HOUCHENS FOOD GROUP, INC.

EMPLOYEE HANDBOOK
EFFECTIVE JANUARY 1, 2024
INSIDE FRONT COVER IS BLANK
 Table of Contents
INTRODUCTION .................................................................................................................... 3
WELCOME TO HOUCHENS FOOD GROUP, INC. ......................................................................3
VALUES, MISSION, AND GOALS ..............................................................................................4
Values ...................................................................................................................................4
Mission .................................................................................................................................4
Goals ....................................................................................................................................4
FUNCTIONS OF THIS HANDBOOK ...........................................................................................5
GENERAL POLICIES .............................................................................................................. 6
SUPPLEMENTAL POLICIES ......................................................................................................6
EQUAL EMPLOYMENT OPPORTUNITY .....................................................................................6
EMPLOYMENT-AT-WILL ...........................................................................................................6
ANTI-HARASSMENT/RETALIATION POLICY .............................................................................7
Harassment Defined ..............................................................................................................7
COMPLAINT/INVESTIGATION PROCEDURES ..........................................................................8
NON-FRATERNIZATION ............................................................................................................9
PERSONAL COMMUNICATION DEVICES..................................................................................9
AUDIO AND VIDEO RECORDING PROHIBITED ........................................................................9
DRUG AND ALCOHOL POLICY ...............................................................................................10
TOBACCO POLICY..................................................................................................................10
MEDICAL EXAMINATIONS AND DRUG SCREENING ..............................................................10
BACKGROUND AND REFERENCE CHECKS ...........................................................................11
MOTOR VEHICLE USAGE AND RECORD INSPECTIONS ........................................................12
Motor Vehicle Safety. ...........................................................................................................12
Driver’s License History. ......................................................................................................12
Accident Report. ..................................................................................................................12
BULLETIN BOARDS ...............................................................................................................12
OPEN DOOR POLICY ..............................................................................................................12
COMMUNICATION AND NETWORK INFORMATION TECHNOLOGY (IT) ..................................13
SURVEILLANCE VIDEO RECORDING .....................................................................................13
PASS CODES AND UNAUTHORIZED ACCESS ........................................................................13
SOFTWARE ............................................................................................................................13
NETWORK USAGE .................................................................................................................14
SOCIAL NETWORKING AND SOCIAL MEDIA ..........................................................................14
TELEPHONE SYSTEMS ..........................................................................................................15
Noncompliance....................................................................................................................15
CARDBOARD BALERS ...........................................................................................................15
CASH AND CHANGE ..............................................................................................................15
EMPLOYEE PURCHASES .......................................................................................................15
STORE OFFICE ACCESS ........................................................................................................16
PERSONNEL PRACTICES .................................................................................................... 17
ORIENTATION AND EVALUATION PERIOD.............................................................................17
PROMOTION ..........................................................................................................................17
PAYROLL PERIODS AND PAY DAYS .......................................................................................17
RECORDING WORK TIME ......................................................................................................18
OVERTIME .............................................................................................................................18
REST AND MEAL BREAKS .....................................................................................................18
PERSONNEL RECORDS .........................................................................................................19
Access to Personnel Records. ...............................................................................................19
TERMINATION OF EMPLOYMENT ..........................................................................................19
EMPLOYEE RESPONSIBILITY ............................................................................................. 20
CONDUCT OF EMPLOYEES ...................................................................................................20
 ALCOHOL AND TOBACCO SALES – ZERO TOLERANCE POLICY ............................................21
ATTENDANCE AND PUNCTUALITY .........................................................................................21
EMPLOYEE SAFETY ...............................................................................................................22
REPORTING INJURIES AND ACCIDENTS ...............................................................................22
PERSONAL APPEARANCE OF EMPLOYEE ..............................................................................22
CUSTOMER RELATIONS ........................................................................................................23
CONFLICT OF INTEREST .......................................................................................................23
FIREARMS AND OTHER WEAPONS ........................................................................................24
CONFIDENTIALITY .................................................................................................................24
EMPLOYEE BENEFITS ........................................................................................................ 25
HOUCHENS BENEFITS ..........................................................................................................25
EMPLOYEE CLASSIFICATIONS ..............................................................................................25
GROUP HEALTH INSURANCE ................................................................................................25
GROUP LIFE INSURANCE ......................................................................................................26
EMPLOYEE STOCK OWNERSHIP PLAN ..................................................................................26
FLEXIBLE BENEFITS PLAN ....................................................................................................27
WORKERS’ COMPENSATION ..................................................................................................27
PAID VACATION .....................................................................................................................27
HOLIDAYS..............................................................................................................................28
JURY DUTY ............................................................................................................................29
EMPLOYEE INFORMATION AND ASSISTANCE .......................................................................29
LEAVES OF ABSENCE ......................................................................................................... 30
LEAVE OF ABSENCE .............................................................................................................30
MILITARY LEAVE ...................................................................................................................31
BEREAVEMENT LEAVE .........................................................................................................32
FAMILY MEDICAL LEAVE ACT ............................................................................................ 33
NOTICE TO EMPLOYEES .......................................................................................................33
REGARDING THE FAMILY AND MEDICAL LEAVE ACT OF 1993.............................................33
EMPLOYEE ELIGIBILITY ........................................................................................................33
LEAVE ENTITLEMENT ...........................................................................................................33
NOTICE AND CERTIFICATION ................................................................................................34
BENEFITS DURING FMLA LEAVE ..........................................................................................34
JOB RESTORATION AFTER FMLA LEAVE ..............................................................................35
OTHER PROVISIONS ..............................................................................................................35
EMPLOYEE INFORMATION AND ASSISTANCE .......................................................................35
ACKNOWLEDGMENT ........................................................................................................... 36

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 INTRODUCTION

WELCOME TO HOUCHENS FOOD GROUP, INC.

Dear Employee,

Welcome to Houchens Food Group, Inc. Houchens began with the opening of a single grocery
store in Glasgow, Kentucky in 1917. Since that beginning, Houchens has prospered and
diversified thanks to the hard work of enthusiastic, conscientious, productive, and loyal
employees, and Houchens now owns and operates retail grocery stores, convenience stores,
hardware stores, restaurants, and other store concepts in multiple states. Houchens is a unique
company in that it was purchased by its employees in 1988 and continues to be owned by its
employees through the Houchens Industries, Inc. Employee Stock Ownership Plan and Trust.

This is the Houchens Food Group, Inc. Employee Handbook (the “Handbook”). It is meant to be
an informative guide to the principles, policies, procedures, and benefits of Houchens. Employees
should acquaint themselves with this Handbook to better understand what Houchens expects
from its employees and what employees can expect from Houchens.

It is Houchens’ belief that success is created by quality products and quality services, thereby
yielding satisfied customers who will continue to shop at the various concept stores owned and
operated by Houchens.

Houchens encourages and welcomes employees’ ideas and suggestions for the continuing
development of its business as a growing, prosperous enterprise. Each employee of Houchens is a
member of an organization that has seen substantial growth, which will continue through the
whole-hearted efforts of each employee.

It has been, and will continue to be, Houchens’ policy to offer competitive wage rates and benefits,
and to provide a quality working environment, so that it can attract and retain valuable
employees. Houchens’ team of loyal, enthusiastic, conscientious, and productive employees is its
most important asset.

Sincerely,

Dion Houchins, Chief Executive Officer

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 VALUES, MISSION, AND GOALS

Values

Houchens is dedicated to:

1. Complete customer satisfaction;

2. Listening and reacting to customers;
3. Fair and honest dealing;
4. Operating profitably;
5. Innovation and action without fear of failure; and
6. Open communications with all employees.

Mission

Houchens’ mission is to serve customers through a variety of well-defined grocery, convenience,

hardware, restaurant, and other concept stores, uniquely focused on customer satisfaction.

Goals

Houchens has the following goals:

1. Position stores for long-term growth and profitability;

2. Increase productivity and opportunity through employee training and communication;
3. Create customer loyalty and satisfaction through strong alliances; and
4. Develop new areas of growth.

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 FUNCTIONS OF THIS HANDBOOK

This Handbook is an outline of the basic personnel policies for Houchens. The policies contained
in this Handbook are not all-inclusive and are supplemented by policies established by
Management and shared with employees orally or through written means other than this
Handbook. This Handbook is not intended to alter the employment-at-will relationship in any
way.

This Handbook contains general statements of policy and should not be read as including the
details of each policy. Additionally, this Handbook should not be interpreted as forming an
express or implied contract or promise that the policies discussed in it will be applied in all cases.
Houchens may add to the policies in the Handbook or revoke or modify them from time to time.
Houchens will attempt to keep the Handbook current, but there may be times when policies will
change before this Handbook is revised.

Each employee must read this Handbook carefully, sign the Acknowledgment at the end of the
Handbook and return the signed Acknowledgment to his or her supervisor during the first week of
such employee’s employment, either by signing same through the online/electronic employee
portal or by returning a hard copy of the signed Acknowledgment. Each employee will be provided
a hard copy of this Handbook and can access this Handbook through the online/electronic
employee portal at any time.

As used in this Handbook:

(a) The words “shall” or “will” should be interpreted as mandatory and the word “may” as
permissive.

(b) “Supervisor,” “Member of Management,” and “Management” mean an individual or

individuals with the authority to assign, direct, and review the work of subordinates.

(c) The term “Confidential Information” means any non-public, private, competitively
sensitive, proprietary, unique, or special information concerning Houchens’ business
systems, processes, and methods, including: IT networks, financial information, trade
secrets, technical data, sales and marketing data, product cost and pricing, vendor lists
and information, advertising techniques, and personal identifying information of
Houchens’ employees.

Houchens operates stores in several states, each of which has its own laws. Houchens is
committed to following the applicable laws in the states in which it does business. To the extent
of an inconsistency between this Handbook and any applicable law in effect in the state in which
the employee resides, that state’s law shall govern.

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 GENERAL POLICIES

SUPPLEMENTAL POLICIES

The policies contained in this Handbook are not all-inclusive and are supplemented by policies
established by management and distributed to employees orally or through written means other
than this Handbook. The violation of such supplemental policies will be treated in the same
manner as a violation of a policy contained in this Handbook.

EQUAL EMPLOYMENT OPPORTUNITY

Houchens is an Equal Employment Opportunity employer. It is Houchens’ policy to provide equal

employment opportunity to all qualified persons, consistent with federal, state, and local equal
employment opportunity laws. No person will be subject to discrimination because of race,
religion, color, sex, sexual orientation, gender identity, age, national origin, disability, military
status, or on any basis that would be in violation of any applicable federal, state, or local law.
This policy will apply to all phases of the employment relationship, including recruitment,
selection, hiring, training, upgrading, promoting, transferring, laying off, terminating, and
compensating of employees.

All complaints of discrimination in violation of this equal employment opportunity policy should
be directed to any member of management or the Human Resources Department by calling (270)
843-3252, extension 2851. Any member of management who receives a complaint of
discrimination shall immediately report the complaint to the Human Resources Department. All
reports and complaints of discrimination involving violations of this policy will be investigated
promptly and in as confidential manner as possible.

EMPLOYMENT-AT-WILL

Employees are employed at the will of Houchens and are subject to termination at any time, for
any reason, with or without cause or notice. At the same time, employees may terminate their
employment with Houchens at any time and for any reason.

This employment-at-will policy may not be modified by any statements contained in this
Handbook or any other employee materials, employment applications, Houchens recruiting
materials, Houchens memoranda, or other written information provided to applicants and
employees in connection with their employment. None of these documents, whether singularly or
combined, create an express or implied contract of employment for a definite period, or an express
or implied contract concerning any terms or conditions of employment. Similarly, Houchens’
policies and practices with respect to any matter should not be considered as creating any
contractual obligation on Houchens’ part or as stating in any way that termination will occur only
“for cause.” Statements of specific grounds for termination set forth in this Handbook or in any
other Houchens’ documents are examples only, not all-inclusive lists, and are not intended to
restrict Houchens’ right to terminate at-will. No member of management other than the
Chairman of the Board has the authority to enter into any agreement for employment for any
specified period, or make any agreement contrary to the foregoing.

Completion of any orientation or evaluation period or conferral of regular status does not change
an employee’s status as an at-will employee or in any way restrict Houchens’ right to terminate
the employee or change the terms or conditions of employment.

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 ANTI-HARASSMENT/RETALIATION POLICY

It is the policy of Houchens to promote a professional and productive work environment and
prohibit harassment in the workplace. Houchens will not tolerate verbal or physical conduct by
any employee that harasses, disrupts, or interferes with another’s work performance or that
creates an intimidating, offensive, retaliatory, or hostile environment. Employees are expected to
maintain a productive work environment that is free from harassing or disruptive activity and no
form of harassment will be tolerated.

Harassment Defined

Harassment includes any verbal, written, or physical act in which race, religion, color, sex, sexual
orientation, gender identity, age, national origin, disability, military status, or other factor
protected by law is used or implied in a manner which would make a reasonable employee
uncomfortable in the work environment or which would interfere with the employee’s ability to
perform the job.

Harassment can occur not only through personal interaction, but also through communication by
telephone, text message, or email/instant messaging. Harassment can also occur through posting
information or comments on the internet, including but not limited to postings made on blogs,
chat rooms, or social networking sites. Harassment of any kind is prohibited regardless of
whether it occurs in person or over the telephone or internet, and regardless of whether it occurs
during working hours or at a time when an employee is not at work.

Houchens’ prohibition of harassment includes, but is not limited to, all forms of sexual
harassment. Sexual harassment includes, but is not limited to, making unwanted or unwelcome
sexual advances, requests or demands for sexual favors, remarks, or jokes of a sexual nature, and
other unwanted and unwelcome visual, verbal, or physical conduct of a sexual nature whereby:

a. Submission to such conduct is made explicitly or implicitly a term or condition of

employment;

b. Submission to or rejection of such conduct is used as a basis for employment

decisions, such as, but not limited to, promotions, transfers, disciplinary actions, job
assignments, wages or assigned duties; or

c. Such conduct interferes with work performance or creates an intimidating, hostile or

offensive work environment.

Other offensive conduct or behavior of a sexual nature by supervisors, members of management

and other employees is also strictly prohibited. Such conduct includes, but is not limited to:

a. Unwanted or unwelcome physical conduct or contact of any kind, including sexual

flirtations, touching, advances or propositions.

b. Verbal conduct of a sexual nature, such as lewd comments, sexual jokes or references
and offensive personal references.

c. Demeaning, insulting, intimidating or sexually suggestive comments about an

individual’s body or personal appearance.

d. The display of demeaning, insulting, intimidating or sexually suggestive objects,

pictures, or photographs.

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 e. Demeaning, insulting, intimidating or sexually suggestive written, recorded or
electronically transmitted messages.

f. Any other conduct or behavior of a sexual nature that interferes with work performance
or creates an intimidating, hostile or offensive work environment.

Harassment of any kind, whether committed by supervisory personnel, non-supervisory

personnel, customers, vendors, or any other persons is specifically prohibited as unlawful and
against stated company policy. This policy applies to all employees, customers, vendors and other
persons.

It is the responsibility of all employees, including members of management, to bring attention to

any evidence of harassment or retaliation and to report any act or event that is believed to be a
violation of this policy so that the matter can be promptly investigated and appropriate action
taken.

It is further the responsibility of every member of management to ensure that this policy is strictly
enforced and that all stores, departments, or other areas of the organization that are under their
responsibility are free from conduct that causes, or reasonably could be considered to cause, an
intimidating or offensive working environment. EEO compliance and investigating complaints of
discrimination will be a component of training for all managerial and supervisory employees.

No supervisor, member of management or other employee shall threaten or insinuate, either

explicitly or implicitly, that another employee’s refusal or willingness to submit to sexual advances
or requests or demands for sexual favors will be used as a basis for employment decisions, such
as, but not limited to, promotions, transfers, disciplinary actions, job assignments, wages or
assigned duties.

COMPLAINT/INVESTIGATION PROCEDURES

Any employee who believes that he or she has been harassed or retaliated against in violation of
this policy should report the situation as soon as possible to the employee’s supervisor. If the
complaint involves an employee’s supervisor, or the employee is uncomfortable for any reason in
reporting the complaint to the employee’s supervisor, then the employee should report the matter
to any other member of management, or call the Human Resources Department at (270) 843-
3252, extension 2851. The complaint may be oral or written in the language of the employee’s
choosing. Houchens also encourages employees who feel they have been harassed in violation of
this policy to put the person committing the harassment or retaliation on notice that his or her
behavior or conduct is unwanted and unwelcome and should stop immediately.

All reports and complaints of harassment and retaliation will be investigated promptly, fairly, and
thoroughly, and in as confidential a manner as possible, by either a supervisor, manager, and/or
member of the Human Resources Department. Investigations will include documentation of the
complaint; a finding of whether discrimination occurred, did not occur, or could not be
determined; interviews of the complainant, the individual(s) alleged to have committed,
participated in, or condoned the alleged conduct, and witnesses; a review of relevant documents;
contemporaneous notes of the investigation and any conclusions; contemporaneous notes of all
corrective and remedial measures implemented when discrimination has been found; and upon
completion of the investigation, a summary report of the investigation will be provided to the
Human Resources Department. Any employee who is found to be in violation of this policy is
subject to disciplinary action, up to and including termination.

Documents related to an investigation of a complaint of harassment or retaliation will not be

retained in the complainant’s personnel file, but in a separate secure location. Disciplinary action

8
taken against employees for violation of this policy will be retained in the violator’s personnel file.
For complaints in which no conclusion or determination could be reached on the complaint, the
investigative documents will be retained for 10 years in the Human Resources Department.

Any form of retaliation against an employee who, in good faith, files a complaint of harassment or
an employee who participates in the investigation of the complaint is strictly prohibited.
Violations of this non-retaliation policy will result in disciplinary action up to and including
termination.

Employees who feel they have been subjected to harassment or retaliation in violation of this
policy and employees who become aware of other employees being subjected to harassment or
retaliation have a responsibility to report the situation as soon as possible in accordance with the
complaint procedures set forth in this policy.

Any updates to or revisions to this policy will be disseminated to all employees.

NON-FRATERNIZATION

While Houchens encourages amicable relationships between members of management and their
subordinates, it recognizes that involvement in a romantic relationship may compromise or create
a perception that compromises a member of management’s ability to perform his or her job. Any
involvement of a romantic nature between an officer, director, manager, supervisor, or agent of the
organization and anyone he or she supervises, either directly or indirectly, is prohibited. Violation
of this policy will lead to corrective and disciplinary action, up to and including termination of the
management individual involved in the relationship.

PERSONAL COMMUNICATION DEVICES

Houchens recognizes that cell phones, smartphones, tablets, and other personal communication
devices have become valuable tools in managing professional and personal lives. However, the use
of such devices in the workplace can raise a number of issues involving safety, security, and
privacy.

Except in cases of emergency, use of personal communication devices during the workday should
be limited to meal breaks and other rest periods. Employees also should conduct personal
business during meal breaks and other rest periods. This includes the use of personal
communication devices (including cell phones) for personal business (i.e., personal emails, text
messaging, sharing, or receiving personal calls, accessing social media, playing games, or
searching the internet, etc.). Employees should be considerate of fellow employees in their usage
of such personal communication devices.

AUDIO AND VIDEO RECORDING PROHIBITED

In order to protect the privacy of all Houchens employees and promote a professional and
productive work environment, all audio and/or video recording by employees is strictly prohibited,
unless required in the course of employee’s job.

Employees are prohibited from using a device’s camera to take photographs or video in the
workplace. Phones and other devices with cameras or recording capabilities are strictly prohibited
in all work areas that contain proprietary information or confidential documents. Camera phones
and other devices with photographic or recording capabilities may not be brought into restrooms,
locker rooms, or other private areas in the workplace.

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 DRUG AND ALCOHOL POLICY

It is the policy of Houchens to maintain a safe working environment, free of alcohol and drugs.

Except for the normal sale of alcohol or over-the-counter medications as part of Houchens’ retail
business, Houchens prohibits the use, possession, sale, purchase, or distribution of illegal drugs,
controlled substances, marijuana, intoxicants (legal or illegal), “look-alike” substances, and any
other drugs or substances that will, in any way, affect safety, work ability, alertness, coordination,
judgment, response, or the safety of employees or others during working hours or in the
workplace.

If an employee must take prescribed drugs, such prescribed drugs must not undermine the
employee’s ability to perform his or her job. If an employee is prescribed drugs by his or her
physician which may affect such employee’s ability to perform his or her job or presents a safety
risk to such employee or others, such employee must notify his or her supervisor before beginning
work.

Violation of any portion of this policy will result in disciplinary action, up to and including
termination.

TOBACCO POLICY

Tobacco use, including use of electronic cigarettes (“e-cigarettes”), by employees is prohibited in all
Houchens offices and stores.

There is absolutely no smoking or use of e-cigarettes in the vicinity of fuel islands at facilities
which sell gasoline. At facilities which sell gasoline, if a customer is smoking or using e-cigarettes
in the vicinity of fuel islands, politely inform the customer that smoking or e-cigarette materials
must be extinguished. If the customer refuses to extinguish their smoking or e-cigarette
materials, the emergency shut off for the fuel island must be activated.

MEDICAL EXAMINATIONS AND DRUG SCREENING

Applicants to whom a conditional offer of employment has been extended and current employees
may be required to undergo medical tests procedures or examinations whenever management
determines that these are necessary for the safe or efficient operation of the organization.

Subject to state law, employees in safety-sensitive jobs are subject to random drug screening.

Successful applicants for employment may be required as a condition of employment to pass a

drug screening test and/or medical examination to establish their fitness to perform the jobs for
which they have applied without endangering the health and safety of themselves or others. All
individuals applying for warehouse positions or store management positions will be required to
submit to a drug screening test. Individuals applying for other positions, including but not limited
to those positions that involve the possession of keys to any Houchens facility, the handling of
cash, or safety sensitive functions, may be required to submit to a drug screening test, if
Houchens determines that such testing is appropriate for the position, subject to the applicable
law in the state where the employee works.

If Houchens determines that a medical examination is appropriate to a particular position, all

applicants for that position to which a conditional offer of employment is made will be required to

10
undergo a medical examination. Employees may be required to have a medical examination on
other occasions when the examination is job-related and consistent with business necessity.

If any workplace accident or injury occurs, the employee(s) involved may be required to submit to
a drug and alcohol screening test. If reasonable suspicion of illegal or non-prescribed drug or
alcohol use exists, the employee may be required to submit to a drug and alcohol screening test.
Certain employees, including but not limited to individuals employed in warehouse positions,
management positions, and/or positions that involve possession of keys to any Houchens facility,
the handling of cash, or safety sensitive positions may be required to submit to periodic drug and
alcohol screening tests, at Houchens’ discretion. Refusal to submit to a drug and alcohol
screening test, or positive test results, will result in disciplinary action, up to and including
termination.

Reasonable suspicion may include, but is not limited to, slurred speech, loss of balance, the odor
of drugs or alcohol, the presence of alcohol or drug-related paraphernalia, observation of the use
of drugs or alcohol, red eyes, irregular work pace, decline in productivity, mood swings, frequent
absences, excessive time away from the workplace, trembling, disorientation, aggressive behavior,
drowsiness, restlessness, or hyperactivity. Refusal to take a drug and alcohol screening test is
considered a positive test result.

The possession of illegal or non-prescribed drugs, alcohol, or drug related paraphernalia during
work hours or on company premises is strictly prohibited. Therefore, illegal or non-prescribed
drugs, alcohol or drug related paraphernalia found on the employee’s person and/or at or near an
employee’s work area may constitute reasonable suspicion. The employer reserves the right to
inspect employee work areas.

Medical examinations required by Houchens will be at its expense and will be performed by a
physician or licensed medical facility designated or approved by Houchens. Medical examinations
paid for by Houchens are the property of Houchens. Records of specific examinations, if required
by law or regulation, will be made available to the employee and other authorized persons.

Houchens reserves the right to require acceptable confirmation of the nature and extent of any
illness or injury that requires an employee to be absent from scheduled work. Employees
returning from a leave or an absence caused by health problems may be required to provide a
doctor’s certification of their ability to perform their work satisfactorily.

Houchens reserves the right to require a second and, if necessary, third medical opinion regarding
an employee’s absence because of illness or injury. Employees who become ill on the job or suffer
any work-related injury, no matter how minor, must report the illness or injury to their
supervisor, who will, if required, arrange referral for examination, treatment, and recording of the
incident. Any employee who suffers a work-related injury may be required to submit to a drug and
alcohol screening test, as set for in the Drug and Alcohol Policy above.

BACKGROUND AND REFERENCE CHECKS

All individuals applying for any position with Houchens will be subject to reference checks with
former employers. Unless required by law, the information obtained from reference checks will not
be shared with the individual.

After a conditional offer of employment is made, Houchens will verify any educational credentials
the applicant claimed to have, whether in writing or in the interview.

Any individual applying for warehouse positions or store management positions will be required to
submit to criminal background checks.

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Information gained from any of the above background checks will be held in confidence and
shared with members of management on a need-to-know basis.

MOTOR VEHICLE USAGE AND RECORD INSPECTIONS

Motor Vehicle Safety. Any employee operating a company vehicle or a personal vehicle for
company business purposes must always exercise utmost safety, courtesy, and consideration for
his or herself, other drivers, and for company property. Employees that operate company vehicles
as well as personal vehicles for company business purposes are required to abide by all applicable
state and federal laws. All employees must have a valid driver’s license and must comply with all
restrictions on their driver’s licenses. Employees are prohibited from possessing weapons of any
kind while operating, using, or riding in company vehicles.

Depending on the job requirements, some employees may have to comply with the Department of
Transportation requirements for a Commercial Driver’s License.

Any use of alcohol, controlled substances, or illegal drugs while operating a company vehicle or a
personal vehicle while on official company business is prohibited and will be cause for disciplinary
action up to and including termination.

Driver’s License History. At least annually, the driving record of each employee may be
examined for violations. Depending on the results of the review of the driving record of the
employee, his or her job duties may be changed.

Accident Report. In the event of any accident occurring in a company vehicle or in a personal
vehicle during the course and scope of an employee’s job duties, such accident should be
immediately reported to law enforcement and photographs should be taken of the vehicle(s)
involved. Additionally, a complete, accurate, written accident report shall be submitted by the
employee to his or her supervisor within 24 hours of the accident, unless the employee is
physically or mentally unable to do so. Any employee involved in an accident or collision may be
subject to an immediate drug screen.

BULLETIN BOARDS

Houchens uses bulletin boards to communicate important business information such as safety
rules, statutory and legal notices, company policies, and management memos. Houchens expects
each employee to have read and understood the messages posted on the bulletin board. Notices by
employees may only be posted on bulletin boards after management approval.

OPEN DOOR POLICY

Houchens believes that there should be open communication between management and
employees. Every employee is encouraged to speak with his or her supervisor when there is a
question or concern. Regardless of the situation, employees should be able to openly discuss any
work-related problems and concerns without fear of retaliation. Managers and supervisors are
expected to listen to employee concerns, encourage their input, and seek resolution to the issues
and concerns.

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If an employee has a concern about discrimination or harassment, Houchens has set up special
procedures to report and address those issues. The proper reporting procedures are set forth in
Houchens’ Anti-Harassment/Retaliation Policy, set forth above in this Handbook.

COMMUNICATION AND NETWORK INFORMATION TECHNOLOGY (IT)

All systems used for communication, storage or transfer of information are the private and
confidential property of Houchens and are to be used for job-related purposes only.
Communication and network include, but are not limited to, mail, courier services, facsimiles,
telephone systems, voicemail, desktop or laptop computers, online services, Internet, hardware,
software, networks, email, or other information created, transmitted, or stored on computer
systems. Use of communication and network IT for purposes other than Houchens’ business
without the approval of the employee’s supervisor or manager is prohibited, unless otherwise
specified. An employee may be allowed access to email outside of work hours if such employee
uses such email in the course and scope of his or her employment with Houchens. Houchens may
access and monitor employee communication and network IT at any time. Employees will have no
expectation of personal privacy with the use of Houchens’ communication or network IT. Any
unauthorized use of communication or network IT that causes damage to such systems or
impedes business-related functions is prohibited.

SURVEILLANCE VIDEO RECORDING

All surveillance video recording is Houchens’ property, and no one other than an authorized
member of Management fulfilling job-related tasks is authorized to review, receive, or release
copies of any surveillance video footage. Prior to any such release or allowing any employee or
third party to review such recording, such authorized member of Management shall obtain
approval from the Vice President, Human Resources, or the Director of Security and
Investigations. In the event of an accident on company property, and in coordination of an
accident investigation, surveillance footage may be released as authorized by the Safety
Coordinator.

PASS CODES AND UNAUTHORIZED ACCESS

Employee IDs, passwords, or other logins (“Pass Codes”) are established by the IT Department
and are the property of Houchens. The altering of Pass Codes without the approval of the IT
Department is prohibited. Sharing of Pass Codes by employees can result in a breach in the
computer system’s security and is prohibited. Any attempt to circumvent security or access
information that is not required for the performance of an employee’s job duties is prohibited.

SOFTWARE

All software used on Houchens’ computer or IT systems must be properly acquired and used in
accordance with appropriate licensing. Possession, downloading, duplication or use of software or
materials that are copyrighted, patented, trademarked, or otherwise identified as intellectual
property is prohibited. In order to protect computer or IT systems from damage from corrupt or
virus infected software, all software installed, duplicated, or downloaded must be approved by the
IT Department. This includes, but is not limited to, applications, screensavers, backgrounds,
images, games, software, utilities, or any email attachments from an unsecured source. When
appropriate Internet material or email attachments are downloaded, they should be scanned
using Houchens’ anti-virus software.

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 NETWORK USAGE

All network communication, including but not limited to email, should be courteous and
professional. Email may be used only for business purposes during working hours. All other
network communications and uses must be limited to business purposes only. No employee shall
use Houchens’ network to violate any company policy, such as (but not limited to) Houchens’
Anti-Harassment/Retaliation Policy or confidentiality policy. Bulk emails, spamming, chain
letters, or other methods of sending unsolicited email messages are prohibited. The use of
harassing, lewd, vulgar, rude, profane, inflammatory, threatening, disrespectful, obscene, or other
inappropriate language is prohibited. Employees are further prohibited from posting any false,
defamatory, or other inappropriate information or images in email messages or attachments.
Additionally, the use of Houchens’ network or computer systems to either access or post
information on blogs, chat rooms, social networking sites, or any other website is strictly
prohibited, unless required for the employee’s job duties. Online services and the Internet may be
accessed only by users authorized by Houchens. Access to material through the Internet or any
other method that is obscene, pornographic or advocates violence, discrimination, or other illegal
acts or which is otherwise inappropriate is prohibited.

SOCIAL NETWORKING AND SOCIAL MEDIA

Personal websites, social media sites, as well as blogs have become prevalent methods of self-
expression and are a popular means of communication. If an employee chooses to identify himself
or herself as an employee of Houchens or of any one of its stores on a website or blog, including
wearing any apparel depicting the name or logo of Houchens or any of its companies or brands,
the employee must adhere to the following guidelines:

• Make it clear to readers the views expressed are the employee’s alone and that they do not
necessarily reflect the views of Houchens.

• Do not use social networking sites or blogs to post material or content that is
discriminating, harassing, bullying, threatening, defamatory or unlawful for any purpose.

• Do not disclose any Confidential Information.

• Do not disclose third party information that has been provided to Houchens.

• Uphold Houchens’ values of respect and avoid making defamatory statements about
Houchens, or any of its related entities, its employees, customers, vendors, and
competitors.

• Employees should have no expectation of privacy in any social networking activity,

especially if Houchens’ name or logo, or the name or logo of any of its stores or related
entities, are used. Any such activity can, and likely will, be reviewed by Houchens’
management.

Management may request any employee cease engaging in communications and activities
contrary to these guidelines, and any such employee will be subject to counseling and other
disciplinary action, up to and including termination of employment. Any questions regarding
social networking or these guidelines can be directed to Human Resources Department.

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 TELEPHONE SYSTEMS

Houchens’ telephones are to be used only for business purposes. Personal calls should be made
during break periods or limited to emergency situations. Houchens has established a voicemail
system to speed communications among employees. Employees are encouraged to leave
messages for other employees and members of management on this system. Voicemail messages
should be followed up with written communication when necessary. Voicemail is the property of
Houchens. Houchens may access and monitor voice mail at any time.

Noncompliance. Houchens uses software and other systems to track, log and trace activities on
all communication and computer systems to ensure compliance with this policy. Any employee
who violates the provisions of this policy or otherwise improperly uses Houchens’ communication
or IT systems shall be subject to disciplinary action, up to and including termination.

CARDBOARD BALERS

Employees under the age of 18 are strictly prohibited from operating or unloading a scrap paper
and cardboard baler or placing scrap paper or cardboard into a scrap paper and cardboard baler.

Violation of this policy will result in disciplinary action, up to and including termination.

CASH AND CHANGE

Employees, such as cashiers, must follow procedures for the proper handling of cash, food
stamps, checks, and coupons. Such employees are responsible for the accuracy of cash entrusted
to the employee, including:

1. Verifying the beginning register drawer (“till”) total;

2. Recording changes in till total;
3. Receiving correct payment;
4. Giving correct change and
5. Ending each shift with no variances.

A variance is when the amount of money in an employee’s register drawer does not equal the
register readings for the employee’s shift. Any significant variance or repeated variances will be
grounds for disciplinary action, up to and including termination.

No employee may open another employee’s register without the employee assigned to the register
being present. Members of management may open an employee’s register in cases of emergency or
when otherwise required in the ordinary course of business.

EMPLOYEE PURCHASES

Any merchandise purchases by employees must be made in strict compliance with the procedures
established by Houchens.

An employee must have a receipt for any merchandise an employee purchases for immediate
consumption. The receipt must be attached in a manner so that it can be checked and viewed
easily. Any merchandise purchased for immediate consumption cannot be stored on the
premises.

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Merchandise purchased by an employee that is intended for home use must be purchased while
the employee is off the time clock, must be taken immediately out of the store and must be
checked out by a designated cashier or a supervisor. An employee may not serve as cashier for
his or her own purchases. If an employee purchases merchandise intended for home use while on
the employee’s meal break, the employee must immediately take the merchandise out of the store.
No merchandise intended for home use can be held or stored on the premises to be taken out at a
later time.

No purchases of lottery tickets may be made by an employee while the employee is on the time
clock.

No reduced merchandise, sale items, or other merchandise can be held or stored for later
purchase by an employee. Merchandise which cannot be sold must be picked up by the vendor or
discarded and may not be used or taken from the premises by employees.

If an employee brings merchandise onto store premises, it is the responsibility of the employee to
have the merchandise inspected by a supervisor upon entering the store. Any merchandise in any
sack, box, or other container or package must be inspected by a supervisor before being taken
from store premises.

STORE OFFICE ACCESS

Access to the store office is limited to management and store personnel who require such access
as part of fulfilling their job functions. Third parties are prohibited from entering the store office.
Unless authorized by the Vice President, Human Resources or the Director of Security and
Investigations, store managers are not allowed to provide access to any individual other than
management and store personnel who require such access as part of fulfilling their job functions.

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 PERSONNEL PRACTICES

ORIENTATION AND EVALUATION PERIOD

The first 60 calendar days that an employee works for Houchens are considered an orientation
and evaluation period. During this period, a new employee will work closely with other employees
and his or her supervisor(s) to learn the requirements of the employee’s position. A new employee
will also learn about Houchens’ policies, employment procedures, benefits, and work rules during
this time period. The orientation period provides the employee and his or her potential
supervisors and coworkers the opportunity to become acquainted and allows Houchens the
opportunity to determine if the employee’s work performance, productivity, and attendance
measure up to Houchens’ standards. The employee’s overall job performance will be reviewed at
the end of this 60-day period.

Throughout this period the employee must demonstrate that he or she will be dependable and
effective. Therefore, new employees may have a different standard for attendance during this
orientation and evaluation period. Any unexcused absence during this period is regarded as
unacceptable and will result in disciplinary action, up to and including termination.

At all times, including during the orientation period and after successful completion of the
orientation period, the employee remains an at-will employee of Houchens and may be subject to
termination at any time for any reason, with or without cause or notice.

PROMOTION

It is the policy of Houchens to hire employees for entry-level positions, to provide training and
development for employees when necessary, and to offer employees promotions to higher-level
positions when appropriate. An employee’s basic eligibility for consideration for promotion will be
determined by the employee’s qualifications, requirements for the new job, whether the employee
has had a satisfactory performance record, and whether the employee has had any disciplinary
action. Houchens also fills positions through outside recruitment.

All employees are encouraged to seek advancement opportunities and career guidance. Store
employees should consult their store manager and all other employees should consult with their
supervisor or with the Human Resources Department for career advice and advancement
opportunities.

Candidates for promotion will normally be screened and selected on the basis of attendance, work
records, attitude, performance, and job-related qualifications. Promoted employees will be subject
in their new positions to the provisions of the Orientation Period policy. The employee remains an
at-will employee at all times and the employment-at-will relationship is not altered by a promotion
or completion of the subsequent Orientation Period of employment.

PAYROLL PERIODS AND PAY DAYS

The pay period begins on Sunday and ends on the following Saturday. Employees will normally
receive their pay on Thursday of each week. The day on which an employee receives his or her
pay may be delayed by one day if there is a holiday during the pay period. No one may pick up an
employee’s paycheck except the employee to whom it is written. If an employee finds an error in
his or her pay, such employee must call it to the attention of his or her supervisor immediately
and the supervisor will see that the error is corrected.

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 RECORDING WORK TIME

All hourly employees, and some employees who are paid on a salary basis, are required to “clock
in” and “clock out” for each shift worked.

If an employee forgets to “clock in” or “clock out” or makes an error while “clocking in” or “clocking
out,” the employee is expected to notify his or her supervisor at once. Employees are prohibited
from recording time for another employee or requesting another employee to record time for him
or her, or clocking in or clocking out for another employee. Any violation of this policy will result
in disciplinary action, up to and including termination.

Performing work prior to “clocking in” or subsequent to “clocking out” is prohibited and may result
in disciplinary action, up to and including termination.

OVERTIME

The Fair Labor Standards Act is a federal law which requires that most employees in the United
States be paid at least the federal minimum wage for all hours worked, and overtime pay for all
hours worked over 40 hours in a work week.

Nonexempt employees (i.e., those not exempt from the provisions of the Fair Labor Standards Act)
will be paid overtime compensation for work in excess of 40 hours during a regular work week.

Certain provisions provide exemption from overtime pay for employees employed as a bona fide
executive, administrative, professional, or an outside sales employee.

Being paid on a “salary basis” means an employee regularly receives a predetermined amount of
compensation each pay period on a weekly, or less frequent, basis.

Deductions from salary based pay are permissible: (1) when an exempt employee is absent from
work for one or more full day(s) for personal reasons other than sickness or disability; (2) for
absences of one or more full day(s) due to sickness or disability if the deductions are made in
accordance with a bona fide plan, policy, or practice of providing compensation for salary lost due
to illness; (3) to offset amounts employees receive as jury or witness fees or military pay; (4) for
unpaid disciplinary suspensions of one or more full day(s) imposed in good faith for workplace
conduct rule infractions. (See Houchens’ policy on penalties for workplace conduct rule
infractions). Also, Houchens is not required to pay the full salary in the initial or terminal week of
employment, for penalties imposed in good faith for infraction of work safety rules of major
significance, or for weeks in which an exempt employee takes unpaid leave under the Family and
Medical Leave Act. In these circumstances, either partial day or full day deductions may be made.

REST AND MEAL BREAKS

Employees should receive a rest break of ten (10) minutes at approximately the middle of every
four (4) hours of work not interrupted by a meal break. Full-time employees are to receive a meal
period of at least thirty (30) minutes near the middle of the employees’ workday. Part-time
employees scheduled to work more than five (5) consecutive hours during a workday will receive a
meal break of the same duration as full-time employees. Employees required to work more than
ten (10) hours in any workday will be allowed a second meal break no later than five (5) hours
after returning from their first meal break.

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Employees must accurately observe and record meal and rest periods. Exceeding the approved
time period for rest or meal breaks is prohibited and may result in disciplinary action, up to and
including termination.

PERSONNEL RECORDS

It is the policy of Houchens to maintain certain personnel records for applicants, employees, and
past employees in order to document employment-related decisions, evaluate and assess policies,
and comply with government record keeping and reporting requirements.

Employees have a responsibility to keep their personnel records up to date and should notify the
Human Resources Department in writing of any changes in at least the following:

(a) Name;
(b) Address;
(c) Telephone number;
(d) Marital status (for benefits and tax withholding purposes only);
(e) Number of dependents (for benefits and withholding purposes only);
(f) Addresses and telephone numbers of dependents and spouse or former spouse (for
insurance purposes only);
(g) Beneficiary designations for any of Houchens’ employee benefit programs; and
(h) Persons to be notified in case of emergency.

In addition, employees who have a change in the number of dependents or marital status must
complete a new Form W-4 for income tax withholding purposes within 10 days of the change if the
change results in a decrease in the number of dependents.

Access to Personnel Records. Personnel files are generally confidential and are the property of
Houchens. However, employees will be permitted reasonable access to their own file during
business hours as determined by the Human Resources Department. All other employees, such
as supervisors, will be granted access to personnel files of others only on a need-to-know basis.
For example, personnel records may be accessed by employees and supervisors only in the course
of performing their job functions. Employees are permitted to inspect their own medical records as
provided by applicable law.

TERMINATION OF EMPLOYMENT

It is the policy of Houchens to terminate employment because of an employee’s resignation,

discharge, or retirement. Employees are free to terminate their employment at any time and for
any reason, and Houchens reserves the right to terminate employment at any time, for any
reason, with or without cause or notice.

Employees are requested to give at least two (2) weeks written notice of their intent to resign.
Employees who are absent from work for two (2) consecutive days without being excused or giving
proper notice to their immediate supervisor will be considered as having voluntarily quit their
employment.

Termination and discharge procedures are only guidelines and do not create a legal contract
between Houchens and its employees or change an employee’s status as an at-will employee or in
any way restrict Houchens’ right to terminate an employee at any time, for any reason allowed by
law, with or without cause or notice.

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 EMPLOYEE RESPONSIBILITY

CONDUCT OF EMPLOYEES

Certain rules, policies and procedures regarding employee conduct are necessary for efficient
business operations and for the benefit and safety of all employees. Employees are expected at all
times to conduct themselves in a positive manner and to promote the best interests of Houchens.
Conduct that interferes with operations, discredits Houchens, or is offensive to customers, co-
workers, vendors, and guests will not be tolerated.

Unacceptable employee conduct includes, but is not limited to:

1. Failure to comply with Houchens’ policies, rules, and procedures, whether contained in
this Handbook or shared with employees orally or through written means other than this
Handbook;
2. Failure to report suspicious, improper, unethical, or illegal conduct by co-workers,
customers, vendors, or suppliers;
3. Failure to cooperate with Houchens’ investigations;
4. Failure to wear assigned safety equipment and to comply with Houchens’ safety and
security policies, rules, and procedures;
5. Failure to report to work punctually as scheduled and being at the proper workstation,
ready for work, at the assigned starting time and at the end of meal or break period;
6. Failure to give proper advance notice whenever unable to work or report to work on time;
7. Failure to maintain cleanliness and order in the workplace and work areas;
8. Arguing with or rudeness toward co-workers, customers, vendors, suppliers, or guests, or
otherwise creating a disturbance;
9. Failure to perform a reasonable quantity of acceptable quality work;
10. Stopping work or making preparation to leave work before the specified quitting time at
breaks, meal time, and the end of the shift;
11. Failure to comply with instructions;
12. Unauthorized use of telephones or cell phones;
13. Excessive time for breaks;
14. An employee’s failure to clock in or out, clocking in or out for another employee, or
requesting another employee to clock in or out for him or her;
15. An employee editing or revising his or her own time;
16. Wearing inappropriate clothing or failing to maintain personal hygiene;
17. Operating machinery improperly without required guards;
18. Failure to immediately report an injury or suspected injury;
19. Failure to report for medical attention when instructed to do so;
20. Unauthorized use of Houchens property, including but not limited to computers, IT
systems, software, phones, cell phones, voicemail, or email;
21. Use of profanity or abusive language;
22. Possessing firearms or other weapons inside buildings owned, leased, or otherwise
occupied by Houchens or any of its subsidiaries;
23. Fighting;
24. Threatening, intimidating, or harassing customers, vendors, suppliers, co-workers or
guests;
25. Reporting to work under the influence of alcohol or illegal or nonprescribed drugs or
using, selling, dispensing, or possessing alcohol or illegal or nonprescribed drugs on
company premises;
26. Disclosing Confidential Information;

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 27. Falsifying or altering any record or report, or other company documents such as an
application for employment, medical report, time record, expense account, or absentee
report;
28. Stealing, destroying, defacing or misusing Houchens’ property, including but not limited to
computers, software, phones, cell phones, voicemail, or email;
29. Insubordination;
30. Possession of obscene or offensive materials;
31. Lying;
32. Sexual harassment or other forms of harassment;
33. Retaliation against an employee who brings a complaint of sexual harassment or against a
employee who participates in the investigation; and
34. The purchase of any lottery ticket or the scratching or otherwise playing any type
of lottery during working hours.

Any employee violating any of the conduct rules included in this non-exhaustive list is subject to
disciplinary action, up to and including termination, even for a first offense.

ALCOHOL AND TOBACCO SALES – ZERO TOLERANCE POLICY

Houchens has a zero-tolerance policy with respect to the sale of alcoholic beverages and/or
tobacco products to underage customers. Sale of any alcoholic beverage or any tobacco
product to any individual under the legal age to purchase such products is strictly prohibited.
Any employee violating this policy will be terminated.

ATTENDANCE AND PUNCTUALITY

Employees are to report for work punctually and to work all scheduled hours and any required
overtime. Excessive tardiness and poor attendance disrupt workflow and customer service and
will not be tolerated.

Employees are expected to carry out their duties during all scheduled work times and should be
ready to begin working at their scheduled starting time. Employees should notify their immediate
supervisor as far in advance as possible whenever they are unable to report for work, know they
will be late, or must leave early. The notice should include a reason for the absence and an
indication of when the employee can be expected to report for work. Employees must report to
their supervisor upon arrival at work late or after an absence. Employees must notify and receive
approval from their supervisor or manager before leaving the company premises for any reason
other than a scheduled break or a scheduled end of shift.

Unauthorized or excessive absences or tardiness will result in disciplinary action, up to and

including termination. An absence is considered to be unauthorized if the employee has not
followed proper notification procedures and/or if the absence has not been approved by the
employee’s supervisor.

Employees who are absent from work for two (2) consecutive days without giving proper notice to
Houchens will be considered as having voluntarily quit their employment.

21
 EMPLOYEE SAFETY

It is the policy of Houchens to comply with all applicable federal, state, and local health and safety
laws and regulations. Employees are expected to comply with all safety and health requirements
established by Houchens or by federal, state, or local law or regulation. Employees should report
to their supervisor all observed safety and health violations, potentially unsafe conditions (such as
equipment malfunctions, or malfunctioning safety guards or mechanisms), and any accidents
resulting in injuries to employees or customers. Employees shall not operate damaged or
malfunctioning equipment until the supervisor confirms its repair. Violations of safety and health
laws, rules, regulations, or procedures will result in disciplinary action, up to and including
termination.

REPORTING INJURIES AND ACCIDENTS

If an employee is injured or becomes ill at work at any time, regardless of the severity of the injury
or illness, the employee must immediately notify the employee’s supervisor or manager. The
employee’s supervisor or manager will see that the employee receives proper first aid and/or
medical attention and that required injury or illness reports are completed.

If an employee is injured on the job, the employee must immediately report his or her injury to the
employee’s supervisor or manager. The employee’s supervisor or manager will help the employee
select the appropriate medical treatment and will arrange for post-injury drug and alcohol
screening, as set forth in the Drug and Alcohol Policy.

If an employee misses work due to an injury, a signed note from the treating physician describing
the employee’s condition and setting forth any restrictions on the employee’s work activities must
be provided to the employee’s supervisor or manager prior to returning to work. If the treating
physician places restrictions on the employee’s work activities, the employee’s supervisor or
manager will determine whether the restrictions can be accommodated.

PERSONAL APPEARANCE OF EMPLOYEE

In an effort to present a unified and professional employee appearance, each employee’s dress,
grooming, personal hygiene, and appearance should be appropriate to the work situation.
Employees are at all times to present a professional, business-like image to customers and the
public.

The personal appearance of employees is governed by standards established by management.

Some of these standards are contained in this Handbook while other standards governing the
personal appearance of employees are conveyed to employees orally or through supplemental
written policies. Employees should check with their supervisor or manager regarding standards
for personal appearance that are in addition to those contained in this Handbook.

Standards governing the personal appearance of employees include, but are not limited to:

(a) Wearing suggestive attire, halter tops, shorts, sandals, open-toe shoes, T-shirts, or other
items of attire that do not present a professional and businesslike appearance are
prohibited.
(b) Hair is to be worn in a manner that allows the employee’s face to be clearly visible to
customers and does not hinder the employee’s ability to perform their work functions
effectively and safely. All hairstyles are subject to the approval of the employee’s
supervisor and must comply with applicable health codes. All food service employees
must wear hairnets and comply with all health code requirements.

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 (c) Employees must wear company shirts or uniforms if they are furnished by Houchens.

(d) All other standards established by management and conveyed to employees orally or
through written policies other than this Handbook.

Employees may be required to meet special dress, grooming and/or hygiene standards depending
on the nature of their job.

Any employee who does not meet the standards of this policy and other personal appearance
standards established by management will be required to take corrective action, which may
include leaving the premises. Employees violating this policy are subject to disciplinary action, up
to and including termination. Any work time missed because of failure to comply with standards
for personal appearance will not be compensated.

CUSTOMER RELATIONS

All employees are to maintain a friendly, helpful, and positive attitude toward all customers and to
provide each customer with friendly, helpful, and courteous services and assistance. Employees
are expected to know products and services and to learn what customers want and need.

Employees are to report customer-related problems to their supervisor or manager. Employees

are to listen carefully to customer complaints and deal with them in a courteous, helpful, and
professional manner. If a controversy arises concerning a company policy, the employee should
explain Houchens’ policy respectfully and clearly. Customers who become unreasonable, abusive,
or harassing should be referred to the employee’s supervisor or manager if the employee cannot
resolve the problem.

CONFLICT OF INTEREST

Employees must avoid conflicts of interest. An employee has a conflict of interest if the employee
places himself or herself in a position where such employee’s private interests may have an
adverse effect on the employee’s motivation or job performance.

Use of company funds for improper purposes or other dishonest practices is absolutely forbidden.
An employee is required to disqualify himself or herself from exerting influence in any transaction
where the employee’s personal interests may conflict with the interests of Houchens or where the
employee may gain any financial benefit in conflict with the interests of Houchens. Employees
must report in writing to his or her manager or supervisor any financial interest the employee or a
family member has in or with any individual, corporation, partnership, or other legal entity doing
business with Houchens.

As a condition of continued employment, an employee is required to disclose any potential conflict

of interest as the conflict arises.

If there is a question about whether or not a conflict of interest exists, an employee should submit
the information to such employee’s supervisor or manager in writing, for review.

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 FIREARMS AND OTHER WEAPONS

Houchens prohibits employees (including those who possess valid licenses to carry concealed
deadly weapons and those who do not possess said license) from carrying any deadly or defensive
weapons (including but not limited to firearms) in any building owned, leased, or occupied by
Houchens or any of its subsidiaries. Cutting implements used for tasks in the workplace are
permitted for the sole purpose of performing valid workplace functions.

For employees in states that permit firearms to be kept in personal vehicles, the vehicle must be
locked, and the firearm(s) must be hidden from plain view and be kept within a locked case or
container within the vehicle.

Any individual or employee found violating this policy may be denied entrance to the building,
ordered to leave the building, and employees may be subject to disciplinary measures.

CONFIDENTIALITY

Employees will have access to Confidential Information in the course and scope of their
employment. All Confidential Information an employee acquires while employed with Houchens
shall remain the sole property of Houchens. An employee’s use of any Confidential Information
shall be restricted to that which is necessary for legitimate and proper Houchens’ business
purposes.

Except as part of legitimate job duties, employees are prohibited from disclosing Confidential
Information to any other person, employee, firm, corporation, or other entity, either during or
subsequent to such employee’s employment with Houchens. Failure of an employee to comply
with this policy may result in legal action against the employee divulging the Confidential
Information and subject the employee to disciplinary action, up to and including termination.

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 EMPLOYEE BENEFITS

HOUCHENS BENEFITS

This section of the Handbook briefly describes the Houchens employee benefit programs.
Employees will also receive summary plan descriptions (“SPDs”), which describe certain benefit
programs in greater detail. If an employee does not receive SPDs, the employee should contact the
Human Resources Department at (270) 843-3252, extension 2851 and request SPDs. An
employee’s SPDs and official plan documents (such as insurance master contracts) contain
information regarding eligibility requirements, coverage limits, deductibles, premiums, and fees.

Each employee must read the Handbook descriptions and SPDs carefully to understand such
employee’s rights and responsibilities. Should a conflict exist between the official benefit plan
documents and this Handbook or the SPDs, the official plan documents will control in all cases.

Houchens reserves the right, at its sole and absolute discretion, to rescind or amend benefits, or
to require or change employee contributions toward premium costs, deductibles, or co-payments.
While Houchens’ intention is to continue offering the Houchens benefit programs, it cannot
guarantee that such benefits will always be available.

EMPLOYEE CLASSIFICATIONS

In determining eligibility for various employee benefits, the following employment categories for
hourly employees have been established by Houchens:

Full-Time Employee: A full-time employee regularly works a scheduled

work week of at least 35 hours. For purposes of health
insurance eligibility only, an employee will be considered
“full-time,” as defined by the Patient Protection and
Affordable Care Act.

Part-Time Employee: A part-time employee regularly works a scheduled work

week of less than 35 hours per week.

These employment categories are solely for the purpose of determining eligibility for certain
employee benefits and do not change an employee’s status as an at-will employee or in any way
restrict Houchens’ right to terminate the employee or change the terms and conditions of
employment. It shall be the responsibility of the employee to contact the Human Resources
Department at (270) 842-3252, extension 2851 if the employee has any questions about whether
the employee is a full-time or part-time employee and/or whether the employee is eligible for any
employee benefits and/or to obtain forms to be completed and filed by the employee in order to
obtain or enroll in any employee benefit for which the employee is eligible.

GROUP HEALTH INSURANCE

Houchens offers a comprehensive group health insurance program that complies with the Patient
Protection and Affordable Care Act. Houchens shares in the cost for employees who enroll in the
comprehensive health insurance program.

Except for onboarding new employees pursuant to an acquisition, coverage begins on the first day
of the calendar month following sixty (60) days of full-time employment. See the summary plan
description for further information regarding the benefits offered under the program.

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The Houchens group health insurance plan (the “Plan”) is subject to the Consolidated Omnibus
Budget Reconciliation Act of 1985, or “COBRA.” COBRA requires the Plan to offer qualified
persons the opportunity for a temporary extension of health care coverage (called “continuation
coverage”) in certain instances where coverage under the group health insurance plan would
otherwise end. Persons eligible to continue coverage under COBRA are known as “qualified
beneficiaries,” and the events which trigger continuation coverage are known as “qualifying
events.” The qualified beneficiaries are responsible for paying all premiums associated with the
continuation coverage.

Continuation coverage under COBRA will be cancelled for the following reasons:

• If Houchens no longer provides group health insurance coverage to any of its employees;

• If the COBRA premium is not paid on time;

• If the qualified beneficiary becomes covered, after the date of the COBRA election, under
another group health plan which does not exclude or limit coverage for the qualified
beneficiary's preexisting conditions;

• If the qualified beneficiary becomes entitled to Medicare after the date of the COBRA
election; or

• If the qualified beneficiary is no longer determined to be disabled, where coverage was

extended beyond 18 months because of disability.

GROUP LIFE INSURANCE

Houchens provides all regular, full-time employees term life insurance coverage at no cost to the
employee. Employees may be permitted to purchase additional term life insurance coverage.

EMPLOYEE STOCK OWNERSHIP PLAN

Houchens provides an employee stock ownership/retirement plan known as the Houchens

Industries, Inc. Employee Stock Ownership Plan (“Houchens ESOP”). Employees who are at
least 21 years of age and complete 1,000 or more hours of service within the 12-month period
following the employee’s initial date of employment or who complete 1,000 hours of service in a
subsequent Houchens ESOP Plan Year are eligible to participate in the Houchens ESOP.

The primary purpose of the Houchens ESOP is to provide employees with an opportunity to
accumulate savings for the employees’ retirement needs. The Houchens ESOP is designed to do
this at no cost to its employees. Each year Houchens may make contributions to the Houchens
Industries, Inc. Employee Stock Ownership Trust (hereinafter “Houchens ESOT”) in stock or cash.
The Houchens ESOT may also enter into securities acquisition loans. The investments are held
by the Houchens ESOT for its employees’ benefit. Houchens stock will gain or lose value, as
determined annually by an outside independent appraiser, based on the financial performance of
Houchens Industries, Inc. and its subsidiary corporations and other relevant factors.

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 FLEXIBLE BENEFITS PLAN

Houchens offers a Flexible Benefits Plan which gives eligible employees a choice to “redirect” part
of their wages to purchase benefits from a “Menu” of nontaxable benefits offered by the Plan.

Each employee selects benefits from the Plan Menu which includes dependent care assistance,
medical reimbursement, and premium benefits. The employee pays for these benefits by electing
to redirect from the employee’s wages an amount sufficient to pay for each benefit selected. These
amounts are redirected from the employee’s wages before they are subject to federal or state
income taxes or social security taxes. The redirected amounts are placed in a separate spending
account for each benefit elected by the employee. As each employee incurs a qualifying expense,
the employee submits a claim which is processed, and the employee is reimbursed from the
money in the employee’s Flexible Benefits Plan account.

WORKERS’ COMPENSATION

Houchens pays the entire cost of workers’ compensation. This law was designed to provide
employees with benefits for any injury arising out of an employee’s work. Under the provisions of
the law, if an employee is injured while at work for Houchens, the injury must be reported at once
to the employee’s supervisor or manager. The supervisor or manager will then see that the
employee receives proper medical services. It is for the employee’s benefit and also Houchens’
benefit that all injuries are reported immediately, no matter how minor. Failure to report an injury
may result in disciplinary action, up to and including termination.

PAID VACATION

Houchens grants vacation time with pay to full-time employees who have completed at least one
year of continuous full-time service. If the employee has not completed at least one year of
continuous full-time service, the employee is not entitled to vacation pay, and any employee
whose employment ends before he or she has worked at least one year of continuous full-time
service will not accrue any paid vacation time. To be eligible for paid vacation, an employee must
have worked on average at least 35 hours a week during the previous year. Vacation time accrues
on a full-time employee’s full-time anniversary date based upon the number of full-time years of
service of the employee. Full-time employees will accrue paid vacation on their full-time
anniversary date according to the following schedule:

YEARS OF SERVICE PAID VACATION

One or two One work week

Three, four, five or six Two work weeks

Seven or more Three work weeks

For hourly employees, a week of paid vacation equals 40 hours. Vacation time accrues on an
annual basis on the employee’s full-time anniversary date, and an employee will not accrue any
vacation time for any partial year worked, except where an employee has twenty (20) years of full-
time continuous service with Houchens or has reached retirement age (age 60), in which case paid
vacation will be prorated based on the number of months worked by the employee since the
employee’s previous full-time anniversary date.

27
Vacation pay will consist of the employee’s regular rate of pay for the vacation period, and
normally will accrue on the employee’s full-time anniversary date, provided the employee is in
active employment with Houchens on the employee’s full-time anniversary date. Prior to payment
of vacation pay, a schedule of vacation dates approved by the employee’s supervisor or manager
must be submitted to the payroll department for all employees who are entitled to at least one or
two weeks vacation time.

An employee with one or two weeks vacation must schedule and use all of his or her time in the
calendar year in which it is earned. An employee who accrues three weeks of vacation time is
required to take at least two weeks of vacation during the calendar year, but may elect to be paid
for the remaining unused time. No unused vacation time may be carried over to the following
calendar year. Vacation time accrued but not yet taken will be paid out to the employee upon the
termination of employment.

The paid vacation benefit is available to enable employees to have time off from work to be with
their family and friends, while receiving their normal pay. An employee with two weeks or less
vacation time is expected to take his or her vacation time unless an extreme hardship is approved.
An employee with three weeks vacation time is expected to take at least two weeks of his or her
vacation time unless an extreme hardship is approved. If an extreme hardship is caused for the
employee or Houchens due to the employee being required to take vacation time, a written
authorized exception may be approved by management.

Should an employee desire that his or her vacation pay be paid on a date subsequent to the
employee’s full-time anniversary date, a request should be sent to the Human Resources
Department prior to the employee’s full-time anniversary date.

Management reserves the right to designate when some or all vacation time must be taken.
Supervisors and managers are responsible for insuring adequate staffing levels, resolving vacation
scheduling conflicts and ensuring that employees entitled to one or two week(s) vacation time
schedule and take their vacation time during the calendar year in which it is earned, and that
employees entitled to three weeks vacation time schedule and take at least two weeks vacation
time during the calendar year in which it is earned.

If a paid holiday falls within the employee’s vacation period, an additional day of vacation will be
granted. This additional day may be taken at the beginning or the end of the employee’s vacation
period or at another time during the vacation year, subject to the approval of the employee’s
supervisor.

HOLIDAYS

Houchens recognizes the following holidays for all full-time employees who have been full-time
employees for at least sixty (60) days:

1. New Year’s Day

2. Memorial Day
3. Independence Day
4. Labor Day
5. Thanksgiving Day
6. Christmas Day

Full-time hourly employees will receive eight (8) hours holiday pay for each of the above holidays.
To be eligible for holiday pay, an employee must have worked on average at least 35 hours a week
during the previous year. If an employee is absent on a regularly scheduled workday preceding or
following a holiday, holiday pay may be disallowed. Employees on a leave of absence, on an FMLA

28
leave, or receiving workers’ compensation benefits are not eligible to receive holiday pay.
Hourly employees’ holiday pay will be calculated at the employee’s regular rate of pay. If an
employee is scheduled to work on a holiday, such employee will receive pay at his or her regular
rate, plus holiday pay.

For holidays that fall on weekends, Houchens may recognize either the Friday before or the
Monday after that weekend as a holiday.

JURY DUTY

All employees are encouraged to fulfill their civic responsibility by serving jury duty when
summoned by a court. The employee shall provide his or her supervisor with court documents
reflecting summons for jury duty, and the dates serving as a juror. When any employee
completes jury service in less than a full day, he or she will be required to report to work for
the balance of the scheduled workday. No employee will be disciplined for serving on jury duty.
This policy does not apply to employees appearing as a party or witness in any court or
administrative agency proceeding, except when the employee is called upon to testify on behalf
of Houchens, or is subpoenaed.

Full-time employees will be protected from loss of income for their regularly scheduled working
hours during the period of time a full-time employee serves on jury duty or serves as a witness
consistent with a subpoena. The following guidelines apply:

• Full-time employees selected for jury duty shall notify his or her supervisor of the
selection as soon as possible.
• Houchens will reimburse full-time employees for their regularly scheduled working
time missed because of jury duty service.
• Jury duty working time will not be considered as time worked for overtime
purposes, and will not be used in computing overtime pay.
• When a full-time employee completes jury service in less than a full day, he or she
will report to work for the balance of the scheduled workday, to be eligible for jury
duty pay.

EMPLOYEE INFORMATION AND ASSISTANCE

Employees that have questions concerning any employee benefit offered by Houchens, eligibility
requirements for such employee benefits or otherwise need assistance, should contact the Human
Resources Department at (270) 843-3252, extension 2851.

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 LEAVES OF ABSENCE

LEAVE OF ABSENCE

Houchens may grant employees extended leaves of absence under certain circumstances for up to
a maximum of six (6) months. Except as stated below, employees will not receive compensation
during a leave of absence. Houchens does not guarantee reinstatement or any other benefits of
employment to an employee granted an extended leave of absence under this policy, except as
required by applicable law.

The granting and duration of each leave of absence will be determined by Houchens in
conjunction with applicable law. The following types of leaves will be considered:

1. Medical Leave of Absence. Employees who are unable to work because of a serious health
condition or disability may be granted a medical leave of absence. A medical leave of absence
includes maternity leave. This type of leave covers disabilities caused by pregnancy, childbirth,
or other related medical conditions. Houchens requires certification of an employee’s serious
health condition, both before the leave begins and on a periodic basis thereafter, by the
employee’s health care provider.

2. Parental Leave of Absence. Female employees, when not disabled by pregnancy or childbirth
(see above), and male employees may be granted a parental leave of absence to care for the
employee’s child upon birth or to care for a child upon the child’s placement with the
employee for adoption or foster care.

3. Family Care Leave of Absence. Employees may be granted a family care leave of absence for
the purpose of caring for the employee’s child, spouse, or parent who has a serious health
condition. Houchens requires certification of the family member’s serious health condition,
both before the leave begins and on a periodic basis thereafter, by the family member’s health
care provider.

4. Personal Leave of Absence. Employees may be granted a leave of absence to attend to

personal matters in cases in which Houchens determines that an extended period of time
away from the job will be in the best interests of the employee and Houchens.

Whenever possible, requests for an extended leave of absence or any extension of a leave of
absence should be submitted in writing to the employee’s supervisor at least thirty (30) days
before the start of the leave of absence or extension period. When the need for an extended leave
of absence or an extension of a leave of absence is not foreseeable, employees should give as much
notice as is practicable. The employee’s supervisor will forward the request for a leave of absence
to the Human Resources Department. The final decision concerning the request for a leave of
absence will be made by the Human Resources Department, and the employee will be notified of
the final decision in writing. All employees on an approved leave of absence are expected to report
to their supervisor and the Human Resources Department any change of status in their need for a
leave of absence or their intention to return to work.

Employees who are on an approved extended leave of absence may not perform work for any other
employer during the leave of absence, except for a military leave of absence.

Full-time employees who have completed sixty (60) days of employment as a full-time employee
and who thereafter are off from work for more than seven (7) consecutive days on an approved
medical leave of absence will receive compensation for time missed after the initial seven (7)
consecutive day period at the rate of One Hundred Fifty Dollars ($150.00) per week for up to a
maximum of twelve (12) weeks. A person receiving temporary total disability benefits or other

30
workers’ compensation benefits is not eligible to receive the $150.00 payment that is available
under this policy.

Any accrued vacation time must be used concurrently with the leave of absence.

Benefits that accrue according to length of service, such as paid vacation and holidays, do not
accrue during periods of leave or during periods in which the employee receives workers’
compensation benefits.

Employees returning from a medical leave of absence must provide certification of their ability to
perform the functions of their job.

If an employee fails to return to work at the conclusion of an approved extended leave of absence,
including any extension of the leave of absence, the employee will be considered to have
voluntarily terminated his or her employment.

MILITARY LEAVE

Houchens will abide by and follow all the provisions of the Uniformed Services Employment
and Re-Employment Rights Act (USERRA). USERRA protects the job rights of individuals who
voluntarily or involuntarily leave employment positions to undertake military service or certain
types of service in the National Disaster Medical System. USERRA also prohibits employers
from discriminating against past and present members of the uniformed services, and
applicants to the uniformed services. An employee has the right to be reemployed by
Houchens if such employee leaves to perform service in the uniformed service and (1) such
employee ensures that Houchens receives advance written or verbal notice of the employee’s
service; (2) the employee has five years or less of cumulative absence time due to service in the
uniformed services while employed with Houchens; (3) the employee returns to work or applies
for reemployment in a timely manner after conclusion of service; and (4) the employee has not
been separated from service with a disqualifying discharge or under other than honorable
conditions. If an employee is eligible to be reemployed, he or she will be restored to the job and
benefits such employee would have attained if he or she had not been absent due to military
service or, in some cases, a comparable job. If the same job or one of equivalent status and
pay is not available as a result of a reduction in force, the employee will be treated in the same
manner as though the employee had been actively employed at the time of the reduction in
force. An employee on a military leave of absence may use accrued vacation days while on
leave. Employees returning from a military leave of absence must comply with all of the
reinstatement requirements specified by law.

If active duty is for more than 30 days, an employee may elect to continue his or her employer-
sponsored health care for themselves and his or her dependents for up to 24 months as long as
the employee makes the premium payments and remains in military service. Even if an
employee does not elect to continue coverage during his or her military service, such employee
shall have the right to be reinstated in Houchens’ health plan when such employee is
reemployed, generally without any waiting periods or exclusions (e.g., pre-existing condition
exclusions) except for service-connected illnesses or injuries. If military service is less than 31
days, health care coverage will be provided as if the service member had remained employed.

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 BEREAVEMENT LEAVE

Full-time employees are granted up to twenty-four (24) hours of paid leave for the death of an
immediate family member up through the day of the funeral. In the event an employee has a
death in his or her immediate family, such employee should notify his or her manager or
supervisor as soon as possible. Immediate family includes the following:

A) Husband, wife
B) Brother, sister
C) Parent, child
D) Grandparent, grandchild
E) In-laws including: mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law
F) Stepfamily members including: stepparent, stepchild, step-grandparent, step
grandchild

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 FAMILY MEDICAL LEAVE ACT

NOTICE TO EMPLOYEES
REGARDING THE FAMILY AND MEDICAL LEAVE ACT OF 1993

Houchens will comply with all applicable requirements of the Family and Medical Leave Act of
1993 (“FMLA”), and any applicable amendments to the FMLA.

The FMLA requires private employers with 50 or more employees to provide eligible employees up
to 12 weeks of unpaid, job-protected leave in any 12-month period for certain family, medical and
military reasons and up to 26 weeks of unpaid, job-protected leave in any 12-month period for the
care of certain military service members or veterans who suffer an injury or illness while on active
duty. Houchens calculates the 12-month period utilizing the retroactive rolling-year method.

EMPLOYEE ELIGIBILITY

The FMLA defines eligible employees as employees who: (1) have worked for Houchens for at least
12 months; (2) have worked for Houchens for at least 1,250 hours in the previous 12 months; and
(3) work at or report to a work site which has 50 or more employees or is within 75 miles of work
sites that taken together have a total of 50 or more employees.

LEAVE ENTITLEMENT

Eligible employees may take leave for the following reasons:

(1) For the birth of a child and to care for a child upon birth or upon placement with the
employee for adoption or foster care;
(2) To care for a parent, spouse, or child with a serious health condition;
(3) When an employee is unable to work because of the employee’s own serious health
condition;
(4) When a “qualifying exigency” arises out of the employee’s spouse, son, daughter, or parent
being on active duty or being notified of an impending call or order to active duty in the
Armed Forces, including the National Guard or Reserves; or
(5) To care for a current service member of Armed Forces, National Guard, or Reserves, or a
veteran who was a member of the Armed Forces, National Guard, or Reserves during the
preceding five (5) years, who is undergoing treatment, recuperation, or therapy for a
serious injury or illness that was incurred in the line of duty or was aggravated by service
in the line of duty.

For further information on what is considered “qualifying exigency,” contact the Human Resources
Department.

Under the FMLA, a “serious health condition” means an illness, injury, impairment, or physical or
mental condition that involves: (1) inpatient care (i.e., an overnight stay), including any period of
incapacity or any subsequent treatment in connection with the inpatient care; or (2) “continuing
treatment” by a health care provider. For further information on what is considered “continuing
treatment,” contact the Human Resources Department.

33
FMLA leave for birth or placement for adoption or foster care must conclude within 12 months of
the birth or placement. In addition, spouses employed by the same employer are jointly entitled to
a combined leave of 12 work weeks of family leave for the birth or placement of a child for
adoption or foster care, and to care for a parent who has a serious health condition.

Eligible employees may take FMLA leave intermittently (for example, in blocks of time) or by
reducing a work schedule in certain circumstances. If FMLA leave is to care for a child after the
birth or placement for adoption or foster care, employees may take their FMLA leave intermittently
or on a reduced work schedule only with Houchens’ permission. If the FMLA leave is because of
the employee’s serious illness or to care for a seriously ill family member, the employee may take
the leave intermittently or on a reduced work schedule if it is medically necessary.

Houchens requires the employee to use any accumulated vacation concurrently with the FMLA
leave period. If an employee requests leave and is otherwise eligible for FMLA leave under this
section, Houchens reserves the right to require the employee to designate such leave as FMLA
leave.

Absences due to reported work-related injuries or illnesses covered by workers compensation will
be recorded as FMLA leave and run concurrently.

NOTICE AND CERTIFICATION

Employees who want to take FMLA leave ordinarily must provide Houchens at least 30 days
notice of the need for leave, if the need for leave is foreseeable. If the employee’s need is not
foreseeable, the employee should give as much notice as is practicable. When leave is needed to
care for an immediate family member or for the employee’s own illness and is for planned medical
treatment, the employee must try to schedule treatment in order to prevent disruptions of
Houchens’ operations.

In addition, employees who need leave for the employee’s or a family member’s serious health
condition must provide medical certification from a health care provider of the serious health
condition. Houchens also may require a second or third opinion (at Houchens’ expense), periodic
recertification of the serious health condition, and, when the leave is a result of the employee’s
own serious health condition, a fitness for duty report to return to work. Houchens may deny
leave to employees who do not provide medical certification.

BENEFITS DURING FMLA LEAVE

Employees taking leave under the FMLA are entitled to receive health benefits during the leave at
the same level and terms of coverage as if they had been working throughout the leave. If
applicable, arrangements will be made for employees to pay their share of health insurance
premiums while on leave. In some instances, Houchens may recover premiums it paid to
maintain health coverage for an employee who fails to return to work from FMLA leave.

The employee’s use of FMLA leave will not result in the loss of any employment benefit that
accrued prior to the start of the employee’s leave.

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 JOB RESTORATION AFTER FMLA LEAVE

Houchens will reinstate an employee returning from FMLA leave to the same or equivalent
position with equivalent pay, benefits, and other employment terms and conditions. However, an
employee on an FMLA leave does not have any greater right to reinstatement or to other benefits
and conditions of employment than if the employee had been continuously employed during the
FMLA leave period.

Certain highly compensated key employees also may be denied reinstatement when necessary to
prevent “substantial and grievous economic injury” to Houchens’ operations. A “key” employee is
a salaried eligible employee who is among the highest paid ten percent of employees within 75
miles of the work site. Employees will be notified of their status as a key employee, when
applicable, after they request FMLA leave.

OTHER PROVISIONS

The FMLA does not affect any federal or state law prohibiting discrimination or supersede any
state or local law or collective bargaining agreement which provides greater family or medical leave
rights.

Salaried executive, administrative, and professional employees of Houchens who meet the Fair
Labor Standards Act (“FLSA”) criteria for exemption from minimum wage and overtime do not lose
their FLSA-exempt status by using any unpaid FMLA leave. This special exception to the “salary
basis” requirements for the FLSA’s exemptions extends only to eligible employees’ use of leave
required by the FMLA.

EMPLOYEE INFORMATION AND ASSISTANCE

Employees that have questions concerning any employee benefit offered by Houchens, eligibility
requirements for such employee benefits or otherwise need assistance, should contact the Human
Resources Department at (270) 843-3252, extension 2851.

35
 ACKNOWLEDGMENT

I have received and read the Houchens Food Group, Inc. (“Houchens”) Employee Handbook. I
understand that the policies and procedures contained in the Houchens Employee Handbook do
not create a contract of employment between Houchens and me. I understand that Houchens
reserves the right to modify, revoke, suspend, terminate, or change any or all policies or
procedures, in whole or in part, at any time, with or without notice. I understand that rules or
policies may also be given to me orally or in writing from time to time. I further understand that I
have the right to terminate my employment with Houchens at any time and for any reason and
that Houchens may terminate my employment at any time, for any lawful reason, with or without
cause or notice.

By signing below, I acknowledge receipt of the Houchens Employee Handbook and certify that I
have read, agree to, and accept the terms, conditions and provisions contained in the Houchens
Employee Handbook and in this Acknowledgment.

Note to Employee: You are required to date, sign, and print your name on the spaces provided and
return the completed Acknowledgment to your supervisor during your first week of employment. A
new Acknowledgment must also be completed and returned each time an employee receives an
updated version of the Houchens Employee Handbook.

__________________________________________
Date

__________________________________________
Signature

__________________________________________
Print Name

(This Acknowledgment is a duplicate of the original Acknowledgment which the employee is required to complete and return
to the employee’s supervisor during the employee’s first week of employment. Current employees will also be required to
complete and return this Acknowledgment upon receipt of an updated version of the Houchens Food Group, Inc. Employee
Handbook.)

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