shall be notified immediately. An EAN will be the initiating documentation for the company’s action.

A termination of Employment Agreement will be prepared in conjunction with management and the employee’s supervisor. This agreement will explain the reason for and the date of the layoff. The company will adhere to any layoff notice requirements under federal and state laws (e.g., the federal WARN Act).

Due to the circumstances of the particular employment in which ASEC engages (i.e., dependency on government funded contracts that could be unfunded with or without advanced notice) severance pay may be granted based on individual consideration by management with the approval of the President. It



is not a guaranteed right or benefit. It is ASEC management’s intent to give employees as much advance termination (layoff) notification as possible (two weeks nominally), but if an immediate termination is required, then the severance pay may be awarded at management’s discretion.

The layoff process shall follow this sequence of events:

a) Notification is received that a contract is no longer funded or a stop work notice has been issued as of a specific date.

• If the specific date when funding ceases is within 14 days of the cease-funding/stop work notice, it is considered short notice for purposes of severance pay. Severance pay may be awarded at the management election in due consideration of budget issues.

• If the specific date when funding ceases is 14 days or beyond from the cease-funding/ stop work notice, severance pay will not be granted.

b) The employee will be alerted to the cease-funding/stop work notice as soon as practical after options for other employment within the company have been considered.

c) Once options for alternative employment have been exhausted, the employee is notified of the layoff and an EAN is generated; the layoff will occur the day of the notification.

15.4.1 Involuntary Termination of Employment Agreement (Furloughs or Changes in Contract Terms)

In the event the customer significantly changes working requirements, it may become necessary to terminate an employees’ original employment agreement and renegotiate employment terms that meet the requirements of the customer.

15.4.2 Termination Employees of ASEC are employed on an at-will basis, and the company retains the right to terminate an employee at any time.

The last day of employment must be a standard working day (i.e., Monday-Friday) and not a holiday. All benefits that are due will be paid out in the last paycheck to the employee. PTO must be cashed out and cannot be used to prolong employment with ASEC. Individual consideration will be up to management discretion. Some benefits may be continued at the employee’s expense (e.g., COBRA health insurance) if chosen; the employee will be notified in writing of the benefits, which may be continued, and of the terms, conditions, and limitations of such continuance. Vested benefits in the 401(k) plan may be transferred to another account. The HR department will assist with the appropriate paperwork. Vested ESOP shares will be dispersed as stated by the plan.

Healthcare insurance continues until the last day of the month in which the termination occurs. All other insurances, such as life insurance, AD&D, STD, and LTD will terminate on the last day of employment. The employee’s last day will be the termination date for purposes of the 401(k) Plan and Employee Stock Ownership Plan (ESOP), if applicable.

Employees must address any outstanding 401(k) loan balances. Please refer to the Loan Process.

If the employee received tuition reimbursement or any monetary payment (bonus) that required employment for up to one year, the employee may be required to refund the monetary amount depending on the circumstances of the termination. If the termination is voluntary or a direct result of the employee’s actions (i.e. poor performance), the employee is obligated to refund the amount as expected and outlined prior to the payment. If the termination is involuntary (i.e., due to a layoff), ASEC may release the employee of the obligation to repay the monies, subject to management approval.



15.4.3 Ability to Rescind a Resignation Employees may rescind a resignation through the effective date of resignation. Acceptance of the withdrawal of the resignation is at the discretion of management.

15.5 Return of Company Property Employees must return all ASEC property immediately upon request or upon termination of employment. If ASEC’s property is not returned upon request or termination, your paycheck will be reduced to cover the cost of the item(s). This reduction shall never reduce your earnings below the applicable minimum wage. ASEC reserves the right to take all legal action deemed appropriate to recover or protect its property.

The employee will be given an Employment Termination Checklist, which will be used to ensure all property was returned.

15.6 Exit Interviews ASEC will generally schedule exit interviews at the time of employment termination. The exit interview will afford an opportunity to discuss such issues as a final paycheck, employee benefits, conversion privileges, repayment of outstanding debts to ASEC, and return of ASEC-owned property. Suggestions, complaints, and questions may also be addressed. Employees will also be given the following link to provide answers to a questionnaire: http://www.asec-incorporated.com/EmploymentPacket/Exit/. This information will help ASEC understand where we excel and what can be done to improve our operations. Employees will have the option of recording their name or submitting the questionnaire anonymously.

15.7 Rehire Former employees who left ASEC in good standing and were classified as eligible for rehire may be considered for reemployment. An application must be submitted to the Human Resources department, and the applicant must meet all minimum qualifications and requirements of the position. Rehired employees begin benefits just as any other new employee. Previous tenure may be considered in calculating longevity, leave accruals, or any other benefits.

An applicant or employee who is terminated for violating policy or who resigned in lieu of termination from employment due to a policy violation will be ineligible for rehire.

http://www.asec-incorporated.com/EmploymentPacket/Exit/





16 EMPLOYEE HANDBOOK DISCLAIMER This Employee Handbook provides the most recent statement of current policies as of the date of this handbook and supersedes any prior handbooks of any kind. I acknowledge, however, that these policies and standards, as well as this Employee Handbook may be revised, rescinded, or supplemented from time to time and that portions of this handbook may become outdated due to changes in policies and procedures after the date of this edition of the Employee Handbook.

I understand that this handbook is not a contract, nor does it create any contractual rights that would be enforceable by me. Any of the policies and procedures in this Employee Handbook can be changed at any time at the sole discretion of the company, without advance notice to me. Moreover, management may choose not to adhere to any one or more of the policies and procedures in this handbook in any instance where management deems it necessary or appropriate.

I understand that I am an at-will employee, and either the company or I can terminate our employment relationship at any time, and for any reason or no reason at all, so long as that termination does not violate applicable federal or state laws.

By signing this disclaimer, I acknowledge receipt of the company’s Employee Handbook. I agree to familiarize myself with all policies and standards of conduct of the company during the course of my employment and to seek answers to questions about any policy or standard that I do not fully understand.

I will also keep informed of any changes to these policies and standards as communicated through official methods of communication. I fully understand that failure to comply with these policies and standards may be cause for disciplinary action.

Printed Name: Date:

Signature:

Documents

ASEC · 1.3 Employee/Employer Relationship ... 5.9.6.1 Project Manager/Program Manager Bonus ... 6.18.5 Employee Status and Benefits during Leave