Team Member Handbook

Table of Contents

INTRODUCTION .................................................................................................................................4

020 Team Member Welcome ................................................................................................................... 4
030 Organization Description ................................................................................................................... 5
040 Intoductory Statement....................................................................................................................... 6
050 Team Member Support Resources .................................................................................................... 6
051 Team Member Acknowledgement Form ........................................................................................... 7
100 Customer Relations............................................................................................................................ 8
101 Nature of Employment....................................................................................................................... 8
102 Team Member Relations.................................................................................................................... 9

Expectations of the Employment Relationship..................................................................................... 9
Our Values........................................................................................................................................... 10
103 Business Ethics and Conduct............................................................................................................ 10
104 Equal Employment Opportunity and Affirmative Action................................................................. 11
105 Reasonable Accommodation ........................................................................................................... 11
106 Sexual and Other Unlawful Harassment ......................................................................................... 12
106 Immigration Law Compliance .......................................................................................................... 13
108 Drug and Alcohol Use....................................................................................................................... 13
Drug Testing:....................................................................................................................................... 14
Employee Assistance: ......................................................................................................................... 14
109 Electronic Equipment and Communications.................................................................................... 14
Personal Devices: ................................................................................................................................ 15
Personal Calls ...................................................................................................................................... 15
Email and Internet Use ....................................................................................................................... 15
Communications ................................................................................................................................. 16
Software/Downloading/Viruses: ........................................................................................................ 16
Copyright Issues:................................................................................................................................. 16
Security: .............................................................................................................................................. 16
Password Usage and Confidentiality: ................................................................................................. 17
Removal of U.S. Toy Company Property and/or Data ........................................................................ 17
Violations: ........................................................................................................................................... 17
110 Hiring of Relatives ............................................................................................................................ 17
111 Conflicts of Interest.......................................................................................................................... 18
112 Outside Employment ....................................................................................................................... 18
113 Non-Disclosure................................................................................................................................. 19
114 Job Posting ....................................................................................................................................... 19
115 Team member Conduct and Work Rules ......................................................................................... 20
116 Attendance and Punctuality............................................................................................................. 21
117 Personal Appearance ....................................................................................................................... 21
118 Return of Property ........................................................................................................................... 22
119 Solicitation........................................................................................................................................ 22

1

EMPLOYMENT STATUS AND RECORDS..............................................................................................24

201 Employment Categories................................................................................................................... 24
202 Employment Applications ................................................................................................................ 25
203 Introductory Period.......................................................................................................................... 25
204 Access to Personnel Files ................................................................................................................. 25
205 Personnel Data Changes .................................................................................................................. 26
206 Job Descriptions ............................................................................................................................... 26
207 Performance Evaluations ................................................................................................................. 26
208 Compensation/Pay Administration.................................................................................................. 27
209 Personal Information-Team Member Privacy.................................................................................. 27

BENEFITS .........................................................................................................................................28

301 Team member benefits.................................................................................................................... 28
302 Holidays............................................................................................................................................ 28
303 Workers' Compensation Insurance.................................................................................................. 29
304 Bereavement Leave ......................................................................................................................... 29
305 Jury Duty .......................................................................................................................................... 30
306 Benefits Continuation (COBRA)........................................................................................................ 31
307 Educational Assistance..................................................................................................................... 31
308 Paid Time Off (PTO).......................................................................................................................... 32
309 Health Insurance .............................................................................................................................. 33
310 Life Insurance ................................................................................................................................... 34
311 Short-Term Disability Insurance....................................................................................................... 34
312 Long-Term Disability Insurance........................................................................................................ 34
313 401(k) Savings Plan........................................................................................................................... 35
314 Assistance Program.......................................................................................................................... 35
315 Community Services......................................................................................................................... 36

LEAVES OF ABSENCE.........................................................................................................................37

401 Family and Medical Leave ................................................................................................................ 37
General Provisions .............................................................................................................................. 37
Eligibility.............................................................................................................................................. 37
Type of Leave Covered........................................................................................................................ 37
Amount of Leave................................................................................................................................. 39
Employment Status and Benefits During Leave.................................................................................. 39
Employee Status Follow Leave............................................................................................................ 39
Use of Paid and Unpaid Time Off........................................................................................................ 39
Intermitten Leave or Reduced Work Schedule................................................................................... 40
Certification of Serious Health Condition ........................................................................................... 40
Procedure for Requesting FMLA Leave:.............................................................................................. 40

2

Intent to Return to Work .................................................................................................................... 40
402 Military Leave.................................................................................................................................. 40

TIMEKEEPING/PAYROLL ...................................................................................................................42
501 Timekeeping..................................................................................................................................... 42
502 Paydays ............................................................................................................................................ 42
503 Separation from Employment.......................................................................................................... 42
504 Pay Advances ................................................................................................................................... 43
505 Administrative Pay Corrections........................................................................................................ 43
506 Pay Deductions................................................................................................................................. 43
507 Overtime .......................................................................................................................................... 44

WORK ENVIRONMENT .....................................................................................................................45
601 Safety ............................................................................................................................................... 45
602 Smoking........................................................................................................................................... 45
603 Work Schedules................................................................................................................................ 46
604 Rest and Meal Periods ..................................................................................................................... 46
605 Use of Equipment and Vehicles ....................................................................................................... 46
606 Business Travel Expenses ................................................................................................................. 47
607 Visitors in the Workplace ................................................................................................................. 48
608 Workplace Monitoring ..................................................................................................................... 48
609 Telecommuting ................................................................................................................................ 48
610 Workplace Violence Prevention....................................................................................................... 49
611 Security Inspections ......................................................................................................................... 50

MISCELLANEOUS..............................................................................................................................52
701 Recycling .......................................................................................................................................... 52
702 Suggestion Program ......................................................................................................................... 53
703 Committee and Volunteer Opportunities........................................................................................ 53
704 Parking and Parking lots................................................................................................................... 53
705 Retail Stores Miscellaneous policies ................................................................................................ 54

3

INTRODUCTION

020 Team Member Welcome

Welcome new team member!
On behalf of your colleagues, we welcome you to U.S. Toy Company/Constructive Playthings (U.S. Toy
Company) and wish you every success here.
We believe that each team member contributes directly to U.S. Toy Company's growth and success, and
we hope you will take pride in being a member of our team.
This handbook was developed to describe some of the expectations of our team members and to outline
the policies, programs, and benefits available to eligible team members. Team members should
familiarize themselves with the contents of the handbook as soon as possible, for it will answer many
questions about employment with U.S. Toy Company.
We hope that your experience here will be challenging, enjoyable, and rewarding. Again, welcome!
Sincerely,
Jonathan Freiden and Seth Freiden

4

030 ORGANIZATION DESCRIPTION

U.S Toy Company was founded in 1953 by Frances Gershon and her first husband. The company was
first named Toy Rack Distributors. Revolving metal racks filled with packaged toys were sold to
supermarkets and drugstores. Mrs. Gershon packaged the toys in plastic bags with help from her
children, Michael and Bari. Mrs. Gershon said that an empty toy rack permanently stood in their family
apartment to be filled with packaged toys.

Once the business outgrew the apartment, a storeroom was rented at 61st Street and Troost in Kansas
City, Missouri. Soon larger toys, games and stuffed animals were added so the company could become
toy wholesalers.

Mrs. Gershon taught preschool in the morning and realized there was a gap in Kansas City to purchase
educational toys, wooden puzzles and class room supplies, so those items were added to the line. As the
company start selling to school boards, the name "U.S. Toy Company" was not descriptive any longer, so
the name Constructive Playthings was added.

The first owned property for the company was a "burned out" neighborhood movie theater that only had
the front lobby and upstairs projection room still intact. The rest was a concrete floor that sloped from the
front to the back. Gradually concrete block walls and a roof were built making the warehouse which was
as large as the original theater.

Later, at 85th Street and Troost Avenue in Kansas City, Missouri, a combination warehouse, showroom
and office was built. By then, Mrs. Gershon's oldest son, Michael Klein, and Donald Linn had come into
the business. Michael had the only desk and Donald and Mrs. Gershon had a table with a phone.

A second retail location was opened in Dallas, Texas. Over the next several years, stores were added in
many states and we now have stores from California to Florida. At the same time, the catalog business
continued to grow.

As the business grew, two warehouses in Grandview, Missouri were occupied. In 1998, the office
addition was made to the current location. The companies sit on 64 acres of land and house 875,000
square feet of warehouse, distribution, showroom, call center and office space.

The company has been bestowed many awards through the years including in 1999 an award as
Entrepreneur of the Year for Kansas and Western Missouri. Additionally in 2010 the company received
Ingram's magazine's "Best Places to Work" in Kansas City award.

Our company continues to be a family owned and operated business. In January 2010, Jonathan Freiden
and Seth Freiden, the sons of Bari Freiden and the grandsons of Mrs. Gershon, took over daily
management of the company.

U.S. Toy Company and Constructive Playthings continue to thrive due to the hard work and courtesy of
our team members and we look forward to a bright future!

5

040 INTRODUCTORY STATEMENT

This handbook is designed to acquaint you with U.S. Toy Company/Constructive Playthings (U.S. Toy
Company) and provide you with information about working conditions, team member benefits, and some
of the policies affecting your employment. You should read, understand, and comply with all provisions
of the handbook. It describes many of your responsibilities as a team member and outlines the programs
developed by U.S. Toy Company U.S. Toy Company to benefit team members. One of our objectives is
to provide a work environment that is conducive to both personal and professional growth.
No team member handbook can anticipate every circumstance or question about policy. As U.S. Toy
Company continues to grow, the need may arise and U.S. Toy Company reserves the right to revise,
supplement, or rescind any policies or portion of the handbook from time to time as it deems appropriate,
in its sole and absolute discretion. No policy or statement in this handbook will create a contract binding
the team member or the employer to an employment agreement for a specific period of time. No
modification, addition, or deletion of any policy in the future will modify the at-will nature of the
employment relationship. Team members will, of course, be notified of such changes to the handbook as
they occur.

050 TEAM MEMBER SUPPORT RESOURCES

In the event that you have a question or wish to address concern related to your employment relationship,
you are strongly encouraged to first speak directly with your supervisor/manager.
Questions related to payroll, benefits, and general HR policies and practices should be directed to
Dorothy Holliday, HR Coordinator, Extension 2305.
Additionally, you are able to address issues related to human resources management, suspected violations
of policy, or any other matter related to employment directly with Nicole Gemeinhardt, Vice President
of Finance and HR Administration, Extension 2379. (Any reference in this handbook to “VP of
Human Resources” is a direct reference to the position currently held by Nicole Gemeinhardt.)

6

051 TEAM MEMBER ACKNOWLEDGEMENT FORM

The team member handbook (as published 03/01/2013) describes important information about U.S. Toy
Company/Constructive Playthings, and I understand that I should consult my Supervisor, Manager or
Human Resources regarding any questions not answered in the handbook.
I have entered into my employment relationship with U.S. Toy Company voluntarily and acknowledge
that there is no specified length of employment. Accordingly, either I or U.S. Toy Company can terminate
the relationship at will, with or without cause, at any time, so long as there is no violation of applicable
federal or state law.
Since the information, policies, and benefits described here are necessarily subject to change, I
acknowledge that revisions to the handbook may occur, except to U.S. Toy Company's policy of
employment-at-will. All such changes will be communicated through official notices, and I understand
that revised information may supersede, modify, or eliminate existing policies. Only the chief executive
officer of U.S. Toy Company has the ability to adopt any revisions to the policies in this handbook.
Furthermore, I acknowledge that this handbook is neither a contract of employment nor a legal document.
I have received the handbook, and I understand that it is my responsibility to read and comply with the
policies contained in this handbook and any revisions made to it.
TEAM MEMBER'S NAME (printed): _______________________________________________
TEAM MEMBER'S SIGNATURE: _________________________________________________
DATE: __________________________________

7

EMPLOYMENT

100 Customer Relations

Effective Date: 4/1/2011, Reviewed/Revised: 03/01/2013

Without our customers, U.S. Toy Company simply would not exist as an employer. Customers are
among our Company's most valuable assets. Every team member represents U.S. Toy Company to our
customers and the public. The way we do our jobs presents an image of our entire Company. Customers
judge all of us by how they are treated when interacting with any one of us. Therefore, one of our first
business priorities is to assist any customer or potential customer. You, as a team member, are expected to
be consistently courteous, friendly, helpful, and prompt in the attention you give to customers.
U.S. Toy Company will provide customer relations and services training to all team members with
extensive customer contact. Our personal contact with the public, our manners on the telephone, and the
communications we send to customers are a reflection not only of ourselves, but also of the
professionalism of U.S. Toy Company. Every team member is expected to positively and professionally
represent U.S. Toy Company in every business communication, whether in person, on the telephone, or in
writing.

101 Nature of Employment

Effective Date: 4/1/2011, Reviewed/Revised: 03/01/2013

Employment with U.S. Toy Company is voluntarily entered into, and the team member is free to resign at
will and at any time, with or without cause. Similarly, U.S. Toy Company/ Constructive Playthings may
terminate the employment relationship at will and at any time, with or without notice or cause, so long as
there is no violation of applicable federal or state law.
Policies set forth in this handbook are not intended to create a contract, nor are they to be construed to
constitute contractual obligations of any kind or a contract of employment between U.S. Toy Company
and any of its team members. The provisions of the handbook have been developed at the discretion of
management and, except for its policy of employment-at-will, may be amended or cancelled at any time,
at U.S. Toy Company’ sole discretion.
These provisions supersede all existing policies and practices and may not be amended or added to
without the express written approval of the Chief Executive Officer of U.S. Toy Company.

8

102 Team Member Relations

Effective Date: 4/1/2011, Reviewed/Revised: 03/01/2013

U.S. Toy Company believes that the work conditions, wages, and benefits it offers to its team members
are competitive with those offered by other employers where we are located and in this industry. If team
members have concerns, they are strongly encouraged to voice these concerns openly and directly to their
supervisors.

Our experience has shown that when team members deal openly and directly with supervisors, the work
environment can be excellent, communications can be clear, and attitudes can be positive. We believe that
U.S. Toy Company amply demonstrates its commitment to team members by responding effectively to
concerns.

EXPECTATIONS OF THE EMPLOYMENT RELATIONSHIP

Like any relationship, the employment relationship is a two way street. Our support of one another
contributes to our corporate and individual success. Both you and U.S. Toy Company have expectations
of one another that when met, will contribute to a successful, long-term relationship.

By your very presence in our organization, you make a difference! We encourage you to recognize that
the difference you make can be positive or negative and YOU get to choose which is true of you. You
will make a positive difference when you choose:

• A positive attitude as demonstrated by your words and actions

• A friendly, optimistic demeanor

• A determined and diligent approach to working, solving problems, and achieving goals

• An creative and hospitable approach to serving others

Team members who choose to make a positive difference will have the greatest chance at long-term
success with U.S. Toy Company.

As a team member, you can expect that U.S. Toy Company will:

• Treat you with respect, common courtesy, and professionalism.

• Provide the environment, information, tools, and resources necessary for you to perform your job
responsibilities.

• Compensate you in a fair and timely manner.

• Abide by federal and state laws and regulations governing employment.

U.S. Toy Company expects that each team member will:

• Contribute to a positive work environment by treating customers, coworkers, and vendors with
respect, displaying an attitude of attentiveness, helpfulness and kindness, avoiding gossip and
other behaviors that damage relationships, and proactively pursuing solutions to identified
problems.

9

• Show up to work as scheduled and follow the appropriate requirements regarding notification if
you are unable to report as scheduled due to family or personal emergency or illness.

• Apply knowledge and skills to perform all tasks assigned by direct supervisor or member of
management team, and perform those tasks competently and efficiently.

• Comply with policies and work procedures as developed and communicated by U.S. Toy
Company and its managers.

OUR VALUES

U.S. Toy Company believes that each team member contributes to our ability to live our company values,
which should be consistently observable in our products and our excellent customer service. Our values
of Team, Passion, Creativity, Family, and Quality Focus should be reflected by every team member:

• TEAM –Fantastic customer service starts with taking care of our own team members.

• PASSION –Our team celebrates a drive and commitment towards inspiring excellence.

• CREATIVE –We incorporate creative thought(s) and problem solving into everything we do as
an organization.

• FAMILY –We are a family business focused on integrity

• QUALITY –We offer the highest quality products, while trying to maintain value for our
customer.

103 Business Ethics and Conduct

Effective Date: 4/1/2011; Reviewed 03/01/2013

The successful business operation and reputation of U.S. Toy Company is built upon the principles of fair
dealing and ethical conduct of our team members. Our reputation for integrity and excellence requires
careful observance of the spirit and letter of all applicable laws and regulations, as well as a scrupulous
regard for the highest standards of conduct and personal integrity.

The continued success of U.S. Toy Company is dependent upon our customers' trust and we are dedicated
to preserving that trust. Team members owe a duty to U.S. Toy Company, our customers, and
shareholders to act in a way that will merit the continued trust and confidence of the public.

U.S. Toy Company will comply with all applicable laws and regulations and expects its directors,
officers, and team members to conduct business in accordance with the letter, spirit, and intent of all
relevant laws and to refrain from any illegal, dishonest, or unethical conduct.

In general, the use of good judgment, based on high ethical principles, will guide you with respect to lines
of acceptable conduct. If a situation arises where it is difficult to determine the proper course of action,
the matter should be discussed openly with your immediate supervisor and, if necessary, with the Vice
President of Human Resources or CEOs for advice and consultation.

Compliance with this policy of business ethics and conduct is the responsibility of every U.S. Toy
Company team member. Disregarding or failing to comply with this standard of business ethics and
conduct could lead to disciplinary action, up to and including possible termination of employment.

10

104 Equal Employment Opportunity and Affirmative Action

Effective Date: 4/1/2011; Reviewed 03/01/2013

In order to provide equal employment and advancement opportunities to all individuals, employment
decisions at U.S. Toy Company will be based on merit, qualifications, and abilities. U.S. Toy Company
does not discriminate in employment opportunities or practices on the basis of race, color, religion, sex,
national origin, age, disability, or any other characteristic protected by law.

U.S. Toy Company will make reasonable accommodations for qualified individuals with known
disabilities unless doing so would result in an undue hardship. This policy governs all aspects of
employment, including selection, job assignment, compensation, discipline, termination, and access to
benefits and training.

In addition to a commitment to provide equal employment opportunities to all qualified individuals, U.S.
Toy Company has established an affirmative action program to promote opportunities for individuals in
certain protected classes throughout the Company.

Any team member with questions or concerns about any type of discrimination in the workplace are
encouraged to bring these issues to the attention of their immediate supervisor or the Human Resources
Vice President. Team members can raise concerns and make reports without fear of reprisal. Anyone
found to be engaging in any type of unlawful discrimination will be subject to disciplinary action, up to
and including termination of employment.

105 Reasonable Accommodation

Effective Date: 4/1/2011; Revised 03/01/2013

In all hiring and employment practices, U.S. Toy Company makes every effort to ensure that it does not
discriminate against team members and applicants with disabilities who are qualified for job positions,
and that it provides reasonable accommodations to team members and applicants with disabilities unless
the accommodations create undue hardship for U.S. Toy Company.

U.S. Toy Company prohibits discrimination with respect to hiring, promotion, discharge, compensation,
benefits, training, and all other aspects of employment against team members or applicants with
disabilities who are qualified for job positions. U.S. Toy Company/Constructive Playthings actively
recruits persons with disabilities who are qualified for vacant positions.

Definitions. Terms used in this policy have the following general meanings: Team members or applicants
with disabilities who are qualified for job positions are team members or applicants who satisfy job-
related requirements they hold or are seeking and can perform the essential functions of such a job with or
without reasonable accommodation. Team members or applicants with disabilities are those: whose
physical or mental impairments substantially limit one or more of their major life activities (for example,
walking or seeing); who have a record of such impairments; or who are regarded as having such
impairments. Reasonable accommodations are modifications to applicants' or team members' work
environment or schedule that allow them to perform the essential functions of the job they seek or hold
unless the accommodations create undue hardship for U.S. Toy Company.

U.S. Toy Company seeks reasonable accommodations for team members and applicants with disabilities
that do not result in undue hardship for U.S. Toy Company. Such accommodations can include: altering
equipment, altering facilities, providing a qualified reader, or providing information aurally. Additionally,

11

in purchasing equipment or making changes to its facilities, U.S. Toy Company strives to ensure that the
adaptability and accessibility of equipment and facilities for team members and applicants with
disabilities are key considerations.

All information obtained by U.S. Toy Company concerning the medical condition or history of applicants
or team members is maintained in separate medical files and treated as confidential records that are
disclosed only as according to ADA and other applicable state and federal law.

All team members must comply with safety rules at all times. U.S. Toy Company makes every effort to
place team members and applicants in positions for which they are qualified. However, team members
and applicants are not placed in positions where, with or without a reasonable accommodation, they
would create a direct threat to the safety or health of themselves or others.

Team members and applicants should contact the HR department about any violations of U.S. Toy
Company policies or any applicable law relating to accommodating persons with disabilities. All
complaints are promptly investigated. Cooperation is expected with investigations. Information obtained
during investigations is confidential and only disclosed to those who have a need for the information.

106 Sexual and Other Unlawful Harassment

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company is committed to providing a work environment that is free from all forms of
discrimination and conduct that can be considered harassing, coercive, or disruptive, including sexual
harassment. Actions, words, jokes, or comments based on an individual's sex, race, color, national origin,
age, religion, disability, sexual orientation, or any other legally protected characteristic will not be
tolerated.

Sexual harassment is defined as unwanted sexual advances, or visual, verbal, or physical conduct of a
sexual nature. This definition includes many forms of offensive behavior and includes gender-based
harassment of a person of the same sex as the harasser. The following is a partial list of sexual harassment
examples:

• Unwanted sexual advances.
• Offering employment benefits in exchange for sexual favors.
• Making or threatening reprisals after a negative response to sexual advances.
• Visual conduct that includes leering, making sexual gestures, or displaying of sexually suggestive

objects or pictures, cartoons or posters.
• Verbal conduct that includes making or using derogatory comments, epithets, slurs, or jokes.
• Verbal sexual advances or propositions.
• Verbal abuse of a sexual nature, graphic verbal commentaries about an individual's body,

sexually degrading words used to describe an individual, or suggestive or obscene letters, notes,
or invitations.
• Physical conduct that includes touching, assaulting, or impeding or blocking movements.

Unwelcome sexual advances (either verbal or physical), requests for sexual favors, and other verbal or
physical conduct of a sexual nature constitute sexual harassment when: (1) submission to such conduct is
made either explicitly or implicitly a term or condition of employment; (2) submission or rejection of the
conduct is used as a basis for making employment decisions; or, (3) the conduct has the purpose or effect
of interfering with work performance or creating an intimidating, hostile, or offensive work environment.

12

If you experience or witness sexual or other unlawful harassment in the workplace, report it immediately
to your supervisor. If the supervisor is unavailable or you believe it would be inappropriate to contact that
person, you should immediately contact the Vice President of Human Resources or any other member of
management. You can raise concerns and make reports without fear of reprisal or retaliation.

All allegations of sexual harassment will be quickly and discreetly investigated. To the extent possible,
your confidentiality and that of any witnesses and the alleged harasser will be protected against
unnecessary disclosure. When the investigation is completed, you will be informed of the outcome of the
investigation to the extent possible.
Any supervisor or manager who becomes aware of possible sexual or other unlawful harassment must
immediately advise the Vice President of Human Resources or any member of executive management so
it can be investigated in a timely and confidential manner. Anyone engaging in sexual or other unlawful
harassment will be subject to disciplinary action, up to and including termination of employment.

106 Immigration Law Compliance

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company is committed to employing only United States citizens and aliens who are authorized
to work in the United States and does not unlawfully discriminate on the basis of citizenship or national
origin.

In compliance with the Immigration Reform and Control Act of 1986, each new team member, as a
condition of employment, must complete the Employment Eligibility Verification Form I-9 and present
documentation establishing identity and employment eligibility. Former team members who are rehired
must also complete the form if they have not completed an I-9 with U.S. Toy Company within the past
three years, or if their previous I-9 is no longer retained or valid. It is the standard practice to use the E-
Verify system provided by the U.S. Department of Homeland Security to verify information provided to
U.S. Toy Company on the I-9. Providing false information or failure to provide proof of eligibility to
work in the United States will be grounds for termination of employment.

Team members with questions or seeking more information on immigration law issues are encouraged to
contact the Human Resources department. Team members may raise questions or complaints about
immigration law compliance without fear of reprisal.

108 Drug and Alcohol Use

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company is committed to providing a drug-free, healthful, and safe workplace. To promote this
goal, team members are required to report to work in appropriate mental and physical condition to
perform their jobs in a satisfactory manner.

While on U.S. Toy Company premises and while conducting business-related activities of U.S. Toy
Company no team member may use, possess, distribute, sell, or be under the influence of alcohol,
marijuana (if legal in your State) illegal drugs, or legal drugs obtained illegally. The legal use of
prescribed drugs is permitted on the job only if it does not impair a team member's ability to perform the
essential functions of the job effectively and in a safe manner that does not endanger other individuals in
the workplace.

13

Violations of this policy may lead to disciplinary action, up to and including immediate termination of
employment. Such violations may also have legal consequences.

Full time team members with questions or concerns about substance dependency or abuse are encouraged
to use the resources of the Team member Assistance Program. They may also wish to discuss these
matters with their supervisor or the Vice President of Human Resources to receive assistance or referrals
to appropriate resources in the community.

Team members with drug or alcohol problems that have not resulted in, and are not the immediate subject
of, disciplinary action may participate in a rehabilitation or treatment program through U.S. Toy
Company’ health insurance benefit coverage if the team member is already participating in our medical
insurance plan.

Under the Drug-Free Workplace Act, a team member who performs work for a government contract or
grant must notify U.S. Toy Company of a criminal conviction for drug-related activity occurring in the
workplace. The report must be made within five days of the conviction.

Team members with questions on this policy or issues related to drug or alcohol use in the workplace
should raise their concerns with their supervisor, manager or the Vice President of Human Resources
without fear of reprisal.

DRUG TESTING: U.S. Toy Company is committed to providing a safe, efficient, and productive

work environment for all team members. Using or being under the influence of drugs or alcohol on the
job may pose serious safety and health risks. To help ensure a safe and healthful working environment,
job applicants and team members may be asked to provide body substance samples (such as urine) to
determine the illicit or illegal use of drugs and alcohol. Behavior exhibited by a team member that causes
one to suspect that the individual is under the influence of a substance, will be cause to request a drug test.
(Behavior consistent with a person under the influence of drugs or alcohol includes, but may not be
limited to slurred speech, unsteady gate, inability to balance, inability to articulate, glazed or “glassy”
eyes, etc.) Refusal to submit to drug testing may result in disciplinary action, up to and including
termination of employment.

EMPLOYEE ASSISTANCE: The Team member Assistance Program (EAP) provides confidential

counseling and referral services to full time team members for assistance with such problems as drug
and/or alcohol abuse or addiction. It is the team member's responsibility to seek assistance from the EAP
prior to reaching a point where his or her judgment, performance, or behavior has led to imminent
disciplinary action. Participation in the EAP after the disciplinary process has begun may not preclude
disciplinary action, up to and including termination of employment.

Copies of the drug testing policy will be provided or have been provided to all team members. Questions
concerning this policy or its administration should be directed to the Vice President of Human Resources.

109 Electronic Equipment and Communications

Effective Date: 4/1/2011; Revised 03/01/2013

In the course of employment with U.S. Toy Company, team members may be issued access to computer
equipment, printers, copiers, telephones, internet use, and a variety of software programs. This policy
describes U.S. Toy Company’s general rules regarding use of electronic communications in the

14

workplace. As with all our policies, U.S. Toy Company adheres to all relevant federal and state laws and
regulations regarding electronic communications.

Equipment allocated to team members is owned and/or leased by U.S. Toy Company for the express
purpose of conducting efficient business operations and is not intended for personal use. Further, the data
accessed and/or stored on company-issued computers is owned by U.S. Toy Company. Team members,
therefore, should have no expectation of privacy during or following the use of company-issued
technology resources. Team members are expected to exercise reasonable care when using electronic
communications equipment to avoid damage or theft of the equipment.

U.S. Toy Company provides team member access to various forms of electronic media, including e-mail
and the internet. More specifically, all team members are provided with password protected corporate e-
mail accounts and corporate access to the internet on their computer workstations. Team members are
expected to protect such logins and passwords and not disclose them to anyone other than Chief
Information Officer.

PERSONAL DEVICES: Some employees may utilize their personal devices (cell phones, smart

phones, smart pads, or laptops) for business use. The use of personal devices is limited to certain
employees and may be limited based on technology. Employees who do use personal devices for U.S.
Toy Company business must register this use with the Human Resources Department and will be given
particular guidelines to govern such use.

PERSONAL CALLS: The company telephones are not intended for personal long-distance calling.

Short, local calls for personal use are understandable, from time to time. Team members should limit
personal calling (whether on company phones or personal cell phones) during work time to only those
call which are urgent and important.

EMAIL AND INTERNET USE: The following guidelines have been established specifically for

using email and the Internet. Any improper use of the Internet or email is not acceptable and will not be
permitted. The Internet can be used to transmit many things, including email, World Wide Web and File
Transfer Protocol (FTP), and VoIP Telephony. All U.S. Toy Company team members are required to
know the company’s email and Internet usage policy, and observe proper conduct as outlined in this
document. The use of the network is a privilege, not a right, which may temporarily or permanently be
revoked at any time for any reason. Failure to follow these rules, depending on the severity of the
violation, may result in revocation of email or Internet access and/or disciplinary action up to and
including termination of employment.

Acceptable Uses
The computer equipment and internet access, including email provided for use to team member
by U.S. Toy Company is intended for authorized business reasons only. U.S. Toy Company
encourages the use of the Internet and email by team members because these tools make
communication more efficient and effective. However, Internet service and email are Company
property, and their purposes are to facilitate Company business. Every staff member has a
responsibility to maintain and enhance the Company’s public image and to use Company email
and access to the Internet in a professional and productive manner.

U.S. Toy Company recognizes that from time to time, company email and internet access may be
used by team members for personal reasons. Such personal use should be infrequent, should not
interfere with the performance of job duties, and should never violate company policies.

Unacceptable Uses
Electronic media provided by U.S. Toy Company cannot be used by team members for
knowingly transmitting, retrieving, or storing any communication that:
• is discriminatory, harassing, defamatory, or otherwise prohibited by federal or state law;

15

• appears derogatory to anyone;
• is obscene or pornographic in content;
• contains electronic/digital viruses, spyware, or similar destructive software or programs

should be transmitted or released. Team members are prohibited from opening emails from
any source not known to them, and must follow all security protocols.
• reveals company trade secrets, development plans, or other information that could harm U.S.
Toy Company or its affiliates/customers; or
• is used for any purpose that is contrary to U.S. Toy Company's policies or business interests.
• present personal views as if they were representative of the Company.
• disparage U.S. Toy Company's products or services, or any those of any customer.
• in any way risks the security of U.S. Toy Company’s IT Systems.

Electronic media provided by U.S. Toy Company also cannot be used by team members for any of
the following activities:

• engaging in illegal, fraudulent, or malicious conduct;
• working on behalf of another organization without any professional or business affiliation

with U.S. Toy Company;
• monitoring or intercepting files or electronic communications of team members or third

parties;
• obtaining unauthorized access to any computer system;
• using another team member's account or identity without explicit authorization; or
• attempting to test, circumvent, or defeat security or auditing systems of U.S. Toy Company or

any other organization without prior authorization.

COMMUNICATIONS: Each team member is responsible for the content of all text, audio or images

that they place or send over the Company’s email/Internet system. No email or other electronic
communications may be sent through U.S. Toy Company IT systems which hides the identity of the
sender or represents the sender as someone else or someone from another Company. All messages
communicated on the Company’s email/Internet system should contain the team member’s name.

SOFTWARE/DOWNLOADING/VIRUSES: To prevent computer viruses from being transmitted

through the Company’s email/Internet system, do not download any software without permission from
your immediate supervisor. All software and files downloaded, emailed or obtained from outside sources
on any media must be scanned for viruses before using or placing on the Company’s systems. All
software must be registered, showing the Company as a user. Team members should contact an
Information Systems representative if they have any questions.

COPYRIGHT ISSUES: Copyrighted materials belonging to entities other than this Company may not

be transmitted by team members on the Company’s email/Internet system. All team members obtaining
access to other companies’ or individuals’ materials must respect all copyrights and may not copy,
retrieve, modify or forward copyrighted materials, except with permission, or as a single copy to
reference only. Failure to observe copyright or license agreements may result in (1) legal liability and (2)
disciplinary action, up to and including termination.

SECURITY: To maintain efficient operation of its computer systems and ensure compliance with

policy, the Company has the right, but not the obligation, to monitor all email/Internet communications
and usage patterns. Reasons for this monitoring are many, including but not limited to maintenance, cost
analysis/allocation, assuring compliance with this Policy, and the management of the Company’s gateway
to the Internet. All messages created, sent, or retrieved over the Company’s email/Internet are the
property of the Company and should be considered public information. The Company reserves the right
to access and monitor all messages and files on the Company’s email/Internet system. Email/Internet
communications sent or received on U.S. Toy Company systems are NOT private. Team members

16

should have no expectation of privacy in any items they create, send or receive on U.S. Toy Company
computer systems or accounts and should transmit highly confidential data in other ways.

PASSWORD USAGE AND CONFIDENTIALITY: Team members are reminded that it is their

responsibility to maintain the confidentiality and security of the Company’s confidential and proprietary
information. To this end, team members will either create a unique password for accessing the
Company’s email and Internet systems, or they will have a password assigned to them. Team members
are prohibited from disclosing or showing their passwords to any other team member, unauthorized
personnel, including individuals who are not employed or associated with the Company. The security and
confidentiality of the team members’ password aid in protecting the Company’s information and
property.

REMOVAL OF U.S. TOY COMPANY PROPERTY AND/OR DATA: Team members are

prohibited from taking electronic communications equipment and/or company data stored on any type of
storage device (such as CD-ROM disk or flash drive) with them from U.S. Toy Company facilities, unless
specifically authorized to do so for business purposes. Further, transmitting company data from U.S. Toy
Company equipment and devices to any unauthorized individual or entity is strictly prohibited and
considered to be theft.

VIOLATIONS: Any violation of any portion of this policy will subject an team member to disciplinary

action, up to and including termination of employment. Additionally, team members who use U.S. Toy
Company’s electronic communications systems and devices for defamatory, illegal, or fraudulent
purposes are subject to legal action by U.S. Toy Company and appropriate governmental entities.

110 Hiring of Relatives

Effective Date: 4/1/2011; Revised 03/01/2013

The employment of relatives in the same department or store location creates a potential for serious
conflicts and problems with favoritism and team member morale. In addition to claims of partiality in
treatment at work, personal conflicts from outside the work environment can be carried over into day-to-
day working relationships.

For purposes of this policy, a relative is any person who is related by blood or marriage, or whose
relationship with the team member is similar to that of persons who are related by blood or marriage. This
policy applies to all team members without regard to the gender or sexual orientation of the individuals
involved.

Relatives of current team members may not occupy a position that will be working directly for or
supervising their relative. U.S. Toy Company also reserves the right to take prompt action if an actual or
potential conflict of interest arises involving relatives or individuals involved in a dating or marriage
relationship who occupy positions at any level (higher or lower) in the same line of authority that may
affect the review of employment decisions.

If a relative relationship is established after employment between team members who are in a reporting
situation described above, it is the responsibility and obligation of the supervisor involved in the
relationship to disclose the existence of the relationship to management. The individuals concerned will
be given the opportunity to decide who is to be transferred to another available position. If that decision is
not made within 30 calendar days, management will decide who is to be transferred or, if necessary,
terminated from employment.

17

In other cases where a conflict or the potential for conflict arises because of the relationship between team
members, even if there is no line of authority or reporting involved, the team members may be separated
by reassignment or terminated from employment. Team members in a close personal relationship should
refrain from public workplace displays of affection or excessive personal conversation.

111 Conflicts of Interest

Effective Date: 4/1/2011; Reviewed 03/01/2013

Team members have an obligation to conduct business within guidelines that prohibit actual or potential
conflicts of interest. This policy establishes only the framework within which U.S. Toy Company wishes
the business to operate. The purpose of these guidelines is to provide general direction so that team
members can seek further clarification on issues related to the subject of acceptable standards of
operation. Contact the Human Resources Department for more information or questions about conflicts of
interest.

Transactions with outside firms must be conducted within a framework established and controlled by the
executive level of U.S. Toy Company. Business dealings with outside firms should not result in unusual
gains for those firms. Unusual gain refers to bribes, product bonuses, special fringe benefits, unusual price
breaks, and other windfalls designed to ultimately benefit the employer, the team member(s), or both.
Promotional plans that could be interpreted to involve unusual gain require specific executive-level
approval.

An actual or potential conflict of interest occurs when a team member is in a position to influence a
decision that may result in a personal gain for that team member or for a relative as a result of U.S. Toy
Company’ business dealings. For the purposes of this policy, a relative is any person who is related by
blood or marriage, or whose relationship with the team member is similar to that of persons who are
related by blood or marriage.

No "presumption of guilt" is created by the mere existence of a relationship with outside firms. However,
if a team member has any influence on transactions involving purchases, contracts, or leases, it is
imperative that they disclose to an officer of U.S. Toy Company as soon as possible the existence of any
actual or potential conflict of interest so that safeguards can be established to protect all parties.

Personal gain may result not only in cases where a team member or relative has a significant ownership in
a firm with which U.S. Toy Company does business, but also when an team member or relative receives
any kickback, bribe, substantial gift, or special consideration as a result of any transaction or business
dealings involving U.S. Toy Company.

Violation of the conflict of interest policy may lead to disciplinary action up to and including termination.

112 Outside Employment

Effective Date: 4/1/2011; Reviewed 03/01/2013

Team members may hold outside jobs as long as they meet the performance standards of their job with
U.S. Toy Company. All team members will be judged by the same performance standards and will be
subject to U.S. Toy Company/Constructive Plaything's scheduling demands, regardless of any existing
outside work requirements.

18

If U.S. Toy Company determines that a team member's outside work interferes with performance or the
ability to meet the requirements of U.S. Toy Company as they are modified from time to time, the team
member may be asked to terminate the outside employment if he or she wishes to remain with U.S. Toy
Company.

Outside employment that constitutes a conflict of interest is prohibited. Team members may not receive
any income or material gain from individuals outside U.S. Toy Company for materials produced or
services rendered while performing their jobs.

113 Non-Disclosure

Effective Date: 4/1/2011; Reviewed 03/01/2013

The protection of confidential business information and trade secrets is vital to the interests and the
success of U.S. Toy Company. Such confidential information includes, but is not limited to, the following
examples:

• computer processes
• computer programs and codes
• customer lists
• customer preferences
• financial information
• labor relations strategies
• marketing strategies
• new materials research
• pending projects and proposals
• proprietary production processes
• research and development strategies
• scientific data
• technological data

Team members who improperly use or disclose trade secrets, trade contacts or confidential business
information will be subject to disciplinary action, up to and including termination of employment and
legal action, even if they do not actually benefit from the disclosed information or if the company is
compromised by the team member's actions.

Team members must keep vendor and supplier information confidential. Interactions with those vendors
must remain professional and confidential in all cases. If any potential or realized conflicts of interest
arise, the team member must immediately report them to their immediate manager or CEO.

114 Job Posting

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company provides team members an opportunity to indicate their interest in open positions and
advance within the Company according to their skills and experience. In general, notices of all regular,
full-time job openings are posted, although U.S. Toy Company reserves its discretionary right to not post
a particular opening.

19

Job openings will be posted on the company bulletin boards and normally remain open for minimum of 3
days. Each job posting notice will include the dates of the posting period, job title, department, location,
grade level, job summary, essential duties, and qualifications (required skills and abilities).

Team members who have a written warning on file, or are on probation or suspension are not eligible to
apply for posted jobs. Eligible team members can only apply for those posted jobs for which they possess
the required skills, competencies, and qualifications.

To apply for an open position, team members should submit a job posting application to the Vice
President of Human Resources listing job-related skills and accomplishments. It should also describe how
their current experience with U.S. Toy Company and prior work experience and/or education qualifies
them for the position.

Job posting is a way to inform team members of openings and to identify qualified and interested
applicants who might not otherwise be known to the hiring manager. Other recruiting sources may also be
used to fill open positions in the best interest of the Company.

115 Team member Conduct and Work Rules

Effective Date: 4/1/2011; Reviewed 03/01/2013

To ensure orderly operations and provide the best possible work environment, U.S. Toy Company expects
team members to follow rules of conduct that will protect the interests and safety of all team members and
the Company.

It is not possible to list all the forms of behavior that are considered unacceptable in the workplace. The
following are examples of infractions of rules of conduct that may result in disciplinary action, up to and
including termination of employment:

• Theft or inappropriate removal or possession of property
• Falsification of timekeeping records
• Working under the influence of alcohol or illegal drugs
• Possession, distribution, sale, transfer, or use of alcohol or illegal drugs in the workplace, while

on duty, or while operating employer-owned vehicles or equipment
• Fighting or threatening violence in the workplace
• Negligence or improper conduct leading to damage of employer-owned or customer-owned

property
• Insubordination or other disrespectful conduct
• Violation of safety or health rules
• Smoking in prohibited areas
• Sexual or other unlawful or unwelcome harassment
• Possession of dangerous or unauthorized materials, such as explosives or firearms, in the

workplace
• Excessive absenteeism or any absence without notice
• Unauthorized use of telephones, mail system, or other employer-owned equipment
• Unauthorized disclosure of business "secrets" or confidential information
• Violation of personnel policies
• Unsatisfactory performance or conduct

Employment with U.S. Toy Company is at the mutual consent of U.S. Toy Company and the team

20

member, and either party may terminate that relationship at any time, with or without cause, and with or
without advance notice.

116 Attendance and Punctuality

Effective Date: 4/1/2011; Reviewed 03/01/2013

To maintain a safe and productive work environment, U.S. Toy Company expects team members to be
reliable and to be punctual in reporting for scheduled work. Absenteeism and tardiness place a burden on
other team members and on U.S. Toy Company.

In the rare instances when team members cannot avoid being late to work or are unable to work as
scheduled, they should notify their supervisor at least 30 minutes before their shift start and preferably
much sooner. Each department or store should notify team members of their call in procedures and phone
numbers.

Poor attendance and excessive tardiness are disruptive. Either may lead to disciplinary action, up to and
including termination of employment.

117 Personal Appearance

Effective Date: 4/1/2011; Reviewed 03/01/2013

Dress, grooming, and personal cleanliness standards contribute to the morale of all team members and
affect the business image U.S. Toy Company presents to customers and visitors.

During business hours or when representing U.S. Toy Company, you are expected to present a clean,
neat, and tasteful appearance. You should dress and groom yourself according to the requirements of your
position and accepted social standards. This is particularly true if your job involves dealing with
customers or visitors in person.

Your supervisor or department head is responsible for establishing a reasonable dress code appropriate to
the job you perform. If your supervisor feels your personal appearance is inappropriate, you may be asked
to leave the workplace until you are properly dressed or groomed. Under such circumstance, you will not
be compensated for the time away from work. Consult your supervisor if you have questions as to what
constitutes appropriate appearance. Where necessary, reasonable accommodation may be made to a
person with a disability.

Without unduly restricting individual tastes, the following personal appearance guidelines should be
followed:

• Shoes must provide safe, secure footing, and offer protection against hazards. In retail stores and
the warehouse/distribution center, shoes must have a closed toe.

• Mustaches and beards must be clean, well trimmed, and neat.
• Hairstyles are expected to be in good taste. Team members regularly interacting with guests

should not wear hats or hoodies up on their heads.
• Extreme hairstyles, such as spiked hair, do not present an appropriate professional appearance.
• Offensive body odor and poor personal hygiene is not professionally acceptable.
• Perfume, cologne, and aftershave lotion should be used moderately or avoided altogether, as

some individuals may be sensitive to strong fragrances.

21

• Jewelry should not be functionally restrictive, dangerous to job performance, or excessive.
• For retail store team members and those headquarters team members regularly interacting with

the public, facial jewelry, such as eyebrow rings, nose rings, lip rings, and tongue studs, are not
professionally appropriate and must not be worn during business hours.
• Torso body piercings with visible jewelry or jewelry that can be seen through or under clothing
must not be worn during business hours.
• For retail store team members and those headquarters team members regularly interacting with
the public, visible excessive tattoos and similar body art must be covered during business hours.

118 Return of Property

Effective Date: 4/1/2011; Reviewed 03/01/2013

Team members are responsible for items issued to them by U.S. Toy Company or in their possession or
control, such as the following:

• client lists
• credit cards
• equipment including phones when applicable
• computers, software, printers or other related property
• identification badges
• keys
• manuals
• protective equipment including gloves
• tools including box cutters
• vehicles
• written materials

Team members must return all U.S. Toy Company property immediately upon request or upon
termination of employment.

119 Solicitation

Effective Date: 4/1/2011; Reviewed 03/01/2013

In an effort to ensure a productive and harmonious work environment, persons not employed by U.S. Toy
Company may not solicit or distribute literature in the workplace at any time for any purpose.

U.S. Toy Company recognizes that team members may have interests in events and organizations outside
the workplace. However, team members may not solicit or distribute literature concerning these activities
during working time unless prior manager approval is obtained. (Working time does not include lunch
periods, work breaks, or any other periods in which team members are not on duty.)

In addition, the posting of written solicitations on company bulletin boards is restricted. These bulletin
boards display important information, and team members should consult them frequently for:

• Affirmative Action statement
• Team member announcements

22

• Internal memoranda
• Job openings
• U.S. Toy Company announcements
• Workers' compensation insurance information
• State disability insurance/unemployment insurance information
If team members have a message of interest to the workplace, they may submit it to the Department or
Store Team Leader or Human Resources Vice President for approval. All approved messages will be
posted by the Department or Store team Leader or Human Resources Vice President.

23

EMPLOYMENT STATUS AND RECORDS

201 Employment Categories

Effective Date: 4/1/2011

Proper team member classification is important to administering salaries, determining eligibility under
team member benefits plan, and complying with employment and tax laws. U.S. Toy Company may
offer part-time, full-time, and temporary employment opportunities to meet a variety of staffing
requirements and accommodate team member needs and preferences. U.S. Toy Company may also use
agency temporaries and contract workers to respond flexibly to changing staffing requirements. All team
members—whether full time, part time, or temporary—are classified as exempt or nonexempt for
overtime and minimum wage requirements.

Each team member’s position is classified as one of the following:
• Full-time team members are team members hired to regularly work 30, or more hours each
week. Full-time regular team members can be exempt or nonexempt.
• Part-time team members are team members hired to regularly work less than 30 hours each
week. Part-time regular team members can be exempt or non-exempt.

Each team member’s position is also classified as one of the following:

• Regular team members are part-time or full-time team members hired by U.S. Toy Company
who are regularly scheduled to work up to 40 hours per week for an indefinite period of time.

• Introductory team members are recently hired team members who are in training. All team
members within the first six months of employment are considered to be “Introductory.”

• Temporary team members are part-time or full-time team members hired by U.S. Toy
Company to work for the duration of specific projects or assignments. Temporary assignments
generally do not extend beyond a 12-month period, unless approved by the President. Temporary
team members can be exempt or nonexempt, depending on the nature of work performed.
NOTE: Temporary team members should not be confused with workers from temporary
agencies. Temporary team members are on U.S. Toy Company's payroll for the duration
of their assignments. Agency temporaries are employees of the temporary agency.

• Contractors: Contractors are not employees of U.S. Toy Company and are not eligible for
employer-sponsored benefits. In general, contractors are employees of firms with which U.S.
Toy Company has contracted directly. Terms of performance, compensation, and duration of
relationship are unique to each contract and governed by the terms of an agreement between U.S.
Toy Company and the contractor.

Each team member’s position is also classified as one of the following:

• Exempt team members are not subject to federal and state overtime requirements. An team
member is exempt if determined to be an executive, administrative, or professional team member
or outside sales representative as defined by the Fair Labor Standards Act.

• Nonexempt team members are entitled to overtime time pay of at least one-and-one-half times
their regular rate for hours worked in excess of 40 in any workweek. Any team member who is
not classified as exempt is nonexempt.

24

202 Employment Applications

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company relies upon the accuracy of information contained in the employment application, as
well as the accuracy of other data presented throughout the hiring process and employment. Any
misrepresentations, falsifications, or material omissions in any information obtained in the hiring process
may result in the exclusion of the individual from further consideration for employment or, if the person
has been hired, termination of employment.

203 Introductory Period

Effective Date: 4/1/2011; Reviewed 03/01/2013

The introductory period of six months is intended to give new team member the opportunity to
demonstrate their ability to achieve a satisfactory level of performance and to determine whether the new
position meets their expectations. U.S. Toy Company uses this period to evaluate team member
capabilities, work habits, and overall performance. Either the team member or U.S. Toy Company may
end the employment relationship at will at any time during or after the introductory period, with or
without cause or advance notice.

All new and rehired team members work on an introductory basis for the first 180 calendar days after
their date of hire. Any significant absence will automatically extend an introductory period by the length
of the absence. If U.S. Toy Company determines that the designated introductory period does not allow
sufficient time to thoroughly evaluate the team member's performance, the introductory period may be
extended for a specified period.

Upon satisfactory completion of the introductory period, team members enter the "regular" employment
classification.

During the introductory period, new team members are eligible for those benefits that are required by law,
such as workers' compensation insurance and Social Security. They may also be eligible for other U.S.
Toy Company-provided benefits, subject to the terms and conditions of each benefits program.

204 Access to Personnel Files

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company maintains a personnel file on each team member. The personnel file includes such
information as the team member's job application, resume, records of training, documentation of
performance appraisals and salary increases, and other employment records.

Personnel files are the property of U.S. Toy Company, and access to the information they contain is
restricted. Generally, only supervisors and management personnel of U.S. Toy Company who have a
legitimate reason to review information in a file are allowed to do so.

Team members who wish to review their own file should contact the Vice President of Human Resources.
With reasonable advance notice, team members may review their own personnel files in U.S. Toy
Company' offices and in the presence of an individual appointed by U.S. Toy Company to maintain the
files.

25

205 Personnel Data Changes

Effective Date: 4/1/2011; Reviewed 03/01/2013

It is the responsibility of each team member to promptly notify U.S. Toy Company of any changes in
personnel data. Personal mailing addresses, telephone numbers, number and names of dependents,
individuals to be contacted in the event of emergency, educational accomplishments, and other such status
reports should be accurate and current at all times. If any personnel data has changed, notify the Human
Resources Department.

206 Job Descriptions

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company makes every effort to create and maintain accurate job descriptions for all positions
within the Company. Each description includes a job information section, a job summary section (giving
a general overview of the job's purpose), an essential duties and responsibilities section, a qualifications
section (including education and/or experience, language skills, mathematical skills, reasoning ability,
and any certification required) and a physical demands section if applicable.

U.S. Toy Company maintains job descriptions to aid in orienting new team members to their jobs,
identifying the requirements of each position, establishing hiring criteria, setting standards for team
member performance evaluations, and establishing a basis for making reasonable accommodations for
individuals with disabilities.

The Human Resources Department and the hiring manager prepare job descriptions when new positions
are created. Existing job descriptions are also reviewed and revised in order to ensure that they are up to
date. Job descriptions may also be rewritten periodically to reflect any changes in the position's duties and
responsibilities. All team members will be expected to help ensure that their job descriptions are accurate
and current, reflecting the work being done.

Team members should remember that job descriptions do not necessarily cover every task or duty that
might be assigned, and that additional responsibilities may be assigned as necessary. Contact the Human
Resources Department if you have any questions or concerns about your job description.

207 Performance Evaluations

Effective Date: 4/1/2011; Reviewed 03/01/2013

Supervisors and team members are strongly encouraged to discuss job performance and goals on an
informal, day-to-day basis. Additional formal performance evaluations are conducted to provide both
supervisors and team members the opportunity to discuss job tasks, identify and correct weaknesses,
encourage and recognize strengths, and discuss positive, purposeful approaches for meeting goals.

Non-exempt performance evaluations are scheduled approximately every 12 months, coinciding generally
with the anniversary of the team member's original date of hire. Exempt performance evaluations are
scheduled approximately annually in March.

26

208 Compensation/Pay Administration

Effective Date: 4/1/2011; Revised 03/01/2013

The Pay Administration program at U.S. Toy Company was created to achieve consistent pay practices,
comply with federal and state laws, mirror our commitment to Equal Employment Opportunity, and offer
competitive salaries within our labor market. Because recruiting and retaining talented team members is
critical to our success, U.S. Toy Company is committed to paying its team members equitable
compensation (wages plus benefits) that reflect the requirements and responsibilities of their positions and
are comparable to the pay received by similarly situated team members in other organizations in the area.

Compensation for every position is determined by several factors, including job analysis and evaluation,
the essential duties and responsibilities of the job, and salary survey data on pay practices of other
employers. U.S. Toy Company periodically reviews its salary administration program and restructures it
as necessary. Merit-based pay adjustments may be awarded in conjunction with superior team member
performance documented by the performance evaluation process. Incentive bonuses may be awarded
depending on the overall profitability of U.S. Toy Company and based on each team member's individual
contributions to the Company.

Team members should bring their pay-related questions or concerns to the attention of their immediate
supervisors, who are responsible for the fair administration of departmental pay practices. The Human
Resources Department is also available to answer specific questions about the Pay Administration
program.

209 Personal Information-Team Member Privacy

Effective Date: 4/1/2011; Revised 03/01/2013

The very nature of the employment relationship requires that U.S. Toy Company obtain and maintain
information about Team Members which is confidential and protected from anyone other than someone
with a “need to know.” Such information may include, but is not limited to your Social Security Number,
your personal medical information (drug test results, completed insurance applications, workers’
compensation claim information, etc.) U.S. Toy Company, and specifically the Human Resources
department adhere to a variety of security measures and reasonable precautions intended to prevent
unauthorized access to your private information. Authorized persons who demonstrate a business purpose
for access to your personal information may include, but are not limited to Team Members or outside
consultants/vendors working in the area of Human Resources on behalf of U.S. Toy Company, outside
insurance companies, agents, brokers, and administrators involved in providing health-related services to
Team Members, local, state, and federal government agencies.

Typically, beyond the authorized circumstances as noted above, your personal information will not be
released to outside persons, such as financial organizations or potential future employers, without your
express consent.

Generally, the work environment (unless a private office or a restroom) is considered a public
environment and team members should not expect a right to privacy while in common areas under the
control of U.S. Toy Company. For security purposes, video surveillance may be used to monitor
company premises. Team members should not expect a right to privacy when using company equipment,
including, but not limited to company-issued computers or business telephones. U.S. Toy Company may,
and reserves the right to, monitor and record telephone calls and computer transmissions when company-

27

owned equipment is used by Team Members.

BENEFITS

301 Team member benefits

Effective Date: 4/1/2011; Reviewed 03/01/2013

Eligible team members at U.S. Toy Company are provided a wide range of benefits. A number of the
programs (such as Social Security, workers' compensation, state disability, and unemployment insurance)
cover all team members in the manner prescribed by law.

Benefits eligibility is dependent upon a variety of factors, including team member classification. Your
supervisor can identify the programs for which you are eligible. Details of many of these programs can be
found elsewhere in the handbook.

The following benefit programs are available to eligible full time team members:

• 401(k) Savings Plan
• Bereavement Leave
• Dental Insurance
• Educational Financial Assistance
• Team member Assistance Program
• Team member Discounts
• Family Leave
• Holidays
• Life Insurance
• Long-Term Disability
• Medical Insurance
• Paid Time Off (PTO)
• Pharmacy
• Profit Sharing
• Short-Term Disability
• Vision Care Insurance
• Wellness Program

Some benefit programs require contributions from team members and some are partially or totally paid by
U.S. Toy Company. *The benefit package for regular full-time team members represents an additional
cost to U.S. Toy Company of approximately 28 percent of wages.

302 Holidays

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company will grant holiday time off to all full time eligible team members on the holidays
listed below:

28

• New Year's Day (January 1)
• Memorial Day (last Monday in May)
• Independence Day (July 4)
• Labor Day (first Monday in September)
• Thanksgiving (fourth Thursday in November)
• Christmas (December 25)

U.S. Toy Company will grant paid holiday time off to all full time eligible team members who have
completed 90 calendar days of service in an eligible employment classification. Holiday pay will be
calculated based on the team member's straight-time pay rate (as of the date of the holiday) times the
number of hours the team member would otherwise have worked on that day. Eligible team member
classification(s): * Full-time

To be eligible for holiday pay, team members must have pre-approved time off or work the last scheduled
day immediately preceding and the first scheduled day immediately following the holiday.

If a recognized holiday falls during an eligible team member's paid absence (such as personal time off),
holiday pay will be provided instead of the paid time off benefit that would otherwise have applied.

303 Workers' Compensation Insurance

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company provides a comprehensive workers' compensation insurance program at no cost to
team members. This program covers any injury or illness sustained in the course of employment that
requires medical, surgical, or hospital treatment. Subject to applicable legal requirements, workers'
compensation insurance provides benefits after a short waiting and based on state laws.

Team members who sustain work-related injuries or illnesses should inform their supervisor immediately.
No matter how minor an on-the-job injury may appear, it is important that it be reported immediately.
This will enable an eligible team member to qualify for coverage as quickly as possible. Work place
injuries not reported timely will result in disciplinary action.

Neither U.S. Toy Company nor the insurance carrier will be liable for the payment of workers'
compensation benefits for injuries that occur during a team member's voluntary participation in any off-
duty recreational, social, or athletic activity sponsored by U.S. Toy Company or any vendor or event
related to the company.

304 Bereavement Leave

Effective Date: 4/1/2011; Reviewed 03/01/13

Team members who wish to take time off due to the death of an immediate family member should notify
their supervisor immediately.
Up to 3 days of paid bereavement leave will be provided to eligible team members in the following
classification(s): Full-time

Bereavement pay is calculated based on the base pay rate at the time of absence and will not include any
special forms of compensation, such as incentives, commissions, bonuses, or shift differentials.

29

Bereavement leave will normally be granted unless there are unusual business needs or staffing
requirements. Team members may, with their supervisors' approval, use any available paid leave for
additional time off as necessary.

U.S. Toy Company defines "immediate family" as the team member's spouse, parent, child, sibling; the
team member's spouse's parent, child, or sibling, daughter-in-law, son-in law, brother-in-law or sister-in-
law.

One day of paid leave is provided for the death of a team member's grandparents, grandchildren, aunt or
uncle.

Special consideration will also be given to any other person whose association with the team member was
similar to any of the above relationships.

Pay for bereavement leave is for actual work time missed. If the funeral or service occurs at a time when
work is not scheduled, payment will not be made. If a holiday or part of a team member's vacation occurs
on any days of bereavement absence, the team member may not receive holiday or vacation pay in
addition to bereavement leave pay. An excused absence for a family funeral or service may not be
retroactive or postponed. Non-Exempt team members will be able to count bereavement leave as "time
worked" when computing weekly overtime.

305 Jury Duty

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company encourages team members to fulfill their civic responsibilities by serving jury duty
when required. Team members may request unpaid jury duty leave for the length of absence. Team
members may use any available paid time off (for example, PTO benefits). There is no company-paid
time off for jury duty.

Team members must show the jury duty summons to their supervisor as soon as possible so that the
supervisor may make arrangements to accommodate their absence. Of course, team members are
expected to report for work whenever the court schedule permits.

Either U.S. Toy Company or the team member may request an excuse from jury duty if, in U.S. Toy
Company' judgment, the team member's absence would create serious operational difficulties.

As with any unpaid absence, if you are absent for an extended period of time due to Jury Duty, you
remain responsible to pay your portion of any team member insurance premiums as applicable. See a
member of the Human Resources team for particular amounts and due dates.

PTO leave and holiday benefits for eligible team members will continue to accrue during unpaid jury duty
leave.

30

306 Benefits Continuation (COBRA)

Effective Date: 4/1/2011; Reviewed 03/1/2013

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives qualified team members
and their qualified beneficiaries the opportunity to continue health insurance coverage under U.S. Toy
Company' health plan when a "qualifying event" would normally result in the loss of eligibility. Some
common qualifying events are resignation, termination of employment, or death of a team member; a
reduction in a team member's hours or a leave of absence; a team member's divorce or legal separation;
and a dependent child no longer meeting eligibility requirements.

Under COBRA, the team member or beneficiary pays the full cost of coverage at U.S. Toy Company’
group rates. U.S. Toy Company provides each eligible team member with a written notice describing
rights granted under COBRA when the team member becomes eligible for coverage under U.S. Toy
Company’ health insurance plan. The notice contains important information about the team member's
rights and obligations.

307 Educational Assistance

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company recognizes that the skills and knowledge of its team members are critical to the
success of the Company. The educational assistance program encourages personal development through
formal education so that team members can maintain and improve job-related skills or enhance their
ability to compete for reasonably attainable jobs within U.S. Toy Company.

U.S. Toy Company will provide educational assistance to all eligible team members who have completed
90 calendar days of service in an eligible employment classification. To maintain eligibility team
members must remain on the active payroll and be performing their job satisfactorily through completion
of each course. Team members in the following team member classification(s) are eligible for educational
assistance: * Full-time team members

Team members should contact the Human Resources Director for more information or questions about
educational assistance.

While educational assistance is expected to enhance team member's performance and professional
abilities, U.S. Toy Company cannot guarantee that participation in formal education will entitle the team
member to automatic advancement, a different job assignment or pay increases.

U.S. Toy Company invests in educational assistance to team members with the expectation that the
investment be returned through enhanced job performance. However, if a team member voluntarily
separates from U.S. Toy Company's employment within one year of the last educational assistance
payment, the amount of the payment may be considered only a loan. Accordingly, the team member may
be required to repay up to 100 percent of the original educational assistance payment.

31

308 Paid Time Off (PTO)

Effective Date: 4/1/2011; Revised 01/01/2013

ELIGIBILITY: Regular full-time team members are eligible for PTO benefits. PTO banks are
input each January. All additional PTO based on years of service will be added on the
anniversary date.

AMOUNTS OF PTO: Effective 01/01/13, the following maximum number of hours per year
for Full Time Team Members will be as follows:

Length of Employment Time off Bank hours Number of Days

per year per Year

After 90 days 52 hrs added 92.00 hours 11.5
at 1 year 40 hrs more added………………… 132.00 hours 16.5
2-4 years…………………………………….. 172.00 hours 21.5
5-14 years …………………………………... 212.00 hours 26.5
15 years and over……………………………

USE OF PTO: Requests for paid time off must be input into the ADP time management
system, from there it will go to your supervisor/manager for approval. Requests will be granted
based upon the staffing needs of the department. In the event of unusual staffing needs, approval
for PTO may be rescinded.

Emergency use of PTO should be for the team member’s own illness or that of an immediate
family member or an unforeseen emergency. All attempts should be made to schedule PTO in
advance. Team members may use PTO in 2-hour increment. PTO cannot be taken more than 6
consecutive days at a time unless approved by management. This Policy will be interpreted and
applied in compliance with FMLA.

PTO is paid at the team member’s base rate of pay at the time the PTO is taken. It does not
include any special forms of compensation such as incentives, bonuses or shift differentials.
Time off for PTO will not be considered as hours worked for the purpose of calculating
overtime.

Team Members may use PTO time during waiting periods for Workers’ Compensation and to
supplement Workers’ Compensation temporary total disability payments or other disability
payments made under U.S. Toy Company sponsored disability plan. The combination of
disability benefits and PTO pay may not exceed the team member’s regular wages or salary.
Blackout dates during our busy seasons for the Call-center, Warehouse, & Retail Stores will
apply by division as needed. (Back to School, Holiday season, etc). In general, Blackout dates
run from November 15 – December 31st for those above mentioned departments . During
blackout dates, PTO hours should not be requested/used unless in the case of extreme emergency
and approved by management.

In the case of unscheduled need for PTO, the team member must call their supervisor no later
than 30 minutes prior to the start time of their regular shift.

32

PTO CARRY-OVER (Hourly only): Team Members are strongly encouraged to use the PTO

benefits provided to them each year. From time to time, team members may not be able to take

all of the time off that is available to them due to work demands or other extenuating

circumstances. In such an instance, the most that can be “carried-over” from year to year is 40
hours. These 40 hours need to be used in the 1st quarter of the following year.

CHANGES MID-YEAR: Team Members who move from Full time to Part time status at the

request of the company will have their PTO prorated as follows:

January-March 0

April-June 25% of PTO bank

July-September 50% of PTO bank

October-December 75% of PTO bank

Team Members who move from Full time to Part time by their own request will not receive
prorated PTO benefits.

Team Members who move from Part time to Full time status midyear will receive a PTO bank in
January or on anniversary date if one year eligibility has not been met.

PAY OUT ON TERMINATION or CHANGE OF STATUS: No Personal Time off benefits
will be paid out in cases of termination of employment or change of employment status without
executive management approval or if it is mandated by State Law.

309 Health Insurance

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company’ health insurance plan provides team members and their dependents access to
medical, dental, vision care and disability, life, accident and critical illness insurance benefits. Team
members in the following employment classifications are eligible to participate in the health insurance
plan: * Regular full-time.

Eligible team members may participate in the health insurance plan subject to all terms and conditions of
the agreement between U.S. Toy Company and the insurance carrier at the first of the month following 90
days of employment.

Medical insurance premiums are supplemented by the company. All other insurance benefits are
voluntary meaning if the team member desires to purchase them, they pay for them.

A change in employment classification that would result in loss of eligibility to participate in the health
insurance plan may qualify a team member for benefits continuation under the Consolidated Omnibus
Budget Reconciliation Act (COBRA). Refer to the Benefits Continuation (COBRA) Policy for more
information.

Details of the health insurance plan are described in the Summary Plan Description (SPD). A SPD and
information on cost of coverage will be provided to eligible team members. Contact the Human
Resources Vice President for more information about health insurance benefits.

33

310 Life Insurance

Effective Date: 4/1/2011; Reviewed 03/01/213

Life insurance offers you and your family important financial protection. U.S. Toy Company provides a
voluntary life insurance plan for eligible team members. Additional supplemental and/or dependent life
insurance coverage may also be purchased.

Team members in the following employment classifications are eligible to participate in the life insurance
plan: Full-time.

Eligible team members may participate in the voluntary life insurance plan subject to all terms and
conditions of the agreement between U.S. Toy Company and the insurance carrier. (Team members pay
for the coverage.)

Details of the basic life insurance plan including benefit amounts are described in the Summary Plan
Description provided to eligible team members. Contact the Human Resources department for more
information about life insurance benefits.

311 Short-Term Disability Insurance

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company provides an opportunity for you to purchase a short-term disability insurance (STDI)
policy. The STDI benefit compensates participants who are unable to work because of a qualifying
disability due to an injury or illness. Full-time team members who have completed 90 days of service are
eligible to enroll in the STDI plan.

Eligible team members may participate in the voluntary STDI plan subject to all terms and conditions of
the agreement between U.S. Toy Company and the insurance carrier. (Team members pay for the
coverage.)

Disabilities arising from pregnancy or pregnancy-related illness are treated the same as any other illness
that prevents a team member from working. Disabilities covered by workers' compensation are excluded
from STDI coverage.

Details of the STDI plan including benefit amounts, when they are payable, and limitations, restrictions,
and other exclusions are described in the Summary Plan Description provided to eligible team members.
Contact the Human Resources department for more information about STDI benefits.

312 Long-Term Disability Insurance

Effective Date: 4/1/2011; Revised 03/01/2013

U.S. Toy Company provides a long-term disability (LTDI) benefits plan to help eligible team members
cope with an illness or injury that results in a long-term absence from employment. LTDI is designed to
ensure a continuing income for team members who are disabled and unable to work for an extended
period.

34

Full-time team members who have completed 90 days of service are eligible to enroll in the LTDI plan.

Eligible team members may participate in the LTDI plan subject to all terms and conditions of the
agreement between U.S. Toy Company and the insurance carrier.

Details of the LTDI plan including benefit amounts, and limitations and restrictions are described in the
Summary Plan Description provided to eligible team members. Contact the Human Resource department
for more information about LTDI benefits.

313 401(k) Savings Plan

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company has established a 401(k) savings plan to provide team members the potential for
future financial security for retirement.

To be eligible to join the 401(k) savings plan, you must complete three months of service and be 21 years
of age or older and be a full time team member. You may join the plan the first of the month any time
after the 90 day eligibility is met. Eligible team members may participate in the 401(k) plan subject to all
terms and conditions of the plan. Any company match is effective after 1 year of employment. (Refer to
the summary plan description for details of match and vesting schedules.)

The 401(k) savings plan allows you to elect how much salary you want to contribute and direct the
investment of your plan account, so you can tailor your own retirement package to meet your individual
needs. U.S. Toy Company also contributes an additional matching amount to each team member's 401(k)
contribution after a team member has worked one year with the company.

Because your contribution to a 401(k) plan is automatically deducted from your pay before federal and
state tax withholdings are calculated, you save tax dollars now by having your current taxable amount
reduced. While the amounts deducted generally will be taxed when they are finally distributed, favorable
tax rules typically apply to 401(k) distributions. Withdrawal of 401k funds prior to retirement age may
result in additional fees and taxes.

Complete details of the 401(k) savings plan are described in the Summary Plan Description provided to
eligible regular full time team members. Contact the Human Resources Department for more information
about the 401(k) plan.

314 Assistance Program

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company cares about the health and well-being of its team members and recognizes that a
variety of personal problems can disrupt their personal and work lives. While many team members solve
their problems either on their own or with the help of family and friends, sometimes team members need
professional assistance and advice.

Through the Team member Assistance Program (EAP), U.S. Toy Company provides confidential access
to professional counseling services for help in confronting such personal problems as alcohol and other
substance abuse, marital and family difficulties, financial or legal troubles, and emotional distress. The

35

EAP is available to all full time team members and their immediate family members offering problem
assessment, short-term counseling, and referral to appropriate community and private services.
The EAP is strictly confidential and is designed to safeguard your privacy and rights. Information given
to the EAP counselor may be released only if requested by you in writing. All counselors are guided by a
Professional Code of Ethics.
Personal information concerning team member participation in the EAP is maintained in a confidential
manner. No information related to a team member's participation in the program is entered into the
personnel file.
There is no cost for team members to consult with an EAP counselor. If further counseling is necessary,
the EAP counselor will outline community and private services available. The counselor will also let team
members know whether any costs associated with private services may be covered by their health
insurance plan. Costs that are not covered are the responsibility of the team member.
Minor concerns can become major problems if you ignore them. No issue is too small or too large, and a
professional counselor is available to help you when you need it. See posters on bulletin boards with
contact information for the EAP.

315 Community Services

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company recognizes the importance of building positive relationships within the community.
Our business and our team members are interdependent on the service agencies, organizations,
educational institutions, and various resources within the community. U.S. Toy Company encourages and
supports participation in community service activities that contribute to the community and foster future
growth and development needs. Our goal is to help existing community service organizations implement
and continue programs and projects that will improve the quality of life for the community at large.
You will have opportunities to participate in a variety of community and charitable activities while
employed at U.S. Toy Company. We encourage you to be involved any time you can. The company
Living the Values Committee will sponsor and post activities throughout the year.

36

LEAVES OF ABSENCE

401 Family and Medical Leave

Effective Date: 4/1/2011 Revised 03/01/2013

The function of this policy is to provide employees with a general description of their FMLA rights. In
the event of any conflict between this policy and the applicable law, employees will be afforded all rights
required by law. If you have any questions, concerns, or disputes with this policy, you must contact the
Human Resources department. NOTE: To request a leave of absence under FMLA, your request must be
received in writing.

GENERAL PROVISIONS: Under this policy, U.S. Toy Company will grant up to 12 weeks (or up to

26 weeks of military caregiver leave to care for a covered service member with a serious injury or illness)
during a 12-month period to eligible employees. The leave may be paid, unpaid or a combination of paid
and unpaid leave, depending on the circumstances of the leave and as specified in this policy.

ELIGIBILITY: To qualify to take family or medical leave under this policy, the employee must meet

all of the following conditions:

1) The employee must have worked for the company for 12 months or 52 weeks. The 12 months or 52
weeks need not have been consecutive. Separate periods of employment will be counted if the break in
service exceeds seven years due to National Guard or Reserve military service obligations

2) The employee must have worked at least 1,250 hours during the 12-month period immediately before
the date when the leave is requested to commence. “Hours Worked is defined by Fair Labor Standards
Act and does not include time for paid time off or unpaid leave.

3) The employee must work in a worksite where 50 or more employees are employed by the company
within 75 miles of that office or worksite. The distance is to be calculated by using available
transportation by the most direct route.

TYPE OF LEAVE COVERED: To qualify as FMLA leave under this policy, the employee must be

taking leave for one of the reasons listed below:

1) The birth of a child and in order to care for that child.

2) The placement of a child for adoption or foster care and to care for the newly placed child.

3) To care for a spouse, child or parent with a serious health condition (described below).

4) The serious health condition (described below) of the employee.

An employee may take leave because of a serious health condition that makes the employee unable to
perform the functions of the employee's position. A serious health condition is defined as a condition
that requires inpatient care at a hospital, hospice or residential medical care facility, including any period
of incapacity or any subsequent treatment in connection with such inpatient care or a condition that
requires continuing care by a licensed health care provider.

This policy covers illnesses of a serious and long-term nature, resulting in recurring or lengthy absences.
Generally, a chronic or long-term health condition that would result in a period of three consecutive days
of incapacity with the first visit to the health care provider within seven days of the onset of the incapacity

37

and a second visit within 30 days of the incapacity would be considered a serious health condition. For
chronic conditions requiring periodic health care visits for treatment, such visits must take place at least
twice a year.

Employees with questions about what illnesses are covered under this FMLA policy or under the
company's sick leave policy are encouraged to consult with the Human Resource Manager.

If an employee takes paid sick leave for a condition that progresses into a serious health condition and the
employee requests unpaid leave as provided under this policy, the company may designate all or some
portion of related leave taken as leave under this policy, to the extent that the earlier leave meets the
necessary qualifications.

5) Qualifying exigency leave for families of members of the National Guard or Reserves or
of a regular component of the Armed Forces when the covered military member is on
covered active duty or called to covered active duty.

An employee whose spouse, son, daughter or parent either has been notified of an impending call or order
to covered active military duty or who is already on covered active duty may take up to 12 weeks of leave
for reasons related to or affected by the family member’s call-up or service. The qualifying exigency must
be one of the following: 1) short-notice deployment, 2) military events and activities, 3) child care and
school activities, 4) financial and legal arrangements, 5) counseling, 6) rest and recuperation, 7) post-
deployment activities and 8) additional activities that arise out of active duty, provided that the employer
and employee agree, including agreement on timing and duration of the leave.

“Covered active duty” means:

(a) in the case of a member of a regular component of the Armed Forces, duty during the deployment of
the member with the Armed Forces to a foreign country; and

(b) in the case of a member of a reserve component of the Armed Forces, duty during the deployment of
the member with the Armed Forces to a foreign country under a call or order to active duty under a
provision of law referred to in section 101(a)(13)(B) of title 10, United States Code.

The leave may commence as soon as the individual receives the call-up notice. (Son or daughter for this
type of FMLA leave is defined the same as for child for other types of FMLA leave except that the person
does not have to be a minor.) This type of leave would be counted toward the employee’s 12-week
maximum of FMLA leave in a 12-month period.

6) Military caregiver leave (also known as covered servicemember leave) to care for an
injured or ill servicemember or veteran.

An employee whose son, daughter, parent or next of kin is a covered servicemember may take up to 26
weeks in a single 12-month period to take care of leave to care for that servicemember.

Next of kin is defined as the closest blood relative of the injured or recovering servicemember.

The term “covered service member” means:

(a) a member of the Armed Forces (including a member of the National Guard or Reserves) who is
undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise
on the temporary disability retired list, for a serious injury or illness; or

38

(b) a veteran who is undergoing medical treatment, recuperation, or therapy, for a serious injury or illness
and who was a member of the Armed Forces (including a member of the National Guard or Reserves) at
any time during the period of 5 years preceding the date on which the veteran undergoes that medical
treatment, recuperation, or therapy.

The term “serious injury or illness”:

(a) in the case of a member of the Armed Forces (including a member of the National Guard or Reserves),
means an injury or illness that was incurred by the member in line of duty on active duty in the Armed
Forces (or existed before the beginning of the member’s active duty and was aggravated by service in line
of duty on active duty in the Armed Forces) and that may render the member medically unfit to perform
the duties of the member’s office, grade, rank, or rating; and

(b) in the case of a veteran who was a member of the Armed Forces (including a member of the National
Guard or Reserves) at any time during a period when the person was a covered servicemember, means a
qualifying (as defined by the Secretary of Labor) injury or illness that was incurred by the member in line
of duty on an active duty in the Armed Forces (or existed before the beginning of the member’s active
duty and was aggravated by service in line of duty on active duty in the Armed Forces) and that
manifested itself before or after the member became a veteran.

AMOUNT OF LEAVE: An eligible employee can take up to 12 weeks for the FMLA circumstances

(1) through (5) above under this policy during any 12-month period. The company will measure the 12-
month period as a rolling 12-month period measured backward from the date an employee uses any leave
under this policy. Each time an employee takes leave, the company will compute the amount of leave the
employee has taken under this policy in the last 12 months and subtract it from the 12 weeks of available
leave, and the balance remaining is the amount the employee is entitled to take at that time.

An eligible employee can take up to 26 weeks for the FMLA circumstance (6) above (military caregiver
leave) during a single 12-month period. For this military caregiver leave, the company will measure the
12-month period as a rolling 12-month period measured forward. FMLA leave already taken for other
FMLA circumstances will be deducted from the total of 26 weeks available.

EMPLOYMENT STATUS AND BENEFITS DURING LEAVE: While an employee is on leave,

the company will continue the employee's health benefits during the leave period at the same level and
under the same conditions as if the employee had continued to work. This means that the team member
must continue to pay for whatever portion of the premiums are required of any other eligible employee.
This is specifically applicable to health, dental, long- and short-term disability, and life insurance
premiums, but may also apply to other benefits.

EMPLOYEE STATUS FOLLOW LEAVE: An employee who takes leave under this policy may be

asked to provide a fitness for duty (FFD) clearance from the health care provider. This requirement will
be included in the employer’s response to the FMLA request. Generally, an employee who takes FMLA
leave will be able to return to the same position or a position with equivalent status, pay, benefits and
other employment terms. The position will be the same or one which is virtually identical in terms of pay,
benefits and working conditions. The company may choose to exempt certain key employees from this
requirement and not return them to the same or similar position.

USE OF PAID AND UNPAID TIME OFF: An employee who is taking FMLA leave must use all

paid vacation, personal or sick leave prior to being eligible for unpaid leave. Paid Time Off and time
eligible for benefits from Disability Insurance run concurrently with FMLA. This means that time that is
compensated by PTO and/or disability counts toward the team member’s entitlement of 12 weeks.

39

INTERMITTEN LEAVE OR REDUCED WORK SCHEDULE: When possible, the employee

may take FMLA leave in 12 consecutive weeks, may use the leave intermittently (take a day periodically
when needed over the year) or, under certain circumstances, may use the leave to reduce the workweek or
workday, resulting in a reduced hour schedule. In all cases, the leave may not exceed a total of 12
workweeks (or 26 workweeks to care for an injured or ill servicemember over a 12-month period).

CERTIFICATION OF SERIOUS HEALTH CONDITION: Generally, within 15 days of the

request for FMLA Leave, U.S. Toy Company will require certification for whatever purpose the FMLA
Leave is requested. The Company may contact the employee or family member’s health care provider in
compliance with Federal Law. The follow resources are available and will be used in the certification
process:.

• Medical certification will be provided using the DOL Certification of Health Care Provider for
Employee’s Serious Health Condition (http://www.dol.gov/esa/whd/forms/WH-380-E.pdf ).

• Medical certification will be provided using the DOL Certification of Health Care Provider for
Family Member’s Serious Health Condition (http://www.dol.gov/esa/whd/forms/WH-380-F.pdf

• Certification of Qualifying Exigency for Military Family Leave will require completion of this
form: (http://www.dol.gov/esa/whd/forms/WH-384.pdf ).

• Certification for the serious injury or illness of a covered service member will require completion
of this form: (http://www.dol.gov/esa/whd/forms/WH-385.pdf ).

PROCEDURE FOR REQUESTING FMLA LEAVE: All employees requesting FMLA leave must

provide verbal or written notice of the need for the leave to the HR Department. Within five business days
after the employee has provided this notice, the HR manager will complete and provide the employee
with the DOL Notice of Eligibility and Rights (http://www.dol.gov/esa/whd/fmla/finalrule/WH381.pdf ).

When the need for the leave is foreseeable, the employee must provide the employer with at least 30 days'
notice. When an employee becomes aware of a need for FMLA leave less than 30 days in advance, the
employee must provide notice of the need for the leave either the same day or the next business day.
When the need for FMLA leave is not foreseeable, the employee must comply with the company’s usual
and customary notice and procedural requirements for requesting leave, absent unusual circumstances.

APPROVED DESIGNATION OF FMLA LEAVE: Within five business days after the employee has
submitted the appropriate certification form, the HR manager will complete and provide the employee
with a written response to the employee’s request for FMLA leave using the DOL Designation Notice
(http://www.dol.gov/esa/whd/forms/WH-382.pdf ).

INTENT TO RETURN TO WORK: Team members who are actively on FMLA Leave will be

required to communicate on a regular basis with U.S. Toy Company regarding their intent and time-line
for returning to work.

402 Military Leave

Effective Date: 4/1/2011; Reviewed 03/01/2013

A military leave of absence will be granted to team members who are absent from work because of
service in the U.S. uniformed services in accordance with the Uniformed Services Employment and
Reemployment Rights Act (USERRA). Advance notice of military service is required, unless military
necessity prevents such notice or it is otherwise impossible or unreasonable.
The leave will be unpaid. However, team members may use any available paid time off for the absence.

40

Continuation of health insurance benefits is available as required by USERRA based on the length of the
leave and subject to the terms, conditions and limitations of the applicable plans for which the team
member is otherwise eligible.
PTO leave and holiday benefits will continue to accrue during a military leave of absence.
Team members on military leave for up to 30 days are required to return to work for the first regularly
scheduled shift after the end of service, allowing reasonable travel time. Team members on longer
military leave must apply for reinstatement in accordance with USERRA and all applicable state laws.
Team members returning from military leave will be placed in the position they would have attained had
they remained continuously employed or a comparable one depending on the length of military service in
accordance with USERRA. They will be treated as though they were continuously employed for purposes
of determining benefits based on length of service.
Contact the Human Resources Vice President for more information or questions about military leave.

41

TIMEKEEPING/PAYROLL

501 Timekeeping

Effective Date: 4/1/2011; Reviewed 03/01/2013

Accurately recording time worked is the responsibility of every nonexempt team member. Federal and
state laws require U.S. Toy Company to keep an accurate record of time worked in order to calculate pay
and benefits. Time worked is all the time actually spent on the job performing assigned duties.

Nonexempt team members should accurately record the time they begin and end their work, through the
time clocks, as well as the beginning and ending time of each meal period. They should also record the
beginning and ending time of any split shift or departure from work for personal reasons. Overtime work
must always be approved before it is performed.

Altering, falsifying, tampering with time records, or recording time on another team member's time record
may result in disciplinary action, up to and including termination of employment.

Nonexempt team members should report to work no more than seven minutes prior to their scheduled
starting time nor stay more than seven minutes after their scheduled stop time without expressed, prior
authorization from their supervisor.

502 Paydays

Effective Date: 4/1/2011; Reviewed 03/01/2013

All team members are paid biweekly on every other Friday weather permitting. When inclement weather
closes a location or airport, payroll will be available on the first available day after the emergency. Each
paycheck will include earnings for all work performed through the end of the previous payroll period.

If a regular payday falls during a team member's vacation, the team member's paycheck will be available
upon his or her return from vacation.

Team members may have pay directly deposited into their bank accounts if they provide advance written
authorization to U.S. Toy Company. Team members will receive an itemized statement of wages when
U.S. Toy Company makes direct deposits.

503 Separation from Employment

Effective Date: 4/1/2011; Revised 03/01/2013

Separation from employment is an inevitable part of work relationship and many of the reasons for
termination are routine. Separation from employment can be voluntary or involuntary. Below are
examples of some of the most common circumstances under separation from employment occurs:

• Voluntary Separation from employment occurs the team member initiates the separation.
Resignation and Retirement are Voluntary Separations.

42

• Involuntary Separation from employment occurs when U.S. Toy Company initiates the
separation. An Involuntary Separation may be due to reduction in force or elimination of the
position held by the Team member, it may be for cause based on unacceptable job performance
or violation of company policy, or it may be without cause.

Since employment with U.S. Toy Company is based on mutual consent, both the team member and U.S.
Toy Company have the right to terminate employment at will, with or without cause, at any time.
Team member benefits will be affected by employment termination in the following manner. COBRA
continuation information will be sent to qualifying team members. Some benefits may be continued at
the team member's expense if the team member so chooses. The team member will be notified in writing
of the benefits that may be continued and of the terms, conditions, and limitations of such continuance.

Should you decide to voluntarily separate from U.S. Toy Company, you are asked to provide written
notice of your intent to resign or retire a minimum of two weeks prior to the effective date. U.S. Toy
Company reserves the right to accept or reject the terms of your separation. Failure to provide proper
notice will result in a status of “ineligible for rehire.”

Final pay will be issued at the next regular pay date unless otherwise required by state regulations. Final
pay will be mailed to the most recent address on record in the payroll system unless the Payroll
department is notified in writing in advance by the team member of another request.

504 Pay Advances

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company does not provide pay advances on unearned wages to team members.

505 Administrative Pay Corrections

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company takes all reasonable steps to ensure that team members receive the correct amount of
pay in each paycheck and that team members are paid promptly on the scheduled payday.

In the unlikely event that there is an error in the amount of pay, the team member should promptly bring
the discrepancy to the attention of the Human Resources Department so that corrections can be made as
quickly as possible.

506 Pay Deductions

Effective Date: 4/1/2011; Reviewed 03/01/2013

The law requires that U.S. Toy Company make certain deductions from every team member's
compensation. Among these are applicable federal, state, and local income taxes. U.S. Toy Company also
must deduct Social Security taxes on each team member's earnings up to a specified limit that is called the
Social Security "wage base." U.S. Toy Company matches the amount of Social Security taxes paid by
each team member.

43

U.S. Toy Company offers programs and benefits beyond those required by law. Eligible team members
may voluntarily authorize deductions from their paychecks to cover the costs of participation in these
programs.
Additional payroll deductions may be taken at the express authorization of the team member and/or when
required by law to garnish a team member's compensation. Such orders stay in effect until otherwise
ordered by the court.
If you have questions concerning why deductions were made from your paycheck or how they were
calculated, your supervisor or Human Resources can assist in having your questions answered.

507 Overtime

Effective Date: 4/1/2011; Reviewed 03/01/2013

When operating requirements or other needs cannot be met during regular working hours, team
members may be given the opportunity to volunteer for overtime work assignments. All overtime
work must receive the supervisor's prior authorization. Overtime assignments will be distributed
as equitably as practical to all team members qualified to perform the required work.
Overtime compensation is paid to all nonexempt team members in accordance with federal and
state wage and hour restrictions. Overtime pay is based on actual hours worked. Time off on
PTO leave, or any leave of absence will not be considered hours worked for purposes of
performing overtime calculations.
When required by heavy production demands or customer service needs, U.S. Toy Company can
require any employee to work overtime. However, the company will attempt to give at least one
day's notice when overtime must be worked. Generally, U.S. Toy Company tries to limit
required overtime work to urgent situations, seasonally high demand, or unexpected
circumstances that cannot be handled satisfactorily during normal working hours.

44

WORK ENVIRONMENT

601 Safety

Effective Date: 4/1/2011; Reviewed 03/01/2013

To assist in providing a safe and healthful work environment for team members, customers, and visitors,
U.S. Toy Company has established a workplace safety program. This program is a top priority for U.S.
Toy Company. The Vice President of the Distribution Center has responsibility for implementing,
administering, monitoring, and evaluating the safety program. Its success depends on the alertness and
personal commitment of all.

U.S. Toy Company provides information to team members about workplace safety and health issues
through regular internal communication channels such as supervisor-team members meetings, bulletin
board postings, memos, or other written communications.

Team members and supervisors receive periodic workplace safety training. The training covers potential
safety and health hazards and safe work practices and procedures to eliminate or minimize hazards. A
safety committee has been established to assist in these activities and to facilitate effective
communication between team members and management about workplace safety and health issues.

Some of the best safety improvement ideas come from team members. Those with ideas, concerns, or
suggestions for improved safety in the workplace are encouraged to raise them with their supervisor, or
with another supervisor or manager, or bring them to the attention of the Vice President of the
Distribution Center.

Each team member is expected to obey safety rules and to exercise caution in all work activities. Team
members must immediately report any unsafe condition to the appropriate supervisor. Team members
who violate safety standards, who cause hazardous or dangerous situations, or who fail to report or, where
appropriate, remedy such situations, may be subject to disciplinary action, up to and including termination
of employment.

In the case of accidents that result in injury, regardless of how insignificant the injury may appear, team
members should immediately notify the Vice President of the Distribution Center or the Vice President of
Human Resources or the appropriate supervisor. Such reports are necessary to comply with laws and
initiate insurance and workers' compensation benefits procedures.

602 Smoking

Effective Date: 4/1/2011; Revised 03/01/2013

In keeping with U.S. Toy Company’ intent to provide a safe and healthful work environment, smoking in
the workplace is prohibited except in those outdoor locations that have been specifically designated as
smoking areas. In situations where the preferences of smokers and nonsmokers are in direct conflict, the
preferences of nonsmokers will prevail.

In our retail store locations, smoking is never permitted near the front doors or entrances. Each store will
have a designated smoking area out of view of guests, entrances and exits.

45

This policy applies equally to all team members, customers, and visitors.

603 Work Schedules

Effective Date: 4/1/2011; Reviewed 03/01/2013

Work schedules for team members vary throughout our Company. Supervisors will advise team members
of their individual work schedules. Staffing needs and operational demands may necessitate variations in
starting and ending times, breaks if applicable and variations in the total hours that may be scheduled each
day and week.

If a team member cannot work a scheduled shift, they must contact their supervisor or manager no later
than within 30 minutes of the shift start and preferably much sooner.

604 Rest and Meal Periods

Effective Date: 4/1/2011; Reviewed 03/01/2013

All full-time team members are provided with one meal period each workday. Supervisors will schedule
meal periods to accommodate operating requirements. Team members will be relieved of all active
responsibilities and restrictions during meal periods and will not be compensated for that time.

Break and meal periods standard practice unless state law requires otherwise:

Paid 10 minute breaks Unpaid 1/2 hour lunch

Team member works under 4 hours 00

Team member works over 4 hours and less than 6 hours 1 0

Team member works over 6 hours and less than 7 hours 1 1

Team member works 7 hours of more 21

605 Use of Equipment and Vehicles

Effective Date: 4/1/2011; Reviewed 03/01/2013

Equipment and vehicles essential in accomplishing job duties are expensive and may be difficult to
replace. When using property, team members are expected to exercise care, perform required
maintenance, and follow all operating instructions, safety standards, and guidelines.

Please notify the supervisor if any equipment, machines, tools, or vehicles appear to be damaged,
defective, or in need of repair. Prompt reporting of damages, defects, and the need for repairs could
prevent deterioration of equipment and possible injury to team members or others. The supervisor can
answer any questions about a team member's responsibility for maintenance and care of equipment or
vehicles used on the job.

The improper, careless, negligent, destructive, or unsafe use or operation of equipment or vehicles, as
well as excessive or avoidable traffic and parking violations, can result in disciplinary action, up to and
including termination of employment.

46

606 Business Travel Expenses

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company will reimburse team members for reasonable business travel expenses incurred while
on assignments away from the normal work location. All business travel must be approved in advance by
the team member's Manager.

Team members whose travel plans have been approved should make all travel arrangements through U.S.
Toy Company’ designated travel agency or have approval to book directly with providers.

When approved, the actual costs of travel, meals, lodging, and other expenses directly related to
accomplishing business travel objectives will be reimbursed by U.S. Toy Company with the appropriate
receipts. Team members are expected to limit expenses to reasonable amounts and the company does not
reimburse for alcoholic beverages.

Expenses that generally will be reimbursed include the following:

• Airfare or train fare for travel in coach or economy class or the lowest available fare.
• Car rental fees, only for compact or mid-sized cars.
• Fares for shuttle or airport bus service, where available; costs of public transportation for other

ground travel.
• Taxi fares, only when there is no less expensive alternative.
• Mileage costs for use of personal cars, only when less expensive transportation is not available.
• Cost of standard accommodations in low to mid-priced hotels, motels, or similar lodgings.
• Cost of meals, no more lavish than would be eaten at the team members own expense.
• Tips not exceeding 15% of the total cost of a meal or 10% of a taxi fare.
• Charges for telephone calls, fax, and similar services required for business purposes.
• Charges for one personal telephone call each day.
• Charges for laundry and valet services, only on trips of five or more days. (Personal

entertainment and personal care items are not reimbursed.)

Team members who are involved in an accident while traveling on business must promptly report the
incident to their immediate supervisor and/or Human Resources if their immediate supervisor is not
available. Vehicles owned, leased, or rented by U.S. Toy Company may not be used for personal use
without prior approval.

Cash advances to cover reasonable anticipated expenses may be made to team members, after travel has
been approved. Team members should submit a written request to their supervisor when travel advances
are needed.

With prior approval, team members on business travel may be accompanied by a family member or
friend, when the presence of a companion will not interfere with successful completion of business
objectives. Generally, team members are also permitted to combine personal travel with business travel,
as long as time away from work is approved. Additional expenses arising from such nonbusiness travel
are the responsibility of the team members.

When travel is completed, team members should submit completed travel expense reports within 7 days.
Reports should be accompanied by receipts for all individual expenses of 5.00 dollars or more.

Team members should contact their supervisor for guidance and assistance on procedures related to travel
arrangements, travel advances, expense reports, reimbursement for specific expenses, or any other
business travel issues.

47

Abuse of this business travel expenses policy, including falsifying expense reports to reflect costs not
incurred by the team member, can be grounds for disciplinary action, up to and including termination of
employment.

More detailed travel procedures and expense reporting forms are available from the Finance department
and should be obtained prior to travel by all team members traveling on behalf of the company.

607 Visitors in the Workplace

Effective Date: 4/1/2011; Reviewed 03/01/2013

To provide for the safety and security of team members and the facilities at U.S. Toy Company, only
authorized visitors are allowed in the workplace. Restricting unauthorized visitors helps maintain safety
standards, protects against theft, ensures security of equipment, protects confidential information,
safeguards team member welfare, and avoids potential distractions and disturbances.

All visitors should enter U.S. Toy Company at the reception area, through the warehouse entrance or
through the main entrance of the retail store locations. Authorized visitors will receive directions or be
escorted to their destination. Team members are responsible for the conduct and safety of their visitors.
All guests must sign-in and be issued a badge at headquarters.

If an unauthorized individual is observed on U.S. Toy Company’ premises, team members should
immediately notify their supervisor or, if necessary, direct the individual to the reception area.

608 Workplace Monitoring

Effective Date: 4/1/2011; Reviewed 03/01/2013

Workplace monitoring may be conducted by U.S. Toy Company to ensure quality control, team member
safety, security, and customer satisfaction.

Team members who regularly communicate with customers may have their telephone conversations
monitored or recorded. Telephone monitoring is used to identify and correct performance problems
through targeted training. Improved job performance enhances our customers' image of U.S. Toy
Company as well as their satisfaction with our service.
Computers furnished to team members are the property of U.S. Toy Company. As such, computer usage
and files may be monitored or accessed.

U.S. Toy Company may conduct video surveillance of non-private workplace areas. Video monitoring is
used to identify safety concerns, maintain quality control, detect theft and misconduct and discourage or
prevent acts of harassment and workplace violence.

Because U.S. Toy Company is sensitive to the legitimate privacy rights of team members every effort will
be made to guarantee that workplace monitoring is done in an ethical and respectful manner.

609 Telecommuting

Effective Date: 4/1/2011; Revised 03/01/2013

48

Telecommuting is the practice of working at home or at a site near the home instead of physically
traveling to a central workplace. It is a work alternative that U.S. Toy Company may offer to some team
members when it would benefit both the Company and the team members.

The decision to approve a telecommuting arrangement will be based on factors such as position and job
duties, performance history, related work skills and the impact on the Company.

The team member's at-home work hours will conform to a schedule agreed upon by the team member and
his or her supervisor. If such a schedule has not been agreed upon, the team member's work hours will be
assumed to be the same as they were before the team member began telecommuting. Changes to this
schedule must be reviewed and approved in advance by the team member's manager.

During working hours, the team member's at-home workspace will be considered an extension of U.S.
Toy Company’ workspace. Therefore, workers' compensation benefits may be available for job-related
accidents that occur in the team member's at-home workspace during working hours. All job-related
accidents must be reported immediately and will be investigated immediately.

U.S. Toy Company assumes no responsibility for injuries occurring in the team member's at-home
workspace outside the agreed-upon work hours. The team member agrees to maintain safe conditions in
the at-home workspace and to practice the same safety habits as those followed on U.S. Toy Company’
premises.

In the case of an injury while working at home, the team member will immediately report the injury to
Human Resources to get instructions for obtaining medical treatment.

The team member should not undertake to provide primary care for any dependent person requiring
personal care (for instance, a child, dependent parent, or other member of the household) during at-home
working hours. However, if a young child is ill, the team member may, on a temporary basis, provide
primary care for that child subject to approval of the team member's supervisor.

Telecommuting is an alternative method of meeting the needs of the Company and is not a universal
benefit. As such, U.S. Toy Company has the right to refuse to make telecommuting available to a team
member and to terminate a telecommuting arrangement at any time.

610 Workplace Violence Prevention

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company is committed to preventing workplace violence and to maintaining a safe work
environment. Given the increasing violence in society in general, U.S. Toy Company has adopted the
following guidelines to deal with intimidation, harassment, or other threats of (or actual) violence that
may occur during business hours or on its premises.
All team members, including supervisors and temporary team members, should be treated with courtesy
and respect at all times. Team members are expected to refrain from fighting, "horseplay," or other
conduct that may be dangerous to others. Firearms, weapons, and other dangerous or hazardous devices or
substances are prohibited from the premises of U.S. Toy Company without proper authorization.

Conduct that threatens, intimidates, or coerces another team member, a customer, or a member of the
public at any time, including off-duty periods, will not be tolerated. This prohibition includes all acts of
harassment, including harassment that is based on an individual's sex, race, age, or any characteristic

49

protected by federal, state, or local law.

All threats of (or actual) violence, both direct and indirect, should be reported as soon as possible to your
immediate supervisor or any other member of management. This includes threats by team members, as
well as threats by customers, vendors, solicitors, or other members of the public. When reporting a threat
of violence, you should be as specific and detailed as possible.

All suspicious individuals or activities should also be reported as soon as possible to a supervisor or
manager or both. Do not place yourself in peril. If you see or hear a commotion or disturbance near your
work area, do not try to intercede or see what is happening.

U.S. Toy Company will promptly and thoroughly investigate all reports of threats of (or actual) violence
and of suspicious individuals or activities. The identity of the individual making a report will be protected
as much as is practical. In order to maintain workplace safety and the integrity of its investigation, U.S.
Toy Company may suspend team member, either with or without pay, pending investigation.

Anyone determined to be responsible for threats of (or actual) violence or other conduct that is in
violation of these guidelines will be subject to prompt disciplinary action up to and including termination
of employment.

U.S. Toy Company encourages team members to bring their disputes or differences with other team
members to the attention of their supervisors, manager or the Vice President of Human Resources before
the situation escalates into potential violence. U.S. Toy Company is eager to assist in the resolution of
disputes and will not discipline team members for raising such concerns.

611 Security Inspections

Effective Date: 4/1/2011; Reviewed 03/01/2013

U.S. Toy Company wishes to maintain a work environment that is free of illegal drugs, alcohol, firearms,
explosives, or other improper materials. To this end, U.S. Toy Company prohibits the possession,
transfer, sale, or use of such materials on its premises. U.S. Toy Company requires the cooperation of all
team members in administering this policy.

Desks, lockers, and other storage devices may be provided for the convenience of team members but
remain the sole property of U.S. Toy Company. Accordingly, they, as well as any articles found within
them, can be inspected by any agent or representative of U.S. Toy Company at any time, either with or
without prior notice.

U.S. Toy Company likewise wishes to discourage theft or unauthorized possession of the property of
team members, U.S. Toy Company, visitors, and customers. To facilitate enforcement of this policy, U.S.
Toy Company or its representative may inspect not only desks and lockers but also persons entering
and/or leaving the premises and any packages or other belongings. Any team member who wishes to
avoid inspection of any articles or materials should not bring such items onto U.S. Toy
Company'/Constructive Plaything's premises.
Team members should always secure their own belongings within the workplace and in their vehicles.
U.S. Toy Company is not responsible for personal loss. Lockers and locking cabinets may be provided in
some work locations. Team members should utilize those resources. Any suspicious behavior or
occurrences should be immediately reported to a supervisor, manager or Human Resources.

Store team members should never work alone and should never enter, lock up or arm the building alone.

50