BAE SYSTEMS. BAE Systems, Inc. Management Policy 1. POLICY

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1 I BAE SYSTEMS BAE Systems, Inc. Management Policy SUBJECT: NUMBER: REVISION: EFFECTIVE: Drug-Free Workplace 113 Three March 1, POLICY It is the policy of BAE Systems, Inc. that all Inc. Businesses comply with the Federal Drug-Free Workplace Act by providing employees a working environment that is free of the problems associated with the use of illegal drugs and the abuse of alcohol, prescription medications, and over-the-counter medications. The use of illegal drugs and the abuse of alcohol, prescription medications, and over-the-counter medications are inconsistent with the behavior expected of employees and subject the Company to unacceptable risks of workplace accidents or other failures that would undermine the Company's ability to operate effectively and efficiently. 2. PURPOSE AND SCOPE The purpose of this policy is to communicate BAE Systems, Inc.'s policy toward maintaining a drug-free work environment in accordance with the Drug-Free Workplace Act. In addition, this policy outlines and defines the Department of Transportation (DOT) drug and alcohol testing program requirements for employees who are subject to DOT regulations, including those required by the Federal Motor Carrier Safety Administration (FMCSA), Federal Aviation Administration (FAA), and Federal Transit Administration (FTA) as set forth in the Appendices. Finally, this policy outlines the Company's drug and alcohol testing requirements for non-dot-regulated employees, in accordance with applicable state and local laws. Unless otherwise notified, applicants and employees will be subject to non-dot testing and policies. This policy can be changed at any time by BAE Systems, Inc. in its sole discretion. It is neither intended to nor does it create any contractual relationship between an employee or potential employee and an Inc. Business. Once printed or duplicated, this policy is not a controlled document. The most up-to-date version of the policy exists in electronic form on the Corporate Policy web site. 1

2 3. DEFINITIONS 3.1 Alcohol means the intoxicating agent in beverage alcohol, ethyl alcohol, or other alcohols including methyl and isopropyl alcohol. 3.2 Controlled Substance is defined under sections 1 02(6) and 202 of the Controlled Substances Act, 21 USC 802(6); 812 and includes all substances listed in Schedules I through V of 21 CFR through , as they may be revised from time to time. 3.3 Conviction means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of a Criminal Drug Statute. 3.4 Criminal Drug Statute means a federal or non-federal criminal statute involving the manufacture, distribution, dispensing, possession, sale, purchase or use of any Controlled Substance. 3.5 Designated Employer Representative (DER) is an employee authorized by the employer to take immediate action/s to remove employees from Safety-Sensitive Functions, including those defined under the Department of Transportation regulations, or cause employees to be removed from covered duties, and to make required decisions in the testing and evaluation processes. 3.6 Drug Abuse includes the use of illegal drugs, and the excessive or illegal use of drugs or alcohol whose sale, use or possession is legal (including abuse of prescription or over-the-counter medications). This includes the use of prescribed medications in a way that is not as prescribed. 3.7 Illegal Drugs refers to controlled substances. The term does not include those Controlled Substances used pursuant to and in accordance with a valid prescription. 3.8 Inc. Businesses means BAE Systems, Inc. and its owned and/or managed businesses. For purposes of this policy, this term shall refer to Inc. Businesses located in the United States, unless otherwise specified. 3.9 Medical Review Officer (MRO) is a licensed physician responsible for receiving laboratory results generated by a drug testing program and evaluating medical explanations for certain drug test results Reasonable Suspicion is a conclusion clearly expressed by a member of management that an individual has used or may have used drugs and/or alcohol in violation of this policy, based on specific, contemporaneous, and objective observations concerning the appearance, behavior, speech and/or body odor of the employee, or as otherwise required by law. 2

3 3.11 Sensitive Positions are those positions that are considered to be sensitive as determined by BAE Systems and would reasonably be expected to affect health, safety, or national security. These include, but are not limited to: duties involving access to U.S. Government classified information; design, manufacture, test, evaluation, control, operation, use, transportation, storage or protection of potentially dangerous equipment, materials, munitions, weapons or weapon systems; national security; the health or safety of themselves or others; or whose positions involve a high degree of trust and confidence. Individuals occupying such positions may be subject to random and/or periodic drug testing, as permitted by applicable laws Safety-Sensitive Functions are defined under the FAA, FMCSA, and FTA and can be found in Appendices 1. ~. and ~ attached hereto Substance Abuse Professional (SAP) is a person who evaluates employees concerning substance abuse and makes recommendations about education, treatment, follow-up testing, and aftercare. 4. APPLICABILITY This policy applies to employees and individuals who have been offered a position with Inc. Businesses in the United States. Non-United States based employees and applicants should follow local in-country laws and policies. For those employees subject to a collective bargaining agreement (CBA), if there is any conflict between the provisions of this policy and the terms of the applicable CBA, the CBA will govern with the exception of those provisions mandated by law. Employees may additionally be required to comply with military regulations or customer requirements if located on a military base or customer location. 5. POLICY REQUIREMENTS 5.1 The Company recognizes that drug and alcohol dependence is a treatable illness and encourages employees who may have a drug or alcohol abuse problem to seek treatment and to utilize our Employee Assistance Program (EAP). 5.2 The Company will handle information and records pertaining to the status of personnel tested, assessed, or treated in accordance with this policy in accordance with federal, state and local laws and regulations. 5.3 The following actions are violations of this policy: a. The unlawful use, possession, sale, distribution, dispensation, manufacturing, trade, and/or transfer of Controlled Substances in Company owned or leased facilities (including parking lots), or other work sites where employees may be assigned during work hours. 3

4 b. The lawful use of prescription medications, by the individual to whom the medication was prescribed, which impact the ability of an employee to safely and accurately perform their assigned job responsibilities. c. The abuse or misuse of prescription medications, or use of prescription medications that have not been prescribed to the individual, which impact the ability of an employee to safely and accurately perform their assigned job responsibilities. d. The use, possession, sale, distribution, dispensation, manufacturing of, or being under the influence of alcohol or other intoxicants in Company owned or leased facilities (including parking lots), or other work sites where employees may be assigned. Exemptions for limited alcohol use or possession for company events may be made by the Headquarters or Sector Vice President of Human Resources in accordance with policies that govern the approval of alcohol use. For avoidance of doubt, this section does not prohibit short-term possession of closed containers of alcohol (e.g. bottles of wine) in Company owned or leased facilities when given or received as gifts. e. The use of alcohol or Controlled Substances on non-working time to the extent such use impairs an employee's ability to perform his/her job; or the use, possession, sale, distribution, dispensation, manufacture, trade or transfer of alcohol or Controlled Substances that affects the reputation of the Company in the general public. f. Operation of a motor vehicle while in the course of business, representing the Company in an official capacity, or reporting for work while under the influence of alcohol or Controlled Substances. g. Refusal to submit to any drug or alcohol test required by this policy. h. Testing positive on any drug or alcohol test required by this policy. 5.4 The Company maintains and reserves the right to take corrective action against employees who violate this policy up to and including discharge, as permitted by law. 5.5 This policy is intended to comply with certain federal, state and local laws and regulations. To the extent that any provision of this Policy is found to conflict with any applicable law or regulation, that determination shall not affect the validity, legality, or enforceability of any other provision of this Policy. 4

5 6. DRUG-FREE AWARENESS PROGRAM 6.1 The Company has established and will maintain a drug-free awareness program and policy to inform employees about: a. The dangers of illegal Drug Abuse in the workplace. b. The Company's policy of maintaining a drug-free workplace. c. Available drug and alcohol counseling, rehabilitation, and employee assistance programs. d. The corrective actions that may be imposed upon employees for violations of this policy. Questions regarding the Company's Drug-Free Awareness Program may be directed to the local Human Resources or Occupational Health department (where available). 7. EMPLOYEE ASSISTANCE PROGRAM (EAP) 7.1 The Company has adopted an Employee Assistance Program (EAP) which: a. Encourages employees to seek and obtain assistance for substance abuse (including alcohol) problems. b. Provides information concerning the effects of alcohol and Controlled Substances use. c. Provides coordination with available community resources. d. Includes assessment and referral to counseling, rehabilitation, and educational services. e. Provides for self-referrals and supervisory referrals to treatment with respect for individual confidentiality consistent with safety and security issues. 8. SUPERVISOR TRAINING Appropriate training may be provided to supervisors to assist in identifying and addressing potential substance abuse by employees. "Reasonable suspicion" training will be provided to supervisors where required by law. 5

6 9. CONDITIONS OF EMPLOYMENT 9.1 Every employee must: a. Abide by all the terms of this policy. b. Notify the Company in writing no later than five (5) days after his/her Conviction under any Criminal Drug Statute for a violation of the law occurring in the course of employment. c. Within ten (1 0) days after rece1v1ng notice of a Criminal Drug Statute Conviction that occurred in the workplace, the Company will notify the appropriate U.S. Government agencies, if and as required. Within thirty (30) days after receiving such notice, the Company will take appropriate corrective action against the employee, up to and including discharge, and/or may require the employee to participate in an appropriate Drug Abuse assistance ; or rehabilitation program. 9.2 Although applicants and employees have the right to refuse to test, any applicant who refuses to test will not be hired and any employee who refuses at any time to submit to a drug or alcohol test will be discharged. 9.3 Consistent with and subject to the Company's policies concerning the Family and Medical Leave Act, and personal leaves and vacations, employees who voluntarily self-identify themselves as having a substance abuse problem and who voluntarily request assistance for such problem will be provided with an opportunity to seek evaluation by a Substance Abuse Professional and to obtain appropriate counseling, treatment or rehabilitation, if recommended. The cost of any evaluation and treatment is the employee's responsibility. This request must be made before the employee has violated this policy or has been requested to submit to a drug or alcohol test required by this policy. Employees may not use this self-identification provision to avoid submitting to a required drug or alcohol test or to avoid discipline for violations of this policy. 10. DRUG AND ALCOHOL TESTING 10.1 All drug and alcohol testing procedures will comply with applicable federal, state and/or local laws. In general, drug and alcohol testing procedures will conform to the Mandatory Guidelines for Federal Workplace Drug Testing Programs published by the U.S. Department of Health & Human Services, unless otherwise required by applicable laws The substances that will be tested for include: Amphetamines, Cannabinoids (THC), Cocaine, Opiates and Phencyclidine (PCP). Additional drugs may be added to the testing panel at the discretion of the Sector, and in accordance with applicable law. Testing for the presence of metabolites of drugs will be 6

7 conducted by the analysis of urine. Individuals with confirmed non-negative results (i.e., positive, adulterated, substituted, and invalid) will be given the opportunity to discuss with the Medical Review Officer (MRO) any legitimate explanation for the test result. If, after speaking with the applicant or employee, the MRO determines that there is a legitimate medical explanation for a confirmed positive test result, the MRO will report the test result as negative. If the MRO determines that there is no legitimate explanation for the confirmed positive test result, the result will be verified as a "verified positive test result" by the MRO. Where required by law, applicants and employees who test positive will be offered the opportunity to have their specimen re-tested at a different laboratory. The request must be made to the MRO within 72 hours of being notified by the MRO of a verified positive test result (unless otherwise required by law). Alcohol screening tests are conducted using either breath or saliva for the initial test, and breath for the confirmatory test, where permitted by law. If the result of the initial screening test is an alcohol concentration of 0.02 or greater, a confirmation breath test will be performed. The confirmation test will be conducted within 30 minutes from the end of the screening test. The confirmation test result is the final result upon which any discipline or other action taken under the Company's policy shall be based. A positive test result is an alcohol concentration of 0.04 or greater The Company conducts drug and/or alcohol tests under the following conditions, where permitted by applicable laws: a. Pre-employment - All applicants, including part-time and temporary, to be hired or rehired (regardless of the length of time away from the Company) must complete a drug screen test once an offer of employment is made. The offer and commencement of employment shall be contingent upon successful completion of the drug screen (i.e., receipt of a negative test result). If the applicant is a minor, a consent form signed by the guardian is to be obtained prior to the testing. b. Certain employees assigned to work on specific customer contracts- In accordance with particular customer requirements, employees may be subjected to drug and/or alcohol tests. c. Follow-Up - Periodic unscheduled drug and/or alcohol testing may be conducted after an employee has returned to work following rehabilitation after failing a drug and/or alcohol test, or when required by applicable law or regulation. d. Periodic - Periodic, unscheduled drug testing may be conducted on any employee considered to be in a Sensitive Position as defined in section 3 of this policy. 7

8 e. Post Accident - BAE Systems reserves the right to test for drugs and/or alcohol when an employee is involved in a work-related accident in which there is a death, personal injury, and/ or significant property damage. f. Random - There will be random testing for employees who perform duties that are covered under the Federal Motor Carriers Safety Administration (FMCSA), the Federal Transit Administration (FTA), or the Federal Aviation Administration (FAA). Random testing may also be conducted in accordance with specific contract requirements or Sector or Business Area procedures. g. Reasonable Suspicion - There may be testing of an employee for Reasonable Suspicion when he/she is in the workplace, performing work, and/or on company time and is reasonably suspected by two members of management or their designee to be under the influence of or impaired by drugs and/or alcohol. h. Negative-Dilute -A specimen reported as "negative-dilute" by the certifying scientist will be re-collected as soon as possible. A "positive-dilute" specimen is regarded as a "positive" result and will not be re-collected Employees who perform duties covered under the DOT drug and alcohol testing regulations will be subject to the testing requirements therein. The DOT agencyspecific regulations cover: a. Employees who assume commercial motor vehicle driving duties as defined by the FMCSA. The regulations are set forth in 49 CFR 382. (See Appendix 1.) b. Employees who perform Safety-Sensitive Functions as defined by the FAA. The regulations are set forth in 14 CFR 120. (See Appendix 2.) c. Employees who perform Safety-Sensitive Functions as defined by the FT A. The regulations are set for in 49 CFR 655. (See Appendix 3.) 11. CONSEQUENCES OF A POSITIVE DRUG OR ALCOHOL TEST 11.1 An employee who tests positive is subject to discipline up to and including discharge, as permitted by applicable law An employee who is not discharged will receive, at a minimum, an immediate five day disciplinary suspension without pay and must sign a "Last Chance Agreement" with the following conditions prior to reinstatement: a. The employee must agree to become and remain drug and/or alcohol free (excluding lawful prescriptions taken as prescribed under a physician's care). 8

9 b. The employee must meet with an Occupational Health Representative or Employee Assistance Program (EAP) Representative for assessment and referral to a rehabilitation program, if appropriate. (Note- Human Resources will generally take the place of Occupational Health in locations that do not have Occupational Health departments). c. The employee must participate in an appropriate rehabilitation program as recommended by the Occupational Health Representative or EAP Representative. d. The employee must authorize the EAP Representative to monitor the employee's progress and to periodically communicate with the applicable Company and/or Human Resources Representative with sufficient information to ensure participation and treatment is occurring, and to address potential return-to-work issues. e. Prior to returning to work, the employee must meet all of the requirements below. An employee meeting all of the requirements will be reinstated to the same position held prior to his/her absence or a similar position held prior to his/her absence if he/she is within any reinstatement rights period. If the employee has no reinstatement rights or is beyond the reinstatement period for which he/she is eligible and no position is available, his/her employment will be terminated. f. Submit to, as instructed, and successfully pass a return to duty drug and/or alcohol test immediately prior to returning to work. g. Receive the written consent for the employee to return to work from the Substance Abuse Professional or EAP. h. Receive approval of the Contracting Officer (when required under U.S. Government Contract). i. Agree to abide by all conditions established for his/her rehabilitation "after care" upon successful completion of a rehabilitation program. j. Agree to participate in a medical monitoring program to include periodic, unscheduled drug and/or alcohol testing, if required by law or if recommended by the treating Substance Abuse Professional. k. Meet the job performance standards of his/her position, including continued compliance with all company policy requirements and standards of conduct. 9

10 11.3 Any violation of the above provisions will be grounds for corrective action up to and including discharge from employment An employee who tests positive for a second time will be discharged from employment Although applicants and employees have the right to refuse a drug test, any applicant who refuses to take a test will not be hired and an employee who refuses to submit to testing will be discharged Refusal to take a drug test will be found if an employee or applicant: a. Fails to appear for any test (except a pre-employment test) within a reasonable time, as determined by the Company after being directed to do so by the Company. b. Fails to remain at the testing site until the testing process is complete; provided that an employee or applicant who leaves the testing site before the testing process commences for a pre-employment test is not deemed to have refused to test. c. Fails to provide a specimen for any drug test required; provided that an employee or applicant who does not provide a specimen because he or she has left the testing site before the testing process commences for a preemployment test is not deemed to have refused to test. d. In the case of a directly observed or monitored collection in a drug test, fails to permit the observation or monitoring of the provision of a specimen (unless prohibited by law), including failing to follow the observer's instructions to permit the observer to determine whether there is any prosthetic or other device that could be used to interfere with the collection process. e. Possesses or wears a prosthetic or other device that could be used to interfere with the collection process. f. Fails to provide a sufficient amount of specimen when directed and it has been determined, through a required medical evaluation, that there was no adequate medical explanation for the failure. g. Fails or declines to take an additional drug test the Company or collector has directed the employee or applicant to take. h. Fails to undergo a medical examination or evaluation, as directed by the Company as part of the verification process. In the case of a pre-employment drug test, the employee or applicant is deemed to have refused to test on this basis only if the pre-employment test is conducted following a contingent offer_ 10

11 of employment. If there was no contingent offer of employment, the Company will cancel the test. i. Fails to cooperate with any part of the testing process (e.g., leaves the test site before the collection process is completed, refuses to empty pockets when so directed by the collector, fails to wash hands after being directed to do so by the collector or behaves in a confrontational way that disrupts the collection process, etc.). j. Is reported by the MRO that he/she has a verified adulterated or substituted test result, or that he/she admitted to the MRO that the specimen was adulterated or substituted Refusal to take an alcohol test will be found if an employee: a. Fails to appear for any test (except a pre-employment test) within a reasonable time, as determined by the company after being directed to do so by the Company. b. Fails to remain at the testing site until the testing process is complete; provided, that an employee who leaves the testing site before the testing process commences for a pre-employment test is not deemed to have refused to test. c. Fails to provide an adequate amount of saliva or breath for any alcohol test required; provided, that an employee who does not provide an adequate amount of breath or saliva because he or she has left the testing site before the testing process commences for a pre-employment test is not deemed to have refused to test. d. Fails to provide a sufficient breath specimen and the physician or nurse has determined, through a required medical evaluation, that there was no adequate medical explanation for the failure. e. Fails to undergo a medical examination or evaluation, as directed by the Company following an insufficient breath sample. f. Fails to sign the certification of the Alcohol Testing Form. g. Fails to cooperate with any part of the testing process An employee who tests positive will be reported to the Facility Security Officer. If the employee currently holds a security clearance or previously held a security clearance, he/she will be reported to the granting agency in accordance with applicable U.S. Government guidelines. 11

12 11.9 Applicants who test positive will be prohibited from being considered for employment for a minimum of three months Employees covered under any Department of Transportation drug testing regulation are subject to the requirements provided therein Drug and alcohol test results will be maintained by the Company in a confidential manner and shall not be disclosed to third parties except with the tested individual's written consent, and/or in accordance with applicable laws Applicants and employees who test positive will be provided with a copy of their test results if required by law. 12. SEARCHES An Inc. Business may conduct reasonable searches for Illegal Drugs and/or alcohol on its premises including, without limitation, parking areas and employee vehicles, at any time and with or without notice, in accordance with applicable laws. Employees are expected to cooperate in such searches. Searches of employees and their personal property may be conducted when there is Reasonable Suspicion that the employee is in violation of this policy. An employee's refusal to comply may result in disciplinary action, up to and including termination of employment. No such search shall be conducted without the prior review and approval of Human Resources. 13. REFERENCES None 14. APPENDICES Appendix 1, Commercial Motor Vehicle Drivers Appendix 2, Safety-Sensitive Position- Federal Aviation Administration Appendix 3, Safety-Sensitive Functions- Federal Transit Administration Appendix 4, Additional State and Local Law Requirements Governing Non-DOT Regulated Testing 15. EXCEPTIONS BAE Systems, Inc. has the sole and exclusive authority to interpret each policy. Exceptions to this policy require the prior written approval of the BAE Systems, Inc. Senior Vice President, Human Resources and Administration (or designee). 12

13 APPENDIX 1 1. COMMERCIAL MOTOR VEHICLE DRIVERS The Federal Motor Carriers Safety Administration (FMCSA) has promulgated specific regulations relating to the misuse of alcohol or the use of controlled substances by drivers of commercial motor vehicles. Drivers of commercial motor vehicles are subject to drug and alcohol testing in accordance with this policy. Any questions regarding the meaning or application of this policy should be directed to the Company's Designated Employer Representative ("DER"), which will be provided to the covered employee in writing at the time an individual becomes covered by this program as the DER varies for each site. 2. DEFINITIONS 2.1 Commercial motor vehicle means a motor vehicle or combination of motor vehicles used in commerce to transport passengers or property if the vehicle: a. Has a gross combination weight rating of 26,001 or more pounds inclusive of towed unit with a gross vehicle weight rating of more than 10,000 pounds; or b. Has a gross vehicle weight rating of 26,001 or more pounds; or c. Is designed to transport 16 or more passengers, including the driver; or d. Is of any size and is used in the transportation of materials found to be hazardous for the purposes of the Hazardous Materials Transportation Act and which require the motor vehicle to be placarded under the Hazardous Materials Regulations. 2.2 Driver means any person who operates a "commercial motor vehicle". Under FMCSA regulations, this includes, but is not limited to: full time, regularly employed drivers; casual, intermittent or occasional drivers; leased drivers; and, independent owner-operator contractors. 2.3 Safety-sensitive function means all time from the time a driver begins to work or is required to be in readiness to work until the time he/she is relieved from work and all responsibility for performing work. Safety-sensitive functions are: a. All time at an employer or shipper plant, terminal, facility, or other property, or on any public property, waiting to be dispatched, unless the driver has been relieved from duty by the employer; 13

14 b. All time inspecting equipment or otherwise inspecting, servicing, or conditioning any commercial motor vehicle at any time; c. All time spent at the driving controls of a commercial motor vehicle in operation; d. All time, other than driving time, in or upon any commercial motor vehicle except time spent resting in a sleeper berth; e. All time loading or unloading a vehicle, supervising, or assisting in the loading or unloading, attending a vehicle being loaded or unloaded, remaining in readiness to operate the vehicle, or in giving or receiving receipts for shipments loaded or unloaded; and f. All time repairing, obtaining assistance, or remaining in attendance upon a disabled vehicle. 2.4 Performing a Safety-Sensitive Function means any period in which a driver is actually performing, ready to perform, or immediately available to perform any safety-sensitive functions. 2.5 Accident requiring post-accident testing is an occurrence involving a commercial motor vehicle operating on a public road in commerce, where the driver was performing safety-sensitive functions and the accident involved: a. Loss of human life; or b. If the driver receives a citation within 8 hours of the occurrence under State or local law for a moving traffic violation arising from the accident if the accident involved: c. Bodily injury to any person who, as a result of the injury, immediately receives medical treatment away from the scene of the accident; or d. One or more motor vehicles incur disabling damage as a result of the accident, requiring the motor vehicle to be transported away from the scene by a tow truck or other motor vehicle. e. If the driver receives a citation within 32 hours of the occurrence as defined in paragraph 2, the driver will be subject to drug testing only. 2.6 Disabling Damage means damage which prevents a motor vehicle from being driven from the scene of the accident in its usual manner in daylight after simple repairs, including damage to motor vehicles that could have been driven, but would have been further damaged if driven. This term does not include damage which can be remedied temporarily at the scene of the accident without special tools or parts; tire disablement without other damage even if no spare 14

15 tire is available; headlight or taillight damage; or damage to turn signals, horn or windshield wipers which make them inoperative. 2.7 Drugs means marijuana, cocaine, opiates, amphetamines, phencyclidine (PCP), or their metabolites. 3. PROHIBITIONS 3.1 Alcohol Prohibitions: a. A driver may not report for duty or stay on duty that requires the performance of a safety-sensitive function: i. With an alcohol concentration of 0.02 or greater. ii. If in possession of alcohol. iii. If using alcohol. iv. Within four hours of using alcohol. b. A driver who has an accident may not use alcohol until post-accident testing is done or for a period of eight (8) hours, whichever comes first. c. Employers who know about any of the above acts cannot permit the driver to perform a safety-sensitive function. 3.2 Drug Prohibitions: a. No driver shall report for duty or remain on duty requiring the performance of safety-sensitive functions when the driver uses any controlled substance, except when the use is pursuant to the instructions of a licensed medical practitioner who has advised the driver that the substance will not adversely affect the driver's ability to safely operate a commercial vehicle. b. Drivers may not report for duty or stay on safety-sensitive duty if they have tested positive for a controlled substance. c. Employers who know about either of the above acts cannot permit the driver to perform a safety-sensitive function. 15

16 4. DRUG AND ALCOHOL TESTING 4.1 Testing History: Prior to performing a safety-sensitive function for the first time, the applicant or employee must provide the employer with written consent authorizing the release of certain drug and alcohol-related information from each of his/her previous DOT-regulated employer(s) for the past three years. The Company will forward the authorizations to each previous employer in connection with the investigation of the driver's safety performance history. An applicant/transferee must inform the Company whether he or she has tested positive, or refused to test, on any pre-employment drug or alcohol test administered by an employer to which the applicant applied for, but did not obtain, safety-sensitive transportation work covered by any DOT operating agency's drug and alcohol testing rules during the past three years. 4.2 Drivers will be tested for the use of controlled substances commencing with the driver's first medical examination. Thereafter, drivers will be tested in accordance with the regulations outlined in 49 CFR Part 382 Subpart C and will include: a. Pre-employment (drugs) b. Transfer into a safety-sensitive function (drugs) c. Post-accident (drugs and alcohol) d. Random (drugs and alcohol) e. Reasonable Suspicion (drugs and/or alcohol) f. Return-to-Duty (drugs and/or alcohol) g. Follow-up (drugs and/or alcohol) 4.3 Drivers are required to submit to "reasonable suspicion" testing and to postaccident testing, in accordance with federal regulations. It is the responsibility of the driver to be tested for the use of alcohol within two (2) hours but not later than eight (8) hours and for drugs as soon as possible but not later than 32 hours after a reportable accident as defined above. 4.4 When a driver has not performed a safety-sensitive function for 30 consecutive calendar days regardless of the reason, and the driver has not been in the Company's random selection pool during that time, the driver must submit to a pre-employment drug test and obtain a negative result prior to performing safetysensitive functions. 4.5 Drivers requiring follow-up testing will be subject to unannounced testing of drug and/or alcohol for a period of not less than one year and not more than five 16

17 years. The first year of testing shall consist of at least six tests following the employee's return to duty. 4.6 A driver who is seriously injured and cannot provide a specimen at the time of the accident shall provide the necessary authorization for obtaining hospital reports and other documents that would indicate whether there were any drugs or alcohol in his/her system. 5. CONSEQUENCES FOR DRIVERS ENGAGING IN SUBSTANCE USE OR ALCOHOL MISUSE 5.1 Drivers and applicants for driver positions who violate this policy will be subject to disciplinary action. The DOT and FMCSA, at a minimum, require the following: a. A driver who has a verified positive drug test result, an alcohol test with a result indicating an alcohol concentration of 0.04 or greater, or refuses to test (including by adulterating or substituting a urine specimen) will be immediately removed from performing safety-sensitive functions and referred to a Substance Abuse Professional (SAP). The driver will not be allowed to perform safety-sensitive functions until he/she has successfully complied with the SAP's evaluation and recommendations, including successful completion of return-to-duty testing and participation in follow-up testing. b. A driver who is found to have an alcohol concentration of 0.02 or greater but less than 0.04 shall not perform or continue to perform safety-sensitive functions, including driving a commercial motor vehicle, nor will the driver be permitted to perform or continue to perform safety-sensitive functions, until the start of the driver's next regularly scheduled duty period, but not less than 24 hours following administration of the test. 6. DRUG AND ALCOHOL TESTING PROCEDURES 6.1 As required by the FMCSA's rules, the Company's drug and alcohol testing procedures comply with the Federal Procedures For Transportation Workplace Drug and Alcohol Testing Programs, 49 C.F.R. Part 40, as amended. These procedures ensure the integrity, confidentiality and reliability of the testing processes, safeguard the validity of the test results and ensure that these results are attributed to the correct driver. Further, these procedures minimize the impact upon the privacy and dignity of persons undergoing such tests. 17

18 6.2 Drug Testing a. Drug testing is conducted by analyzing an employee's urine specimen. DOT has established a chain-of-custody procedure for the collection and analysis of urine samples that will verify the identity of each sample and test result. The collector of the specimen will seal and label the urine specimen, complete a required chain of custody form (Federal Drug Testing Custody and Control Form), and prepare the specimen and accompanying paperwork for shipment to a DHHS-certified laboratory. Only official DOT-authorized Federal Custody and Control forms shall be used in connection with this procedure. b. Individuals with confirmed non-negative results (i.e., positive, adulterated, substituted, and invalid) will be given the opportunity to discuss with the MRO any legitimate explanation for the test result. If, after speaking with the driver, the MRO determines that there is a legitimate medical explanation for a confirmed positive test result, the MRO will report the test result as negative to the DER. If the MRO determines that there is no legitimate explanation for the confirmed positive test result, the result will be verified as a "verified positive test result" by the MRO. c. A split-specimen collection method will be used for drug tests. This means that a urine sample is subdivided into two bottles labeled as a "primary" and a "split" specimen. Both bottles are sent to a laboratory. Only the "primary" specimen is opened and used for the urinalysis. The "split" specimen bottle remains sealed and is stored at the laboratory. All applicants and drivers whose primary urine sample is verified positive, adulterated or substituted have the right to request that their split-specimen be analyzed in a different DHHS certified laboratory, selected by the Company, to reconfirm the positive, adulterated or substituted result. The request must be made to the MRO within 72 hours of being notified by the MRO of a verified positive, adulterated or substituted test result. 6.3 Alcohol Testing a. Alcohol screening tests will be performed by a screening test technician ("STT") using a non-evidential screening device, or by a breath alcohol technician ("BAT") using an evidential breath testing device ("EBT"). The Company ensures that the STTs are proficient in the operation of nonevidential screening devices and that the BATs are proficient in the operation of EBTs. In addition, the Company will use only non-evidential alcohol screening devices and EBTs which are listed on the conforming products list issued by the National Highway Traffic Safety Administration. b. If the result of the screening test is an alcohol concentration of 0.02 or greater, a confirmation test will be performed using an EBT. The confirmation test will be conducted within 30 minutes from the end of the screening test. 18

19 The confirmation test result is the final result upon which any discipline or other action taken under the Company's policy shall be based. A positive test result is an alcohol concentration of 0.04 or greater. 19

20 APPENDIX 2 1. SAFETY-SENSITIVE POSITIONS FEDERAL AVIATION ADMINISTRATION The Federal Aviation Administration (FAA) has promulgated specific regulations relating to the misuse of alcohol or the use of drugs by individuals performing safety-sensitive functions. Individuals performing such duties are subject to drug and alcohol testing in accordance with this policy. 2. DEFINITIONS 2.1 Covered Employee is a person who performs, either directly or by contract, a safety-sensitive function for the Company. An employee also is a person who transfers into a position to perform a safety-sensitive function for the Company. For purposes of pre-employment drug testing only, the term "covered employee" includes a person applying to perform a safety-sensitive function. 2.2 Safety-sensitive function means a function that is performed by a covered employee as defined below, including any assistant, helper, or individual in a training status, either directly or by contract (including by subcontract at any tier) for the Company, including full-time, part-time, temporary, and intermittent employees regardless of the degree of supervision. Safety-sensitive functions are: a. Flight crewmember duties b. Flight attendant duties c. Flight instruction duties d. Aircraft dispatcher duties e. Aircraft maintenance and preventive maintenance duties f. Ground security coordinator duties g. Aviation screening duties h. Air traffic control duties 2.3 Accident means an occurrence associated with the operation of an aircraft which takes place between the time any person boards the aircraft with the intention of flight and the time all such persons have disembarked, and in which any person suffers death or serious injury or in which the aircraft receives substantial damage. 20

21 2.4 Drugs means marijuana, cocaine, opiates, phencyclidine (PCP), amphetamines or their metabolites. 3. PROHIBITIONS 3.1 Alcohol Prohibitions: a. A covered employee may not perform a safety-sensitive function if the employee's test result indicates an alcohol concentration of 0.02 or greater. b. A covered employee may not perform a safety-sensitive function while using alcohol. c. A covered employee may not perform a safety-sensitive function within 4 hours after using alcohol. If the employee performs flight crewmember or flight attendant duties, then he/she may not perform those duties within 8 hours after using alcohol. d. A covered employee may not use alcohol for 8 hours following an accident in which the employee has actual knowledge of an accident involving an aircraft for which he/she performed a safety-sensitive function at or near the time of the accident, unless the employee has been given a post-accident test or the employer has determined that the employee's performance could not have contributed to the accident. 3.2 Drug Prohibitions: a. A covered employee may not report for duty or remain on duty requiring the performance of safety-sensitive functions when the employee uses or has drugs in his or her system, or has tested positive for drugs. 4. DRUG AND ALCOHOL TESTING 4.1 Testing History: a. Prior to performing a safety-sensitive function for the first time, the covered employee must provide the employer with written consent authorizing the release of certain drug and alcohol-related information by his/her previous DOT-regulated employer(s) for the past two years (five years for pilots). A covered employee must inform the Company he or she has tested positive, or refused to test, on any pre-employment drug or alcohol test administered by an employer to which the employee applied for, but did not obtain, safetysensitive transportation work covered by any DOT operating agency's drug and alcohol testing rules during the past two years. 21

22 b. Covered employees will be tested for the use of drugs and alcohol in accordance with the regulations outlined in 14 CFR 120 and will include: i. Pre-employment (drugs) ii. Transfer into a safety-sensitive function (drugs) iii. Post-accident (drugs and alcohol) iv. Random (drugs and alcohol) v. Reasonable Suspicion (drugs and alcohol) vi. Return-to-Duty (drugs and/or alcohol) vii. Follow-up (drugs and/or alcohol) c. Covered employees are required to submit to "reasonable suspicion" testing and to post-accident testing, in accordance with federal regulations. If a covered employee's performance either contributed to an accident or cannot be completely discounted as a contributing factor to the accident, the employee must submit to testing within two (2) hours but not later than eight (8) hours for alcohol and as soon as possible but not later than 32 hours for drugs following the accident. d. Covered employees requiring follow-up testing will be subject to unannounced testing of drugs and alcohol for a period of not less than one year and not more than five years. The first year of testing shall consist of at least six tests following the employee's return to duty. 5. CONSEQUENCES FOR COVERED EMPLOYEES ENGAGING IN SUBSTANCE USE OR ALCOHOL MISUSE 5.1 Covered employees who violate this policy will be subject to disciplinary action as outlined in Section 11 of the Policy. The DOT and FAA, at a minimum, require the following: a. A covered employee who has a verified positive drug test result, an alcohol test with a result indicating an alcohol concentration of 0.04 or greater, or refuses to test (including by adulterating or substituting a urine specimen) will be immediately removed from performing safety-sensitive functions and referred to a Substance Abuse Professional (SAP). The covered employee will not be allowed to perform safety-sensitive functions until he/she has successfully complied with the SAP's evaluation and recommendations, including successful completion of return-to-duty testing and participation in follow-up testing. b. A covered employee who has verified positive drug test results on two (2) required drug tests or has engaged in prohibited drug use during the performance of a safety-sensitive function is permanently precluded from performing the safety-sensitive function. 22

23 c. A covered employee who is found to have an alcohol concentration of 0.02 but less than 0.04 will immediately be removed from performing the safetysensitive function until the employee's alcohol concentration measures less than 0.02 or the start of the employee's next regularly scheduled duty period, but not less than 8 hours following administration of the test. If the employer chooses to permit the employee to perform safety-sensitive functions within 8 hours, the employee may not return to the safety-sensitive function until he/she is retested with a negative result. d. A covered employee who has verified positive alcohol test of 0.04 or higher and had previously engaged in alcohol use that violated this policy is permanently precluded from performing the safety-sensitive function. 6. DRUG AND ALCOHOL TESTING PROCEDURES 6.1 As required by the FAA's rules, the Company's drug and alcohol testing procedures comply with the Federal Procedures For Transportation Workplace Drug and Alcohol Testing Programs, 49 C.F.R. Part 40, as amended. These procedures ensure the integrity, confidentiality and reliability of the testing processes, safeguard the validity of the test results and ensure that these results are attributed to the correct employee. Further, these procedures minimize the impact upon the privacy and dignity of persons undergoing such tests. 6.2 Drug Testing a. Drug testing is conducted by analyzing an employee's urine specimen. DOT has established a chain-of-custody procedure for the collection and analysis of urine samples that will verify the identity of each sample and test result. The collector of the specimen will seal and label the urine specimen, complete a required chain of custody form (Federal Drug Testing Custody and Control Form), and prepare the specimen and accompanying paperwork for shipment to a DHHS-certified laboratory. Only official DOT-authorized Federal Custody and Control forms shall be used in connection with this procedure. b. Individuals with confirmed non-negative results (i.e., positive, adulterated, substituted, and invalid) will be given the opportunity to discuss with the MRO any legitimate explanation for the test result. If, after speaking with the employee, the MRO determines that there is a legitimate medical explanation for a confirmed positive test result, the MRO will report the test result as negative to the DER. If the MRO determines that there is no legitimate explanation for the confirmed positive test result, the result will be verified as a "verified positive test result" by the MRO. 23

24 c. A split-specimen collection method will be used for drug tests. This means that a urine sample is subdivided into two bottles labeled as a "primary" and a "split" specimen. Both bottles are sent to a laboratory. Only the "primary" specimen is opened and used for the urinalysis. The "split" specimen bottle remains sealed and is stored at the laboratory. All applicants and covered employees whose primary urine sample is verified positive, adulterated or substituted have the right to request that their split-specimen be analyzed in a different DHHS certified laboratory, selected by the Company, to reconfirm the positive, adulterated or substituted result. The request must be made to the MRO within 72 hours of being notified by the MRO of a verified positive, adulterated or substituted test result. 6.3 Alcohol Testing a. Alcohol screening tests will be performed by a screening test technician ("STT") using a non-evidential screening device, or by a breath alcohol technician ("BAT") using an evidential breath testing device ("EBT"). The Company ensures that the STTs are proficient in the operation of nonevidential screening devices and that the BATs are proficient in the operation of EBTs. In addition, the Company will use only non-evidential alcohol screening devices and EBTs which are listed on the conforming products list issued by the National Highway Traffic Safety Administration. b. If the result of the screening test is an alcohol concentration of 0.02 or greater, a confirmation test will be performed using an EBT. The confirmation test will be conducted within 30 minutes from the end of the screening test. The confirmation test result is the final result upon which any discipline or other action taken under the Company's policy shall be based. A positive test result is an alcohol concentration of 0.04 or greater. 24

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