All regular, full-time employees are eligible for paid holidays. V.L.S observes the following holiday schedule:

New Year's Day
Independence Day
Labor Day
Thanksgiving Day
Dayafter Thanksgiving Day
Christmas Day

If a holiday falls on Saturday, employees will be off on the Friday before the holiday. If the holiday falls on Sunday, the following Monday will be observed.

The Client at whom an employee works governs holidays. If Client has a working day on which V.L.S has a holiday, Employee should work at the client site as per the Client Holiday Schedule. If a holiday falls within an employee's scheduled annual leave, he/she will report holiday hours for that period in lieu of annual leave. Employees on leave without pay will not be eligible for paid holidays falling in such absences. A maximum of upto 8 holidays can be taken if the client at where an employee works, has a schedule for 8 or more days.

Holidays do not accrue and cannot be carried forward. The standard holiday schedule shall be amended, as necessary, to comply with contractual obligations, which deviate from this policy.

Paid annual leave is provided to regular, full-time employees because V.L.S believes that employees benefit from scheduled time off to enjoy relaxation and recreation, and to return to work in a revitalized condition. Annual leave may be taken before the end of the six-month introductory period, if approved by the employee's supervisor. Any advance leave prior to the end of the six-month evaluation period is subject to client schedules. Unused annual leave may be carried for the next year or can be cashed.

Employees are eligible for paid vacation for all client billable hours, earned in accordance with the following annual leave accrual schedule.

Length Of Service	Annual Leave
Six months, less than two years	up to 10 working days (80 hrs) per year or 3.33 hours per full hours in pay period
Third year	up to 13 working days (104 hrs) per year or 4.33 hours per full hours in pay period
Four years, but less than seven years	up to 15 working days (120 hrs) per year or 5.00 hours per full full hours in pay period.
Seven years or more	up to 20 working days (160 hrs) per year or 6.66 hours per full full hours in pay period.

In order to request annual leave, an Annual Leave Request Form must be submitted at least two weeks prior to the beginning of the leave. Annual Leave Requests are approved by the employee's supervisor.

No leave will be granted to employees after either the employee, or V.L.S has given termination notice. Employees will not be compensated for any unused vacation leave.

Employees are not charged with a day of annual leave when a scheduled paid holiday occurs during their vacation, provided they are employed on the day following their vacation.

V.L.S has intended to provide a method of furthering the health and general welfare of regular, full-time employees, as well as establishing standards to ensure maximum and reasonable job attendance. Company provided sick leave should not be viewed as a right to be used at the employee's discretion nor as a permissive level of absence; it is a privilege of paid time away from work duties where such absence is necessary for an employee's disabling injury, illness, or for assisting with the required or necessary medical care or doctor's appointment of the employee's immediate family.

Employees are required to notify their supervisor no later than one hour after their scheduled starting time. Employees who must leave work should likewise advise their supervisor. It is the responsibility of every employee to report the circumstances of the sick leave, recovery progress, and probable duration. Employees are responsible for reporting, and record keeping of sick leave.

Regular, full-time employees are entitled to a maximum paid sick leave of 5 days (40 hours) per calendar year or 1.66 hours per pay period. Employees who exhaust their sick leave may continue their necessary absence by use of their accrued vacation, and/or requesting a leave of absence.

Any illness or injury exceeding three days could, at the discretion of the project manager or supervisor, require a physician's certificate as a condition to return to work.

If an employee becomes ill or injured while on vacation, all days of consecutively scheduled vacation time will be completed before medical leave commences.

Employees will not be compensated for accrued but unused sick leave upon separation from V.L.S service. Any negative sick leave balance will be repaid to the company at termination.

Jury Duty.

This leave requires prior approval. The employee will receive his/her regular rate of pay less any compensation received from the court. (Expenses paid by the court, as opposed to jury duty pay, will not be refunded to V.L.S)

The employee must inform his/her Project Manager or supervisor as soon as he/she receives the summons to appear. The employee must submit a copy of the summons to appear along with his/her time-sheet for the week jury duty is served. It is the responsibility of the Project Manager or supervisor to obtain this copy, and to assure the time is accurately recorded on the time-sheet and submitted to Accounting. If jury duty exceeds 80 hours, continuation of pay will require the approval of the President or Executive Vice President.

An employee subpoenaed to court as a result of legal action not initiated by the employee, and clearly out of the employee's control, shall be considered the same as if he or she was on jury duty for a period not to exceed eight hours. If the employee initiates legal action resulting in a subpoena for his/her appearance in court, the employee shall be required to charge the time to annual leave.

Bereavement

The employee is to inform his/her Project Manager or supervisor of such leave as soon as possible. It is the Project Manager or supervisor's responsibility to assure that bereavement leave is recorded on the employee's time sheet.

Employees are eligible for up to three (3) days paid absence for time lost from work due to a death in the immediate family. Immediate family includes spouse, parent, son, daughter, brother, sister, father-in-law, mother-in-law, grandparent and grandchild.

Voting

On election days, employees are requested to vote either before or after business hours.

Personal Leave Regular, full-time employees may request, subject to the discretionary approval of VLS management, a personal leave of absence without pay for a period not to exceed 12 weeks.

Request for a Personal LOA should be submitted in writing to the supervisor as far in advance of the anticipated leave date as possible. The leave request must be dated, signed by the employee, and sate the reason, duration, and location of the employee during leave. The supervisor will submit his or her recommendation to the SBU Manager, who will approve or disapprove the leave, and so notify the employee through the supervisor. The effective date of the LOA will be the last day worked.

Family and Medical Leave all full-time and part-time employees are eligible to request up to 12 weeks leave of absence (on a calendar year basis) from the company under the Family Medical Leave Act (FMLA).

An employee must first exhaust any available leave prior to unpaid leave, the total of which can not exceed 12 weeks.

If a husband and wife both work for V.L.S as full-time employees, they may share 12 weeks of leave for the birth or adoption of a child. Both will be entitled to the full 12 weeks for their own illness or for the care of a sick child, spouse on or parent.

Employees are required to provide advance notice of not less than 30 days when the need for leave is foreseeable, and for unforeseeable leave as soon as is practicable. Employees will also be required to submit medical certification starting the illness or treatment, as well as an estimate of the duration of time needed. Leave may be taken continuously or under certain circumstances on a reduced leave schedule. Leave may not be carried over from year to year. Leave may only be taken in whole day increments.

The effective date of the family/medical leave will be the last day worked. Upon the expiration of family or medical leave, the employee may be reinstated to the position held or an equivalent one, if such a position is available.

If the leave was for medical reasons, a doctor's note releasing the employee to return to work must be submitted to the Project Manger.

The following guidelines are applicable to both personal and family/medical leave of absences:

V.L.S offers health insurance, life insurance and long term disability insurance for regular, full-time employees. Regular, full-time employees may elect short term disability and family health insurance for a nominal fee. All insurance coverage (if elected) becomes effective the first day of the calendar month following the start of full-time employment.

Following are brief description of each insurance program (refer to your respective insurance booklets for further details):

Health Insurance Health insurance benefits include Major medical insurance, Dental insurance and vision care. Pre-existing conditions are covered, but only to a limited extent (see Health Plan booklet for details).

In order to be reimbursed for medical and/or dental expenses, employees are required to submit the appropriate claim forms directly to the insurance administrator.

V.L.S health care benefit coverage terminates at the end of the pay period in which the employee is terminated (either voluntarily or for caused).

Tuition Reimbursement: V.L.S encourages its employees to further their careers by developing their knowledge, skills and abilities through formal education directly related to their carrier track. Graduate and undergraduate degree and non-degree programs are included in the Company's educational assistance program. In general, it is expected that the employee's performance on the job will not be impaired by the requirements of the educational courses.

To be eligible for this program, the employee must be a regular, full-time employee, and have completed the Six month introductory period. As well as, be on the active payroll at the time the course begins and ends.

Eligible employees interested in participating in Education Assistance Programs must complete an Educational Assistance Request Form. Before enrolling in a college program or any outside course for which tuition assistance will be provided, employees should discuss with their supervisor how the course work applies to their work-related strengths or weaknesses and which new skills, knowledge or abilities they expect to learn from the course and apply on the job.

Tuition assistance will be provided to all regular, full-time employees on an equal basis without regard for race, color, religion, national origin, age, sex, disability, or veteran status.

For approved courses relating to the nature of V.L.S business, V.L.S will provide tuition reimbursement for up to two (2) approved graduate or undergraduate courses per semester taken by regular, full-time employees. Tuition reimbursement includes course registration, actual tuition costs. Tuition reimbursement will be made according to the following schedule:

Reimbursement will be made upon successful completion of the course(s) and presentation of the original grade reports, proof of payment, and a completed expense report.

Since there is a limited amount of money that can be spent on educational assistance, these requests will be spent on educational assistance, these request will be handled on a first come, first served basis.

In the event an employee leaves V.L.S within two-years period of receiving tuition reimbursement, the employee will reimburse V.L.S 100 percent of the tuition reimbursement paid. Payment for this reimbursement may be deducted from the employee's final check. Amounts not recovered from the last paycheck(s) will become due to V.L.S within 2 weeks of termination of employment.

A Tuition/Training Agreement must be signed by the employee and will be binding for all applicable tuition costs incurred and/or reimbursements paid to the employee. V.L.S System policy is set at a maximum tuition reimbursement of up to $1250 per employee per 12 moth period, not calendar year.

Under Federal law, this may be a taxable benefit depending upon the nature of the educational course(s), and will be added to the employee's W-2 Form where appropriate.

Training Reimbursement. It is V.L.S Systems belief that training is an integral part of the success and efficiency of V.L.S Systems operation, and instrumental to employee development within their job and in preparation for career advancement. Training is therefore viewed as a shared responsibility of management and employees in order to accomplish the mutual benefit of an increasingly skilled and efficient work force.

Responsibility for vocational training and observance of safe work practices is shared equally by each employee. In this regard, employees are responsible for attending, learning, and applying the information provided by in-service training, and will be responsible for self-initiation of that training outside the work environment that could reasonably lead to, or be required by, the standards for promotional employment opportunities.

Training, as related to V.L.S System policy, is considered to be industry training or seminars which are directly related to V.L.S System current business.

V.L.S will pay up to 100 percent of training costs for approved programs that are job-related. Each request will be considered on a case-by-case basis and must be approved by a V.L.S officer.

These training costs will be paid back to V.L.S by the employee, if the employee leaves V.L.S within one-year period after the last day of training. This training may be assigned by management or the employee may request a given training course.

The company encourages its professional staff members to participate actively in appropriate technical/professional societies. Annual dues may be reimbursed with the approval of Company management. Once approval has been given, the employee will be reimbursed upon providing proof of payment of dues, proof of membership and a complete expense report.

Employees are encouraged to contribute to their profession by presenting papers to technical publications, and before technical society meetings and symposia. Use of Company facilities will be provided. Activities of this nature should be coordinated with your immediate supervisor.

V.L.S has a 401(K) Plan to help its regular, full-time and part-time employees prepare for future financial needs. This plan makes it easy for an employee to save regularly through tax deferred payroll deductions. The decision to participate and the amount contributed is completely voluntary.

Employees must be at least 21 years of age and on V.L.S payroll during the enrollment period to be eligible to enroll. Enrollment periods are held quarterly. Employees must complete a 401(K) Enrollment and Investment Selection Form and return it to Human Resources prior to the end of the open enrollment period. Late enrollments will be returned to the employees. Employees may also make changes to existing contributions or fund designations during these periods. Funds from previous 401(K) accounts can be rolled over into V.L.S System plan at any time.

The 401(K) Plan is designed to encourage employees to say with V.L.S Systems, Inc. With the exception of hardship withdrawals and loans, payment of a participating employee's account balance is only available upon the employee's termination, disability, retirement, or death. If employment is terminated, the employee is entitled to receive only the "vested percentage" of his/her account balance. For more details regarding our Retirement Savings Plan, please consult your individual Summary Plan Description SPD or the Human Resources Department.

At the end of each year, V.L.S will equally distribute the profit for all the employees. Please check the plan details for further information.

The company insures all employees against work-related injuries. Any such injuries must immediately be brought to the attention of your supervisor so that you may receive proper medical attention. The injury must be reported to Human Resources so that it can be filed with the worker's Compensation carrier. Any unsafe conditions should be immediately brought to the attention of your supervisor.

COMPENSATION AND PERFORMANCE APPRAISAL PRACTICES

PERFORMANCE EVALUATIONS

Each employee will be evaluated at the conclusion of his/her Six month introductory period. Thereafter, evaluations will be conducted annually or more frequently as deemed appropriate by supervisory personnel.

The purpose of the written appraisal is to provide the employee with an assessment of his/her personal progress, and level of achievement of project and corporate goals. The appraisal helps to identify carrier development plans and job objectives as they relate to the strategic business growth of the Company, and the personal goals of the employee. Among the factors evaluated during formal performance evaluations are the employee's quality and quantity of work, work habits, interpersonal relations and adaptability to technical and managerial responsibilities.

Each employee is required to complete a self evaluation form and submit it to the evaluation supervisor, along with an updated corporate resume. Each employee is given an opportunity to meet with the evaluating supervisor to openly and candidly discuss the evaluation before it is finalized. Once the Performance Evaluation has been thoroughly discussed with the employee to point out both areas of successful performance and areas that need improvement, the employee should sign the performance evaluation to acknowledge awareness of its contents and discussion with the rating supervisor. Most of the clients will look for 2 to 4 weeks of performance guarantee. For any reason, if Client asks employee to leave because of non-performance, it will be reflected in the appraisal process.

A promotion will be reflected by a change in title and may be accompanied by a salary increase. Although promotions generally occur in conjunction with regularly scheduled salary review actions, promotions may occur independent of such actions based upon business need and individual qualifications. The amount of promotional increase, when grated, will vary depending on the employee's performance, and the additional skill, responsibility and judgment required in the new position.

V.L.S makes every effort to promote from within the Company. There may be executions to this policy when specific skills are not available within the Company or when such a change would disrupt a current client's project. However, one of the Company's objectives is to offer employees more responsible work as they demonstrate their ability and willingness to accept added responsibility.

One of the advantages of working for a service organization is the possibility for employees to transfer to vacant or new, higher level positions when qualified employees are available or deemed suitable in all respects, and where it is determined to be in the best interests of V.L.S to do so. Every attempt is to be made to keep the employee satisfied while maintaining good client relationships.

Once an employee has approached a Manger or Human Resource expressing an interest in a transfer it is imperative that the manager from the employee's proposed Group/Department discuss with, and get approval from, the employee's current manager before the transfer can take place.

RELOCATION EXPENSES

Relocation expenses will be considered on a case by case basis with V.L.S senior management.

Employees receiving any financial assistance for relocation are required to sign a Reimbursement Agreement. Should an employee resign voluntarily or be terminated for cause within one and half year (18 months) after receiving this benefit, he/she must reimburse V.L.S the full amount within 30 days of his/her last day of employment. The Agreement also makes it clear that, to the extent possible, relocation expenses will be recovered from the terminating employees last paycheck(s).