hhgregg

associate handbook

This handbook supersedes all prior policies, procedures and practices - verbal or written. hhgregg operates in multiple jurisdictions. In the event of a conflict between the provisions of this handbook and state or local law, the later supersedes the relevant provisions of this handbook. It is hhgregg’s policy and practice to comply with the law of every jurisdiction in which it operates.

May 2010

TABLE OF CONTENTS FOREWORD I.

1

INTRODUCTION

A. B.

Welcome to hhgregg Purpose Of This Handbook

2 2

II. WORKPLACE CONDUCT

A. B. C. D. E. F.

Code of Conduct/Whistleblower Workplace Violence Weapons Policy Duty To Report Arrests, Convictions and Guilty Pleas Professional Conduct & Anti-Harassment Policy Open Door Policy

III. GENERAL EMPLOYMENT AND WORKPLACE POLICIES

A. B. C. D. E. F. G. H. I. J. K. L. M. N. O.

Page

Equal Employment Opportunity Drug Free Policy Smoke Free Background Checks Fraternization and Personal Relationships Employment Classification Performance Management Job Selection Dress Code Accident and Safety Loss Prevention Electronic Communication System Policy Cellular Phone Use Personal Mail Visitors

3 11 11 12 12 16

16 16 18 18 18 19 20 21 21 22 22 23 24 24 24

IV. PAYROLL AND ADMINISTRATIVE POLICIES

A. B. C. D. E. F.

Pay Periods/Payday FLSA Safe Harbor Statement Time and Attendance Unscheduled Closings Changes In Employment Information Driver Responsibilities

25 25 26 28 29 29

i

TABLE OF CONTENTS (continued)

G.

H.

I.

V.

Page

1. Guidelines For Use Of Personal Vehicles 2. Company Vehicles 3. Driver’s License Associate Referral Bonus Bulletin Boards News Media, Contributions & Printed/Personalized Materials

BENEFITS AND SERVICES

A. Associate Purchase Program

B. Associate Service Award

C. Statutory Benefits

1. Worker’s Compensation Insurance

2. Unemployment Compensation Insurance

3. Social Security

D. Benefit Programs

Benefits Summary

E. Vacation Matrix

F. Holidays

G. Leaves of Absence

1. Bereavement Leave

2. Military Leave

3. Jury Duty

4. Medical Leave Of Absence

5. Family and Medical Leave (FMLA)

VI. ASSOCIATE CONDUCT

29 30 30 30 31 31

32 33 33 33 33 33 33 34 35 37 38 38 38 38 39 39

Discipline/Termination/Work Rules

45

Acknowledgement of Receipt of the Code of Conduct

49

Acknowledgement of Receipt of Equal Employment Opportunity and Professional Conduct & Anti-Harassment Policy 50

Acknowledgement of Receipt of Associate Handbook

Note: For simplicity the Company has used masculine pronouns in these materials.

Any such reference is meant to apply equally to males and females.

ii

52v

FORWARD The success of any business depends upon the effective cooperation of all the people in the organization.

Through hard work and a cooperative attitude, you contribute to the Company’s growth and development and to your own progress. It will always be out desire to make hhgregg “a great place to work.” In furthering this objective, we strive to treat you as an individual, and each member of the leadership team is charged with the responsibility of developing and maintaining a sincere interest in your career. With any business, sales are an absolute necessity for maintaining jobs and building for the future. We look at sales and exceptional service as a “must.”

Ho do we continue to generate sales to create future opportunities for all associates? With teamwork. Together we must meet the challenges we face on a daily basis. The most crucial component of this business is you. Our entire work force functions as a single integrated unit. One department is no more important than another. We believe that we do not need an outside group between our associates and the Company. By continuing to deal directly with each other, we will have the freedom to maintain, an where necessary improve our relationship with each other, The effectiveness of our Company is determined by the success of each person in each work assignment. It is this integration of each unit working together that makes the Company operate effectively and efficiently in order to serve and satisfy the public.

You represent hhgregg at all times, and it is up to each of you to put your best foot forward. Our Company exists because of your joint efforts. Do not underestimate your contribution. A great many people outside the business who invest their time, money and faith in us are part of that equation. Our customers will determine whether and how fast we grow, how many people we employ, and the profit we make. To retain these customers and attract new ones, we want to ensure continued success by always giving our customers the best possible value, quality, and service. Working together to satisfy our customers increases the value of our most significant asset, our good reputation.

We expect all associates to follow our established policies, procedures, and practices and to act in a professional manner at all times. hhgregg also expects associates to perform their assigned duties in an efficient, effective, and competent manner. Our leadership team should always value our associates and work to provide growth opportunities. Together we better serve our customers and ensure our success.

Dennis May Chairman & CEO hhgregg

I. INTRODUCTION A. Welcome to hhgregg!

Starting a new job is exciting, but at times can be overwhelming. This associate handbook will help you get acquainted and answer many of your initial questions.

We cannot overstate the importance of your contribution as an associate of hhgregg. Our goal is to provide the finest quality products and customer service and to do this more efficiently and economically than our competitors. If we satisfy our customers’ needs, they will continue to do business with us and will recommend us to others.

You are an important part of this process; for your work directly influences our reputation.

This associate handbook explains our personnel policies and benefits, and your specific opportunities and responsibilities at hhgregg. In an effort to be responsive to the needs of an evolving organization, changes or additions to this handbook will be made from time to time. We will keep you informed when these changes are made.

We are glad you have joined us, and we hope you will find your work challenging and rewarding.

B.

Purpose Of The Handbook

hhgregg’s personnel policies reflect its belief that its associates are its most valuable asset. This handbook will (1) answer some of the questions associates have, (2) provide information hhgregg believes associates should know about their employment, and (3) inform associates of some of the rules, regulations and policies related to their employment.

The matters discussed in this handbook are of great importance, but are not, and are not intended to be, a complete list of all of hhgregg’s policies and procedures. hhgregg reserves the right to modify its policies and procedures from time to time. Every associate is expected to comply with each of the rules and policies discussed in this handbook as well as any others adopted by hhgregg exercising its right to manage its business. If you have questions about any the policies and procedures, please direct them first to your direct supervisor and then to the Human Resources Department. You should understand that a violation of any of hhgregg’s policies, procedures or practices may result in discipline up to and including termination.

2

II. WORKPLACE CONDUCT A. Code of Conduct and Whistleblower Policy

Code of Business Conduct and Ethics for Associates, Executive Officers and Directors Introduction We strive to apply high ethical, moral and legal principles in every aspect of our business conduct. This Code of Business Conduct and Ethics (the Code) is a guide for each of our associates, executive officers and directors to follow in meeting these principles. We will make this Code available on our website at www.hhgregg.com and shall disclose such availability in our Annual Report on Form 10-K and in our Annual Proxy Statement.

This Code describes certain ethical principles that we have established for the conduct of our business, and outlines certain key legal requirements of which you must be generally aware and with which you must comply. While this Code does not cover every issue that may arise, it sets out basic principles to guide you in the course of performing your duties and responsibilities to hhgregg.

This Code is designed to deter wrongdoing and promote the following:

•

h onest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications we make;

• compliance with applicable governmental laws, rules and regulations;

• prompt internal reporting to an appropriate person or persons identified herein of violations of this Code; and

• accountability for adherence to this Code.

If you or another associate, executive officer or director are concerned about a possible ethical or illegal situation or any violation of this Code or are not sure whether specific conduct meets applicable hhgregg standards, you should discuss the situation with an immediate supervisor or contact our chief executive officer or chief financial officer. If you are an executive officer or member of hhgregg’s board of directors, you should discuss the situation with the board of directors or a committee of the board of directors. Anyone who violates the standards contained in this Code will be subject to disciplinary action, which may include termination. We will treat as confidential, to the extent possible, all information we receive from you with respect to a possible ethical or illegal situation and will not take any retributive or retaliatory action by reason of such disclosure against you if you disclose this information in good faith.

1. Conflicts of Interest A “conflict of interest” exists when your private interest interferes in any way or appears to interfere with our interests. A conflict of interest can arise when you act in a matter, or have interests, that may make it difficult for you to objectively and effectively perform your work for us. Conflicts of interest also can 3

arise when you, or members of your family, receive improper personal benefits because of your position at hhgregg.

Unless approved by the board of directors or a committee of the board of directors, neither you, nor any member of your immediate family, can acquire a financial interest in, or accept employment with, any entity doing business with hhgregg if the interest or employment could conflict with your duties to hhgregg and the performance of such duties. It is usually a conflict of interest for you to work simultaneously, even on a part-time or temporary basis, for a competitor, customer or supplier of hhgregg.

You cannot work for a competitor as an associate, consultant, contractor or board member unless approved by the board of directors or a committee of the board of directors.

In addition, you and your immediate family members cannot accept material gifts or favors that could create the appearance that your business judgment could be affected by the receipt of such gifts or favors. You and members of your immediate family can accept gifts of nominal value from existing sources, prospective sources and persons, firms or companies with whom hhgregg does or might do business. Customary meals, refreshments, vendor retreats or events, entertainment and other business courtesies (sometimes including spouses) are permitted as long as the cost is reasonable, the activity is clearly related to and necessary for hhgregg’s relationship, and the vendor is in attendance.

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. You cannot offer gifts or favors to any associate of a competitor, supplier or customer of hhgregg, or a member of such associate’s immediate family, if the gifts or favors might place the recipient under any obligation to you or to hhgregg.

Conflicts of interest are prohibited as a matter of hhgregg policy. Conflicts of interest may not always be apparent so if you have a question regarding whether a particular situation is a conflict of interest, you should consult with your immediate supervisor or contact hhgregg’s chief financial officer. If you are an executive officer or member of the board of directors, you should consult with the board of directors or a committee of the board of directors. You must bring any conflict of interest or potential conflict of interest to the attention of your immediate supervisor or hhgregg’s chief financial officer, or follow the procedures described in Section 14 below.

2. Corporate Opportunities You cannot personally take for yourself business opportunities discovered using hhgregg property, information or position. You cannot use hhgregg property, information or position for personal gain. It is your duty and responsibility to advance hhgregg’s legitimate interests when the opportunity to do so arises.

At the date of the adoption of this Code, hhgregg has members of its board of directors who are partners 4

or associates of private equity funds. This Code acknowledges the fact that such private equity funds and related investment entities routinely invest in a number of retail companies. As a result, notwithstanding anything in this Code to the contrary, if a member of hhgregg’s board of directors who is also a partner or associate of an entity that is in the business of investing and reinvesting in other entities, or an associate of an entity that manages such an entity, referred to throughout this Code as a Fund, acquires knowledge of a potential transaction or other matter in such individual’s capacity as a partner, manager or associate of the Fund (and other than directly in connection with such individual’s service as a member of hhgregg’s board of directors) and that may be an opportunity of interest for both hhgregg and such Fund, then hhgregg has no expectancy that such director or Fund offer an opportunity to participate in that corporate opportunity to hhgregg. In addition, provided that the director complies with the disclosure procedure outlined in this Code, acts in good faith, and otherwise complies with all applicable legal and stock exchange requirements, any investment or other involvement by the director or Fund in any corporate opportunity shall not be considered a violation of this Code.

3. Confidentiality You must maintain the confidentiality of all confidential and non-public information entrusted to you by hhgregg and our customers and suppliers, except when disclosure is authorized by an executive officer of hhgregg or required by applicable laws or regulations. Confidential information includes all information that, if disclosed, might be of use to our competitors or harmful to us or our customers or suppliers. It also includes information that hhgregg customers and suppliers have entrusted to us. For example, confidential information includes customer lists, financial documents, pricing, manufacturer and vendor information, corporate development materials, financial results or trends, the cost of goods, personnel files, manuals and procedures, proprietary information (as discussed below), computer software, design documents, videos and internal reports and memoranda. Information that we have made public, such as information presented in press releases, advertisements or documents filed with governmental regulatory authorities, is not confidential information. The obligation to preserve confidential information extends beyond the term of employment with, or service to, hhgregg.

4. Fair Dealing We seek to outperform our competition fairly and honestly through superior performance and not through unethical or illegal business practices. You must endeavor to deal fairly with your colleagues and customers, suppliers and competitors of hhgregg. You cannot steal proprietary information, possess trade secret information obtained without the owner’s consent or induce such disclosures by past or present associates of other companies. You may not take unfair advantage of anyone through manipulation, concealment, abuse of confidential information, misrepresentation of material facts or any other unfairdealing practice. Your knowing or deliberate falsification of any documents or data may be the basis for immediate termination and may subject you to civil and/or criminal penalties.

5

5. Protection and Proper Use of Company Assets You must endeavor to protect our assets and property and ensure their efficient use. Theft, carelessness and waste have a direct impact on our profitability. You must report any suspected incident of fraud or theft immediately for investigation to your immediate supervisor or our chief financial officer. If you are an executive officer or member of the board of directors you must report such fraud or theft to the board of directors or a committee of the board of directors. You must use all assets and property of hhgregg for legitimate business purposes only.

Your obligation to protect our assets includes our proprietary information. Proprietary information includes business, marketing and service plans, databases, customer information, records, salary information, intellectual property and any unpublished financial data and reports. Unauthorized use or distribution of this information violates our policy and may subject you to civil and/or criminal penalties.

6. Compliance with Laws, Rules and Regulations You must respect and obey the laws, rules and regulations of the cities, states and countries in which we operate. You must contact our chief executive officer or chief financial officer with any questions as to the applicability of any law, rule or regulation or the appropriate manner of compliance therewith.

7. Insider Trading If you have access to confidential information you cannot use or share such information for stock trading purposes or for any other purpose except the proper conduct of our business. We will deal firmly with all instances of insider trading. If you have any questions regarding non-public information and the use of such information you should contact our chief financial officer.

8. Discrimination and Harassment We require strict adherence to our policies and applicable laws regarding equal employment opportunities and discrimination in the workplace. We will not tolerate any illegal discrimination or harassment of any kind. Relationships with colleagues and business relationships with competitors, suppliers and customers always must be conducted free of any discrimination, including based on race, color, creed, religion, age, sex, sexual preference, national origin, marital status, veteran status, handicap or disability. Examples of illegal discrimination or harassment include derogatory comments based on any of the preceding characteristics and unwelcome sexual advances.

9. Health and Safety We will not tolerate violence or threatening behavior in the workplace. You are required to report to work in condition to perform your duties, free from the influence of illegal drugs or alcohol. We will not tolerate the use of illegal drugs in the workplace or on any of our property.

6

10. Record-Keeping

We require honest and accurate recording and reporting of information in order to make responsible business decisions. You must document and record accurately all business expense accounts you use.

If you are unsure whether a certain expense is legitimate, you should ask your immediate supervisor or our chief financial officer. If you are an executive officer or member of the board of directors you should confer with the board of directors or a committee of the board of directors. Rules and guidelines regarding business expenses are available from our accounting department.

All of our books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect our transactions and must conform both to applicable legal requirements and to our system of internal controls. Unrecorded or “off the books� funds or assets cannot be maintained unless permitted by applicable laws or regulations.

You must avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations of people and companies in business records and communications. This prohibition applies equally to e-mail, internal memos and formal reports.

11. Payments to Government Personnel or Candidates for Office

You must comply with the Foreign Corrupt Practices Act, which prohibits giving anything of value, directly or indirectly, to officials of foreign governments or foreign political parties or candidates to obtain or retain business and prohibits making payments to government officials of any country. You may not give to, or receive from, any government official kickbacks, bribes, rebates or other illegal consideration. When dealing with government agencies you must be aware of, and comply with, any agency rules limiting or prohibiting gifts or other favors.

We cannot contribute, directly or indirectly, to any political campaign or party. You cannot use expense accounts to pay for any personal political contributions or seek any other form of reimbursement from us for such contributions. Of course, you are free to engage in political activity with your own resources on your own time.

12. Waivers of the Code of Business Conduct and Ethics Any waiver of this Code for executive officers or directors requires the approval of the board of directors and must be disclosed promptly as required by applicable law, rules or regulations.

7

13. Reporting any Illegal or Unethical Behavior You are encouraged to talk to immediate supervisors or our chief financial officer about observed illegal or unethical behavior when unsure about the best course of action to take in a particular situation. If you are an executive officer or member of the board of directors you should discuss such behavior with the board of directors or a committee of the board of directors. In addition, you must report violations of laws, rules, regulations or this Code to immediate supervisors or our chief financial officer. If you are an executive officer or member of the board of directors you must report such matters to the board of directors or a committee of the board of directors. We prohibit retaliation for reports of ethical misconduct made by you in good faith. If a situation requires that your identity not be disclosed, we will protect your anonymity to the extent legally possible. We will not permit retaliation of any kind against you for good faith reports of ethical violations.

14. Compliance Procedures This Code broadly describes the ethical standards by which we conduct our business. If you are uncertain as to the applicability of any of these standards to a particular situation or the propriety of any contemplated course of action, we encourage you to discuss the potential situation with your immediate supervisor or our chief financial officer. If you are an executive officer or member of the board of directors you should discuss the potential situation with the board of directors or a committee of the board of directors. In any case where you feel that it is not appropriate to discuss an issue with an immediate supervisor, or where you do not feel comfortable approaching an immediate supervisor with a question, you are encouraged to discuss the question with our chief financial officer or report the matter directly to the board of directors or a committee of the board of directors through our Whistleblower hotline provided on our website.

15. Amendments This Code may be amended by the board of directors. We must report promptly any amendments pertaining to executive officers or senior financial officers as required by applicable laws, rules or regulations.

8

Whistleblower Policy

Purpose.

It is our policy to comply with all applicable legal and regulatory requirements relating to accounting, internal accounting controls and auditing matters and to require our associates, officers, directors and others acting on our behalf, to do likewise. Each of these individuals has the responsibility to assist us in meeting these legal and regulatory requirements.

Our internal controls and operating procedures are intended to prevent, deter and remedy any violation of the applicable laws and regulations that relate to accounting, internal accounting controls and auditing matters. Even the best systems of control, however, cannot provide absolute safeguards against such violations. We have a responsibility to investigate and report to appropriate governmental authorities, as required, any violations of applicable legal and regulatory requirements relating to accounting, internal accounting controls and auditing matters and the actions we take to remedy such violations. This policy governs the process through which you, either directly or anonymously, can notify hhgregg’s Audit Committee of possible accounting and auditing violations or concerns. In addition, this policy establishes a mechanism for responding to, and keeping records of, these allegations.

Reporting Alleged Accounting, Internal Accounting Controls and Auditing Violations or Concerns.

If you believe that hhgregg or any associate, officer, director, or other individuals acting on our behalf has, or might have, violated any accounting rules, internal accounting controls procedures or auditing rules, or if you receive from any other person a complaint or allegation of any such violation or concern, then you should report such to the Director of Internal Audit or the Chairman of the Audit Committee. These reports are referred to throughout this policy as “Statements.�

Statements must be sufficiently detailed and inclusive to ensure a clear understanding by the recipients of the issues raised. Statements (except for Statements received from persons other than an associate, officer, director or other individual acting on our behalf) may be submitted anonymously. Statements should be candid and set forth all of the information you know regarding the allegation or concern.

We may not commence an investigation if a Statement contains only unspecified wrongdoing or broad allegations without appropriate informational support. If you were to discuss a Statement or further communicate with the Director of Internal Audit or the Audit Committee regarding a Statement you should leave your personal contact information for the Audit Committee or such designated third party.

9

Statements may be made in the following manner: 1. Telephone: You may submit a Statement in a voicemail by calling 866-713-4435. All voicemail messages will be electronically altered/disguised to ensure the confidentiality of your identity.

2. Mail: You may submit a Statement in writing by mailing the Statement to the following address.

The Statement should be marked as “confidential and private�:

hhgregg, Inc.

c/o Director of Internal Audit

4151 East 96th Street

Indianapolis, Indiana 46240

3. E-mail: You may email a message to the Audit Committee, please use the following address:

gregg@openboard.info

4. Anonymous Web-based Form: You may complete an on-line web-based form by accessing the following website: https://www.openboard.info/gregg/index.cfm

Investigation of Alleged Accounting, Internal Accounting Controls and Auditing Violations or Concerns.

Upon receipt of your Statement or a Statement from any other person, the Director of Internal Audit or the Chairman of the Audit Committee will make a determination, in his or her reasonable judgment, whether such Statement is material to the accounting, auditing and internal controls of hhgregg. If the Director of Internal Audit or the Chairman of the Audit Committee determines that a Statement, in his or her reasonable judgment, raises plausible concerns, the Chairman immediately will notify the chief financial officer or the chief executive officer. If such a statement involves the chief financial officer or the chief executive officer, the Chairman of the Audit Committee will be immediately notified. The chief financial officer generally will have the responsibility for investigating any Statement submitted. In the event any Statement is related to a possible violation or concern relating to the internal accounting controls of hhgregg, the chief executive officer will have the responsibility for investigating the Statement.

In addition, other parties may become involved in investigations based on their oversight responsibility or expertise. The chief financial officer or the chief executive officer will prepare and distribute a report to the Audit Committee for consideration at its next meeting, stating the nature of any Statement submitted to him or her during the period since the most recent meeting of the Audit Committee, whether or not any Statement was determined to raise plausible concerns and the status of any investigation relating thereto.

The Audit Committee will ensure coordination of each investigation and will have overall responsibility for implementation of this policy. The Audit Committee will have the authority to retain such independent counsel and other advisors in any investigation as it deems necessary or advisable to conduct the investigation in accordance with its charter.

10

No Retaliation for Submitting Statements of Alleged Violations or Concerns. hhgregg will not retaliate, and will not knowingly permit any associate officer, director, or other individual acting on our behalf to retaliate, against (i) any associate, officer, director, or other individual acting on our behalf who submits a Statement or (ii) any person that participates in the investigation of a Statement, pursuant to this policy even if after investigation we determine that no violation has occurred.

Corrective Action.

It is our responsibility, and your responsibility, with the oversight of the Audit Committee, to prevent or correct noncompliance of the legal and regulatory requirements relating to accounting, internal accounting controls and auditing matters. This is our legal obligation. A violation can subject us and you to legal liability, regulatory investigation and adverse publicity, which can damage our reputation and business.

Retention of Statements by Associates.

Any Statement you submit (except for a Statement you submitted that merely relates the receipt and details of a third party complaint) will remain confidential to the fullest extent possible, consistent with the need to conduct an adequate review of such Statement, except as required by law or upon the advice of our legal counsel. In addition, we will retain all written Statements, along with the results of any investigations relating thereto, for a minimum of five years.

Violation of this Policy.

You should follow the procedures outlined herein before you report possible violations or concerns to any news medium, government agency or similar body. We consider it important that we have the opportunity to investigate and remedy any possible violations or concerns you report and accordingly we are relying on each of you to ensure that we have an opportunity to undertake such an investigation.

B. Workplace Violence

hhgregg will not tolerate violence or threatening behavior in the workplace. All associates are responsible for notifying a member of management of any possible violations of this policy or other threats to work place security that they have experienced, witnessed, or otherwise become aware of. Possible violations include threatening, intimidating, malicious, or violent behavior that is or was job-related or has been or might be carried out on Company property.

C. Weapons Policy

It is the policy of hhgregg that associates are prohibited from using or possessing firearms or weapons of any kind, concealed or otherwise, at any time while on hhgregg premises (including parking lots) or while engaged in conducting business on behalf of hhgregg. This includes using any tool, supply, product or other resource in a manner than implies that it is a weapon.

11

Below are the exceptions:

• Florida hhgregg respects each individual’s right to bear arms but does not believe firearms are appropriate in the workplace, on hhgregg property or customer’s property. Associates are prohibited from bringing a firearm into hhgregg distribution centers or retail stores; onto its customers’ property; or into an hhgregg vehicle and any associate who engages in such conduct will be terminated.

Associates without concealed weapons permits are also prohibited from bringing a firearm onto hhgregg parking lots, and any associate who engages in such conduct will be terminated.

• Georgia hhgregg respects each individual’s right to bear arms but does not believe firearms are appropriate in the workplace, on hhgregg property or customer’s property. Associates are prohibited from bringing an unlicensed firearm into hhgregg distribution centers, retail stores, or onto parking lots; onto its customers’ property; or into an hhgregg vehicle and any associate who engages in such conduct will be terminated. Also, any associate bringing a licensed firearm in an hhgregg distribution center, retail store, or on a customers’ property, carrying a firearm in an hhgregg vehicle, or displaying a licensed firearm in his or her vehicle in a Company parking lot, will be terminated. In addition, any associate who has a disciplinary action on file is prohibited from possessing or carrying a firearm in Company distribution centers, retail stores, or on parking lots.

•

entucky K hhgregg respects each individual’s right to bear arms but does not believe that firearms are appropriate in the workplace, on hhgregg property or on customers’ property. Except as permitted by law, Associates are prohibited from bringing a firearm, part of a firearm, ammunition, or ammunition component (collectively “firearm”) into hhgregg distribution centers or retail stores, onto its customers’ property, or into an hhgregg vehicle and any Associate who engages in such conduct will be terminated. Associates who are not legally entitled to possess a firearm are also prohibited from bringing a firearm onto hhgregg parking lots.

•

ississippi M hhgregg respects each individual’s right to bear arms but does not believe that firearms are appropriate in the workplace, on hhgregg property or on customers’ property. Associates are prohibited from bringing a firearm into hhgregg distribution centers or retail stores, onto its customers’ property, or into an hhgregg vehicle and any Associate who engages in such conduct will be terminated. Associates are permitted to bring firearms onto hhgregg parking lots in their vehicle only if their vehicle remains locked. While on an hhgregg parking lot, Associates are forbidden from removing firearms from their locked vehicle. Associates who while on an hhgregg parking lot fail to lock their vehicle with a firearm in it, or who remove a firearm from their locked vehicle, will be terminated.

12

D. Duty To Report Arrests, Convictions, And Guilty Pleas

Associates must notify Human Resources in writing within three (3) calendar days of any arrest,

conviction, or entry of a guilty plea for any criminal offense, or immediately upon reporting to work following such arrest, conviction, or plea entry, whichever is earlier. This reporting obligation includes drug or alcohol related offenses but does not apply to minor traffic tickets or citations.

E. Professional Conduct Policy & Anti-Harassment Policy

hhgregg is proud of its professional and congenial work environment, and is committed to ensure that the work environment remains pleasant for all who work here. All associates must treat each other with courtesy, consideration and professionalism. hhgregg is committed to providing a workplace free of inappropriate treatment of any associate because of the associate’s race, sex, religion, age, national origin, disability, or any other category protected under federal, state, or local law. To be unlawful, conduct must be so severe and pervasive that it unreasonably interferes with an associate’s ability to work. hhgregg does not, however, condone or tolerate any inappropriate conduct based on an associate’s race, sex, age, religion, national origin, disability, or any other category protected under federal, state, or local law, and with this policy, hhgregg prohibits not only unlawful harassment, but also other unprofessional and discourteous actions. hhgregg is committed to protecting associates from inappropriate conduct whether from other associates or non-associates such as vendors and customers.

Each associate must exercise his own judgment to avoid engaging in conduct that may be perceived by others as harassment or inappropriate conduct. Harassment or inappropriate conduct may include, among other things:

1. Verbal: Epithets, slurs, stereotyping, or threatening, intimidating, or hostile acts that relate to race, sex, age, religion, national origin, or disability;

2. Visual/Non-Verbal: Written or graphic material that denigrates or shows hostility or aversion toward an individual or group because of race, sex, age, religion, national origin, or disability;

3. Other: making or threatening reprisals as a result of a negative response to harassment.

Specifically included in the policy is a commitment to provide a workplace free of inappropriate conduct of a sexual nature. Such conduct may include, among other things:

1. U nsolicited and unwelcome comments or conduct of a sexual nature or that are demeaning to women or men as a group (for example, offensive or vulgar jokes, name-calling, comments about one’s body or sex life, stereotyping based on a person’s sex, touching, leering, ogling, patting, pinching, indecent exposure, physical gestures, or displaying sexually explicit photographs or objects that might interfere with a reasonable person’s work); 13

2. U nsolicited and unwelcome demands or requests for sexual favors or social or sexual encounters;

3. A n explicit or implicit promise of preferential treatment with regard to a person’s employment in exchange for sexual favors or sexual activity; and

4. T he use of an associate’s or applicant’s submission to or rejection of sexual conduct as the basis for making, influencing, or affecting an employment decision that has an impact upon the terms and conditions of the individual’s employment (for example, hiring, firing, promotion, demotion, compensation, benefits, or working conditions).

Given the nature of this type of conduct and the serious effects such conduct can have on the target of the conduct and the one accused of the conduct, hhgregg treats alleged violations of this policy seriously and, to the extent possible, confidentially. hhgregg expects all individuals to treat alleged violations in the same responsible manner.

I f you believe you or any other associate is being subjected to conduct or comments that violate this policy, you are encouraged to and have a responsibility immediately to report these matters to your direct supervisor. If for any reason you do not feel comfortable reporting your concerns to your direct supervisor, you may report your concerns to the Human Resources Department or an officer of the Company, consistent with our Open Door Policy or call the associate hotline 866-887-3694. Any manager or supervisor who becomes aware of any potential violation of this policy must report the potential violation to the Human Resources Department. Failure to report potential violations may result in appropriate discipline, up to and including termination.

No action will be taken against any associate merely because he or she reports behavior believed to violate this policy. We assure all associates that we will take action to investigate and resolve complaints. hhgregg is firm in its commitment to maintaining an environment free of discrimination and inappropriate conduct. Violations of this policy will not be tolerated and will result in appropriate disciplinary action, up to and including termination.

Please help us maintain a comfortable work environment free from inappropriate and offensive conduct.

Associate Hotline

• Call 1-866-887-3694 and leave a confidential message describing your concern.

• Contact the Associate Relations Department at Company headquarters by phone, email or in writing.

14

F. Open Door Policy & Issue Resolution Procedure

In any Company, there will be honest differences of opinion about working conditions, disciplinary action, rules and other personnel issues. For hhgregg and its associates to succeed, all must be committed to open communication and continually seek opportunities to perform our jobs more efficiently and effectively. An open channel of communication is essential to a good work atmosphere and productivity, customer service, and customer satisfaction. This policy will help associate, managers, and upper management work together to address and resolve work-related issues in a positive and productive manner.

When you have such questions, discuss them with your direct supervisor first. Most questions or problems can be answered by your direct supervisor. However, if the problem has not been solved to your satisfaction, or if you do not feel comfortable speaking with your direct supervisor, contact the next level of management or the Human Resources Department.

While the Company relies on this chain of command through which it conducts its business and associate programs in as efficient a manner as possible, associates should be aware that they may meet with senior management or an officer at any time to discuss concerns, questions or suggestions.

15

II. GENERAL INFORMATION III. GENERAL EMPLOYMENT AND WORKPLACE POLICIES A. Equal Employment Opportunity

premises or while using hhgregg property.

Any associate who violates this Policy will be subject to disciplinary action, up to and including immediate termination of employment.

As a result hhgregg has established this policy as part of its ongoing efforts to maintain a drug- and alcohol-free workplace.

The types of drug and alcohol screen tests the Company will institute are: • pre-employment • reasonable cause • return to duty • random • post accident • promotions

• Pre-Employment / Transfer of Position – Upon receipt of written authorization, hhgregg will conduct pre employment drug and alcohol urine tests.

The pre-employment urine drug test must indicate that the urine is free of illegal drugs and alcohol. Employment is contingent upon the receipt of a negative result. Any associate who is transferred into a safety sensitive position will be required to submit to a drug screen test before being placed in that position.

It is hhgregg’s policy that, as required by law, equal employment opportunities be available to all persons without regard to race, sex, age, color, religion, national origin, disability, citizenship status, or any other category protected under federal, state, or local law. This policy applies to associates and applicants and to all phases of employment including hiring, promotion, demotion, treatment during employment, rates of pay or other forms of compensation, and termination of employment. hhgregg will take appropriate steps to provide reasonable accommodations upon request to qualified individuals with disabilities so long as doing so does not cause an undue hardship on hhgregg.

B.

Drug-Free/AlcoholFree Workplace

This applies to all associates.

hhgregg recognizes that the use and abuse of drugs and alcohol can seriously impair an associate’s ability to perform his or her duties safely and efficiently. Drug and alcohol use and abuse not only jeopardize co-workers’ and the public’s safety, they undermine the public’s confidence in hhgregg.

The company prohibits all associates from possessing, using, or being under the influence of illegal drugs or alcoholic beverages while on duty, on hhgregg

16

• Post Accident Testing - Associates involved in work related accidents where there are injuries requiring any medical treatment or significant property damage (of at least $500) may be tested for drugs and alcohol. This policy includes associates driving Company vehicles, operating Company equipment, or on Company business.

II. GENERAL INFORMATION T he testing shall be conducted as soon as possible after the accident, taking into consideration the initial need to attend to the associate’s health and safety. Any associate who fails or refuses to submit to post-accident testing on a timely basis will be treated as having violated the policy.

systematic basis to avoid discrimination. hhgregg will pay for all negative drug and alcohol tests.

Associates may not return to work until the test results are known. If the test results are negative, they will be paid for their regular scheduled days. If the test results are positive, they will not be paid for their time off.

Any associate who refuses to submit to testing when requested will be considered the same as insubordination and will be terminated.

• Reasonable Cause Testing - When there is reasonable cause to believe that the associate has used drugs or alcohol, testing will be required.

Reasonable cause testing may be based upon such things as specific observations concerning the appearance, behavior, or speech of the associate, a pattern of abnormal or erratic behavior evidenced by the associate’s work time actions, appearance, or conduct. In any reasonable cause situation, hhgregg will ensure that the associate is transported to an appropriate facility and then transported back to the work site, where a spouse, family member, or other individual will be contacted to transport the associate home.

In the event no such individual is available, hhgregg will contact a taxi cab to transport the associate home.

• Random Testing - The Company may, at its discretion, conduct random drug testing of associates at any time with or without cause or suspicion in order to assure compliance with its drug-free work place policy. Any random testing will be done on a

17

Associates Testing Positive - The Company will allow an associate one (1) occurrence of testing positive on a conditional basis with the following terms: 1. An associate testing positive for the first time will not be permitted to return to work until the individual has consulted with a substance abuse professional and agrees to participate in a recommended program of treatment, counseling and/or rehabilitation.

2. The associate will not be permitted to return to work until he/she successfully completes the program. The outpatient or ongoing treatment program must be authorized by a certified counselor. No on-line programs permitted.

3. The associate remains drug and alcohol free during their employment period.

4. In addition to the return to duty test, the associate agrees within the 12 month period to (6) six periodic and unscheduled random drug screen tests to ensure that the associate remains drug and alcohol free.

II. GENERAL INFORMATION 5. T he cost of a positive drug test, the rehabilitation program and subsequent drug tests will be the responsibility of the associate.

6. A second positive test will be grounds for immediate termination.

7. An associate of less than 90 days of employment is not eligible for the SAP program and will be subject to immediate termination.

requests protection after being asked to submit to testing or after the associate’s use of drugs or alcohol becomes a personnel issue based on direct observation or evidence obtained from an arrest or criminal conviction for a drug or alcohol related offense.

• Confidentiality - Test results will be disclosed only to those hhgregg management associates with a “need to know.” All records and information regarding the personnel actions taken with respect to associates with verified positive tests results will be maintained in a confidential file in the Human Resources Department.

• Voluntary Identification And R ehabilitation/Treatment - Any associate who voluntarily identifies himself as having a drug or alcohol related problem will not be subject to discipline for volunteering that fact.

Rather, the associate will be permitted to take an unpaid leave of absence for the purpose of undergoing rehabilitation or treatment to permit the associate an opportunity to eliminate dependence on drugs or alcohol.

C. No Smoking Policy

hhgregg is a smoke-free and tobacco-free workplace.

D. Background Checks

hhgregg reserves the right to conduct background checks and obtain consumer reports in accordance with the Fair Credit Reporting Act and applicable state laws.

ssociates who volunteer such A information and participate in a rehabilitation program are not relieved of their obligation to comply with applicable rules concerning alcohol and drugs and will be subject to disciplinary action, including termination, for their violation.

E. Fraternization & Personal Relationship Policy

A personal relationship at hhgregg, whether between a supervisor and supervisee, or between co-associates can cause serious conflicts, issues of real or perceived favoritism and/or claims of sexual harassment. Such relationships also can adversely affect morale. In addition, conflicts in a personal relationship may

Since the key to hhgregg’s rehabilitative efforts is an associate’s willingness to admit and seek to remedy the problem, this provision is not available to an associate who 18

II. GENERAL INFORMATION

personal relationship, consistent with the restrictions in paragraph 4. Obviously, the number of associates at the site involved will bear on hhgregg’s ability to make such an accommodation.

An acceptable accommodation at one site may not be an acceptable accommodation in another. If the Human Resources Department decides hhgregg cannot reasonably accommodate a personal relationship or if a proposed accommodation is not in hhgregg’s best interest, then one person will be asked to leave the site or hhgregg.

6. This policy is in addition to hhgregg’s policies on Equal Employment Opportunity and Professional Conduct & Anti-Harassment.

carry over and adversely effect work relationships at hhgregg. Accordingly, hhgregg has adopted the following personal relationship policy.

1. “Personal relationship” is defined to mean individuals who are dating or involved in a romantic or physical relationship, including living together and/or become engaged or married.

A personal relationship also includes a familial relationship, such as persons related by blood or marriage.

2. To avoid the potential problems described above, hhgregg strongly discourages individuals from entering into personal relationships with others at hhgregg. However, if such a relationship exists or come into existence, hhgregg will address it in accordance with this policy.

3. If individuals are or become involved in a personal relationship with another person at hhgregg, they must report it promptly to the Human Resources Department.

4. Individuals involved in a personal relationship should not work with or around one another. S pecifically, they may not (a) supervise or be in the line of supervision with one another, (b) be in the same Department, (c) assign work to one another; or (d) have any input into or influence on hhgregg’s decisions affecting the other person; e.g., evaluations, compensation, or promotion decisions.

5. The Human Resources Department will evaluate whether hhgregg can reasonably accommodate a

F.

Employment Classifications

For the purpose of designating eligibility for certain benefits and the payment of overtime, employment classifications fall into one of each of the following categories:

1. Regular - A regular associate is an individual who has been hired to fill a specific position for an indefinite period of time.

2. Temporary - A temporary associate is an individual who has been hired for work of purely temporary nature. A temporary associate is entitled only to worker’s compensation, unemployment and Social Security benefits.

3. Full-Time - A full-time associate is regularly scheduled to work 40 or more hours per week.

4. Part-Time - A part-time associate is any 19

II. GENERAL INFORMATION individual who is regularly scheduled to work less than 40 hours per week.

Part-time associates may occasionally be required to work full-time hours because of business needs. These occasions will not alter the associate’s part-time status unless management determines that the requirements of the position warrant converting the position to full-time status. If management makes that determination, the associate will be notified that his employment status is changed from part-time to full-time.

5. Exempt/Non-Exempt – hhgregg places associates into one of two classifications, based on level and

position, consistent with the Fair Labor Standards Act and applicable state law. Exempt associates who hold managerial, administrative and professional positions are exempt from overtime pay provisions. Non-exempt associates are eligible for minimum wage and overtime pay provisions.

6. Reinstate – If you leave hhgregg’s employ but then return to full employment within thirty (30) days, you will retain your original anniversary date, and you will not lose benefits.

However, you will lose vacation hours for the period you are gone from hhgregg’s employment.

7. Rehire - If you leave hhgregg’s employ or voluntarily go to part-time status but then return to full employment after thirty (30) days, you will be considered a new associate with a new anniversary date. If the associate left hhgregg due

to a policy violation, they will not be considered for rehire.

• Probation Period All associates hired for regular part-time or full-time employment will be placed on a 90-day probation period.

If it is determined that you are not satisfying the company’s performance expectations during or at the end of the initial 90 days, your employment will be terminated unless the company concludes that a 30-day extension of the probation period is appropriate.

O nce the company determines that you have successfully completed the probation period, you will be notified of your regular employment status. Because all associates are associates-at-will, employment may still be terminated (by hhgregg or by the associate) for any reason or no reason at all at any time before or after completion of the orientation period.

• Anniversary Date The first day you begin employment with the Company is your anniversary date. This date is used to determine your eligibility for benefits.

G. Performance Management

hhgregg is a performance based organization. Once an associate has completed 90 days of employment they will be given a 90 day review by their immediate manager.

20

II. GENERAL INFORMATION Performance reviews are conducted annually to provide both you and your manager with the opportunity to discuss your job responsibilities, identify weaknesses, encourage and recognize strengths, and discuss methods for improving your performance. A positive performance review does not guarantee an increase in salary, a promotion, or even continued employment.

related to your work or work in which you are interested.

If you have an interest in other positions within hhgregg, you should apply online through the Company Intranet Internal Career Center.

I.

Dress Code

hhgregg believes that appropriate dress and personal grooming create a favorable image for hhgregg. We expect you to use good judgment and to maintain high standards in your personal cleanliness and attire. You create the image many people will have about hhgregg. Check your appearance before reporting to work. A well-groomed appearance and good hygiene creates a good impression and gives you confidence when dealing with others. hhgregg reserves the right to determine appropriate dress and to request that an associate change if they do not meet requirements of hhgregg.

• Improving Associate Job Performance hhgregg believes that associates should be given the opportunity to demonstrate their abilities and continually improve their job performance. Where performance problems exist, associates should be told about these deficiencies and, in many instances, given an opportunity to improve. When hhgregg determines that an associate is a candidate for improvement, an attempt will be made to help the associate meet hhgregg’s expectations. However, any effort to work with associates to overcome performance problems should not be deemed as changing hhgregg’s policy of at-will employment.

T his policy is consistent with and works in conjunction with the Company Dress Code, which specifies the type of clothing associates are required to wear. A copy of the Company Dress Code is given to each associate upon hire and can be accessed via the intranet.

P lease refer to the full Dress Code Policy on the Company intranet under Human Resources/Documents/ Associate Handbook & Policies/Dress Code.

H. Job Selection Procedure

hhgregg tries to transfer and promote from within, when possible, to fill existing vacancies. You can p repare for transfer and advancement by doing your present job well, mastering new skills when an opportunity presents itself, and obtaining additional education and training in fields 21

II. GENERAL INFORMATION J.

Accident & Safety

K. Loss Prevention

All workplace accidents, defined as any event that is not expected, foreseen, or intended, and involves actual physical injury and/or property damage, must be reported immediately to your manager.

We will investigate serious accidents to try to prevent unsafe conditions, unsafe acts and future accidents and injuries. If your manager is not available, report the accident to another manager or member of management. It is the responsibility of all associates to report any unsafe working conditions to their immediate manager.

• Workplace Monitoring hhgregg may conduct workplace monitoring for a multitude of reasons, including to ensure quality control, associate safety, security, and customer satisfaction. Associates who regularly communi cate with customers and vendors may have their telephone conversations monitored or recorded.

You and the customer and/or vendor will be informed if a conversation will be monitored.

To promote open communications, hhgregg and its managers do not secretly record conversations with associates. Similarly, hhgregg does not permit associates to record their managers or co-workers during meetings, telephone calls, or any other conversations. Violation of this policy is grounds for discipline, up to and including termination.

You must report any work-related injury, no matter how slight, immediately or as soon as possible to your manager so you may receive prompt and proper medical attention. The manager must promptly report the accident to the Worker’s Compensation Administrator.

Associate-injury forms must also be completed as soon as possible. You may be required to go to a Company-chosen medical provider for initial treatment and for follow-up treatment. Failure to report work-related injuries may result in disciplinary action, up to and including termination.

• Cooperate with Investigations From time to time when problems such as suspected theft, dishonesty, destruction of property, or alcohol or drug use arise, hhgregg may require your full cooperation in an investigation. All associates asked to cooperate in such an investigation are expected, as a condition of employment, to fully do so (excluding issues arising out of the National Labor Relations Act).

If a work-related injury requires you to be absent from work or to incur medical costs, you must contact your manager for the appropriate forms to be completed and processed for worker’s compensation.

22

II. GENERAL INFORMATION from infecting hhgregg’s computers or computer network or causing computer system problems. In addition, loading pirated software into hhgregg’s computers may create legal liability for hhgregg.

Therefore, under no circumstances may you load unauthorized computer software onto any computer owned or leased by hhgregg. If you wish to load software onto one of hhgregg’s computers, whether via diskette, CD Rom, or from the Internet, such software must be for business purposes only and must be loaded by the IT Help Desk. Further, you should never open any electronic mail or attachment from unfamiliar sources. All questions concerning computer software, hhgregg’s computer network, or computer viruses should be directed to the IT Help Desk.

Where permitted by law, cooperation with investigations also may include submitting to inspections or searches of your personal property and Company property. Searches of associate-owned vehicles will only be conducted by law enforcement officers consistent with constitutional protections.

L.

Electronic Communication Systems Policy

E-mail, computer, and voice mail systems are hhgregg’s property and are intended for business, not personal, use. The systems are not to be used for personal use unless specifically authorized.

Associates have no right of privacy as to any information or files maintained in or on hhgregg’s property or transmitted or stored through hhgregg’s electronic information systems or other technical resources.

Incidental and occasional use of hhgregg’s electronic communication systems for personal use is permitted only when such use does not generate a direct cost to hhgregg, including the cost of loss of time, or does not adversely impact hhgregg’s reputation and/or mission. However, hhgregg prohibits “blogging” and “chat room” conversations on hhgregg computer systems at all times.

Violations of this policy may result in disciplinary action up to and including termination. Associates learning of any use of hhgregg’s electronic communication systems that is inconsistent with the requirements of this policy must notify the Human Resources Department of such misuse or violation immediately. hhgregg’s Electronic Communication Systems Policy does not prohibit conduct protected by the National Labor Relations Act. Please refer to the full Electronic Communications System Policy in the Company Policy Manual.

Computer Viruses/Unauthorized

Software – You must be extremely cautious to prevent computer viruses 23

II. GENERAL INFORMATION M. Cellular/Communication Devices - hhgregg discourages the

The first contact many people have with our business is through the telephone. You are encouraged to cultivate a pleasant voice and cheerful manner.

use of cellular phones while driving and encourages associates to cease driving before using a cellular phone.

N. Personal Mail Do not use Company stationary, stamps,

Cellular or other communication device use is prohibited unless the cellular or mobile phone is company issued or the use is expressly authorized by a manager.

Personal use of a company issued cellular phone should be limited to emergency calls only. Personal cellular phones are permitted only during nonworking times such as breaks or meal periods.

• Telephone Use Prompt and efficient telephone service is an important part of our office operation. We ask your h elp in keeping the lines clear for business calls. Please tell your family and friends not to call you during working hours except in an emergency.

Personal calls should be made only on break or during lunchtime unless they are made with your manager’s approval. Under no circumstances should you make or charge a longdistance call unless it is work-related and approved by your manager.

Good telephone etiquette is important when dealing with the public. Identify yourself and the location where you work in a pleasant and helpful voice.

Be courteous and professional.

postage meters, facsimile machines, or other Company equipment and supplies for your personal correspondence. Have your personal correspondence sent to your home.

O. Visitors Personal visits by individuals not employed by hhgregg to your work area are also restricted by your manager’s guidelines.

Visitors must be escorted by an hhgregg associate at all times.

24

IV. PAYROLL AND ADMISTRATIVE POLICIES A. Pay Periods/Payday

The basic work week is from Monday through the following Sunday. Associates are paid on Friday for the two-week period ending the previous Sunday. If payday is on a weekend or holiday, hhgregg typically releases paychecks the prior business day.

If you believe there is an error in your paycheck, report it to your manager immediately. We cannot under any circumstances, make advances against future paychecks.

hhgregg will release your paycheck only to you unless you submit written authorization to release your

paycheck to someone else. If you are absent on payday and want your check mailed, please let your manager know. Associates may enroll in direct deposit of their pay. Direct deposit is the safest and most convenient way to receive payments and ensure pay is received.

• Payroll Deductions

hhgregg is required by law to withhold federal tax, state and local income taxes, and the associate’s portion of Social Security taxes from each associate’s pay and garnishments, if a valid court order is issued. hhgregg will also withhold voluntary elections of pay deductions from an associate’s pay.

• Personnel Files and Verification of Employment/Referrals All personnel files are the sole property of the Company. The contents of these files will not be distributed to any associate or former associate for any reason. Associates who wish to review their own files should contact the Human Resources Department. With reasonable advance notice, associates may request to review personnel files via your manager.

Upon written request, the Human Resources Department will verify only dates of employment, position or positions held, and salary information. Any other information requested is not furnished. The Company does not furnish letters of recommendation and requests for them will be denied.

• Stop Payment Check Policy Any associate who receives a check from hhgregg that is lost, stolen, destroyed or for any reason that requires the Company to issue a Stop Payment on the check, will be charged a fee to reissue a check. This is the fee the bank charges the Company to issue a Stop Payment.

B.

FLSA Safe Harbor Statement

eductions From Exempt Associates’ Salaries – Salaried exempt associates work as few or as D many hours as are necessary to get the job done. For this reason, and subject to the exceptions outlined, hhgregg’s policy does not reduce a salaried exempt associate’s predetermined compensation for any 25

partial-day absence (other than intermittent FMLA leave); any partial-week absence occasioned by hhgregg or its operating requirements, including holidays and partial-week shutdowns; or because of variations in the quality of work performed.

Deductions from salary may occur in the following circumstances: 1. Full-day absences for personal reasons, other than sickness or disability;

2. Full-day absences to the associate’s own sickness or injury (including work-related injuries and FMLA-related absences). Such deductions will be made in accordance with hhgregg’s paid time off plans and state worker’s compensation laws and regulations;

3. A penalty imposed for infraction of a safety rule of major significance;

4. Full-day absences for unpaid disciplinary suspensions under hhgregg’s disciplinary action policy for infractions of hhgregg’s workplace conduct rules; and

5. When no work is performed in a work week.

Note: h hgregg’s attendance and disciplinary action policies are applicable to an absence even though the absence may not be one for which a deduction from salary will be taken.

Note: h hgregg reserves the right to require an associate to utilize paid time off benefits for partial-day absences occasioned by personal reason or the associate’s own illness or injury.

hhgregg encourages any exempt associate who believes his/her salary has been improperly reduced to report the problem immediately to the Human Resources and/or Payroll Manager. Associates are assured that hhgregg is committed to comply, and expects all supervisors and managers to comply, with this policy and not to make improper deductions from salary. hhgregg will reimburse an associate for any improper deduction.

C. Time and Attendance

• Recording Your Time Non-exempt associates are required to maintain an accurate record of all time worked each day through hhgregg’s Time & Attendance system in each location.

Associates are required to “clock in” at the beginning of the shift and “clock out” at the end of the shift. Associates are required to take a mandatory 30 minute meal period and must clock in and out for that period. Other breaks are permitted during your shift but may be limited by your supervisor. Habitual failure to clock in and out and/or abuse of breaks will result in discipline, up to and including termination.

• Overtime

Managers may schedule overtime when it is deemed necessary. Associates may not work overtime

without the prior approval of their manager.

26

• Attendance Every position within hhgregg is necessary and requires dedication and commitment from those hired to perform them. Part of that commitment means being at work on time each day ready to perform the tasks necessary to do your job. Because of hhgregg’s streamlined posture, excessive tardiness and absenteeism places an inordinately large strain on hhgregg’s operation. When you are excessively tardy or absent, other associates must perform your tasks as well as their own, thereby placing further stress and strain on those around you. Consequently, hhgregg cannot and will not tolerate excessive tardiness or absenteeism. Poor attendance and excessive tardiness may result in disciplinary action, up to and including termination.

• Discipline Procedure for Non-Exempt and Commissioned Associates:

Absenteeism is defined as being absent from work on any scheduled work day for 2 hours or more.

Scheduled time off work will not count as an absence/late arrival/leaving early occurrence if scheduled and approved in advance. Examples of scheduled absences are: scheduled vacation, jury duty, and a medical leave of absence evidenced by a physician’s statement and approved by HR.

If you are a qualified individual with a disability, hhgregg will consider your absences on a case-by-case basis and the availability of any reasonable accommodation that would not cause undue hardship on the operation of hhgregg. If it is a reasonable accommodation, your absence will not be counted as an occurrence.

Excessive absenteeism is defined as being absent on 6 occurrences in a prior 12 month period. An occurrence is defined as 1 or more consecutive days of absence. The following steps will be used to correct excessive absenteeism: 6 occurrences in a prior 12 month period 7 occurrences in a prior 12 month period 8 occurrences in a prior 12 month period

Verbal warning Written warning Final written warning

9 occurrences in a prior 12 month period

Termination

Late Arrival - An unscheduled “occurrence of a late arrival” is defined as arriving at your work area more than 7 minutes but less than 2 hours after your scheduled time to start work, without manager approval.

Leaving Early - An unscheduled “occurrence of leaving early” is defined as leaving your assigned work area more than 7 minutes but less than 2 hours prior to the end of your work day, without manager approval.

27

Excessive late arrival/leaving early is defined as being late and/or leaving early on 8 occurrences in a

prior 12 month period. The following steps will be used to correct excessive late arrivals/early leaves:

Verbal warning 8 occurrences in a prior 12 month period 9 occurrences in a prior 12 month period 10 occurrences in a prior 12 month period 11 occurrences in a prior 12 month period

Written warning Final written warning Termination

Occurrences of late arrival and leaving early are combined when initiating the report of attendance for late arrival and leaving early. Occurrences of late arrival and leaving early are not included in counting occurrences of absenteeism.

bsences around a day off, holiday, weekend, or other irregular attendance patterns will be discussed A with you and you may be subject to discipline, regardless of the above guidelines.

You may be required to submit a physician’s statement if you are absent for three (3) or more

consecutive work days or if you demonstrate a pattern of persistent absenteeism.

No Call/No Show - Absence from work without calling in or notifying your manager for 2 consecutive

days or more will result in termination.

A continuous absence for multiple days resulting from an associate’s single illness will be considered one occurrence for purposes of this Attendance Policy. A continued absence for multiple days resulting of an immediate family member’s illness will be considered as an additional (1) occurrence. hhgregg reserves the right to request medical documentation confirming that all of the days during an associates’ absence were required by a single illness for either the associate of the immediate family member. A medical slip does not excuse an absence.

D. Unscheduled Closings

If an hourly associate is sent home prior to the end of their regular work schedule due to a situation deemed an emergency by the Company, the associate will be paid their regular pay through the end of their regular work schedule for that day. If an hourly associate is given an option to leave early and does so, the associate will not be paid for the unworked hours of their regular work schedule. If the facility in which the associate works does not open due to an emergency, the associate will not be paid for the unworked hours of their regular work schedule.

Where practical, the Company may assist the hourly associates in making up the lost time, as long as it is within the same week of the occurrence so as to not incur overtime. With supervisory approval, 28

associates may use available vacation hours to make up for lost time. Exempt associates are expected to adjust their work schedule to assure that the work is completed.

The Company will attempt to notify associate of store or office closings by telephone and/or local television and radio stations.

E.

Changes In Employment Information

F.

Driver Responsibilities

To keep personnel records up to date, you must promptly login to your www.myhhgregg.com account to update any of the following:

1. home address

2. home telephone number

3. marital status

4. emergency contact information

5. dependents information

6. life insurance beneficiary designee You are not authorized to make certain personnel changes through www.myhhgregg.com. Please submit the following changes in writing and send to the Human Resources Department:

1. your name

2. marital status for tax purposes

3. status affecting your legal right to work in the United States

4. licenses (to the extent they are required to perform your job responsibilities)

5. number of dependents for tax purposes

6. voluntary payroll deductions

7. military status

8. 401K beneficiary designee 1. Guidelines For Use Of Personal Vehicles - Associates who use their personal vehicles for workrelated activities on behalf of hhgregg are reimbursed for that use at a set rate per mile driven. You must submit expense reports to your manager requesting reimbursement and providing appropriate documentation.

Each associate using his or her personal vehicle to conduct Company business must carry all insurance required by law and be properly licensed to drive that vehicle. hhgregg’s liability insurance covers only claims against hhgregg and it does not cover you or your personal vehicle when you are using that vehicle to conduct Company business.

In the event you are injured as a result of an accident while you are using your personal vehicle to conduct Company business, you may be entitled to certain worker’s compensation benefits, depending on the circumstances and state worker’s compensation law.

29

2. Company Vehicles - Company vehicles are provided strictly for business use. The vehicle shall not be used by members of associates’ families and not for use other than the functions they are designed to perform in our business.

Associates shall be responsible for operating Company vehicles within the legal restrictions of the community. Any and all fines imposed as a result of violations shall be paid entirely by the associate who was responsible for the violation. We insist that our associates abide by all speed, parking and traffic regulations and use existing seat belts at all times and will be responsible for any traffic citation you receive when driving on Employer business or at any time when using a Company vehicle.

3. Driver’s License - If your job requires you to operate a motor vehicle, you must have and maintain

an appropriate, valid driver’s license, insurance, and proof of that insurance.

i. Revoked Or Suspended Driver’s License - If your job requires you to drive on Company

business and your driver’s license is revoked, suspended or restricted for any reason, you must

report the change in driving status to your manager immediately. If you voluntarily report the suspension or revocation of your driver’s license, depending on the circumstances, we may attempt to move you to a job that does not involve driving. The work may be in a different classification and pay rate. If hhgregg cannot move you to a job that does not require driving, you may be placed on a leave of absence without pay.

ii. Driving Without A License - If your job involves driving, hhgregg will periodically need to verify your driving record and the status of your driver’s license through the Bureau of Motor Vehicles. hhgregg may do so at any time. Associates whose jobs involve driving are required to obtain or to authorize hhgregg to obtain a state Bureau of Motor Vehicle report yearly or upon reasonable request at any time, because this information is a condition of employment in that capacity. If you drive either a Company or private vehicle on Company business without a valid driver’s license you will be subject to disciplinary action up to and including termination.

G. Associate Referral Bonus

We believe our own associates, knowing the quality of individual that we seek for the Company, can be our best recruiters.

The Company will give a bonus to each associate who refers someone to apply for a full-time position, is hired, and is employed at least ninety (90) days. There will be additional bonuses if the new associate remains with us at least ninety (90) more days and another bonus if the new associate remains with us at least one (1) full year as a full-time associate.

30

At the time of the interview, the prospective associate must inform the Company if they were referred by a specific current associate. A referral form will be made available for each interview and must be attached to the Payroll Packet that is sent to our Human Resources Department.

This referral program is available to all associates who have been employed at least ninety (90) days, fulltime or part-time, and are employed on the date the new associate begins working for the Company.

H.

Bulletin Boards

Bulletin Boards are used by hhgregg to provide official, work-related information such as announcements, program changes, and new or revised personnel policies. Management must approve all materials before they are posted. Associates are responsible for checking the bulletin board regularly. Bulletin boards are for Company business only.

I. News Media, Contributions & Printed / Personalized Materials

Any statements to the news media are solely the responsibility of the Marketing Department, and associates may not take it upon themselves to act as a spokesperson for the Company. Therefore, associates who receive inquiries from the media should refer them to the Marketing Department. If associates participate in public forums, such as “Letter to the Editor� in newspapers, they may not represent themselves as official hhgregg spokespersons. hhgregg has a responsibility as a corporate citizen and will make every effort to support the communities in which we conduct business. Only the Marketing Department may make commitments for Company contributions or the purchase of tickets to events. All individuals representing organizations that seek contributions should be directed to place their request in writing and mail it to the Contributions

Committee at the corporate headquarters. Requests for contributions will not be taken on the telephone. hhgregg will provide all printed materials, such as letterhead or business cards, where necessary for associates in the conduct of Company business. Issuance of these cards must be approved by the Marketing Department.

31

V. ASSOCIATE BENEFITS AND SERVICES A. Associate Purchase Program

A person must be employed at least ninety (90) days before being eligible to participate in this program.

As a part of our Company’s effort to provide benefits to associates, we have developed a program which permits associates to purchase products at the same cost paid by the Company.

The following rules apply:

1. All regular full-time associates can purchase, at Landed Cost, any product the Company carries, if the product is for their personal use only.

2. All regular full-time associates can purchase, at less than public Sale price, any product the Company carries, if the product is to be given as a gift to parents or to children not living at home. “Less than public Sale price” means 50% of the difference between Landed Cost and Sale price.

3. All regular part-time associates can purchase, at less than public Sale price, any product the Company carries, if the product is for their personal use only. “Less than public Sale price” means 50% of the difference between Landed Cost and Sale price.

4. Families of all regular full-time associates can purchase, at less than public Sale price, any product the Company carries, if the product is for their personal use only. “Less than public Sale price” means 50% of the difference between Landed Cost and Sale price.

5. No associate is permitted to purchase any product at any time at a price less than the Company’s Landed” cost.

6. All purchases must be pre-approved by and written and dispensed by the associate’s store manager only. All Central associate purchases must be pre-approved by their department manager and the approved. Associate Purchase Form m ust be presented to the location where the purchase is made.

7. If the associate purchases under any special financing program, the associate will be charged the same fee that hhgregg is charged under that program.

8. There are additional fees for all purchases made with Visa, Master Card, Discover Cards, or other acceptable charge cards.

9. Associates will be charged the normal customer delivery fee for products delivered to their home.

10. Layaways will not be accepted.

11. At no time may an associate purchase a product directly from our suppliers. Products must be purchased through hhgregg.

12. Associates must have store manager approval to return or exchange any merchandise they have purchased. Any request for a return or an exchange after 30 days from date of purchase must be approved by their Region Manager.

32

B.

Associate Service Award

Once an associate has attained their 5th, 10th, 15th, 20th, 25th, etc. years of service with the Company, they are given an opportunity to select a service award. This is to show the Company’s appreciation to the associates for the years of service and commitment that the associate has given to the Company.

C. Statutory Benefits

In accordance with applicable law, the following benefits are provided to all associates:

1. W orker’s Compensation Insurance - Worker’s compensation insurance provides financial protection in case you are injured or become ill as a result of your employment. This coverage complies with applicable State worker’s compensation laws, and hhgregg pays the entire cost of this protection. For more information regarding Worker’s Compensation refer to page 22, Section J. Accident & Safety

2. U nemployment Compensation Insurance - Based on your earnings, hhgregg makes regular payments to the State and federal governments for your unemployment insurance benefits. These benefits are paid to you by the State should you become unemployed and qualify for assistance under the laws governing this insurance.

3. S ocial Security - Social Security coverage entitles you and your family to certain health and retirement benefits based on your income and the number of years you have worked. hhgregg contributes to this coverage by paying one-half of your Social Security tax.

D. Benefit Programs

hhgregg periodically reviews the features of its insurance programs, including coverages, carriers and associate participation requirements. Any significant changes in insurance plans will be communicated to covered associates prior to the effective date of the changes.

Note: Many of the benefit plans sponsored through hhgregg have a plan description booklet or other informational materials. You may access a copy of these materials through www.myhhgregg.com under Plan Summaries. The terms of our benefit plans are described in detail in those materials. You will also have access to a Resource Center that provides you with a direct link to all of our carrier’s websites and contact numbers. Upon completion of your benefits enrollment you will receive an ID card from the carriers. If you do not, please contact them directly to order a new card.

33

BENEFITS SUMMARY

Benefits

Eligibility

Classification

Medical Insurance

The first of the month after 90 days of employment

Full-time (30+ hours a week)

Bi-weekly Pre-taxed

Dental/Vision Insurance

The first of the month after 90 days of employment

Full-time (30+ hours a week)

Bi-weekly Pre-taxed

Disability - short term & long term

The first of the month after 90 days of employment

Full-time (30+ hours a week)

Bi-weekly After-tax

Medical Leave of Absence

After 90 days of employment but less than 1 yr. of service

Full-time and Part-time

Not Paid

Family Medical Leave of Absence

Min 1250 hours worked AND 12 months of employment

Full-time and Part-time

Not Paid

Flexible Spending Account

The first of the month after 90 days of employment

Full-time (30+ hours a week)

Bi-weekly Pre-taxed

Basic Company Paid Life Insurance

The first of the month after 90 days of employment

Full-time (30+ hours a week)

No

Optional Life Insurance

The first of the month after 90 days of employment

Full-time (30+ hours a week)

Bi-weekly After-tax

401K Retirement Plan

At least 21 years of age; worked 1000 hours in the past 12 months; and 1 year of service

Full-time and Part-time

Bi-weekly Pre-taxed

Vacation

Please see vacation accrual chart

Full-time (30+ hours a week)

N/A

Associate Purchase Plan

The first of the month after 90 days of employment

Full-time (30+ hours a week)

N/A

• • •

Payroll Deduction

Benefit enrollment is done through www.myhhgregg.com and submitted online.

You must enroll for benefits prior to your eligibility date or you may be denied coverage.

For more information regarding our benefit packages please refer to the Associate Benefit Guide found in your new hire packet or on www.myhhgregg.com.

34

E. Vacations

All attempts should be made by our associates to take their earned vacation time each year. Vacations are necessary so that a person is refreshed and avoids job burnout.

Full-time hhgregg associates will be credited for vacation hours earned for twelve (12) months each year.

Only full-time associates are entitled to paid vacation time. Vacation time is considered credited during a person’s first year of employment and earned each month thereafter.

1. Procedure - At the beginning of each calendar year, all managers must prepare and approve a tentative vacation request schedule for each associate. This tentative schedule, titled “Vacation Requisition,” must be submitted to Human Resources. Additionally, as changes and additions occur, the managers must immediately notify Human Resources.

Each associate’s biweekly check stub will reflect the number of vacation hours he has accrued and not taken. Therefore, it will not be necessary for anyone to call the Human Resources Department to inquire as to their status.

Vacations may be taken at any time provided they do not interfere with the department or store’s normal business. Sole authority for the approval of when an associate may use earned vacation and the length of that vacation rests with the associate’s store or department manager. There is no limit to the number of days that may be taken in a calendar year provided the associate does not exceed the number carried over into that year plus the number earned in that calendar year.

Associates may take vacation prior to actually earning it within the same calendar year, but they must pay it back through earned time before the end of the calendar year.

In the unlikely event an associate is unable to take all earned vacation within a calendar year, a maximum of forty (40) hours may be carried into the new year. Unused earned vacation above forty (40) hours is forfeited. No vacation hours may ever be redeemed for compensation unless the employment of the associate terminates for any reason.

35

2. V acation Pay - All full time associates are eligible for vacation. Your vacation time is based on years of service. See chart below. The rate at which you are paid is as follows: • Hourly associates: current hourly rate.

• Commission associates: designated hourly rate.

• Salaried associates: current base weekly salary.

Associates employed with hhgregg for more than one year may use vacation time in advance of it being earned. You are not allowed to be in the negative at the end of the year.

If an associate of more than one year terminates, all earned but not used vacation hours will be paid.

Additionally, if more vacation has been taken than earned, the excess amount of vacation will be deducted from the final check.

Associates employed with hhgregg for less than one year is credited for vacation in their first year of employment at the rate of 3.3 hours per month. An associate must be employed for six (6) months before being permitted to use any credited vacation. If the associate terminates for any reason within one year, any used vacation credits must be repaid to the Company.

Note, however, that if an associate begins employment by the 15th of the month, the vacation credits begin in the same month; if employment begins after the 15th of the month, the vacation credits begin in the next month.

Vacation hours will not be paid in lieu of time off.

Store Management: After completion of 5 year’s in management, vacation hours are added at the maximum 3 weeks annually.

Service

< year

1-5 yrs.

6 yrs.

7 yrs.

Monthly hrs. earned

3.33

6.66

7.33

Days earned

5

10

40

80

Total hours earned

8 yrs.

9 yrs.

10 yr. max

8

8.66

9.33

10

11

12

13

14

15

88

96

104

112

120

36

F. Holidays

hhgregg observes the following holidays:

New Yearâ&#x20AC;&#x2122;s Day

Memorial Day

Fourth of July, Independence Day

Labor Day

Thanksgiving Day

Christmas Day Full-time associates who work on one of these holidays will receive a regular dayâ&#x20AC;&#x2122;s pay as holiday pay plus their regular hourly rate for all hours worked on the holiday. However, if they are scheduled to work on a holiday and do not work that day, they generally will not be entitled to receive any holiday pay. If a holiday falls on a day they are normally off duty, or if their location is closed for the holiday on one of the holidays, they will be paid for the holiday. Similarly, if they take their vacation during a week in which a paid holiday falls, they will receive holiday pay in addition to their vacation pay. Holiday pay does not count as hours worked for the purpose of determining overtime pay.

Part-time associates will be paid one and one-half (11â &#x201E;2) times their regular hourly rate for all hours worked on the holiday. If their location is closed for the holiday on a day that falls on any of the above holidays, they will be paid their regular hourly wage rate for all hours they regularly would have been scheduled to work that day. Part-time associates who are scheduled but do not work shall not receive any holiday pay.

In order to be paid as a part-time or full-time associate, you must work your last scheduled day before and your first scheduled day after the holiday. Previously arranged vacation days qualify as working the scheduled days. Delivery and commissioned service associates will be paid holiday pay at their current designated hourly rate. Commissioned sales associates are not eligible for holiday pay.

Note: The Company closes its stores on Easter. Any hourly associate whose forty (40) hour work week includes Easter will be asked to work a forty (40) hour schedule within the six (6) previous days.

ssociates not active on payroll (e.g., any leaves of absence, layoff, disciplinary suspension, off more A than seven (7) consecutive days for on-the-job illness or injury, and so forth) are not eligible for holiday pay.

37

G. Leaves of Absence

1. B ereavement Leave - Regular full-time associates shall be entitled to up to three (3) consecutive work days off with pay at their regular rate in connection with the death of a member of their immediate family or their spouse’s immediate family. “Immediate family” includes parents, grandparents, spouses, children, grandchildren, brothers, and sisters. Managers should send notification to the payroll department indicating the need for the leave for an associate to be paid under this type of leave.

2. Military Leave - hhgregg will comply with all applicable laws regarding military leaves of absence.

To request a leave of absence for military duty, you must give advance notice either orally or in writing to your manager.

Time limits for returning to work depend on the duration of the orders. Service of 1 to 30 days: the beginning of the first regularly scheduled work day or 8 hours after the end of the military duty, plus reasonable commuting time from the military duty station to home. Service of 31 to 180 days: application for reinstatement must be submitted not later than 14 days after completion of military duty. Service of 181 or more days: application for reinstatement must be submitted not later than 90 days after completion of military duty.

After periods of military leave of absence for more than 30 days, the Company has the right to request such documentation, which can be used to establish the associate’s basic eligibility for protection under USERRA. All National Guard and Reserve members are encouraged to provide a copy of orders, the annual drill schedule, or other type of documentation to the Company as soon as available and, if possible, before the commencement of military duty.

Associates must be excused from work to attend inactive duty training (drill) or annual training and the Company must treat the associate as if there isn’t an absence. Although there is no differentiation between voluntary and involuntary military duty, there is a 5-year cumulative service limit on the amount of voluntary military leave an associate can use and still retain reemployment rights.

3. Jury Duty - Jury service is a civic duty. hhgregg will provide an associate’s full compensation during jury duty that lasts up to 30 days. hhgregg will pay one-half an associate’s compensation during jury duty on days 31-60, and will not provide compensation after sixty (60) days. Hourly and salaried associates will receive their normal compensation. Commissioned sales, service, installation, and delivery associates will receive their designated hourly rate for time spent on jury duty. Advance notice of your jury duty call is required and must be given to your supervisor as soon as your become aware of it. Also, you must obtain evidence of the jury duty from the court in which you serve and be able to present this evidence to the HR department upon your return to work.

38

4. M edical Leave of Absence - Associates who have been employed more than (90) days and who are not otherwise eligible for FMLA leave and who have become unable to work because of a medical disability due to personal illness, injury or pregnancy or related medical conditions, may be placed on a leave of absence. That leave will be for the period of disability up to thirty (30) days, subject to renewal for successive periods of up to thirty (30) days with a maximum of ninety (90) days.

T o apply for an initial or renewed disability leave, you must provide the Company with a physician’s certificate stating that you are medically unable to work, the estimated duration of the disability, and whether and when any surgical or other medical procedure will be required. The Company reserves the right (1) to inquire of you as to the status of any disability; (2) to require that you provide medical evidence from your physician or from a physician of the Company’s choice concerning any disability; (3) to deny a request for disability leave or any renewal thereof if it determines, from the medical evidence, that you are able to perform your work; and (4) to place or continue you on disability leave if the Company determines, from the medical evidence, that you are not able to perform your work.

Y ou must notify the Company in writing of your intent to return to work at least two (2) weeks before your anticipated return date. You must also provide written confirmation by your physician of your ability to perform your normal duties. Every attempt will be made to return you to the same job and pay rate you held before your medical leave. However, it may not always be possible to hold your job open. If the vacancy must be filled, when you are able to return to work, you may apply for any job posting for which you are qualified, within (30) days following your return to work date.

n approved medical leave of up to ninety (90) days will not constitute an interruption in your service A record and will not alter your anniversary date. You will not continue to accrue vacation as though you were on active payroll. hhgregg will continue to share the cost of any insurance or benefit program in which you were enrolled at the time your leave of absence began, and your coverage under these programs will continue during the leave for a period of no longer than three (3) months, as long as you continue to pay your share of the cost of the program, if any.

5. Family

and Medical Leave (FMLA) - The Company provides leaves of absence to eligible associates for certain family and medical reasons. This policy complies with the Family and Medical Leave Act of 1993 (“FMLA”), as amended. In addition, the U.S. Department of Labor’s FMLA Notice is posted in the workplace and included at the end of this policy.

Eligibility To be “eligible,” an associate must have worked for the Company as of the date the requested leave is to begin: • for at least 12 months and • for at least 1,250 hours during the previous 12 months.

39

Reasons For Leave FMLA leave may be requested for the following reasons:

• Parenting Leave. This leave can be taken to care for a new son or daughter, including by birth or by adoption or foster care placement. An associate may take Parenting Leave only during the 12-month period that begins on the date of the birth, adoption, or placement, and this leave cannot be taken intermittently or on a reduced schedule.

• Family Medical Leave. This leave can be taken by an associate to care for the “serious health condition” of the associate’s spouse, son or daughter, or parent.

• Associate Medical Leave. This leave can be taken for the associate’s own “serious health condition” if the condition renders the associate unable to perform the associate’s job functions.

• Military Family Exigency Leave. This leave can be taken by an associate because of a qualifying exigency arising from the fact that the associate’s spouse, son or daughter, or parent is on or has been called to covered active duty in the U.S. Armed Forces. Qualifying exigencies include things such as making arrangements necessitated by short-term deployments, attending certain military events and related activities, assisting the service member with alternative child care arrangements when the active duty or call to active duty status necessitates a change in the existing arrangements, and assisting the service member with certain financial and legal arrangements related to active duty or the call to active duty.

• Covered Service member Leave. An associate may take this leave to care for the associate’s spouse, son or daughter, or parent who is a Covered Service member with a Serious Illness or Injury incurred or aggravated in the line of active duty on active duty. Also, this leave may be taken by an associate who is the next of kin of a Covered Service member.

D uration of Leave An eligible associate is entitled to a total of 12 workweeks of leave during a “rolling” 12-month period measured backward for each associate from the date the associate uses FMLA leave other than Covered Service member Leave.

For Covered Service member Leave, eligible associates are entitled to up to 26 workweeks of leave in a single 12-month period. For purposes of Covered Service member Leave only, the “single 12-month period” is the 12-month period measured forward from the first date of Covered Service member Leave.

When a husband and wife are both eligible associates of the Company, the husband and wife will be permitted to take only (1) a combined total of 12 weeks for Parenting Leave, or (2) a combined total of 26 weeks in a single 12-month period for Covered Service member Leave.

40

S ubstitution of Paid Leave Generally, FMLA leave is unpaid. However, if an associate also has available vacation hours, the associate may elect to use all available vacation hours concurrent with FMLA leave.

Associates are not required to use their vacation hours when receiving disability or worker’s compensation benefits. However, where disability or workers’ compensation benefits provide replacement income that is less than the associate’s full salary, associates may elect to use available vacation hours to supplement such benefits with a written request to Human Resources. FMLA will run concurrently with disability or worker’s compensation benefits, regardless of whether the associate supplements those benefits with available vacation hours.

Intermittent or Reduced Schedule Leave Under certain circumstances, an associate may take intermittent or reduced schedule leave in increments of no less than one hour. “Intermittent leave” generally means leave taken on an occasional basis for such reasons as medical treatments. “Reduced schedule leave” means a temporary, but regular, change in the associate’s usual number of hours per day or hours per week.

An associate is not entitled to take leave intermittently or on a reduced schedule for Parenting Leave.

For Family Medical, Associate Medical, or Covered Service member Leave, the associate may take an intermittent or reduced schedule leave if it is medically necessary. An associate must provide certification that a medical need for leave exists and that the medical need can best be accommodated through an intermittent or reduced schedule leave. Military Family Exigency Leave may also be taken on an intermittent or reduced schedule basis.

Associates needing intermittent leave or a reduced schedule must make reasonable efforts to schedule their leave so as not to disrupt the Company’s operations. In addition, if an associate requests intermittent or reduced schedule leave that is foreseeable based on planned medical treatment, the Company may require the associate to transfer temporarily to an available alternative position, with equivalent pay and benefits, for which the associate is qualified and which better accommodates intermittent or reduced schedule leaves.

Notification Requirements An associate must request FMLA leave at least 30 days before the date FMLA leave is to begin by requesting and completing a Request for Leave Form except in cases of medical emergency, unexpected changed circumstances, or where the need for leave is unforeseeable. In those cases, the associate must give notice as soon as practicable after the associate is aware of the need to take FMLA leave. Request for Leave Forms can be obtained from Human Resources.

41

If an associate requests Family Medical, Associate Medical, or Covered Service member Leave, the associate must submit a medical certification from the associate’s or family member’s health care provider within 15 days after the Company delivers the written request for medical certification for FMLA leave. The certification must also notify the Company of the reasons why the intermittent or reduced schedule leave is medically necessary and of the schedule for treatment if applicable.

Associates requesting Military Family Exigency Leave must also submit certification of the qualifying exigency within 15 days after the Company’s written request. Failure to provide timely medical certification may result in a delay or denial of FMLA leave.

If an associate fails to give 30 days’ notice for a foreseeable leave with no reasonable excuse for the delay, the Company may deny FMLA leave until at least 30 days after the date the associate provides notice of the need for FMLA leave. After an associate submits a medical certification, the Company may require an associate to obtain a second opinion from a provider of the Company’s choice and at its expense. In some cases, the Company may require, at its expense, a third opinion from a provider selected jointly by the associate and the Company.

During FMLA leave, an associate may be required to report periodically on the associate’s status and intent to return to work.

Associates on a Family or Associate Medical Leave may also be required to submit medical recertifications periodically during the leave period subject to the same rules as the initial medical certification. Medical recertifications may also be required under certain specific circumstances, for example, (1) when an associate requests an extension for a leave, (2) when circumstances under an initial certification have significantly changed, (3) when there is information which casts doubt on the current medical certification, or (4) when an associate is unable to return to work after FMLA leave.

Upon the conclusion of an Associate Medical Leave, the associate must present certification from the associate’s health care provider that the associate is able to return to work. Unless and until an associate provides this fitness-for-duty certification, the associate will not be able to return to work.

Continuation of Benefits As a general rule, FMLA leave is unpaid. The Company, however, will maintain an associate’s coverage under its group health plan on the same conditions during FMLA leave as if the associate had been employed continuously during the FMLA leave period. The associate must continue to pay the associate’s share of the premiums during an FMLA leave period to maintain coverage.

The Company will also maintain an associate’s coverage under the Company’s short-term disability insurance program during the FMLA leave period if the associate continues to pay the associate’s share of the premiums for such coverage during the FMLA leave period.

42

FMLA leave will not constitute an interruption in the associate’s service record and will not alter the associate’s anniversary date. During FMLA leave, the associate will not continue to accrue vacation as though on active payroll.

Right to Job Restoration Upon return from FMLA leave, associates will generally be restored to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment. Certain salaried key associates (as defined by the FMLA) may be denied restoration if their reinstatement would cause substantial and grievous economic injury to the Company. If, during FMLA leave, a reduction or other event occurs that would have changed, or even eliminated, the associate’s job had the associate not taken leave, the returning associate will have no greater rights than if the associate had been continuously employed during FMLA leave. The Company will determine whether an associate will be restored to the same position or to an equivalent position.

If an associate chooses not to return to work after FMLA leave expires, the Company may recover its share of health insurance premiums paid on the associate’s behalf during the FMLA leave period. The Company will seek to recover those premiums unless the associate fails to return because of (1) the continuation, recurrence, or onset of a serious health condition (or serious illness or injury, with respect to Covered Servicemember Leaves) that would otherwise entitle the associate to FMLA leave or (2) other circumstances beyond the associate’s control. If an associate fails to return to work because of the continuation, recurrence, or onset of a serious health condition (or serious illness or injury, as applicable), the associate must provide a medical certification of the serious health condition or serious illness/injury within 30 days from the date the Company requests it. If the associate does not provide the certification in a timely manner, the Company may recover its share of the health insurance premiums paid for the associate during the entire FMLA leave period.

At the exhaustion of FMLA leave time, if an associate is unable to return to work, employment will be administratively terminated unless: (1) the associate is eligible for additional leave under the Company’s Medical Leave Of Absence policy, or (2) an evaluation of the associate’s circumstances indicates that the associate is a qualified individual with a disability for whom a reasonable extension of leave would be an accommodation, and the Company can provide that accommodation without causing an undue hardship on its operation.

43

II. GENERAL INFORMATION Selected Definitions “Parent” means a biological, adoptive, step or foster father or mother, or any other individual who stood in the place of the associate’s parent when the associate was a Son or Daughter (see definition of “Son or Daughter” below). The term “Parent” does not include parents “in law.”

during deployment to a foreign country under a call or order to active duty under a provision of law referred to in 10 U.S.C. § 101(a)(13)(B).

“Covered Service member” means a member of the Armed Forces who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the military’s temporary disability retired list for a Serious Illness or Injury.

Covered Service member also means 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 at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.

“Son or Daughter” means a biological, adopted or foster child, a stepchild or legal ward of an associate, or a child for whom the associate stands in the place of his/her parent, who is either (1) under age 18 or (2) an eligible adult child age 18 or older and incapable of self-care because of a mental or physical disability at the time that FMLA leave is to commence. (This definition does not apply to Covered Service member Leave or Military Family Exigency Leave.)

“Serious Illness or Injury” with respect to a member of the Armed Forces means an injury or illness incurred or aggravated in the line of duty and on active duty that renders the Covered Service member unfit to perform the duties of his or her office, grade, rank or rating. With respect to a Covered Service member who is a veteran, a Serious Illness or Injury means a qualifying illness or injury (as defined by the Secretary of Labor) that was incurred or aggravated in the line of duty on active duty in the Armed Forces and that manifested itself before or after the member became a veteran.

“Son or Daughter of a Covered Service member” means a Covered Service member’s biological, adopted or foster child, stepchild or legal ward, or a child for whom the Covered Service member stood in the place of his/her parent, who is of any age. (This definition only applies to Covered Service member Leave.)

“Son or Daughter on covered active duty” means (1) the associate’s biological, adopted or foster child, stepchild, or legal ward, or a child for whom the associate stood in the place of the parent when the child was under 18, (2) who is on or called to covered active duty, and (3) who is of any age. (This definition only applies to Military Family Exigency Leave.)

“Covered Active Duty” means, in the case of a member of the regular Armed Forces, duty during deployment to a foreign country. In the case of a member of a reserve component of the Armed Forces, covered active duty means duty

“Outpatient Status” with respect to a Covered Service member means the status of a member of the Armed Forces assigned to a military medical treatment facility as an outpatient or a unit established for the purpose of providing command and control of members of the Armed Forces receiving medical care as outpatients.

“Veteran” is defined by 38 U.S.C. § 101.

44

II. GENERAL INFORMATION VI. ASSOCIATE CONDUCT • Termination Of Employment The Company recognizes that from time to time, associates may voluntarily leave the Company. In such cases, the associate should notify his/her manager as far in advance as possible.

If the reason for leaving involves job dissatisfaction, associates are urged to discuss their decision with their manager to attempt to resolve the problem(s).

• Discipline/Termination/

Work Rules hhgregg hopes that your working relationship with hhgregg will be mutually satisfactory.

However, your employment will continue only so long as you are satisfied with hhgregg, and hhgregg is satisfied with your performance. Just as you may resign at any time, hhgregg may terminate your employment at any time. hhgregg cannot promise continued employment or employment for a specific period of time.

There may be occasions when associates perform at an unsatisfactory level, violate a Company policy, or behave inappropriately. hhgregg will try, when it deems appropriate, to provide associates with reasonable opportunities to correct deficiencies.

However, as previously noted, employment may be terminated at will by the associate or hhgregg at any time with or without cause and without following any system of discipline or warning.

Associates voluntarily or involuntarily leaving the Company are entitled to pay for work performed through the last hour worked, and pay for earned but unused vacation time.

Commissioned salespersons who leave the Company’s employ will be paid commissions on all of their sales that are completed only during the first thirty (30) day period after they leave employment.

Commissioned salespersons who leave the Company’s employ before the end of any bonus period will not receive any bonus for that period.

Nevertheless, hhgregg may choose in certain

Associates are entitled to normal health insurance benefits through the remainder of the month in which the associate leaves, (providing they were eligible under the terms and conditions of the Company’s insurance carrier).

cases to use forms of discipline that are less severe than termination. Examples of such less severe forms of discipline include counseling, a verbal warning, written warning, suspension with or without pay.

Additionally, you may be placed on an investigatory leave to allow hhgregg time to review fully the circumstances related to a potential disciplinary matter.

Upon termination of your employment, whether voluntary or involuntary, you are expected to immediately return uniforms, all Company equipment, and any other Company property in your possession.

45

II. GENERAL INFORMATION detrimental to the interests of hhgregg, other associates, customers or vendors may also result in disciplinary action, including termination.

Investigatory leave is not disciplinary and will not be reflected in your performance review or in your personnel file, although the results of the investigation may lead to documentation in your file.

Because circumstances vary in each case involving possible disciplinary action, each situation will be handled on an individual basis with the severity and frequency of the conduct taken into consideration. Although one or more of the steps described above may be taken in connection with a particular associate, no formal order or system is necessary.

Whenever a disciplinary action is documented, you will be asked to acknowledge that you have reviewed the documentation by signing the original. Your signature will not signify your agreement with the contents of the document.

The policies set forth as well as in prior sections of this Handbook are intended to provide you with fair notice of what is expected of you. It is not possible, however, to provide an exhaustive list of all types of impermissible conduct and performance, and the following are only examples of behaviors that are unacceptable and, if found to exist, can result in disciplinary action up to and including immediate termination.

You should, therefore, be aware that conduct not specifically listed below, but which adversely affects or is otherwise 46

•

A ttendance - Engaging in a pattern of absenteeism/tardiness/leaving early/taking unauthorized, excessive or extended breaks.

No call/No show for two consecutive days.

•

onfidential Matters - Discussing or C revealing confidential information with individuals outside or within hhgregg who are not authorized to have such information.

•

riminal Activity - Being convicted of C or pleading guilty to a crime that reflects unfitness for the job or constitutes a threat to the safety or well-being of hhgregg or its associates, customers, or property.

•

Customer, Public and Co-worker Relations - Mistreating, abusing, or intimidating customers, vendors, visitors, or other associates. Use of profane, obscene, or disrespectful language.

•

etrimental Behavior - Making false, D misleading, or malicious statements about other associates, hhgregg, or Company practices; engaging in conduct that undermines, or is intended to undermine, hhgregg’s reputation. Inappropriate conduct while on Company property, in Company vehicles or while conducting Company business.

II. GENERAL INFORMATION •

•

•

•

ishonesty - Falsifying, altering, or D omitting information on an employment application or any other Employer record; giving false information to management personnel or concealing defective or erroneous work, damage, or other matters that may affect hhgregg’s customers, reputation and services.

•

•

oor Performance - Failing to P produce quality and timely work or meet performance expectations.

•

Safety - Failing to use equipment, materials, and supplies in accordance with Company policies and practices; violating safety or health rules or practices or engaging in horseplay or other conduct that creates a safety or health hazard.

•

nauthorized Use of Employer U Time/Property - Using Company time or property for non-work related activities such as gambling, soliciting, internet use, etc.

•

F ailing To Remain Alert - Failing to remain alert at all times while on duty.

Drugs and Alcohol - Violating hhgregg’s Drug and Alcohol Abuse Policy.

E qual Employment Opportunity/ Anti-Harassment - Failing to comply with hhgregg’s Equal Employment Opportunity/Professional Conduct & Anti-Harassment Policy.

Fighting - Verbal or physical fighting, baiting, or other behavior that instigates fighting or other conduct that violates hhgregg’s Workplace Violence Policy.

• Non-Compliance with Laws/Regulations - Failing to comply with local, state and federal laws and/or regulations.

• Mishandling Company Property - Mishandling, misusing, stealing, unauthorized taking, or improperly accounting for Company money, funds, property or merchandise.

•

I nsubordination - Failing to follow or comply with instructions or work orders in a timely manner.

•

Failure to Cooperate - Failing or refusing to cooperate in an investigation conducted by hhgregg.

47

Other Policies, Procedures and Practices - Failing to comply with other expectations for performance and behavior set forth in this Handbook or by your manager.

If you have any questions about the information included in this handbook, please direct them to your manager or the Human Resources Department. **** This handbook is not a contract of employment.

NOTICE Nothing in this Handbook is intended to create (nor shall be construed as creating) an express or implied contract of employment or to guarantee employment for any term or to promise that any specific procedures must be followed by hhgregg.

While hhgregg hopes that your employment relationship with it will be a satisfactory one, you may resign your employment at any time for any reason at all, with or without notice. hhgregg may similarly terminate the employment relationship at will.

48

ACKNOWLEDGEMENT RECEIPTS

•

Acknowledgement of Receipt of the Code of Conduct

•

cknowledgement of Receipt of Equal Employment Opportunity and Professional A Conduct & Anti-Harassment Policy

•

Acknowledgement of Receipt of Associate Handbook

49

ACKNOWLEDGEMENT OF RECEIPT OF CODE OF BUSINESS CONDUCT AND ETHICS/ WHISTLEBLOWER POLICIES Acknowledgement and Affirmation By completing the acknowledgement and affidavit, you are attesting to the following: • •

• •

I have received and read and I understand hhgregg, Inc’s Code of Business Conduct and Ethics.

I acknowledge and agreed that the Code of Business Conduct and Ethics does not create an employment contract between the company and me.

I will not commit or knowingly condone an act that is outside of our Code of Business Conduct and Ethics or any act that would be considered fraudulent to the company or its shareholders.

I have read and I understand the Policy on Complaints of Accounting, Internal Accounting Controls, Auditing Matters and Public Matters and Reporting (“Whistleblower” Policy).

___________________________________________ Associate Signature ___________________________________________ Associate Name Printed ___________________________________________ Date of Signature

Revised Date: October 2008

ACKNOWLEDGEMENT OF RECEIPT OF EQUAL EMPLOYMENT OPPORTUNITY AND PROFESSIONAL CONDUCT & ANTI-HARASSMENT POLICY

I have received a copy of hhgreggâ&#x20AC;&#x2122;s Equal Employment Opportunity and Professional Conduct & AntiHarassment Policy. I understand that this policy supersedes all prior similar policies, written or oral, and that any questions about this policy should be directed to my direct supervisor or the Human Resources Department. I also understand that concerns about any violation of this policy should be reported immediately to one of these individuals/departments, so that the Company can take appropriate action.

_________________________________ __________________________________

Associate Signature Printed Name

_________________________________

Date

Revised Date: October 2008

ACKNOWLEDGEMENT OF RECEIPT OF ASSOCIATE HANDBOOK AND CONFIDENTIALITY AGREEMENT

I have received a copy of the hhgregg’s Associate Handbook and agree to read and keep the handbook for future reference and to direct any questions about the handbook or its contents to my direct supervisor. I understand that as a term and condition of my employment I am to comply with and abide by the policies in the handbook. I understand that this handbook is not a contract of employment and does not alter my at-will employment relationship with hhgregg. I understand that hhgregg reserves the right to modify, change, delete, or add to, as it deems appropriate, the policies, procedures, benefits, and other general information contained in this handbook.

I recognize that during my employment in the course of performing my duties, I may have access to confidential information. Confidential information includes, but is not limited to, information not publicly available about the Company’s development, purchasing, marketing, sales, costs, pricing, improvements, ideas (whether patentable or not) that are related to the Company’s activities; personal and professional information about other associates, including their salaries, benefits, and medical information; confidential information of a personal and professional nature about the Company’s customers; and information relating to customers, including telephone and address lists. I understand that I am to protect such confidential information and that I shall not directly or indirectly use or disclose this confidential information without authority from the CEO of the Company. I understand that unauthorized disclosure of confidential information will subject me to immediate termination and possible criminal and civil penalties.

_________________________________ ___________________________________

Associate Signature Printed Name

_________________________________

Date

Revised Date: October 2008