MOTOR VEHICLE DRIVERS POLICY MANUAL

TABLE OF CONTENTS

ARTICLE 1.0 Introductory Information

1.01 General Applicability 1.02 Department of Transportation Regulations 1.03 Nondiscrimination

ARTICLE 2.0 Driver Qualifications

2.01 General 2.02 CDL Drivers 2.03 New Hires 2.04 Employees - Driving Is Essential 2.05 Employees - Driving Is Non-essential 2.06 Reinstatement 2.07 Notification of Violations 2.08 MVR Review 2.09 Driver's Licenses

ARTICLE 3.0 Vehicle Maintenance

3.01 General 3.02 Vehicle Files 3.03 Daily Pre-Drive Inspection 3.04 Daily Post-Drive Inspection DOT Regulated Vehicles 3.05 Periodic Maintenance 3.06 DOT Inspection 3.07 Mechanical Facilities 3.08 Expense Records 3.09 Cleaning 3.10 Signs

ARTICLE 4.0 Vehicle Operating Rules

4.01 Seat Belts 4.02 Passengers 4.03 Fines and Tickets 4.04 Company Use 4.05 Alcoholic Beverages/Drugs 4.06 Laws, Rules and Regulations 4.07 Personal Vehicles 4.08 Locking of Vehicles 4.09 New Drivers

ARTICLE 5.0 Accident Reporting

5.01 Accident Reporting 5.02 Accident Kits
Dale Williams Trucking, Inc.

Motor Vehicle Policy Manual

ARTICLE 1.0 -- Introductory Information

1.01 General Applicability.

This manual sets forth the policies of Dale Williams Trucking, Inc. and each of its subsidiaries (each such company is hereinafter referred to as "Company") as to the use and maintenance of Company owned and leased vehicles. It is not an employment contract and should not be construed or interpreted to grant or confirm any rights or benefits of employment. The information contained herein is subject to change and/or deletion without prior notice, although the Company will try to notify you of changes as they occur. The information contained in this manual is the most current at this time and supersedes all previous manuals and policy statements by the Company.

1.02 Department of Transportation Regulations.

This manual is intended to cover all vehicles operated by the Company and to be complimentary with (and not a substitute for) the Department of Transportation's Federal Motor Carrier Safety Regulations (the "DOT Regulations"). All Company vehicles and drivers subject to the jurisdiction of the DOT Regulations will be subject to the DOT Regulations as well as the rules in this manual. If the same subject matter is covered by a DOT Regulation and this manual, the stricter of the two shall govern. In the event of a direct conflict between this manual and the DOT Regulations, the DOT Regulations shall govern.

1.03 Nondiscrimination.

The provisions of this policy manual will be administered on a nondiscriminatory basis without regard to a person's race, color, religion, age, sex, national origin, or ancestry.

Section 2.0 -- Driver Qualifications

2.01 General.

All employees driving Company vehicles on a regular or recurring basis must have a current appropriate driver's license and a satisfactory motor vehicle record (MVR). For purposes of assessing whether an MVR is satisfactory, moving traffic offenses are classified in the following categories:

Group A Violations

Leaving the scene of an accident. Driving under the influence of alcohol or drugs. Driving while ability impaired by alcohol or drugs. Speed contests. Eluding a police officer. Reckless driving. Speeding over a posted limit by 15 or more m.p.h. Use of a vehicle in or during the commission of a felony. Driving while license suspended or revoked.

Group B Violations

Careless driving. Following too closely. Failure to report an accident to the supervisor. Speeding over the posted limit by less than 15 m.p.h. Failure to stop for school or school bus signals.

Group C Violations

All other moving violations including operating an unsafe or defective vehicle and unlawful alteration of a vehicle, but excluding lane designation violations, seat belt violations and licensing improprieties.

The appearance of a violation on an employee's MVR shall be presumptive evidence of the stated violation. The Company, in its sole and absolute discretion, may ignore any plea bargaining, dismissals or other disposition of a citation and treat such citation as though there was a conviction on the charges set forth in the original citation

If an employee or applicant is involved in an accident for which no official citation is issued, for whatever reason, the Company may nevertheless issue a reprimand or assign a violation to it if it deems the driver or applicant to be at fault. Any such reprimand or violation assignment will be treated as an official violation for purposes of the employee's or applicant's MVR.

Violations shall be treated the same regardless of whether they are committed in a Company vehicle or a personal vehicle or during the course of Company business or personal business.

2.02 CDL Drivers

Under the Federal Motor Carrier Safety Regulations (FMCSR), all violations received while driving any vehicle – both commercial and non-commercial vehicles – must be counted toward the disqualification of a driver to operate a commercial vehicle. A CDL driver’s complete MVR will be reviewed as a whole record as outlined in the FMCSA Driver Safety Regulations, Subpart D, Section 383.51 with potential disqualifications as outlined in these regulations.

2.03 New Hires.

No person whose job requirements include driving a Company vehicle will be hired until his MVR has been reviewed. The applicant cannot be hired if:

• in the immediately preceding three years there are any Group A violations or three or more violations of any kind; or • in the immediately preceding two years there are any Group B violation or two or more violations of any kind.

2.04 Employees/Driving Essential.

This Section sets forth the procedures for employees driving Company vehicles as an essential part of his/her duties.

The following violations will be cause for immediate discharge:

• Any Group A violation. • Any Group B violation if within the preceding twenty-four (24) months there has been any Group A or Group B violation, or if there have been any two other moving violations. • Any moving violation if: = within the twelve (12) months immediately preceding the violation there have been two other violations of any kind; or = within the immediately preceding twenty-four (24) months there has been a Group B violation; • or = within the immediately preceding thirty-six (36) months there has been any three (3) other moving violations.

Notwithstanding the other provisions of this Section 2.03, management shall have the right in its sole and absolute discretion to deny driving privileges to any employee for any reason it deems appropriate, including, but not limited to medical reasons, insurance company direction, or an MVR which, while in technical compliance with the standards above, is, when viewed as a whole, indicative of a poor driving risk.

Any employee who has at least one year of exemplary service with the Company and who is subject to discharge under Section 2.03 above, may, with the recommendation of his superior, apply to the Company's administrative vice president for a waiver of discharge. Any such waiver, which will be in the discretion of the administrative vice president after taking into account the entire service record and driving record of the employee, will provide for at least a one week suspension, without pay, and the imposition of a probationary period of no less than six months. Any violation during the probationary period will lead to mandatory discharge.

2.05 Employees/Driving Non-essential.

Employees who drive Company vehicles on a regular or recurring basis, but not as an essential part of their job requirements, will be subject to the same rules as in Section 2.03 above, except that the penalty of termination of employment will be changed to revocation of driving privileges and the penalty of suspension from work without pay will be changed to suspension of driving privileges for thirty days. Whether driving is an essential part of a job description will be determined in the sole and absolute discretion of Company management.

2.06 Reinstatement.

Any employee whose employment or driving privileges are terminated under this Article may (but need not) be reinstated at such time as he or she would qualify as a new hire under Section 2.02.

2.07 Notification of Violations.

Every employee who drives a Company vehicle on a regular or recurring basis must report to the risk management department of the [NAME] office, any citation for a violation or alleged violation of a motor vehicle law or ordinance, other than violations involving only parking. The report must be made within three days and must be accompanied by a legible copy of the citation. Any failure to comply with this Section will cause the violation which was not reported to be reclassified from a Group C violation to a Group B violation or from a Group B violation to a Group A violation, as the case may be.

2.08 MVR Review.

On or about January 2 and July 1 of every year, the Company will reorder MVR's for every employee driving a Company vehicle on a regular or recurring basis. If the Company is unable to obtain an MVR directly from the State Motor Vehicle Department, the employee will obtain a current MVR for the Company on request. Falsification or misrepresentation of an MVR will be grounds for immediate termination of employment. Each MVR will be reviewed to verify driver compliance with the Company's MVR qualification requirements. This function will be performed by the Company's risk management department. Along with the semi-annual MVR review, each driver's motor vehicle license will be reviewed for expiration.

CDL drivers complete (commercial and personal) MVR will be reviewed as a whole record as outlined in the FMCSA Driver Safety Regulations, Subpart D, Section 383.51.

2.09 Driver's Licenses.

All employees driving a Company vehicle on a regular or recurring basis will be required to provide a copy of his/her current driver's license for inclusion in his/her personnel file. Each driver is required to keep his/her driver's license current and to provide the office with a legible copy of any new driver's license.
SECTION 3.0 --Vehicle Maintenance

3.01 General.

The Company is committed to a program of regular, thorough maintenance of its motor vehicles, both as a means of reducing fleet operating costs and, more importantly, to reduce the risk of accidents caused by faulty equipment. The employee to whom a vehicle is assigned is responsible for the maintenance of that vehicle. For pool vehicles, maintenance is the responsibility of the Operations Manager having control of the vehicle. Failure to properly maintain a vehicle is grounds for disciplinary action as well as revocation of driving privileges. No vehicle is to be driven with any defect or irregularity which may compromise safety.
3.02 Vehicle Files. Each Operations Manager will keep or designate a person to keep a separate file for every vehicle under his/her control. This file will contain all maintenance reports and information. Each vehicle file must be kept for at least six months after retirement of the vehicle.

3.03 Daily Pre-Drive Inspection.

All motor vehicles shall be subject to a daily inspection before being driven. The daily pre-drive inspection will include the items on the checklist attached as Appendix A hereto. If a driver is to drive a vehicle which has previously been driven on that day by another driver, he/she should not assume that the daily inspection has been performed. He/she must perform the entire inspection before operating the vehicle. A copy of the daily checklist must be kept in all Company vehicles and referred to at each inspection.

In addition to the daily inspection, the following items must be checked after every break in use of the vehicle (such as after stopping for fuel or before returning home at the end of a day):

Tires (paying particular attention to inside dual tires) Load Tie Down Trailer Hitches and Safety Chains

Any irregularities making the vehicle dangerous to drive or increasing the possibility of breakdown detected during inspection must be corrected before operating the vehicle.

3.04 Daily Post-Driving Inspection - DOT Regulated Vehicles.

For any vehicles subject to the DOT regulations, a daily inspection report listing all defects is required to be completed and signed at the end of each work day. The daily report required after the vehicle has been driven is attached hereto as Appendix B. This report must list any defect or deficiency which would affect the safety of operation or result in the vehicle's mechanical breakdown. It should be noted on the report if there are no defects or deficiencies. The driver must sign this report each day.

If there are any defects affecting the safety of the operation of the vehicle noted on the report, the vehicle cannot be driven until the defects are corrected.

The original report must remain in the vehicle until it is replaced by the next day's report, at which time it shall be delivered to the Operations Manager.

3.05 Periodic Maintenance.

Appendix C hereto lists the maintenance and inspection items which must be performed at periodic mileage or time intervals. In addition, the person responsible for the maintenance of the vehicle must see that all manufacturer's recommended inspections are performed at the designated intervals.

3.06 DOT Inspection.

The drivers of all vehicles subject to the inspection, repair, and maintenance requirements of Part 396 of the DOT Regulations shall be familiar with those regulations and comply with them in all respects.

3.07 Mechanical Facilities.

Vehicles operated in areas where the Company has shop facilities and mechanics will be serviced by the Company mechanics unless otherwise directed by a supervisor because of time constraints or because the service is not within the capability or capacity of the mechanic or facility. All other work is to be performed at shops or facilities designated by the Operations Manager or his/her superiors. No mechanical work other than fluid changes and other routine maintenance are to be performed by non-mechanic employees unless approved in advance by the Operations Manager. Such approval is not to be given if the Operations Manager has any doubt about the ability of the employee to competently and safely perform the work.

3.08 Expense Records.

Each vehicle is to have on board a monthly maintenance and expense sheet in the form of Appendix D hereto. All fuel, oil, maintenance and mileage information requested on the form is to be thoroughly and currently provided. At the end of each month this form is to be turned into the Operations Manager for review and filing in the vehicle file. All receipt and backup documentation must be attached to the monthly report. For vehicles regularly serviced by Company mechanics, such as in Anaheim, California, local management shall have the authority to adopt alternative procedures and forms for recording the information required by the monthly maintenance and expense sheet attached as Appendix D. Any such alternative systems must, at a minimum, record the information required by Appendix D for each vehicle.

3.09 Cleaning.

All Company vehicles must be kept clean, inside and out, at all times. The inside must be cleared of all trash at the end of each day and the inside and outside must be washed on a regular basis, as needed. No pool vehicle is to be turned in without the inside cleared of all trash.

3.10 Signs.

No bumper stickers, window stickers, emblems, decals, or signs, other than those issued by the Company, are to be affixed to any Company vehicles.

SECTION 4.0 -- Vehicle Operating Rules

4.01 Seat Belts.

SEAT BELTS ARE TO BE WORN BY ALL VEHICLE OCCUPANTS AT ALL TIMES, REGARDLESS OF TRIP LENGTH.

4.02 Passengers.

Company vehicles are not to be used to carry passengers unless they are employees of the Company or directly related to Company business. Under no circumstances (except extreme emergencies involving life or bodily injury) are Company vehicles to carry hitchhikers.

4.03 Fines and Tickets.

All fines, tickets and penalties for traffic violations are the responsibility of the individual drivers, not the Company. The only exceptions to this are tickets for overweight vehicles and delinquent or defective registration, so long as such tickets are not caused by the driver's failure to follow Company policies.

4.04 Company Use.

Unless otherwise specifically authorized by a President or Vice President of the Company, Company vehicles are to be driven only by authorized employees of the Company for Company business except that personal use is allowed for the following purposes:

Commuting to and from work by employees having assignment of a Company vehicle. Incidental, minimal personal business conducted during the course of commuting allowed above (for example, stopping for a haircut or groceries on the way home from work). On jobs involving overnight stays, employees may use Company vehicles for travel between job sites, nearby restaurants and motels, and to attend to other incidental local personal business. If Company vehicles are used for this purpose, no alcoholic beverages may be consumed at any location from which the employee intends to drive a Company vehicle. For example, if an employee intends to drive a Company vehicle from his or her motel to a nearby restaurant, and back again, he or she may consume NO alcoholic beverages with the meal.

4.05 Alcoholic Beverages/Drugs.

Under no circumstances is a Company vehicle to be operated while the driver is under the influence of any alcoholic beverage or drugs, nor are any alcoholic beverages or unlawful drugs to be consumed or carried open in any Company vehicle. If a Company vehicle is used for commuting, as allowed above, stopping at bars, taverns or other drinking establishments for the purpose of consuming alcoholic beverages is prohibited. Employees driving Company vehicles during non-working hours on jobs involving overnight stays must abstain entirely from alcoholic beverages; if an employee on such a job wishes to frequent a drinking establishment or consume alcoholic beverages with dinner, he/she must walk, take a cab or arrange other means of transportation.

4.06 Laws Rules and Regulations.

Drivers shall at all times obey all local, state, federal and client traffic laws, ordinances, rules and regulations. In addition, drivers shall become familiar with the Company's Health and Safety Manual and comply with all provisions therein applicable to the operation of motor vehicles.

4.07 Personal Vehicles.

Employees using their own vehicles for Company business are required to maintain adequate insurance coverage in force at all times with minimum limits as determined by the company. A certificate of insurance shall be provided to the company prior to the business use of that vehicle.

4.08 Locking of Vehicles.

All Company vehicles left unattended, regardless of the length of time, are to be locked.

4.09 New Drivers.

All employees being asked to drive a Company vehicle larger than a 3/4 ton pickup truck for the first time will first be given a road test by an experienced driver. Larger Company vehicles are to be driven by the most experienced driver available for driving duty. No employee shall be assigned to drive a Company vehicle unless he is capable of driving the type of vehicle being assigned.

SECTION 5.0 -- Accident Reporting

5.01 Accident Reporting.

Every accident involving a Company vehicle, even if there are no bodily injuries or property damage, must be reported to the employee's superior within 24 hours after occurrence. Each such accident shall also be immediately reported by the supervisor to the Risk Management Department which will direct the driver's supervisor to prepare a full and complete accident report (Appendix E) if:

Involves damage of any kind to the Company's vehicle, any other vehicle, or any other property of any kind; Involves injury or death to any person or animal; or Involves another vehicle occupied by a driver or passenger, regardless of whether there is any damage or apparent bodily injuries.

All insurance related communications will be made solely by the Risk Management Department. Drivers and superiors are NOT to contact the Company's insurance carriers.

5.02 Accident Kits.

Each Company vehicle is to at all times have on board an official Company accident kit which sets forth the procedures to be followed and the forms to be completed in the event of any reportable accident. Compliance with the accident kit is mandatory in the event of a reportable accident.

5.03 Post Accident Suspension and/or Reinstatement

Any employee driving a Company vehicle involved in an accident will, immediately upon the occurrence of such accident, have Company driving privileges suspended until such time as the Home Office Risk Management Department authorizes the resumption of such privileges. This applies to all accidents that are reportable under Section 5.01 of the Motor Vehicle Driver's Policy Manual.

Reinstatement of driving privileges will not be considered until the Risk Management Department receives an accident report from the driver's supervisor. If the Risk Management Department concludes that the accident was not the fault of the employee, driving privileges will be reinstated immediately. If the accident is judged to be the fault of the employee, the employee must furnish the Risk Management Department with a copy of the employee's DMV driving record, dated after the date of the accident, which will be reviewed to determine if a longer term suspension is required under the Motor Vehicle Driving Policy Manual.
Daily Pre-Trip Vehicle Inspection Checklist

|Inspection Item |OK or Describe Defect |
|Date | |
|Vehicle Number | |
|Vehicle Make | |
|Oil Level | |
|Fuel Level | |
|Water Level | |
|Steering gear operating properly | |
|Service brakes operating properly | |
|Parking brakes operating properly | |
|Condition of tires and rims | |
|Lug nuts tight | |
|Headlights | |
|Brake lights | |
|Running lights | |
|Turn signals and emergency flashers | |
|Windshield wipers | |
|Emergency equipment | |
|Describe other vehicle defects | |
| | |
|Other comments: |
| |
| |
| |
| |
| | |
|Signed | |

DRIVERS DAILY VEHICLE INSPECTION REPORT
Check any defective item and give details under "Remarks."

DATE: ____________________________

TRUCK/TRACTOR NO. ______________

O Air Compressor
O Heater
O Safety Equipment
O Air Lines
O Horn Fire Extinguisher
O Battery Lights Flags -Flares-Fuses
O Brake Accessories
O Headlights – Spare Bulbs & Fuses
O Brakelights and Tail lights – Dash lights – Spare Seal Beam
O Springs
O Carburetor Turn Indicators
O Starter
O Clutch
O Mirrors
O Steering
O Defroster
O Muffler
O Tires
O Drive Line
O Oil Pressure
O Transmission
O Engine
O On-Board Recorder
O Wheels
O Fifth Wheel a Radiator
O Windows
O Front Axle
O Rear End
O Windshield Wipers
O Fuel Tanks
O Reflectors
O Other

TRAILER(S) NO.(S)

1.
O Brake Connections
O Hitch
O Tarpaulin
O Brakes and Landing Gear
O Tires
O Coupling Chains
O Lights - All
O Wheels
O Coupling (King) Pin
O Roof
O Other
O Doors
O Springs
|Remarks: |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |

O Condition of the above vehicle is satisfactory

Drivers signature: ________________________________________ Date:______________________

O Above defects were corrected.

O Above defects need not be corrected for safe operation of vehicle

Mechanic’s Signature: _____________________________________ Date: ______________________

Owning Driver’s Signature: _________________________________ Date: ______________________