Corporate Compliance Plan LAW 531 Business Law Alexander Mason IV

Introduction In this paper I will create a corporate compliance plan paper for Riordians virtual organization. This plan will focus on managing the legal liability of officers and directors of Riordian. This plan will address ADR, enterprise liability, product liability, international law, tangible and intellectual property, legal forms of business, and governance. ADR Alternative dispute resolution (ADR) will be used for resolving complaints and disagreements without the use of attorneys or going to court. ADR will be the preferred method for resolving complaints and disagreements so both sides can reach an agreement quickly. ADR is preferred because it is efficient and an effective way so parties can continue to do business together. ADR processes are alternative methods of helping resolve legal problems before going to court. ADR involves an independent third person who helps resolve or minimize the conflict. Using ADR can result in the more efficient, cost-effective resolution of disputes with greater satisfaction for both sides involved. Most courts recognize ADR as a tool for settling disputes. The two types of ADRs that can be used at Riordians are arbitration or mediation. 1.) Arbitration is used to resolve complaints in a forum that is less formal setting than a trial. If arbitration is chosen participation will be voluntary a private third party person will be chosen as a judge and will impose a resolution after both sides have presented their case. Depending on the dispute arbitration can be binding or nonbinding. If binding arbitration is chosen then the decision is final. The parties cannot appeal the decision to any court. Nonbinding arbitration means if the parties are not satisfied with the results in the arbitration; the case may still be

litigated. The Federal Arbitration Act (FAA) was passed to stop judicial decisions that made arbitration clauses invalid. The U.S. Supreme Court provided its interpretation in case 4.1 the binding nature of arbitration clauses in contracts under the FAA. 2.) Mediation is a process in which both parties meet with a neutral mediator. Both parties will have the chance to explain their position. The mediator helps parties arrive at a mutually agreeable solution the mediator does not issues a decision; the role of the mediator is to try to get the parties to agree on a solution. The mediation process will be completely confidential. Mediation is not binding unless the parties have agreed to be bound by the decision.

Enterprise liability Enterprise liability is a legal doctrine under which individual entities can be held jointly liable for some actions on the basis of being part of a shared enterprise. To minimize the enterprise liability at Riordians any partners or subcontractors that does business with Riordians will be held to the same standards as any employees at Riordians. Riordians can and should perform periodic checks on joint partners to reduce Riordians enterprise liability.

Product liability Product liability should be a concern for all products that are produced at Riordians. To ensure customers are aware of the products sold by Riordians, a product liability statement will be printed on the label of every product produced by Riordians. Riordians managers can reduce the risk of liability cases by inspecting products to ensure the product liability statements are clearly understood and legally sound. The product liability statements are important because over the last few years the courts have changed from the buyer beware labiality. To now the company is found labial for the products they produce if the product is found defective. In 2002, the median award in

product liability cases was $520,000 (Chapter, 11). International law International laws are principles, rules and standards that govern nations and other participants. International law is the law of the international community. Most international law consists of long-standing customs; provisions agreed to in treaties and generally accepted principles of law recognized by nations. The purposes of international law include resolution of problems of a regional or global scope. International law also aims to maintain peaceful international relations and resolve international tensions. Enforcement of international law is difficult because each country is independent and they may but there own interest ahead of the international community. However enforcement can be effectively achieved through the actions of individual nations, agencies of international organizations such as the United Nations and the international courts.

Tangible

Intellectual property Intellectual properties are creative works that have economic value and are protected by law. Intellectual property laws are to protect the creators work by preventing others from copying, performing or distributing with out permission. Some intellectual properties are automatically protected by law from the moment of their creation. Other types require the creator to request a specific grant of right from the government agency before they can be protected by law. Most nations have laws protecting intellectual property; some nations do not enforce intellectual property laws.

The types of intellectual property are patents, copyrights and trademarks. Patent law protects inventions that demonstrate technological progress. Copyright law protects a variety of literary and artistic works. Trademark law protects words, slogans, and symbols that serve to identify different brands of goods and services in the marketplace. Any new products developed by Riordians will seek legal advice before the product is released to the general public. The legal department will check if the product needs a patent, copyright or a trademark. Managers must ensure this process is completed to reduce the risk of rival companies stealing Riordains ideas.

Legal forms of business Governance

This handbook is designed to acquaint you with Riordan 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. The handbook describes many of your responsibilities as an employee and outlines the programs we have developed to benefit our employees. One of our objectives at Riordan 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 every one of our policies. Therefore, there may be situations where the need arises for us to revise, add or cancel policies. Further, Riordan reserves the right to add new policies and to change or cancel existing policies at any time. The only exception is that our employment-at-will policy will not be changed or cancelled. The employment-at-will policy permits you or Riordan to end the employment relationship at any time for any reason. We

will notify you of any changes to the handbook as they occur.

Employee Acknowledgement Form The employee handbook describes important information about Riordan, and I understand that I should consult the Human Resources Director regarding any questions not answered in the handbook. I have entered into my employment relationship with Riordan voluntarily and acknowledge that there is no specified length of employment. Accordingly, either Riordan or I may terminate the employment relationship at will at any time, with or without cause, so long as there is no violation of applicable federal or state law. Since the information, policies and benefits described in the handbook are subject to change as needed, I acknowledge that revisions to the handbook may occur, except to the employment-at-will policy of Riordan. All such changes will be communicated through official notices, and I understand that revised information may supersede, modify or eliminate existing policies. I also understand that only the chief executive officer of Riordan has the ability to adopt revisions to the policies in this handbook. Furthermore, I acknowledge that this handbook is neither a contract of employment nor a legal document. I have received the handbook, and I understand that it is my responsibility to read and comply with the policies contained in this handbook and any revisions made to it. Nature of Employment This handbook is intended to provide you with a general understanding of the personnel policies of Riordan and to answer many common questions. You are encouraged to review all the policies in the handbook and become familiar with them. However, this handbook cannot anticipate every situation or answer every question about employment. This handbook is also not an employment contract and is not intended to create contractual obligations of any kind. Since employment at Riordan is based on mutual consent and is at will, either you or Riordan have the right to end the employment relationship at any time, with or without cause or advance notice. In order to retain necessary flexibility in the administration of policies and procedures, we reserve the right to change, revise or eliminate any of the policies and/or benefits described in this handbook, except for the

policy of employment-at-will. The only recognized deviations from the policies in this handbook must be authorized and signed by the chief executive officer of Riordan. Employee Relations We believe that the work conditions, wages and benefits we offer to Riordan employees are competitive with those offered by other employers in this area and in this industry. If you have concerns about work conditions or compensation, you are strongly encouraged to voice these concerns openly and directly to your supervisor. Our experience has shown that when employees deal openly and directly with management, the work environment can be excellent, communications can be clear and attitudes can be positive. We believe that Riordan amply demonstrates its commitment to employees by responding effectively to employee concerns. If employees want to investigate the option of union representation, we strongly encourage that you carefully consider all sides, including related issues such as regular deductions for union dues from your paycheck, the potential for outside interference with supervisory relationships, and the commitment for you to comply with union-initiated directions. Because we want to maintain direct employer/employee communications, we will resist organization (within the limits of the law) and protect your right to speak for yourself.

Equal Employment Opportunity In order to provide equal employment and advancement opportunities to all individuals, employment decisions at Riordan will be based on merit, qualifications and abilities. Riordan does not discriminate in employment opportunities or practices on the basis of race, color, religion, sex, national origin, age, disability or any other characteristic protected by law. We will make reasonable accommodations for qualified individuals with known disabilities unless doing so would result in an undue hardship. This policy covers all aspects of employment, including selection, job assignment, compensation, discipline, termination and access to benefits and training. If you have a question or concern about any type of discrimination in the workplace, you are encouraged to bring the issue to the attention of your

supervisor or the Human Resources Director. At Riordan, be assured that you can raise concerns and make reports without fear of reprisal. Further, anyone found to be engaging in any type of unlawful discrimination will be subject to disciplinary action, up to and including termination of employment.

Business Ethics and Conduct The successful business operation and reputation of Riordan is built upon the principles of fair 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. Our continued success is dependent upon our customers' trust, and we are dedicated to preserving that trust. Employees owe a duty to Riordan, our customers and shareholders to act in ways that will merit the continued trust and confidence of the public. As an organization, Riordan will coiply with all applicable laws and regulations, and we expect our 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, you should find that using good judgment, based on high ethical principles, will guide you to act appropriately. If you are unsure about the proper course of action, you should discuss the matter openly with your supervisor. If necessary, you may also contact the Human Resources Director for advice and consultation. It is the responsibility of every Riordan employee to comply with our policy of business ethics and conduct. Disregarding or failing to comply with this standard of business ethics and conduct could lead to disciplinary action, up to and including possible termination of employment. Immigration Law Compliance Riordan is committed to employing only United States citizens and aliens who are legally authorized to work in the United States. We also do not unlawfully discriminate on the basis of citizenship or national origin. In order for us to comply with the Immigration Reform and Control Act of

1986, all new employees, as a condition of employment, must complete the Employment Eligibility Verification Form I-9 and provide documentation that establishes their identity and eligibility for employment. Former employees who are subsequently rehired must also complete an I-9 and provide appropriate documentation if 1) they have not completed an I-9 with Riordan within the past three years, or 2) their previous I-9 is no longer valid or was not retained. If you have questions or want more information on immigration law issues, you are encouraged to contact the Human Resources Director. At Riordan, you can raise questions or complaints about immigration law compliance without fear of reprisal.

Non-Disclosure It is vital to the interests and success of Riordan that we protect our confidential business information and trade secrets. Confidential information includes, but is not limited to, the following examples:

? sales data

? compensation data

? customer lists

? financial information

? marketing strategies

? new materials research

? pending projects and proposals

? proprietary production processes

? research and development strategies

scientific data

? scientific formulae

? scientific prototypes

? technological data

? technological prototypes If you are exposed to confidential information, we may request that you sign a non-disclosure agreement as a condition of your employment. Because we consider security breaches very serious, if you improperly use or disclose trade secrets or confidential business information, you will be subject to disciplinary action, up to and including termination of employment and legal action, even if you do not actually benefit from the

disclosed information. Disability Accommodation Riordan is committed to complying fully with the Americans with Disabilities Act (ADA) and ensuring equal opportunity in employment for qualified persons with disabilities. All employment practices and activities are conducted on a non-discriminatory basis. Our hiring procedures have been reviewed and provide persons with disabilities meaningful employment opportunities. Pre-employment inquiries are made only regarding an applicant's ability to perform the duties of the position. We require post-offer medical examinations only for positions that have bona fide job-related physical requirements. An examination will be given to any person who enters the position but only after being given a conditional job offer. Medical records are kept separate and confidential. Reasonable accommodation is available to an employee with a disability if the disability affects the performance of job functions. We make all employment decisions based on the merits of the situation in accordance with defined criteria, not the disability of the individual. Qualified individuals with disabilities are entitled to equal pay and other forms of compensation (or changes in compensation) as well as job assignments, classifications, organizational structures, position descriptions, lines of progression and seniority lists. We provide vacation and medical leaves to all employees on an equal basis. Riordan will not discriminate against any qualified employee or applicant because the person is related to or associated with a person with a disability. Riordan will follow any state or local law that provides individuals with disabilities greater protection than the ADA. This policy is neither exhaustive nor exclusive. Riordan is committed to taking all other actions necessary to ensure equal employment opportunity for persons with disabilities in accordance with the ADA and all other applicable federal, state and local laws. Job Posting Our job posting program provides you with the opportunity to indicate your interest in open positions and advance within the organization according to your skills and experience. In general, we post all regular, full-time job openings although Riordan reserves its right to not post a particular

opening. Job openings will be posted on the employee bulletin board and in the email system, and normally remain open for 10 days. Each job posting notice will include the dates of the posting period, job title, department, location, grade level, job summary, essential duties and qualifications (required skills and abilities). To be eligible to apply for a posted job, you must have performed competently for at least 180 calendar days in your current position. If you have a written warning on file or are on probation or suspension, you are not eligible to apply for posted jobs. You may only apply for posted jobs for which you possess the required skills, competencies and qualifications. To apply for an open position, submit a job posting application to the Human Resources Department listing your job-related skills and accomplishments. You should also describe how your current experience with Riordan and prior work experience and/or education qualifies you for the position. We recognize the benefit of developmental experiences and encourage you to talk with your supervisor about your career plans. We also encourage supervisors to support employees' efforts to gain experience and advance within Riordan. After you apply for a job, your supervisor may be contacted to verify your performance, skills and attendance. Any staffing limitations or other circumstances that might affect a prospective transfer may also be discussed. Job posting is a way to inform employees of openings and to identify qualified and interested applicants who might not otherwise be known to the hiring manager. We may also use other recruiting sources to fill open positions when it is in the best interest of the organization. Employment Categories Understanding the definitions of the employment classifications at Riordan is important because your classification is one of the factors that determine your employment status and benefit eligibility. These classifications do not guarantee employment for any specified period of time. Since employment with Riordan is based on mutual consent, either you or Riordan have the right to terminate the employment relationship at will at any time, with or without cause or advance notice.

Depending on your position, you are 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. Your EXEMPT or NONEXEMPT classification may be changed only with written notification from Riordan management. In addition to the Exempt and Nonexempt categories, you also belong to one of the following employment categories:

? REGULAR, FULL-TIME employees are employees who are regularly scheduled to work the full-time schedule at Riordan. Regular, full-time employees are eligible for all Riordan benefit programs, subject to the terms, conditions and limitations of each benefit program.

? PART-TIME employees are employees who are regularly scheduled to work less than 40 hours per week. While part-time employees receive all legally mandated benefits (such as Social Security and workers' compensation insurance), they are ineligible for the other Riordan benefit programs.

Personnel Data Changes To help us keep records and benefit program information accurate, please notify Riordan of any changes to your personal information. The information we need includes your mailing address, telephone numbers, your marital status, changes to your dependents' information, who to contact in case of an emergency, educational accomplishments and other possibly relevant information. To make changes or if you have questions about what information is required, contact the Human Resources Department. Employment Applications Riordan relies on the accuracy of the information provided on the employment application as well as the accuracy of other data presented during the hiring process and employment. If there are any misrepresentations, falsifications or material omissions in any of this information, we may exclude that applicant from further consideration. If the person was already hired, it could result in termination of employment.

Performance Evaluation The best communications about job performance happen on an informal, day-to-day basis. You and your supervisor are strongly encouraged to talk about performance regularly. In addition, Riordan wants to ensure that you and your supervisor have regular, formal performance evaluations. These discussions give you both the opportunity to discuss job responsibilities and goals, encourage and recognize strengths, identify and correct any weaknesses, develop plans for dealing with any obstacles and plan for the future. The performance of all employees is generally evaluated on an ongoing 12-month cycle, beginning at the end of the fiscal year. Riordan awards merit-based pay adjustments in recognition of truly superior employee performance. These adjustments are based on numerous factors, including the information documented by the formal performance evaluation process. Job Descriptions Riordan makes every effort to create and maintain accurate job descriptions for all positions within the organization. We use the job descriptions to help new employees understand their job duties and to set standards for employee performance evaluations. Job descriptions are also used to identify the requirements of each position, establish hiring criteria and establish a basis for making reasonable accommodations for individuals with disabilities. The Human Resources Department and the hiring manager prepare job descriptions when new positions are created. Existing job descriptions are also reviewed and revised in order to ensure that they are up to date. Job descriptions may also be rewritten periodically to reflect any changes in the position's duties and responsibilities. You can also be helpful by making sure that your job description accurately reflects the work you do. We would like you to remember that job descriptions do not necessarily cover every task or duty that you might be assigned, and that additional responsibilities may be assigned as necessary. You can contact the Human Resources Department if you have any questions or concerns about your job description. Salary Administration The salary administration program at Riordan was created to achieve consistent pay practices, comply with federal and state laws, mirror our commitment to Equal Employment Opportunity and offer competitive salaries

within our labor market. Because we believe that recruiting and retaining talented employees is critical to our success, we are committed to paying our employees equitable wages that reflect the requirements and responsibilities of their positions and are comparable to the pay received by similarly situated employees in other organizations in the area. Compensation for every position is determined by several factors, including job analysis and evaluation, the essential duties and responsibilities of the job and salary survey data on pay practices of other employers. We periodically review our salary administration program and restructure it as necessary. We may award merit-based pay adjustments in conjunction with superior employee performance as documented by our performance evaluation process. If you have a question about the pay practices for your department, you can talk with your supervisor. The Human Resources Department is also available to answer questions about Riordan's salary administration program. Employee Benefits Riordan provides a wide range of benefit programs to eligible employees. Certain legally required programs (such as Social Security, workers' compensation, state disability and unemployment insurance) cover all employees in the manner required by the laws. Your eligibility for each benefit program depends on a variety of factors, including your employee classification. To better understand exactly which benefit programs you are eligible for, talk to your supervisor. You will find details about many of these programs elsewhere in the employee handbook. In some cases, a policy may also refer you to other sources, such as the Summary Plan Document for that benefit. The following benefit programs are available to regular, full-time employees, subject to terms and conditions of each program:

? Flexible Spending Accounts

? 401(k) Savings Plan

? Dental Insurance

? Educational Financial Assistance

? Flextime Scheduling

? Health Insurance

? Holidays

? Life Insurance

? Vacation Benefits

While some of the benefit programs we offer may require you to contribute to the cost, many programs are fully paid by Riordan. Vacation Benefits Riordan offers vacation time off with pay to regular, full-time employees for rest, relaxation, and personal pursuits. The amount of paid vacation time you receive each year increases with the length of your employment as shown in the following schedule:

? Upon initial eligibility, the employee is entitled to 5 vacation days each year.

? After 5 years of eligible service, the employee is entitled to 10 vacation days each year.

? After 10 years of eligible service, the employee is entitled to 15 vacation days each year.

? After 15 years of eligible service, the employee is entitled to 20 vacation days each year.

The length of eligible service is calculated on the basis of a "benefit year." A benefit year is defined as the 12-month period that begins when you start earning vacation time. Your benefit year may be extended for any significant leave of absence except military leave of absence. (Military leave has no effect on the benefit year calculation.) See the leave of absence policies in this handbook for more information. Once you enter an eligible employment classification, you begin to earn paid vacation time according to the schedule in this policy. You can use earned vacation time in the year after it is accrued. You may use vacation time in minimum increments of one-half day. To schedule vacation time, you should first request advance approval from your supervisor. Each request will be reviewed based on a number of factors, including our business needs and staffing requirements. Vacation time off is paid at your base pay rate at the time of the vacation. It does not include overtime or any special forms of compensation such as incentives, commissions, bonuses or shift differentials. We encourage you to use your available paid vacation time for rest, relaxation and personal pursuits. In the event that you do not use your available vacation by the end of the benefit year, you will forfeit the unused time.

If your employment terminates, you will be paid for any unused vacation time that has been earned through your last day of work. However, if Riordan, in its sole discretion, terminates your employment for cause, your unused vacation time may be forfeited. Child Care Benefits To help parents who work at Riordan, we provide child care assistance to eligible employees. Regular, full-time and part-time employees are eligible to participate in the child care assistance programs, subject to the terms and conditions of each program. The following brief descriptions list the child care assistance programs that are offered when feasible. To find out the details of a specific program, please contact the Human Resources Department.

? CAFETERIA PLAN/FLEXIBLE SPENDING ACCOUNT: Employees choose benefits (including child care) from a list of options and contribute a part of pretax salaries to a child care account. This option allows employees to minimize the federal tax they must pay on child care dollars.

? FLEXTIME SCHEDULING: Employees may request the opportunity to vary their work schedules (within employer-defined limits) to better accommodate child care responsibilities.

Holidays Riordan gives holiday time off to all employees on the following holidays:

? New Year's Day (January 1)

? Memorial Day (last Monday in May)

? Independence Day (July 4)

? Labor Day (first Monday in September)

? Thanksgiving (fourth Thursday in November)

? Christmas (December 25)

We provide holiday time off with pay to regular, full-time employees immediately upon assignment to an eligible employment classification. If you are eligible for paid holidays, your holiday pay will be calculated on your straight-time pay rate as of that holiday multiplied by the number of hours you would normally have worked on that day. To be paid for a holiday, an eligible employee must work both the last scheduled work day immediately preceding the holiday and the first scheduled work day immediately following the holiday. If a recognized holiday falls during an eligible employee's paid absence (e.g. vacation time or sick leave), the employee will be ineligible for holiday pay. If eligible nonexempt employees work on a recognized holiday, the employees will receive holiday pay plus wages at one and one-half times their straight-time rate for the hours worked on the holiday. Paid time off for holidays will be counted as hours worked for the purposes of determining overtime pay. Workers' Compensation Insurance Riordan provides a comprehensive workers' compensation insurance program to our employees. The workers' compensation program covers injuries or illnesses sustained in the course of employment that require medical, surgical or hospital treatment. Subject to the applicable legal

requirements, this program provides benefits after a short waiting period or, in the event of hospitalization, immediately. It is critical that you inform your supervisor immediately about any work-related injury or illness, regardless of how minor it might appear at the time. Immediate reporting ensures that, if eligible, you will qualify for workers' compensation benefits as quickly as possible and also lets us investigate the matter promptly. Workers' compensation is intended to cover only work-related injuries and illnesses. Because of this, neither Riordan nor our insurance carrier will be liable for the payment of workers' compensation benefits for injuries that might occur during employees' voluntary participation in off-duty recreational, social or athletic activities that we may sponsor. Benefits Continuation (COBRA) The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees and their qualified beneficiaries the opportunity to continue health insurance coverage under our health plan when a "qualifying event" occurs that would normally result in the loss of eligibility. "Qualifying events" include:

? Resignation, termination of employment or death of an employee

? A reduction in an employee's hours

? Employee's leave of absence

? Employee's divorce or legal separation

? When a dependent child no longer meets the eligibility requirements

Under COBRA, the employee or beneficiary pays the full cost of coverage at Riordan's group rates plus an administration fee. When you become eligible for Riordan health insurance, we will also give you a written notice describing the rights granted under COBRA. Because the COBRA notice contains important information about your rights and your obligations, please read it carefully. Educational Assistance We recognize that our employees' skills and knowledge are critical to the success of Riordan. Therefore, we created our educational assistance program to encourage employees to maintain and improve their job-related skills through formal education. We also want to help employees enhance their potential to compete for reasonably attainable jobs at Riordan. Our educational assistance program is available to all eligible employees who have completed one year of regular, full-time employment. To remain eligible once you begin receiving educational assistance, you must stay on the active payroll and perform your job satisfactorily as you complete each course. To be eligible for educational assistance, individual courses or courses that are part of a degree, licensing or certification program must be related to your current job duties or to a position you might have at Riordan in the foreseeable future. Riordan management will determine if a course or program is related to your current job or one that you might hold in the foreseeable future.. The Human Resources Department can provide more information about educational assistance if you have questions. While we expect educational assistance to enhance your performance and professional abilities, we do not promise or guarantee that additional education will result in advancement, new job assignments or pay increases. We invest in employees' educational assistance with the expectation that the investment will benefit Riordan. However, if you voluntarily terminate employment within one year of the last educational assistance payment, we will consider educational assistance amounts to be loans to you. Accordingly, you will be required to repay up to 50 percent of the original educational assistance payment. Health Insurance The health insurance plan at Riordan offers regular, full-time employees and their dependents access to medical and dental insurance benefits, subject to

the terms and conditions of the agreement between Riordan and the insurance carrier. If you change to an employment classification that would cause you to lose your health insurance plan eligibility, you may qualify to continue your health care benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA). Refer to the Benefits Continuation (COBRA) Policy in this handbook for more information. You will find details of the health insurance plan in the Summary Plan Description (SPD). When you become eligible, you will receive the SPD and rate information prior to the enrollment date. For questions about health insurance, contact the Human Resources Department. Life Insurance Life insurance offers you and your family important financial protection. Riordan provides a basic life insurance plan for regular, full-time employees. Eligible employees may participate in the life insurance plan subject to the terms and conditions of the agreement between Riordan and its insurance carrier. You will find details about the basic life insurance plan including benefit amounts in the Summary Plan Description. If you have questions, contact the Human Resources Department for more information. 401(k) Savings Plan Riordan has established a 401(k) savings plan to provide employees with the potential for future financial security for their retirement. To be eligible to join our 401(k) savings plan, you must complete 12 months of service and be 21 years of age or older. You may join the plan only during open enrollment periods. Eligible employees may participate in the 401(k) plan subject to all terms and conditions of the plan. The 401(k) savings plan allows you to elect how much salary you want to contribute, so you can tailor your own retirement package to meet your individual needs. Riordan also contributes an additional matching amount to each employee's 401(k) contribution. Because your contribution to a 401(k) plan is aupomatically deducted from your pay before federal and state tax withholdings are calculated, you save tax dollars now by having your current taxable amount reduced. While the

amounts deducted generally will be taxed when they are finally distributed, favorable tax rules typically apply to 401(k) distributions. Complete details of the 401(k) savings plan are described in the Summary Plan Description. You can contact the Human Resources Department for more information about the 401(k) plan. Flexible Spending Account (FSA) Riordan provides a Flexible Spending Account (FSA) program that allows regular, full-time employees to have pre-tax dollars deducted from their salaries to pay for eligible out-of-pocket expenses. The pre-tax contributions made to the FSA can be used to pay for predictable non-reimbursed health care expenses and dependent care expenses during the plan year. Through the FSA program, you can reduce your taxable income without reducing your real income, so that you can keep more of the money you earn. Participation in the Health Care and/or Dependent Care FSA is optional and determined on an annual basis for the plan year. You must enroll for each plan year. You determine how much to contribute to the account, up to a specified maximum, based on anticipated expenses during the plan year. You may contribute up to a maximum of $1,000 each year for your Health Care FSA. The maximum contribution for your Dependent Care FSA is $ 5,000 per year. Contributions are directed to the FSA through salary reduction on a pre-tax basis. This tax-free money is then available to you for reimbursement of out-of-pocket expenses. Since the amounts that remain in the account at the end of the plan year are forfeited, you should take care not to over-fund your account. Details of the Flexible Spending Account program are described in the Summary Plan Description. Contact the Human Resources Department for more information on the Flexible Spending Account program and to obtain enrollment and reimbursement forms and worksheets with examples of reimbursable and non-reimbursable expenses. Timekeeping Nonexempt employees are responsible for accurately recording the hours they work. This information also helps Riordan comply with the laws that require us to keep accurate records of "time worked" in order to correctly calculate employee pay and benefits. "Time worked" is defined as all the time nonexempt staff spend performing assigned duties. If you are a nonexempt employee, you must accurately record the time you begin and end your work, including the beginning and ending time of any meal

periods, split shifts or if you leave the workplace for personal reasons. Also, you always need to receive advance approval before working any overtime hours. We consider attempts to falsify timekeeping records a very serious matter. Therefore, any of the following actions may result in disciplinary action, up to and including termination: altering, falsifying or tampering with time records or recording another employee's time record. You are also responsible for signing your time records to certify their accuracy. Your supervisor will then review and initial the time records before submitting for payroll processing. Paydays All employees are paid weekly every Friday. Each paycheck includes earnings for all work performed through the end of the previous payroll period. We also offer the option of having your pay directly deposited into your bank account once you provide us with the required authorization. When you select direct deposit, you receive an itemized statement of wages on paydays instead of a paycheck. Safety To assist in providing a safe and healthful work environment for employees, customers and visitors, Riordan has established a workplace safety program. This program is a top priority at Riordan. The Safety Manager is responsible for implementing, administering, monitoring and evaluating the safety program. The success of the program depends on the alertness and personal commitment of everyone. We provide information to employees about workplace safety and health issues through regular internal communication channels. These may include supervisor-employee meetings, bulletin board postings, memos or other written communications. Employees and supervisors receive periodic workplace safety training. The training covers potential safety and health hazards as well as safe work practices and procedures to eliminate or minimize hazards. You are expected to obey all safety rules and use caution in your work activities. You must immediately report any unsafe condition to the appropriate supervisor. If you violate Riordan safety standards, cause a hazardous or dangerous situation or fail to report or remedy such situations, you may be subject to disciplinary action, up to and including

termination of employment. In the case of an accident that results in an injury, regardless of how insignificant the injury may appear, you should immediately notify the Safety Manager or the appropriate supervisor. Prompt reporting can ensure legal compliance and quick initiation of insurance and worker's compensation benefits procedures. Overtime There may be times when Riordan cannot meet its operating requirements or other needs during regular working hours. If this happens, we may schedule employees to work overtime hours. When possible, we will try to let you know in advance of a mandatory overtime assignment. It is our policy that no overtime can be worked without the approval and authorization of the supervisor. We try to distribute overtime assignments fairly among all employees who are qualified to perform the required work. All nonexempt employees will be paid overtime compensation in accordance with federal and state wage and hour restrictions. Overtime pay is based on actual hours worked. For this reason, time off for sick leave, vacation and other paid or unpaid leaves of absence are not considered hours worked for the purpose of calculating overtime pay. If you fail to work scheduled overtime or work overtime without receiving your supervisor's prior authorization, you may be subject to disciplinary action, up to and including possible termination of employment. Medical Leave Riordan provides unpaid medical leaves of absence to regular, full-time employees who become temporarily unable to work due to a serious health condition or disability. For medical leave purposes, a serious health condition or disability includes:

? Inpatient care in a hospital, hospice or residential medical care facility

? Continuing treatment by a health care provider

? Temporary disabilities associated with pregnancy, childbirth and related medical conditions

Eligible employees may request medical leave only after completing 180 calendar days of service; however, we may consider exceptions to the service requirement to accommodate disabilities. In order to receive medical leave, you must specifically request it. If you think you will need a medical leave, submit your request to your supervisor at least 30 days in advance of the date the leave would start. This will help us plan for your possible absence. If it is an unexpected situation, make your request as soon as possible. We require a health care provider's statement verifying the need for medical leave and the start and expected end dates. You are responsible for telling us about any subsequent changes to that information. Before you can return to work, we will require verification from a health care provider stating that you are fit to return. Unpaid medical leaves are normally for the period of the disability, up to a maximum of 12 weeks within any 12 month period. The 12 week maximum applies to any combination of both medical leave and family leave during any 12 month period. Before beginning an unpaid medical leave, you must first use any available accrued paid time off, such as vacation or sick benefits. If you incur a work-related injury, you are eligible for a medical leave for the period of disability in accordance with the laws covering occupational disabilities. Subject to the terms, conditions and limitations of the applicable plans, Riordan will continue to provide health insurance benefits for the full period of a medical leave. Benefit accruals, such as vacation, sick leave or holiday benefits, will be suspended during a medical leave and will resume when you return to active employment. To help us plan for your return from leave, we request at least two weeks notice before your expected return date. When you return from medical leave, you will be reinstated to your position unless that job is no longer

available. If it is not available, you will be placed in an equivalent position for which you are qualified. If you do not report back to work promptly at the end of a medical leave, we will assume that you have resigned. Employee Conduct and Work Rules To ensure orderly operations and provide the best possible work environment, we expect you to follow rules of conduct that will protect the interests and safety of all employees and Riordan. Although it is not possible to list all the forms of behavior that are considered unacceptable at work, the following are some examples 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

? Possession, distribution, sale, transfer or use of alcohol or illegal drugs in the workplace, while on duty or while operating employer-owned vehicles or equipment

? Fighting or threatening violence in the workplace

? Insubordination or other disrespectful conduct

? Violation of safety or health rules

? Smoking in prohibited areas

? Sexual or other unlawful or unwelcome harassment

? Possession of dangerous or unauthorized materials, such as explosives or firearms, in the workplace

? Excessive absenteeism or any absence without notice

? Violation of personnel policies

? Unsatisfactory performance or conduct

Since employment with Riordan is based on mutual consent, either you or Riordan have the right to terminate the employment relationship at will, with or without cause or advance notice, at any time. Drug and Alcohol Use Riordan wants to provide a drug-free, healthful and safe workplace. To meet this goal, we expect you to report to work in a mental and physical condition that enables you to perform your job in a satisfactory manner. While on Riordan premises or while conducting business-related activities off Riordan premises, you may not use, possess, distribute, sell or be under

the influence of alcohol or illegal drugs. We permit the legal use of prescribed drugs on the job only if they do not impair your ability to perform the essential functions of your job effectively and safely without endangering others. If you violate this policy, it may lead to disciplinary action, up to and including immediate termination of your employment. Additionally, we may require that you participate in a substance abuse rehabilitation or treatment program. If you violate this policy, there could also be legal consequences. If you have questions about this policy or issues related to drug or alcohol use at work, you can raise your concerns with your supervisor or the Human Resources Director without fear of reprisal. Sexual and Other Unlawful Harassment Riordan 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 Human Resources Director 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 Human Resources Director or any member of management so it can be investigated in a timely and confidential manner. Any employee engaging in sexual or other unlawful harassment will be subject to disciplinary action, up to and including termination of employment. Attendance and Punctuality As an employee of Riordan, we expect you to be reliable and punctual by reporting for work on time and as scheduled. When you are absent or late, it places a burden on other employees and can impact productivity and service. In the rare instances when you cannot avoid being late or are unable to work as scheduled, be sure to notify your supervisor as soon as possible so that appropriate arrangements can be made. Because unplanned absences can be disruptive to work, a poor attendance record or excessive lateness may lead to disciplinary action, up to and including termination of employment. Progressive Discipline This policy describes the policy for administering equitable and consistent discipline for unsatisfactory conduct at Riordan. We believe that the best disciplinary measure is the one that does not have to be enforced and comes from good leadership and fair supervision at all employment levels. We also believe that it is in the best interests of Riordan to ensure fair treatment of all employees and make 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 performance in the future. Although your employment is based on mutual consent and both you and Riordan have the right to terminate employment at will, with or without cause or advance notice, Riordan 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. If more than 12 months have passed since the last disciplinary action, the process will normally start over. Riordan 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 considered 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 employees and Riordan. References (2008). When does a breach of contract occur. Retrieved October 23, 2008, from Free Advice Web site: http://law.freeadvice.com/general_practice/contract_law/breach_contract.htm (2008). Week 3 Topic 1 contract risk and opportunities. Retrieved October 23, 2008, from University of Phoenix Web site: https://ecampus.phoenix.edu/classroom/ic/classroom.aspx