APPENDIX

On behalf of your colleagues, I welcome you to Blueberry Hill Communications, Inc. and wish you every success here.

We believe that each employee contributes directly to Blueberry Hill's growth and success, and we hope you will take pride in being a member of our team.

This handbook was developed to describe some of the expectations of our employees and to outline the policies, programs, and benefits available to eligible employees. Employees should familiarize themselves with the contents of the employee handbook as soon as possible, for it will answer many questions about employment with Blueberry Hill.

We hope that your experience here will be challenging, enjoyable, and rewarding. Again, welcome!

Sincerely,

Craige Campbell, President

Blueberry Hill Communications, Inc.

ORGANIZATION DESCRIPTION

BHCOM is a "web presence provider". BHCOM has provided Internet services to over 15,000 customers in 100 countries around the world. BHCOM hosts more than 6000 unique domains on high-speed hosting servers, representing companies that range from one-person enterprises, to major, multi-national corporations.

The BHCOM mission is to provide the best website hosting and development services for individuals and companies who are best served by outsourcing these functions.

Blueberry Hill Communications, Inc. (BHCOM) was formed in October 1995 to take advantage of the coming Digital Revolution. Founder Craige Campbell saw the phenomenal growth potential that the Internet represented. Before it became a household word, he predicted that the Internet represented sweeping changes in the way people interacted with one another globally and in the way business is done.

In October 1995 very few people even knew what the Internet meant, much less bought Internet related products and services. Pioneering in this fledgling industry, BHCOM concentrated its attentions on becoming a premier web presence provider. In spite of little consumer awareness and a lack of now-available technology, the Company seized the opportunity to focus on services that produce recurring revenue

The industry was experiencing phenomenal growth and existing providers were struggling in the transition. Customer care was nonexistent. The Company quickly determined that the proper approach was to focus on procuring existing technology and delivering it to the consumer with the highest level of customer care available. BHCOM remains one of the few web hosting providers that provides live responses to customer inquiries.

Despite these challenges, Mr. Campbell pioneered technologies with a committed team that in 1996 averaged only 20 years old. He developed unique processes and automation that allowed BHCOM to become a leader in offering the highest level of advanced web-hosting technology.

As a web presence provider, BHCOM has now provided Internet services to over 15,000 customers in 100 countries worldwide. The Company hosts more than 6000 unique domains on high-speed hosting servers, representing companies that range from one-person enterprises, to major, multi-national corporations. The BHCOM mission is to provide the best website hosting and development services for individuals and companies who are best served by outsourcing these functions.

Headquartered in Palm Desert, California, with twelve employees, BHCOM is well positioned to continue its phenomenal growth.

INTRODUCTORY STATEMENT

This handbook is designed to acquaint you with Blueberry Hill and provide you with information about working conditions, employee benefits, and some of the policies affecting your employment. You should read, understand, and comply with all provisions of the handbook. It describes many of your responsibilities as an employee and outlines the programs developed by Blueberry Hill to benefit employees. One of our objectives is to provide a work environment that is conducive to both personal and professional growth.

No employee handbook can anticipate every circumstance or question about policy. As Blueberry Hill continues to grow, the need may arise and Blueberry Hill reserves the right to revise, supplement, or rescind any policies or portion of the handbook from time to time as it deems appropriate, in its sole and absolute discretion. The only exception to any changes is our employment-at-will policy permitting you or Blueberry Hill to end our relationship for any reason at any time. Employees will, of course, be notified of such changes to the handbook as they occur.

101 Nature of Employment

Effective Date: 5/1/1999 Revision Date: 1/1/2000

This handbook is intended to provide employees with a general understanding of our personnel policies. Employees are encouraged to familiarize themselves with the contents of this handbook, for it will answer many common questions concerning employment with Blueberry Hill.

However, this handbook cannot anticipate every situation or answer every question about employment. It is not an employment contract and is not intended to create contractual obligations of any kind. Neither the employee nor Blueberry Hill is bound to continue the employment relationship if either chooses, at its will, to end the relationship at any time.

In order to retain necessary flexibility in the administration of policies and procedures, Blueberry Hill reserves the right to change, revise, or eliminate any of the policies and/or benefits described in this handbook, except for its policy of employment-at-will. The only recognized deviations from the stated policies are those authorized and signed by the chief executive officer of Blueberry Hill.

102 Employee Relations

Effective Date: 5/1/1999 Revision Date: 1/1/2000

Blueberry Hill believes that the work conditions, wages, and benefits it offers to its employees are competitive with those offered by other employers in this area and in this industry. If employees have concerns about work conditions or compensation, they are strongly encouraged to voice these concerns openly and directly to their supervisors.

Our experience has shown that when employees deal openly and directly with supervisors, the work environment can be excellent, communications can be clear, and attitudes can be positive. We believe that Blueberry Hill amply demonstrates its commitment to employees by responding effectively to employee concern

103 Equal Employment Opportunity

Effective Date: 5/1/1999

In order to provide equal employment and advancement opportunities to all individuals, employment decisions at Blueberry Hill will be based on merit, qualifications, and abilities. Blueberry Hill docs not discriminate in employment opportunities or practices on the basis of race, color, religion, sex, national origin, age, or any other characteristic protected by law.

This policy governs all aspects of employment, including selection, job assignment, compensation, discipline, termination, and access to benefits and training.

Any employees with questions or concerns about any type of discrimination in the workplace are encouraged to bring these issues to the attention of their immediate supervisor. Employees can raise concerns and make reports without fear of reprisal. Anyone found to be engaging in any type of unlawful discrimination will be subject to disciplinary action, up to and including termination of employment.

104 Business Ethics and Conduct

Effective Date: 5/1/1999

The successful business operation and reputation of Blueberry Hill is built upon the principles of falr dealing and ethical conduct of our employees. Our reputation for integrity and excellence requires careful observance of the spirit and letter of all applicable laws and regulations, as well as a scrupulous regard for the highest standards of conduct and personal integrity.

The continued success of Blueberry Hill is dependent upon our customers' trust and we are dedicated to preserving that trust. Employees owe a duty to Blueberry Hill, its customers, and shareholders to act in a way that will merit the continued trust and confidence of the public.

Blueberry Hill will comply with all applicable laws and regulations and expects its directors, officers, and employees to conduct business in accordance with the letter, spirit, and intent of all relevant laws and to refrain from any illegal, dishonest, or unethical conduct.

In general, the use of good judgment, based on high ethical principles, will gnide you with respect to lines of acceptable conduct. If a situation arises where it is difficult to determine the proper course of action, the matter should be discussed openly with your immediate supervisor and, if necessary, with the President for advice and consultation.

Compliance with this policy of business ethics and conduct is the responsibility of every Blueberry Hill employee.

107 Immigration Law Compliance

Effective Date: 5/1/1 999 Revision Date: 1/1/2000

Blueberry Hill is committed to employing only United States citizens and aliens who are authorized to work in the United States and does not unlawfully discriminate on the basis of citizenship or national origin.

In compliance with the Immigration Reform and Control Act of 1986, each new employee, as a condition of employment, must complete the Employment Eligibility Verification Form I-9 and present documentation establishing identity and employment eligibility. Former employees who are rehired must also complete the form if they have not completed an I-9 with Blueberry Hill within the past three years, or if their previous I-9 is no longer retained or valid.

Employees with questions or seeking more information on immigration law issues are encouraged to contact the Assistant to the President. Employees may raise questions or complaints about immigration law compliance without fear of reprisal.

108 Conflicts of Interest

Effective Date: 1/1/2000

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

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

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

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

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

110 Outside Employment

Effective Date: 1/1/2000

Employees may hold outside jobs as long as they meet the performance standards of their job with Blueberry Hill and prior written permission is obtained by the President. All employees will be judged by the same performance standards and will be subject to Blueberry Hill’s scheduling demands, regardless of any existing outside work requirements.

If Blueberry Hill determines that an employee’s outside work interferes with performance or the ability to meet the requirements of Blueberry Hill as they are modified from time to time, the employee may be asked to terminate the outside employment if he or she wishes to remain with Blueberry Hill.

Outside employment that constitutes a conflict of interest is prohibited. Employees may not receive any income or material gain from individuals outside Blueberry Hill for materials produced or services rendered while performing their jobs.

112 Non-Disclosure

Effective Date: 5/1/1999

The protection of confidential business information and trade secrets is vital to the interests and the success of Blueberry Hill. Such confidential information includes, but is not limited to, the following examples:

*computer processes

*computer programs and codes

*customer lists

*financial information

*marketing strategies

*pending projects and proposals

*technological data

All employees may be required to sign a nondisclosure agreement as a condition of employment. Employees who improperly use or disclose trade secrets or confidential business information will be subject to disciplinary action, up to and including termination of employment and legal action, even if they do not actually benefit from the disclosed information.

201 Employment Categories

Effective Date: 5/1/1999 Revision Date: 1/1/2000

It is the intent of Blueberry Hill to clarify the definitions of employment classifications so that employees understand their employment status and benefit eligibility. These classifications do not guarantee employment for any specified period of time. Accordingly, the right to terminate the employment relationship at will at any time is retained by both the employee and Blueberry Hill.

Each employee is designated as either NONEXEMPT or EXEMPT from federal and state wage and hour laws. NONEXEMPT employees are entitled to overtime pay under the specific provisions of federal and state laws. EXEMPT employees are excluded from specific provisions of federal and state wage and hour laws. An employee's EXEMPT or NONEXEMPT classification may be changed only upon written notification by Blueberry Hill management.

In addition to the above categories, each employee will belong to one other employment category:

REGULAR FULL-TIME employees are those who are not in a temporary or introductory status and who are regularly scheduled to work Blueberry Hill's full-time schedule. Generally, they are eligible for Blueberry Hill's benefit package, subject to the terms, conditions, and limitations of each benefit program.

REGULAR PART-TIME employees are those who are not assigned to a temporary or introductory status and who are regularly scheduled to work less than the full-time work schedule, but at least twenty hours per week. Regular part-time employees are eligible for some benefits sponsored by Blueberry Hill, subject to the terms, conditions, and limitations of each benefit program.

INTRODUCTORY employees are those whose performance is being evaluated to determine whether further employment in a specific position or with Blueberry Hill is appropriate and those deemed to be an INTERN. Employees who satisfactorily complete the introductory period will be notified of their new employment classification.

202 Access to Personnel Files

Effective Date: 5/1/1999

Blueberry Hill maintains a personnel file on each employee. The personnel file includes such information as the employee's job application, resume, records of training, documentation of performance appraisals and salary increases, and other employment records.

Personnel files are the property of Blueberry Hill, and access to the information they contain is restricted. Generally, only supervisors and management personnel of Blueberry Hill who have a legitimate reason to review information in a file are allowed to do so.

Employees who wish to review their own file should contact the Assistant to the President. With reasonable advance notice, employees may review their own personnel files in Blueberry Hill's offices and in the presence of an individual appointed by Blueberry Hill to maintain the files.

203 Employment Reference Checks

Effective Date: 5/1/1999

To ensure that individuals who join Blueberry Hill are well qualified and have a strong potential to be productive and successful, it is the policy of Blueberry Hill to check the employment references of all applicants.

Blueberry Hill will respond in writing only to those reference check inquiries that are submitted in writing. Responses to such inquiries will confirm only dates of employment, wage rates, and position(s) held.

204 Personnel Data Changes

Effective Date: 5/1/1999

It is the responsibility of each employee to promptly notify Blueberry Hill of any changes in personnel data. Personal mailing addresses, telephone numbers, number and names of dependents, individuals to be contacted in the event of an emergency, educational accomplishments, and other such status reports should be accurate and current at all times. If any personnel data has changed, please notify the Assistant to the President.

205 Introductory Period

Effective Date: 5/1/1999

The introductory period is intended to give new employees the opportunity to demonstrate their ability to achieve a satisfactory level of performance and to determine whether the new position meets their expectations. Blueberry Hill uses this period to evaluate employee capabilities, work habits, and overall performance. Either the employee or Blueberry Hill may end the employment relationship at will at any time during or after the introductory period, with or without cause or advance notice.

All new and rehired employees work on an introductory basis for the first 90 calendar days after their date of hire. Any significant absence will automatically extend an introductory period by the length of the absence. If Blueberry Hill determines that the designated introductory period does not allow sufficient time to thoroughly evaluate the employee's performance, the introductory period may be extended for a specified period.

Upon satisfactory completion of the introductory period, employees enter the "regular" employment classification.

During the introductory period, new employees are eligible for those benefits that are required by law, such as workers' compensation insurance and Social Security. After becoming regular employees, they may also be eligible for other Blueberry Hill-provided benefits, subject to the terms and conditions of each benefits program. Employees should read the information for each specific benefits program for the details on eligibility requirements.

208 Employment Applications

Effective Date: 5/1/1999

Blueberry Hill relies upon the accuracy of information contained in the employment application, as well as the accuracy of other data presented throughout the hiring process and employment. Any misrepresentations, falsifications, or material omissions in any of this information or data may result in the exclusion of the individual from further consideration for employment or, if the person has been hired, termination of employment.

209 Performance Evaluation

Effective Date: 5/1/1999

Supervisors and employees are strongly encouraged to discuss job performance and goals on an informal, day-to-day basis. A formal written performance evaluation will be conducted at the end of an employee's initial period of hire, known as the introductory period. Additional formal performance evaluations are conducted to provide both supervisors and employees the opportunity to discuss job tasks, identify and correct weaknesses, encourage and recognize strengths, and discuss positive, purposeful approaches for meeting goals.

Merit-based pay adjustments are awarded by Blueberry Hill in an effort to recognize truly superior employee performance. The decision to award such an adjustment is dependent upon numerous factors, including the information documented by this formal performance evaluation process.

301 Employee Benefits

Effective Date: 5/1/1999 Revision Date: 1/6/2000

Eligible employees at Blueberry Hill are provided a wide range of benefits. A number of the programs

(such as Social Security, workers' compensation, state disability, and unemployment insurance) cover all employees in the manner prescribed by law.

Benefits eligibility is dependent upon a variety of factors, including employee classification. Your

supervisor can identify the programs for which you are eligible. Details of many of these programs can be found elsewhere in the employee handbook.

The following benefit programs are available to eligible employees:

*Bereavement Leave

*Flextime Scheduling

*Health Insurance

* Holidays

*Profit Sharing Plan

Some benefit programs require contributions from the employee, but most are fully paid by
Blueberry Hill.

303 Vacation Benefits

Effective Date: 1/1/2000

See Paid Time Off- 315 (See Pages 15-17)

306 Workers’ Compensation Insurance

Effective Date: 1/6/1900

Blueberry Hill provides a comprehensive workers' compensation insurance program at no cost to employees. This program covers any injury or illness sustained in the course of employment that requires medical, surgical, or hospital treatment. Subject to applicable legal requirements, workers' compensation insurance provides benefits after a short waiting period or, if the employee is hospitalized, immediately.

Employees who sustain work-related injuries or illnesses should inform their supervisor immediately. No matter how minor an on-the-job injury may appear, it is important that it be reported immediately. This will enable an eligible employee to qualify for coverage as quickly as possible.

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

309 Bereavement Leave

Effective Date: 1/1/2000

Revision Date: 1/6/2000

Employees who wish to take time off due to the death of an immediate family member should notify their supervisor immediately.

Up to 2 days of paid bereavement leave will be provided to eligible employees in the following classification(s):

* Regular full-time employees

Bereavement pay is calculated based on the base pay rate at the time of absence and will not include any special forms of compensation, such as incentives, commissions, bonuses, or shift differentials.

Bereavement leave will normally be granted unless there are unusual business needs or staffing requirements. Employees may, with their supervisors' approval, use any available paid leave for additional time off as necessary.

Blueberry Hill defines "immediate family" as the employee's spouse, parent, child, sibling; the employee's spouse's parent, child, or sibling.

311 Jury Duty

Effective Date: 5/1/1999

Blueberry Hill encourages employees to fulfill their civic responsibilities by serving jury duty when required. Employees may request unpaid jury duty leave for the length of absence. If desired, employees may use any available paid time off (for example, vacation benefits).

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

Either Blueberry Hill or the employee may request an excuse from jury duty if, in Blueberry Hill's judgment, the employee's absence would create serious operational difficulties.

Blueberry Hill will continue to provide health insurance benefits until the end of the first full month of unpaid jury duty leave. At that time, employees will become responsible for the full costs of these benefits if they wish coverage to continue. When the employee returns from jury duty, benefits will again be provided by Blueberry Hill according to the applicable plans.

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

315 Paid Time Off (PTO)

Effective Date: 1/1/2000 Revision Date: 1/6/2000

The unique requirement of an Internet company dictates that we never close and thus we cannot offer traditional Holidays off as a guarantee to ANY employee. In lieu of this Blueberry Hill has developed a unique Paid Time Off (PTO) Policy for its employees which incorporates paid floating Holiday Days, Vacation Time and Sick Leave into one!

Paid Time Off (PTO) is an all purpose time off policy for eligible employees to use for holidays, vacation, illness or injury, and personal business. It combines traditional holiday, vacation and sick leave plans into one flexible, paid time off policy. Employees in the following employment classification(s) are eligible to earn and use PTO as described in this policy:

* Regular full-time employees

Once employees enter an eligible employment classification, they begin to earn PTO according to the schedule below. However, before PTO can be used, a waiting period of 45 calendar days must be completed. After that time, employees can request use of earned PTO including that accrued during the waiting period.

The amount of PTO employees receive each year increases with the length of their employment as shown in the following schedule:

* Upon initial eligibility the employee is entitled to 12 PTO days each year, accrued semimonthly at the rate of 0.500 days.

* After 1 year of eligible service the employee is entitled to 13 PTO days each year, accrued semimonthly at the rate of 0.542 days.

* After 2 years of eligible service the employee is entitled to 14 PTO days each year, accrued semimonthly at the rate of 0.583 days.

* After 3 years of eligible service the employee is entitled to 15 PTO days each year, accrued semimonthly at the rate of 0.625 days.

* After 5 years of eligible service the employee is entitled to 19 PTO days each year, accrued semimonthly at the rate of 0.792 days.

The length of eligible service is calculated on the basis of a "benefit year." This is the 12-month period that begins when the employee starts to earn PTO. An employee's benefit year may be extended for any significant leave of absence except military leave of absence. Military leave has no effect on this calculation. (See individual leave of absence policies for more information.)

PTO can be used in minimum increments of one-half day. Employees who have an unexpected need to be absent from work should notify their direct supervisor before the scheduled start of their workday, if possible. The direct supervisor must also be contacted on each additional day of unexpected absence.

To schedule planned PTO, employees should request advance approval from their supervisors. Requests will be reviewed based on a number of factors, including business needs and staffing requirements.

PTO is paid at the employee's base pay rate at the time of absence. It does not include overtime or any special forms of compensation such as incentives, commissions, bonuses, or shift differentials.

If recognized NONEXEMPT employees work on a recognized holiday, they will receive holiday pay of wages one and one-half times their straight-time rate for the hours worked on the holiday

As an additional condition of eligibility for PTO, an employee on an extended absence for illness or injury must apply for any other available compensation and benefits, such as workers' compensation. PTO will be used to supplement any payments that an employee is eligible to receive from state disability insurance, workers' compensation, or Blueberry Hill-provided disability insurance programs. The combination of any such disability payments and PTO cannot exceed the employee's normal weekly earnings.

In the event that available PTO is not used by the end of the benefit year, employees may carry unused time forward to the next benefit year. If the total amount of unused PTO reaches a "cap" equal to two times the annual PTO amount, further accrual will stop. When the employee uses PTO and brings the available amount below the cap, accrual will begin again.

Upon termination of employment, employees will be paid for unused PTO that has been earned through the last day of work.

316 Health Insurance

Effective Date: 1/6/1900

Blueberry Hill's health insurance plan provides employees access to medical insurance benefits. Employees in the following employment classifications are eligible to participate in the health insurance plan:

* Regular full-time employees

Eligible employees may participate in the health insurance plan after completing 90 days employment, subject to all terms and conditions of the agreement between Blueberry Hill and the insurance carrier.

Details of the health insurance plan are described in the Summary Plan Description (SPD). An SPD and information on cost of coverage will be provided in advance of enrollment to eligible employees. Contact the Assistant to the President for more information about health insurance benefits.

401 Timekeeping

Effective Date: 1/6/1900

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

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

Altering, falsifying, tampering with time records, or recording time on another employee's time record may result in disciplinary action, up to and including termination of employment.

If corrections or modifications are made to the time record, both the employee and the supervisor must verify the accuracy of the changes by initialing the time record.

403 Paydays

Effective Date: 1/6/1999

All employees are paid semimonthly on the 5th and 20th days of the month. Each paycheck will include earnings for all work performed through the end of the previous payroll period.

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

If a regular payday falls during an employee's vacation, the employee's paycheck will be available upon his or her return from vacation.

405 Employment Termination

Effective Date: 5/1/1999

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

* Resignation - voluntary employment termination initiated by an employee.

* Discharge - involuntary employment termination initiated by the organization.

Since employment with Blueberry Hill is based on mutual consent, both the employee and Blueberry Hill have the right to terminate employment at will, with or without cause, at any time. Employees will receive their final pay in accordance with applicable state law.

Employee benefits will be affected by employment termination in the following manner. All accrued, vested benefits that are due and payable at termination will be paid. Some benefits may be continued at the employee's expense if the employee so chooses. The employee will be notified in writing of the benefits that may be continued and of the terms, conditions, and limitations of such continuance.

410 Pay Deductions

Effective Date: 5/1/1999

The law requires that Blueberry Hill make certain deductions from every employee's compensation. Among these are applicable federal, state, and local income taxes. Blueberry Hill also must deduct Social Security taxes on each employee's earnings up to a specified limit that is called the Social Security "wage base." Blueberry Hill matches the amount of Social Security taxes paid by each employee.

Blueberry Hill offers programs and benefits beyond those required by law. Eligible employees may voluntarily authorize deductions from their paychecks to cover the costs of participation in these programs.

If you have questions concerning why deductions were made from your paycheck or how they were calculated, your supervisor can assist in having your questions answered.

501 Safety

Effective Date: 5/1/1999

To assist in providing a safe and healthful work environment for employees, customers, and visitors, Blueberry Hill has established a workplace safety program. This program is a top priority for Blueberry Hill. The Assistant to the President has responsibility for implementing, administering, monitoring, and evaluating the safety program. Its success depends on the alertness and personal commitment of all.

Blueberry Hill provides information to employees about workplace safety and health issues through regular internal communication channels such as supervisor-employee meetings, bulletin board postings, memos, or other written communications.

Each employee is expected to obey safety rules and to exercise caution in all work activities. Employees must immediately report any unsafe condition to the appropriate supervisor. Employees who violate safety standards, who cause hazardous or dangerous situations, or who fail to report or, where appropriate, remedy such situations, may be subject to disciplinary action, up to and including termination of employment.

In the case of accidents that result in injury, regardless of how insignificant the injury may appear, employees should immediately notify the Assistant to the President or the appropriate supervisor. Such reports are necessary to comply with laws and initiate insurance and workers' compensation benefits procedures.

502 Work Schedules

Effective Date: 5/1/1999

The normal work schedule for all employees is 9 hours a day, 5 days a week. Supervisors will advise employees of the times their schedules will normally begin and end. Staffing needs and operational demands may necessitate variations in starting and ending times, as well as variations in the total hours that may be scheduled each day and week.

Flexible scheduling, or flextime, is available in some cases to allow employees to vary their starting and ending times each day within established limits. Flextime may be possible if a mutually workable schedule can be negotiated with the supervisor involved. However, such issues as staffing needs, the employee's performance, and the nature of the job will be considered before approval of flextime. Employees should consult their supervisor to request participation in the flextime program.

504 Use of Telephones

Effective Date: 5/1/1999

Personal use of the telephone for long distance and toll calls is not permitted. Employees should practice discretion when making local personal calls and may be required to reimburse Blueberry Hill for any charges resulting from their personal use of the telephone.

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

505 Smoking

Effective Date: 1/6/1900

In keeping with Blueberry Hill's intent to provide a safe and healthful work environment, smoking is prohibited throughout the workplace.

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

508 Use of Equipment and Vehicles

Effective Date: 5/1/1999

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

Please notify the supervisor if any equipment, machines, tools, or vehicles appear to be damaged, defective, or in need of repair. Prompt reporting of damages, defects, and the need for repairs could prevent deterioration of equipment and possible injury to employees or others. The supervisor can answer any questions about an employee's responsibility for maintenance and care of equipment or vehicles used on the job.

The improper, careless, negligent, destructive, or unsafe use or operation of equipment or vehicles, as well as excessive or avoidable traffic and parking violations, can result in disciplinary action, up to and including termination of employment.

512 Business Travel Expenses

Effective Date: 5/1/1999

Blueberry Hill will reimburse employees for reasonable business travel expenses incurred while on assignments away from the normal work location. All business travel must be approved in advance by the Assistant to the President.

Employees whose travel plans have been approved should make all travel arrangements through Blueberry Hill's designated travel agency.

When approved, the actual costs of travel, meals, lodging, and other expenses directly related to accomplishing business travel objectives will be reimbursed by Blueberry Hill. Employees are expected to limit expenses to reasonable amounts.

Employees who are involved in an accident while traveling on business must promptly report the incident to their immediate supervisor. Vehicles owned, leased, or rented by Blueberry Hill may not be used for personal use without prior approval.

With prior approval, employees on business travel may be accompanied by a family member or friend, when the presence of a companion will not interfere with successful completion of business objectives. Generally, employees are also permitted to combine personal travel with business travel, as long as time away from work is approved. Additional expenses arising from such non-business travel are the responsibility of the employee.

When travel is completed, employees should submit completed travel expense reports within 10 days. Reports should be accompanied by receipts for all individual expenses.

Employees should contact their supervisor for guidance and assistance on procedures related to travel arrangements, expense reports, reimbursement for specific expenses, or any other business travel issues.

Abuse of this business travel expenses policy, including falsifying expense reports to reflect costs not incurred by the employee, can be grounds for disciplinary action, up to and including termination of employment.

514 Visitors in the Workplace

Effective Date: 5/1/1999

To provide for the safety and security of employees and the facilities at Blueberry Hill, only authorized visitors are allowed in the workplace. Restricting unauthorized visitors helps maintain safety standards, protects against theft, ensures security of equipment, protects confidential information, safeguards employee welfare, and avoids potential distractions and disturbances.

All visitors should enter Blueberry Hill at the lobby. Authorized visitors will receive directions or be escorted to their destination. Employees are responsible for the conduct and safety of their visitors.

If an unauthorized individual is observed on Blueberry Hill's premises, employees should immediately notify their supervisor or, if necessary, direct the individual to the lobby.

516 Computer and E-mail Usage

Effective Date: 1/6/1900

Computers, computer files, the e-mail system, and software furnished to employees are Blueberry Hill property intended for business use. Employees should not use a password, access a file, or retrieve any stored communication without authorization. To ensure compliance with this policy, computer and e-mail usage may be monitored.

Blueberry Hill strives to maintain a workplace free of harassment and sensitive to the diversity of its employees. Therefore, Blueberry Hill prohibits the use of computers and the e-mail system in ways that are disruptive, offensive to others, or harmful to morale.

For example, the display or transmission of sexually explicit images, messages, and cartoons is not allowed. Other such misuse includes, but is not limited to, ethnic slurs, racial comments, off-color jokes, or anything that may be construed as harassment or showing disrespect for others.

E-mail may not be used to solicit others for commercial ventures, religious or political causes, outside organizations, or other non-business matters.

Employees should notify their immediate supervisor, the Office Manager or any member of management upon learning of violations of this policy. Employees who violate this policy will be subject to disciplinary action, up to and including termination of employment.

517 Internet Usage

Effective Date: 5/1/1999

Internet access to global electronic information resources on the World Wide Web is provided by Blueberry Hill to assist employees in obtaining work-related data and technology. The following guidelines have been established to help ensure responsible and productive Internet usage. While Internet usage is intended for job-related activities, incidental and occasional brief personal use is permitted within reasonable limits.

All Internet data that is composed, transmitted, or received via our computer communications systems is considered to be part of the official records of Blueberry Hill and, as such, is subject to disclosure to law enforcement or other third parties. Consequently, employees should always ensure that the business information contained in Internet e-mail messages and other transmissions is accurate, appropriate, ethical, and lawful.

Data that is composed, transmitted, accessed, or received via the Internet must not contain content that could be considered discriminatory, offensive, obscene, threatening, harassing, intimidating, or disruptive to any employee or other person. Examples of unacceptable content may include, but are not limited to, sexual comments or images, racial slurs, gender-specific comments, or any other comments or images that could reasonably offend someone on the basis of race, age, sex, religious or political beliefs, national origin, disability, sexual orientation, or any other characteristic protected by law.

The unauthorized use, installation, copying, or distribution of copyrighted, trademarked, or patented material on the Internet is expressly prohibited. As a general rule, if an employee did not create material, does not own the rights to it, or has not gotten authorization for its use, it should not be put on the Internet. Employees are also responsible for ensuring that the person sending any material over the Internet has the appropriate distribution rights.

Internet users should take the necessary anti-virus precautions before downloading or copying any file from the Internet. All downloaded files are to be checked for viruses; all compressed files are to be checked before and after decompression.

Abuse of the Internet access provided by Blueberry Hill in violation of law or Blueberry Hill policies will result in disciplinary action, up to and including termination of employment. Employees may also be held personally liable for any violations of this policy. The following behaviors are examples of previously stated or additional actions and activities that are prohibited and can result in disciplinary action:

* Sending or posting discriminatory, harassing, or threatening messages or images

* Using the organization's time and resources for personal gain

* Stealing, using, or disclosing someone else's code or password without authorization

* Sending or posting confidential material, trade secrets, or proprietary information outside of the

organization.

* Jeopardizing the security of the organization's electronic communications systems

* Engaging in any other illegal activities

701 Employee Conduct and Work Rules

Effective Date: 1/6/1900

To ensure orderly operations and provide the best possible work environment, Blueberry Hill expects employees to follow rules of conduct that will protect the interests and safety of all employees and the organization.

It is not possible to list all the forms of behavior that are considered unacceptable in the workplace. The following are examples of infractions of rules of conduct that may result in disciplinary action, up to and including termination of employment:

* Theft or inappropriate removal or possession of property

* Falsification of timekeeping records

* Working under the influence of alcohol or illegal drugs

* Smoking in prohibited areas

* Sexual or other unlawful or unwelcome harassment

* Excessive absenteeism or any absence without notice

* Unauthorized disclosure of business "secrets" or confidential information

* Unsatisfactory performance or conduct

Employment with Blueberry Hill is at the mutual consent of Blueberry Hill and the employee, and either party may terminate that relationship at any time, with or without cause, and with or without advance notice.

702 Drug and Alcohol Use

Effective Date: 5/1/1999

It is Blueberry Hill's desire to provide a drug-free, healthful, and safe workplace. To promote this goal, employees are required to report to work in appropriate mental and physical condition to perform their jobs in a satisfactory manner.

While on Blueberry Hill premises and while conducting business-related activities off Blueberry Hill premises, no employee may use, possess, distribute, sell, or be under the influence of alcohol or illegal drugs. The legal use of prescribed drugs is permitted on the job only if it does not impair an employee's ability to perform the essential functions of the job effectively and in a safe manner that does not endanger other individuals in the workplace.

Violations of this policy may lead to disciplinary action, up to and including immediate termination of employment, and/or required participation in a substance abuse rehabilitation or treatment program. Such violations may also have legal consequences.

Under the Drug-Free Workplace Act, an employee who performs work for a government contract or grant must notify Blueberry Hill of a criminal conviction for drug related activity occurring in the workplace. The report must be made within five days of the conviction.

Employees with questions on this policy or issues related to drug or alcohol use in the workplace should raise their concerns with their supervisor or the Assistant to the President without fear of reprisal.

703 Sexual and Other Unlawful Harassment

Effective Date: 5/1/1999

Blueberry Hill is committed to providing a work environment that is free from all forms of discrimination and conduct that can be considered harassing, coercive, or disruptive, including sexual harassment. Actions, words, jokes, or comments based on an individual's sex, race, color, national origin, age, religion, disability, sexual orientation, or any other legally protected characteristic will not be tolerated.

Sexual harassment is defined as unwanted sexual advances, or visual, verbal, or physical conduct of a sexual nature. This definition includes many forms of offensive behavior and includes gender-based harassment of a person of the same sex as the harasser. The following is a partial list of sexual harassment examples:

* Unwanted sexual advances.

* Offering employment benefits in exchange for sexual favors.

* Making or threatening reprisals after a negative response to sexual advances.

* Visual conduct that includes leering, making sexual gestures, or displaying of sexually suggestive

objects or pictures, cartoons or posters.

* Verbal conduct that includes making or using derogatory comments, epithets, slurs, or jokes.

* Verbal sexual advances or propositions.

* Verbal abuse of a sexual nature, graphic verbal commentaries about an individual's body, sexually degrading words used to describe an individual, or suggestive or obscene letters, notes, or invitations.

* Physical conduct that includes touching, assaulting, or impeding or blocking movements. Unwelcome sexual advances (either verbal or physical), requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when: (1) submission to such conduct is made either explicitly or implicitly a term or condition of employment; (2) submission or rejection of the conduct is used as a basis for making employment decisions; or, (3) the conduct has the purpose or effect of interfering with work performance or creating an intimidating, hostile, or offensive work environment.

If you experience or witness sexual or other unlawful harassment in the workplace, report it immediately to your supervisor. If the supervisor is unavailable or you believe it would be inappropriate to contact that person, you should immediately contact the President or any other member of management. You can raise concerns and make reports without fear of reprisal or retaliation.

All allegations of sexual harassment will be quickly and discreetly investigated. To the extent possible, your confidentiality and that of any witnesses and the alleged harasser will be protected against unnecessary disclosure. When the investigation is completed, you will be informed of the outcome of the investigation.

Any supervisor or manager who becomes aware of possible sexual or other unlawful harassment must immediately advise the President or any member of management so it can be investigated in a timely and confidential manner. Anyone engaging in sexual or other unlawful harassment will be subject to disciplinary action, up to and including termination of employment.

704 Attendance and Punctuality

Effective Date: 5/1/1999

To maintain a safe and productive work environment, Blueberry Hill expects employees to be reliable and to be punctual in reporting for scheduled work. Absenteeism and tardiness place a burden on other employees and on Blueberry Hill. In the rare instances when employees cannot avoid being late to work or are unable to work as scheduled, they should notify their supervisor as soon as possible in advance of the anticipated tardiness or absence.

Poor attendance and excessive tardiness are disruptive. Either may lead to disciplinary action, up to and including termination of employment.

705 Personal Appearance

Effective Date: 1/6/1900

Dress, grooming, and personal cleanliness standards contribute to the morale of all employees and affect the business image Blueberry Hill presents to customers and visitors.

During business hours or when representing Blueberry Hill, you are expected to present a clean, neat, and tasteful appearance. You should dress and groom yourself according to the requirements of your position and accepted social standards. This is particularly true if your job involves dealing with customers or visitors in person.

Your supervisor or department head is responsible for establishing a reasonable dress code appropriate to the job you perform. If your supervisor feels your personal appearance is inappropriate, you may be asked to leave the workplace until you are properly dressed or groomed. Under such circumstance, you will not be compensated for the time away from work. Consult your supervisor if you have questions as to what constitutes appropriate appearance. Where necessary, reasonable accommodation may be made to a person with a disability.

705 Personal Appearance (continued)

Without unduly restricting individual tastes, the following personal appearance guidelines should be followed:

* Tank tops, tube or halter tops may be worn underneath additional clothing

* Unnaturally colored hair and extreme hairstyles, such as spiked hair and shaved heads, do

not present an appropriate professional appearance.

* Offensive body odor and poor personal hygiene is not professionally acceptable.

706 Return of Property

Effective Date: 5/1/1999

Employees are responsible for items issued to them by Blueberry Hill or in their possession or control, such as the following:

* client lists

* equipment

* keys

* manuals

* written materials

Employees must return all Blueberry Hill property immediately upon request or upon termination of employment. Where permitted by applicable laws, Blueberry Hill may withhold from the employee's check or final paycheck the cost of any items that are not returned when required. Blueberry Hill may also take all action deemed appropriate to recover or protect its property.

708 Resignation

Effective Date: 5/1/1999

Resignation is a voluntary act initiated by the employee to terminate employment with Blueberry Hill. Although advance notice is not required, Blueberry Hill requests at least two weeks' written resignation notice from all employees.

710 Security Inspections

Effective Date: 1/5/2000

Blueberry Hill wishes to maintain a work environment that is free of illegal drugs, alcohol, firearms, explosives, or other improper materials. To this end, Blueberry Hill prohibits the possession, transfer, sale, or use of such materials on its premises. Blueberry Hill requires the cooperation of all employees in administering this policy.

Desks, lockers, and other storage devices may be provided for the convenience of employees but remain the sole property of Blueberry Hill. Accordingly, they, as well as any articles found within them, can be inspected by any agent or representative of Blueberry Hill at any time, either with or without prior notice.

716 Progressive Discipline

Effective Date: 5/1/1999

The purpose of this policy is to state Blueberry Hill's position on administering equitable and consistent discipline for unsatisfactory conduct in the workplace. The best disciplinary measure is the one that docs not have to be enforced and comes from good leadership and fair supervision at all employment levels.

Blueberry Hill's own best interest lies in ensuring fair treatment of all employees and in making certain that disciplinary actions are prompt, uniform, and impartial. The major purpose of any disciplinary action is to correct the problem, prevent recurrence, and prepare the employee for satisfactory service in the future.

Although employment with Blueberry Hill is based on mutual consent and both the employee and Blueberry Hill have the right to terminate employment at will, with or without cause or advance notice, Blueberry Hill may use progressive discipline at its discretion.

Disciplinary action may call for any of four steps -- verbal warning, written warning, suspension with or without pay, or termination of employment -- depending on the severity of the problem and the number of occurrences. There may be circumstances when one or more steps are bypassed.

Progressive discipline means that, with respect to most disciplinary problems, these steps will normally be followed: a first offense may call for a verbal warning; a next offense may be followed by a written warning; another offense may lead to a suspension; and, still another offense may then lead to termination of employment.

Blueberry Hill recognizes that there are certain types of employee problems that are serious enough to justify either a suspension, or, in extreme situations, termination of employment, without going through the usual progressive discipline steps.

While it is impossible to list every type of behavior that may be deemed a serious offense, the Employee Conduct and Work Rules policy includes examples of problems that may result in immediate suspension or termination of employment. However, the problems listed are not all necessarily serious offenses, but may be examples of unsatisfactory conduct that will trigger progressive discipline.

By using progressive discipline, we hope that most employee problems can be corrected at an early stage, benefiting both the employee and Blueberry Hill.

718 Problem Resolution

Effective Date: 5/1/1999

Blueberry Hill is committed to providing the best possible working conditions for its employees. Part of this commitment is encouraging an open and frank atmosphere in which any problem, complaint, suggestion, or question receives a timely response from Blueberry Hill supervisors and management.

Blueberry Hill strives to ensure fair and honest treatment of all employees. Supervisors, managers, and employees are expected to treat each other with mutual respect. Employees are encouraged to offer positive and constructive criticism.

If employees disagree with established rules of conduct, policies, or practices, they can express their concern through the problem resolution procedure. No employee will be penalized, formally or informally, for voicing a complaint with Blueberry Hill in a reasonable, business like manner, or for using the problem resolution procedure.

If a situation occurs when employees believe that a condition of employment or a decision affecting them is unjust or inequitable, they are encouraged to make use of the following steps. The employee may discontinue the procedure at any step.

1. Employee presents problem to immediate supervisor after incident occurs. If supervisor is unavailable or employee believes it would be inappropriate to contact that person, employee may present problem to Assistant to the President or any other member of management.

2. Supervisor responds to problem during discussion or after consulting with appropriate management, when necessary. Supervisor documents discussion.

3. Employee presents problem to President if problem is unresolved.

4. President counsels and advises employee, assists in putting problem in writing, visits with employee's manager(s), if necessary, and directs employee to President for review of problem.

5. Employee presents problem to President in writing.

6. President reviews and considers problem. President informs employee of decision and forwards copy of written response to President for employee's file. The President has full authority to make any adjustment deemed appropriate to resolve the problem.

Not every problem can be resolved to everyone's total satisfaction, but only through understanding and discussion of mutual problems can employees and management develop confidence in each other. This confidence is important to the operation of an efficient and harmonious work environment, and helps to ensure everyone's job security.

807 Office Supplies/Purchases

Effective Date: 1/6/1900

Revision Date: 1/6/2000

Blueberry Hill purchases office supplies twice a month (10th & 25th). It is the responsibility of each employee to let the office manager know when they are running low on any supplies. All requests must be sent via email to office@BHCOM.com 1 business day prior to order date.

Requests are not always granted and management has the right to ask employee to explain why they are requesting any office supply. All requests are subjected to review.