Employee purchase policy

EMPLOYEE PURCHASE POLICY Eligibility: All regular full time employees are eligible beginning on their date of hire.

Program dates: Calendar year is January 1 through December 31 each year.

Eligible product: Bikes and equipment. Availability may be limited on high-demand products. Dealer orders are filled first. Bikes can only be purchased from open stock in Oracle or from the Blem bike inventory which can be viewed via the Specialized intranet.

Equipment purchases are to be transacted via the Specialized Internet web-site only.

Maximums: Two bikes per employee per calendar year (700C road or 26 inch mountain).

(Frames count as a bike. Bikes with 12,16, 20 inch wheels do not count against the two bike minimum, but are limited to one for each child in your immediate family per year.)

Terms: Check or money order for bikes purchased by Salt Lake or Ohio employees.

Check or credit card for bikes purchased by Morgan Hill employees, including Field Reps.

Pricing: Bikes and equipment are 20% off of the Level 1 dealer level pricing. Please refer to the Item Availability link on the intranet for pricing and to locate the part # Shipping costs: $20 per bike for ground freight. Equipment: $6 dollars per order for Fed Ex 3 day / options defined on the web-site.

Limitations Following Purchase: Purchases are for personal use or the immediate family* of the purchasing employee. The employee agrees that any purchased items may not ever be sold for a profit or resold before one full year. Employee acknowledges this is an essential element of the employee purchase program, and shall continue on even after separation from employment.

Best Behavior: The employee is responsible to ensure that dealer interaction with employee purchased bikes is avoided or handled in an appropriate, non-offensive manner. Any violation of this agreement will result in loss of purchase privileges and may invoke disciplinary action up to and including loss of employment.

Law, Jurisdiction, Enforcement, and Damages: Employee acknowledges that any attempt to sell, including any advertisement, as well as any actual sale in violation of the

terms of this agreement would inevitably disrupt company morale, negatively impact the Specialized brand, and negatively impact Specialized’s relationship with its dealers and their customers. Employee therefore agrees that in the event of a breach of the Limitations Following Sale clause actual damages would be difficult to calculate. Thus, in the event employee advertises product purchased under this program for sale in violation of the terms hereof, such as on eBay or Craigslist, or in any newspaper, the parties agree to liquidated damages at $500 for each advertisement including each day the advertisement is posted or placed. The prevailing party in any action to enforce this agreement shall be entitled to recover his/her/its attorneys’ fees and litigation costs.

Procedure: 1- For all bike purchases, a manager’s signature is required and a completed Employee Bike Purchase form must be completed (found on Paceline ) 2- Employees in Morgan Hill give the signed order forms to the USA Sales Administrator for processing.

3- Employee’s in Ohio and Salt Lake forward order forms to Salt Lake; fax 801-9732558. (Corporate Distribution Manager signature required for Ohio and Salt Lake employee orders).

4- The order will then be entered into Oracle and the bike will be shipped to the appropriate location for assembly by the designated builder.

Equipment orders are all processed via the web site.

Bike Assemblers: The designated Specialized employee at each facility must build all bikes on their own time. For those who have bike building experience, they may build their own with their manager’s approval.

Additional Information: A $20 contribution to Bikes Belong is required with all bike purchases of 700C road or 26 inch mountain bikes. (http://bikesbelong.org) Bikes Belong Coalition is the national organization dedicated to putting more people on bicycles more often. They link bicycle manufacturers, suppliers and retailers with broad-based and grassroots efforts to make bicycling safe, convenient and fun. ___________________________________ ________________________________ _____________________________ Print name

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* Immediate family members include: spouse, significant other, son/daughter, stepson/stepdaughter, brother/sister, mother/father, grandmother/grandfather/grandchild, motherin-law/ father-in-law, brother-in-law/sister-in-law, son-in-law/daughter-in-law, niece/nephew