HSE Incentive Program

COMPANY NAME

HEALTH, SAFETY , AND ENVIRONMENT INCENTIVE PROGRAM

Document No.

Approvals:

Preparer Date

ApproverDate

REVISION HISTORY

REV. NOISSUE DATEPREPARED BY AND DATEREVIEWED BY AND DATEAPPROVED BY AND DATEDESCRIPTION OF REVISION

Incentive Program

TABLE OF CONTENTS

1.0INTRODUCTION3PURPOSE3OBJECTIVES3DEFINITIONS AND ACRONYMS32.0STATISTICS4PROACTIVE4REACTIVE43.0GUIDELINES5QUARTERS5TEAM5Scoring5Target Goals5Earned Points6Weight7INDIVIDUAL8Scoring8Target Goals9Earned Points94.0AWARDS10TEAM AWARDS10INDIVIDUAL AWARDS10SPOT AWARDS11

Construction Management - Phase 31The Company Doc

LIST OF APPENDICESAPPENDIX A PROJECT TEAM POINTS REGISTER APPENDIX B PROJECT INDIVIDUAL POINTS REGISTER APPENDIX C PROJECT INDIVIDUAL AWARDS

Construction Management - Phase 32The Company Doc

1.0 INTRODUCTION1.1 PURPOSE

The purpose of this Program is to provide incentive for employees of the Project to establish and maintain a high degree of consciousness and participation in the Company Site Specific Safety Health, and Environment Plan (SSSHEAP) and HSE Principles. This Program will provide a systematic approach for recognizing and rewarding positive behavior that relates to Health, Safety and Environment (HSE).

1.2 OBJECTIVES

The objective of this program is to facilitate the Zero Incident Goal from start to finish of the Project; and as a result, all employees will go home safely at the end of each work day.

The Company has developed this Program to create a heightened sense of HSE awareness among construction miners as individuals and also as team members at all levels. As a result of this program, Project Construction Miners will plan and implement their work consistent with this goal.

This program will also promote Safe Production, which is the principle that each construction miner will perform every task, the safe and right way, every time.

1.3 DEFINITIONS AND ACRONYMS

HSE Health, Safety and Environmental MSHA Mine Safety and Health Administration SSHSEAP Site Specific Safety Health and Environmental Plan HSE Statistics A process or indicator of HSE behavior and / or performance.

Proactive Measurement A process that aims to prevent the occurrences of HSE related incidents Reactive Measurement A statistical indicator that represents HSE performance

2.1 STATISTICSCompany Name will aim to achieve the Purpose and Objectives of this program by monitoring Project HSE Statistics:

Objective Leading Indicators (Proactive) Numbers Frequencies

Subjective Leading Indicators (Proactive) Employee Values Employee Attitudes o Employee Opinions o Employee Ideas

Objective Lagging Indicators (Reactive) Incident Rates2.1 PROACTIVE

This Program principally promotes Proactive Project HSE Statistics by encouraging the achievement by establishing Target Goals and rewarding Project Members for efforts that go beyond what is required. Examples of Proactive Project HSE Statistics are listed below.

Safe Work Observations Hazard Identifications (Unsafe conditions/Unsafe Acts) Equipment Inspections Workplace Inspections Near Miss Reporting

2.2 REACTIVE

This Program will also recognize the lagging indicators or incident rates of the Project. These Reactive Statistics are considered lagging because they are an observed result or measurement of a negative event, of the Project. If Proactive Statistics are achieved and maintained, reactive Statistics should drop automatically.

Positive Reactive Project HSE Statistics will be realized through Project-wide participation in the Proactive Project HSE Statistics listed in section 2.1.

14The Company Doc

3.0 GUIDELINESThis HSE Promotional Program will be executed on a Quarterly basis. It will track and record HSE performance of the Project Team and Individuals separately. Points will be earned based on HSE behavior and performance that can be redeemed for awards at the end of each Quarter.

3.1 QUARTERS

The HSE Promotional Program Quarters are defined below.

QuarterBegin DateEnd Date

11/13/31

24/16/30

37/19/30

410/112/31

3.2 TEAM

The Project Teams HSE performance will be scored on the following HSE Statistics.

Completion of Workplace Examinations Completion of Internal Regulatory Compliance Audits Zero First Aid Cases Zero Reportable Spills Zero Reportable Damages Zero MSHA Citations (Non S&S) Zero MSHA Citations (S&S) Zero MSHA Reportable Incident

3.2.1 Scoring

The Project Team scoring system is dynamic in that points are earned as well as reduced depending on what measurement is being considered.

3.2.2 Target Goals

Team Target Goals have been established by the The Company. Measurements that have a Target Goal greater than zero (0) for the Quarter will result in earning or adding of points for the team for each occurrence. Each of the HSE measurements with an established quota greater than zero (0) begins the Quarter with zero (0) points. As the Project Team completes the HSE processes, then points are accumulated.

The daily completion of Workplace Examinations, and weekly performance and compliance of Internal Regulatory Audits all have an established Target Goals.

The Target Goal for the Completion of Completion of Workplace Inspections will be equal to the number of Work Days for the given Quarter.

The Target Goal for the Completion of Internal Regulatory Compliance Audits will be equal to the number of Work Weeks in the Quarter.

Project Team HSE MeasurementTarget Goal Established [per Quarter]

Completion of Workplace Inspections61

Completion of Internal Regulatory Audits12

3.2.3 Earned Points

To determine the Earned Points for each Measurement, the quantity Attained will be divided by the Team Target Goal to derive a percentage. This percentage will then be multiplied by the Maximum Points allotted for each measurement to determine the Earned Points. A sample of this calculation can be seen below:

Team Earned Points

Project HSE MeasurementTeam Target Goal [Quarterly]Attained [Qty]Goal Attained [%]Maximum PointsEarned PointsStatic Weight [%]Dynamic Weight [%]

Workplace Exams Completed615692%4.003.674.004.50

Goal Attained: (61/56) = 0.92 = 92%

Earned Points: 4.00 x 0.92 = 3.67

3.2.4 Weight

The Static and Dynamic Weight calculated for each measurement analyzes of how much each measurement can contribute or has contributed to the maximum positive value of Earned Points or the absolute value of Earned Points, respectively.

3.2.4.1 Static Weight

The Static Weight represents the percentage of a specific Measurement in relation to the Maximum Points for all Statistics.

3.2.4.2 Dynamic Weight

The Dynamic Weight represents the percentage of the current Earned Points of the given Measurement with respect to the earned points of all Statistics combined (absolute value). This is dynamic since it will change as points are earned and / or deducted throughout the Quarter.

An occurrence of any of the following Project Team HSE Statistics will result in a reduction of points.

First Aid Cases Reportable Spills (Greater than one (1) Gallon) Reportable Damages (Greater than $1000) MSHA Citations (Non S&S) MSHA Citations (S&S) MSHA Reportable Incidents

For the HSE Statistics, the Team begins each Quarter with 100% of the Maximum Points; however, points are deducted upon each occurrence. This can be seen in the table excerpt below.

Team Awards

Project HSE Measurement

Team GoalAttained [Qty]Goal Attained [Y/N]Maximum PointsEarned PointsStatic Weight [%]Dynamic Weight [%]

First Aid Cases01N5.0005.00%0.00%

Reportable Spills00Y8.008.008.00%8.08%

MSHACitations (Non S&S02N8.00(12.00)8.0012.12%

In this example no points for First Aid Cases were earned because the goal was not met. The total points that could be earned for this measurement are 5.00. The table excerpt does not reveal all the Project Team Statistics, but it can be reasoned that since the Static Weight of First Aid Cases (5.00%) is exactly equal to the Maximum Points of First Aid Cases (5.00), then one-hundred percent (100%) of the Maximum Points for the Project Team is equal to 100.

Statistics that have a target goal of zero (0) occurrences will result in zero (0) points upon a single occurrence; if more than one occurrence is attained, then points will be deducted at a rate of one and half (1.5) times the Maximum Points for that Measurement.

If one of the HSE Statistics occurs more than once, the Dynamic Weight will be affected since the total absolute value of the Earned Points will have changed. The Project Team Points Register located in Appendix A will account for this by summing the absolute value of each Measurements Earned Points and then dividing the absolute value of each Measurements Earned Points by the summation. This is illustrated in the Table above. The Dynamic Weight of MSHA Citations (Non S&S) is larger than the Static Weight because the Quantity Attained is greater than one (1), which begins to reduce points at a rate of one and half (1.5x), and therefore contributes more heavily to the Earned Points albeit in a negative way.

3.3 INDIVIDUAL

Each Project Individual will be scored based on the following HSE Statistics. Safe Work Observation Hazard Identification (Unsafe Acts/Unsafe Conditions) Safety Meeting Participation Audit Participation Near Miss Reporting Service on Project HSE Committee

3.3.1 Scoring

The Project Individual scoring system is dynamic in that points are earned as well as reduced depending on what measurement is being considered.

There is only one Project Individual HSE Measurement that has an established Minimum or Quota, which is the completion of Safe Work Observations.

Individual HSE MeasurementEstablished Quota [per Quarter]

Safe Work Observations12

Individual employees will begin to accumulate Earned Points for Safe Work Observations completed only after they have completed 12 for the Quarter. If the Individual does not complete the minimum amount of Safe Work Observations there will be a deduction of points equal to that difference between the Minimum Quantity and the Attained Quantity times the earnable points per completion for each Safe Work Observations.

3.3.2 Target Goals

Unlike the Project Team, Project Individual HSE Statistics do not have established Target Goals; however, for each Project Individual HSE Measurement attained the Individual will earn points.

3.3.3 Earned Points

The Company has assigned a point value for each Project Individual HSE Measurement. To determine the Earned Points for each Measurement, the quantity Attained will be multiplied by the established points per Measurement occurrence. The table below shows the HSE values.

Project Individual Measurement Values

Project HSE MeasurementPoints Per OccurrenceMinimum

Safety Meeting Participation100

Safe Work Observations Completed2512

Hazard IDs Recognized250

Near Miss Report250

Audit Participation500

Service on Project HSE Committee2500

The Company will monitor and track Project Individuals Earned Points throughout each Quarter. The Project Individual Point Register located in Appendix B illustrates how this will be performed.

4.0 AWARDSThe Company will utilize a point scoring system (explained in Section 3.2.1 and Section 3.3.1) to facilitate the distribution of awards at the end of each Quarter. Points will be recognized for the Project Team and also for each individual Project Construction Miners, and each has its own Awards. A list of the HSE awards can be found in Appendix C Project Individual Awards.

Awards have been chosen by The Company. The awards range from miscellaneous gadgets to quality apparel. Each award will sport the The Company name and logo.

4.1 TEAM AWARDS

LevelDescriptionPoints Required

GrandDenver Sporting Event100

FirstCatered Lunch92

SecondProject T-Shirts85

ThirdBreakfast Burritos80

4.2 INDIVIDUAL AWARDS

Each Individual Award receives a classification based on the value of the item. The table below illustrates this Programs classification system for Individual Awards.

ClassValue [$]Points Required

E0.00 9.9950

D10.00 19.99150

C20.00 29.99250

B30.00 39.99350

A40.00- 49.99450

A+50.00 +550

4.3 SPOT AWARDS

The Company will also award employees instantaneously or On the Spot in some cases. The HSE awards will be reserved for employees demonstrate any of the following:

Active Participation in Safety Meetings Safe Work Observation Safety Leadership

The Class of Award to be given will be at the discretion of The Company and will be directly related to the magnitude of the behavior observed.

APPENDIX A PROJECT TEAM POINTS REGISTER

Project Team Points Register

Project HSE MeasurementTeam Target Goal [Quarterly]Attained [Qty]Goal Attained [% or Y/N]Maximum PointsEarned PointsStatic Weight [%]Dynamic Weight [%]

HSE Audit Participation13-0%4.004.004.00%0.00%

Workplace Inspections61-0%6.006.006.00%0.00%

Internal Regulatory Compliance Audits Completed and Compliant3-0%12.0012.0012.00%0.00%

First Aid Cases--Y5.005.005.00%6.41%

Reportable Spills--Y8.008.008.00%10.26%

MSHA Citations (Non S&S)--Y8.008.008.00%10.26%

Reportable Damages--Y10.0010.0010.00%12.82%

MSHA Citations (S&S)--Y17.0017.0017.00%21.79%

MSHA ReportableIncidents--Y30.0030.0030.00%38.46%

100.00100.00100.00%100.00%

APPENDIX B PROJECT INDIVIDUAL POINTS REGISTER

Individual Points Register

No.CompanyEmployeeProject HSE MeasurementAttained [Qty]Points/MeasurementPoints

1

DOE, JOHNAudit Participation-25(300)

(300)

Hazard IDs Recognized-25-

Safety Meeting Participation-10-

Safe Work Observation-50-

Near Miss Report-25-

Service on Project HSE CommitteeN250-

2

DOE, JANEAudit Participation Observations Completed-25(300)

(300)

Hazard IDs Recognized-25-

Safety Meeting Participation-10-

Safe Work Observation-50-

Near Miss Report-25-

Service on Project HSE CommitteeN250-

APPENDIX C PROJECT INDIVIDUAL AWARDS

CategoryItemAvg. Cost [ea.]Min. OrderPlan OrderSubtotalClass

E

E

E

E

E

E

E

E

D

D

C

C

C

B

B

B

B

B

B

B

A

A