Lyntegar Electric Cooperative, Inc.

Employee Handbook &

Policy Manual

*Revised October ___, 2015

**Replaces any previously published policies.

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TABLE OF CONTENTS

WELCOME! ........................................................................................................................................................................... 4 ABOUT THIS HANDBOOK ................................................................................................................................................ 4

802.1 THE COOPERATIVE MISSION STATEMENT ........................................................................................................... 4 802.2 YOUR SUPERVISOR ........................................................................................................................................................ 4 802.3 QUESTIONS, SUGGESTIONS, AND CONCERNS ...................................................................................................... 5

EMPLOYMENT POLICIES ................................................................................................................................................. 5 803.1 COMPLIANCE WITH EMPLOYMENT LAWS ........................................................................................................... 5 803.2 PERSONNEL FILES & CHANGE OF PERSONAL STATUS ..................................................................................... 6 803.3 RESIDENCY REQUIREMENT FOR EMPLOYEES .................................................................................................... 6 803.4 USE OF COOPERATIVE VEHICLES ............................................................................................................................. 7 803.5 CONFLICTS OF INTEREST ............................................................................................................................................ 7 803.6 CO-OP WHISTLEBLOWER ........................................................................................................................................... 7 803.7 RECORDS MANAGEMENT AND RETENTION POLICY ......................................................................................... 8 803.8 SOCIAL MEDIA POLICY ................................................................................................................................................. 8 803.9 AT-WILL EMPLOYMENT .............................................................................................................................................. 9 803.10 DISCHARGE, LAY-OFF OR VOLUNTARY TERMINATION OF EMPLOYMENT............................................... 9

COMPENSATION POLICIES ........................................................................................................................................... 10 804.1 CLASSIFICATION OF EMPLOYEES AND INDEPENDENT CONTRACTORS ................................................ 10 804.2 RECORDING WORK HOURS ...................................................................................................................................... 10 804.3 OVERTIME COMPENSATION ................................................................................................................................... 11 804.4 “CALL-OUT” TIME........................................................................................................................................................ 11 804.5 “ON-CALL” TIME .......................................................................................................................................................... 12 804.6 EMPLOYEE TRAVEL EXPENSES .............................................................................................................................. 12 804.7 REIMBURSABLE EXPENSES FOR EMPLOYEES .................................................................................................. 12 804.8 ADDITIONAL REIMBURSABLE EXPENSES FOR PROFESSIONAL, TECHNICAL & SUPERVISORY EMPLOYEES .................................................................................................................................................................................... 13 804.9 PERFORMANCE REVIEWS ........................................................................................................................................ 13

TIME-OFF BENEFITS ...................................................................................................................................................... 13 805.1 VACATION LEAVE ....................................................................................................................................................... 13 805.2 HOLIDAYS ...................................................................................................................................................................... 15 805.3 SICK LEAVE .................................................................................................................................................................... 15 805.4 TIME OFF ........................................................................................................................................................................ 16 805.5 LEAVE OF ABSENCE - GENERAL ............................................................................................................................. 17 805.6 LEAVE OF ABSENCE – UNIFORMED SERVICES .................................................................................................. 18

GROUP HEALTH AND OTHER BENEFITS .................................................................................................................. 20 806.1 MEDICAL INSURANCE PLAN ................................................................................................................................... 20 806.2 HEALTH SAVINGS ACCOUNT ................................................................................................................................... 21 806.3 DENTAL AND VISION INSURANCE ........................................................................................................................ 21 806.4 VOLUNTARY LIFE INSURANCE PROGRAM ......................................................................................................... 22 806.5 INCOME PROTECTION PLAN (SHORT-TERM AND LONG-TERM DISABILITY INSURANCE) ............. 22 806.6 BUSINESS TRAVEL ACCIDENT INSURANCE ....................................................................................................... 23 806.7 NRECA GROUP LIFE INSURANCE PLAN FOR EMPLOYEES ............................................................................ 23 806.8 NRECA SUPPLEMENTAL GROUP LIFE INSURANCE PLAN ............................................................................. 23 806.9 24-HOUR AD&D INSURANCE – EMPLOYEES ...................................................................................................... 24 806.10 EMPLOYEES 401(K) SAVINGS PLAN ..................................................................................................................... 24 806.11 HOMESTEAD FUNDS .................................................................................................................................................. 24 806.12 NRECA SECTION 125 CAFETERIA PLAN FOR EMPLOYEES ........................................................................... 24 806.13 LONGEVITY PAY........................................................................................................................................................... 25

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WORK PERFORMANCE .................................................................................................................................................. 26 807.1 APPEARANCE AND WORK UNIFORM FOR EMPLOYEES ................................................................................ 26 807.2 ATTENDANCE AND PUNCTUALITY ....................................................................................................................... 29 807.3 REPLACEMENT OF PERSONAL TOOLS ................................................................................................................. 29 807.4 VEHICLE MECHANIC TOOLS .................................................................................................................................... 30 807.5 COMPENSATION FOR INJURIES ON THE JOB ..................................................................................................... 30 807.6 REST PERIODS .............................................................................................................................................................. 30 807.7 PERSONAL MAIL .......................................................................................................................................................... 31 807.8 GENERAL RULES OF CONDUCT AND THE DISCIPLINE PROCESS................................................................ 31

WORKPLACE STANDARDS ........................................................................................................................................... 31 808.1 DRUG-FREE WORKPLACE POLICY ........................................................................................................................ 31 808.2 NON-SMOKING POLICY ............................................................................................................................................. 35 808.3 NO HARASSMENT........................................................................................................................................................ 36 808.4 NON-FRATERNIZATION POLICY ............................................................................................................................ 38

SAFETY AND SECURITY ................................................................................................................................................ 38 809.1 SAFETY POLICY ............................................................................................................................................................ 38 809.2 SAFETY RULES AND PROCEDURES ....................................................................................................................... 39 809.3 FRAUD POLICY ............................................................................................................................................................. 39 809.4 PERSONAL BELONGINGS .......................................................................................................................................... 40 809.5 REPORTING ACCIDENTS OR INCIDENTS............................................................................................................. 41 809.6 DRIVING FOR COOPERATIVE BUSINESS ............................................................................................................. 41 809.7 DRIVING RECORDS ..................................................................................................................................................... 41 809.8 PROOF OF INSURANCE .............................................................................................................................................. 41 809.9 NOTICE OF SUSPENSION OR REVOCATION OF LICENSE OR CANCELLATION OF LIABILITY

INSURANCE ................................................................................................................................................................... 42 809.10 WORKPLACE VIOLENCE PREVENTION ............................................................................................................... 42

PRIVACY POLICIES ......................................................................................................................................................... 43 810.1 CONFIDENTIALITY ..................................................................................................................................................... 43 810.2 PRIVACY NOTICE ......................................................................................................................................................... 43 810.3 PRIVACY POLICY FOR EMPLOYEES AND MEMBER INFORMATION........................................................... 44

ARBITRATION ................................................................................................................................................................. 45 811.1 ARBITRATION PROCEDURE .......................................................................................................................................... 45

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WELCOME! Welcome to Lyntegar Electric Cooperative, Inc.! We extend our congratulations on your employment and we hope that you will find satisfaction here. As an employee, you are our most important resource. Through your efforts as a member of our team, we aim to provide the highest quality of service to our customers. Your pride in your work and your attitude is the primary ingredient of our success.

To answer some of the questions you may have concerning the Cooperative and its policies, we have written this Handbook. The policies stated in this Handbook are subject to change at the sole discretion of the Cooperative. From time to time, you may receive updated information concerning changes in policy.

We wish you the best during your employment. Thanks for joining our team! Welcome aboard!

ABOUT THIS HANDBOOK As with any job change, you will experience a period of adjustment. You will want to know what you can expect from the Cooperative and what will be expected of you. We have prepared this Handbook to assist you in finding the answers to many of these questions. However, we do not expect this Handbook to answer all of your questions. Your supervisor will be your primary source of information.

The Handbook is not, nor should it be considered to be, an agreement or contract of employment, express or implied, or a promise of treatment in any particular manner in any given situation. This Handbook states only general Cooperative guidelines. The Cooperative may, at any time, in its sole discretion, modify or vary anything stated in this Handbook - except as required by law, and except for the rights of the parties to terminate employment at will, which may only be modified by an express written agreement signed by you and the CEO of the Cooperative.

This Handbook is a compilation of Cooperative’s existing policies concerning employees brought together in a single manual for the convenience of its employees. To the extent of conflict between this Handbook and the terms of other policies of the Cooperative, the terms of this Handbook shall control.

Any violation of the policies and/or procedures set forth in this Handbook may result in disciplinary action, up to and including termination.

802.1 THE COOPERATIVE MISSION STATEMENT

Lyntegar Electric Cooperative, Inc. is a non-profit organization committed to providing our members with reliable and affordable products and services with professionalism and the highest standards of conduct and ethics. We will strive to conduct our responsibilities with a high degree of competence and with good citizenship.

802.2 YOUR SUPERVISOR

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Your supervisor is responsible for planning the work schedule, ensuring the quality of your work, and providing you with whatever assistance you may need. An important part of your supervisor’s responsibilities is to answer questions, listen to your concerns, and take action where appropriate. Give your supervisor your cooperation. If your supervisor does not have an answer to your question, he or she will do his or her best to obtain one for you.

802.3 QUESTIONS, SUGGESTIONS, AND CONCERNS

If you have a question, suggestion or concern, you should discuss it with your supervisor. Because you and your supervisor work closely on a daily basis, most concerns can and should be addressed and resolved at that level. If you cannot resolve the issue with your supervisor, bring it to the attention of the Manager of Human Resources. If the Manager of Human Resources cannot resolve your concern, bring it to the attention of the Chief Executive Officer.

EMPLOYMENT POLICIES

803.1 COMPLIANCE WITH EMPLOYMENT LAWS

803.1.1 Equal Opportunity Employment. The Cooperative is an equal opportunity employer. We enthusiastically accept our responsibility to make employment decisions without regard to race, religious creed, color, age, sex, sexual orientation, gender identity, national origin, religion, marital status, medical condition, disability, military service, pregnancy, or any other classification protected by federal, state, and local laws and ordinances. Our management is dedicated to ensuring the fulfillment of this policy with respect to hiring, placement, promotion, transfer, demotion, layoff, termination, recruitment advertising, pay, and other forms of compensation, training, and general treatment during employment, including compliance with the EEOC Pregnancy Discrimination Guidelines issued July 14, 2014 requiring the employer to engage in an interactive process and provide reasonable accommodation to employees who are affected by pregnancy under such guidelines.

803.1.2 Immigration Reform and Control Act of 1986. The Immigration Reform and Control Act of 1986 makes it unlawful for an employer to knowingly hire, recruit, or refer for a fee for employment in the United States any individual (citizen or alien) not supplying proper documentation to verify his eligibility to work in the United States. Additionally, the law makes it unlawful for an employer not to maintain documents in its files establishing the individual's entitlement to employment. Cooperative will comply fully with this law and will not knowingly employ anyone who does not supply the Cooperative with government-required support documentation to verify that the employee is authorized to work in the United States. In the event it is determined an individual does not have the appropriate documentation, that individual will be subject to termination.

803.1.3 Fair Labor Standards Act. We are firmly committed to comply with all provisions of the Fair Labor Standards Act, as amended, which establishes minimum rates of pay and overtime pay requirements. We likewise adhere to and support the Equal Pay amendments to that law.

803.1.4 Americans with Disabilities Act of 1990. Cooperative is committed to complying with the Americans with Disabilities Act of 1990 as amended by the Americans with Disabilities

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Act Amendments Act of 2008. Accordingly, all employment decisions as to applicants for employment or as to persons having been employed will be made regardless of the existence of a disability. Once it is known that an individual suffers from a disability and that person is otherwise qualified for the job in question, we will make engage in an interactive process with the employee to seek means available to reasonably accommodate the individual's disability, provided the accommodation does not cause an undue hardship. This determination will be made on a case-by-case basis, dependent upon the facts involved. No employee or applicant for employment will be denied employment because of the need for reasonable accommodation.

803.1.5 Age Discrimination In Employment Act. The Cooperative is committed to complying with the Age discrimination in Employment Act of 1967 and other state and federal laws prohibiting discrimination against employees based upon their age.

803.1.6 OSHA. The Cooperative reviews applicable safety regulations that are intended to provide all employees with a safe place to work. Management endeavors to comply with the requirements of the Occupational Safety and Health Act. In this regard, each employee is requested to assist management in its obligation to provide you with a safe place to work. THINK SAFETY.

803.1.7 Right-to-Work Law. The Cooperative resolves to respect the Right-to-Work laws of Texas, our home state, and will carefully protect each person's right to enjoy all the privileges of employment without regard to his or her membership or non-membership in any employee organization or association.

803.2 PERSONNEL FILES & CHANGE OF PERSONAL STATUS

The Cooperative must maintain current and accurate personnel records on all employees. To ensure that your personnel file is up-to-date at all times, notify your supervisor or Manager of Human Resources in writing as soon as possible whenever there is a change in your personal status, including but not limited to:

A. Name change – through marriage or otherwise, B. Change in Address or Phone Number, C. Changes in information regarding your person to notify in case of emergency, D. Changes in deductions or insurance, E. Number of dependents, F. Beneficiary designations, G. Tax filing status, and H. Marital status.

Personnel files are the Cooperative’s property. They are also considered confidential and only you and Cooperative employees who need information from your file to carry out Cooperative business, or respond to lawful inquiries, will have access to your file.

803.3 RESIDENCY REQUIREMENT FOR EMPLOYEES

It is the Cooperative’s policy to establish a residency requirement for employees so that the best possible service can be rendered at all times. The Cooperative requires that existing, newly-hired, transferred, or promoted employees always meet the residency requirement.

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A. Employees must live in their headquarters town or, with prior approval, within fifteen

(15) statute miles of their headquarters town. B. Existing employees falling out of compliance because of a change in residency shall be

given an opportunity to move within ninety (90) days, to reestablish compliance with this policy.

C. New employees, after completing six (6) months of employment, and who are not in compliance with this policy, shall be given up to a ninety (90) day period to comply.

D. Compliance with this policy is a continuing requirement of employment. Compliance with this policy does not create, nor should it be construed to create, an express or implied agreement or promise of continued employment.

E. Temporary or part time residency does not meet the requirements of this policy. F. Prior approvals are grandfathered under this policy and prior verbal notices where a time

deadline has been given for compliance will be honored.

803.4 USE OF COOPERATIVE VEHICLES

Cooperative-owned vehicles are for business use only and are to be stored on Cooperative premises with exceptions for certain employees as determined by the CEO

Employees that are required to store vehicles at their homes and commute to and from work are to use the cooperative vehicles for work only, with the only exception being for de minimus personal use.

Drivers of vehicles designated for commuting to and from work are advised that IRS reporting requirements will be followed for valuing commuting expenses. Each employee who has been assigned a vehicle shall be responsible for the maintenance and care of the vehicle (at the Cooperative’s expense) and shall maintain maintenance and mileage logs as required by management. Such logs shall be provided to the employee’s supervisor and turned into the CFO on a monthly basis to become a permanent part of the Cooperative’s records on transportation expenses.

803.5 CONFLICTS OF INTEREST

No employee shall engage in the same or a similar line of business as carried on by the Cooperative. An employee shall not solicit the Cooperative’s customers. An employee shall not have a financial interest in a business that is a competitor of or a supplier to the Cooperative. Financial interests held by immediate family members in such companies are to be disclosed to your supervisor in order that a determination can be made as to whether a conflict exists. For the purposes of this Section 803.5, financial interests do not include investments in publicly traded stocks of competitors or suppliers where less than 5% of such publicly traded ownership is owned by the employee or family member.

For the complete version of the Cooperative’s Conflicts of Interest Policy, please see the Appendix to the Employee Handbook located in the Human Resources office.

803.6 CO-OP WHISTLEBLOWER

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It is Cooperative’s policy that no retaliation shall occur against any employee who internally reports a concern about potentially unlawful or unethical conduct (“Whistleblower”). Each employee has an obligation to report in accordance with this Whistleblower Policy: (a) questionable or improper accounting or auditing practices, (b) suspected unlawful conduct, and (c) violations or suspected violations of Cooperative policy (collectively referred to as “Concerns” from this point forward).

No employee, who in good faith reports a Concern, shall be subject to retaliation in any form for making the report. An employee that retaliates against someone who has made a good faith report about a Concern is subject to discipline, up to and including termination of employment.

Employees should first discuss their Concern with their immediate supervisor. If the Whistleblower continues to have reasonable grounds to believe the Concern is valid and the supervisor is not responsive, the Whistleblower should then report the Concern to the Manager of Human Resources. If the supervisor is a subject of the Concern, or if the Whistleblower is uncomfortable speaking with his or her supervisor, the Whistleblower should report his or her Concern to the Manager of Human Resources. If the Manager of Human Resources is the subject of the Concern, the Concern should be reported to the CEO. If the CEO is the subject of the Concern, the Concern should be reported to the President of the Board of Directors.

For the complete version of the Cooperative’s Whistleblower policy, please see the Appendix to the Employee Handbook located in the Human Resources office.

803.7 RECORDS MANAGEMENT AND RETENTION POLICY

It is the policy of the Cooperative to ensure that the Cooperative maintains a reasonable and good faith retention of all records created by or under the control of the Cooperative, whether paper or electronic, that are necessary or advisable to retain for: business operations; historical value; accounting, audit, tax and financial purposes; compliance with applicable law; possible future use in litigation involving the Cooperative; and possible future use in an official proceeding or governmental investigation, audit or other matter. For the complete version of the Cooperative’s Records Management Policy, please see the Appendix to the Employee Handbook located in the Human Resources office, or if you have any questions regarding whether a document should be retained, please ask your supervisor or the Manager Human Resources.

803.8 SOCIAL MEDIA POLICY

A. PURPOSE

The purpose of this policy is to establish guidelines for the use of the Cooperative’s official social media accounts. This policy includes, but is not limited to, the establishment and use of Facebook, YouTube, and Twitter (“social media networks”) by cooperative staff on behalf of the Cooperative.

Social media is part of a strategic initiative to identify methods of connecting and communicating with the members. The Cooperative recognizes that our diverse membership includes many consumers who prefer to interact with the Cooperative primarily via the internet. The Cooperative will continue to maintain the traditional methods of communications, but there is a need to develop a more interactive web

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presence than the current website offers. Social media tools offer a mechanism to provide a constantly changing information stream, an interactive exchange and expand the online communications with the members.

This is an abbreviated form of the policy that applies to employees generally. For the complete detailed policy please see the Appendix to the Employee Handbook located in the Human Resources office.

803.9 AT-WILL EMPLOYMENT

The Cooperative’s policy is that employment is “at will.” You are free to leave the Cooperative at any time, with or without a reason and with or without notice, although the Cooperative does request 2 weeks advance written notice if possible. The Cooperative also has the right to end your employment at any time, with or without a reason and with or without notice. Although the Cooperative may choose to end your employment for a cause, cause is not required. In case of retirement, it is recommended that you give one month written notice and contact Manager Human Resources for instructions on continuing eligible benefits into retirement.

The Cooperative has the right to manage its work force and direct its employees. This includes the right to hire, transfer, promote, demote, reclassify, lay-off, terminate, or change any term or condition of employment at any time, with or without a reason and with or without notice unless otherwise required by law. The Cooperative also reserves the right to run a criminal background check on any employee or candidate for employment.

No one other than the CEO of the Cooperative may enter into an agreement on behalf of the Cooperative with an employee for employment for a specific period of time or make any agreement contrary to the policy of at-will employment. Any such agreement must be in writing signed by the CEO of the Cooperative and you.

803.10 DISCHARGE, LAY-OFF OR VOLUNTARY TERMINATION OF EMPLOYMENT

The Cooperative reserves the right to dismiss an employee at any time his services are no longer needed or for disciplinary reasons.

Employees are expected to give the Cooperative two (2) weeks advance written notice in the event they decide to terminate their employment. The Cooperative will likewise give two (2) weeks advanced written notice in case of dismissal for any reason other than disciplinary.

Although not all inclusive, the following may be reason for dismissal:

1. Violating the Alcohol, Drugs and Controlled Substances Policy; 2. Fighting or causing bodily injury to another or disorderly conduct on the job; 3. Arriving late to work; 4. Failing to notify supervisor when not reporting for work; 5. Failing to provide proper quality or quantity of work; 6. Negligently and/or habitually damaging or destroying Cooperative property; 7. Misrepresenting or continually giving wrong information; 8. Violating safety rules;

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9. Violating personnel rules and regulations; 10. Violating highway traffic rules and regulations; 11. Failure to take proper care of tools; 12. Abuse of sick leave; 13. Theft; 14. Insubordination

COMPENSATION POLICIES 804.1 CLASSIFICATION OF EMPLOYEES AND INDEPENDENT CONTRACTORS

For wage and benefit purposes, the Cooperative’s employees are classified as (1) full-time, (2) part-time, (3) temporary and (4) Exempt/Non-Exempt. These classifications do not alter your at-will employment status.

Full-Time: An employee who is regularly scheduled to work at least 40 hours in a workweek. The employee may be exempt or non-exempt and is eligible for all employment benefits offered by the Cooperative, subject to the terms of those plans. A standard workweek for full-time employees normally shall be made up of 5 eight-hour workdays, but may be arrived at in some instances by various combinations of work days and work hours.

Part-Time: An employee who is regularly scheduled to work 19 hours or fewer in a workweek. They are not eligible for any employment benefits offered by the Cooperative, except as required by law.

Temporary: An employee who fills a temporary, emergency or short-term need, with no expected minimum number of hours of employment. The employee will not receive any benefits unless specifically authorized in writing or as required by law.

Exempt/Non-Exempt: A provision of the federal Fair Labor Standards Act generally divides all employees into two categories based on their eligibility for overtime pay. An exempt employee works the hours required to meet his/her work responsibilities and do not receive overtime pay.

In addition, the Cooperative may employ individuals or business entities on an independent contractor basis. The Cooperative is not responsible for an independent contractor’s tax liability or worker’s compensation insurance. Independent contractors and their employees are not employees of the Cooperative and not eligible for benefits.

804.2 RECORDING WORK HOURS

It is the policy of the Cooperative to comply with applicable laws that require records to be maintained of the hours worked by our employees. To ensure that accurate records are kept of the hours you actually work (including overtime hours where applicable) and of the accrued leave time you have taken, and to ensure that you are paid in a timely manner, you will be required to record your time worked and your absences on the Cooperative’s official time record form, either in a hardcopy or electronic format. This form should be completed daily then signed

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and forwarded to your supervisor on a weekly basis. After reviewing the form and resolving any discrepancies, your supervisor will approve the form and forward it to payroll for processing. Please ensure that your actual hours worked and leave time taken are recorded accurately. Falsification of a time record is a breach of cooperative policy and is grounds for disciplinary action, including the possibility of termination.

804.3 OVERTIME COMPENSATION

This section applies to non-exempt employees. Non-Exempt employees will be paid overtime at one and one-half (1 ½) their base hourly rate for all hours worked in excess of eight (8) hours in a workday. Overtime must be pre-approved by your supervisor. Supervisor must consult with CEO before allowing overtime to be worked.

Exempt salaried employees are not required to be compensated for overtime hours worked. Exempt employees will be required to use accumulated vacation and/or sick leave time when gone for any length of time equal to or more than 30 minutes, unless worked during the lunch hour between 8 a.m. and 5 p.m. and discussed with supervisor. When extenuating work related events occur, such as working during storms, compensated (“comp”) time may be granted to exempt salaried employees with approval from supervisor and CEO. All comp time granted will be limited to 4 hours per day and must be taken within 30 days of the event. No comp time will be granted without approval from CEO.

Work during the Cooperative’s annual meeting will qualify for comp time.

804.4 “CALL-OUT” TIME

All employees of the Cooperative are subject to “call-out” to perform work and duties as required at any time other than regularly scheduled work hours. They are expected to respond to any such “call-out,” unless valid reasons exist for refusing the call.

All line employees will be expected to answer calls from the Cooperative, unless they have “checked out” as being out of town with an On-Call supervisor. All other employees are expected to answer calls from the Cooperative, unless they have “checked out” as being out of town with their immediate supervisor.

Any employee not answering phone calls as described in this policy may be subject to unpaid administrative leave for up to three (3) days. If the problem of not answering calls continues, the employee may be subject to further discipline, up to and including termination.

In our industry, most outages occur during inclement weather, and employees should be on alert to call-out during those times.

Non-Exempt hourly employees will be paid for time actually worked on “call-out,” except they will be paid a minimum of one (1) hour per “call-out”, even if less time is worked. The minimum time provision does not apply when an employee is called out for additional work before the employee checks out from work or leaves the employer’s premises after having checked out from work.

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All employees are responsible for reporting current home and cell phone numbers to their Supervisor and/or Branch Manager. It is then the responsibility of the Supervisor and/or Branch Manager to report those changes to the Executive Secretary to update listing for Line Department Supervisors and Dispatchers.

804.5 “ON-CALL” TIME

All employees of the cooperative are subject to call for work at any time and are expected to respond to such call unless a valid reason for refusing the call exists.

Certain employees may be designated to receive duty calls “first” on weekends and holidays. For agreeing to accept “first” calls on these days, the designated non-exempt hourly employees shall be credited with two (2) hours’ time worked whether or not they actually work and in addition to any time they do actually work.

804.6 EMPLOYEE TRAVEL EXPENSES

The Cooperative will pay for approved employees to travel to certain events and or meetings. Please contact your supervisor or Human Resources Department to obtain an employee Travel Request form to be authorized by your supervisor and the CEO. A non-exclusive list of approved events and meetings can be found in the Appendix to the Employee Handbook located in the Human Resources Department.

Transportation will normally be in Cooperative owned vehicles; however, commercial transportation may be authorized. In the event a personal vehicle is authorized, the employee will be reimbursed at the most current IRS Published rate per mile round trip. Transportation expenses will be for the employee only.

The Cooperative will pay for the hotel room cost, registration fees, tuition, and admission to banquets, special events, and air fare for employee only. Telephone, internet services, taxicab, parking fees and tolls will also be paid for by the Cooperative for employee only. These fees may be paid for by using the Cooperative issued credit card, or the employee may use a personal credit card and be reimbursed by the Cooperative, by submitting the receipts for these expenses. Employees are expected to use prudent care and reason when incurring expenses while travelling on Cooperative business...

Should reimbursement for travel expenses be received from another organization for the same trip, then reimbursement will be made under this policy only if the other payment is surrendered or an appropriate deduction for the other reimbursement is made.

804.7 REIMBURSABLE EXPENSES FOR EMPLOYEES

The Cooperative will reimburse employees under the following circumstances:

A. When employees are required to remain away from their headquarters overnight, lodging and meals shall be arranged by the supervisor and furnished by the Cooperative. A per diem will be given for meal expenses.

B. When an employee is called out to work outside the regular workday and works through a normal meal period, the Cooperative may provide for a meal.

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C. When an employee is called out to work before his regularly scheduled starting time and remains out during the regular working day, the noon meal may be provided by the Cooperative.

D. When workers who normally work without leaving town are required to leave town and are out through a meal period, the meal may be provided by the Cooperative.

E. Out-of-pocket expenses incurred on behalf of the Cooperative for items such as repairing flat tires, gasoline, pulling out of mud holes, towing, and other items for which immediate payment is required, may be reimbursed by the Cooperative.

F. Reimbursement will be made to the employee upon completion of an authorized form, with required receipts attached, and approval by his supervisor.

804.8 ADDITIONAL REIMBURSABLE EXPENSES FOR PROFESSIONAL, TECHNICAL & SUPERVISORY EMPLOYEES

In addition to applicable reimbursements described in 804.7 above, because of the nature of their duties, professional, technical and supervisory employees may be additionally reimbursed for meals when n acting as host to others on behalf of the Cooperative.

Reimbursement will be made to the employee upon completion of an authorized form, with required receipts attached, and approval by his supervisor or paid for with a Cooperative credit card.

804.9 PERFORMANCE REVIEWS

To ensure that you perform your job to the best of your abilities, it is important that you be recognized for good performance and that you receive appropriate suggestions for improvement when necessary. Consistent with this goal, your performance will be evaluated by your supervisor on an ongoing basis. You will also receive periodic written evaluations of your performance.

Employee evaluations will normally occur after you have been employed for six (6) months, on your first anniversary date, and annually thereafter. In addition, if you are promoted or transferred to a new position, your performance will normally be evaluated in writing after you have been in your new job for six months.

The Cooperative endeavors to conduct written performance reviews of each employee’s performance annually. All written performance reviews will be based on your overall performance in relation to your job responsibilities and will also take into account your conduct, demeanor, and record of attendance and tardiness. In addition to the regular performance evaluations described above, your supervisor may conduct special written performance evaluations at any time to advise you of the existence of performance or disciplinary problems.

TIME-OFF BENEFITS 805.1 VACATION LEAVE

It is the policy of the Cooperative to provide vacation or annual leave to all full time employees.

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A. For Employees Hired Before January 1, 2015:

After six (6) months of continuous employment, there shall be six (6) days of vacation leave established for each full time employee and shall thereafter accumulate for continuous service as follows:

• 6 months through 10th year- 1 day for each month worked • 11th through 15th year - 1 1/4 days for each month worked • 16th through 20th year - 1 1/2 days for each month worked • 21st year and thereafter- 1 3/4 days for each month worked

It is recommended that vacation leave be used in maximum amount authorized each year; however, it shall be mandatory that at least one-half of the amount authorized to be accrued each year be used the same year after an employee has had an opportunity to accrue fifteen (15) days of vacation. This provision may be waived in extreme cases where an employee is not allowed to take vacation because of work load.

Use of vacation leave will be left to the discretion of the employee as much as work scheduling will permit and subject always to the approval of the employee’s supervisor.

After the first pay period in December each year, the employee may be paid in cash at the employee’s regular rate of pay for any vacation days in excess of fifteen (15) days.

Upon termination of employment or death, the employee will be paid in cash for accumulated vacation leave.

In addition, upon retirement (age 62 years or older) the Cooperative will continue to participate in the cost of benefit programs the employee is allowed to carry into retirement for as many months as the accumulated vacation days convert to. The participation will be $335/month (employee only medical coverage) or $625/month (employee plus dependent medical coverage) to be contributed to a Health Reimbursement Account (HRA) established with Cooperative Benefit Administrators (CBA) and may be used to pay premiums and other health related expenses allowed under HRA rules. The employee must have had medical coverage through the Cooperative’s medical group plan on the day of retirement to qualify.

B. For Employees Hired On or After January 1, 2015:

After six (6) months of continuous employment, there shall be six (6) days of vacation leave established for each full time employee and shall thereafter accumulate for continuous service as follows:

• 6 months through 10th year - 1 day for each month worked • 11th through 15th year - 1 1/4 days for each month worked • 16th year and thereafter- 1 1/2 days for each month worked

It is recommended that vacation leave be used in maximum amount authorized each year; however, it shall be mandatory that at least one-half of the amount authorized to be accrued each year be used the same year after an employee has completed one year of

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employment. All days in excess of this requirement will be lost. This provision may be waived in extreme cases where an employee is not allowed to take vacation because of work load.

Use of vacation leave will be left to the discretion of the employee as much as work scheduling will permit and subject always to the approval of the employee’s supervisor.

After the first pay period in December each year, the employee will be paid in cash at 100% of the employee’s current rate of pay for all vacation leave in excess of twenty (20) days.

Upon termination of employment of five years or longer, the employee will be paid in cash for accumulated vacation leave, not to exceed twenty (20) days, as long as (i) the employee has given a two weeks written notice; (ii) no more than two days’ vacation has been taken during the two weeks’ notice period described in (i) above; and (iii) no vacation time is taken on the last day of employment.

The Cooperative will not participate in any cost of benefits at retirement.

805.2 HOLIDAYS

Employees shall be allowed eight (8) hours of time off with pay on holidays as follows:

1. New Year’s Day 2. Good Friday 3. Memorial Day 4. Independence Day 5. Labor Day 6. Thanksgiving Day 7. Day after Thanksgiving 8. Christmas Eve 9. Christmas Day

When a holiday falls on a day other than a regular work day, the employee may be requested to take time off on the regular work day just prior to or just following the holiday, depending upon work schedules and other conditions.

805.3 SICK LEAVE

The purpose of this section is to define conditions under which compensation will be paid to full- time employees for absences due to illness, injury, or need for medical, dental or optical attention of the employee or a member of the employee’s immediate family or disability of the employee, that protect both the employee’s legitimate need for protection against loss of income and the Cooperative’s need to control any abuse of this policy. For the purposes of this policy, immediate family is your spouse, birth child, adopted child, step-child, foster child or any child you have been given legal guardianship of, and who is 18 years of age or younger.

POLICY:

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After six (6) months of continuous employment, there shall be six (6) days of sick leave time established for each full time employee, and sick leave time shall thereafter accumulate on the basis of one (1) day of sick leave for each month of employment.

Charges to sick leave time may be made by an employee when the employee is unable to perform their regular duties as the result of sickness, injury or need for medical, dental or optical attention of the employee, or of a member of the employee=s immediate family as described above, or due to disability of the employee, and subject always to the approval of their supervisor. You may also use sick leave for taking your child, age 19 and older, or your own parent, to an appointment involving a surgical procedure rendering them unable to drive themselves home, as well as any appointments or procedures that fall under the Family Medical Leave Act, and for the birth of your grandchild. See the attached Employee Rights & Responsibilities Under the Family and Medical Leave Act for further guidance. A doctor=s statement may be required to substantiate the claim.

For Employees Hired Before January 1, 2015:

The employee may be paid in cash, at one-half (1/2) of their regular rate of pay, for any accumulated sick leave in excess of 180 days at the end of each year.

Upon retirement (age 62 or older) or due to the death of the employee, the employee will be paid in cash for all accumulated sick leave at 100 % of their regular rate of pay.

In addition, upon retirement (age 62 or older) the Cooperative will continue to participate in the cost of medical benefit programs the employee is allowed to carry into retirement for as many months as the accumulated sick leave days convert to. The participation will be $335.00/month (employee only medical coverage) or $625.00/month (employee plus dependent medical coverage) to be contributed to a Health Reimbursement Account (HRA) established with Cooperative Benefit Administrators (CBA) and may be used to pay premiums and other health related expenses allowed under HRA rules. The employee must have had medical coverage through the Cooperative’s medical group plan on the day of retirement to qualify.

For Employees Hired After January 1, 2015:

Upon retirement (age 62 or older) or due to the death of the employee, the employee will be paid in cash for all accumulated sick leave at 50% of the then current rate of pay of the employee.

The Cooperative will not participate in any cost of benefits at retirement.

805.4 TIME OFF

Time off may be granted to an employee, with or without pay, depending upon the circumstances, for the following situations: funeral, jury duty, election duty, voting, and personal business. Approval may be given by the department head or supervisor not to exceed more than a few days, except where time may be extended due to orders issued by a Court. Situations and standard handling procedures are as follows:

1. Funerals – A reasonable amount of time off, depending upon the circumstances, but not to exceed (a) three (3) days, with pay, for a death of a spouse, child, parent,

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sibling, grandparent or legal guardian of employee or employee’s spouse; one (1) day, with pay, for the death of an uncle, aunt, cousin, niece, or nephew of the employee or employee’s spouse or while representing Lyntegar, or to be a pall bearer.

2. Jury Duty – Time off with pay as ordered or required by the Court or by law. Any compensation received for such service is to be turned over to the Cooperative. If paid vacation or no pay is taken, then employee may keep any compensation from the Court.

3. Election Duty – Time off with pay as required. Any compensation received for such service to be turned over to the Cooperative. If paid vacation or no pay is taken, then employee may keep any compensation from the Court.

4. Voting – The necessary required time off to vote in any national, state, or local election will be granted with pay.

5. Personal Business – Time off without pay may be granted to employees to attend to personal business or for other miscellaneous reasons. Where circumstances permit and with previous approval, short periods of time off may be made up during lunch hours or after working hours.

Since period of time off under this policy are generally limited to a few days, all benefits of an active employee will be continued.

805.5 LEAVE OF ABSENCE - GENERAL

The Cooperative recognizes that circumstances beyond the control of the employee may necessitate being absent from their job. The purpose of this policy is to detail the conditions under which an employee may be granted leave without pay to be absent from job responsibilities.

A. The Cooperative may, upon request, grant a Leave of Absence, without pay, to any employee upon certain terms, conditions, and approvals as follows:

1. All vacation leave, and sick leave as applicable, must be substituted for unpaid leave until depleted or employee returns to work, except as provided under Policy 805.6 Leave of Absence – Uniformed Services.

2. Each request shall be considered independently of all others. In reviewing requests, consideration will be based upon, but not limited to, the following:

a. Reason for requesting leave. The provisions for medical leave of absence will be followed in accordance with the federal Family and Medical Leave Act of 1993 (FMLA), where applicable;

b. Type of job and relationship with other jobs;

c. Trained personnel available to fill vacancy or do work temporarily without jeopardizing own work flow;

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d. Effect on department or overall operations;

e. Length of leave requested; and

f. Service longevity.

3. An employee should give the Cooperative at least thirty (30) days written notice before the date leave is to begin, if the need is foreseeable. If thirty (30) days’ notice is not practicable, such as in the case of a medical emergency, the employee must provide the best notice practicable.

4. All requests subject to approval by the CEO upon recommendation of department head, supervisor and/or Manager of Human Resources.

B. Such Leave of Absence shall be limited to a maximum of twelve (12) weeks during any twelve (12) month period, except that in extreme cases, additional time may be given by special approval of the Board of Directors upon recommendation by the CEO.

C. An employee granted Leave of Absence shall forfeit all rights of an active employee except:

1. Guarantee that same job, or another job equivalent in pay, will be available upon return;

2. No loss of time toward service longevity; and

3. In the case of a Medical Leave of Absence as described under the Family Medical Leave Act of 1993, the Cooperative will maintain an employee’s coverage under its group health plan at the same level and conditions that would have been provided if the employee had not taken the leave. The employee must make arrangements for payment of their share of the premiums prior to the Leave of Absence or as soon as reasonably possible.

The Cooperative may recover its share of any premiums paid for maintaining coverage during an unpaid leave period, if the employee fails to return from leave for a reason other than the continuation, recurrence or onset of a serious health condition of the employee or the employee’s spouse, child or parent. Upon Employee’s return to work, the Cooperative may also recover the employee’s share of any premiums missed by the employee during any of the FMLA leave period during which the Cooperative may have maintained the employee’s share of premium payments missed.

In all other requests for Leave of Absence under this policy, the Cooperative will maintain an employee’s coverage under its group health plan at the same level and conditions that would have been provided if the employee had not taken the leave, only as long as the employee has accrued time (vacation) still on the books for a partial of each month the leave is requested.

805.6 LEAVE OF ABSENCE – UNIFORMED SERVICES

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The Cooperative will, upon advance notice, grant Leave of Absence, without pay, to any employee who serves in the uniformed services, who needs to take military caregiver leave or who has a “qualifying exigency” as described in the amended Family Medical Leave Act Regulations effective January 16, 2009. “Serves in the uniformed services” means the performance of duty on a voluntary or involuntary basis in a uniformed service, including active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, absence from work for an examination to determine a person=s fitness for any of the above types of duty, funeral honors duty performed by National Guard or reserve members and duty performed by intermittent disaster response personnel for the Public Health Service, and approved training to prepare for such service. The uniformed services consist of the following:

1. Army, Navy, Marine Corps, Air Force or Coast Guard;

2. Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve or Coast Guard Reserve;

3. Army National Guard or Air National Guard;

4. Commissioned Corps of the Public Health Service; or

5. Any other category of persons designated by the President in time of war or emergency.

A military caregiver is defined as an eligible employee who is closely related to a service member in the uniformed services. A military exigency is defined as 1) short-notice deployment; 2) military events and related activities; 3) certain temporary childcare and school activities; 4) financial and legal arrangements; 5) counseling by a non-medical counselor (such as a member of the clergy); 6) rest and recuperation (leave permitted up to five days when the military member is on temporary rest and recuperation leave); and 7) post-deployment activities.

Approval will be given by the CEO upon recommendation by the department head or supervisor, and subject to the provisions of this policy and state and federal laws pertaining to Veteran’s re-employment rights and the Family Medical Leave Act. Such leave may be limited to five (5) or less cumulative years of service in the uniformed services while employed with Lyntegar Electric Cooperative, Inc., except the time may be extended during periods of national emergency upon approval of the Board of Directors. Military caregiver leave is limited to 26 workweeks in a “rolling” 12-month period to care for a service member with a serious illness or injury while on active duty or 12 workweeks of leave in a “rolling” 12-month period for any “qualifying exigency” stemming from such active duty.

The employee shall forfeit all rights of an active employee except:

1. Guarantee that same job, or another job equivalent in pay, will be available upon return, along with all general across the board pay raises that they would have received if not for the leave of absence for service in the uniformed services;

2. No loss time toward service longevity;

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3. Eligibility to continue health care coverage up to twenty-four (24) months (total cost at employee=s expense) beginning on the date on which military leave of absence begins; and

4. Pension contributions to the employee=s 401(k) Pension Savings Plan, only if the employee elects to continue making contributions while on leave or chooses to buy the lost time at the rate the employee would have paid had the employee remained actively employed. The employee will have three times the length of their absence or a maximum of five years to complete their share of the contributions.

Earned vacation leave may be substituted for any unpaid leave due to Leave of Absence under this policy, but is not required. The employee will be eligible to return to work or apply for re-employment if done so in a timely manner after conclusion of service and may not have been separated from service with a disqualifying discharge or under other than honorable conditions.

GROUP HEALTH AND OTHER BENEFITS 806.1 MEDICAL INSURANCE PLAN

The Cooperative strives to provide a medical insurance plan that will provide assistance to employees in time of need. Because employees are a valuable resource, the Cooperative has a substantial interest in their welfare. Therefore, the Cooperative has secured and carries a medical insurance plan for the benefit of its employees. While the Cooperative intends that such benefit plan will remain in effect, the Cooperative reserves the right to amend or terminate any such plan or benefit. Payroll deductions are authorized where applicable for these programs.

Statements contained in this policy are solely for the purpose of identifying the medical insurance plan at the Cooperative. This policy does not attempt to summarize the benefits or rules of the benefit plan. Instead, a Summary Plan Description is available for this purpose. This policy does not represent a promise or agreement to provide benefits and does not create any independent rights to employee benefits. Instead, the rules regarding benefits, eligibility, and all other matters relating to the plan identified herein are governed exclusively by the terms of the formal plan document. Any inconsistency between the language in this policy and the formal plan document will be resolved based solely on the terms of the plan document. Please refer to the applicable Summary Plan Description and/or plan document if you need additional information about the plan.

At present, the NRECA High Deductible Medical PPO Plan will be made available to all full time employees, directors, retained attorneys and their eligible dependents, subject to all provisions and requirements of the plan. Coverage is made available beginning on the date of employment. The cost of the plan shall be as follows:

75% of the total cost is paid by the Cooperative;

25% of the total cost is paid by the Employee.

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Coverage may continue after retirement in accordance with the provisions of the Plan. The Cooperative will not participate in the cost, except as provided for in sections 805.1 vacation leave and 805.3 sick leave.

Upon the death, termination (except for gross misconduct), reduction in hours, divorce or separation of the covered employee, or the cessation of dependency status of a qualified beneficiary, such employee or beneficiary may elect to continue coverage under the Cooperative=s group major medical plan in compliance with the Consolidated Omnibus Budget Reconciliation Act (COBRA) and state law. The cost will be paid by the participant and will be 102% of the prevailing premium.

806.2 HEALTH SAVINGS ACCOUNT

The purpose of this policy is to establish the rules for making contributions to eligible Cooperative employee’s health savings accounts.

To be eligible, an employee must first be enrolled in the NRECA High Deductible PPO Medical Insurance Plan adopted by the Cooperative and follow all other rules established by the Internal Revenue Service (IRS). Employees will be solely responsible for making sure they qualify according to the IRS rules.

If contributions are made by the Cooperative, all eligible employees who are actively employed during the month of January will qualify for the full contribution. All eligible employees hired in February or later, will receive a pro-rated contribution amount.

806.3 DENTAL AND VISION INSURANCE

The Cooperative has adopted the NRECA Dental and Vision plans for all full-time employees, directors, retained attorney and their eligible dependents, subject to all provisions and requirements of the plans.

The cost of the above plans for employees, directors and attorney shall be paid by the Cooperative.

Optional dependent coverage is made available for each employee, director and attorney by the employee, director or attorney paying the total dependent coverage cost.

Subject to the provisions of the plans, continuation of coverage will be made available as follows:

1. Death of Employee, Director, Attorney - Continuation of coverage will be made available to eligible dependents provided for in the plans. The Cooperative will not participate in the cost

2. Retirement – Continuation of coverage will be made available at retirement as provided for in the plans. The Cooperative will not participate in the cost except as provided for in sections 805.1 Vacation Leave and 805.3 Sick Leave.

3. Death of Retiree - Continuation of coverage will be made available to eligible dependents provided for in the plans. The Cooperative will not participate in the cost.

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4. COBRA Requirements – Continuation of coverage will be made available to terminating employees, or other family members as required by the act for the time specified. The cost will be borne by the participant and will be 102% of the prevailing premium.

806.4 VOLUNTARY LIFE INSURANCE PROGRAM

The Cooperative formerly adopted the NRECA Voluntary Life Insurance Program through MetLife for all full-time employees, directors, retained attorneys and their eligible dependents, subject to all provisions and requirements of the plan. NRECA is no longer offering the Program to new employees, directors, attorneys, or to any employees, directors or attorneys who do not currently have a policy under this Program.

Those participants who currently have an insurance policy under this Program are eligible to continue their policy and add to it if so desired.

The cost of the Program shall be paid by the participant. Payroll deductions are authorized for this Program.

Subject to the provisions of the Program, continuation of coverage will be made available as follows:

1. Death of Employee – Continuation of existing coverage will be made available to eligible dependents as provided for in the Program. The Cooperative will not participate in the cost.

2. Retirement – Continuation of existing coverage will be made available at retirement as provided for in the Program. The Cooperative will not participate in the cost.

3. Death of Retiree – Continuation of existing coverage will be made available to eligible dependents as provided for in the Program. The Cooperative will not participate in the cost.

806.5 INCOME PROTECTION PLAN (SHORT-TERM AND LONG-TERM DISABILITY INSURANCE)

The Cooperative seeks to provide all full-time employees with income protection while out of work due to an accident, injury or sickness that causes the employee to miss at least eight (8) consecutive work days.

Income protection will be provided for all full-time employees, subject to the provisions and requirements of the NRECA Disability Plan as follows:

1. Weekly Short-Term Disability Insurance –

a. Duration – Maximum Thirteen (13) Weeks

b. 66 2/3 % Salary Benefit - Begins on the eighth (8th) consecutive day.

c. $800.00 Maximum Weekly Benefit Amount

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2. Monthly Long-Term Disability Insurance

a. Begins After Thirteen (13) Consecutive Weeks

b. 66 2/3 % Salary Benefit

c. $15,000.00 Maximum Monthly Benefit Amount

Accrued sick leave and/or vacation leave may be used to supplement income from disability benefits to the extent that 100 % of base salary is not exceeded. The cost of the plan shall be borne by the Cooperative. Coverage will begin on date of employment. All rules and regulations of the plan as described in the Summary Plan Description will apply.

806.6 BUSINESS TRAVEL ACCIDENT INSURANCE

The NRECA Business Travel Accident Insurance plan will be provided for all directors, retained attorney and full time employees subject to the provisions and requirements of the plan.

The cost of providing this coverage will be paid for by the Cooperative.

806.7 NRECA GROUP LIFE INSURANCE PLAN FOR EMPLOYEES

The Cooperative has adopted the NRECA Group Life Insurance Plan for its employees.

The amount of life insurance provided for each employee shall be in an amount equal to four (4) times the employee’s base annual salary rounded to the next higher multiple of $1,000, if not already a multiple thereof.

Coverage will begin on date of employment.

The cost of the plan is paid 100% by the Cooperative.

All rules and regulations of the plan will apply. See Summary Plan Description for more information.

Coverage may continue after retirement in accordance with the provisions of the plan. The Cooperative will not participate in the cost of retired life insurance, except as provided for in Sections 805.1 Vacation Leave and 805.3 Sick Leave.

806.8 NRECA SUPPLEMENTAL GROUP LIFE INSURANCE PLAN

The Cooperative has adopted the NRECA Group Life Insurance Plan for its employees and it allows for Supplemental Life Insurance for the employee and their dependents.

The amount of supplemental life insurance available for each employee shall be in an amount equal to one, two, three or four (4) times employee’s base annual salary rounded to the next higher multiple of $1,000, if not already a multiple thereof.

The amount of supplemental life insurance available for each employee’s spouse shall be in an amount equal to $10,000, $25,000, $50,000, $75,000 or $100,000.

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The amount of supplemental life insurance available for each employee’s dependent child shall be in an amount equal to $10,000.

Coverage is available beginning on date of employment, at annual enrollment or within 31 days of a life event, such as marriage, birth of a child, divorce or death of a dependent. See Summary Plan Description for other examples of life events and for all rules and regulations.

The cost of the plan is paid 100% by the Employee for all supplemental insurance elected.

Coverage may be converted to an individual insurance policy within 31 days after termination or retirement.

All rules and regulations of the plan will apply. See Summary Plan Description for more information.

806.9 24-HOUR AD&D INSURANCE – EMPLOYEES

The Cooperative has adopted the NRECA 24-Hour Accidental Death & Dismemberment plan for all employees and their eligible dependents, subject to all provisions and requirements of the plan.

Coverage is to be optional and cost is to be paid by the employee.

All rules and regulations of the plan will apply.

806.10 EMPLOYEES 401(K) SAVINGS PLAN

The Cooperative has adopted for its employees the 401(k) Savings Plan for Employees of the National Rural Electric Cooperative Association and its Member Systems and the Trust under which it is administered.

This plan is provided for all full-time employees of the Cooperative subject to all the rules and regulations of the Plan, as described by the Adoption Agreement with the National Rural Electric Cooperative Association.

806.11 HOMESTEAD FUNDS

NRECA created Homestead Funds to offer a mutual fund designed for the investment and retirement needs of NRECA members.

All employees are eligible to invest Homestead Funds. Contributions to Homestead Funds can be made through payroll deductions.

806.12 NRECA SECTION 125 CAFETERIA PLAN FOR EMPLOYEES

The Cooperative has adopted the NRECA Section 125 Cafeteria Plan which is available to all employees. The Cafeteria Plan is an employee benefit program designed to take advantage of Section 125 of the Internal Revenue Code. The Cafeteria Plan allows employees to pay certain qualified expenses (such as health insurance premiums) on a pre-tax basis, thereby reducing their total taxable income.

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Participation by employees is subject to all the rules and regulations of the plan. The administrative costs billed to the Cooperative by NRECA or Cooperative Benefit Administrators, Inc., will be passed on to the employees.

806.13 LONGEVITY PAY

Subject to the availability of funds and the Board of Directors annual approval, in order to recognize, and compensate for, the added value of long time service and experience, full time employees of the Cooperative meeting requirements as set out below may receive longevity pay for continuous service in an amount not to exceed the sums set forth in the following schedule:

YEARS OF EMPLOYMENT

ANNUAL AMOUNT

YEARS OF EMPLOYMENT

ANNUAL AMOUNT

YEARS OF EMPLOYMENT

ANNUAL AMOUNT

1ST $227. 24TH $1786.00 47TH $7623.00 2ND $227.00 25TH $1907.00 48TH $8119.00 3RD $227.00 26TH $2029.00 49TH $8647.00 4TH $259.00 27TH $2166.00 50TH $9,209.00 5TH $295.00 28TH $2305.00 and thereafter 6TH $328.00 29TH $2454.00 7TH $365.00 30TH $2614.00 8TH $417.00 31ST $2783.00 9TH $470.00 32ND $2965.00

10TH $518.00 33RD $3157.00 11TH $571.00 34TH $3362.00 12TH $640.00 35TH $3581.00 13TH $708.00 36TH $3814.00 14TH $782.00 37TH $4062.00 15TH $866.00 38TH $4325.00 16TH $952.00 39TH $4607.00 17TH $1041.00 40TH $4907.00 18TH $1126.00 41ST $5225.00 19TH $1231.00 42ND $5564.00 20TH $1336.00 43RD $5926.00 21ST $1437.00 44TH $6311.00 22ND $1543.00 45TH $6722.00 23RD $1665.00 46TH $7158.00

The amount, if approved for any given year, is an annual amount accrued at the completion of a year’s service. If approved, payment will be presented to employees in December of each year for the calendar year that their service is completed. No employee will receive a longevity check until they have completed their 1st year of employment. Upon termination of employment due to retirement age 62 or older) or permanent disability, the amount due for that year of service, based upon years of service completed, may be paid at that time.

806.14 Exercise Facilities

Employees may be allowed to use the exercise facilities at Cooperative’s Headquarters in accordance with policies adopted from time to time by Cooperative, on condition that those who use such facilities sign all required releases/waivers. Use of such exercise facilities shall be at the sole risk of employee and any permitted invitee of an employee (limited to family members living in the employee’s household) and by its use of such facilities employee and the family members who obtain access through such employee agree to release and hold harmless Cooperative and its directors, officers, employees and agents from and against any claim arising out of such voluntary use of the facilities.

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WORK PERFORMANCE 807.1 APPEARANCE AND WORK UNIFORM FOR EMPLOYEES

All employees of the line department, except clerical help and supervisors; all outside employees of the engineering department; and building custodians shall be required to wear a standard uniform while on duty. While in the presence of Arc Hazard Rating 1 or higher, all employees shall wear and use flame retardant uniforms in accordance with Federal, State and Municipal safety laws, as well as the Cooperative approved A.P.P.A. Safety Manual. Conditions and requirements of the program are as follows:

A. Appearance: All uniforms shall be worn in as neat appearance as possible. A change to a clean, laundered and pressed uniform shall be required at least every other working day and/or as more often as required to maintain neat appearance. If an employee is determined to be dressed inappropriately, the employee’s supervisor can send the employee home in order to change into appropriate clothes.

B. Uniformity:

1. Uniforms shall be of a standard style and material approved at time of purchase, except those desiring a different style may order by paying the full difference in cost between approved style and the style desired, but only with proper authorization.

2. Headgear shall consist of caps and hard hats. Optional shall be straw or felt hats all of the same type. Employees may purchase, at their full cost, a straw or felt hat, with approval from supervisor.

a. Caps shall be ordered by the Cooperative and have the Lyntegar name and emblem.

b. While on duty for Lyntegar, employees may not wear another company’s logo. Only the Lyntegar Electric Cooperative Logo will be acceptable.

c. Hard hats are to be ordered by and issued thru the storeroom and will be paid for by the Cooperative at 100%

d. Hard hats shall not have stickers or decals that are not dielectrically approved for use.

C. Emblems:

1. The entire cost of all emblems shall be borne by the Cooperative.

2. A Cooperative emblem shall be placed over the left pocket of all shirts, coats, jackets and coveralls. The Cooperative emblem shall be placed on the front of caps.

D. Purchasing:

1. All uniforms shall be purchased by the Cooperative from standard suppliers.

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2. Purchases shall be made twice each year.

3. Employees may not be required to purchase an entire uniform authorization, if uniforms on hand are approved as to serviceability and appearance.

4. Items Cooperative shall furnish with no-cost shares: Five (5) pair of safety glasses per one (1) year period, hard hat and leather gloves. Items will be ordered and supplied by the Cooperative at no-cost to the employee.

E. Flame Retardant Uniforms:

1. The entire cost of Flame Retardant (FR) Uniforms will be borne by the Cooperative for Employees while in the presence of Arc Hazard Rating 1 or higher.

2. Authorized employees, on the initial year of hire, shall be allowed to order eight (8) FR shirts and eight (8) FR jeans, one (1) FR coat, one (1) FR jacket or FR vest, one (1) FR coverall and four (4) caps.

3. For subsequent years, Authorized employees shall be allowed to order four (4) FR shirts and four (4) FR jeans and four (4) caps. Optional items may be ordered on each of these dates as needed.

4. After the initial order, Authorized employees will be allowed to order one (1) FR coat, one (1) FR jacket or FR vest, one (1) FR insulated coverall, every 3rd year (Example: 2015; 2018; 2021)

5. New employees may participate in the program immediately. a. Newly hired employees will initially be given a maximum of four (4) FR shirts and

four (4) F.R. jeans and one (1) FR coat, one (1) FR jacket or FR vest, one (1) FR insulated coverall and four (4) caps.

b. After six (6) months of employment, authorized employees shall be allowed to order remainder of allotted uniforms consisting of four (4) FR shirts and four (4) F.R. jeans, and any remainder of unordered FR uniforms.

6. One (1) FR rain suit will be provided per four (4) year period.

F. Non-Flame Retardant Uniforms:

1. Division of Cost:

a. The cost shall be divided two-thirds (2/3) to the cooperative, and one-third (1/3) to the employee.

b. To participate in the program, the employee must present a signed & approved Uniform Requisition Form that authorizes the Cooperative to deduct one-third of the cost of the uniform from the employee’s paycheck. The minimum deduction will be

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the amount owed, or $25, whichever is less, and the employee may have a total of three (3) months or six (6) paychecks to pay the amount owed. If an employee chooses not to participate in the Uniform Program, the Employee’s portion of the cost of the uniforms must be paid at the time of delivery.

c. New employees may participate in the program immediately and will be given a

maximum of six (6) months or twelve (12) paychecks to pay their one-third (1/3rd) share of the initial order and shall participate in the 1st order after six (6) months of employment.

2. Full (Non-FR) Uniform:

a. Full Non-FR Uniform: Authorized employees shall be allowed to order six (6) shirts and six (6) 100% cotton jeans, one (1) coat, one (1) jacket or vest, one (1) insulated coverall and four (4) caps annually. Optional items may be ordered on each of these dates as needed. Aprons and shop coats are optional items.

b. After the initial order Authorized employees will be allowed to order one (1) coat, one (1) jacket or vest, one (1) coverall, every 3rd year.

c. One (1) rain suit will be provided per four (4) year period.

3. Supervisor/Advisor Uniform:

a. Authorized employees include: Three (3) Branch Managers, Manager Outside

Operations, Line Department Manager, Maintenance Superintendent, Assistant Maintenance Supt., Construction Superintendent, Manager of Engineering, Electrical Engineer, Two (2) Member Service Advisors

b. Authorized employees shall be allowed to order four (4) shirts and four (4) 100% cotton jeans, one (1) coat, one (1) jacket or vest. Optional items may be ordered on each of these dates as needed.

c. After the initial order Authorized employees will be allowed to order one (1) coat and one (1) jacket or vest every 3rd year.

d. Cooperative shall provide 100% of the cost of one (1) non-insulated FR coverall, which may be replaced as needed.

4. Office & Clerical Uniform: a. All other inside employees shall be allowed to order two (2) shirts annually.

G. Uniform Replacement:

Upon Supervisor approval, the Cooperative will replace uniform articles when ruined or destroyed while on the job. Ruined articles will be turned in for replacement by supervisor.

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H. Termination of Employment:

An employee leaving the Cooperative who has ordered uniforms or has received uniforms but has not yet paid for the uniforms, shall be required to pay full cost of those items from his/her last check with no-cost shared by the Cooperative.

Flame Retardant uniforms paid for by Cooperative as Personal Protective Equipment (PPE), and issued to the employee, will not be billed upon termination of employment.

807.2 ATTENDANCE AND PUNCTUALITY

The Cooperative expects all employees to assume diligent responsibility for their attendance and promptness. All employees are expected to report to work, each day, on time, unless prior approval has been given for that employee to show up late. An employee that shows up to work more than five (5) minutes late is considered tardy

Should you be unable to work because of illness, you must notify your supervisor or your department head by 8:15 a.m. on each day of your absence unless you are granted an authorized sick leave, in which case different notification procedures apply. (See Section 805.3 Sick Leave Policy in this Handbook.)

While the Cooperative recognizes that situations arise which can hinder punctuality, absenteeism or tardiness that is unexcused or excessive in the judgment of the Cooperative is grounds for disciplinary action, up to and including termination.

807.3 REPLACEMENT OF PERSONAL TOOLS

In order to assure that employees have proper and safe personal tools with which to perform their jobs, a Personal Tool Replacement program shall be established for employees on the following basis:

A. ELIGIBILITY

Any employee of the line department, or other department (i.e. mechanics), who is required to furnish their own tools are eligible for the program. Participation will begin upon notification to the Purchasing Agent by supervisor that the employee possesses a full set of tools. If an employee chooses not to participate in the Replacement of Personal Tools program, the full cost of any tools purchased will be paid for by the Employee.

B. METHOD OF PAYMENT

To participate in the program, the employee must present a signed and approved Tool Requisition form that authorizes the replacement of the tool and authorizes one-third (1/3) of the total cost of the tool to be deducted from the employee’s paycheck. The minimum deduction will be the amount owed or $25 whichever is less. The total cost to the employee will be spread out over no more than four paychecks. The Cooperative will pay the other two-thirds (2/3) of the cost of the approved tool purchase.

C. REPLACEMENT OF TOOLS

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The purpose of this policy is to replace required personal tools that are worn, damaged, or lost. The request may be made by the employee or upon notice by the employee=s supervisor or safety instructor that tools have been condemned. Tools to be replaced through this policy must be ordered through the Cooperative and be a tool on the “Required & Approved Tool List” periodically updated by the Line Department Managers. Requests for replacement are subject to supervisor or purchasing agent approval.

D. DISPOSITION OF REPLACED TOOLS

By agreeing to participate in this program, the employee agrees to turn over all tools replaced to the Cooperative in order that they can be properly disposed of to meet safety requirements.

E. TERMINATION

In event of termination of employment and the employee has ordered tools and not yet paid for them, the employee shall be required to pay full cost of those items from their last check with no cost shared by the Cooperative, and the cost will be shown on their pay stub as an Employee Purchase.

807.4 VEHICLE MECHANIC TOOLS

In order to assure that the vehicle mechanic will have the proper and safe tools with which to perform his job, the following policy is adopted:

A. The vehicle mechanic shall furnish their original set of hand tools in the shop at their own expense.

B. The Cooperative will equip the shop pickup with a set of hand tools and maintain them.

C. The Cooperative will share in the necessary replacement of the mechanic’s hand tools to the extent of two-thirds the cost, as described in section 807.3 “Replacement of Personal Tools”.

D. See section 807.3 for procedures on paying for tools.

807.5 COMPENSATION FOR INJURIES ON THE JOB

The Cooperative seeks to provide all employees with income protection while out of work due to an accident or injury occurring while on the job.

Income protection will be provided for all employees, subject to the provisions and requirements of the Texas Workers’ Compensation Plan. Accrued sick leave and/or vacation leave may be used to supplement income from Texas Workers’ Compensation Insurance to the extent that 100 % of base salary is not exceeded. The cost of the plan shall be borne by the Cooperative. Coverage will begin on date of employment. All rules and regulations of the plan as described by Texas Workers’ Compensation will apply.

807.6 REST PERIODS

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The Cooperative grants to all employees two (2) fifteen (15) minute rest periods. Employees shall take one rest period in the morning and one rest period in the afternoon. These two periods may be used for coffee or other refreshments.

807.7 PERSONAL MAIL

If employees receive personal mail at the Cooperative, the Cooperative may open the mail to determine the proper person or department to receive the mail, but once the Cooperative determines the mail is personal, the Cooperative will make every effort to protect the employee’s privacy rights.

807.8 GENERAL RULES OF CONDUCT AND THE DISCIPLINE PROCESS

As an integral member of the Cooperative team, you are expected to accept certain responsibilities, adhere to acceptable business principles in matters of personal conduct, and exhibit a high degree of personal integrity at all times. This not only involves sincere respect for the rights and feelings of others, but also demands that both in your business and in your personal life you refrain from any behavior that might be harmful to you, your co-workers, and/or the Cooperative and its clients, or behavior that might be viewed unfavorably by current or potential customers or by the public at large. Whether you are on duty or off, your conduct reflects on the Cooperative. You are, consequently, encouraged to observe the highest standards of professionalism at all times.

Should your performance, work habits, overall attitude, inattention to duty, inefficiency, absence without leave, inappropriate conduct, or demeanor become unsatisfactory in the judgment of the Cooperative, based on violations either of the preceding provisions or of any other Cooperative policies, rules, or regulations, or other reasons deemed appropriate, you will be subject to disciplinary action, up to and including termination.

Disciplinary action, depending on the severity of the offense and repeated violations, may include the following measures: verbal and written warnings, making up lost time, withholding salary increase or promotion, suspension, demotion or termination. An employee will not be required to work more than forty hours in a week to make up lost time unless the employee is considered an exempt employee. Employees may be notified in writing by their immediate supervisor of inadequate performance.

Nothing in this section limits either party's right to terminate the employment relationship at any time, with or without reason.

WORKPLACE STANDARDS 808.1 DRUG-FREE WORKPLACE POLICY

The Cooperative intends to help provide a safe and drug-free work environment for our employees. With this goal in mind, and to safeguard the Cooperative’s property, protect the health and safety of the general public, and to set a positive example in the communities in which the Cooperative does business, the Cooperative has adopted this Drug-Free Workplace Policy.

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Compliance with this Policy is a condition of initial and continued employment with the Cooperative. Moreover, because the Cooperative is or may be subject to the provisions of the Drug-Free Workplace Act of 1988, this Policy incorporates the requirements of that Act. Finally, this Policy is adopted in furtherance of the requirements of the Texas Workers’ Compensation Act, and rules adopted thereunder, relating to the elimination of drug abuse.

A. DEFINITIONS. As used in this Policy, the following terms shall have the following meanings:

1. “Controlled substance” means a controlled substance in Schedules I through V of Section 202 of the Controlled Substances Act (21 U.S.C. 812) and as further defined by regulation at 21 C.F.R. 1308.11-1308.15.

2. “Conviction” means a finding of guilt (including a plea of nolo contendre) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of Federal or State criminal drug statutes.

3. “Criminal drug statute” means a criminal statute relating to the manufacture, distribution, dispensation, use, or possession of any controlled substance.

4. “Under the influence” with respect to alcohol means a .08% or greater alcohol concentration in the sample taken; and with respect to drugs or controlled substances means having any detectable level in the person’s body regardless of when or where it may have been consumed.

B. STATEMENT OF POLICY

1. All employees will be given a copy of this Policy. All employees will be required to sign and return an acknowledgment of receipt of and consent to the Policy. This Policy may be amended at any time by the Cooperative, provided however, that all employees affected by the amendment will be provided a copy of the amended Policy.

2. The Cooperative explicitly prohibits:

a. The manufacture, distribution, dispensation, possession, concealment, use, sale or transfer of illegal drugs, controlled substances, and alcohol and other legal intoxicants, such as synthetic marijuana, while at work, on the Cooperative’s premises (including parking lots) or worksites, in the Cooperative’s vehicles, or on the Cooperative’s business.

b. The possession of drug-related paraphernalia or literature promoting the use of illegal drugs, controlled substances, and alcohol and other legal intoxicants, such as synthetic marijuana, while at work, on the Cooperative’s premises (including parking lots) or worksites, in the Cooperative’s vehicles, or on the Cooperative’s business.

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c. The presence of any person on the Cooperative’s premises or worksites (including parking lots), or in the Cooperative’s vehicles, while under the influence of illegal drugs, controlled substances, or alcohol and other legal intoxicants.

3. The foregoing prohibitions apply to the Cooperative’s employees; applicants for employment with the Cooperative; contractors of the Cooperative, as well as their employees and subcontractors (and their subcontractor’s employees); and to visitors upon the Cooperative’s premises or worksites (including parking lots).

4. The Cooperative may conduct drug and/or alcohol testing under any of the following circumstances:

a. PRE-EMPLOYMENT: Passing a drug and/or alcohol test may be a condition of employment.

b. RANDOM TESTING: Employees may be selected at random for drug and/or alcohol testing at any interval determined by the Cooperative.

c. FOR-CAUSE TESTING: The Cooperative may ask an employee to submit to a drug and/or alcohol test at any time it feels that the employee may be under the influence of drugs or alcohol, including, but not limited to, the following circumstances: evidence of drugs or alcohol on or about the employee's person or in the employee's vicinity, unusual conduct on the employee’s part that suggests impairment or influence of drugs or alcohol, negative performance patterns, or excessive and unexplained absenteeism or tardiness.

d. POST-ACCIDENT TESTING: Any employee involved in an on-the-job accident or injury under circumstances that suggest possible use or influence of drugs or alcohol in the accident or injury event may be asked to submit to a drug and/or alcohol test. "Involved in an on-the-job accident or injury" means not only the one who was or could have been injured, but also any employee who potentially contributed to the accident or injury event in any way.

5. Prescription Drugs and Over-the-Counter Medications: Prescription drugs prescribed by a licensed medical practitioner for the person using or possessing them and over-the-counter medications are generally not prohibited by this Policy, provided they were lawfully obtained and are not consumed at a frequency or quantity greater than the dosage prescribed or otherwise recommended on the medication’s label.

a. However, any employee taking any prescription or over-the-counter drug or medication, regardless of whether it was lawfully obtained and properly consumed, which drug or medication is known or advertised as possibly affecting or impairing judgment, coordination, or other senses, or which may adversely affect ability to perform work in a safe and productive manner, must notify his or her supervisor or other management official prior to starting work or entering the Cooperative’s premises or worksites. The supervisor or management official, in consultation with appropriate medical personnel, will decide if the employee may remain at work or on the Cooperative’s premises or worksites and what work restrictions, if any, are deemed necessary.

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6. Notification of Conviction: Employees shall notify the Cooperative of any criminal drug statute conviction no later than five (5) days after such conviction.

7. Consequences of Violating this Policy, Convictions, or Losing Driver’s License:

a. Compliance with this Policy is a condition of initial and continued employment. Disciplinary action, up to and including termination, will be taken against any employee who violates this Policy.

b. Any employee, any contractor, or any employee or subcontractor of any contractor (or any employee of any such subcontractor), or visitor who is found to be in violation of this Policy, may be refused entry onto or immediately removed from the Cooperative’s premises or worksites and denied future access to such premises or worksites.

c. An employee who gets convicted of a drug-related offense, whether on or off the Cooperative’s premises, will be subject to disciplinary action, up to and including termination.

d. An employee who loses their driver’s license or commercial driver’s license (“CDL”), due to convictions or violations, including but not limited to a DWI or DUI, will be subject to disciplinary action, up to and including termination .

e. An employee who fails an employer-administered drug/alcohol test will be immediately terminated.

f. An employee who refuses to submit to an employer-administered drug/alcohol test will be immediately terminated.

g. The Cooperative makes no promises to rehire an employee that has been terminated pursuant to this Policy, but if the former employee applies to the Cooperative again, a rehire can be considered and discussed between the former employee’s supervisor, senior staff, Manager Human Resources, and CEO on a case by case basis.

h. An employee terminated pursuant to this Policy would have to complete a rehab program, or the Substance Abuse Professionals (“SAP”) in case of Department of Transportation (“DOT”) drivers, and get their license back, in order to be considered for rehire, but completing the rehab or SAP program and regaining one’s license does not guarantee the terminated employee will be rehired; it is still within management’s discretion.

i. When a DOT employee has undergone SAP and is considered for rehire, the Cooperative may rehire the former employee, but he/she must complete all requirements contained in their program and the failure to do so will result in immediate termination without the possibility of rehire.

j. In the case of a terminated employee that has been rehired, all drug tests required by SAP or Employee Assistance Program (“EAP”) will be paid for by the employee, and all program costs of SAP or EAP will be paid for by the employee.

k. An employee who has not been convicted of a criminal drug statute, has not lost his or her license, and has not failed a drug test, but voluntarily self-admits to a drug or alcohol problem and immediately enters into and completes a rehabilitation program will not be immediately terminated.

C. TESTING REQUIREMENTS FOR SPECIFIC EMPLOYEES

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Applicants for and employees in positions which may require the operation of a vehicle with a gross vehicle weight rating or gross combination of weight rating of 26,001 or more pounds will also be subject to testing, including pre-employment, reasonable cause, random and post-accident testing, pursuant to the Federal Highway Administration’s Controlled Substance Testing Regulation as adopted by the Texas Department of Public Safety. Such regulations are incorporated in this Policy by reference and are available for review upon request by any employee.

D. EMPLOYEE ASSISTANCE PROGRAM AND DRUG-FREE AWARENESS PROGRAM

1. The Cooperative will maintain an EAP Training and Drug-Free Awareness Program for all employees and supervisory personnel.

2. Under the Drug-Free Awareness component of this Program, the Cooperative will inform all employees about (i) the dangers of drug abuse in the workplace; (ii) the Cooperative’s Policy of maintaining a drug-free workplace; (iii) any available drug counseling, rehabilitation, and employee assistance programs; and (iv) the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace.

3. Under the EAP Training component of this Program, the Cooperative will: a. Educate and train all employees and supervisory personnel, on an ongoing basis,

about (i) the effects and consequences of controlled substance abuse on personal health, safety, and the work environment; (ii) the manifestations and behavioral causes that may indicate controlled substance use or abuse; and

b. Maintain documentation of the training given to employees and supervisory personnel.

E. NOTIFICATION OF VIOLATIONS

Whenever the Cooperative receives actual notice of any criminal drug statute conviction for a violation occurring in the workplace, the Cooperative shall, within ten (10) days of receiving such notice, notify the Cooperative’s contracting officer or granting agency of such conviction, the Cooperative shall immediately terminate the employee, and require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State or local health, law enforcement, or other appropriate agency, if that terminated employee desires to be considered for rehire.

808.2 NON-SMOKING POLICY

It is the policy of the Cooperative to comply with all applicable federal, state, and local regulations regarding smoking in the workplace and to provide a work environment that promotes productivity and the well-being of its employees.

The Cooperative recognizes that smoking in the workplace can adversely affect employees. Accordingly, smoking is restricted at all of its facilities.

Smoking is prohibited inside all Cooperative facilities, except for areas where it is specifically authorized. The supervisor of each department is responsible for monitoring and enforcing this

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policy. This policy applies to employees during working time and to members and visitors while on the Cooperative’s premises.

Employees are expected to exercise common courtesy and to respect the needs and sensitivities of coworkers with regard to the smoking policy. Complaints about smoking should be resolved at the lowest level possible. Employees who violate the policy will be subject to disciplinary action.

The Cooperative does not discriminate against individuals on the basis of their use of legal products, such as tobacco, and therefore this policy will be uniformly applied.

Employees may contact the Cooperative’s Manager of Human Resources or Wellness Coordinator regarding the effects of smoking and the availability of smoking cessation programs.

808.3 NO HARASSMENT

The Cooperative does not tolerate harassment of our job applicants, contractors or employees by another employee, supervisor, vendor, customer, or any third party. Any form of harassment on the basis of race, religious creed, color, age, sex, sexual orientation, gender identity, national origin, religion, marital status, medical condition, disability, military service, pregnancy, childbirth and related medical conditions, or any other classification protected by federal, state, or local laws and ordinances is prohibited and will be treated as a disciplinary matter.

A. Harassment Defined. Harassment as defined in this policy is unwelcome verbal, visual or physical conduct creating an intimidating, offensive, or hostile work environment that interferes with work performance. Harassment can be verbal (including slurs, jokes, insults, epithets, gestures or teasing), graphic (including offensive posters, symbols, cartoons, drawings, computer displays, or e-mails) or physical conduct (including physically threatening another, blocking someone’s way, etc.) that denigrates or shows hostility or aversion towards an individual because of any protected characteristic. Such conduct violates this policy, even if it is not unlawful. Because it is difficult to define unlawful harassment, employees are expected to behave at all times in a professional and respectful manner.

B. Sexual Harassment Defined. Sexual harassment can include all of the above actions, as well as other unwelcome conduct, such as unwelcome or unsolicited sexual advances, requests for sexual favors, conversations regarding sexual activities and other verbal or physical conduct of a sexual nature. Examples of conduct that violates this policy include but are not limited to:

1. unwelcome sexual advances, flirtations, advances, leering, whistling, touching, pinching, assault, blocking normal movement

2. requests for sexual favors or demands for sexual favors in exchange for favorable treatment

3. obscene or vulgar gestures, posters, or comments

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4. sexual jokes or comments about a person’s body, sexual prowess, or sexual deficiencies

5. propositions, or suggestive or insulting comments of a sexual nature

6. derogatory cartoons, posters, and drawings

7. sexually-explicit e-mails, text-messages or voicemails

8. uninvited touching of a sexual nature

9. unwelcome sexually-related comments

10. conversation about one’s own or someone else’s sex life

11. conduct or comments consistently targeted at only one gender, even if the content is not sexual

12. teasing or other conduct directed toward a person because of the person’s gender

All such conduct is unacceptable in the workplace and in any work-related settings such as business trips and business-related social functions, regardless of whether the conduct is engaged in by a supervisor, co-worker, client, customer, vendor, or other third party.

C. Reporting Procedures. The following steps have been put into place to ensure the work environment at the Cooperative is respectful, professional, and free of harassment. If an employee believes someone has violated this policy, the employee should promptly bring the matter to the immediate attention of their supervisor or the Manager of Human Resources. If the employee makes a complaint under this policy and has not received a satisfactory response within five (5) business days, he or she should contact the CEO of the Cooperative immediately.

D. Investigation Procedures. The Cooperative will promptly investigate the facts and circumstances of any claim of harassment. To the extent possible, the Cooperative will endeavor to keep the reporting employee’s concerns confidential. During the investigation, the Cooperative generally will:

1. interview the complainant and the alleged harasser

2. conduct further interviews as necessary

3. document the Cooperative’s findings regarding the complaint

4. document recommended follow-up actions and remedies, if warranted

5. inform the complainant of the Cooperative’s findings.

Every supervisor who learns of any employee’s concern about conduct in violation of this policy, whether in a formal complaint or informally must immediately report the issues to the Manager of Human Resources.

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Upon completion of the investigation, the Cooperative will take corrective measures against any person who has engaged in conduct in violation of this policy, if the Cooperative determines such measures are necessary. These measures may include, but are not limited to, counseling, suspension, or immediate termination. Anyone, regardless of position or title, whom the Cooperative determines has engaged in conduct that violates this policy will be subject to discipline, up to and including termination.

E. No Retaliation. No employee will be subject to, and the Cooperative prohibits, any form of discipline or retaliation for reporting perceived violations of this policy, pursuing any such claim, or cooperating in any way in the investigation of such claims. If an employee believes someone has violated this no-retaliation policy, the employee should bring the matter to the immediate attention of the CEO or Manager of Human Resources of the Cooperative. Anyone, regardless of position or title, whom the Cooperative determines has engaged in conduct that violates this policy against retaliation will be subject to discipline, up to and including termination.

We cannot remedy claimed harassment or retaliation unless you bring these claims to the attention of management. Failure to report claims of harassment and/or retaliation prevents us from taking steps to remedy the problem.

808.4 NON-FRATERNIZATION POLICY

The Cooperative strongly discourages romantic or sexual relationships between management or other supervisory employee and his or her staff (an employee who reports directly or indirectly to that person) because such relationships tend to create compromising conflicts of interest or the appearance of such conflicts.

In addition, such a relationship may give rise to the perception by others that there is favoritism or bias in employment decisions affecting the staff employee. Moreover, given the uneven balance of power within such relationships, consent by the staff member is suspect and may be viewed by others or, at a later date, by the staff member himself or herself, as having been given as the result of coercion or intimidation.

The atmosphere created by such appearances of bias, favoritism, intimidation, coercion or exploitation undermines the spirit of trust and mutual respect, which is essential to a healthy work environment. If there is such a relationship, the parties need to be aware that one or both may be moved to a different department, or other actions may be taken.

SAFETY AND SECURITY 809.1 SAFETY POLICY

It is the policy of the Cooperative to comply with all applicable federal, state, and local health and safety regulations and to provide a work environment as free as practicable from recognized hazards. Employees are expected to comply with all safety and health requirements whether established by the Cooperative or by federal, state, or local law. It is also the policy of the Cooperative to establish procedures and conditions that safeguard the Cooperative=s members and the general public from potentially dangerous electrical conditions. A complete list of

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Cooperative safety policy goals and objectives can be found in the Employee Handbook Appendix located in the Human Resources Department.

809.2 SAFETY RULES AND PROCEDURES

The official Safety Manual of the Cooperative shall be the current Edition of the APPA Safety Manual for an Electric Utility. The same being the Safety Handbook as approved and adopted by Texas Electric Cooperatives Loss Control Program.

The duties of the Safety Coordinator for the Cooperative, as approved by the board of directors, shall include, but are not limited to, the following:

1. Considers and recommends additional safe operating rules and procedures for the Cooperative and puts in draft form.

2. Assist in the evaluation of public liability exposures and their control.

3. Assist the Texas Electric Cooperative (TEC) loss control instructor in conducting scheduled meetings at the Cooperative. Suggest programs that would be most beneficial to the cooperative.

4. Coordinate safety and training meetings to supplement programs presented by the TEC instructor.

5. Prepare a monthly loss control activity report for the CEO.

6. Maintain a working relationship with representatives of the insurance carrier. Cooperate with the insurance carrier’s safety consultant in analyzing the Cooperative’s exposures to loss and recommending corrective action and controls.

7. Supply the TEC Advisory Committee with suggestions for strengthening the TEC Loss Control Program.

8. Coordinate the effort toward achievement of NRECA safety accreditation.

9. Assure that accident statistics, including recordable injuries, lost-time days and staff-hours worked, are maintained and submitted to the appropriate agency.

10. Attend safety meetings and keep minutes.

11. Assist the Cooperative in compliance with all Safety laws.

809.3 FRAUD POLICY

A. PURPOSE:

This policy is intended to set forth the guidelines and responsibilities of Lyntegar Electric Cooperative, Inc. (ACooperative@) in the event fraud is suspected or discovered.

B. POLICY:

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It is management=s responsibility to detect fraud of any type. It is the responsibility of each employee, consultant and legal advisor to report fraud of any type.

It is the Cooperative=s intent to fully investigate any suspected acts of fraud, misappropriation or other similar irregularity. An objective and impartial investigation will be conducted which may be conducted internally or by an independent, third party as deemed appropriate, regardless of the position, title, length of service or relationship with the Cooperative of any party who might be or becomes involved in or becomes/is the subject of any suspected acts of fraud, misappropriation or other similar irregularity.

This policy applies to any suspected act of fraud, misappropriation or other similar irregularity involving employees, directors, consultants and legal advisors.

After investigation, and in the event that fraud, misappropriation or other similar irregularity is determined to have occurred, the Cooperative will take appropriate disciplinary and/or legal action in all cases.

C. PROCEDURE:

Any employee who has knowledge of an occurrence or irregular conduct or has reason to suspect that a fraud has occurred shall immediately notify the CEO. If the employee has reason to believe that the CEO may be involved, the employee shall immediately notify Manager Human Resources who will notify the President of the Board.

Actions constituting fraud, misappropriation and irregularities include, but are not limited to, dishonest, illegal, or fraudulent act, or forgery or alteration of documents, or misapplication of funds. Actions constituting fraud, misappropriation and irregularities do not include unintentional, inadvertent errors or mistakes.

The employee shall not discuss the matter with anyone other than the CEO, Manager of Human Resources or President of the Board, as applicable. Employees who knowingly make false allegations will be subject to discipline up to and including dismissal. All participants in a fraud investigation shall keep the details and results of the investigation confidential.

D. WHISTLE-BLOWER PROTECTION:

No person acting on behalf of the Cooperative shall terminate or threaten to terminate an employee, or discipline or suspend or threaten to discipline or suspend an employee, or impose any penalty upon an employee, or intimidate or coerce an employee, because the employee has acted in accordance with the requirements of the policy. The violation of this protection will result in discipline up to and including termination.

809.4 PERSONAL BELONGINGS

The Cooperative allows employees to bring small personal belongings to decorate the employee’s workspace. The employee’s personal belongings are subject to the Cooperative’s harassment policy set forth in section 808.3 of this handbook, as well as the guidelines set forth in this section.

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Employees are prohibited from bringing any personal belongings or decorations that are sexually suggestive, offensive, or demeaning to any protected individual or group. Violation of this provision subjects the employee to disciplinary action up to and including termination.

Employee’s personal property shall not create a cluttered or unprofessional workspace. If the employee’s supervisor or another member of the Cooperative’s management deems an employee’s workspace is in violation of this policy, the employee will be asked to remove their personal belongings. Failure to comply with a request to remove personal belongings, or repeated violations of the policy, will subject the employee to possible discipline.

The Cooperative is not liable for any damage, loss, or theft to an employee’s personal property brought to or left at the workplace. The employee brings their personal property to work at their own risk.

809.5 REPORTING ACCIDENTS OR INCIDENTS

The Cooperative has an obvious concern for employee safety. In order for the Cooperative to be able to respond appropriately, employees must report all accidents, incidents, and near misses to the employee’s supervisor immediately or as soon as practicable, but no later than the end of the employee’s work shift. Employees must report:

A. Personal injuries to employees, contractors, temporary service workers or vendors

B. Property damage

C. Any incident or near miss that has been observed.

Failure to follow this procedure may result in the employee being subject to disciplinary action up to and including termination.

809.6 DRIVING FOR COOPERATIVE BUSINESS

Employees driving for Cooperative business are expected to follow all traffic laws at all times. If an employee receives a citation for a traffic violation, the employee must report the citation to his or her supervisor immediately. The employee is responsible for paying any applicable fines associated with the citation. Repeated violations of this policy could subject the employee to possible disciplinary action.

The Cooperative will pay any fine associated with a citation for an outdated inspection, registration or DOT violation regarding the Cooperative vehicle itself.

809.7 DRIVING RECORDS

The Cooperative conducts motor vehicle record checks on all job applicants following a conditional offer of employment and, thereafter, annually for all employees for whom driving a motor vehicle is an essential job function or when employees must obtain and drive rental vehicles during the course of conducting Cooperative business. After conducting an individualized assessment, exceptions may be made for individuals who do not hold a driver’s license due to disability, religious belief or other reasons not related to license suspension or criminal conviction or for whom driving a motor vehicle is not an essential job duty.

809.8 PROOF OF INSURANCE

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The Cooperative requires that all employees required to operate Cooperative vehicles provide the Cooperative with a current and valid proof of liability insurance.

809.9 NOTICE OF SUSPENSION OR REVOCATION OF LICENSE OR CANCELLATION OF LIABILITY INSURANCE

If an employee has his or her driver’s license suspended or revoked, the employee must immediately inform the Cooperative. Failure to notify the Cooperative of the suspension or revocation will subject the employee to possible discipline.

If an employee has his or her liability insurance cancelled by the insurance provider because of traffic violations or traffic accidents, the employee must immediately notify the Cooperative. Failure to notify the Cooperative of the cancellation of liability insurance will subject the employee to possible discipline.

809.10 WORKPLACE VIOLENCE PREVENTION

The Cooperative is concerned about the increased violence in society, which has also filtered into many workplaces throughout the United States, and has taken steps to help prevent incidents of violence from occurring at the Cooperative. In this connection, it is the policy of the Cooperative to expressly prohibit any acts or threats of violence by any Cooperative employee or former employee against any other employee in or about the Cooperative’s facilities or elsewhere at any time. The Cooperative also will not condone any acts or threats of violence against the Cooperative’s employees, clients, or visitors on the Cooperative’s premises at any time or while they are engaged in business with or on behalf of the Cooperative, on or off the Cooperative’s premises.

In keeping with the spirit and intent of this policy, and to ensure the Cooperative’s objectives in this regard are attained, the Cooperative is committed to the following:

A. To provide a safe and healthful work environment, in accordance with the Cooperative’s safety and health policy;

B. To take prompt remedial action up to and including immediate termination, against any employee who engages in any threatening behavior or acts of violence or who uses any obscene, abusive, or threatening language or gestures;

C. To take appropriate action when dealing with clients, former employees, or visitors to the Cooperative’s facilities who engage in such behavior. Such action may include notifying the police or other law enforcement personnel and prosecuting violators of this policy to the maximum extent of the law;

D. To prohibit employees, former employees, clients, and visitors from bringing non CHL and unauthorized firearms or other weapons onto the Cooperative’s premises;

E. To establish viable security measures to ensure that the Cooperative’s facilities are safe and secure to maximum extent possible and to properly handle access to Cooperative facilities by the public, off-duty employees, and former employees. Some employees will receive a key to the Cooperative’s offices. You must notify the Human Resource Department of lost keys, and upon termination of employment, keys must be returned to the Human Resource Department.

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Any employee who displays a tendency to engage in violent, abusive, or threatening behavior, or who otherwise engages in behavior that the Cooperative, in its sole discretion, deems offensive or inappropriate will be subject to disciplinary action, up to and including termination.

In furtherance of this policy, employees have a “duty to warn” their supervisors, or Human Resource Department representatives of any suspicious workplace activity or situations or incidents that they observe or that they are aware of and involve other employees, former employees, clients, or visitors that appear problematic. This includes, for example, threats or acts of violence, aggressive behavior, offensive acts, threatening or offensive comments or remarks, and the like. Employee reports made pursuant to this policy will be held in confidence to the maximum possible extent. The Cooperative will not condone any form of retaliation against any employee for making a report under this policy.

PRIVACY POLICIES 810.1 CONFIDENTIALITY

It is the policy of the Cooperative to ensure that the operations, activities, and business affairs of the Cooperative and our clients are kept confidential to the greatest possible extent. If, during the course of their employment, employees acquire confidential or proprietary information about the Cooperative and its clients, such information is to be handled in strict confidence and not to be discussed with outsiders. Employees are also responsible for the internal security of such information. Employees found to be violating this policy are subject to disciplinary action, up to and including termination, and may also be subject to civil and criminal penalties for violations of, among other things, applicable securities laws.

810.2 PRIVACY NOTICE

The Cooperative is committed to protecting the personal information of its employees. This notice explains what nonpublic personal information is collected by the Cooperative, what we do with your personal information and how we safeguard that information.

We collect nonpublic personal information about you from the following sources:

$ Information we receive from you on applications or other forms;

$ Information we receive from your previous employer;

$ Information we receive from your health and drug screening(s) when hired and as required throughout your employment;

$ Information we receive on your benefits election forms.

We do not disclose any nonpublic personal information about our employees or former employees to anyone, except as permitted by law, or after receiving a signed release form from you. We do not sell customer lists to others for the purpose of marketing products directly to you.

From time to time, we disclose nonpublic personal information about our employees to third parties who are contracted to provide products or services to the Cooperative and its employees. Our contract with these third parties prohibits the contractor from disclosing any of the

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information it receives from the Cooperative to anyone else. We may also disclose employee information to related parties with whom we have joint marketing agreements or those who perform marketing services on our behalf.

We restrict access to nonpublic personal information about you to those employees who need to know in order to provide products or services to you. We maintain physical, electronic and procedural safeguards to protect this personal information.

You can trust that the Cooperative will take the necessary steps to ensure the confidentiality and security of our employee’s personal information.

810.3 PRIVACY POLICY FOR EMPLOYEES AND MEMBER INFORMATION

A. OBJECTIVE:

This policy is intended to set forth the guidelines and responsibilities of the Cooperative regarding the Cooperative’s commitment to the privacy of Employees and Member Information. It shall be the policy of the Cooperative to take all reasonable steps to identify, detect, and prevent the theft of its employee’s and member’s personal information – commonly known as Identity Theft. In order to carry out that policy, the Cooperative hereby adopts the following policy for identifying and detecting Red Flags that should raise concerns for the Cooperative that an employee’s or member’s information is potentially being misused or stolen.

B. DEFINITIONS:

1. The term “Red Flag” means a pattern, practice or specific activity that indicates the possible existence of Identity Theft.

2. The term “Identity Theft” means a fraud committed or attempted using the identifying information of another person without authority.

3. The term “identifying information” means any name or number that may be used alone, or in conjunction with any other information, to identify a specific person, including name, social security number, date of birth, official State or government issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number or address.

C POLICY:

The Cooperative is committed to safeguarding confidential information for its employee and member interests, as well as for its own reputation and that of the membership we represent, within applicable federal and state legislation. Employees of the Cooperative are prohibited from disclosing confidential or sensitive information about the Cooperative’s members or about other employees gathered and maintained as part of their normal job responsibilities. Employees are prohibited from acquiring information about members or other employees that is unnecessary to their jobs.

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This policy establishes fair information principles for the Cooperative in carrying out its responsibility to respect the privacy of personally identifying information about employees and members and to recognize the Cooperative’s obligation to protect the confidentiality of identifying information used in the course of normal business operations.

1. The Cooperative shall implement a program to detect, prevent and mitigate identity theft of its Members and Employees which shall include provisions to:

a. Identify relevant “Red Flags” and assess the associated risk of identity theft; b. Detect “Red Flag” occurrences and respond appropriately; c. Periodically update the program to reflect changes in risk of identity theft; d. Train staff to effectively implement the program; e. Exercise appropriate and effective oversight of third-party service providers; and f. Incorporate procedures in the program and modify those procedures as required to

support the program.

2. A program report shall be provided to the Board of Directors annually. The report should address material matters related to the program and evaluate issues, when relevant, such as:

a. Effectiveness of program procedures; b. Arrangements with third-party service providers; c. Significant incidents involving identity theft and Lyntegar’s response; and/or d. Recommendations for material changes to the program.

D. RESPONSIBILITY:

1. The Board shall be responsible for reviewing and making necessary changes in this policy as may be recommended or that are required by changing circumstances.

2. The CEO shall be responsible for the administration of this policy, issue such procedures as may be required to effectively administer this policy, and be responsible for formulating any recommended changes in policy content which require action by the Board of Directors.

ARBITRATION 811.1 Arbitration Procedure

The Cooperative and each employee of the Cooperative, agree, by executing the employee acknowledgment, and/or by continuation of employment, that all disputes, controversies or claims that may arise between him or her and the Cooperative (including its members, officers, agents and employees), including without limitation any claim under the Civil Rights Act of 1991, Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act, the Age Discrimination in Employment Act, the Americans

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with Disabilities Act, the Texas Human Rights Commission Act, and any other federal, state or local statute, law, ordinance, or order of the same or similar effect or import, as now enacted or as in effect when the dispute arises, but SPECIFICALLY EXCLUDING those disputes described hereinafter, shall be submitted to, and determined by, binding arbitration.

Such arbitration shall be conducted before a single arbitrator pursuant to the Labor Arbitration Rules then in effect of the American Arbitration Association, except to the extent such rules are inconsistent with this section. Exclusive venue for such arbitration shall be in Lubbock, Lubbock County, Texas. The arbitrator shall apply the laws of the United States and of the State of Texas (without regard to conflict of law rules) in determining the substance of the dispute, controversy or claim and shall decide the same in accordance with the terms of applicable state or federal law and/or judicial precedent in the State of Texas, taking into account any applicable usages of trade. Evidentiary questions shall be governed by the Federal Rules of Evidence. The arbitrator’s award shall be in writing and shall set forth the findings and conclusions upon which the arbitrator based the award.

The arbitrator shall have no authority to alter, amend or modify the terms and conditions of employment or the terms of this Handbook. Matters pertaining to assessment of disciplinary action, termination of employment and/or “just cause” for the Cooperative’s action are SPECIFICALLY EXCLUDED from arbitration hereunder, except where such matters are alleged to be violations of federal or state statutes referenced above prohibiting employment discrimination. The arbitrator shall have no authority to award any relief, whether monetary or otherwise, for any period barred by applicable statutes of limitation existing as of the date of the grievance, and except for matters covered by federal or state protective statutes referenced above, may not authorize remedial relief for any period prior to the date the grievance was filed. Any award pursuant to such arbitration shall be final and binding upon the parties, and judgement on the award may be entered in any federal or state court sitting or located in Lynn County, Texas, or in any other court having jurisdiction.