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Revised, June, 2010This handbook replaces and supersedes all prior handbooks

by Sapphire Ventures, Inc.

26470 Ruether Ave., Ste 109Santa Clarita, CA 91350

(661) 251-6444 ♦ (661) 251-6671 FAXsapphire@svi35.com

TABLE OF CONTENTS

PAGE WELCOME TO SUPERCUTS 4PURPOSE OF THE HANDBOOK 4 EMPLOYEE RELATIONS 5EMPLOYMENT POLICY 5OPEN DOOR POLICY 5AT WILL EMPLOYMENT 5 RECRUITING & HIRING

Immigration Law Compliance 6Equal Employment Opportunity 6No Harassment Policy 6

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Union Free Salon EMPLOYER ORGANIZATION 8 EMPLOYEE CLASSIFICATION & CATEGORY OF EMPLOYMENT

Employee Status 10Introductory Employees 10Exempt/Non Exempt 10Regular Full-Time Employees 10Regular Part-Time Employees 10Probationary Employees 11

Rehired Employees 11Rehire Considerations 11Work Permits 11Working at Other Stores 11

WAGES AND BENEFITSHours of Work 12Wages

Pay Schedule 12Recording Work Time 12Overtime Policy 13Split Shifts 13Holidays 13Effective Date of Wage Changes 13Exchanging Shifts 14Payroll Deductions 14

BenefitsBenefits for Full-Time Employees 14

Paid Holidays 14Non-Paid Holidays 14Vacation 14Products and Equipment 15Training/Continued Training 15Health Benefits 15Dental Benefits 16

Benefits for Part-Time Employees 16Vacation 16Products and Equipment 16Training/Continued Training 16

Other BenefitsPaying Back The Future 17Credit Union 17Bonus Plan 17Simple IRA Retirement Plan 17Cosmetology License Renewal 17

General

Change in Personnel Records 17Doctor's Verification 18Vacation Policy with Six-Month Eligibility Period 18Continued Insurance Benefits (COBRA) 18

Legislated BenefitsWorkers' Compensation Program 19State Disability Insurance 19Unemployment Insurance 20

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Social Security 20

Leaves of AbsencesPersonal Leave of Absence 20Medical Leave for Occupational or Non-Occupational Disabilities 20Pregnancy Disability Leave 21Family Care and Medical Leave 22Unpaid Status 24Vacation Benefits 24Health/Dental Insurance 24Jury Service 24Military Leave of Absence 24Other Legally Required Leaves of Absence 24

PERFORMANCE AND DISCIPLINE POLICIES

Personal Appearance 25Personal Telephone Calls, Visits & Mail 25Safety and Security 26Loans and Pay Advances 26Cleanliness of Work Area 26Cell Phone Etiquette 27English/Foreign Language at Work 27Employee Services 27Smoking 27Drug and Alcohol Abuse 28Outside Employment 28Absenteeism and Tardiness 28Performance Appraisals and Merit Increases 29Discipline and Termination 29Final Paycheck

29No Solicitation/No Distribution 29Proprietary Information 30

RULES OF CONDUCT 31EXIT INTERVIEW 32INJURY AND ILLNESS PREVENTION PROGRAM 33EMPLOYEE ACKNOWLEDGEMENT OF RECEIPT OF EMPLOYEE HANDBOOK 35

WELCOME TO SUPERCUTS

Welcome and congratulations on becoming part of the Supercuts team. The Supercuts idea started in 1976 in the San Francisco Bay area. At that time, there was no one in the beauty industry providing a fashionable haircut at an affordable price. Barber shops offered little in style and full service salons were high priced and required a great deal of time. By 1979 Supercuts began selling franchises and by the end of 1982 some 200 shops had been opened on the West Coast. Supercuts became part of Regis Corporation in 1996. Currently Supercuts, Inc. operates 2200 (haircutting franchises) salons both Company owned and franchised in the United States, Canada and Puerto

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Rico. We have one of the most extensive advanced educational systems in the country. Every stylist must not only be licensed, but each stylist must graduate from Supercuts’ rigorous one week training program on advanced haircutting and styling before beginning work. In addition every Supercuts stylist must be periodically re-certified to assure quality and to keep our stylists up-to-date on the latest in hairstyling fashions and products. Your shop will be periodically visited by representatives of the franchisor, Supercuts, Inc. As with any successful franchise organization, it is important that the Supercuts system maintain a uniform appearance and consistent methods of operation. These Supercuts’ representatives are concerned with upholding these standards and maintaining our national reputation for quality and customer service.

PURPOSE OF THE HANDBOOK

This Handbook has been prepared to acquaint you with our Company and to give you a ready reference to answer most of your questions regarding your employment with us. The contents of this Handbook, however, constitute only a relatively brief summary of the employee benefits, personnel policies, and employment regulations in effect at the time of publication. This handbook is property of the Company and is intended for the personal use and reference by employees of the Company. Circulation of this handbook outside the Company is prohibited. The Company reserves the right to add, change or delete benefits and policies as it deems appropriate, which you accept by your continuation of employment when such modifications occur. This handbook replaces and supersedes all prior handbooks. This handbook is presented as a matter of information and none of the policies or benefits contained in it constitute a contract of employment between the Company and any of its employees.

EMPLOYEE RELATIONS

Our sincere conviction is that the best and most rewarding employee-management system results from a direct relationship between management and employees. This is why we prefer to deal with employees directly rather than through a third party.

We encourage you to bring your problems to your manager or any other member of management whom you feel can help you. We, in turn, promise to listen to your concerns with respect and do our best to solve your problems. Management accepts responsibility to provide favorable working conditions, and competitive pay and benefits. We believe that you as an employee have the individual right to speak for yourself.

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EMPLOYMENT POLICY

The policies and procedures contained in this manual are management guidelines and, accordingly, the Company reserves the right to modify or delete any of the policies contained in this handbook as necessary. Your employment with the Company is voluntarily entered into and you are free to resign at any time. Similarly, the Company may terminate your employment when the Company believes it is appropriate, with or without cause. This manual is presented as a matter of information and none of the policies or benefits contained in it constitute a contract of employment between the Company and any of its employees.

OPEN DOOR POLICY

In our spirit of willingness to listen, the company believes in and maintains an open door policy. In order to have open communication, there must be mutual respect and a willingness to resolve disputes without the intervention of any third party. You are encouraged to see your manager with questions or problems relating to your job or feelings of well-being. If you are uncomfortable discussing these questions with your manager, you should feel free to address the same with your shop’s general manager or the owner.

Please remember – don’t keep a problem inside. You can’t reach a solution if no one knows about it. You may use this procedure without fear of reprisal.

AT-WILL EMPLOYMENT

All employment at the Company is “at will”. This means that both employees and the Company have the right to terminate employment at any time, with or without advance notice, and with or without cause. Nothing in this Handbook should be construed as altering in any way the at will nature of your employment. No one other than an officer of the Company has the authority to alter this arrangement or to make any agreement contrary to this at-will status. Any such agreement must be in writing, must be signed by an officer of the Company and by the affected employee.

RECRUITING & HIRING IMMIGRATION LAW COMPLIANCE

The Company complies with the employment verification procedures required by federal immigration law. Every new employee must provide satisfactory evidence of identity and legal authority to work in the United States on a I-9 form no later than three (3) business days after beginning work. All offers of employment and continued employment for positions in the United States are conditioned upon furnishing such satisfactory evidence. Submission of false information will result in the termination of employment.

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EQUAL EMPLOYMENT OPPORTUNITYThe Company is committed to a policy of equal employment opportunity for

applicants and employees and does not discriminate on the basis of race, color, sex (including pregnancy, childbirth or related medical conditions), national origin, ancestry, age, physical disability, mental disability, medical condition, family care status, veteran status, marital status, sexual orientation or any other characteristic protected by law. Employment decisions shall comply with federal, state and local laws prohibiting discrimination in employment.

Furthermore, the Company prohibits the harassment of any individual on the basis of race, color, religion, sex (including pregnancy, childbirth or related medical conditions), national origin, ancestry, age, physical disability, mental disability, medical condition, family care status, veteran status, marital status, sexual orientation or any other characteristic protected by law.

No employee may ask an applicant or another employee for information regarding the applicant’s or employee’s physical, mental or medical condition, including any disability or illness, unless specifically authorized to make such an inquiry by the owner(s) of the Company. NO HARASSMENT POLICY

We do not tolerate harassment of any of our employees by managers, supervisors, co-workers, or third parties with whom the Company has a business, service, or professional relationship. Any form of harassment related to an individual’s race, color, sex, religion, national origin, citizenship status, age, handicap, disability, sexual orientation, marital status, veteran’s status and any other basis protected by law is a violation of this policy and will be treated as a disciplinary matter. For these purposes, the term harassment includes, but is not limited to, slurs and any other offensive remarks, jokes, other verbal, graphic, or physical conduct. Sexual harassment includes statements that suggest or insinuate that an employee’s submission or refusal to submit to sexual advances or requests for sexual favors will affect the employee’s employment, wages, advancement, or any other term or condition of employment. Harassment also includes unwelcome sexual advances, requests for sexual favors, unwelcome or offensive touching, requests for dates, and other verbal, graphic, or physical conduct of a sexual nature that creates an intimidating, hostile working environment. If you have any questions about what constitutes harassing behavior, ask your manager. Violation of this policy is not within the scope of employment and will subject an employee to disciplinary action, up to and including immediate discharge.

If you feel that you or another employee is being harassed by another employee, you must immediately notify your manager. If you do not feel that the matter can be discussed with your manager or if you are not satisfied with your manager’s response to a complaint of harassment you have made, you must immediately contact the general manager or owner and arrange for a meeting to discuss your complaint. The Company forbids retaliation against anyone for reporting harassment, assisting in making a harassment complaint, or cooperating in a harassment investigation. You may be assured that you will not be penalized in any way for reporting a harassment problem, or assisting in a harassment investigation. If you feel you have experienced or witnessed any conduct that is retaliatory, you should follow the reporting procedures stated above.

Harassment of our employees in connection with their work of or by a customer or supplier may also be a violation of this policy. Any employee who observes any harassment of or by an employee of such a non-employee should report such harassment to his or her manager. Immediate and appropriate action will be taken against violation of this policy.

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Every reported complaint of harassment will be investigated thoroughly, promptly,

and in a confidential manner. Names of participants, the facts of an investigation, or any written information regarding an investigation to anyone not directly involved in the investigation, will not be revealed, except to the extent required by law or appropriate to resolve the matter. Upon completion of the investigation, the findings and intended actions will be communicated to the complainant and alleged harasser as expeditiously as possible. If the investigator finds that harassment occurred, the harasser will be subject to appropriate instructive and/or disciplinary procedures. In the case of employees, disciplinary action for a violation of this policy may range from verbal or written warnings up to and including immediate termination, depending upon the circumstances. With regard to acts of harassment by customers or vendors, corrective action will be taken after consultation with the appropriate management personnel.

We cannot help resolve a harassment problem unless we know about it. Therefore, it is your responsibility to bring those kinds of problems promptly to our attention so that we can take whatever steps are necessary to correct the problem. Failure to do so could affect your rights under law. Employees who believe they have been harassed or discriminated against may contact state or federal agencies to file a complaint.

Employees who believe they have been harassed or discriminated against may

contact The California Department of Fair Employment and Housing (“DFEH”) (800) 884-1684 (or, TTY, (800) 700-2320) to file a complaint. For more information about or from the DFEH, visit www.dfeh.ca.gov. The DFEH will investigate complaints of discrimination or harassment, and may attempt to resolve such complaints either by prosecuting, conciliating or settling the matter on the employee’s behalf. The Company will not retaliate against any employee who files a complaint with, or otherwise participates in any such investigation, proceeding or hearing.

UNION FREE SALON

The Company’s open door policy, our commitment to deal directly with employees rather than through a third party and our provision of competitive pay and benefits reflects our view that employees do not need to pay a union to represent their interests. While unions have served a historical purpose in manufacturing and other industries, in the last few decades they have generally failed to provide members with salaries and benefits available at non-union competitors, and have more often agreed to concessions in failing industries. We are not aware of any salons in the United States that have operated successfully in a union environment. Accordingly, we ask for your support in maintaining an open, union free workplace.

EMPLOYER ORGANIZATION

Franchisees: Joseph and Cheryl Robinson - Sapphire Ventures, Inc.

Donald Grupe - MoonlowMarc Port - Samson Management

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Sapphire Ventures, Inc. Management Office:

Vice President,Operations: Marlena ToddGeneral Managers: Norma Estrada

Yolanda Mejia Senior Managers: Krista Saunders

Vickie Vargas

Office Support Staff:Amy Jimenez – Accounts Payable, BankingJude Mayes - Personnel & Administration

You should feel free to bring any problem, concern or idea to a Shift Manager or the Manager of your shop. If for any reason you are not comfortable doing so, please contact your Senior Manager at their shop or your General Manager through the Sapphire Ventures, Inc. office.

Besides your General Manager and Senior Manager, your shop will also be visited time to time by representatives of the franchisor, Supercuts, Inc. These representatives are concerned with upholding our national reputation for quality and customer service and will work mostly with your Manager. Sapphire Ventures, Inc. operates these shops in California: SUPERCUTS CA-00719424 Nordhoff StreetNorthridge, CA 91324 SUPERCUTS CA-0798101 W. Beverly BlvdLos Angeles, CA 90048

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SUPERCUTS CA-1312054 W. Ave. JLancaster, CA 93535 SUPERCUTS CA-1481650 Westwood BlvdLos Angeles, CA 90024 SUPERCUTS CA-1497910 Foothill BlvdSunland, CA 91040 SUPERCUTS CA-33213521 Beach BlvdWestminster, CA 92683 SUPERCUTS CA-5477100 Santa Monica BlvdLos Angeles, CA 90046 SUPERCUTS CA-604415 Avenida Pico, Unit FSan Clemente, CA 92672 SUPERCUTS CA-79116602 Ventura BlvdEncino, CA 91436 SUPERCUTS CA-79912940 B Foothill BlvdSan Fernando, CA 91340 SUPERCUTS CA-8003115 Rancho Vista BlvdPalmdale, CA 93551 SUPERCUTS CA-8764470 W. Sunset BlvdLos Angeles, CA 90029 SUPERCUTS CA-12579329 W. Pico BlvdLos Angeles, CA 90035 SUPERCUTS CA-1332531-C N. Hollywood WayBurbank, CA 91505 SUPERCUTS CA-143525523 Marguerite PkwayMission Viejo, CA 92692SUPERCUTS CA-151526921 Aliso Creek RoadAliso Viejo, CA 92656 SUPERCUTS CA-15262196 N. Foothill BlvdLa Cañada, CA 91011 SUPERCUTS CA-83474250 Barranca Pkwy, Ste T

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Irvine, CA 92604 SUPERCUTS CA-8731240 N. Larchmont BlvdLos Angeles, CA 90004 SUPERCUTS CA-8004719725 Rinaldi StreetNorthridge, CA 91326 SUPERCUTS CA-8007728251 Crown Valley PkwyLaguna Niguel, CA 92677 SUPERCUTS CA-8009311034 Ventura BlvdStudio City, CA 91604 SUPERCUTS CA-8018721502 Victory BlvdWoodland Hills, CA 91364 SUPERCUTS CA-802778589 Santa Monica BlvdWest Hollywood, CA 90069 SUPERCUTS CA-80300805 E. Ave. K, Ste 105Lancaster, CA 93535 SUPERCUTS CA-8034811075 West Pico BlvdLos Angeles, CA 90065 SUPERCUTS CA-8038222195 El Paseo, Ste 160R Snt Margarita, CA 92688 SUPERCUTS CA-805495942 E. Edinger, Ste 105Huntington Bch, CA 92649 SUPERCUTS CA-8055313401 Ventura Blvd, #101Sherman Oaks, CA 91423 SUPERCUTS CA-8069639445 10th St West, Unit BPalmdale, CA 93551SUPERCUTS CA-8077138045 47th St. East, Ste BPalmdale, CA 93552

SUPERCUTS CA-8102530231 Golden Lantern, #CLaguna Niguel, CA 92677 SUPERCUTS CA-8103723337 Mulholland DrWoodland Hills, CA 91364

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EMPLOYEE CLASSIFICATION & CATEGORY OF EMPLOYMENT

Employee Status

1. Introductory employees: Every employee must graduate from the Supercuts training program before beginning work. For every new employee, the first ninety (90) day period of continuous full-time employment is an evaluation period for both you and the Company. During this time, you are able to learn about the Company, your job, and your new surroundings. At the same time, the Company can learn about you.

During the first ninety days, your job performance, punctuality in reporting to work, attendance, attitude and overall interest in your job will be carefully reviewed by your supervisor. The Company will then evaluate your performance and make a decision concerning your continued employment. The Company reserves the right to extend the Introductory period to give you a fair opportunity to improve your performance. Throughout your employment with the Company your performance will continuously be evaluated to ensure that your performance meets all Company standards and rules of conduct.

Introductory employees whose attendance and/or performance do not meet Company standards may be terminated prior to the conclusion of the introductory period. The Company may also choose to extend your introductory period as necessary to give you a fair opportunity to demonstrate your ability to do the job. If your introductory period is extended you will be notified.

Introductory employees do not accrue or receive any benefits other than employee discounts until they have satisfactorily completed the Introductory period. On successful completion of the introductory period, you will become a regular employee. Successful completion of the introductory period, however, does not guarantee employment for any specific duration or change the at-will nature of your employment.

2. Exempt: An employee who is not subject to federal and state overtime laws. Exempt employees are generally paid on a salary basis.

3. Nonexempt: An employee who is subject to federal and state overtime laws. Nonexempt employees are generally paid on an hourly basis.

4. Regular full-time: An employee who regularly works a minimum of 30 hours a week on a continuing basis, and who has completed the Introductory period, is considered a regular full-time employee. These employees are eligible to accrue and receive benefits.

5. Regular part-time: An employee who regularly works less than 30 and who has successfully completed the Introductory period. Part-time employees should contact their manager to discuss which benefits they are eligible for. An employee who has successfully completed the introductory period and who works less than 10 hours a week is an irregular part-time employee and is not eligible to accrue or receive benefits.

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6. Probationary: In the event of unsatisfactory performance, as an alternative

to immediate dismissal, the Company may, at its option, inform the employee of identified deficiencies and the employee will then be given an appropriate amount of time, determined by the Company, to correct the deficiencies. The employee will be terminated if job performance deficiencies are not satisfactorily corrected within the allotted time period. Rehired Employees

An employee who is rehired following a break in service in excess of one month other than an approved leave of absence. These employees must complete a new Introductory period regardless of whether such a period was previously completed. Such employees are considered new employees from the effective date of their re-employment for all purposes, including for purposes of measuring benefits. Not all former employees who have a break in service are eligible for rehire. Rehire Considerations

Employees who were classified as "eligible for rehire" when they separated from the employer will be considered for rehire with other applicants if they apply. Their prior record with the employer will be considered. Employees who were classified as "ineligible for rehire" will not be considered for further employment with the employer. Work Permits

An employee may be required under state and/or federal law to have and maintain a work permit in order to be and remain employed. Working at Other Stores

Although you may have been interviewed or hired at a particular location, from time to time it may be necessary for you to travel to an adjacent store for training, product classes, or to cover shifts as necessary.

WAGES AND BENEFITS Hours of Work

The Company’s normal business hours vary from shop to shop. Employees are expected to be available to work from 8:00 a.m. to 9:00 p.m. weekdays, and 8:00 a.m. to 7:00 p.m. on Saturdays and Sundays. Employees are expected to be available to work any shifts within those times. Schedules are subject to change weekly and from time to time as business conditions require. Employees who work in excess of five hours in a work day shall be required to take a thirty minute unpaid meal period which may be waived only if the employee is scheduled to work not more than six hours. Non-exempt employees who work more than ten hours in one day shall receive a second thirty (30) minute meal

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break, unless (1) the employee works twelve (12) or fewer hours, (b) the employee agrees with the employer to waive the second meal period, and (c) the first meal period has not been waived by the employee. Employees shall be permitted a paid ten minute rest period or break for each four hours of work and which, insofar as practicable shall be in the middle of each four-hour work day. An employee who wants to express breast milk for the employee’s infant child will be allowed to use break time for this purpose. In the event that customers are present in the shop at closing time, you may be required to continue to work past the normal closing time in order to see that all customers are properly and completely served. Wages

1. Pay Schedule: All employees are paid bi-weekly. The work period always ends on a Sunday. Payday is the first Friday after the Sunday ending the pay period.

2. Recording Work Time: The law requires that working hours for all non-exempt employees be recorded accurately each working day. Paper or electronic devices are used as a means of accurately recording hours worked and calculating pay. They record regular hours worked, meal periods, overtime, absences, vacations and tips. Accordingly, employees should record the time they begin and end work each day, the beginning and end of each meal period, and the beginning and end of any split shift or departure from work for personal reasons.

It is strictly forbidden to punch or make entries on another employee’s time record or inaccurate entries on one’s own record. Disciplinary action will be taken against anyone who violates this rule.

Vacation days, sick days, and holidays must be entered on the time record and each employee is responsible for keeping an accurate record of such time. A weekly total of tips received should be noted on the time record with the employee’s signature for verification.

It is important that the time record not be lost, falsified or mutilated. Any modifications or alterations on an employee’s time record must be initialed by the employee’s supervisor. Falsifying a time record may result in termination. Remember this is a legal document. Please do not deface it.

3. Overtime Policy:

A. Overtime: All nonexempt employees are paid one-and-a-half times their straight hour wages for overtime hours as required by law. Overtime work must be authorized in advance by the Manager or in their absence the designated member of the management team. Employees are expected to work overtime when it is assigned or required to serve customers properly and completely.

B. Split Shifts: Split shifts are paid as regular hours plus an additional hour's pay at your regular rate.

C. Holidays: The employer recognizes the importance of leisure time in achieving greater productivity, and provides full-time regular employees with the following paid holidays each year.

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New Year's DayMemorial DayIndependence DayThanksgivingChristmas Day

In order to receive holiday pay an employee must maintain an

average work week of thirty (30) hours over the past six (6) payroll periods (12 weeks); must have achieved regular full time status; and must work the last scheduled day before the holiday and the first scheduled day after the holiday and have no absences the entire week of the holiday from Monday through Sunday. Any scheduled hours not worked (including illness), disqualifies the employee from receiving the holiday benefit. If an employee is sent home during a scheduled work period because the shop is slow, the employee should receive credit for fulfilling his schedule. If an employee is late to work in excess of 1/2 hour any day of the holiday week, he will lose his paid holiday benefit.

Part-time, temporary and Introductory employees are ineligible for paid holiday benefits. While employees are on a leave of absence, they are ineligible to receive holiday benefits that occur during the leave.

The amount of holiday pay is determined by the employee's average work week. For example:

1. An employee who regularly works forty (40) hours is paid for an eight (8) hour day.

2. An employee who regularly works thirty-five (35) hours (7 hours x 5 days) is paid for an seven (7) hour day.

3. An employee who regularly works thirty (30) hours (6 hours x 5 days) is paid for a six (6) hour day.

4. Effective Date of Wage Changes: All changes in an employee's rate of pay will normally become effective on the first day of the pay period after they are officially approved. Exceptions to this policy will occur only when the employee is officially advised that a change in pay will take effect on a different date, either retroactively or in the future. 5. Exchanging Shifts: An employee is not permitted to exchange shifts with another employee without the prior authorization of the employees' Manager. No authorization for exchanging shifts will be granted unless the exchange can be accomplished without interference with the shop's operations and without either employee working overtime.

6. Payroll Deductions: State and federal laws require us to make the proper payroll tax deductions on your behalf. Amounts withheld vary according to how much you earn, your marital status and the number of your exemptions.

Required deductions include:a. Social Security (FICA)b. Federal Income Taxc. State Income Taxd. State Disability Insurance (SDI)e. Medicare (MED)

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Tips an employee receives are generally subject to federal and state withholding. An employee must report to the Company all cash tips received directly from customers. A weekly total of tips received should be noted on the time record with the employee’s signature for verification. Employee's tips are subject to income and social security taxes.

Other deductions may be made from an employee's paycheck with the employee's written permission, including:

a. Insurance premiums for dependent coverage or coverage of the employee;

b. Payments due the company for goods or services requested and received by the employee on behalf of the employee or a member of his/her family. Benefits Benefits for Full-Time Employees: A full-time employee is one who has been employed at least three (3) months, is no longer in a Introductory state, and maintains an average work week of at least thirty (30) hours. This average is calculated by taking the average hours worked per week over the preceding three (3) months (past 12 weeks).

1. Paid HolidaysNew Year's DayMemorial DayIndependence DayThanksgivingChristmas Day

2. Non-Paid Holidays

Easter Sunday

3. VacationThe Company provides vacation benefits to our regular full-time and part-

time employees for rest and relaxation. Such employees are eligible to take paid vacation after one year of continuous employment. Employees do not earn or accrue vacation benefits during the first six months of employment (Refer to GENERAL, paragraph 3, Vacation Policy with Six-Month Eligibility Period, page 18, for detailed information). Thereafter, employees will earn 5/6 of a day of vacation for each full month of employment. In other words, on an employee’s one year anniversary, he or she will be entitled to five (5) days of vacation pay. After the second continuous year of service, an employee will be entitled to ten (10) days of vacation pay. After the tenth continuous year of service, an employee will be entitled to fifteen (15) days of vacation pay. A day of vacation will be paid based on average gross income in the preceding six pay periods prior to your vacation. An employee may accrue a maximum of twenty (20) days of vacation at any time. If the maximum accrual is reached, no further days will accrue until the accrual drops below twenty (20) days.

The Company reserves the right to schedule vacation. Vacations must be scheduled with and approved by your Manager in advance, and in accordance with existing procedure. Vacation should be planned for Monday through Sunday, unless other arrangements are made with your Manager. In the first year of employment, all vacations must be taken on or after the employee’s yearly anniversary date and, in subsequent years, vacation should be taken before the next yearly anniversary date.

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In the event that an employee resigns, is terminated, or otherwise leaves the employ of the Company, all unused vacation accrued will be paid.

4. Products and EquipmentDesignated retail products and equipment are available at a discount (plus

tax where applicable) for personal use only to all employees.

5. Training/Continued TrainingOur franchisor, SUPERUTS, has created a training program for stylists that

is unique in the industry, and we pay trainees in the program from the first day of training. The Company reserves the right to monitor employee performance through recordings or otherwise in order to provide training and improve the quality of our services to customers.

Every employee who works as a stylist must undertake and successfully complete initial training and be certified by the franchisor, SUPERCUTS, Inc., in order to retain employment with the Company. Every stylist must undertake and successfully complete the re-certification procedure in accordance with a schedule set by the franchisor, SUPERCUTS, Inc., and must be re-certified by SUPERCUTS, Inc. in order to retain employment. The Company has the right to suspend or terminate the employment of any employee who does not complete these requirements.

6. Health BenefitsAll regular full-time employees are eligible for health insurance benefits

after three (3) months of employment and in accordance with the provisions of the plan documents. Employee co-payments may be required; if so, written authorization to deduct the co-payment from the employee’s payroll check will be necessary. Dependent coverage is available on terms that are described under separate cover Dependent coverage is also available to provide group health benefits for the domestic partner of an employee. More detailed information will be distributed to you when you become covered under the Plan. Health insurance becomes effective the first of the month following the day of eligibility. Employees transferred from another Supercuts and who were on insurance will be eligible the first of the month following their transfer date. At the start of the employee's eligibility period, a payroll deduction for the employee's share of premium will be withheld for a total of eighteen (18) payrolls. After the 18 deductions are withheld the employer will continue to pay for the majority of the employee's cost of insurance. The employee, however, is responsible to pay for any dependent coverage he/she elects to carry and this amount will continue to be deducted from the employee's paycheck on a bi-weekly basis.

1. Dental BenefitsAll regular full-time employees are eligible for dental insurance benefits after three

(3) months of employment and in accordance with the provisions of the plan documents. Benefits for Part-Time Employees: A part-time temporary employee is one who works less than 30 hours a week and who has successfully completed the introductory period.

1. Vacation

The Company provides vacation benefits to our regular full-time and part-time employees for rest and relaxation. Such employees are eligible to take paid vacation after one year of continuous employment. Employees do not earn or accrue vacation benefits during the first six months of employment (Refer to GENERAL, paragraph 3, Vacation Policy with Six-Month Eligibility Period, page 18, for detailed information). Thereafter, employees will earn 5/6 of a day of vacation for each full month of employment. In other words, on an employee’s one year anniversary, he or she will be entitled to five (5)

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days of vacation pay. After the second continuous year of service, an employee will be entitled to ten (10) days of vacation pay. After the tenth continuous year of service, an employee will be entitled to fifteen (15) days of vacation pay. A day of vacation will be paid based on average gross income in the preceding six pay periods prior to your vacation. An employee may accrue a maximum of twenty (20) days of vacation at any time. If the maximum accrual is reached, no further days will accrue until the accrual drops below twenty (20) days.

The Company reserves the right to schedule vacation. Vacations must be scheduled with an approved by your Manager in advance, and in accordance with existing procedure. Vacation should be planned for Monday through Sunday, unless other arrangements are made with your Manager. In the first year of employment, all vacations must be taken on or after the employee’ yearly anniversary date and, in subsequent years, vacation should be taken before the next yearly anniversary date.

In the event that an employee resigns, is terminated, or otherwise leaves the employ of the Company, all unused vacation accrued will be paid.

2. Products and EquipmentDesignated retail products and equipment are available at a discount (plus

tax where applicable) for personal use only to all employees.

3. Training/Continued TrainingOur franchisor, SUPERUTS, has created a training program for stylists that

is unique in the industry, and we pay trainees in the program from the dirst day of training. The Company reserves the right to monitor employee performance through recordings or otherwise in order to provide training and improve the quality of our services to customers.

Every employee who works as a stylist must undertake and successfully complete initial training and be certified by the franchisor, SUPERCUTS, Inc., in order to retain employment with the Company. Every stylist must undertake and successfully complete the re-certification procedure in accordance with a schedule set by the franchisor, SUPERCUTS, Inc., and must be re-certified by SUPERCUTS, Inc. in order to retain employment. The Company has the right to suspend or terminate the employment of any employee who does not complete these requirements. Other Benefits

1. Paying Back The Future: "Paying Back The Future" is a program developed by SUPERCUTS to assist cosmetologists in meeting their obligations to repay federally-guaranteed student loans. This will help to assure that future students will also have this financial resource to study for careers in cosmetology. The program is a "matching funds" partnership. SUPERCUTS will pay up to 50% of your bank loan payment in most instances. Stylist provides SUPERCUTS with verification of loan and repayment schedule. SUPERCUTS will administer the payment program with the stylist's consent with payment directly paid to the lender. To qualify for this program:

* A stylist may be either a full or part-time employee.

* The employee must agree in writing to have 1/2 of their monthly Federal Loan payments made (up to $25/month) by employer provided that employee agrees to have the remaining balance of the monthly payment made via employee payroll deductions.

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2. Credit Union: The Company offers Credit Union membership through the

Valley Credit Union and the DWP Credit Union. Checking and savings accounts, Visa cards, car loans and direct payroll deposit are among the many services offered by the Credit Unions. Ask you Shop Manager or the Sapphire Ventures, Inc. office for information brochures and/or application forms.

3. Bonus Plans: A variety of Bonus plans may be made available from time to time and will be posted in your store.

4. Simple IRA Retirement Plan: You are eligible to participate if you have been employed by Supercuts for two (2) years and have made at least $5,000 each of those two years. Employees who wish to participate can contribute up to $6,000 per year from payroll deductions. The store that you work for will match up to 3% of your contributions.

5. Cosmetology License Renewal: If you have been employed by Supercuts for at least two (2) years, we will pay to renew your cosmetology license, provided we receive the appropriate documents at least thirty (30) days before your license expires. Any fees incurred due to late renewals will be covered by the employee. General

1. Change in Personnel Records: To keep your personnel records up-to-date, to ensure that the Company has the ability to contact you, and to ensure that the appropriate benefits are available to you, employees are expected to notify the Company promptly and in writing of any change of name, address, phone number, marital status, number of dependents, or other applicable information. All information you provide in the job application and any other personnel document must be true and accurate, and you must not omit any information requested. Falsification of any Company record is grounds for discharge.

2. Doctor's Verification: The employer reserves the right to require a satisfactory statement of a licensed physician whenever an employee misses work due to an illness, injury or disability. The employee may be asked to provide a physician's statement that verifies the nature of an illness, injury or disability, its beginning and ending dates, and/or the employee's ability to return to work without endangering his own safety or the safety of others. When requested, such verifications and releases may be a condition to return to work. Although a physician's statement normally will not be requested for absences of less than three working days, the employer may request such a statement in situations where it determines it is warranted.

3. Vacation Policy with Six-Month Eligibility Period:

The Company provides vacation benefits to our regular full-time and part-time employees for rest and relaxation. Such employees are eligible to take paid vacation after one year of continuous employment. Employees do not earn or accrue any vacation benefits during the first six months of employment. Thereafter, employees will earn 5/6 of a day for each full month of employment. In other words, on an employee’s one year anniversary, he or she will be entitled to five (5) days vacation pay. After the second continuous year of service, an employee will be entitled to ten (10) days of vacation pay. After the tenth continuous year of service, an employee will be entitled to fifteen (15) days of vacation pay. All regular, full-time and part-time employees begin to earn vacation benefits after they complete six (6) months of continuous service. Employees do not, however, earn or accrue any vacation benefits while on a leave of absence for any reason.

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Employees who quit, or are terminated, and who are later rehired will not

receive credit for any period of service prior to their break in service.

Employees who quit, or are terminated before completing six months of employment never begin to participate in the vacation plan or earn any vacation benefits with the employer. Accordingly, such employees will not have earned and will not be entitled to receive any vacation benefits upon termination of employment. Employees who have completed at least six months of employment and who have, therefore, begun to participate in the vacation plan will be entitled to receive all vested vacation benefits upon termination of their employment. Such benefits will be paid promptly on termination of employment with their final paycheck.

4. Continued Insurance Benefits (COBRA): The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers to offer employees and their families the opportunity for a temporary extension of health coverage (called “continuation coverage”) at group rates in certain instances where coverage under the plan would otherwise end. This notice is intended as a summary of your rights and obligations under the continuation coverage provisions of the law. Contact the Sapphire Ventures office for further information and clarification.

Eligible employees covered under the Company’s group health plan have

the right to choose this continuation coverage if they lose their group health coverage because of a reduction in their hours of employment or the termination of their employment (including failure to return from a family and medical leave of absence) for reasons other than gross misconduct. Qualified beneficiary’s (spouse or dependent child) of an employee covered by the group health plan have the right to choose continuation coverage for themselves if they lose group health coverage due to the death of the employee, divorce or legal separation, or cessation of a dependent child’s coverage.

Under COBRA, the covered employee or qualified beneficiary has the responsibility to inform the Company of a divorce, legal separation, or a child losing dependent status under the group health plan within 60 days after the date of such event. Failure to provide such notice may result in a forfeiture of a qualified beneficiary’s right to continuation coverage.

When the Company is notified that one of these events has occurred, we will notify you within 14 days that you have the right to choose continuation coverage. You will have at least 60 days from the date you would lose coverage to inform the Company that you want continuation coverage. If you do not choose continuation coverage, your group health insurance coverage will end.

If you choose continuation coverage, COBRA requires that you be afforded the opportunity to maintain continuation coverage for up to 18 months in most cases, and for up to 29 months if you lose your job due to a disability. A qualified beneficiary may have more than one qualifying event, but the coverage period may not exceed a total of 36 months.

Under California law, if your employment terminates after you reach 60 years of age, if you have worked for the Company for at least five years, and if you are otherwise qualify under COBRA, you may elect to continue coverage beyond the period COBRA permits at a premium rate set by the carrier. If the Company retains the same plan, your coverage will continue until you reach age 65, qualify for Medicare, or obtain coverage under another plan. If you have any questions about the COBRA, please contact the Sapphire Ventures office.

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If you have changed marital status, or you or your spouse have changed address, please also notify the Sapphire Ventures office. Legislated Benefits

1. Workers' Compensation Program: The Company carries workers' compensation insurance coverage as required by law to protect employees who are injured on the job. This insurance provides medical, surgical, and hospital treatment in addition to payment for loss of earnings that result from work-related injuries. Compensation payments begin from the first day of an employee's hospitalization or after the third day following the injury if an employee is not hospitalized. The cost of this coverage is paid completely by the employer.

If you are injured while working, you are required to report it immediately to your manager, regardless of how minor the injury may be.

2. State Disability Insurance: To protect employees who miss work due to a non-work related accident or illness, the law requires that a small percentage of each employee's wages, up to the prevailing maximum, be deducted each pay period for disability insurance. Benefits begin from the first day an employee is hospitalized or after the seventh day of the illness or accident if the employee is not hospitalized. Eligible employees will be paid a percentage of their regular earnings for a maximum period provided by law in any one year.

3. Unemployment Insurance: If your employment terminates, you may be eligible to receive unemployment insurance. In most cases, you must file a claim in order to collect this benefit. Should such a situation arise, you should inquire about unemployment insurance at the time of your separation from service.

4. Social Security: Under the Federal Insurance Contributions Act, better known as the federal Social Security Act, the Company is required to deduct a percentage of your pay, match it with an equal amount from the Company and send it to the government to be deposited in your Social Security account. If you are not familiar with the retirement and disability benefits provided under Social Security, check with your local Social Security Administration office for a more complete explanation. Leaves of Absences

When an employee takes an approved leave of absence, the Company will attempt to hold the employee’s position open for the period of the approved leave. If, however, business conditions do not permit a position to be held open, or if a position is eliminated or total staff is reduced, a position may not be available when the leave ends. In such situations, reinstatement is guaranteed only to the extent required by law.

1. Personal Leave of Absence. A regular full-time employee or a regular part-time employee may request in writing an unpaid personal leave of absence. The Company will make every effort to grant your request; however, we cannot guarantee that the request will be granted. An employee must use all accrued and unused vacation, prior to taking unpaid leave. An employee’s benefits cease at the beginning of the unpaid personal leave, including medical benefits and accrued vacation, and will be reinstated upon return to full-time employment. Employees who wish to continue to receive medical benefits during the unpaid leave may do so at their own expense.

Reinstatement from a personal leave is not guaranteed; if possible,

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however, the Company will return the employee to his or her former position, or the employee will be offered the first available opening in a comparable position for which he or she is qualified.

In those states where the law so requires, an employee may be permitted to take a leave of absence to care for an ill parent, spouse, or child. The Company will comply with state law requirements in such cases.

Where state law requires, absences may be taken to attend the school activities of the employee’s child, or to be at school if requested; or to participate in a court proceeding or program related to domestic violence, or to seek medical attention or prevent future domestic violence, subject to verification(s) permitted by law. When possible advance notice for such leave is expected; the leave will be unpaid, except that paid vacation or other compensatory paid time off may be used.

2. Medical Leave for Occupational and Non-Occupational Disabilities. A regular full-time employee may request, in writing, an unpaid temporary disability leave of absences if necessary to accommodate a workplace injury or a disability under the Americans with Disabilities Act and any applicable state or local law or ordinance. Any disability leave under this section will run concurrently with any medical leave to which the employee is entitled under the FMLA or California Family Rights Act (“CFRA”). Proof of disability and the need for and duration of the leave must be supported by a written statement from a health care provider. Upon approval of a request by the Company, an employee will be granted a leave of absence for the period of his or her disability, provided such period does not exceed three (3) months or four (4) months for pregnancy disability or occupational disability, which is the time established by Company policy, or the time required by law, whichever is longer.

A regular full-time employee who is granted a disability leave of absence shall be entitled to utilize any vested vacation, and/or other benefits available to the employee during the period of his or her disability. Health and (other) insurance benefits ordinarily provided by the Company, and for which the employee is otherwise eligible, will be continued during the period of disability at the employee’s expense. Vacation and holiday benefits will not accrue during any medical leave for such disabilities.

Requests for extensions of a leave of absence will be considered if they are received by the Company in writing before the expiration of the approved leave, are supported by proof of continued disability in the form of a physician’s statement, and requested extensions do not cause the total period of absence to exceed the maximum time allowed by Company policy; namely three (3) months (four (4) months for a pregnancy disability or occupational disability) or the time required by law, whichever is longer. An employee who fails to report for work at the end of an approved leave will be deemed to have voluntarily resigned.

An employee who seeks to return to work at the end of his or her disability leave of absence will be returned to his or her former position, if possible, or will be offered the first available opening in a comparable position for which he or she is qualified. An employee seeking to return from leave will have no greater rights than he or she would have if the leave had not been taken. Such an employee will be credited with all service prior to the commencement of his or her disability, but not for the period of his or her disability. The Company may, at its discretion, require the employee to present a fitness for duty certification from the employee’s health care provided.

3. Pregnancy Disability Leave: Employees who are disabled because of

pregnancy, childbirth or related medical conditions are entitled to leave for the period of

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actual disability, up to a maximum of four months. Pregnancy disability leave may be taken intermittently, or on a reduced-hours schedule, as medically advisable. Moreover, an employee is entitled to a reasonable accommodation for pregnancy, childbirth or related medical conditions, including among other things a transfer to a less strenuous position, if she so requests and provides the Company with medical certification from her health care provider.

An employee should submit a written request for pregnancy disability or transfer as soon as she is aware of the need. If the leave or transfer is foreseeable, such notice should be provided at least 30 calendar days in advance of the anticipated start of the leave or transfer. If an employee fails to give 30 days notice without any reasonable explanation, the Company reserves the right to delay the taking of the leave or transfer until at least 30 days after the date on which the employee provides notice of the need for the leave or transfer.

The required medical certification should include:● The date on which the employee became disabled due to

pregnancy● The probable duration of the period or periods of disability● A statement, that due to the disability, the employee is

unable to perform one or more of the essential functions In order to return to work, an employee must provide a release from her physician.

Unless the Company and the employee have already agreed to a return to work date, an employee must notify the Company at least two business days before her scheduled return to work. An employee who timely returns to work at the expiration of her pregnancy disability leave will be reinstated to her former position, or a comparable position, whenever possible and consistent with applicable law. An employee returning from a pregnancy disability leave, however, has no greater right to reinstatement than if the employee had been continuously employed.

4. Family Care and Medical Leave

A. Consistent with the requirements of the Federal Family and Medical Leave

Act of 1993 (and the California Family Rights Act of 1993, as amended) employees who are employed at a work site which has at least 50 employees within 75 miles of that work site; have completed one year of employment with the Company; and have worked 1250 hours in the year preceding the leave will be eligible for a maximum of 12 work weeks’ unpaid leave in a 12-month period in the following circumstances:

1. The birth of a child of the employee, the placement of a child with the employee in connection with the adoption or foster care of the child by the employee, or the serious health condition of a child of the employee;

2. To care for a child, parent or a spouse or a registered domestic partner, who has a serious medical condition; or

3. Because of an employee’s own serious health condition that makes the employee unable to perform the functions of the position of that employee;

4. For any “qualifying exigency” (as defined by federal regulations) arising out of the fact that an employee is the spouse, son, daughter, or parent of an individual who is on covered active duty in the Armed Forces and has been called in support of a contingency operation (“Exigency Leave”)

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5. Up to 26 weeks in a 12-month period for an employee who is the spouse, son, daughter, parent or next of kin of a covered service member who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or on the temporary disability retired list for a serious injury or illness to care for the service member (“Service member Family Leave”)

The 12-month period in which the 12 weeks of leave entitlement occurs shall be a rolling 12-month period measured backward from the date an employee’s requested absence for family leave would begin. Thus, each time an employee requests family care leave, the remaining leave entitlement would be any balance of the 12 weeks which has not been used during the 12 months preceding the date on which the leave will commence.

Family care leave taken for the birth or placement of a child must be commenced within a year of the qualifying birth, adoption or foster care placement.

B. A female employee who is eligible for family care and medical leave and who takes a disability leave of absence for pregnancy, childbirth, and related conditions, may take an additional 12-work weeks of family and medical leave for the birth or serious health condition of the child in addition to her pregnancy disability leave.

C. During family care and medical leave, the Company will continue to pay the Company’s share of the employee’s medical insurance for a maximum period of 12 weeks. In some cases, the Company may recover premiums paid for maintaining an employee’s health coverage if the employee fails to return to work from family care and medical leave.

D. Employees requesting family care and medical leave to care for a child, spouse, or parent must provide medical certification of the serious health condition of the individual requiring care. The medical certification must state: (1) the date the condition started; (2) how long it is expected to last; (3) how much time the medical care provider estimates the employee will be needed to care for the individual requiring care; and (4) that the condition requires a family member to provide care.

The Company may require that the employee obtain subsequent re-certification regarding the serious health condition of the child, spouse, or parent, if additional leave is required.

E. An employee requesting family care and medical leave because of his or her own serious health condition must provide medical certification of the condition issued by his or her health care provider. The medical certification must state: (1) the date the condition started; (2) how long it is expected to last; and (3) a statement that, due to the serious health condition, the employee is unable to perform the functions of his or her position. The Company may require that the employee obtain subsequent re-certification regarding the employee’s serious health condition, if additional leave is required.

F. The Company may require, at the Company’s expense, examination by an independent second health care provider. If the second provider differs from the employee’s health care provider, the Company may require, at its expense, a third opinion. The third opinion is final and binding.

G. Employees must give reasonable, advance notice of the desire to take a family care and medical leave in circumstances where the need for such leave is foreseeable. Leave to accommodate planned medical treatment should be scheduled to avoid disruption in company operations.

H. Employees are required to use any or all of their accrued, unused vacation

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during this leave. Vacation time which is substituted for unpaid family care and medical leave will be granted as paid leave. The remainder of the family care and medical leave will be granted on an unpaid basis.

I. Vacation time will not accrue while an employee is on family care and medical leave in excess of thirty (30) days.

J. Upon return from family care and medical leave, employees will be returned to their previous position or a comparable position will be made available to them, unless (1) the job has ceased to exist because of legitimate business reasons unrelated to the leave or (2) reinstatement would cause substantial and grievous economic injury and is being sought by any employee who is among the top 10% paid at the work location or within 75 miles of the location. As a condition of an employee’s return from leave taken because of the employee’s own serious health condition, the employee must obtain a fitness for duty certification from his or her health care provider that the employee is able to resume work.

5. Unpaid Status. All leaves of absence are provided on an unpaid basis.

6. Vacation Benefits. The period that an employee is on leave of absence is not considered time worked for purposes of determining eligibility for or the amount of certain benefits, such as vacation benefit. After fourteen (14) days, vacation eligibility is extended by the length of the leave of absence.

7. Health/Dental Insurance. Employees must pay for the entire cost of group health insurance for the period of any leave of absence in excess of 30 days in the event of a medical leave. Employees must arrange for all necessary payments before their leave commences. Failure to arrange for payment during this period will result in the lapse of health insurance coverage as of the 31st day following the commencement of a medical leave. If an employee leaves after the 15th of any month, SUPERCUTS will pay its share of an employee's insurance and the employee's share will be deducted from the employee's last pay check. At the beginning of the next month, an employee must pay the entire insurance premium as directed by Sapphire Ventures, Inc.

8. Jury Duty. If an employee is called to serve jury duty, the employee must immediately notify the store manager or owner of the date such service is to begin. Submission of the jury duty notice may be required. All regular full-time employees who have past the first anniversary of their date of hire will be paid regular wages while on jury duty (less amounts from other sources while on duty) for a maximum of five (5) days in any three (3) year period.

9. Military Leave of Absence. Employees who require time off from work to fulfill military duties will be treated in accordance with applicable requirements of state and federal law. You are expected to notify your manager of upcoming military duty by providing him or her with a copy of your orders as soon as possible.

10. Other Legally Required Leaves of Absence. Employees will be granted a leave of absence as required by law for the purpose of fulfilling any required legal or military obligation (e.g., (if eligible), appearance as a witness in a legal proceeding, appearance at school by a parent when requested pursuant to the Education Code, domestic violence leave, or performance of emergency duty by a volunteer firefighter). Employees are required to provide reasonable advance notice of any need for such leave and are expected to return to work each day or portion of the day that they are no longer required to be on leave.

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Employees who do not have sufficient time outside of their regular working hours to vote in a statewide election may request time off to vote. If possible, employees should make their request at least two (2) days in advance of the election. Up to two hours of paid time off will be provided, at the beginning or end of the employee’s regular shift, whichever will allow the most free time for voting and the least time off work.

PERFORMANCE AND DISCIPLINE POLICIES

1. Personal Appearance: The heart of our business is personal neatness and appearance. Our employees' personal grooming, neatness and cleanliness are absolutely necessary at all times. Clothing always should be neat and clean. The employee should dress appropriately, in good taste, and according to the requirements of his/her position. The Company reserves the right to inform any employee that personal appearance standards are not being met. The Company may require an employee to return home to change or otherwise relieve an employee of his or her duties until the standards established by the Company are met. All shop employees may wear any colors they choose and any type of clothing as long as it follows the standards below:

* Any type of slacks or pants are permitted, with the exception of blue jeans, sweat pants or snug fitting pants. Leggings/knit tight pants only with shirts or jackets to cover crotch and backside.

* Tennis or athletic shoes are not permitted. "Ked" type tennis shoes are permitted as long as they are kept clean and in good condition and are a solid color without athletic soles.

* Skirts must be no shorter than 4" above the knee. Shorts may be worn as long as they are no shorter than 4" above the knee. Bicycle shorts and jogging shorts are not permitted.

* Blouses, tops or shirts must have sleeves. Tank tops or sleeveless tops/

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shirts are not permitted. T-shirts should not have large logos unless they are related to our business.

* Midriffs must be covered even when arms are raised.

If there are any questions as to what constitutes proper attire, the Shop Manager should be consulted for the guidelines

2. Personal Telephone Calls, Visits and Mail: We have a limited number of telephone lines, and it is essential that we keep these lines open for customer calls. Therefore, we ask our employees not to make or receive personal calls, except of course in emergencies. Cell phones and pagers should be left in a secure place in the breakroom. Breaks or lunch periods are the appropriate time to return personal calls or messages and should be made off premises whenever possible. No personal long distance or toll calls are to be charged to the Company’s phone.

Friends and family members are not permitted to be in any nonpublic area of a shop without the Manager’s express permission. Visits by friends or relatives can be disturbing to our operations. Therefore, we strongly discourage such visits during work hours.

No personal mail is to be received at work, and no personal mail may be sent at Company expense.

All electronic and telephone communications systems and all communications and information transmitted by, received from, or stored in these systems are the property of the Company and are to be used solely for Company business. The use of any software or business equipment, including but not limited to computers, telephones (except as stated above), facsimiles, and copy machines for personal purposes is strictly prohibited unless express permission by the Company has been sought and granted.

3. Safety and Security: Every employee is responsible for safety. To achieve our goal of providing a safe work place, everyone must be safety conscious. Please report any unsafe or hazardous condition directly to your supervisor immediately. Every effort will be made to remedy problems as quickly as possible.

Every employee must participate as scheduled in any injury and illness prevention program established by the Company. Each employee is required to follow the safety rules established by the Company in order to avoid illness and injury. Failure to comply with these rules can have serious consequences.

The Company strictly prohibits employees, customers, visitors, or any other parties from behavior that is violent or threatens harm to Company personnel or property. An employee who observes or becomes aware of such behavior by an employee, customer, visitor or anyone else that creates a risk to Company personnel or property should notify the Company immediately. The Company will investigate promptly and will take appropriate corrective action to eliminate the violence or threat of it.

An employee who is required to drive his or her vehicle on Company business must have a current, valid driver’s license and automobile insurance covering the vehicle and must, on request, show evidence of a current, valid driver’s license and automobile insurance covering, at a minimum, liability and personal property and personal injury coverage. Each employee required to drive on Company business is required immediately to disclose any loss or suspension of his or her driver’s license or automobile insurance.

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In case of an accident involving a personal injury, regardless of how serious, you must notify your Manager immediately. Failure to report accidents can lead to difficulties in processing insurance and benefit claims. If an employee is injured on the job, he/she may be entitled to benefits under the state workers’ compensation law.

The security of each employee is critical to the Company and no employee should ever put himself or herself at risk of personal harm. Each employee must report any known or suspected theft of Company property or improper or illegal conduct on the premises. Employees must follow Company cash-handling policies to avoid unnecessary security risks to themselves, co-workers, and the Company.

4. Loans and Pay Advances: Loans to employees or advances in pay do little in the long run to help an employee meet his or her financial obligations. At the same time, we may be put in a very difficult and unpleasant position if we were required to collect a past due loan. For these reasons, it is our policy not to make loans or advances of pay to employees.

5. Cleanliness of Work Area: In order to project a professional and sanitary image, it is important to always maintain your work station and the entire shop in a neat, organized, and clean fashion.

6. Cell Phone Etiquette. Employees are to turn cell phones off during work hours so the rings will not be a distraction during our business hours. Please keep cell phones in the safety of locker in the employee break room or other secure place, and not in your work area (stations, drawers, top box, front desk, etc.). Please utilize rest/break periods and meal periods to check personal cell phone messages, if desired. Employees are expected to be available for customers during their normal work hours. This means that employees, hairstylists and receptionists, are on the platform, serving customers, or waiting to greet the next arriving customers, unless performing a service or task at the utility sink, shampoo area, office, etc. We have asked our customers to please refrain from using cellular phones during their service as a courtesy to our stylists.

7. English/Foreign Language at Work. Supercuts maintains a policy that permits employees to speak their native language, if it is not English, during non-working time and in non-work areas. In order not to create the risk that the customers feel uncomfortable or feel that they are being talked about in a language they do not understand, however, Supercuts restricts the use of foreign language when a customer is present, absent the need to effectively communicate with a customer who does not appear to understand English, but is able to communicate in a foreign language that the employee also speaks.

Supercuts employees are permitted to speak the language of their choice during rest breaks and lunch periods taken off the platform, off the reception desk, or otherwise as long as the use of that language is outside of the presence of customers. When any customer is present, employees are expected to speak English only to customers and to co-workers, except when it is necessary in order to best serve a particular customer to speak to that customer in a foreign language that both the employee and that customer speak. If it is necessary to speak to a customer on the telephone in a foreign language that the employee understands in order to schedule or reschedule an appointment or for some other business-related purpose, speaking in a foreign language is permitted even when a customer is present, but the communication should be restricted to the caller’s business-related purpose.

8. Employee Services. Employees can, with prior approval of management, get their hair cut, colored or get waxing services from a licensed co-worker in their home salon ONLY when both of them are not scheduled to work:

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● On their days off● Before or after their scheduled shifts● On slowest days and times of day on Tuesdays, Wednesdays, and

Thursdays—never on weekends● Never before or after salon hours due to security● Never on break or mealtime because rest periods are required by state law● At no service charge and without a ticket—no production given● At a station furthest away from customers● Professionally dressed● Employee pays for the cost of the supplies

Family, friends and former employees are welcome at Supercuts on a paid service basis just like we serve our regular customers. However, we are always pleased to welcome your family, friends and former employees as models during trainings and seminars.

9. Smoking: Because the smoking of tobacco is a danger to health and is a cause of material annoyance and discomfort to customers and employees alike, smoking is prohibited in all working areas. Smoking may be permitted if areas have been designated for smoking; otherwise, smoking may be prohibited on the premises. No employee may smoke in a restroom or any other area not designated, and this rule will be strictly enforced. Some cities and counties have enacted ordinances banning all smoking in public places and have expanded the rights of non-smokers in the workplace and Supercuts will strictly comply with those laws.

10. Drug and Alcohol Abuse: The Company has always maintained a strong commitment to provide a safe, efficient, and productive work environment. The Company wishes to ensure that employees will perform their duties safely and efficiently and in a manner that protects their interests and those of their co-workers and customers. In keeping with this commitment, the Company has a strict policy prohibiting the use, possession, or distribution of illegal drugs and alcohol at work, and being under the influences of illegal drugs and alcohol. Employee involvement with alcohol and illegal drugs, and even drugs that have been prescribed and non-prescription that affect work performance, pose serious safety and health risks to the user and others, and have a negative impact of work efficiency, productivity, and goodwill. Accordingly, the Company requires that all employees be at work fit to perform their jobs and we prohibit the use or possession of alcohol or illegal drugs or being under the influence of them, or of prescription and non-prescription drugs that affect performance, at work. If you have been prescribed a medication or are using a non-prescription drug that might affect your job performance, you must inform your manager immediately. All employees must adhere to this policy.

11. Outside Employment: It is important that other employment and outside interests do not interfere in any way with an employee’s primary job with the Company. An employee should be careful that extra hours of work do not affect the safe performance of work with the Company.

If an employee has to seek a second job, or self-employment, which could create an actual or potential conflict of interest or involves work in the hair care industry, for example, working for a competitor or in your own hair care or styling business, you are expected to discuss the matter with your manager and obtain written authorization for such work prior to undertaking the work. Absent disclosure and approval, such employment is not permitted.

If, in management’s judgment, an actual conflict exists, you may be asked to choose between your job with the Company and your outside job.

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If an employee is found to be working in another job that constitutes an

actual or potential conflict of interest and has not disclosed the fact of that employment, the employee is in violation of this Handbook and may be subject to immediate termination.

12. Absenteeism and Tardiness: Each of our employees plays an important role in getting the day’s work done. Therefore, each employee is expected to be at his or her work station on time each day. Absenteeism, tardiness, or leaving work early, even for good reasons, is disruptive to our operations and interferes with our ability to satisfy our customer’s needs and is unfair to other employees who must cover your shift. Therefore, excessive absenteeism or tardiness can result in discipline up to and including discharge. Absence is any time you are scheduled to work and are unable to report. This does not include approved time off for vacation, holiday, bereavement leave, jury duty, leave of absence, or company-initiated time off. If you are going to be late or absent from work for any reason, you must personally notify your supervisor as far in advance as possible so that proper arrangements can be made to handle your work during your absence. Of course, some situations may arise in which prior notice cannot be given. In those circumstances, you are expected to personally notify your supervisor. Notification to a co-worker is not proper notification. Failure to notify your supervisor can result in termination. When absence is due to illness, the Company reserves the right to require medical documentation. Tardiness is any time when you arrive late at your work station and/or are not properly dressed and ready to work. An example of excessive absenteeism is when the number of your absences exceeds 12 days in any 12-month period and/or three days in the three-month period prior to your most recent absence. An example of excessive tardiness is when you are late more than three times within any 30-day period. No show/no call is when you fail to report for work or notify the manager or a designee. If you are absent for more than three days without communication with the Company it will be considered a voluntary termination. When you do not meet these requirements, you will be subject to disciplinary action, which may include termination of employment.

13. Performance Appraisals and Merit Increases: You will be given periodic verbal or written appraisals which evaluate your performance. Performance evaluations are an important part of the Company’s personnel policies and become a part of your record. They provide an objective, consistent, and fair way to gauge each employee’s on-the-job effectiveness. The evaluation process should inform employees of their standing in the Company and communicate expected standards of performance. It is also used to discuss work standards, areas where improvement is needed, career development potential, and possible opportunities.

14. Discipline and Termination: The Company maintains a progressive discipline procedure to ensure a fair method of disciplining employees. The progressive discipline system is intended to give employees advance notice, whenever possible, of problems with their conduct or performance in order to provide them an opportunity to correct any problems. Normally, progressive discipline involves verbal counseling, and one or more written warnings, before an employee is terminated. However, exceptions or deviations from the normal procedure may occur whenever the employer deems that circumstances warrant that one or more steps in the process be skipped. Accordingly, circumstances may sometimes warrant immediate termination. It should be remembered

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that employment is at the mutual consent of the employee and the employer. Accordingly, either the employee or the employer can terminate the employment relationship at will.

15. Final Paycheck: Employees will receive their final paycheck within the time required by law. The final paycheck for employees who resign with at least 72 hours advance notice will be provided on their last day of work. Employees who resign without providing at least 72 hours advance notice, however, will receive their final paycheck within 72 hours of their resignation. Employees who are terminated involuntarily will be provided their final paycheck on their last day of work. Company property, such as keys, tools, and equipment, must be returned by each employee at the time the final paycheck is provided.

16. No Solicitation/No Distribution/No Competition: Any type of solicitation by an employee of another employee during the working time of either employee or in any public areas of a Company salon during business hours for any reason is strictly prohibited. For example, canvassing, collecting funds, soliciting pledges, circulating petitions and soliciting membership in any organization are prohibited. Distribution of advertising materials, leaflets, petitions, handbills or other literature is prohibited in all working areas at all times. Solicitation and distribution of literature by non-employees is prohibited on Company premises at all times. The Company may make an exception to this rule to permit solicitations for recognized charitable organizations.

No employee may engage in any activity at or outside of work that competes, or is in conflict or creates the appearance of conflict, with the business and business interests of Supercuts. Such activity includes, but is not limited to, offering one’s services as a stylist for a fee to any non-family member or selling hair care products. Nothing in this paragraph is intended to limit the right of an employee to engage in gainful employment subsequent to working for Supercuts.

While employed by the Company, employees have access to and become acquainted with information of a confidential or proprietary nature. This trade secret information, related to the business of the Company, includes pricing information, compilations of data regarding customers, the identities of customers and potential customers or vendors. Employees may not disclose any of this information, directly or indirectly, to any third party while employed by the Company or at any time thereafter, except as required in the course of employment with the Company.

By accepting employment with Supercuts, each employee agrees that while employed and for a two (2) year period following employment, the employee will not solicit customers or employees of Supercuts to accept employment with any other business entity offering styling or haircutting services.

17. Proprietary Information. Customer lists, customer names, product costs to the Company, and sharing information of other employees are confidential proprietary information that no employee may share with any non-employee of the Company. An employee who violates the policy will be subject to immediate termination. Each employee owes a duty of complete loyalty to the Company, and is expected to comply with this duty at all times.

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RULES OF CONDUCT SUPERCUTS depends on its people to keep its commitment to service. That commitment includes your on-the-job performance and conduct, as well as your relationship to the public and your fellow workers. Any violation of the following rules of conduct may result in disciplinary action up to and including immediate termination.

The following are prohibited:

1. Violation of the following conflict of interest guidelines:

a. Soliciting personal trade from any customer for either themselves or any other person or salon including, but not limited to, the handing out of business cards.

b. Working at or for a direct competitor or preparing to compete with the Company.

c. Working for a full service beauty shop without written approval from your Manager and in no case within our shop’s trading area.

2. Conduct detrimental to our business including, but not limited to, comments to customers which would be harmful to our business.

3. Stealing or other dishonesty. This refers not only to the misappropriation of goods or monies belonging to the Company or to individuals, but also the misuse of discount privileges and/or willful inaccuracies, making untrue or misleading statements on a job application, or falsification of Company records, including punching or entering other than your own time record.

4. Any repeated, unreported or unauthorized absence or tardiness, without approval, including leaving work during scheduled working hours or failure to return on time from a leave of absence.

5. Rude, threatening, harassing, or disorderly conduct toward customers or co-workers.

6. Removing Company property or disclosing without proper authorization confidential Company or customer information, training information, styling processes or other proprietary information that has been furnished or disclosed to the employee by the Company.

7. Giving preferential treatment to non-employees, including family or friends and consisting of (but not limited to) cutting their hair at no charge in the shop or providing shop products or other shop services at no charge or reduced charges.

8. Insubordination: refusal or deliberate failure to follow instructions or company regulations, including the rules set forth in this Handbook.

9. Willfully or negligently destroying or defacing company property.

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10. The use, possession, distribution, or sale of alcoholic beverages or

narcotics or related drugs, unless prescribed, and/or coming to work under the influence of aforementioned alcohol and drugs.

11. Reporting for work in unfit condition or appearance.

12. Smoking anywhere on Company premises where prohibited, in covered parking lots and stairwells, and in customer contact areas.

13. Violation of a rule or breach of any obligation set forth in this Handbook.

14. Other conduct that is against the business interests of the Company.

EXIT INTERVIEW Any employee leaving the Company is required to attend an exit interview conducted by the employee’s manager. The purpose of the interview is to determine the reasons for leaving and to resolve any questions of compensation, insurance continuation, return of Company property, or other related matters.

INJURY AND ILLNESS PREVENTION PROGRAM

Employee safety is of paramount importance to the company. In keeping with its commitment of safety in the work place, the company has established this Injury and Illness Prevention Program (the "IIPP") to explain its safety policies and procedures. Some of the key features of the program are summarized below: 1. Responsibility for Administration: Each shop's IIPP will be administered jointly by your Senior Manager and the General Manager. 2. Need for Compliance: All employees are required to comply with the company's safety and health policies and practices. Performance evaluations take into consideration all aspects of an employee's performance, including the employee's compliance with the company's

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safety standards. Consequently, strict adherence to the company's safety standards and legal obligations concerning safety will be viewed positively in an evaluation. In the same manner, employees who fail to promote the interests of safety and health in the work place may be viewed negatively in an evaluation. 3. Communications: Employees will be informed of matters relating to occupational safety and health from time to time. Communications of this nature may be contained in posted notices, memos, personnel policy statements, employee newsletters, or safety guidelines. Important safety issues may also be raised at employee meetings and training programs. Employees are, in turn, encouraged to direct any questions they have regarding safety issues or the IIPP to the Senior Manager or General Manager. It is also the responsibility of each employee to inform his or her supervisor or your Senior Manager immediately of any hazard or unsafe condition in the work site. This can occur without fear of reprisal in any form. 4. Inspection: The company has adopted procedures that are designed to assist it to identify and evaluate work place hazards, including unsafe conditions and work practices. These procedures include periodic inspections, such as, during shop performance reports and other visits from corporate field staff or your General Manager. 5. Investigation of Injuries and Illnesses: The company will investigate occupational injuries and illnesses when and in the manner that it determines appropriate. This may involve a physical inspection of the location where an injury occurred, the circumstances that led to the injury or illness, and whether specific procedures, practices, or preventive measures could have helped to reduce or eliminate the danger or prevent the injury or illness. 6. Correction of Unsafe Conditions: Where it is determined that an unsafe or unhealthy condition, work practice or work procedure exists, the company will take steps that it determines are appropriate under the circumstances to correct the condition, practice or procedure in a timely manner. 7. Training and Instruction: The company will also provide training and instruction to employees under the IIPP from time to time. Such training and instruction will be provided (a) when the program is first established, (b) as part of the orientation provided to new employees, (c) when new equipment or procedures are introduced in the work place and represent a new hazard, (d) when the company becomes aware of a new hazard or one that was previously unrecognized, and (e) to supervisors who must be familiar with the safety and health hazards to which employees under their immediate direction and control may be exposed. This training may be incorporated into the corporate re-certification program. 8. Records: The company will retain records of inspections and training conducted under the IIPP for the period required by law. The objectives of the IIPP can only be fully accomplished with the cooperation of all employees. We again wish to stress the importance of safety to the company and all of its employees and urge every employee to cooperate in our goal of achieving "safety first". If you have any questions regarding the IIPP or your responsibilities with respect to work place safety, please direct them to your Senior Manager or the General Manager.

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EMPLOYEE ACKNOWLEDGEMENT OFRECEIPT OF EMPLOYEE HANDBOOK

This will acknowledge that I have received my copy of the Employee Handbook. I will familiarize myself with all rules and regulations in this Handbook; and any additional rules and regulations affecting my job. I understand that this Handbook represents only the Company’s current policies, regulations and benefits, and that it does not create a contract of employment. The Company retains the rights to change wages and all other working conditions as it deems necessary or appropriate. I understand that I am employed for no particular period, that I have the right to terminate my employment at any time, with or without cause, and that the Company has a similar right. I further understand that my status as an “at will” employee cannot be changed except in writing, signed by the Franchise Owner. I agree that if I leave the Company, I will not solicit any other employee of Supercuts to leave his or her job or to seek employment, or any customer of

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Supercuts to cease using its hairstyling services. I have read and understand the paragraph in this Employee Handbook affecting resolution of disputes and agree to resolve any controversy, claim, or dispute I may have with the Company in accordance with its terms. Print Full Name____________________________________ Signed___________________________________________ Date_____________________________________________ (Copy to be retained in Employee Personnel File)

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