1. HIRING PRACTICE: Selection of all personnel will be strictly based on abilities, previous work experience suitability for specific positions and references. Each applicant will be given consideration for suitable available position. Each applicant will be required to complete an application for employment. All personnel will be classified into one of six departments: Customer Service, Accounting, Installation/Service, Information Technology/Engineering, Central Station, and Sales. All personnel will be hired under the authority of the Senior Partners of the Corporation.
   
2. LETTER OF APPOINTMENT: At the time of employment, the employee will be given a letter of appointment which will state the job title, salary, date of employment, term of employment (permanent, temporary, full-time, part-time, etc.), working hours, and a job description.

3. CONTINUATION OF EMPLOYMENT: Continuation of employment will be based on employee’s continuing satisfactory performance, HORIZON’S continuing need for the particular position in which the employee is working and the financial ability of the company to maintain that position.
   
4. ORIENTATION: Each new employee will receive (in addition to the letter of appointment mentioned above), a copy of this report (containing these policy statements), literature describing HORIZON’S services and other appropriate orientation materials and information as may be determined necessary.

   EMPLOYMENT OF RELATIVES: As a matter of general policy, HORIZON will not hire individuals to work in departments where they would be under the direct supervision of a relative unless specifically authorized by the Senior Partners before the fact.
   

5. OPPORTUNITIES FOR ADVANCEMENT: Whenever a position is vacant, first consideration will be given to HORIZON'S employees who wish to be transferred or promoted. All vacancies will be posted where all employees may see them. All promotions and transfers will be based on qualifications and performance.
6. TERM OF EMPLOYMENT: Employees will be hired under one of the following terms: Permanent Full-time (40 hours per week), Permanent Part-time (up to 30 hours per week), temporary full-time (up to 12 months ) and Per Diem (for specific "one-time" tasks).
   
7. PROBATION: New personnel hired for permanent employment will work on a probationary basis for a three month period in order to determine their suitability for continued employment. At the end of this period the employee will be evaluated by the appropriate supervisor. Who will then recommend whether the employee should be retained for employment and designated as permanent employee; remain on an additional 3 or 6 month probationary period in order to correct deficiencies in job performance or other indications of being unable to conform with HORIZON'S regular permanent staff. The Senior Partners will determine what action is to be taken on the Supervisor's recommendations in accordance with HORIZON'S best interests. If performance level is not maintained, probation may be reinstated at a later date.
   
8. WORKING HOURS: These hours very depending on departmental schedules and are to be given to the employees at the time they are hired. Some departments may have specific requirements on shift hours. The company at times may adjust the hours to the day or night shift accordingly, due to business needs. However, a person who works day or night will not be changed to the other shift involuntarily. The company may also ask the employee to work weekends when need be.
   
9. COMPENSATORY TIME/OVERTIME: It is the general policy of HORIZON not to pay overtime unless specifically requested by the appropriate supervisor and approved by the Senior Partners before the fact. If an employee is requested to work other than normal working hours by the supervisor. HORIZON will pays 1½ times the employee’s base salary rate for all time worked beyond the normal workweek or grant compensatory time off with pay for an appropriate number of hours/days at a mutually agreed upon time/date.
   
10. ATTENDANCE AND PUNCTUALITY: It is understood that there are times when delays are unavoidable or unforeseeable and days when one is unable to report to work. Nonetheless, all employees are strongly urged to be dependable! If an employee is unable to report to work, the immediate supervisor is to be notified as early in the day as possible ( 3 hours before the shift) so that necessary decisions regarding distribution of workloads can be made. This procedure is to be followed by all employees for each day of absence.
    
11. SALARIES: Every attempt is made to pay employee a salary comparable to others doing similar work requiring similar skills. Our payroll week begins on Thursday and ends on Wednesday. Pay will be distributed BI-weekly on Friday afternoon.
    
12. ADVANCES: It is against general company policy to make advances against any employee’s salary, this is why the company recommends our employees to become members of our credit union.
    
13. PERFORMANCE EVALUATION: A Performance Evaluation of each employee shall be completed annually by the appropriate supervisor. This evaluation will measure satisfactory job performance, the progress of growth since the last evaluation (or lack of it), the strength and weakness of the employee and whether or not the employee merits a salary increase. The evaluation will help the employee to determine problem areas (if any) and assist him or her to improve job performance. The evaluation will be discussed with the employee who will then be allowed to make comments on the evaluation form for the record. Whenever it is noted a permanent employee’s performance falls bellow acceptable levels, a 3 month probation shall be imposed following a Special Evaluation documenting problems and needed improvements in performance. A second Special Evaluation shall be performed at the end of the 3 months to determine if the employee has taken the necessary corrective action (s) and to remove the employee from probation, extend probation for another 3 months, or terminate the employee.
    
14. SALARY INCREASES: Every attempt will be made to grant Meritory Performance Increases on a yearly basis, (company's fiscal year, or a year after the last raise) based on the employee’s evaluation. The amount of all increases will be determined by the Senior Partners. Certain salary adjustments may be done in the first year of employment. The overriding factor must and will be the availability of funds. In general employees should reach top pay between three to five years depending on craft. Top pay will be adjusted from time to time to keep current with outside scales and cost of living.
    
15. EMPLOYEE ASSISTANCE: HORIZON realizes that at times employees may develop serious problem which may affect their job performance. When this happens, it becomes a matter of concern to the company. HORIZON will offer every possible assistance to the employee and in certain cases (such as Alcoholism, Drug Abuse, Mental or Emotional Disturbances, etc) the company will require that the employee seek professional assistance. If the employee’s performance is seriously impaired for a prolonged period of time, he or she shall be terminated.
    
16. USE OF COMPANY EQUIPMENT: Craftsmen or technicians shall own and maintain their own personal tools the company will supply trucks and major tools, (i.e. ladders, extension cords, generators etc.). Employees assigned HORIZON'S equipment and materials will be responsible for exercising reasonable care in their use, preserving the life of the equipment, and observing safety precautions. Supervisors will assign equipment and material, explain security and safety procedures and enforce then. The personal use of company equipment and material is strictly prohibited. OSHA approved equipment and rules shall be followed at all times.
    
17. USE OF COMPANY TELEPHONE: The appropriate supervisor will assign personnel to handle all incoming calls. Nonetheless, No employee should allow a telephone to remain unanswered. The use of company telephones for personal calls should be kept to an absolute minimum and is strongly discouraged. Any employee abusing this privilege or making unauthorized long distance calls will be subject to severe disciplinary measures.
    
18. PERSONAL PROPERTY: Employees are discouraged from bringing personal property to the office and will be solely responsible for their belongings.
    
19. PUBLIC RELATION: Each employee should be aware of the image of the company which he or she communicates to the public. Each employee represents HORIZON and should act accordingly. No employee should presume to represent HORIZON'S policies to members of the media (newspapers, radio, or television stations) or representatives of other company's without the prior approval of the Senior Partners.
    
20. OUTSIDE EMPLOYMENT: HORIZON will not interfere with outside employment activities unless they interfere with the employee’s work performance, work is not to be solicited from HORIZON'S customers or referrals. They are to be given to the sales department. Serious disciplinary action (termination) is to be given if a HORIZON employee is found to be doing work in our trade for a HORIZON customer base or potential customers. However, employees are requested to notify their supervisors before accepting any conflicting employment.
    
21. POLITICAL ACTIVITY: All employees are encourage to politically be aware and participate in political activities on their off duty time and to regularly exercise their right to vote. Active political campaigning or solicitation for political contribution while on duty is strictly prohibited.
    
22. MILEAGE: Certain employees may be expected to travel outside the office on company business in the performance of their regular job duties. It will be the responsibility of the employee to comply with all state laws regarding the operation of a motor vehicle, licensing, insurance, etc. If such traveling is done in the employee’s personal vehicle, reimbursement will be made for travel expenses based on the mileage traveled at a rate to be determined by the Senior Partners.
    
23. QUESTIONS AND COMPLAINTS: HORIZON encourages employees to express any questions they may have regarding job duties, working conditions or other policies and procedures. Any employee who does not fully understand any action directly affecting him or her should discuss the situation with the appropriate supervisor. In addition, either of the Senior Partners will be available to discuss the situation should the need rise.
    
24. RESIGNATION: All personnel are requested to give HORIZON a minimum of 2 weeks advance notice when resigning from their positions. Notice should be submitted in writing. This will not only give the company time to plan for the redistribution of workloads and begin recruiting for a replacement but it will also insure that the employee is given any vacation pay or other benefits forthcoming prior to leaving the company.
    
25. SAFETY: Each employee is responsible for taking reasonable safety precautions at all times, particularly when operating equipment, or working in a construction building. OSHA'S guide-lines shall be follow. NO SMOKING will be permitted in the building.
    
26. ABANDONMENT OF JOB: Employees with an unexplained absence of 3 consecutive days (failure to follow call in procedures) shall be deemed to have abandoned their job and will be immediately terminated. All sick-leave shall be forfeited.
    
27. MAINTENANCE OF WORK AREA: It is the responsibility of all employees to maintain their work area in a neat, orderly, and presentable condition. All tools, material, and paperwork not being currently used should be stored away neatly in their proper storage places (preferably out of sight) until needed. Food and beverage containers should be washed and put away as soon as possible to avoid accidental spillage and insect infestation. Technicians must clean up after working in customers business or residences.
    
28. PERSONAL APPEARANCE AND DRESS CODE: Employees are expected to maintain a neat and presentable personal appearance, dress in a manner suitable to professional office, or work environment and attend to their personal hygiene (i.e. showering, shaving, combing their hair, trimming and cleaning fingernails, etc.) before reporting to work each day. Each supervisor should have the authority to determine what should be a proper dress code, for their specific area. Any employee not in compliance with the provisions of this section may be dismissed for the remainder of the workday. Time lose due to such action may not be made up or compensated for in any way.
29. CENTRAL STATION DEPARTMENT: In the event that an operator is absent due to sickness, there shall be a rotating back up system for central station personal. The company expects that the designated person on the list will take over the shift for that day or night shift. In the event that, that person is not available or excused, the following person shall take over the shift and the previous person will make it up at a later day. In the event that an employee calls in sick the company expects for the employee to acquire medical assistance and if asked, to bring proper proof. Overtime pay should apply to the employee filling up the shift, unless otherwise arranged. Company holidays worked by central station personal should be pay as double time.
    
30. INSTALLATION & SERVICE DEPARTMENT: There is to be a technician on duty at all times for after hours, commercial, or emergency services. This technician should rotate weekly. Holidays are to be rotated also and they shall be chosen by seniority. Compensation for this on call duty, is determine by the Senior Partners. As of January 1^st 1998, the technician on duty is to be paid $100.00 as a fix rate, plus call out time. Minimum call out is two hours overtime paid. Customer telephone assistance is to be paid as 15 minutes, overtime paid per customer assisted. A detailed report must be signed and approved by the service manager before it can be past on to our pay roll department. Technicians must request a ticket # from the dispatching operator before taken the service call and most verify if the service is chargeable or not, and if it is chargeable must verify that client has being informed and accepted emergency service call.

1. HOLIDAYS: The following paid holidays will be observed each year:

Whenever one of these holidays falls on a Saturday, it will be observed on the preceding Friday. If it falls on a Sunday, it will be observed on the following Monday.

Note: In order for employees to be eligible for holiday pay they must have successfully completed their required probationary period and work both the last scheduled workday before the holiday as well as the first scheduled workday after the holiday. Any employee on an approved vacation during a holiday will be entitled to an extra vacation period. Any exceptions to the above must have prior approval from the Senior Partners.

1. SHORT TERM DISABILITY INSURANCE:  Provided and paid by the company.  Short term disability is intended to protect your income for a short duration in case you become ill or injured.  Eligibility: All full-time active employees working 40 or more hours per week in an eligible class are eligible for coverage on the policy effective date.  Maximum Benefit = 13 weeks, Maximum Weekly Benefit 60% of weekly salary up to $600 per week.  Benefits begin on: 8th day for an accident, 8th day for an                    illness.                        
2. LONG TERM DISABILITY INSURANCE: Provided and paid by the company. Long term disability is intended to protect your income for a long duration after you have depleted short-term disability or any sick leave your company may offer.  Maximum Monthly Benefit = 60% of salary up to $5,000 per month.  Maximum Benefit Duration: Social Security Normal Retirement Age. Elimination Period = 90 days.  In case of any insurance change or cancellation for whatever reason the company will notify the employees in advance. Check your manual and policy for coverage and details.
   
3. GROUP LIFE INSURANCE: A $25,000.00 life insurance is provided and paid by the company. AD&D Benefit $25,000.00, Check your policy for details, and next to kin.
4. 401K RETIREMENT PLAN, (This Plan was Roll Over to a Simple IRA in 2002): Allows employees to save on current income taxes, and enjoy the potential of tax-deferred growth, save in an easy way. Payroll deduction from 1%-15% each pay period. Choose and control your own investments. As of January 1st 2000, Horizon is contributing 25% of each dollar you contribute up to 4% of your compensation. Additional discretionary contributions may also be made. You are 100% vested immediately on the value of your contributions. You will be completely vested on the value of your employer's contribution based on the following vesting schedule:
   Years of service ----------------1--------------2--------------3--------------4---------------5--------------
   Amount vested --------------20%---------40%----------60%---------80%----------100%-----------
   *Loans are available. Participants may borrow up to 50% your own account value.
5. SIMPLE IRA PLAN:  Was discontinue by the company and transfer directly to the employees at the end of 2002, due to stock market conditions.  Employees are encourage to continue with the plan at their own supervision.
   
   HORIZON ELECTRONICS, INC: Is governed by the Senior Partners who are directly responsible for establishing rules and procedures regarding employee relations. Discipline is an unpleasant but necessary component of the employer-employee relationship. In an attempt to inform the employee of the type of disciplinary actions which might be taken in certain circumstances this section describes general guidelines to be used in enforcing personnel policies as well as a code of Ethics to be adhered by all employees. These guidelines will also serve as a guide for the supervisor in determining what type of actions to take under certain circumstances. In any case, these guidelines are only recommendations, which may be modified without notice and may not necessarily apply in every case. This is left to the discretion of the immediate supervisor and the Senior Partners.

CODE OF ETHICS

The following Code of Ethics shall be adhered to by all employees, without exception:

1. No employee shall disclose any confidential information gained through employment with HORIZON. (ALL CLIENT INFORMATION IS CONFIDENTIAL).
   
2. No employee shall deny HORIZON'S services to any individual based on any personal criteria (this includes any discrimination based upon age, sex, race, color, religion, national origin, etc.)
   
3. No employee shall use his or her position with HORIZON in order to obtain unauthorized personal gain (financially or otherwise).

1. Failure to work assigned hours (including compensatory or overtime hours) as previously agreed without adequate notification of supervisory personnel.
2. Unauthorized use or possession of company property (equipment, materials, etc).
3. Failure to perform assigned work during working hours without permission.
4. Abuse of rest periods or lunch break.
5. Failure to perform assigned duties adequately.
6. Disruption of inter-personal relationships between fellow employees.
7. Lateness in reporting to work more than three days in a month.
8. Chronic absenteeism.
9. Failure to follow call-in procedure, when absent.
10. Unsafe actions in violation of safety regulations due to carelessness.
11. Failure to report an accident or personal injury on the job.
12. Disorderly conduct (including but not limited to: horseplay, wrestling, throwing object, practical pranks, etc.)
13. Failure to provide for the payment of personal debts resulting in annoyance to the company.
14. Creating or contributing to unsafe or unsanitary conditions.

SECONDARY OFFENSES GROUP B

1. Improper treatment of a fellow employee or client including abusive language, threats, intimidation, etc.
2. Violating the Code of Ethics.
3. Engaging in any game of chance on company property.
4. Circulating false, vicious, or malicious statements concerning any fellow employee.
5. Reporting for work while medically, mentally, or physically unfit to work (except for minor ordinary sickness such as colds, flu, etc.)
6. Negligent actions, which affect any individual’s safety or threaten company property.
7. Distribution of any written of printed matter unless authorized.
8. Failure to report, any request for information or subpoena from any legal firm or lawyer to HORIZON management.
9. Unauthorized financial activities (vending, soliciting, collecting money, etc.)
10. Possession or use of another employee’s tools or equipment without authorization.
11. Refusal to testify in investigations involving company accidents.
12. Negligence resulting in damage to company property.
13. Consuming alcoholic beverages during or prior to reporting to work.
14. Disregarding or violating company rules, orders, or policies.

OFFENSES RESULTING IN DISMISSAL GROUP C

1. Willful neglect in performance of assigned duties.
2. Deliberately misusing or damaging another’s personal property or company property.
3. Falsification of company records including employment applications, time sheets, etc.
4. Falsifying information or misrepresenting facts in order to obtain any work-related benefits such as worker’s compensation, unemployment, etc.
5. Refusal to perform assigned work, or comply with supervisory instructions.
6. Discourtesy to clients seeking the company’s services,
7. Unauthorized possession of firearms, explosives, or weapons during working hours or on company property.
8. Unauthorized removal or theft of company property from company premises.
9. Immoral, unlawful, improper conduct, or indecency which affects an employee’s relationship with his her work, fellow workers, etc.
10. Use or sale of illegal narcotics/drugs.
11. Unauthorized absence (failure to call in) 3 consecutive days.
12. Striking any individual at any time, fighting, or instigating a fight on company premises.
13. Committing or being convicted of any felony or misdemeanor of the first degree.
14. Knowingly concealing a communicable disease, which may endanger others.
15. Concerted interference with operations.
16. Being under the influence of liquor or illegal drugs while on duty or immediately prior to reporting for work.
17. Possessing intoxicating beverages or illegal drugs on duty.
18. Sexually harassing any fellow employee.
19. Leaving the job site with intentions of stealing company time.
20. Sleeping during working hours.

The recommended disciplinary action to be taken for violations in these areas is as follows:

VII. COMPANY SERVICES

The following brief description is meant to quickly familiarize new employees with some of the services we offer:

INTEGRATED ACCESS CONTROL

FIRE PROTECTION

SECURITY/CCTV SURVEILLANCE SYSTEMS

BUSINESS TELEPHONE AND NETWORK SOLUTIONS

We also offered CENTRAL STATION SERVICES, to other security dealers through our Central Monitoring Services Division.

CLOSING STATEMENT:

We hope that this staff Handbook/Intranet report has been helpful, in familiarizing you with our operations and what you can expect from us as an employee of HORIZON and what we expect from you. We hope that you will take pride in our accomplishments and work toward a better future for all of us. We are always interested in your opinions, and any ideas you may have for improving HORIZON ELECTRONICS, INC. will always be welcome!

CREDIT UNION.

HEALTH-INSURANCE.

AvMed Health Plans                                                                                                                                                                      Send Claims to:  P.O. Box 569000, Miami, Florida  33256-9000                                                                                                 
www.avmed.org

Group Name:  Horizon Electronics, Inc.                                                                                                                                         Group Number: 108896                                                                                                                                                      

Members Call:  1-800-882-8633                                                                                                                                               PROVIDERS CALL:  1-800-452-8633

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GROUP SHORT AND LONG TERM DISABILITY & LIFE/AD&D INSURANCE.
         
Lincoln Financial Group,

Short-Term Disability Claim Processing

Policy # 01-0107955-00000

Lincoln Financial Group

P.O. Box 2609

Omaha, NE 68103-2609

Tel. 1-866-783-2255

Fax 1-877-843-3950

email: disabilityclaims@lfg.com

  
To learn more about the Lincoln Financial Employee-Connect program visit:  http://www.bensingerdupont.com/jp_login.aspx

(password = connect) or talk with a specialist at 1-877-757-7587

Agent: