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Altering, falsifying or tampering with time records is prohibited and subjects the employee to discipline, up to and
including discharge.

Rig crew member’s time will be entered daily onto a rig crew electronic time keeping system by a member of the
Operations Management Team. If a crew member has a question about the crew time sheet daily entry, s/he should
contact their immediate supervisor for review. Any errors in the time record should be reported immediately to a
Supervisor, who will attempt to correct and make necessary adjustments.

Overtime
Like most successful companies, we experience periods of extremely high activity. During these busy periods, additional
work is required from all of us. Supervisors are responsible for monitoring business activity and requesting overtime work
if it is necessary. Effort will be made to provide employees with adequate advance notice in such situations.

Any non-exempt employee who works overtime will be compensated at the rate of one and one-half times (1.5) his/her
regular rate of pay (RROP) for all time worked in excess of forty (40) hours each week, unless otherwise required by law.

Note: Administrative nonexempt employees may work overtime but only with prior management authorization.

IMPORTANT OVERTIME CALCULATION NOTICE (WAOT AND RROP)
Where an employee in a single workweek works at two or more different types of work for which different straight-time
rates have been established, the regular rate of pay for that week is the weighted average of such rates. That is, the
earnings from all such rates are added together and the total is then divided by the total number of hours worked at all
jobs for the entire workweek.

For purposes of calculating overtime for non-exempt employees, the workweek begins at 12:01am Sunday and end
11:59pm on Saturday. Unless the job being performed is under a prevailing wage determination that specifies overtime
rate requirements, when two or more hourly rates or types of earnings during the workweek comprise an employees total
wages (i.e., job rate, travel rate, fringe rate etc) the Company uses the WAOT (weighted average overtime) formula to
determine an employee’s RROP first before applying the applicable overtime multiplier (1.5x etc) to each hourly rate.

Both California and Federal Overtime Laws require that employees be paid overtime based on an employee’s given hourly
rate of pay, but is rather a computed rate based on all the compensation that a single employee has earned for the entire
workweek.

The basic rule for computing the regular rate of pay (RROP) is that it is computed by taking all the compensation that you
made during that week and dividing it by the total number of hours worked. Unfortunately, it is never quite that simple.
The Department of Labor (DOL) has issued regulations that control exactly how the regular rate of pay (RROP) is to be
computed. An example of how we will arrive at the RROP and WAOT (weighted average overtime) calculations are noted
below.

The first thing is thing we determine is the total compensation for the week is. The rule is that all payments of any kind,
either cash or non-cash, must be included in the regular rate of pay (RROP). Everything of value that the National pays its
hourly (nonexempt) employees must be included unless it meets one of the following exceptions:

1. Small occasional gifts, such as Christmas gifts that are not based on production or efficiency.
2. Vacation, Holiday, or sick pay.
3. Discretionary bonuses. The bonus must be 100% discretionary. That is, the amount and whether it will be paid
must not be tied to any type of performance measure.
4. Retirement or life-insurance contributions that are irrevocable.
5. Daily or other type of overtime pay (just means that overtime is not "double counted").
6. Extra pay for 6th, 7th day pay or holidays provided that the pay is 1.5 the employees normal rate. That is, if you
receive 1.5x for holiday work, you won't also get 1.5x if that work was also overtime.

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