asian.book manual for salary

October 2, 2005

Industrial Relations Manual for Asian Employees

(Last Updated: October 2, 2005)

Industrial Relations ManualIntroduction

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Introduction

I. General

The Industrial Relations Manual contains statements of Company policy. It is intended to be a working guide for managerial, supervisory and professional staff employees in the day-to-day administration of Industrial Relations and related programs.

This Manual will increase understanding of Company intent, eliminate the need for individual decisions on Company-wide matters, and assure greater uniformity of administration throughout the Company. It is the responsibility of each member of management to administer these policies in a consistent and impartial manner.

For the purposes of this Manual, a policy is a general statement of Company intent presented with specific methods for achieving that objective in most situations. In other words, this Manual provides:

• statements of the Company's intentions, and• guides to the established methods of carrying out those intentions.

In using this Manual, it must be remembered that no two situations are exactly the same. Further, it simply is not practical, nor possible, to anticipate all possible situations in advance and present policies which supply complete ready-made answers. However, it should be possible to address virtually every situation within the framework of the Company intentions presented in this Manual.

All references in this Manual to "Company" shall be deemed to be references to "Saudi Arabian Oil Company (Saudi Aramco)". All references in this Manual to "Aramco Overseas Company" or "AOC" shall be deemed to be references to either "Aramco Overseas Company (AOC)" or "Aramco Overseas Company B.V. (AOC B.V.)".

II. Policy Presentation and Maintenance

Employee Relations Policy & Planning is responsible for the writing, codification and maintenance of Industrial Relations Policy. The Director, Personnel, is responsible for notifying the workforce of policy additions and revisions.

The Company sanctioned Industrial Relations Manual and policies are presented and maintained in the corporate HR InfoCenter intranet Web site (http://hr/hrinfocenter/). Printed versions of the policies from the HR InfoCenter are not considered Company sanctioned due to their potential alteration.

From time to time, the IR policies will be updated to reflect changes in current policy or document new policy. These changes and additions will be communicated to employees by the Director, Personnel, and highlighted in the HR InfoCenter Web site.


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It is important that everyone in the Company properly understand the policies which affect them. When specific questions arise, employees should refer to the applicable portions of the IR Manual in the HR InfoCenter. HOWEVER, NO PORTIONS OF THE MANUALS SHOULD BE REPRODUCED NOR MADE AVAILABLE TO NON-EMPLOYEES EXCEPT BY EMPLOYEE RELATIONS POLICY & PLANNING.

III. Organization of the Manual

The Industrial Relations Manual is organized into 7 volumes generally along the lines of the 7 basic payrolls. These volumes are entitled:

Each volume is divided into chapters, which contain a combination or grouping of related policies.

The Chapter titles are:

Each chapter is organized in outline form. Major divisions, called sections, are indicated by Roman Numerals (i.e., I, II, III, IV, etc.). Sections are further divided into sub-sections indicated by capital letters (i.e., A, B, C, etc.). Further divisions

Volume 1 Saudi ArabVolume 2 U.S./CanadianVolume 3 Other ArabVolume 4 Pound SterlingVolume 5 AsianVolume 6 CasualVolume 7 Euro

TOC Table of Contents1 Employment2 Salary & Job Administration3 Over Base Salary Components4 Overtime & Shift Premiums5 Benefit Programs6 Vacations & Holidays7 In-Kingdom Assignments8 Out-of-Kingdom Assignments9 Leaves Of Absence10 Terminations11 Shipment Of Effects12 Housing & Families13 Employee Communications14 Personnel Development15 Schooling For Children16 Local/International Transportation17 Miscellaneous


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are by paragraph (numbered 1, 2, 3, etc.) and sub-paragraph (indicated as a, b, c, etc.). References within each volume will be by chapter, section, sub-section, paragraph and sub-paragraph, where applicable.

IV. Interpretation/Clarification of Policy

Managerial and supervisory employees share in the administrative responsibilities for IR policies. Those functions that have primary responsibility for administration of policy are referred to in the text by title or function (i.e., Directors, Personnel; Housing Office; Area Personnel Administrator, etc.).

Questions concerning the interpretation of policy should be addressed to that function having primary administrative responsibility (i.e., Traffic, Transportation, Community Services, Personnel). Where responsibilities are not clear or when there is a need for written clarification, requests should be directed to the Area Personnel Administrator located in each district.

V. Out-of-Policy Committee (Function and Procedures)

It is recognized that established Industrial Relations policy may not be sufficiently explicit to cover all situations that may occur within the framework of specific policies and exceptions to policy may be warranted. The Out-of-Policy Committee has been established to review such situations and to make recommendations for their handling.

The Committee is composed of eight permanent members: The Chairman (the Coordinator of Personnel Staff Services); representatives from ERP&P and Community Services; and five representatives from the non-Industrial Relations Business Lines.

A. Procedures for Out-of-Policy Actions

1. An employee submits his request in writing to his supervisor who evaluates the request. If he concurs with its appropriateness and validity, he submits a recommendation to the Area Personnel Administrator for action on the request. The recommendation must have the concurrence of the employee's Department Head. The Area Personnel Administrator will present the relevant facts along with the request and his recommendation to the Coordinator, Personnel Staff Services (Chairman, Out-of-Policy Committee).

2. Requests pertaining to special benefits, home ownership, special education assistance, special residences, salary administration, layoff benefits, medical referrals, career development and other areas specifically covered by other Committees are outside the scope of this Committee; and will continue to be handled by the respective Committee specifically established for responding to special situations, or in accordance with the out-of-policy authorities as designated in the IR Manual.


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B. Guidelines for Consideration

Consideration of an out-of-policy request is determined in accordance with the following guidelines:

1. The request must have the prior written support and concurrence of the employee's Department Head (Department Head recommendation required for all requests from up to and including Division Head; Executive Management recommendation required for all requests from Department Heads and above).

2. The request should have first been reviewed and rejected by the organization charged with administering similar policies or benefits.

3. The request must be based on an unusual situation that, if kept unresolved, might cause the employee or dependent an unusual or an unacceptable material, physical or personal setback or damage.

4. The request must be of unique individual nature in that the circumstances that created it should not apply or be expected to apply to a large number of other employees or dependents, nor should it be of a recurring nature to the same individual or other Saudi Aramco employees or their dependents.

5. All cases properly presented to the Committee will be considered, provided they meet the Committee's guidelines for consideration. A case will be based on its individual merits, regardless of payroll or service with the Company.

6. Direct and/or indirect costs and precedents to the Company as a result of an out-of-policy approval will be made explicit and be factors in determining whether or not a recommendation for such approval will be submitted.

7. Out-of-policy approvals shall not necessarily constitute a precedent nor shall previous out-of-policy approvals be accepted as jurisdiction for proposed cases.


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Table of Contents

Note: To go to a particular topic, click the relevant item below or in the "Contents" frame at left.

Introduction........................................................................................................... 2

I. General ........................................................................................... 2

II. Policy Presentation and Maintenance.................................................... 2

III. Organization of the Manual................................................................. 3

IV. Interpretation/Clarification of Policy..................................................... 4

V. Out-of-Policy Committee (Function and Procedures)............................... 4

A. Procedures for Out-of-Policy Actions ................................................ 4B. Guidelines for Consideration ........................................................... 5

Chapter 1: Employment ........................................................................................ 22

I. Definitions ..................................................................................... 22

II. Recruitment ................................................................................... 23

A. General ..................................................................................... 23B. Responsibilities ........................................................................... 23C. Exceptions ................................................................................. 23

III. Employment................................................................................... 23

A. General ..................................................................................... 23B. Responsibilities ........................................................................... 23C. Employment Procedures .............................................................. 24D. Exceptions ................................................................................. 28

IV. Employment Standards.................................................................... 28

A. Responsibilities ........................................................................... 28B. Standards of Employment ............................................................ 29

V. Probationary Period ......................................................................... 31

A. General ..................................................................................... 31B. Exceptions ................................................................................. 31

VI. Employment Interview/Processing Expenses....................................... 31

A. General ..................................................................................... 31B. Procedure .................................................................................. 31C. Exceptions ................................................................................. 32

VII. Relocation Expenses for All New Employees ........................................ 32

A. General ..................................................................................... 32B. Procedure .................................................................................. 32

VIII. Compensation - New Hires ............................................................... 33

IX. Employee Benefits .......................................................................... 33

X. Reinstatement of Employment .......................................................... 34


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XI. Release of Employee Personnel Information........................................ 35


XII. Conflict of Interest Policy ................................................................. 35

A. The Company’s Policy on Conflict of Interest ................................... 35B. Examples of Actions Which Are Violations of the Company’s Conflict of

Interest Policy ............................................................................ 40C. Examples of Actions Which Are Not Violations of the Company’s Conflict

of Interest Policy......................................................................... 40D. Disclosure and Approval Form....................................................... 41

XIII. Business Ethics Policy ...................................................................... 41

A. The Company’s Policy on Business Ethics........................................ 41B. Examples of Actions that Are Strictly Prohibited .............................. 42C. Examples of Actions that Do Not Present Ethical Problems ................ 43

XIV. Career Center Division Policies.......................................................... 43

A. General ..................................................................................... 43B. Career Center Service.................................................................. 43C. Job Posting Program.................................................................... 43

Appendix I: Approval Authorities for Manpower Requisitions - Foreign Contract, ITEA and Chinese STC Employees .............................. 47

Salary Codes 18 and Above (excluding Physicians) .............................. 47Salary Codes 17 and Below (including SC18 Physicians) ....................... 47Physicians...................................................................................... 47

Appendix II: Sample Letter of No Objection................................................ 48

Chapter 2: Salary & Job Administration................................................................ 49

I. General Policies .............................................................................. 49

II. Definitions ..................................................................................... 49

III. Job Description and Job Evaluation .................................................... 51

IV. Salary Structure ............................................................................. 52

A. General ..................................................................................... 52B. Policies ...................................................................................... 52

V. Hiring Rates ................................................................................... 52


VI. Review of Performance and Salary Planning........................................ 53

A. General ..................................................................................... 53B. Policies ...................................................................................... 53C. Approval of the annual performance distribution for SC 03-17 employees

is by the President & CEO............................................................. 54

VII. Merit Increases............................................................................... 54


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A. General ..................................................................................... 54B. Policies - Merit Increases.............................................................. 54C. Lump Sum Payment for Asian Employees when Merit Increase Limited by

Range Maximum ......................................................................... 57

VIII. Promotional Increases ..................................................................... 58

A. General ..................................................................................... 58B. Criteria for Promotion .................................................................. 59C. Normal Promotions...................................................................... 60D. Professional Ladder Promotions..................................................... 60E. Superior Performer...................................................................... 61F. Job Reclassification ..................................................................... 62G. Approval Authorities .................................................................... 62

IX. Downward Job Reclassification .......................................................... 62


X. Downward Job Reassignment............................................................ 63


XI. Temporary Assignments................................................................... 64

A. Acting Assignment ...................................................................... 64B. Other Assignments...................................................................... 66

Appendix I: Approval Authorities for Salary Offers ....................................... 68

Salary Codes 18 and Above .............................................................. 68Salary Codes 17 and Below (Excluding Physicians) .............................. 68Physicians...................................................................................... 68

Appendix II: Approval Authorities for Merit Increases (SA-8000 Action) (Including Upwards Reclassification Increases Not Involving Change in Job Scope) .......................................................................... 69

Part I - Merit Actions ....................................................................... 69Part II - Changes and/or Processing SA-8000 Merit Actions................... 69

Appendix III: Permanent Lateral Transfers (Job in Same Salary Code & Same Organization Level)............................. 71

Appendix IV: Approval Authorities for Promotional/Permanent Assignment Actions (Including Reclassification Increases Based on Expanded Job Scope) ......... 72

Part I - Promotional Actions.............................................................. 72Part II - Changes and/or Processing SA-8000 Promotional Actions ......... 72

Appendix V: Approval Authorities for Downward Job Reclassification/Reassignment and Full Salary Code Protection (SA-8000 Action) ............... 74

Chapter 3: Over Base Salary Components............................................................. 75

I. General Policies .............................................................................. 75

II. Definitions ..................................................................................... 75

III. Thirteenth Month Pay ...................................................................... 75

IV. Annual Benefits Supplement............................................................. 75


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A. General ..................................................................................... 75B. Policy ........................................................................................ 75

V. Specified Location Allowance ............................................................ 76

A. General ..................................................................................... 76B. Criteria ...................................................................................... 76C. Amount ..................................................................................... 76D. Eligibility.................................................................................... 77E. Application................................................................................. 77F. Application During Time Off and Business/Temporary

Assignments .............................................................................. 77G. Approval Authority ...................................................................... 78

VI. Mobile Field Party Allowance ............................................................. 78

A. General ..................................................................................... 78B. Eligibility.................................................................................... 78C. Amount ..................................................................................... 78

VII. Work Clothing................................................................................. 78


VIII. Transportation Allowance ................................................................. 81

IX. Rental Assistance Allowance ............................................................. 81

X. Company Annual Award ................................................................... 81

XI. Travel Time Allowance ..................................................................... 81


XII. IK Project Mobility Allowance ............................................................ 83

A. General ..................................................................................... 83B. Criteria ...................................................................................... 83C. Amount ..................................................................................... 84D. Application................................................................................. 84E. Application During Time Off and Business/Temporary

Assignments .............................................................................. 84F. Approval .................................................................................... 85

XIII. In-Kingdom Temporary Assignment Allowance (IKTA) .......................... 85

XIV. Retroactive Allowance Payment......................................................... 85

Appendix I: Specified Locations ................................................................ 86

Category I ..................................................................................... 86Category II .................................................................................... 86Category III ................................................................................... 86Category IV ................................................................................... 86

Appendix II: Specified Location Allowance Amounts..................................... 88

Appendix III: Eligible Work Locations for Travel Time (Zone) Allowance Application .......................................................................... 89


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Chapter 4: Overtime & Shift Premiums................................................................. 91

I. General ......................................................................................... 91

II. Definitions ..................................................................................... 91

III. Shift Allowance............................................................................... 92


IV. Straight Time Pay Rate .................................................................... 93


V. Overtime ....................................................................................... 94


VI. On-Call Time .................................................................................. 98


VII. Call-In Time ................................................................................... 99

A. General ..................................................................................... 99B. Policies .....................................................................................100

VIII. Training Time ................................................................................100

A. General ....................................................................................100B. Policies .....................................................................................100

IX. Ramadan Time ..............................................................................100


Appendix I: Overtime Approval Authorities ................................................101

Appendix II: Schedule of Shift Allowance ..................................................102

Chapter 5: Benefit Programs .............................................................................. 103

I. General ........................................................................................103

II. Basic Benefit Plans .........................................................................103

A. Supplemental Retirement Income Plan..........................................103B. Thrift Plan.................................................................................103

III. Severance Award Plan ....................................................................104

A. Involuntary Termination..............................................................104B. Voluntary Termination.................................................................104C. Non-Payment of Severance Award................................................104

IV. Death Benefits...............................................................................105

A. Ex-Gratia Benefit .......................................................................105B. Approval Authority .....................................................................105C. Priority of Beneficiaries ...............................................................105

V. Short Term Disability Benefits - Foreign Contract Employees ................105


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A. Industrial Disability ....................................................................105B. Non-Industrial Disability..............................................................106C. General Provisions .....................................................................106

VI. Short Term Disability Benefits - Indefinite TermEmployment Agreement and Chinese Specified Term Contract..............108

VII. Permanent and Total Disability Benefits.............................................109

A. Benefit Amount..........................................................................109B. Injury or Illness Following Normal Retirement Age..........................110C. Condition ..................................................................................110

VIII. Layoff Benefit Plan .........................................................................110

IX. Industrial Injury Benefits ................................................................110

A. Work Related Injuries .................................................................110B. Occupational Diseases ................................................................111

X. Continuous Service ........................................................................111

A. Establishment of Continuous Service Date .....................................111B. Non-Retroactivity of Benefits on Reinstatement ..............................111C. Repayment of Severance Benefits on Reinstatement .......................111D. Rehires - Participation in Benefit Plans (Foreign Contract

Employees) ...............................................................................112

XI. Service Award Program...................................................................112

A. Objective ..................................................................................112B. Eligibility...................................................................................112C. Awards .....................................................................................112D. Administration ...........................................................................113E. Presentation of Awards ...............................................................113F. Termination Year........................................................................114G. Special Leave for Long Service.....................................................114H. Long Service Cash Award ............................................................115

XII. Medical and Dental Services ............................................................115

A. Definitions ................................................................................115B. Eligibility...................................................................................115C. Medical And Dental Care System..................................................115D. Cost of Medical and Dental Services..............................................117E. Referral ....................................................................................118F. Release and Confidentiality of Employee and Dependent Medical

Information...............................................................................120

XIII. Physical Examinations ....................................................................123

XIV. Executive Health Program ...............................................................123

XV. Retirement Parties .........................................................................124

Chapter 6: Vacations & Holidays......................................................................... 125

I. General Policies .............................................................................125

II. Definitions ....................................................................................125

III. Holidays .......................................................................................126


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A. Company Holidays .....................................................................126B. Bridging....................................................................................127C. Random Use of Vacation Credits for Special Occasions ....................127D. Holidays Affecting Pay ................................................................128

IV. Annual Vacation Plan - Foreign Contract, ITEA, and Chinese STC Employees..............................................................................129

A. Applicability ..............................................................................129B. Vacation Eligibility ......................................................................129C. Annual Vacation Credits ..............................................................130D. Travel Time ...............................................................................132E. Repatriation Travel Costs.............................................................132F. Scheduling of Repatriation Vacations ............................................133G. Length of Repatriation Vacations ..................................................133H. Deferred Vacation Credits/Buy-Out of Vacation Days After Year of

Arrival ......................................................................................133I. Vacation Credit Use ....................................................................134J. Recall and Early Return from Vacation...........................................134K. Late or Non-Return from Vacation ................................................134L. Holidays and Rescheduled Days Off Within a Vacation Period............134M. Business Assignments in Conjunction with Vacations.......................135N. Employees Assigned Temporarily to an Associated Company ............135O. Employees Completing Temporary Assignments .............................135P. Sickness While on Vacation .........................................................135Q. Vacation Accounting at Termination ..............................................135R. Vacation Excess Baggage ............................................................136

Appendix I: Authorized Repatriation Travel Time ........................................137

Chapter 7: In-Kingdom Assignments.................................................................. 138

I. General ........................................................................................138

II. Definitions ....................................................................................138

III. Business Assignments ....................................................................138

IV. Permanent Reassignment Within Saudi Arabia....................................148

A. Duration ...................................................................................148B. Documentation ..........................................................................148C. Personal Effects .........................................................................148D. Relocation Allowance ..................................................................148E. Housing and Meal Allowance/Per Diem ..........................................150F. Lease Cancellation Financial Assistance .........................................151

V. Loan of Saudi Aramco Employees to Vela International Marine, Ltd...............................................................................................152

VI. Business/Transient Expenses ...........................................................152

A. Documentation/Forms ................................................................152B. Expense Approvals/Authorization .................................................154

VII. Free Food or Meal Allowance............................................................158



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Appendix I: Housing Allowances and Related Tables....................................162

Appendix I.1:Housing Spendable (Hypothetical Rent) Deduction Guidelines.................................................................................162

Appendix II: Miscellaneous......................................................................163

Appendix II.1:Per Diem Amounts for Business Assignments in Saudi Arabia..............................................................................163

Appendix II.2:Business Assignment Meal Allowance/Per Diem Amounts - Returning Saudi Aramco Employees..............................................164

Appendix II.3:Entertainment Allowance ............................................165

Chapter 8: Out-of-Kingdom Assignments ........................................................... 166

I. General ........................................................................................166

II. Definitions ....................................................................................166

III. Business Assignments ....................................................................166

IV. Temporary Assignments Outside Saudi Arabia ....................................170

A. Duration ...................................................................................170B. Definition/Limitations .................................................................171C. Approvals and Clearance Requirements .........................................171D. Documentation ..........................................................................171E. Compensation ...........................................................................172F. Benefit Plan Participation.............................................................176G. Vacations and Holidays ...............................................................176H. Shipment of Effects ....................................................................177I. Family Accompaniment ...............................................................178J. Air Transportation Procedures ......................................................185K. Transient Living Expenses ...........................................................186L. Settling-In Allowance..................................................................187M. Local Transportation ...................................................................189N. Education for Children ................................................................191O. Local Language Instruction for Employee.......................................191P. Business Recreation, Social & Health Club Membership....................192Q. Housing and Personal Effects Storage in Saudi Arabia .....................192R. Continuation in the Assignment....................................................194

V. Business/Transient Expenses ...........................................................194

A. Documentation/Forms ................................................................194B. Expense Approvals/Authorization .................................................195

VI. Loan Agreement, Letter of Understanding, Temporary Assignment Summary - Saudi Aramco Employees ..............................199

A. Conditions Requiring Loan Agreements/Letter of Understanding .......199B. Responsibilities and Procedures for Applicable Loan Agreement, Letter of

Understanding and Related Forms and Documents..........................201

VII. Loan of Saudi Aramco Employees to Vela International Marine, Ltd...............................................................................................204

VIII. Loan of Saudi Aramco Employees to ASC Locations.............................205

Appendix I: Housing Allowances and Related Tables....................................206


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Appendix I.1:Housing Spendable (Hypothetical Rent) Deduction Guidelines.................................................................................206

Appendix II: Miscellaneous......................................................................207

Appendix II.1:Per Diem Amounts for Business Assignments .................207Appendix II.2:Business Assignment Meal Allowance/Per Diem Amounts -

Returning Saudi Aramco Employees..............................................208Appendix II.3:Entertainment Allowance ............................................209Appendix II.4:Spouse Accompaniment on Business Assignments

(All Locations) ...........................................................................210

Chapter 9: Leaves Of Absence ............................................................................ 211

I. General ........................................................................................211

II. Medical Leave of Absence................................................................211

A. General ....................................................................................211B. Policy .......................................................................................211C. Approvals .................................................................................211

III. Paid Education Leave, Training Assignments, and In-Camp Educational Programs..................................................212

IV. Emergency Leaves of Absence .........................................................212

A. General ....................................................................................212B. Policy .......................................................................................212C. Duration of Leave.......................................................................213D. Air Transportation Assistance .......................................................214E. Approval Authority .....................................................................215

V. Hajj Leaves of Absence ...................................................................215

A. General ....................................................................................215B. Policy .......................................................................................215C. Approval Authority .....................................................................216

VI. Marriage Leaves of Absence ............................................................216


VII. Leaves of Absence Involving SAG .....................................................216

A. General ....................................................................................216B. Policy .......................................................................................216C. Approval Authority for Labor Case/Witness "P" Time .......................218

VIII. (Unassigned).................................................................................218

IX. Birth of a Child ..............................................................................218

A. General ....................................................................................218B. Approval Authority .....................................................................218

X. Housing Relocation/Furniture Delivery Leave......................................218


XI. Leaves of Absence Without Pay ........................................................219


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XII. Professional Certification Examination Leave......................................220


XIII. Vacation Leaves.............................................................................220

XIV. Administration ...............................................................................221

A. Late Return From a Leave of Absence ...........................................221B. Holidays During a Leave of Absence..............................................221C. Transportation ...........................................................................221D. Effect of Leaves on Vacation ........................................................222E. Effect of Unpaid Leaves on Annual Benefits Supplement ..................222F. Continuous Service ....................................................................222G. Illness Incurred While on Leave ...................................................222

Chapter 10: Terminations................................................................................... 223

I. General ........................................................................................223

A. Scope.......................................................................................223B. Intent.......................................................................................223C. Definitions ................................................................................223

II. Authority to Terminate, and Documentation.......................................223

III. Types of Terminations.....................................................................223

A. Involuntary ...............................................................................223B. Voluntary..................................................................................223

IV. Treatment of Termination - Involuntary .............................................224

A. Company Option ........................................................................224B. Medical.....................................................................................224C. Termination for Cause.................................................................225D. Repatriation by Request of the Saudi Arab Government...................226E. Failure of Probation ....................................................................226F. Lack of Work .............................................................................226G. Failure to Report to Work ............................................................226H. Retirement for Foreign Contract Employees ...................................227I. Employment Termination at Age 60 ..............................................227J. Severance Award .......................................................................228

V. Warning Notice and Corrective Guidance Procedure ............................228

A. General ....................................................................................228B. Counseling ................................................................................228C. Progression of Warning Notices ....................................................228D. Review of Warning Notices ..........................................................229E. Termination of Service ................................................................230

VI. Reinstatement of Terminated Employees ...........................................230

VII. Treatment of Terminations - Voluntary ..............................................230

A. Effective Date............................................................................230


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B. Severance Award .......................................................................231

VIII. Marriage of Female Employees.........................................................231

IX. Exit Interview/Questionnaire ...........................................................231

X. Letter of No Objection (Release) ......................................................231

Appendix I: Approval Authorities to Terminate ...........................................234

Chapter 11: Shipment Of Effects......................................................................... 235

I. General ........................................................................................235

II. Applicability ..................................................................................235

III. Definitions ....................................................................................235

IV. Initial Relocation Shipments -- Employees from China, the Philippines, Singapore, Bangladesh, Sri Lanka and Thailand - (ITEA) .....................236

A. Single/Bachelor Status Employees on Indefinite Term Employment Agreements (ITEA) and Chinese Specified Term Contracts (STCs) .....236

B. Family Status Employees on Indefinite Term Employment Agreements (ITEA) ....................................................................236

V. Initial Relocation Shipments - Employees from India or Pakistan - (FC) ..........................................................................238

A. Employees in Salary Codes 03-10 ................................................238B. Employees in Salary Codes 11+ ...................................................238

VI. General Conditions - Overweight Charges, Storage in Saudi Arabia, and Shipment Entitlement if Hired Outside Home Country.........240

A. Overweight Charges ...................................................................240B. Storage in Saudi Arabia ..............................................................240C. Shipment Entitlement if Hired Outside Home Country......................240

VII. Articles Subject to Confiscation or Censorship ....................................240

A. Articles Subject to Confiscation ....................................................241B. Articles Subject to Censorship......................................................241

VIII. Articles Not Accepted for Shipment...................................................242

IX. Shipment of Pets ...........................................................................243

X. Customs Duties .............................................................................243

XI. Items of High Value or Unusual Nature..............................................243

XII. Claims for Loss or Damage..............................................................244

XIII. Export Shipments from Saudi Arabia ................................................244

A. Terminated Employees and Retirees..............................................244B. Death of the Employee - China, the Philippines, Singapore, Bangladesh,

Sri Lanka, Thailand, India, Pakistan ..............................................250C. Divorce, Legal Separation, Abandonment or Permanent

Departure of Spouse ..................................................................251D. Excess Furniture Shipment For Move to a Smaller House .................251E. Employee-Paid Storage Period .....................................................251F. Articles Not Accepted for Shipment...............................................252

XIV. Out-Of-Kingdom Temporary Assignments ..........................................252


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A. Unaccompanied Airfreight ...........................................................252B. Surface Shipment ......................................................................252C. Excess Weight Charges ...............................................................252D. Customs Duties .........................................................................253E. Storage ....................................................................................253F. Cash-in-Lieu Option for Returning Shipment to Saudi Arabia ............253

XV. Relocation Shipments Within the Kingdom.........................................253

XVI. Personal Effects Shipment for Newlyweds..........................................254

A. Eligibility...................................................................................254B. Accompanied Baggage................................................................254C. Unaccompanied Airfreight ...........................................................255D. Surface Shipment ......................................................................255

XVII. Vacation Excess Baggage ................................................................255

XVIII.Exceptions....................................................................................255

Chapter 12: Housing & Families ......................................................................... 256

I. General ........................................................................................256

II. Applicability ..................................................................................256

III. Definitions ....................................................................................256

IV. Eligible Family Members..................................................................258

V. Visitors and Guests ........................................................................259

A. Visitors.....................................................................................259B. Guests......................................................................................259

VI. Eligibility for Company Housing........................................................260

A. Male Employees.........................................................................260B. Female Employees .....................................................................260

VII. SC 11+ Male and All Female Initial In-Camp Housing ..........................260

A. Applicability ..............................................................................260B. Assignment of Initial In-Camp Housing .........................................261C. Furnishings ...............................................................................262

VIII. Housing Point Priority System/Permanent In-Camp Housing.................262

A. Position Factor Points..................................................................262B. Continuous Service Factor Points..................................................263C. Foreign Service Factor Points .......................................................263D. Temporary Assignment Factor Points.............................................264E. Point Ties..................................................................................264F. Bidding for In-Camp Housing.......................................................264G. Convenience and Other Type Moves Through Bidding ......................265H. Housing Acceptance/Subsequent Declination .................................266I. Inter-Area Transfers ...................................................................267J. Absences from the Kingdom ........................................................267

IX. Storage of Personal Effects..............................................................268

A. Bachelor/Single Status Employees Resident in SC 11+Housing ....................................................................................268


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B. Family Status Employees Resident in Company Housing ..................268C. Access to Storage ......................................................................269

X. Retention of Housing During Temporary Assignments of Less Than Six Months .....................................................................269

XI. Disposition of Housing During Temporary Assignments of Six Months or More ........................................................................269

XII. Relinquishment of Housing ..............................................................271

XIII. Monthly Rental Fees .......................................................................272

A. Housing ....................................................................................272B. Furniture and Appliances.............................................................272C. Rent Reimbursement ..................................................................273

XIV. Landscape, Gardening and Maintenance............................................273

A. Landscape and Gardening ...........................................................273B. Maintenance..............................................................................274

XV. Home Improvement .......................................................................274

XVI. SC 03-10 Bachelor Housing .............................................................275

A. Applicability ..............................................................................275B. Location ...................................................................................276C. Furnishings ...............................................................................276D. Monthly Rental Fee.....................................................................276E. Accommodations........................................................................276F. Preferred Quarters/Single Occupancy............................................276G. Housing Point Priority System ......................................................276H. Visitors.....................................................................................277I. Facilities ...................................................................................277J. Relinquishment of Assigned Quarters ............................................277

XVII. Consultant Housing ........................................................................277

XVIII.Remote Area Housing.....................................................................277

XIX. Transient Housing for Employees on Temporary Assignment (TA)..........278

XX. Transient Housing for Regular Work Schedule Employees Assigned to Remote Locations..........................................................278

XXI. Unauthorized Occupancy.................................................................279

XXII. Caretaker .....................................................................................279

XXIII.Pet Ownership...............................................................................279

XXIV. Facilities Utilization.........................................................................280

A. All Female Employees and Male Salary Code 11+ Employees ...........280B. Male Salary Codes 03 - 10 Employees...........................................280

XXV. No Objection Certificates (NOC's) for Family Status ............................280

A. General ....................................................................................280B. Policy .......................................................................................280C. Housing ....................................................................................281D. Personal Effects Movement..........................................................281

XXVI.Independent Housing/Rental Assistance Allowance .............................281

A. General ....................................................................................281


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B. Rental Assistance Allowance ........................................................281C. Eligibility...................................................................................281D. Employees on Temporary Assignment ...........................................282E. Employees Living in Jeddah or Riyadh...........................................282

XXVII.Intra-Area Transfer Allowance.........................................................282

A. General ....................................................................................282B. Allowance Amount......................................................................283C. Payment ...................................................................................283

XXVIII.Exceptions ..................................................................................283

Chapter 13: Employee Communications ............................................................. 284

I. General ........................................................................................284

II. Intent...........................................................................................284

III. Definitions ....................................................................................284

IV. Means of Communications...............................................................284

A. Communications Meetings...........................................................284B. Weekly Highlights and Notices .....................................................284C. Notices/Management Messages....................................................284D. Formal Publications ....................................................................285E. Formal Training Programs............................................................285F. Annual Report of Operations ........................................................285

V. Petitions and Upward Communications..............................................286

A. General ....................................................................................286B. Response to a Petition ................................................................286

VI. Grievances....................................................................................286

A. Grievance Procedure ..................................................................286

VII. Personnel Records..........................................................................288

VIII. Language......................................................................................288

IX. Reproduction of Copyrighted Material................................................288

X. Confidentiality of Information ..........................................................289

Chapter 14: Personnel Development .................................................................. 290

I. Educational Refund Plan..................................................................290

A. General ....................................................................................290B. Applicability ..............................................................................290C. Policy .......................................................................................290D. Administration ...........................................................................292

II. Professional, Management and Supervisory Training Programs .............292

A. General ....................................................................................292B. Applicability ..............................................................................292C. Policy .......................................................................................292

III. PERFORMANCE MANAGEMENT PROCESS (PMP) ..................................293

A. Applicability ..............................................................................293


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B. Purpose ....................................................................................294C. Objectives.................................................................................294D. Procedure .................................................................................294E. Salary Administration .................................................................295F. Responsibility ............................................................................295

IV. Membership Dues - Professional Associations.....................................296

Chapter 15: Schooling for Children..................................................................... 298

I. Company Operated Schools.............................................................298

A. General ....................................................................................298B. Eligibility...................................................................................298C. Screening of Dependents ............................................................298

II. Educational Assistance Plan.............................................................298

A. General ....................................................................................298B. Intent.......................................................................................299

III. EAP Eligibility ................................................................................299

A. Eligible Employees .....................................................................299B. Eligible Dependents....................................................................299C. Children of Former Marriage ........................................................300D. Employees on Chapter 8 Out-of-Kingdom Assignments....................300E. Loss of Eligibility ........................................................................300F. Re-qualification for EAP...............................................................301

IV. Types of EAP Assistance..................................................................302

A. Tuition, Room and Board .............................................................302B. In-Kingdom Transportation..........................................................305C. Out-of-Kingdom Transportation ....................................................305D. Miscellaneous ............................................................................312

V. Method of EAP Payment ..................................................................313

A. Tuition, Room and Board .............................................................313B. Transportation ...........................................................................313C. Miscellaneous ............................................................................314

VI. EAP Verification of Attendance and Travel ..........................................314

A. Attendance Verification ...............................................................314B. Student Transportation Verification ...............................................314C. Parent-In-Lieu Trip or Parent Accompaniment Verification ................315

VII. Revision or Loss of EAP Assistance ...................................................315

A. Change of School .......................................................................315B. Partial Year ...............................................................................316C. Repeat Year ..............................................................................316D. Loss of Eligibility ........................................................................316E. Early Completion of High School...................................................316

VIII. Miscellaneous EAP Provisions ...........................................................317

A. Repatriation Vacation..................................................................317B. Travel Schedule -- Salary Codes 07 through 10 ..............................317C. Travel Schedule -- Salary Codes 11 and Above...............................317


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IX. EAP Authorities and Responsibilities..................................................317

A. General ....................................................................................317B. Out-of-Policy Requests................................................................318C. Special EAP Benefits ...................................................................318

Chapter 16: Local/International Transportation................................................. 319

I. Local Transportation .......................................................................319

A. Local Work Bus Transportation .....................................................319B. Local Transportation Allowance for Daily and Days Off

Commuters ...............................................................................321C. School Buses.............................................................................323D. Other Regularly Scheduled Bus Services........................................324E. Special Buses ............................................................................325F. Assigned Light Vehicles...............................................................325G. U-Drive Vehicles ........................................................................327H. Workhaul Passenger Vans............................................................328I. Saudi Aramco Service Vehicles (SASVs) ........................................328J. Driving Licenses.........................................................................330K. Private Vehicles .........................................................................330L. Assignment to a New Work Location .............................................331M. Liability Incurred while using Company Vehicles .............................331

II. International Transportation ............................................................332

A. General ....................................................................................332B. Travel by Commercial Airline........................................................333C. Income Tax Services Group Review ..............................................333D. Special Company-Paid Travel .......................................................333E. Passports and Visas....................................................................337

Appendix I: Visa Requirements for Assignment of Non-U.S. Citizens to the U.S.A. .....................................................................................341

Appendix II: Local Transportation Allowances.............................................346

Daily Commuters ...........................................................................346Days Off Commuters ......................................................................346

Appendix III: Commercial Air Travel Authorized .........................................347

Chapter 17: Miscellaneous.................................................................................. 349

I. Domestic Helpers and Housemaids ...................................................349

II. Fire Brigade ..................................................................................349

A. General ....................................................................................349B. Regular Fire Brigade Employees ...................................................349C. Volunteer Fire Brigade ................................................................349

III. Yanbu Industrial Relations Policy ......................................................350

IV. Jiddah/Riyadh Industrial Relations Policy ...........................................350

V. Tapline Industrial Relations Policy .....................................................350

VI. Telephone Expense Reimbursement Policy .........................................350

Industrial Relations Manual for Asian EmployeesChapter 1: Employment

October 2, 2005

Chapter 1: Employment

I. Definitions

A. ASSOCIATED COMPANIES -- Aramco Services Company (ASC), Aramco Overseas Company B.V. (AOC B.V.), Aramco Associated Company (AAC), Saudi Refining, Inc., Saudi Petroleum International, Inc., Bolanter Corporation N.V., Pandlewood Corporation N.V., Saudi Petroleum Overseas Ltd., Vela International Marine Ltd., and any other subsidiary Company hereafter designated an Associated Company by Saudi Aramco.

B. CASUAL EMPLOYEE -- A resident wife of a regular expatriate Company employee. She is hired to work for the Company for a definite or indefinite temporary period. Spouses may, be regulation of the Saudi Arab Government, only be employed by the Company. The candidate must be able to obtain a Saudi Arab Government issued work permit and if she is to be a member of the medical staff, the appropriate Saudi Arab Government issued medical license.

C. CONTINUOUS SERVICE DATE -- The date on which a current continuous period of unbroken service with the Company commences. Such service can include recognized periods of service with Associated Companies, Star Enterprise, or any other Company for which Saudi Aramco hereafter recognizes periods of service as well as prior recognized periods of Company service, as in the case of a reinstated employee.

D. EMPLOYEE -- The Saudi Labor Law defines an "employee" or workman, as "any person working for the account of an employer under the latter’s direction or control, even though he may not be under the employer’s direct supervision, in consideration of a wage." Pursuant to existing policies and procedures, the Company may also utilize the services of consultants and contractors, in which cases it is the intent of the Company to treat these individuals as independent contractors rather than employees. Questions related to the status of any worker as an employee, consultant, contractor, apprentice, trainee, student, etc., and their possible rights to compensation, allowances, benefits or other provisions in this IR Manual, should be referred to Law for clarification.

E. FOREIGN CONTRACT EMPLOYEE -- Employees from India and Pakistan are normally hired under Foreign Contract Employment Agreements.

F. IN-KINGDOM LOCAL HIRE (IKLH) -- Expatriate wife of non-Company employee hired on the payroll applicable to her country of citizenship.

G. INDEFINITE TERM EMPLOYMENT AGREEMENT (ITEA) EMPLOYEE -- An employee whose Employment Agreement is valid for an unspecified period. Employees from Far Eastern Asian countries (Philippines, Thailand, Bangladesh and Sri Lanka) are normally hired under such agreements.


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H. POINT-OF-ORIGIN -- The location nearest the employee's most recent work, residence, family, educational and personal linkage at the time of hire. Eligible dependents have the same point-of-origin as the employee.

I. SAUDI ARAMCO HIRE DATE -- The date on which an employee is placed on the Saudi Aramco payroll.

J. SPECIFIED TERM CONTRACT (STC) EMPLOYEE -- An employee whose Employment Agreement is valid for a fixed period, usually two years, because of home-country requirements. Employees from China are normally hired under such agreements.

K. STC INITIAL HIRE DATE -- The date on which a current or former STC employee's first employment contract started. For STC - ITEA Conversions and for Chinese STC employees, this date is used to determine total years of service for Service Awards, Housing Points and for Severance Award vesting.

II. Recruitment

A. General

This policy covers hiring employees for the Asian Saudi Riyal Payroll. The Company employs Saudi Arab Nationals in its Saudi Arabian operations in preference to nationals of other countries. For those positions which cannot satisfactorily be filled by Saudi Arab Nationals, the Company considers candidates of other national origins in the sequence specified in Ministerial Decision No. 50.

B. Responsibilities

The Director - Personnel is responsible for recruiting Asians.

C. Exceptions

Exceptions must have the prior approval of the Vice President - Employee Relations and Training.

III. Employment

A. General

Responsibilities and procedures for recruiting and employing Asian Saudi Riyal employees are defined.

B. Responsibilities

The Expatriate Recruitment Division is responsible for:

• In liaison with Business Lines, determining annual recruitment needs;


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• Maintaining a comprehensive manpower procurement and processing tracking system;

• Establishing recruitment strategy to include coordinating interviews;• Initial screening of candidate's education and work experience;• Formulation and adherence to guidelines for personnel interviews;• Extending all formal offers of employment;• Developing and maintaining recruitment agency contacts; and • Advertising methods and media and accompanying fees.

C. Employment Procedures

1. Requisitions

To hire a new employee, the Department Head must:

• verify that the vacant position cannot be filled by promotion or transfer;

• complete a Manpower Requisition form, noting in the details section any unique or special features of the job;

• obtain approval of the appropriate authority listed in Appendix I; and

• send the requisition, approved current job description, and a supplemental job brief to the Expatriate Recruitment Division.

• any changes to a manpower requisition, with respect to upgrading to a higher salary code, or changing to a more expensive source area, require approval by the Business Line Head. All other changes require approval by the Department Head.

2. Letter of No Objection

Employment contact with people currently or previously employed in the Kingdom of Saudi Arabia, including those employed by contractors, sub-contractors and service organizations must be initiated by the prospective employee. The candidate must first obtain a "Letter of No Objection" from the current/former employer in Saudi Arabia (refer Appendix II). This letter permits the candidate to seek work with the Company. The candidate must present the original Letter of No Objection authenticated by the Chamber of Commerce before completing the employment application. The Expatriate Recruitment Division will review the candidate against an approved open requisition.

3. Government Notification

In compliance with Article 42 of the Saudi Arab Government Labor and Workmen Law, Employment will provide as necessary a listing of job vacancies to the appropriate Saudi Arab Government Labor Office.

4. Offers of Employment


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The Expatriate Recruitment Division, upon receipt of an appropriately approved job offer, extends offers of employment. Guidelines for salary offers are contained in Chapter 2: Salary Administration.

5. Payroll Assignment for New Employees

New employees are normally placed on the payroll designated for the employee’s primary country of citizenship acceptable to the Company. In order to be placed on a different payroll, an individual must have substantial educational and/or work experience in the country from which recruited, or another country which is being requested by the employee. Such evaluation is based on the facts and circumstances of each case; this includes the prospective employee’s residence status in the country being requested as a reference for payroll assignment and, in the case of holding two passports, the passport used to obtain employment in a third country prior to joining Saudi Aramco.

6. Hire Date

The Saudi Aramco hire date is the employee's date of beginning travel by the most direct means to Saudi Arabia to commence work under a current Employment Agreement. This date is entered on the Employment Agreement.

7. Continuous Service Date

a. New Hires

The continuous service date is normally the Saudi Aramco hire date.

b. Chinese STC Employees and STC - ITEA Conversions

The continuous service date is the current contract start date. However, for certain purposes, including determination of Service Awards, Severance Pay, and Housing Points, previous periods of specified term employment will be accounted for, provided there were no breaks in service greater than 90 days between contracts.

c. Rehire

A rehire is an individual who has terminated from the Company and does not qualify for reinstatement of prior service. The employee's continuous service date is the new Saudi Aramco hire date.

8. Point-of-Origin

The following principles apply to establishment of point-of-origin and any subsequent changes:


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a. The designation of point-of-origin is based on the employee’s closest and most recent work, residence, family, education and personal linkages in the employee’s home country at the time of hire.

b. The point-of-origin for any expatriate new hire who was born, raised, educated and is currently residing in Saudi Arabia, is the country of nationality.

c. If the new hire is a citizen of the country of recruitment, then the point-of-origin will be in that country.

d. If the new hire is a citizen of one country and is recruited in another country, his/her point-of-origin must be in the country of nationality except if:

• The individual has a permanent residency/work permit from the country of recruitment and is hired on the payroll applicable to the country of recruitment, or

• The individual is a citizen of both countries

e. The Administrator, Expatriate Recruitment Division is responsible for designating point-of-origin for new hires processed in accordance with the above criteria.

f. An individual’s point-of-origin is not subject to unrestricted personal preference. Once the point-of-origin is established, any subsequent change within the same country requires the approval of the appropriate Area Personnel Administrator. The following documents/evidence must be submitted by the employee along with any request to change point-of-origin:

• Proof that the employee owns property (livable dwelling, e.g., house, condominium, townhouse, etc.) at the new location and pays taxes thereon.

• Airline ticket stubs or receipts for the employee and eligible dependents having traveled to the new location for each of the last three repatriation vacations.

• Proof of additional ties, such as water and electricity bills, rent receipts, bank account, driver license or identification card, birth certificate, marriage certificate, college or high school certificate and any other documents the employee believes to be pertinent and supportive.

g. Requests for changes in point-of-origin between countries will only be considered in cases where an error has been made in the original assignment of the employee’s point of origin at the time of hire. All changes between countries require the approval of the Director of Personnel. All changes within a point-of-origin country require the approval of the Area Personnel Administrator.


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h. An employee is not entitled to change the established point-of-origin because he/she obtained a new passport nationality even if the work/residence visa is transferred to the new passport.

9. New Employee Orientation

a. Prior to Departure for Saudi Arabia

Prior to their departure to Saudi Arabia, employees are informed of current Company policies and practices on:

• conditions of employment;• housing;• use of facilities; and• applicable Saudi Arab Government Law.

The program helps new Company employees and eligible accompanying dependents prepare for residence in Saudi Arabia.

b. Upon Arrival in Saudi Arabia

Upon arrival in Saudi Arabia, the employee receives an orientation coordinated by the Expatriate Recruitment Division.

The purposes of this program are to:

• acquaint the employee with local customs in Saudi Arabia;• explain the Company's Safety Program;• enroll employees in the Saudi Arab Government Social

Insurance Program;• provide housing information; and • help the employee obtain a Company I.D. card, driving

license application, mail box and other items.

c. After Arrival in Saudi Arabia

When a new employee reports to work, the individual's Department Management should discuss with him:

• Job duties and responsibilities;• Department organization; and• Company policies and programs.

Individual follow-up meetings should be scheduled with each new employee at intervals of no more than thirty (30) calendar days during the first three (3) months of employment and prior to the end of the ninety (90) days probationary period. During these meetings, the appropriate Department Representative discusses job progress and takes any necessary corrective action. Refer to Section V for more details on Probationary Period.


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10. Eligible Work Locations Within Saudi Arabia for Female Employees

Employment of females may occur within Company work sites contained within or attached to a Company family camp when the work site can be accessed via the family camp's internal road network. Any work site or office which requires exiting outer perimeter security gates and use of public roads may not employ females. Approved exceptions to this policy are for:

a. Medical Organization staff assigned to Saudi Aramco operated medical facilities (Al-Hasa Clinic - for example);

b. Industrial Security female staff who provide female passenger security screening at Company operated air terminals;

c. Female employees required to provide supervision and support to the female portion of SABGS program; and

d. Preventive Medicine/Medical Education staff who interface regularly with Governmental agencies/schools or dependents who reside in non-Company facilities.

Exceptions to this policy require endorsement by the concerned member of Executive Management, concurrence of the Director of Personnel and approval of the Vice President, Employee Relations and Training.

11. Permanent Work Visas

The Expatriate Recruitment Division is responsible for coordinating with Business Lines and Government Affairs the submission of the Company’s permanent work visa (name and/or block visas) and work permits requirements to the appropriate government authorities.

D. Exceptions

Unless noted otherwise, exceptions to these employment policies must have the prior approval of the Vice President - Employee Relations and Training.

IV. Employment Standards

A. Responsibilities

The Administrator of the Expatriate Recruitment Division is responsible for verifying that Asian job applicants meet the minimum employment standards.


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B. Standards of Employment

1. Physical

The Admin Area Head - Medical Services Organization establishes standards of health which must be met for Company employment. The employee and all eligible accompanying dependents must satisfactorily complete physical examinations according to Company medical requirements.

a. Exceptions

All exceptions to the pre-employment physical standard recommendations of the Medical Services Organization must be concurred to by the candidate’s department head and approved by the Director of Personnel Department.

b. Immunizations and Other Required Tests

All employees and dependents must be immunized and complete any other tests as required by Saudi Arab Government authorities or by the Company before entering Saudi Arabia.

2. Age

All candidates for employment must be at least twenty one (21) years of age.

Normal retirement (termination for ITEA employees) age for all employees is age 60 unless otherwise mutually agreed to between the employee and the Company. Employment offers to candidates age 60 or older require the approval of the concerned Business Line Head.

3. Previous Work Experience Requirement

Previous work experience is required as determined by the job description. Exceptions require the approval of the Proponent's Department Head and the concurrence of the Director of Personnel.

4. Educational Standards

A high school diploma or equivalency certificate is the minimum standard regardless of the job for which the candidate is applying. Depending on the approved job description, additional education standards may be required.

Exceptions require the approval of the proponent’s Department Head and the concurrence of the Director of Personnel.

5. Employment of Relatives

The Company permits the employment of relatives provided one relative does not directly supervise the other. Examples:

• Husband/Wife• Parent/Child• Uncle/Nephew or Niece


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• Brother/Brother• Brother/Sister• Father-in-Law/Son or Daughter-in-Law• Brother-in-Law/Brother or Sister-in-Law

Exceptions require the approval of the Director - Personnel.

6. Standard Reference (Background) Verification

When the Company makes a job offer, it verifies information supplied by the applicant to include but not limited to:

• the candidate's education;• the date(s) and place(s) of prior employment;• references listed on the "Application for Employment";• the candidate's occupational licenses.

A Company representative reviews the information and keeps it confidential.

Exceptions require the prior approval of the Director of Personnel.

7. Housing Status

Suitable housing must be available for a candidate to be employed. The approval of the Senior Vice President of the proponent organization is required to hire candidates with four (4) or more eligible children if the candidate is eligible for Company family housing. Candidates with four or more eligible dependent children and who request No Objection Certificate (NOC) sponsorship require the approval of their Executive Management and the concurrence of the Vice President, Employee Relations & Training. Requests for waiving the minimum service requirements (i.e., 1 or 3 years) for eligibility for NOC family status sponsorship require the approval of the new hire’s proponent Executive Management and the concurrence of the Director of Personnel Department. For more information, refer to Chapter 12, Housing and Families.

8. Passports

All employees and accompanying eligible dependents (Foreign Contract only) must have a valid, recognized passport or travel document prior to employment. Change of passport nationality after employment will not be a basis upon which an employee's Company-assigned payroll classification may be changed.

9. Saudi Arab Visas

All candidates must obtain valid entry, work and residence visas from the Saudi Arab Government as a precondition to employment. All accompanying eligible dependents must obtain a valid Saudi Arab Residence Visa from the Saudi Arab Government in order to reside in


October 2, 2005

Saudi Arabia as dependents. The Company provides the candidate with a letter stating the candidate has satisfied these preconditions to employment by Saudi Aramco.

10. Fees

The Company pays the cost of physical and dental examinations, inoculations, and any other approved and required tests for the employee and accompanying eligible family members required in connection with employment and residence in Saudi Arabia. Refer to Chapter 16 regarding the cost of passport, visas, residence and work permits.

V. Probationary Period

A. General

The Probationary Employment Period is 90 calendar days from the date the employee reports to the job. During the 90-day probationary period, the employee’s performance will be judged by the employee’s Department as satisfactory or unsatisfactory. If the employee’s performance is unsatisfactory, appropriate action will be determined between the employee’s Department and Personnel. Departments must use Employee Appraisal and Performance Report During Probationary Period (Saudi Aramco Form 2014) to evaluate a new hire employee during the probationary period.

B. Exceptions

Exceptions must have the prior approval of the Director - Personnel.

VI. Employment Interview/Processing Expenses

A. General

The Company reimburses verifiable and reasonable costs directly related to the employment interview and any other required processing. These reimbursable costs are for the candidate and spouse, if applicable.

B. Procedure

1. Reimbursable Expenses

Transportation Bus, Economy Class Airfare, Rail and Boat Fare, Automobile (specified amount per mile). SC 11+ candidates may be reimbursed for Business Class Airfare, if available, when an employment interview is required in Saudi Arabia.

Lodging Room and Tax at a Hotel approved by the Company


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2. Non-Reimbursable Expenses

C. Exceptions

Exceptions must have the prior approval of the Director of Personnel.

VII. Relocation Expenses for All New Employees

A. General

This policy defines the allowable expenses for initial relocations to Saudi Arabia.

B. Procedure

1. Travel Expenses

a. Foreign Contract Asian (India/Pakistan)

• The Company will pay the cost of overland transportation by rail or bus and an appropriate meal allowance required to reach the Company approved airport nearest the point-of-origin at time of employment.

• The Company will provide SC 10 and below employees economy class air transportation from the Company approved airport nearest the employee's point-of-origin to Saudi Arabia. SC 11+ employees are eligible for Business Class air transportation, if available. In addition, the Company will pay 20% of the air transportation cost to Saudi Arabia as compensation for additional associated travel expenses.

b. ITEA and Chinese STC Asian

• The Company will pay the cost of overland transportation by rail or bus and an appropriate meal allowance required to reach the Company approved airport nearest the point-of-origin at time of employment.

• The Company will provide SC 10 and below employees economy class air transportation from the Company approved airport nearest the employee's point-of-origin to Saudi Arabia. SC 11+ employees are eligible for Business Class air transportation, if available. In addition, the

Meals As Necessary

Miscellaneous Parking, Gratuities, Taxi Fares, etc.

Miscellaneous • Long Distance Telephone Calls• Other Costs not Specified Above


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Company will pay ten percent (10%) of the air transportation cost to Saudi Arabia as compensation for additional associated travel expenses.

2. Shipment of Effects and Storage Expenses

Refer to Chapter 11, Shipment of Effects.

3. Subsistence Allowance - Pakistani Employees

Upon approval of an employee's Employment Agreement by the Pakistani Protector of Emigrants, the maximum waiting period for an emigrant is 45 days. If the Company does not authorize the employee to arrive in Saudi Arabia before the end of the waiting period, the Company may cancel the agreement. In this event, the Company will pay the employee one month's contractual salary in lieu of notice. However, if the candidate is unable to obtain a Saudi Arab Government visa, the agreement is void and the subsistence allowance is not applicable.

As an alternative to voiding the Employment Agreement, the Company may pay the employee a subsistence allowance at the rate of one third of the monthly contractual salary until the employee is authorized to leave Pakistan for work in Saudi Arabia.

4. Settling-In Allowance

Upon arrival in Saudi Arabia, each employee receives a one time, unaccountable settling-in allowance. The amount of this allowance is:

• Family Status: SR 1,000• Single/Bachelor Status: SR 500

At the time of arrival, if a married employee arrives alone, an initial payment of SR 500 is made. If the family arrival is confirmed within thirty (30) days, the remaining SR 500 is paid.

Rehires whose service dates are not reconstructed qualify for the settling-in allowance. Reinstated employees do not qualify.

VIII. Compensation - New Hires

Refer to Chapter 2, Salary Administration.

IX. Employee Benefits

Refer to Chapter 5, Benefit Programs.


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X. Reinstatement of Employment

A. General

Types of re-employment are defined.

B. Procedure

1. Rehire

A rehire is an individual who does not qualify for reinstatement of prior service with the Company or an Associated Company.

The continuous service date is the rehire date for the purpose of computing vacation accrual, disability benefits, housing points and service award eligibility. Approval of the Sr. Vice President, Industrial Relations is required for any exceptions to policy, other than housing points, regarding recognition of the previous employment period.

Restoration of housing points requires the approval of the Vice President, Employee Relations & Training.

2. Reinstatement

Former employees of the Company or an Associated Company may be reinstated if the following conditions are met:

a. Any Severance Award paid at termination must be repaid prior to reinstatement.

b. The following schedule lists the time limits within which the employee must be re-employed following termination in order to be eligible for reinstatement:

Time off the employment roll is measured from the effective date of termination to the date of re-employment.

c. The Reason for Termination

To be eligible for reinstatement, the employee must have been terminated for one of the following reasons:

• Layoff• Release at Company Option• Release due to continued disability after the end of a

Medical Leave of Absence. The employee must provide satisfactory proof of continued disability at the end of the Leave and establish that he has recovered from the

Length of Service Re-Employment Within

Less than 1 Gregorian Year 13 Weeks

1 to 5 Gregorian Years 26 Weeks

5 Gregorian Years or More 1 Year


October 2, 2005

disability prior to applying for reinstatement. The employee must also make application for re-employment within thirty (30) days after recovery from the disability.

d. Continuous Service Date

If an employee qualifies for reinstatement based on the above eligibility requirements, the employee must complete one full service year after reinstatement to have the continuous service date reconstructed as the date of original hire. If an employee does not complete the one year of service after re-employment, the service date is the re-employment date and the employee is treated as a rehire.

e. Approval

An employee may only be reinstated in accordance with the above conditions provided a job opening exists for which the employee is qualified. All such reinstatements require the approval of the Vice President, Employee Relations and Training.

XI. Release of Employee Personnel Information

A. General

The employee personnel records are confidential and are administered accordingly. The Area Personnel Divisions release information only after receiving a written request from recognized business institutions or governmental agencies.

B. Procedure

The following information may be released:

• Date of hire• Date of termination• Job title

XII. Conflict of Interest Policy

A. The Company’s Policy on Conflict of Interest

1. Policy Applicable to Employees Who Are Officers

Employees who are officers of the Company are to set an example of the highest ethical conduct, both in appearance and in fact. The Company requires that its officers and their family members (parents, spouses, and children) avoid situations in which their personal interests conflict or might conflict with the interests of the Company. Such conflicts of interest could potentially arise if officers or their family members have a financial interest in the Company’s dealings


October 2, 2005

with contractors, vendors, or any other companies, organizations, or individuals doing or seeking to do business, directly or indirectly, with the Company or in competition with the Company. In addition to this general policy, specifically:

• Company officers are prohibited from having any direct or indirect personal interests in the Company’s contracts or projects or in vendors or contractors doing or seeking to do business with the Company.

• Company officers are prohibited from having personal interests in outside businesses which are suppliers or sub-contractors to vendors or contractors doing business with the Company.

• A "personal interest" means holding a position, engaging in the activities of, or having a financial stake or ownership interest (other than a permitted passive investment) in an outside business.

• Company officers are prohibited from holding positions in, engaging in the activities of, or having a financial stake or ownership interest (other than a permitted passive investment) in outside businesses which do not do or seek to do business with the Company.

• A "permitted passive investment" is the cumulative ownership by an officer and/or his/her family members (parents, spouses and children) of a non-controlling interest in company shares (less than 5% of issued share capital) available for sale or trade to the public. The permitted passive investment exception is limited to stock of publicly traded companies.

• The foregoing notwithstanding, holding a position (e.g., membership on the Board of Directors or other management, or advisory role) or engaging in the activities of a Company subsidiary, joint venture or other affiliate company in which Saudi Aramco or one of its subsidiaries holds ownership interest, is not prohibited when such activity is performed at the request of, or through nomination or appointment by the Company. Monies, bonuses, stocks and all other forms of compensation received by the Company officer must be remitted to the Company in accordance with General Instruction #286.030.

• Company officers who are requested to hold a position (e.g., membership on the Board of Directors or other management, or advisory role) in entities other than a Company subsidiary, joint venture or other affiliate company in which neither Saudi Aramco nor any of its subsidiaries have a direct or indirect ownership interest, must request the Company’s prior approval. If approved, the Company officer will be allowed to keep any monies, bonuses, stocks or any other forms of compensation he/she receives from those entities. Time needed to attend meetings or discharge any responsibilities relating to the position will be at the officer’s own time and expense including cost of travel, accommodation, and other expenses.


October 2, 2005

• Company officers who are appointed by the Saudi Government to hold a position in outside entities (e.g., membership on a Board of Directors or other management, or advisory role) will not be affected by this policy and will not be required to remit to the Company any remuneration paid to them.

• Company officers are prohibited from engaging in trade of any type other than in their capacities as employees of the Company.

• Family members of Company officers may have personal interests in outside businesses whether or not they do or seek to do business with the Company, but such interests are subject to disclosure to and approval by the Company as provided below in Subsection 4 of this Paragraph A and in Paragraph D.

• The term "Company" includes Saudi Aramco, its subsidiaries and affiliates.

2. Policy Applicable to Other Employees

The Company requires that its employees (including temporary and loaned employees) and their family members (parents, spouses, and children) avoid situations in which their personal interests might conflict with the interests of the Company. Such conflicts of interest could potentially arise if employees or their family members (parents, spouses and children) have a financial interest in the Company’s dealings with contractors, vendors and any other companies, organizations, or individuals doing or seeking to do business, directly or indirectly, with the Company or in competition with the Company. In addition to this general policy, specifically:

• Employees are prohibited from having direct or indirect personal interests in outside businesses doing or seeking to do business with the Company.

• Employees are prohibited from having personal interests in outside businesses which are suppliers or sub-contractors to vendors or contractors doing business with the Company.

• A "personal interest" means holding a position, engaging in the activities of, or having a financial stake or ownership interest (other than a permitted passive investment) in an outside business.

• A "permitted passive investment" is the cumulative ownership by the employee and/or his/her family members (parents, spouses and children) of a non-controlling interest in company shares (less than 5% of issued share capital) available for sale or trade to the public. The permitted passive investment exception is limited to stock of publicly traded companies.

• The foregoing notwithstanding, holding a position (e.g., membership on the Board of Directors or other management, or advisory role) or engaging in the activities of a Company subsidiary, joint venture or other affiliate company in which Saudi Aramco or one of its subsidiaries holds ownership interest, is not prohibited when such activity is performed at the request


October 2, 2005

of, or through nomination or appointment by the Company. Monies, bonuses, stocks and all other forms of compensation received by the Company employee must be remitted to the Company in accordance with General Instruction #286.030.

• Employees who are requested to hold a position (e.g., membership on the Board of Directors or other management, or advisory role) in entities other than a Company subsidiary, joint venture or other affiliate company in which neither Saudi Aramco nor any of its subsidiaries have a direct or indirect ownership interest, must request the Company’s prior approval. If approved, the employee will be allowed to keep any monies, bonuses, stocks or any other forms of compensation he/she receives from those entities. Time needed to attend meetings or discharge any responsibilities relating to the position will be at the employee’s own time and expense including cost of travel, accommodation, and other expenses.

• Company employees who are appointed by the Saudi Government to hold a position in outside entities (e.g., membership on a Board of Directors or other management, or advisory role) will not be affected by this policy and will not be required to remit to the Company any remuneration paid to them.

• Employees may have personal interests in outside businesses which do not do or seek to do business with the Company or its vendors or contractors, provided that such interests do not interfere with their performance of their jobs with the Company. Such interests (other than "permitted passive investments" as defined above) are subject to disclosure to and approval by the Company as provided below in Subsection 4 of this Paragraph A and in Paragraph D.

• Family members of employees may have personal interests in businesses whether or not they do or seek to do business with the Company, but such interests are subject to disclosure to and approval by the Company as provided below in Subsection 4 of this Paragraph A and in Paragraph D.

• The term "Company" includes Saudi Aramco, its subsidiaries and affiliates.

3. All officers and other employees are required to read and acknowledge their understanding of the above policies and agree to strictly abide by them on Saudi Aramco Form SA-8942. Every officer and non-officer employee must sign this form at least once every two years.

4. Disclosure and Approval Requirements

Officers and employees have an affirmative obligation to disclose the following situations, as applicable, to the Company and, where required, to obtain the Company’s approval of any of the following situations, whether or not an actual or potential conflict of interest exists.


October 2, 2005

• Every officer and employee must disclose any position he/she holds or other personal involvement in an outside business whether located in-Kingdom or out-of-Kingdom, except where such position is held or involvement is undertaken pursuant to an appointment by the Saudi Government.

• Every officer and employee must disclose any ownership interest he/she holds in other companies, other than permitted passive investments. A "permitted passive investment" is the cumulative ownership by the officer or employee and/or his/her family members (parents, spouses and children) of a non-controlling interest in company shares (less than 5% of issued share capital) available for sale or trade to the public. Permitted passive investments are limited to stock of publicly traded companies.

• Every officer and employee must disclose any position, financial or ownership interest (other than permitted passive investments) by a family member (parents, spouses, and children) in a vendor or contractor doing or seeking to do business with the Company.

• Every officer and employee must disclose all ownership interests he/she and/or family members (parents, spouses, and children) hold in a company whose shares are available for sale or trade to the public where the cumulative ownership interest of the officer or employee and/or his/her family members is 5% or more of issued share capital and, therefore, does not qualify as a permitted passive investment.

• Every officer and employee must disclose to and obtain the Company’s approval of any situation that could involve a prohibited conflict of interest. All such developments are subject to review and evaluation by his/her management and, where required, to a decision to approve or disapprove by the Personnel Department. Whenever an employee transfers to a supervisory position with the Company, to a position in Purchasing or Contracting, or any other position that has the potential for conflict of interest, an employee is required to complete a new Saudi Aramco Form 8942 within 30 days of the change. It is also the responsibility of the employee’s supervisor to ensure that full disclosure by employee is duly completed. The Company’s manuals, including the Industrial Relations, Supply Chain Management, and Contracting Manuals, contain certain examples applying these policies to specific situations.

Failure to disclose such interests and to obtain the required approvals will subject officers and employees to corrective punitive actions consistent with and subject to the Saudi Arabian Labor Law and the Company’s Internal Work Rules Governing Conflict of Interest.


October 2, 2005

B. Examples of Actions Which Are Violations of the Company’s Conflict of Interest Policy

1. Officers of the Company having any personal interest in contractors or vendors doing business with the Company, its subsidiaries, or affiliates.

2. Officers of the Company engaging in trade of any type other than the performance of their duties as employees of the Company. An officer shall be deemed to be engaging in a trade if he maintains in his name a Saudi Arab Commercial Registration or similar license for the conduct of any business or industry in Saudi Arabia or elsewhere.

3. Employees holding any position in another company without disclosing such position. Examples include serving as a director, officer, employee, consultant or representative of any third party.

4. Failure of officers or employees to disclose to or obtain the Company’s approval of the financial interests of family members (parents, spouses, and children) in vendors or contractors seeking or doing businesses with the Company, its subsidiaries, or affiliates.

C. Examples of Actions Which Are Not Violations of the Company’s Conflict of Interest Policy

1. Officers and employees participation in civic affairs which does not adversely affect the proper performance of an employee’s job or the Company’s public image and relations with the Government.

2. Employees who are not officers of the Company holding a position in or working in an outside business that is not doing business or seeking to do business with the Company, where Company information is not used, and Company time is not infringed upon, when disclosed to and approved by the Company in writing.

3. Employees accepting reasonable business entertainment, such as a business meal.

4. Employees who are not officers of the Company having financial interests in outside businesses that are not doing or seeking to do business with the Company, its subsidiaries, or affiliates, provided that such interests (other than a "permitted passive investment" as defined above) are disclosed to and approved by the Company.

5. Family members (parents, spouses, and children) of officers or employees of the Company having a financial interest in outside businesses that do or seek to do business with the Company provided they are disclosed to and approved by the Company because circumstances presenting a conflict or potential conflict situation do not exist.


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D. Disclosure and Approval Form

An Employee Disclosure and Acknowledgement Statement (Saudi Aramco Form SA-8942), which is a stationery item is also available from Personnel Department for the purpose of disclosing interests, positions, or activities of the employee or family members (parents, spouses and children) that are required to be disclosed under the Company’s Conflict of Interest Policy. All employees are required to complete and sign an Employee Disclosure and Acknowledgement Statement in the following circumstances:

• Upon employment.• Whenever an employee or a family member acquires an investment or

position requiring disclosure. (Note: a "permitted passive investment" as defined above does not require disclosure.)

• Whenever an employee transfers to a supervisory position with the Company, to a position in Purchasing or Contracting, or any other position that has the potential for conflict of interest, an employee is required to complete a new disclosure form within 30 days of the change. It is also employee’s management responsibility to ensure that full disclosure by employee is duly completed.

• Whenever the cumulative ownership interest of an employee and/or his/her family members (parents, spouses, and children) in a company whose shares are available for sale or trade to the public reaches five percent of the issued share capital.

• If none of the preceding events intervene, at least once every two years.

XIII. Business Ethics Policy

A. The Company’s Policy on Business Ethics

1. The Company shall maintain the highest ethical and legal standards in the conduct of its business; it shall conduct business with strict regard for what is right and proper; it shall be honest and straightforward in all of its dealings; and it should avoid all situations that might give even the appearance of being unethical or illegal.

2. The books and records of the Company shall be kept in a complete and accurate manner, one that fairly reflects the activities of the Company. Any willful omission or falsification of Company records will be regarded as a serious violation of Company policy.

3. The Company’s confidential and proprietary business information shall be safeguarded and utilized only in keeping with the best interests of the Company, its obligations to third parties, and the highest ethical and legal standards. Such information shall not be disclosed to third parties without prior approval of a duly authorized member of Company Management.


October 2, 2005

4. In all situations, including those where there are no clear legal constraints, the Company’s business shall be conducted in such a manner that neither the Company nor any of its directors, officers, or employees would be embarrassed if the full facts were disclosed.

5. All employees of the Company are to discharge their duties and responsibilities in a manner consistent with these policies and consistent with all applicable laws of any country in which they perform work for the Company.

6. The officers and other supervisory personnel of the Company are to set an example of the highest ethical and legal conduct, both in appearance and in fact.

7. The Company requires candor and honesty of its officers and employees at all levels to assure compliance with these policies.

All employees are required to read and acknowledge their understanding of the above guidelines and agree to strictly abide by them on Saudi Aramco Form SA-8942.

B. Examples of Actions that Are Strictly Prohibited

1. Selling, giving, or disclosing the Company’s confidential and proprietary business information prepared for internal use to other companies or outsiders for personal gain or other unauthorized purposes, or without prior approval of a duly authorized member of Company Management.

2. Using the Company’s confidential and proprietary business information for personal gain or other unauthorized purposes.

3. Purchasing property on the basis of inside information for the purpose of selling or leasing it to the Company at a profit.

4. Accepting gifts or free or discounted services from an individual or organization doing or seeking to do business with the Company, its subsidiaries or affiliates. All such gifts and services offered to an employee or family member must be reported to the employee’s supervisor who shall contact Personnel Department for appropriate action. Any question of whether a gift or service received by or offered to the employee or family member violates the Company’s business ethics policy must be likewise reported for decision or resolution by Personnel Department. Examples of items to be reported include but are not limited to the following:

• Airplane tickets.• Vacations paid in part or in whole.• Entertainment, other than that permitted under C.3 below.• Gifts of other kinds having significant value - rugs, home

furnishings, jewelry and clothing are a few obvious examples of prohibited gifts.


October 2, 2005

• Repairs or construction of property used by or owned by the employee or family member.

• Kickbacks or payment of anything of value to the employee or family member.

• Using facilities such as apartments, automobiles, or offices of a contractor or businessman who is seeking or doing business with the Company, its subsidiaries or affiliates.

• Interest-free or low-interest loans.• Personal services of servants.• Contractors paying bills for the employee or family member.

C. Examples of Actions that Do Not Present Ethical Problems

1. Participation in civic affairs which does not adversely affect the proper performance of an employee's job or the Company's public image and relations with the Government.

2. Employees purchasing vehicles or equipment or materials from Reclamation on open bid basis and selling such items for profit.

3. Employees accepting reasonable business entertainment, such as a business meal.

XIV. Career Center Division Policies

A. General

It is the Company’s objective to achieve the optimum utilization of the workforce. Through reassignment, transfer and promotions, employees are placed in positions which use their skills, interests and potential to the greatest mutual advantage.

B. Career Center Service

The Career Center Division is responsible for administering and coordinating all internal staffing services including the Job Posting Program and excess manpower programs.

C. Job Posting Program

1. Job Posting Criteria

The following outlines the general policy to be followed by line organizations in determining the need to post a job to the workforce:

• Only job openings in salary codes 14 and below may be posted by the Career Center.

• To post a job, departments must submit a Job Posting Request Form to the Career Center Division, approved by the requesting Department Head.


October 2, 2005

• A department may post any job in salary codes 14 and below to employees.

• Departments may only post jobs that are specifically approved for that department by the Organization Consulting Department.

• It is mandatory for a department to post a job to employees before taking the following actions:

a. the external hiring of a regular or casual employee

b. the permanent reassignment of an employee from another department

• However, departments do not need to post a job in the following situations:

a. Developmental reassignment of an employee between departments.

b. Permanent reassignment of an employee between departments within the same administrative area.

c. Permanent reassignment of employee to or from a developmental program such as CDP, Field Deployment Program, etc.

d. Conversion to regular status of graduating participants from non-employee programs.

e. Redeployment between departments of excess employees.

• Executive Management approval is required to waive the posting of a job.

• Jobs can be posted at any time and will remain posted for a minimum of 14 and a maximum of 30 calendar days.

• If suitable applicants are not identified for a posted job, departments may re-post the job. Alternatively, departments may reassign an employee from another organization or hire a new employee from external sources.

2. Employee Eligibility

• All regular and casual employees, irrespective of gender, payroll category or nationality, are eligible to apply for posted jobs.

• The following are ineligible to apply to posted jobs:

a. Employees whose performance is currently rated ’Unsatisfactory’.

b. Employees on full-time development programs of six months or more duration such as CDP, PDP or ADP. Such employees can only apply three years after the completion of the program.

c. Non-employee program participants.


October 2, 2005

d. Contractors, STCs and Loanees.

• Employees must have been in their current salary code for at least four years before applying to a posted job. Employees with less than four years may apply with the written approval of their Division Head.

• After successfully applying and reassignment to a posted job representing a lateral reassignment, an employee may apply to another posted job representing a promotional reassignment after one year following their reassignment. However, the employee can only apply to another posted job representing a lateral reassignment after four years following their reassignment.

• Employees may apply to a posted job without informing their immediate supervisor. However, employees must notify their immediate supervisor when selected for interview by a posting department.

• Employees may apply to several posted jobs at the same time without any restrictions, including jobs posted by their current department.

• If qualified, employees may apply to any job posting including jobs that are different to their current job title.

• Employees may apply to a posted job which is up to two salary codes higher than their current salary code.

• Employees may apply to a posted job which is in a lower salary code than their current salary code.

• Employees may apply to several posted jobs at the same time without any restrictions. However, employees should only apply for jobs that closely meet their qualifications and training.

3. Employee Releasability

• After an employee has been selected for a posted job, the reassignment should be effective within 90 days of the employee’s acceptance.

• The approval level required to prevent an employee transferring to a new assignment (after the employee has successfully applied to a posted job) is as follows:

a. To prevent an employee transferring to a new assignment on a lateral basis (same salary code), the approval of the employee’s Department Head is required.

b. To prevent an employee transferring to a new assignment on a promotional basis (higher salary code), the approval of the employee’s Executive Head is required.


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c. The same approval levels above apply when an employee is prevented from attending a technical interview, after being short-listed by the Career Center for a posted job.

• An employee can only be prevented from transferring to a new assignment for a period of one year (after the employee has successfully applied to a posted job). After one year, an employee may again apply to posted jobs, provided the eligibility requirements are met. The employee cannot be prevented from transferring to a new assignment, if the employee again successfully applies to a posted job.

4. Selection and Job Offer

• Posting departments should interview any selected applicant (employee) before approving a job offer.

• After a job is posted, the posting department may only select an applicant from the applicants applying to that job through the Career Center unless none of the applicants meet the selection criteria.

• Employees who have been selected for a posted job representing a promotional opportunity, can be immediately assigned the full job title and salary code of the posted job. However, the effective date for promotional salary increase should be in accordance with the current policy.

• Posting departments should route E-8000 actions through the Career Center for endorsement prior to the reassignment of an employee.

• If mutually agreed by the posting and releasing departments, new assignments may be made on a trial basis for a 90 day Developmental Period, to determine an employee’s ability to perform satisfactorily in the new assignment. If mutually agreed by the posting and releasing departments, an employee may also be granted a similar option to return to their original department, if the employee is dissatisfied with the new assignment.


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Appendix I: Approval Authorities for Manpower Requisitions - Foreign Contract, ITEA and Chinese STC Employees

Salary Codes 18 and Above (excluding Physicians)

All manpower requisitions in Salary Codes 18 and above (excluding Physicians) require President & CEO approval.

Salary Codes 17 and Below (including SC18 Physicians)

All manpower requisitions in Salary Codes 17 and below (including SC18 Physicians) require Corporate Management approval.

Physicians

Notes:

(1) Approval authorities for actual salary offers are contained in Appendix I of Chapter 2, Salary Administration.

Salary Codes Approval Level

18 and Above President & CEO

17 and Below Corporate Management

Salary Codes Approval Level



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Appendix II: Sample Letter of No Objection

(Name of Company)

_____________________

To Whom It May Concern:

________________________________________, former employee was employed by

_______________________________ located at ______________________, Saudi Arabia,

from _______________ to _______________ in the position of ______________________.

In accord with the Council of Ministers Decision No. 826, dated July 14, 1975, we have

no objection to __________________________ seeking or obtaining employment within

the Kingdom of Saudi Arabia.

_______________________

Administrator

(Official Stamp of Company Issuing this Letter)

Industrial Relations Manual for Asian EmployeesChapter 2: Salary & Job Administration

October 2, 2005

Chapter 2: Salary & Job Administration

I. General Policies

These policies apply to Asian employees, including Indians, Pakistanis, Filipinos, Thais and Sri Lankans. The purposes of our Base Salary Administration program are to:

• attract and retain capable employees;• motivate employees; and• reward good performance.

The policies are based on the following principles:

A. Base salaries for Asian employees should be competitive with those of comparable companies in the employees' home countries.

B. Jobs are evaluated. All jobs with comparable content are assigned to the same salary code. For each salary code, there is a hiring rate or a range which reflects the value of jobs in that salary code relative to all other jobs within the Company.

C. The performance of each employee is reviewed periodically. Merit or recontracting increases are based on performance and the applicable merit guide.

D. Approval Authorities. The President/CEO has granted to various levels of management (Section II, sub-paragraph J.) specific IN-POLICY and OUT-OF-POLICY approval authority. They are specifically detailed throughout Chapter 2: Salary & Job Administration and they cannot be re-delegated by anyone other than the President/CEO.

II. Definitions

A. ANNUALIZED INCREASE -- When Management gives an increase of a given percent for a period greater or less than twelve months, they determine the equivalent annual rate by the formula:

Actual percent increase

-------------------------- x 12 = Annualized increase

Months since last increase

B. BASE SALARY -- An employee's compensation excluding premiums, allowances, overtime and bonuses.

C. DOWNWARD JOB REASSIGNMENT -- The official reassignment of an employee to a job classified in a lower salary code at his/her request or due to unsatisfactory performance.


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D. FOREIGN CONTRACT EMPLOYEE -- An employee whose Employment Agreement may be extended indefinitely following satisfactory completion of an initial provisionary period of one year. Employees from India and Pakistan are normally hired under Foreign Contract Employment Agreements.

E. HIRING RATE -- The salary an employee receives when he/she is first employed by the Company.

F. INDEFINITE TERM EMPLOYMENT AGREEMENT (ITEA) -- An employee whose Employment Agreement is valid for an unspecified period. Employees from Far Eastern Asian countries (Philippines, Thailand, etc.) are normally hired under such agreements.

G. JOB -- A group of related functions which have been officially approved for an employee to perform. Through a job description, every job in the Company is defined in terms of its basic function, duties, responsibilities, scope, contacts, and qualification requirements.

H. JOB EVALUATION -- The systematic and objective determination of the relative value of jobs in terms of level of general responsibility, skill requirements and complexity relative to other jobs within the Company.

I. JOB RECLASSIFICATION -- The re-evaluation of a job to a higher or lower salary code. Refer to General Instructions 0000.003 for complete information.

J. MAXIMUM OF THE SALARY RANGE -- The maximum salary the Company pays for a job.

K. MANAGEMENT -- Levels of management within the Company are defined below. For specific positions and names of incumbents, refer to the Management Guide Manual.

• CORPORATE MANAGEMENT - Senior Vice Presidents and above, inside Board Directors, General Counsel.

• EXECUTIVE MANAGEMENT - Vice Presidents, Executive Directors, Assistant to the Chairman of the Board, Treasurer.

• GENERAL MANAGEMENT - General Managers, Assistant Controllers, Associate General Counsel, Chief Engineer, Chief of Staff - Medical Staff, General Auditor.

• DEPARTMENT MANAGEMENT - Department Managers, Directors and other positions at the Department Head level.

L. MERIT SALARY INCREASE -- An increase in an employee's base salary, based on relative job performance, position in salary range, and months since last increase.

M. MIDPOINT OF THE SALARY RANGE -- Halfway between the minimum and maximum of the salary range. The midpoint is established through surveys of comparable companies. It is designed to pay employees a competitive salary normally linked to the market average.


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N. MINIMUM OF THE SALARY RANGE -- The minimum salary the Company pays for a job. It is the lowest salary which should be paid to an employee who meets minimum job requirements.

O. PLACED JOB -- A job officially approved and classified in a specific salary code.

P. PROMOTION -- The reassignment of an employee to a different job classified in a higher salary code. Also, the job reclassification to a higher salary code when the scope, complexity and responsibilities have increased sufficiently.

Q. PROMOTIONAL SALARY INCREASE -- An increase in an employee's base salary based on his/her promotion to a job classified in a higher salary code.

R. PRORATED INCREASE -- When Management gives an increase at a specific annual rate, but for a period greater or less than 12 months, they determine the actual percent increase by the prorating formula:

Months since last increaseAnnual increase rate x --------------------------

12

= Actual (or prorated) percent increase

S. SALARY CODE -- The number identifying a specific salary range within the salary structure.

T. SALARY RANGE -- The range of possible salaries for a specific salary code.

U. SALARY STRUCTURE -- The group of salary ranges for placed jobs.

V. SPECIFIED TERM CONTRACT (STC) EMPLOYEE -- An employee whose Employment Agreement is valid for normally two years.

W. THIRTEENTH MONTH PAY -- The pay the Asian employee receives in addition to the normal base salary. It is equivalent to one month's base salary.

III. Job Description and Job Evaluation

Each job is given a unique job code number, a descriptive title and described in detail in a formal job description. The job is placed in an appropriate Salary Code that corresponds to a salary range. Jobs should not remain unplaced for more than 120 days. Refer to General Instruction 0.003 for complete information on job descriptions and job evaluations.


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IV. Salary Structure

A. General

The Company's salary structure is designed to attract and retain highly qualified employees. It is competitive with the salary structure of comparable companies within the employees' home country and the Kingdom of Saudi Arabia.

B. Policies

1. Elements of the Salary Structure

The salary structure consists of salary ranges for every job classified in each salary code. The salary ranges have spreads designed to recognize differences in qualifications, job performance and length of stay in a job salary code. The salaries in each salary range recognize higher levels of duties and responsibilities as the job salary codes go higher. Each salary range has a minimum, maximum, and midpoint.

2. Classifications of Jobs

Jobs are classified through job evaluation. Jobs with similar content are classified in the same salary code and have the same salary range.

3. Periodic Review of Salary Structure

The Company reviews the salary structure and salary ranges periodically to keep them competitive with comparable companies within the employee’s home countries and the Kingdom of Saudi Arabia.

V. Hiring Rates

A. General

These policies provide guidelines for hiring rates which attract qualified candidates.

B. Policies

1. Minimum Hiring Rates and Salary Structures

Minimum hiring rates and salary structures are applied based on the employee’s home country. They are competitive with the pay levels of comparable companies within the employee’s home country.

2. Guidelines for Salary Offers

The hiring salary offered is:

a. Minimum Hiring Rate -- is offered to candidates who meet the minimum requirements of the job.


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b. Above Minimum Hiring Rate -- Is offered to candidates who exceed the minimum requirements of the job.

c. Above Mid-Point of the Range -- Is offered to outstanding candidates whose qualifications substantially exceed the minimum requirements of the job.

3. Approval Authorities for Salary Offers

Salary offers must have the prior approval of the authorities specified in Appendix I.

VI. Review of Performance and Salary Planning

A. General

These policies provide guidelines for planning merit increases.

B. Policies

1. Performance Categorization

Management reviews the performance of each employee assigned to a whole job annually to determine their performance category. The review considers job performance, and potential for promotion. This review is used in planning the merit increases for the following year.

2. Performance/Merit Distribution Guidelines:

a. Distribution guidelines are published at the beginning of the Annual Performance (PMP) Cycle (January).

b. Guideline compliance is required and balanced at the Department Level or above. This ensures uniformity in achieving departmental equity. SAP-PMP system automatically tracks actual performance rating distribution against corporate guidelines.

c. "Exception-To-Guideline" provides a method to handle exceptional situations within Admin Area and/or Business Line (e.g., small organizations staffed with large number of high performers, specialized staffs or other situations). Admin Area and/or Business Line are expected to be within compliance on an over-all basis.


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d. PMP Ratings, Definitions and Distribution Guidelines are as follows:

C. Approval of the annual performance distribution for SC 03-17 employees is by the President & CEO.

For further information on the Performance Appraisal Program, refer to Chapter 14, Part IV, Section III.

VII. Merit Increases

A. General

These policies encourage good performance by giving merit increases.

B. Policies - Merit Increases

Guidelines for administering merit increases are developed annually for all employees. These Merit Increase Guides are distributed prior to the Salary Planning Cycle.

Performance/Merit Distribution GuidelinesPMP-Performance Ratings Definition Percent

DistributionOverall

Distribution

Significantly Exceed

RequirementsS

Highest performance. A level rarely achieved by others. Competencies of Performance, Leadership and Goal results SIGNIFICANTLY EXCEED objectives and job requirements.

3% 7%

S- 4%

Exceed Requirements

E+ 5%

23%E

Performance above expectations, to a greater degree than most other employees. Competencies of Performance, Leadership and Goal results EXCEED objectives and job requirements.

8%

E- 10%

Meets Requirements

M+ 35%

65-70%M

Performance fully meets expectations of position. Competencies of Performance, Leadership and Goal results MEET performance objectives and job requirements.

20%

M- 10-15%

Does Not Meet Requirements

D+

Performance DID NOT MEET some of performance objectives and job requirements. Employee capable and shows improvement.

0-3%0-5%

D

Performance does not meet expectations of position. Competencies of Performance, Leadership and Goal results DID NOT MEET objectives and job requirements.

0-2%


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1. Eligibility for a Merit Increase

The criteria for eligibility are:

• The employee is assigned to a placed job,• The employee's performance category conforms to the

appropriate Merit Increase Guide discussed below,• The amount of the increase plus the base salary will not exceed

the applicable salary range maximum (where the merit increase of a Foreign Contract employee is limited by the range maximum, refer to Paragraph C of this Section),

• The employee is not planned for surplus within three months of the effective date of the merit increase; and

• Terminating employees with an earned merit increase scheduled to be effective the same month of termination provided the effective date of separation is after payroll cut-off date for that month.

2. Amount of Merit Increase

Merit Increase Guides are designed to offer a range of salary increase options based on competitive economic and business conditions, and factors such as the employee's performance category, his position in the salary range and the interval since his last merit or promotional increase. Employees approved "PMP rating" and "quartile" position in the salary scale will determine the amount of merit increase.

If the applicable percentage in the Merit Increase Guide is not sufficient to raise the employee's salary to the minimum of the range (or within the hiring rate range, if applicable), an adjustment of up to 5% may be added to the merit percentage for "Meets Requirements" and better performers.

3. Timing of Merit Increases

Merit increases are given to employees at the intervals listed on the appropriate Merit Increase Guide. Merit increases are effective on the first day of the month.

4. Impact of Extended Leaves of Absence on Merit Increases

Department Managers are responsible for monitoring the impact of extended leaves of absence on employee's merit increases.

a. The merit increase intervals for employees on approved leaves and absences without pay (W or X time) shall be extended as per the following schedule:

Accumulated Days of AbsenceSince Last Salary Action Merit Extension

0 - 89 None

90 - 105 3 Months


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When the merit increase occurs, the effective date of the action shall be used to establish the next eligibility for a future salary action.

b. If the effective date of a merit increase occurs while an employee is on an extended leave of absence with pay (K, M or P time) in excess of 90 days, the effective date of the merit increase will be postponed to the first of the month following the month the employee returns to work.

5. Guidelines may not be exceeded without higher approval authority for out-of-policy action. Although not required by policy, it is recommended that all out-of-policy merit actions be reviewed by Salary Administration before submitting them for approval to assure internal equity. Where lesser amount or longer time interval is recommended, out-of-policy action and higher approval authority are not required.

6. Employees in Unplaced Jobs

Merit increases for employees in unplaced jobs would be administered within policy, provided the assignment of the individual was approved in accordance with Management Guide, Section 4, Approval Authorities and Appendix II, Chapter 2, I.R. Manual.

7. Deceased Employees

Planned merit increases for employees who die while on service will be included in the final rate of pay of the deceased employee on a pro-rated basis. If the deceased employee was at the maximum of his salary range and therefore not eligible for a merit increase he will be eligible for a pro-rated lump sum payment in accordance with Section C.3 below.

8. Approval Authorities

The approval authorities for merit increases are listed in Appendix II.

106 - 135 4 Months

136 - 165 5 Months

166 - 195 6 Months

196 - 225 7 Months

226 - 255 8 Months

256 - 285 9 Months

286 - 315 10 Months

316 - 335 11 Months

336 - 365 12 Months


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C. Lump Sum Payment for Asian Employees when Merit Increase Limited by Range Maximum

1. General

The purpose of this policy is to enable Asian employees, whose salaries are at the maximum of their salary ranges, to receive up to two lump sum cash payments in recognition of their performance and continuing contribution to the Company.

2. Eligibility

a. Employees are eligible for the first lump sum payment if they meet the following criteria:

• they are evaluated at Performance "Good" or better.• their base salary is at the maximum.• twenty-four (24) months have elapsed from the date of

last salary action.

b. Employees are eligible for the second lump sum payment if they meet the following criteria:

• they are evaluated at Performance "Good" or better.• they have received the first lump sum payment.• they have not received a promotional increase subsequent

to the first lump sum payment.• twenty-four (24) consecutive months have elapsed since

the most recent of either the first lump sum payment or any subsequent merit increase.

• their salary is at the maximum salary of the same salary code they were in when they received the first lump sum payment.

3. Amount of Payment

The lump sum payment amount applicable to employees who meet the eligibility rules is equal to the average annualized rate as specified in the appropriate merit guidelines multiplied by the annual base salary.

4. Timing and Administration

Refer to paragraph C.2 of this Section for timing of payments.

Payments for eligible employees are calculated and initiated automatically. Salary action documents are not required from departments.

5. Effect on Benefits/Other Payments

The lump-sum payment is not considered a part of base salary or regular compensation. It has no effect on the payment of any allowance, benefit plan computations, severance awards or "overbase salary components".


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VIII. Promotional Increases

A. General

Promotional Increase Guides are developed annually for all payrolls and are distributed prior to the Salary Planning Cycle. The Guides are designed to offer a range of salary increase options based on factors such as the employee's performance category, his position in the salary range and the interval since his last merit or promotional increase.

Promotional increases must comply with all of the following:

1. Promotional increases for Asian employees are calculated in accordance with the Promotional Increase Guide.

2. Promotional increases are effective on the first day of a month. In cases where a promotion occurs during the month, the promotional increase should be granted on the first day of the following month. Approved actions should be submitted to the appropriate Salary Administration Group at least l0 days prior to the effective date.

3. The salary of an employee, fully qualified for the assigned job, should be at least the minimum of the salary range or the hiring rate established within the range for that position. If the sum of the Earned Merit and Promotion Increment in the Promotional Increase Guide is not sufficient to raise the employee's salary to the minimum of the range (or within the hiring rate range, if applicable) an adjustment of up to 5% may be added for "Good" or better performers.

4. Employees may not be promoted more than two salary codes higher at any one time. In the rare situation where an individual might be considered for promotion to a job three levels above his or her current salary code, he or she may be promoted immediately only to a maximum of two salary codes higher. The third salary code will be granted at the time of the employee's next normal merit review date. No promotional increment will be granted at the time of the third salary code promotion.

5. Guidelines may not be exceeded without higher approval authority for out-of-policy action. Where lesser amount or longer time interval is recommended, out-of-policy action and higher approval authority are not required.

6. Where exceptional circumstances warrant consideration outside these guidelines, such cases may be submitted for out-of-policy approval, accompanied by full justification and substantiation.

7. Guidelines apply to all salary codes. However, recommendations affecting individuals in salary codes 20 and above, or proposals to promote individuals to salary code 18, require approval of the Compensation Committee (Appendix IV, Part I).


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8. Promotional increases are not granted when employees are assigned to unplaced jobs.

9. Promotional increases may not be granted to downgraded employees unless they are promoted to a job with an approved salary code which exceeds the employee's protected salary code. In such cases, the approval authorities listed in Appendix IV apply.

10. Impact of Extended Leaves of Absence on Promotion

The promotions of employees on approved leaves and absences without pay ("X" time) shall be administered as follows:

• Planned promotions (primarily ladder jobs) or those planned to coincide with the employee's next approved merit increase shall be administered in accordance with the schedule for merit extension specified under "Merit Increases" section.

• Unplanned promotions which occur on other than the employee's merit increase date shall be administered in accordance with promotional and prorated merit guidelines. However, the period of "X" time shall be deducted (as per the schedule for merit extension specified under the "Merit Increases" section) from the time since last merit increase in calculating the prorated merit increase or eligibility period for promotion. When the planned or unplanned promotion occurs, the effective date of the action shall be used to establish the next eligibility for a future salary action.

B. Criteria for Promotion

The Company considers candidates for promotions if they meet the minimum requirements specified in the job description. In addition, Saudi Arab candidates who have the potential to meet the minimum requirement are also considered.

In order for a promotion to be authorized:

• a vacancy must exist in an approved job.• the selected employee must be qualified for the job or must

demonstrate potential to qualify within a reasonably short period of time, not to exceed six months.

• all available candidates must be considered.• If the job is placed at Salary Code 15 or above, the selected employee

must appear as a Replacement Table candidate or in a slate of candidates prepared by the Management Development Department unless otherwise approved by the Corporate Management. The Director, Management Development Department, reviews promotions prior to the action being taken for other than professional ladder jobs.


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• Employees who do not meet the minimum requirements specified in the job description and are promoted on out-of-policy basis will continue to require out-of-policy approval for all subsequent promotions if they continue to lack the minimum requirements of the new job.

C. Normal Promotions

1. A normal promotion is the appointment of an employee from the job currently occupied to another job already classified in a higher salary code (excluding Professional Ladder Promotions, reference D.1).

2. When an employee is promoted, the new salary code may be granted immediately. However, the promotional increase for SC 3-10 employees is not to be granted earlier than six months following the last merit or promotional increase. The promotional increase for SC 11 and above employees must be granted on the normal merit increase date.

3. If, at the time that an employee is scheduled for a regular merit increase, it is planned that he or she will receive a promotion within the next six months, the merit increase is not granted. The promotional increase, when granted, is calculated according to the Promotional Increase Guide. For employees whose salaries are not at or near the maximum of their current salary code, and who therefore have been receiving normal merit increases, "Months Since Last Increase" is determined by calculating the months due at the scheduled regular merit increase and then adding the months elapsed between that date and the promotion.

4. For employees at the maximum of their salary code, and who therefore have not been eligible for merit increases, the maximum number of "Months Since Last Increase" to be used in calculating the earned merit increment is the lesser of actual time following last merit/promotional increase or the maximum "time in months" for the employee's Appraisal Rating, determined from the Merit Increase Guidelines.

D. Professional Ladder Promotions

1. A professional ladder promotion is official reassignment from one professional ladder job to another classified in a higher salary code. Professional ladder jobs are a family of non-supervisory professional jobs requiring college degrees and classified in various successively higher salary codes.

2. The date a promotional increase is granted is the normal merit increase date.

3. The amount of the promotional increase is calculated in accordance with the Promotional Increase Guide.


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E. Superior Performer

1. General

Occasionally, the incumbent of an evaluated job clearly possesses pertinent experience, personal capabilities, and leadership qualities in excess of the stated job requirements. The employee also uses these skills in the accomplishment of the job. While the employee remains in the job, its scope and responsibilities are broadened beyond that stated in the job description.

Accordingly, the employee may be promoted to a salary code one grade higher than that of the evaluated job. When the employee is moved out of the job, the normal placement immediately goes into effect. It is the employee and not the job that is awarded the superior performer placement.

Normally, there are few cases that justify "superior performer" treatment. Each proposal is critically examined. This procedure is not used to provide extraordinary salary treatment for an employee who has long service in a job and for whom it is probably a terminal job. The proponent must clearly demonstrate several distinct ways in which the employee's capabilities and application of those capabilities enhance the value of the job. The proponent must also explain why such capabilities and performance levels should not reasonably be normal expectations of the job.

2. Approvals

The employee's management prepares a request for out-of-policy salary code placement. The request is endorsed by the following (in the sequence indicated) prior to submittal to the President & Chief Executive Officer for approval.

Endorser Purpose of Endorsement

Manager, Organization Consulting Department

Confirms that appropriate review has been made to verify that the regular job described in the job description is properly placed.

Director, Employee Relations Policy and Planning

Confirms that the proposal is consistent with policy intent, sound compensation practice and previous appointments.

Director, Career DevelopmentORDirector, Management Development (SC 15+)

Confirms that the proposed action does not conflict with future development plans for the employee or block the progress of other employees.


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3. Notification to Employee

An employee classified as a "superior performer" should be informed that the use of his personal qualifications and capabilities makes the job of greater value than would normally be the case. The superior performer promotion is in recognition of this fact.

F. Job Reclassification

When an employee's job is re-evaluated and reclassified to a higher salary code, the employee should, at that time, be advanced to the new salary code without a change in salary. At his/her next normal merit review date, the employee receives either the full Earned Merit Increment percentage in accordance with the Promotional Increase Guide, or the full Planned Merit Increase in accordance with the Merit Administration Guide, whichever is greater. If the resultant base salary is below the midpoint of the new salary code, the employee may also be granted a Promotion Increment to be added to the Earned Merit Increment.

The Promotion Increment is the lesser of the percentage in the Guide or the percentage required to bring the salary to the midpoint of the new salary code.

G. Approval Authorities

Approval authorities are listed in Appendix IV. Proposed promotional increases which exceed the guidelines require "out-of-policy" approval authority.

IX. Downward Job Reclassification

A. General

These policies protect the salary of any employee from any reduction if his/her job is reclassified downward.

B. Policies

1. Salary and Salary Code Protection

The base salary of an employee whose job is reclassified downward remains unchanged. In addition, the employee retains the perquisites and privileges such as housing points and housing eligibility associated with the former job classification.

2. General Salary Increases

Employees under salary code protection receive the lower general increase of:

• the amount applicable to the job's previous salary code; or• the amount to reach the new salary range maximum.


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3. Merit Increase Administration

Future merit increases for an employee whose job has been reclassified downward are administered as if the job were still classified under the previous salary code. However, the employee is not eligible for a merit increase while his/her base salary exceeds the new job's salary range maximum.


The approval authorities for downward job reclassification and ongoing administration of affected employees are contained in Appendix V. Out-of-Policy approval is required for an employee to retain full salary code protection, that is, to continue to be fully administered in the former (higher) salary code with no restrictions. Once approved, ongoing salary administration is on an in-policy basis.

X. Downward Job Reassignment

A. General

These policies protect the salary of an employee from any reduction if he/she is reassigned to a job classified in a lower salary code. Downward job reassignment may occur through either the employee's request or inadequate performance in his/her previous job.

B. Policies

1. Salary and Salary Code Protection

The base salary of an employee reassigned to a job in a lower salary code remains unchanged. In addition, the employee retains the perquisites and privileges such as housing points and housing eligibility associated with the former job.

2. General Salary Increases

Employees under salary code protection receive the lower general increase of:

• the amount applicable to the job's previous salary code; or• the amount to reach the new salary range maximum.

3. Merit Increase Administration

Future merit increases for an employee who has been reassigned to a job in a lower salary code are administered on the basis of the new job's salary range. However, the employee is not eligible for a merit increase while his/her base salary exceeds the new job's salary range maximum.


October 2, 2005


Approval authorities for placement of employees into jobs with salary codes less than or equal to the employee's former approved salary code are contained in Appendix V and are administered as in-policy assignments. Out-of-Policy approval is required for an employee to retain full salary code protection, that is, to continue to be fully administered in the former (higher) salary code with no restrictions. Once approved, ongoing salary administration is on an in-policy basis.

5. Documentation of Downward Job Reassignment

Reasons for downward job reassignment must be explicitly documented in the Remarks Section of the A-8000 Profile Document. The employee must sign Form Aramco 1535 acknowledging voluntary acceptance of the reassignment.

XI. Temporary Assignments

A. Acting Assignment

1. General

An Acting Assignment is the temporary assumption of a position by an employee who becomes responsible for its regular duties.

• The Company intends that positions vacated by the temporary absence of the regular incumbents, or standing vacant pending appointment of regular incumbents, be used to the maximum practical extent for the training and development of employees of recognized potential.

• These assignments broaden the scope of their experience and knowledge.

2. Duration and Approval Authorities

As a general rule, acting assignments are expected to extend no longer than 90 days. For acting assignments which exceeds 90 days, clear business reasons must exist for such assignments. Acting assignment approval level required is based on the cumulative number of days unless the interval between assignments is 90 days or more. Requests for approval of acting assignments are those as specified below:


October 2, 2005

a. Employee in Acting Position Below Department Head

The following approval authorities are required prior to the assignment’s commencement. Acting assignments to SC 15 and above positions other than professional ladder jobs also require concurrence of the Management Development Department if the length of assignment exceeds 180 days.

b. Acting Assignments to Department Head Positions

With the concurrence of Management Development Department, the following approval authorities are required prior to the assignment’s commencement:

c. Acting Assignments to General Management and Executive Management

3. Salary Administration

a. Salary Code

The assigned employee retains the salary code of his regular position and salary is administered in accordance with policies for that position. This includes:

• Class III overtime if eligible in regular incumbent position and employee actually works the overtime hours;

• Shift Premium if eligible in regular incumbent position and actually works the corresponding shift; and

Duration of Acting Assignment

Minimum Approval Authority

90 days or less Department Head or higher as required for job being filled

91 - 180 days General Management

181 - 365 days Executive Management

366+ days Corporate Management



90 days or less General Management

91 - 365 days Corporate Management

366+ days President & CEO



90 days or less Corporate Management

91 days or more President & CEO


October 2, 2005

• Other Allowances if eligible in regular incumbent position and maintains the requisite eligibility in the acting position.

b. Position Title

The assigned employee assumes the title of the temporary position and the word "Acting" is incorporated into the title, such as "Acting" Superintendent, Superintendent (Acting) or abbreviated Superintendent (A).

4. Documentation

Form SA-8000 is required for all Department Head level assignments regardless of length of assignment, and is required for all Division Head level assignments, which are 30 days or more.

All Department Head acting assignments are sent to MDD for endorsement, regardless of period. Acting assignments below Department Head level for other than professional ladder jobs are sent to MDD for endorsement if the duration of assignment exceeds 180 days.

Refer to Employee Information System (EIS) Manual for information on completing this form.

B. Other Assignments

1. General

All "OTHER" temporary assignments that are not covered under Acting Assignments will be administered under this section.

2. Duration of Approval Authorities

These types of "Other Assignments" are usually due to operational requirements and are short in duration.

Approval of such assignments lies with the employee’s management who are authorized to approve In-Policy merit increases for that employee. Refer to Appendix II - Approval Authorities for Merit Increases (SA-8000).

3. Salary Administration

The assigned employee retains the salary code of his/her regular position.

The salary of an employee on an Other Assignment is administered according to the policies applicable to his/her regular job. The employee is eligible for normal merit increases.


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4. Documentation

Form SA-8000 is required for all Department Head level assignments regardless of length of assignment, and is required for all Division Head level assignments, which are 30 days or more.

All Department Head acting assignments are sent to MDD for endorsement, regardless of period. Acting assignments below Department Head level for other than professional ladder jobs are sent to MDD for endorsement if the duration of assignment exceeds 180 days.

Refer to Employee Information System (EIS) Manual for information on completing this form.

Organizations without General Management level will revert to next higher level of approval authority.


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Appendix I: Approval Authorities for Salary Offers

Salary Codes 18 and Above

• All personnel requisitions involving Salary Codes 18 and above require President & Chief Executive Officer approval.

• Salary offers for Salary Codes 18 and above (excluding Physicians) require Compensation Committee approval. (See Appendix I, Chapter 1, for further details on personnel requisition approval authority).

Salary Codes 17 and Below (Excluding Physicians)

Physicians

Notes:

(1) Corporate Management may re-delegate the approval authority for Salary Offers for SC 17 and below.

(2) The approval of the Senior Vice President of the proponent organization is required for any expatriate employee who requires more than a three bedroom Company house at the time of hire.

(3) Organizations without General Management level will revert to next higher level of approval authority.

Salary Codes Zero through 50% in Range Above 50% in Range

16 & 17 Executive Management Corporate Management

15 General Management Executive Management

11 to 14 Department Heads General Management

10 & Below As delegated by Department Heads

General Management

Salary Codes Target Step Up to Midpoint

Above Target Step or Above Midpoint

Up to Maximum

Above Maximum

15 to 18 Executive Management Corporate Management

President & CEO


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Appendix II: Approval Authorities for Merit Increases (SA-8000 Action) (Including Upwards Reclassification Increases Not Involving Change in Job Scope)

Part I - Merit Actions

• Salary Codes 20 and above employees - All salary actions are reviewed and approved by the Compensation Committee.

• Salary Codes 18 (excluding Physicians) and 19 Employees - All salary actions are reviewed and approved by the President and CEO

• Salary Codes 17 and below employees and Physicians - The approval authority for individual salary plan is the same as the approval authority for processing SA-8000 merit actions. The overall salary plans distribution for each Admin. Area are reviewed and approved by the Business Line Senior Vice President.

Part II - Changes and/or Processing SA-8000 Merit Actions

• Salary Codes 18 and above employees (excluding Physicians) - The following approval authorities apply only to the processing of SA-8000 merit actions, any changes require approval as outlined in Part I.

• Salary Codes 17 and below employees and Physicians - The following approval authorities apply to any changes to the annual salary plan and to the processing of SA-8000 merit actions.

(1) To ensure consistent application to policy, Out-of-Policy Equity Adjustments require endorsement of Vice President-Employee Relations & Training.

(2) Refer to Note #3.

Notes:

(1) In-policy increases consist of:

•Planned merit increases per guidelines (percentage increase and time interval.

Salary Codes (SC) In-Policy Increases Out-of-Policy Increases

20 & above President & CEO Compensation Committee

18 & 19 Executive Management President & CEO

15 to 17 General Management Corporate Management(1)

11 to 14 Department Heads Executive Management(1)

10 & below Division Head(2) Department Head(1)

Physicians

19M & 18M Executive Management President & CEO

18 & below General Management Corporate Management(1)


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•Promotion increases

•Additional up to 5% to reach minimum of salary code

•Delayed merit increases up to 6 months

•Delayed promotions up to 6 months

Out-of-Policy increases consist of:

•All other Salary Actions not listed under In-Policy Increases

(2) Assignment of any individual to an unplaced job requires the same approval authority as "Out-of-Policy Merit Actions", even though merit action may not be anticipated at the time of assignment. The Director of Management Development Department reviews all SC 15 and above incumbents in unplaced jobs. Any subsequent merit treatment, after a person has been assigned to an unplaced job, would be handled as within policy.

(3) Department Head is required to approve any salary increases for SC 3-10 if the increase includes an adjustment amount up to 5% to bring to salary code minimum (or to the established hiring rate, if applicable). Refer to Section VII.B.2.



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Appendix III: Permanent Lateral Transfers (Job in Same Salary Code & Same Organization Level)

Notes:

(1) Management Development Department's endorsement is required for any changes in assigned job or organization for an employee assigned to a SC 15 or above position for other than professional ladder jobs.

(2) The approval authorities for a transfer (job change) are for actions, which do not involve a promotion. If a promotion is involved in the job change, Promotion approval authorities (Appendix IV) apply.

(3) Permanent moves to positions that are at the same organization level (i.e., unit, division, department, etc.) and salary code level as currently held by employees are permanent lateral transfers. In these instances, the organization code or the job code changes, but the employees remain at the same salary code and organization levels.


Level /Salary Codes In-Policy Out of-Policy

All Department Head and above and SC 18+ Professionals

President & CEO President & CEO

All Division/Section Head levels and SC 15 to 17 Professionals

Executive Management Corporate Management

All Unit Heads and SC 11 to 14 other levels

Department Head Executive Management

All SC10 & Below As delegated by Department Head

General Management


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Appendix IV: Approval Authorities for Promotional/Permanent Assignment Actions (Including Reclassification Increases Based on Expanded Job Scope)

Part I - Promotional Actions

• Salary Codes 18 and above employees (excluding Physicians) - All promotional actions are reviewed and approved by the Compensation Committee.

• Salary Codes 17 and below employees and Physicians - The approval authority for individual promotional plan is the same as the approval authority for processing SA-8000 promotional actions.

Part II - Changes and/or Processing SA-8000 Promotional Actions

• Salary Codes 18 and above employees (excluding Physicians) - The following approval authorities apply only to the processing of SA-8000 promotional actions, any changes require approval as outlined in Part I.

• Salary Codes 17 and below employees and Physicians - The following approval authorities apply to any changes to the promotional plan and to the processing of SA-8000 promotional actions.

Notes:

(1) Out-of-policy promotional actions are required when there is any deviation from the Promotional Guidelines and/or for specific minimum educational or experience requirement as stated in the job description, but all promotions must be to an evaluated and placed position.

(2) Promotions to Salary Codes 15 and above are limited to candidates listed on the succession plans, or on slates of candidates prepared by the Management Development Department, unless approved by Out-of-Policy Approval Authorities. The Director of

Level/Salary Codes (SC) In-Policy Out-of-Policy

All Department Head and above and SC 18+ Professionals


All Division/Section Head levels and SC 15 to 17 Professionals


All Unit Heads and SC 11 to 14 other levels

General Management Corporate Management

All SC 10 & below Department Head Executive Management

Physicians

SC 18 & below Executive Management Corporate Management


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Management Development endorses all SC 15 through SC 17 promotions for other than professional ladder jobs, which includes promotions from SC 14 to SC 15, prior to action being taken.

(3) Permanent assignments to higher salary code positions than that currently held by an employee are processed on the same basis as promotions. This type of action is used when placing employees into higher grade code positions without salary or grade code increases at the time of the transfer. Such actions are therefore processed as regular promotions because these employees are being permanently placed into higher positions.


Examples

Example Issue Result

Employee A - was hired at SC 8 and then downgraded to SC 7 then promoted to SC 8.

Would this employee be eligible to receive the promotional increase when promoted to SC 8?

No., this employee was hired at the higher SC and paid the appropriate salary for that SC.

Employee B - was promoted to SC 8, then downgraded to SC 7, and then promoted to SC 8.

Would this employee be eligible to receive the promotional increase when promoted to SC 8?

No, this employee would have been placed on protected status. The employee has already received the promotional increase for the initial grade promotion.


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Appendix V: Approval Authorities for Downward Job Reclassification/Reassignment and Full Salary Code Protection (SA-8000 Action)

(1) Normal merit increase authority (Appendix II) is required when returning an employee to a position evaluated in his former salary code.

(2) For employee job assignments previously approved by the Compensation Committee, the President and Chief Executive Officer has full authority to return employees to job assignments which do not result in employees being assigned to jobs with a higher salary code than the employee's former salary code as approved by the Compensation Committee for employees in Salary Codes 18+.

Note:Management Development concurrence is required for all downward job reassignment/reclassification and full salary code protection actions affecting SC 15 and above employees.

Organizations without General Management level will revert to next higher level of approval authority.

Salary Codes In PolicyRegular DownwardJob Reassignment/Reclassification(1)

Out-of-PolicyDownward Job Reassignment/Reclassification InvolvingFull Salary Code Protection

20 & Above Compensation Committee(2) Compensation Committee(2)

All Department Heads and SC 18+ Professionals


All Division/Section Head Levels and SC 15-17 Professionals


14 & Below Department Head General Management

Industrial Relations Manual for Asian EmployeesChapter 3: Over Base Salary Components

October 2, 2005

Chapter 3: Over Base Salary Components

I. General Policies

These policies apply to regular Asian employees. They provide over base salary compensations and allowances that increase an eligible employee's net pay. The Company's objectives in providing these components are:

• To maintain competitive compensation packages that attract highly qualified employment candidates

• To motivate employees to continue working for the Company.

II. Definitions

A. CONTINUOUS SERVICE -- See Chapter 1, Employment, for definition.

B. MOBILE FIELD PARTIES -- Desert drivers, desert convoy crews, exploration parties, well maintenance parties, geophysical crews, seismographic crews and other field parties with similar functions who work and sleep in desert locations.

C. REGULAR WORK SCHEDULE -- See Chapter 4, Overtime and Shift Premiums for definition.

III. Thirteenth Month Pay

Regular employees receive a thirteenth month payment once a year. Management determines eligibility, and when in the year thirteenth month pay is granted.

IV. Annual Benefits Supplement

A. General

This policy applies only to Asian employees covered by Indefinite Term Employment Agreements (ITEAs) and Chinese employees on the Specified Term Contracts.

B. Policy

1. Supplement in Lieu of Long Term Benefits Programs

ITEA and Chinese STC employees are paid an Annual Benefits Supplement in lieu of long term benefit programs such as Retirement Income Plan, Thrift Plan or Permanent Total Disability Plan.


October 2, 2005

2. Amount and Timing of Payment

The Benefits Supplement is a lump sum payment equivalent to 17% of the employee's annual base salary in effect on the annual anniversary date of the ITEA or Chinese STC. Payment is made annually at the end of the month of the anniversary date of the agreement.

3. Proration Upon Termination

In the event of termination, the Supplement is prorated based on the actual number of days of service since the last anniversary date or date of employment if less than twelve months of service.

V. Specified Location Allowance

A. General

A Specified Location Allowance is paid to encourage employees to accept assignments in designated remote areas (Specified Locations) having limited living and recreational facilities.

B. Criteria

To be classified as a Specified Location, one or more of the following criteria must be met:

1. An area which is more than 50 kilometers by secondary road, or approximately one hour driving time by major Government highway, from the nearest Company camp with family housing or from a developed housing area where family housing is available for lease or purchase.

2. Offshore fixed or floating structure which:

• contains the employee's work and living quarters;• has no direct daily transportation services to onshore locations

where family accommodations or developed housing facilities are available.

3. Difficult living conditions at the Remote Location due to limited on-site facilities and amenities.

Workday residence locations that are in or adjacent to established municipalities do not qualify as remote for purposes of this allowance.

C. Amount

1. Specified Locations are divided into four Categories, based on remoteness and relative severity of living conditions. Each category attracts a different Allowance, varying from 10-17% of monthly base salary.

Specified Locations are listed by Category in Appendix I.


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Specified Location Allowance percentages are listed by Category in Appendix II.

2. The Allowance is calculated on monthly base salary up to the approved mid point of SC 17 only. The portion of salary exceeding SC 17 mid point does not attract the Allowance.

D. Eligibility

1. Employees on Regular Work Schedules are eligible for Specified Location Allowances if they are assigned to work and live for one month or for 30 or more consecutive days in a Specified Location.

2. Employees assigned to work and live for less than one month or less than 30 consecutive days in Specified Locations do not receive the Allowance, but are granted free quarters and meal allowances or free meals.

3. Temporary change in work schedule for up to 60 days.

E. Application

1. Payment of the allowance is keyed to an employee's work day residence location, irrespective of his daily work location.

2. The monthly allowance is prorated for any portion of a month during which an eligible employee is assigned to Company housing at the specified location.

New hires, transferees (in/out of the Company), and terminees are paid the allowance for hours worked in Saudi Arabia in the month of hire, transfer or termination.

3. An employee temporarily assigned from one specified location to another continues to receive his regular Specified Location Allowance, plus the meal allowance appropriate to the new location.

4. The allowance is not a permanent component of compensation. It, therefore, has no effect on overtime premiums or employee benefit plans.

F. Application During Time Off and Business/TemporaryAssignments

Specified Location Allowance is paid when employee is on any of the following:

• Paid Personal Leave ("P" Time)• Medical Leave ("M" and "K" Time)• Business and Short Term Temporary Assignments of up to 60 Days,

Including Those Recorded as "D" Time in the United States

Specified Location Allowance is not paid when employee is on any of the following:


October 2, 2005

• Vacation Leave ("L" Time)• Authorized Leave Without Pay ("X" Time)• Unauthorized Leave Without Pay ("Z" Time)• Authorized Medical Leave Without Pay ("W" Time)• Temporary Assignments of More Than 60 Days, Including Those

Recorded as "D" Time in the United States

G. Approval Authority

Proposals to shift a Specified Location from one category to another, or to add or delete Specified Locations, should be submitted through the concerned Executive Management to the Vice President, Employee Relations & Training, for coordination and approval.

VI. Mobile Field Party Allowance

A. General

A Mobile Field Party Allowance is paid to offset hardships incurred by employees assigned to mobile field parties (e.g., desert driving crews, water well maintenance field crews, survey/exploration and Mobile Geological Laboratory crews, pilots, etc.)

B. Eligibility

To be eligible for the Mobile Field Party Allowance, an employee must be assigned to the desert for at least three consecutive days.

Employees on Special Work Schedules are not eligible for the Mobile Field Party Allowance.

C. Amount

The Mobile Field Party Allowance is paid for each day of eligibility with fractional days counted as full days.

Desert driving crews are paid the daily equivalent of 17% of monthly base salary up to the midpoint of Salary Code 15 (the portion of salary exceeding SC 15 midpoint does not attract the allowance).

All other mobile field party employees are eligible for 14% up to the same maximum.

VII. Work Clothing

A. General

The Company provides specific work clothing if it is required for a job. Work clothing which remains Company property is cleaned and maintained at Company expense.


October 2, 2005

B. Policies

1. Where Work Clothing Is Worn

The Department Head determines when, where and by whom work clothing should be worn. He/she should consider the safety of the employee, the work environment and the needs of the organization.

2. Methods Of Providing Work Clothing

a. Check-Out-And-Return

The Company retains highly specialized work clothing required occasionally and issues it only as needed.

b. Periodic Issue

Work clothing worn frequently or regularly is issued to the employees periodically. The quantity of clothing issued depends on how frequently it is worn and laundered. In the case of work clothing worn regularly, the quantities considered reasonable are:

c. Reimbursement - Female Nurses

Female nurses must purchase their own work clothing. They receive an unaccountable uniform allowance at the following time intervals:

3. Who Takes Care Of Work Clothing

Company-retained work clothing is cleaned and maintained at Company expense. Employees who purchase their own work clothing must clean and maintain it.

4. Authorization for Work Clothing

a. Personal Protective Clothing

The Division Head and Loss Prevention Department authorize use and issue of personal protective clothing.

How Often Laundered Sets IssuedSets UsedPer Year

After 1 day's use 12 5

After 2 days use 6 3

After 5 days use 3 2

Initial employment SR 1,000

Each subsequent 12 months SR 600


October 2, 2005

b. All Other Work Clothing

Initially, a Division Head must approve issuing all other types of work clothing. Once approved, purchases are made according to established signature authorities.

Requests for Company-provided work clothing must state:

• who is to wear the clothing;• when it is to be worn; and• why it is needed.

The request should also include details on the clothing specifications, quantity required, issue schedule, controls to be used, and estimated annual clothing and laundering costs.

The following organizations may be contacted for information or advice:

1. Employee Relations, Policy & Planning Department (Uniforms).

2. Medical Department (Sanitary Clothing).

3. Safety Department (Personal Protective Clothing).

4. Materials and Planning Department (Supply and Inventory).

5. Damage to Personal Clothing

The Company may reimburse an employee for damage incurred during drills or emergencies. To claim reimbursement an employee must:

• report the damage to the supervisor soon after the event;• show the damaged clothing;• explain how the damage happened; and• place a cash value on the damage.

The supervisor, after verifying the circumstances and confirming the claim for damages, prepares a Payment Authorization. The Division Head must approve it. The cost is charged to the job or operation where the damage occurred.

6. Dress Standards

Employees, their dependents and visitors are required to meet basic dress standards in public areas. Division Heads and above are responsible for monitoring their employees' adherence to dress standards in the workplace.


October 2, 2005

VIII. Transportation Allowance

Refer to Chapter 16, Local/International Transportation.

IX. Rental Assistance Allowance

Refer to Chapter 12, Housing and Families.

X. Company Annual Award

The Company grants each Foreign Contract employee an annual award equivalent to SR 3 per month of recognized continuous service. The award is paid annually in the June statement. If an employee is terminated, the award is paid on a pro rata basis.

XI. Travel Time Allowance

A. General

Employees are eligible for travel time payment provided the following basic requirements are met:

1. Travel Time must be outside normal work hours (not less than 8 hours) on a daily basis

2. Travel Time must be to a work site as approved under the eligibility guidelines set forth in this policy.

3. The employee must be permanently assigned to a qualifying Work Site. Other assignments such as relief/Temporary Assignments must be 30 or more days in duration.

B. Policies

1. Travel Time Payment

Eligible employees will be paid a flat monthly Travel Time (Zone) Allowance for time spent in traveling to/from an authorized Work Site. These zones are determined on the basis of travel time from an approved travel reference location (e.g., where an employee could live) to the Work Site. The monthly allowances are:

Zone 2 Zone 3

3-10 11+ 3-10 11+

FC (SR) 545 935 710 935


October 2, 2005

Appendix III contains eligible Work sites by zones.

2. Policy Limitations

a. Daily Workday Travel Time payment is not authorized if living quarters (married or single accommodations) are available at the Work Site. Housing is considered "available" if it has been offered to the employee at the Work Site. It is immaterial whether it was accepted or declined.

b. Employees commuting between any of the Major Administrative Areas are ineligible to receive a Travel Time payment.

c. Daily Workday Travel Time payment is not authorized if travel to the Work Site is at the option of the employee.

d. Payment of compensation other than, or in addition to, the Travel Time Allowance for Daily Workday Travel Time is not authorized in recognition of Travel Time. Payment of overtime and Specified Location Allowance are specifically prohibited for the purpose of paying for Daily Workday Travel Time.

e. Travel Time Allowance is not paid for other than Daily Workday travel.

f. The monthly Travel Time Allowance is prorated for any portion of a month during which employee is eligible for a Travel Time Allowance.


g. Travel Time Allowance payment is paid when employee is on any of the following:

• Paid Personal Leave ("P" Time)• Medical Leave ("M" and "K" Time)• Business and Short Term Temporary Assignment of up to

60 days, including those recorded as "D" Time in the United States.

Travel Time Allowance payment is not paid when employee is on any of the following:

• Vacation Leave ("L" Time)• Authorized Leave Without Pay ("X" Time)• Unauthorized Leave Without Pay ("Z" Time)• Authorized Medical Leave Without Pay ("W" Time)

ITEA and Chinese STC (SR)

290 520 395 520


October 2, 2005

• Temporary Assignments of more than 60 days, including those recorded as "D" Time in the United States

3. Established of Travel Time Allowance for New Work Sites

A request of Travel Time Allowance eligibility for a new work site is submitted by Executive Management to the Vice President, Employee Relations & Training for review and approval.

4. Considerations for Travel Time Allowance Eligibility

Travel Time Allowance eligibility for a given work site is determined by taking one or more factors into consideration, which include: travel time to the distant work site from where employees could live, commuting practices, etc. These factors are evaluated both individually and collectively to determine if allowance eligibility exists for a given work site for either Zone 2 (approximately 30+ minutes one-way travel time) or Zone 3 (approximately 60+ minutes) from the approved travel reference location to a given work site.

5. Payment to Employees

Daily Workday Travel Time Allowance approvals are identical to approvals required for salary (merit increase) actions for the particular salary codes concerned. Chapter 2 of the appropriate Industrial Relations Manuals contains these approval authorities.

XII. IK Project Mobility Allowance

A. General

The In-Kingdom (IK) Project Mobility Allowance is paid to compensate employees who are temporarily assigned to construction projects outside the Company’s main operating areas. Employees are generally subject to frequent change of assignments from one project location to another and experience family separation, long weekend commute to/from their days-off residence and difficult living conditions at contractor construction camps (e.g., Project Engineers and Project Managers).

B. Criteria

To be eligible for the IK Project Mobility Allowance, the following specific criteria must be met:

1. Assignment must be to a non-SLA work location outside the Company’s major operating areas, i.e., those outside the Eastern Province traditional operations area, Riyadh, Jeddah, Rabigh, Yanbu, etc.

2. Employee is assigned to a project location for more than 30 consecutive days.


October 2, 2005

An employee assigned to a project location at Company-designated SLA work location will not receive this allowance. Instead, he receives the appropriate SLA allowance established for the area.

C. Amount

The allowance is paid monthly and is equivalent to 10% of employee base salary up to the approved mid point of SC 15 only. The portion of salary exceeding SC 15 mid point does not attract the Allowance.

D. Application

1. The allowance is paid to all eligible employees, irrespective of salary code.

2. The monthly allowance is prorated for any portion of a month during which an eligible employee is assigned to Company construction project locations.


3. The allowance is not a permanent component of compensation. It, therefore, has no effect on overtime premiums or employee benefit plans.

E. Application During Time Off and Business/TemporaryAssignments

The IK Project Mobility Allowance is paid when employee is on any of the following:

• Paid Personal Leave ("P" Time)• Medical Leave ("M" and "K" Time)• Business and Short Term Temporary Assignments of up to 60 Days,

Including Those Recorded as "D" Time in the United States

The IK Project Mobility Allowance is not paid when employee is on any of the following:




October 2, 2005

F. Approval

Authority to approve the IK Project Mobility Allowance is identical with approvals required for salary merit increase actions for the particular salary codes concerned. Chapter 2 of the Industrial Relations Manuals contains these approval authorities.

XIII. In-Kingdom Temporary Assignment Allowance (IKTA)

Employees are eligible for IKTA allowance when they are re-assigned temporarily to In-Kingdom work locations, including business assignments within Saudi Arabia and loan assignments with IK Joint Venture Companies. The IKTA allowance is paid as an incentive for employees to commence a temporary assignment to another work location. The allowance is paid monthly and it is equivalent to 7% of an eligible employee’s base pay, irrespective of salary code or position, up to the mid-point of Salary Code 17. See Chapter 7; section III.B.2 "Entitlements" for more details.

XIV. Retroactive Allowance Payment

Employees have a responsibility for knowing their entitlements and/or notifying the Company of a change in status that could affect an allowance payment, e.g., getting married, changing residence. They are also responsible for notifying their Supervisor on a timely basis in the event of non-payment or incorrect payment of an allowance entitlement. In the event an employee is not paid an allowance, the following retroactive payment timetable applies:

Retroactive Period Signatory Level

Up to 6 Months Division Head

7-12 Months Department Head and approval of Area Personnel Division Head

Over 12 Months Exec. Mgmt. and approval of Personnel Director


October 2, 2005

Appendix I: Specified Locations

Category I

Category II

Category III

Category IV

LocationWorkday Residence Location Code

There are no locations in this category.


Tanajib CommunityHaradh RIC (old)Haradh Bachelor Camp

070406530656


Remote Field Party Fixed RFPF

Remote Field Party Mobile RFPM

East-West Pipeline Pump Stations 3 & 6East-West Pipe Mobile

74807481

Hawtah RIC CampKhuff Gas Construction Camp(4)

Haradh Project CampsHaradh GOSP-2 Project Camp(6)

Khursaniyah Construction Camp(7)

15815431065806540742


Abha-Jizan Booster Pump 1 0677

Abha-Jizan Booster Pump 2 0678

Abu Safah GOSPDrilling Offshore Mobile

0295OSDM


October 2, 2005

(1) Category IV - Remote Field Party Mobile authorized for Deep Desert Convoy Drivers/Crews only.

(2) Shaybah locations are assigned a Temporary Specified Location Allowance of 20% during the construction/start-up phase.

(3) For employees with a workday residence in one of the Satellite Pump Stations; employees with a workday residence in one of the main Pump Stations (PS 3 and PS 6) should have a workday residence code of 7480 in Category III above. PS 10 is distinguished and its SLA is CAT IV (17%). PS 4 is removed from the SLA eligibility effective January 1st, 2005.

(4) SLA for the Khuff Gas Construction Camp will be paid during construction/start-up only.

(5) SLA for the E/W Pipeline Project Camps will be paid during construction/start-up only.

(6) Haradh GOSP-2 Project Camp is assigned a Temporary Specified Location Allowance of 14% during the construction/start-up phase.

(7) SLA for the Khursaniyah Construction Camp will be paid during construction/start-up only.

Producing Offshore FixedMarjan GOSP 1

OSPF0694

Marjan GOSP 2 0685

Marjan GOSP 3 0686

Zuluf GOSP 1 0695

Zuluf GOSP 2 0696

Zuluf GOSP 4 0698

Safaniya GOSP 4 0699

Marine Offshore Mobile OSMM

Producing Offshore Mobile OSPM

Remote Field Party Mobile(1) RFPM

East/West Satellite Pump Station(3)

(PS#1, 2, 5, 7, 8, 9, 11 & PRS)7487

Vela VesselsShaybah Residential/Industrial Camp(2)

97131111

E/W Pipeline Project Camps(5)

E/W Pump Station #1074887489


October 2, 2005

Appendix II: Specified Location Allowance Amounts

(Effective September 1, 1981)

(1) Maximum Allowance - The allowance will be calculated on monthly base salary up to the approved mid-point of Salary Code 17.

(2) For SC15+ employees receiving the Regular Specified Location Allowance, an additional Specified Location Allowance Supplement of 10% of base pay (up to SC17 mid-point) is paid.

(3) Shaybah locations are assigned a Temporary Specified Location Allowance of 20% during the construction/start-up phase.

Location Category% of Monthly Base Pay

as Allowance(1)(2)

I 10%

II 12%

III 14%

IV 17%(3)


October 2, 2005

Appendix III: Eligible Work Locations for Travel Time (Zone) Allowance Application

(See exceptions below)

Travel Zone "2" Travel Zone "2" (Continuation)

Abqaiq GOSP’s 2&3 Mubarraz ITC (1)

Abqaiq North WIP’s Nariyah Pump Station

Abu Ali/Berri Plants Prod Offshore Moving (Code OSPM excluded)

Abu Ali Camp Qurayyah Seawater Plant

Abu Ali Marine Pier Remote Chemical Storage & Handling Fac.

Abu Safah GOSP Sea Islands 1,2,3,4, (Code 0316 excluded)

Ain Dar Facility Shedgum Facility

Ain Dar Field Services Building Shedgum GOSP’s 1,2,3,4,5,6

Ain Dar GOSP’s 1,2,3,4,6 Shedgum Khuff Manifold

Ain Dar Water Injection Station Shedgum NGL Plant

Ain Dar WIP Shedgum Pump, Wire, Field Service

Ain Dar Wireline Shedgum WIP’s 2,3

Al Hasa Clinic (1)(3) Uthmaniyah GOSP’s 1,6,7,8,9,10 (4)

Berri NGL Plant (2) Uthmaniyah WIP’s 2,3 (4)

Berri GOSP’s 3,4,5 Uthmaniyah Water Station (1)

Fazran GOSP Yanbu White Sand Beach

Haradh GOSP’s 1,2 (5) Travel Zone "3"

Hawiyah Gas Plant Abu Hadriyah GOSP

Hawiyah GOSP’s 2,3,4 Abu Jifan GOSP

Hawiyah Central WIP Harmaliyah Facility

Hawiyah Station #825 Harmaliyah GOSP

Juaymah Platform (Code 0319 excluded) Haradh GOSP 1 (6)

Juaymah Sea Island Khursaniyah GOSP

Khurais Facility Khursaniyah Pump Station

Khurais GOSP’s 1,2,3,4 Jubail Port (2)

Mubarraz (1) Mizalij GOSP


October 2, 2005

(1) Applicable to employees with a workday residence of UDSC or UDHS.(2) Not applicable to employees with a workday residence of Jubail City.(3) Employees living in Abqaiq must have out-of-policy approval to receive the allowance.(4) Not applicable to employees with a workday residence of UDSC, UHHS, 0600 or 3310.(5) Applicable to employees with a workday residence of Haradh Camp.(6) Applicable to employees travelling from Udhailiyah and points North of Udh.

Industrial Relations Manual for Asian EmployeesChapter 4: Overtime & Shift Premiums

October 2, 2005

Chapter 4: Overtime & Shift Premiums

I. General

Supervisors are responsible for managing and controlling overtime. The Company authorizes overtime only for special circumstances and operations which cannot be done during the Normal Work Schedule.

II. Definitions

A. BUILT-IN OVERTIME -- Scheduled overtime contained within either a scheduled work day or cycle which is not automatically paid to employees. The time sheet should reflect the actual hours worked, and is the only document based on which overtime will be paid. Employees are paid built-in overtime only if they work more than 8 hours/day, and they get paid the 7th day overtime only if they work 7 consecutive days.

B. CALL IN -- An employee reporting in response to his/her Supervisor's instructions to perform work during non-work hours.

C. CALL IN TIME -- The period when an employee on an "on call" assignment is called in to perform a certain task.

D. COMPENSABLE OVERTIME -- Officially authorized overtime work with pay.

E. HOLIDAY WITH PAY -- A day officially designated as a non-work day. It observes a particular occasion, or is an additional rest day for employees.

F. IRREGULAR WORK SCHEDULE (IWS) -- A work schedule consisting of a 7-day work cycle; an 8-hour work shift; a lunch break; no scheduled overtime; and: a) work either starts before 5:30 A.M. or ends after 18:00 P.M., or b) work requires two rotating shifts.

G. NORMAL WORK SCHEDULE (NWS) -- A work schedule with a 7-day work cycle and 8 hours or less of work shift, starting at or after 5:30 A.M. and before 9:30 A.M., with a lunch break of 1/2 or 1 hour, and ending before 18:00 hours. The Normal Work Schedule has no scheduled overtime and no shift premium.

H. ON-CALL STATUS -- An assignment which requires employees to remain available during non-work hours to perform an essential task which cannot be scheduled in advance.

I. OVERTIME -- For employees on work cycles with 5 days work/2 days off work, overtime is time worked over 8 hours a day or 40 hours per week. For all other employees, overtime is time worked in excess of 8 hours a day or 48 hours per week. For all work schedules, overtime is time worked during holidays, scheduled days off, or on the 7th consecutive day of a work cycle.


October 2, 2005

J. OVERTIME PREMIUM -- Pay at the rate of 150% of the straight time hourly rate for authorized work beyond normal work hours.

K. RESTRICTED WORK SCHEDULE (RWS) -- A work schedule with any one or a combination of the following aspects: a) built-in or scheduled overtime; b) six or seven consecutive days of work; c) no lunch break; and/or d) rotating shifts.

L. SCHEDULED DAY OFF -- A day/days within a work cycle for rest.

M. SHIFT ALLOWANCE MAXIMUM HOURLY RATE -- An hourly rate established for each salary code which sets the maximum value of standard hourly rate used in calculating Shift Allowances.

N. STANDARD HOURLY RATE -- Annualized base salary divided by straight time annualized hours (i.e., 365 x 8 = 2920).

O. STRAIGHT TIME -- Hours in a Gregorian calendar year or month for which an employee is paid a fixed and regular monthly compensation.

P. STRAIGHT TIME HOURLY RATE -- An employee's normal hourly rate of pay.

Q. WORK CYCLE -- A span of time from the beginning of an employee's established schedule of work days and days off, up to the time the schedule repeats itself.

R. WORK SCHEDULE -- A description of the hours and days that an employee is scheduled to work. The policies governing work schedules are detailed in the Organization Consulting Department General Instruction 1.200.

S. WORK SHIFT -- Work hours scheduled for a specific time in the day. There may be more than one work shift in a day. Employees may be rotated among shifts.

III. Shift Allowance

A. General

The Company recognizes that work shifts starting before 05:30 hours or ending after 18:00 hours, as well as those shifts with rotating or oscillating hours, are less convenient to employees than Regular Work Schedules. These policies grant Shift Allowances to employees who work these shifts. The Shift Allowance is not a permanent component of compensation. Therefore, it has no effect on overtime premium or employee benefit plans.

B. Policies

1. Eligibility for Shift Allowance

All employees in Salary Codes 03 through 15 who are assigned to work shifts designated in Appendix II receive a Shift Allowance, provided their assigned shift schedule is 30 consecutive days or longer.


October 2, 2005

Employees in unplaced jobs assigned to these shifts also receive a Shift Allowance if their base salaries are within the ranges of Salary Codes 03 through 15.

2. Amount of Shift Allowance

The Shift Allowance is computed on a monthly basis according to the following formula:

Eligible Hours Worked x Employee's x Percent Listed in the Month Standard in Appendix II Hourly Rate(a)

(a) Not to exceed the Shift Allowance Maximum Hourly Rate for employee's salary code.

The Shift Allowance increases with the number of eligible hours worked.

3. Application

The monthly allowance is prorated for any portion of a month during which an eligible employee is assigned to a shift work schedule.


4. Application During Time Off and Business/Temporary Assignments

Shift Allowance is paid when employee is on any of the following:

• Paid Personal Leave ("P" Time)• Medical Leave ("M" and "K" Time)• Business and Short Term Temporary Assignments of up to 60

Days, Including Those Recorded as "D" Time in the United States

Shift Allowance is not paid when employee is on any of the following:



IV. Straight Time Pay Rate

A. General

These policies define the uses of Straight Time Pay Rate.


October 2, 2005

B. Policies

Straight Time Pay Rate is used to compute:

• Overtime hourly premium rate.• Pay in lieu of vacation time.• Severance allowance.• Pay for travel time connected with transfers and terminations.• Partial month's pay for new employees, transferees, or terminated

employees.• Partial month's pay due to lost time without pay.• Pay for scheduled days off, earned vacations, paid holidays.• Pay for enforced idleness due to circumstances beyond the

employee's control, such as inclement weather, power interruption and others.

• Pay for Muslim employees' prayer periods.• Pay for authorized excess hours worked beyond six (6) per day for

Overtime Class II Muslim employees during Ramadan. NOTE: SC15+ employees in Specified Locations are not eligible for Additional Straight Time.

• Pay for Overtime Class I and III shift workers whose scheduled days off coincide with a Company-paid holiday or a rescheduled day off.

• Pay for travel time on days off or outside assigned normal work hours for Overtime Class I employees who must travel via Company or commercial air service to meet unusual and infrequent work requirement. The Additional Straight Time paid covers, as applicable, the round trip land travel time between employee’s residence and the airport used, required check-in times before flight departures (normally 30 minutes), round trip flight hours, and round trip land travel time to/from the destination airport.

• Pay for travel time during days off or holidays for Overtime Class I or III employees who are authorized to work overtime. The Additional Straight Time paid covers the round trip travel time between residence and work location.

V. Overtime

A. General

These policies define the conditions that justify overtime with pay.

B. Policies

1. Classification of Overtime

As a part of the job evaluation function, jobs are classified to determine the employees eligible for overtime pay:


October 2, 2005

a. OVERTIME CLASS I -- Jobs in which employees are eligible for overtime pay. These are normally performance-level, non-supervisory positions, generally classified in Salary Codes 03 to 10. (Approval authorities are specified in Appendix I.)

b. OVERTIME CLASS II -- Jobs in which employees are normally not eligible for overtime pay. These are normally professional, supervisory and managerial positions classified in Salary Codes 11 and above. Employees in Overtime Class II are expected to work the necessary hours to complete their assignments.

c. OVERTIME CLASS III -- Individual employees in jobs classified in Overtime Class II are eligible for temporary overtime work and pay for a defined period of time and number of hours on specific duties and responsibilities. Overtime pay is limited to these periods of time, number of hours and specific duties and responsibilities performed during the overtime period. Employees in Salary Codes 11-14 are eligible for Overtime Class III and continue their eligibility for overtime, shift premium, and other allowances if placed in an acting assignment for a salary code 15 or above position. (Reference Chapter 2, X.A.3 policy for Acting Assignment.) Employees in Salary Codes 15 and above are not eligible for Overtime Class III. (Approval authorities are outlined in paragraph 4 of this section, and summarized in Appendix I.)

2. Conditions for Approval of Overtime Class III Employees

a. The employee's overtime must be scheduled in advance. It must be recurring, extend for a specified period of time and meet the minimum overtime hours requirement listed in paragraph 3, below.

b. The employee must work the scheduled overtime in order to receive payment for it.

c. The employees must meet the salary code eligibility requirements specified in paragraph 1c, above.


October 2, 2005

3. Minimum Overtime Hours for Overtime Class III

Supervisors must recommend that an employee be temporarily classified in Overtime Class III. The minimum weekly work schedules which justify Class III are:

4. Approval of Overtime Class III

The following are overtime approval authorities for specific types of Class III overtime assignments:

a. Department Heads have authority to assign employees to established Special/Irregular Work Schedules or Remote Area Work Schedules and approve built-in Class III overtime, so long as use of the work schedule has been approved by appropriate authority.

b. Department Heads in the Training Organization may approve Class III overtime for teachers and instructors.

c. For all other Class III overtime requirements, the Department Head may approve overtime for assignments up to three months; General Manager approval is required for assignments up to six months; and Administrative Area Head approval is required for assignments up to one year. Business Line Head approval is required for assignments lasting more than one year.

Approval authority for above (c) actions is based on cumulative Class III overtime in a one year for assignments of up to twelve months, and in a two year period for assignments lasting more than twelve months, including the period covered by the current assignment request. (For example, an employee's present Class III overtime assignment is expected to last two months and a previous Class III overtime assignment in the preceding twelve months also lasted two months. Since total Class III overtime in the twelve-month period exceeds three months, General Manager or Executive Head approval is required for the present assignment).

Class III overtime approval authorities are summarized in Appendix I.

Duration of Continuous Overtime Work in Weeks Weekly Work Schedule

1 60 Hours or More

2 55 Hours or More

3 or More 50 Hours or More

Indefinite Number of Weeks 42 Hours or More


October 2, 2005

5. Delineation of Compensable Overtime

a. Overtime During Regular Work Days

The compensable overtime for a regular work day is the authorized time worked above eight (8) hours.

b. Overtime During Scheduled Days Off

The compensable overtime during scheduled days off is the actual time worked or two (2) hours, whichever is greater.

c. Compensable Overtime on the Seventh (7th) Day of a Special Work Schedule

The seventh (7th) day of a Special Work Schedule is considered a day off for employees who are working Special Work Schedules.

d. Compensable Overtime During Paid Holidays

1. Non-shift Employees in Overtime Class I Jobs

Employees are entitled to:

2. Irregular Work Schedules, and Overtime Class III Employees

Employees are entitled to compensable overtime for the actual hours worked.

e. Travel Time

Employees in overtime class I or III who are authorized to work overtime during their scheduled days-off or holidays are paid additional straight time for the round trip travel time between residence and work location.

6. Computation of Overtime Pay

The formula for the gross hourly overtime premium rate is:

Annual Base Salary x 1.5

365 x 8

To compute overtime pay, the overtime premium rate is multiplied by the number of compensable overtime hours.

Duration ofOvertime Work Compensable Overtime

4 Hours and Below 4 Hours

More Than 4 Hours But Not Exceeding 8 Hours

8 Hours

More Than 8 Hours Actual Time Worked


October 2, 2005

7. Approval Authorities for Overtime

If overtime is scheduled in advance, it should also be approved in advance.

If overtime is urgently needed, but cannot be scheduled and approved in advance, the authorities' approval should be obtained after the overtime. Authorities are listed in Appendix I.

VI. On-Call Time

A. General

Some Company operations require employees with specific skills to remain available during non-work hours. Although these employees may not actually go in to work during these hours, they must remain on-call. This may restrict normal off-hours activities. Therefore, the Company has this policy to cover on-call time and pay for that time.

B. Policies

1. Justification for On-Call Status Assignment

Supervisors should justify all on-call status assignments. The guidelines are:

a. The work is essential. Delays may result in undue hardship, expense, or risk to life or property.

b. Only one or a limited number of uniquely qualified employees can perform the work.

c. The work is not part of the supervisor's regular duties and responsibilities.

d. The work must be done during normal time-off periods of uniquely qualified employees.

2. Eligibility for On-Call Pay

The conditions required for an on-call pay are:

a. The employee is officially required to remain at a designated place where he/she can be quickly called in to perform essential work.

b. The employee is in an Overtime Class I.

c. The employee keeps an authorized person informed of his/her location at all times during the on-call time.

3. Periods of On-Call Status

On-call status occurs:


October 2, 2005

a. Between Regular Work Days -- if the employee is asked to be on-call at any time between the end of one regular work day and the beginning of the next.

b. During Days Off or Paid Holidays -- if the employee is asked to be on-call at any time between the last work hour before the days off or paid holidays and the first work hour after the days off or paid holidays.

4. Overtime Pay for On-Call Status

Eligible employees assigned to on-call status are entitled to overtime pay. The overtime pay formula uses the greater of:

• the overtime hours granted in the table below; or• the number of hours actually worked by the employee.

This schedule lists up to 24 hours of on-call status. If the hours exceed 24, repeat the schedule for each 24-hour period or portion thereof for the remaining hours.

5. Approval Authorities for On-Call Assignments

The assignment of an employee to an on-call status must be approved by the appropriate Department Head.

VII. Call-In Time

A. General

Sometimes employees are called in for work during non-work hours. There is no advance notice. Employees in Overtime Class II and III jobs are not given additional pay. This is considered part of their job. But employees in Overtime Class I are given additional pay.

TABLE I: SCHEDULE OF ON-CALL PAY

Number of HoursIn On-Call Status

Number of On-CallOvertime Hours Granted

OverBut Not

More Than

BetweenRegular

Work Days

During ScheduledDays Off or

Paid Holidays

0 8 2 4

8 12 3 5

12 16 4 6

16 24 5 7


October 2, 2005

B. Policies

1. Employees Entitled to Call-In Pay

An employee in an Overtime Class I job, who is not on an on-call status but who is officially called in by a supervisor to perform urgent essential work, receives call-in pay.

2. Rate of Call-In Pay

Call-In pay is based on the employee's overtime premium rates.

3. Compensable Overtime

Employees receive overtime pay for the greater of two hours or the period for which they are called in.

VIII. Training Time

A. General

The Company recognizes that approved training courses are important for employees and the Company. Therefore, the Company pays the overtime premium for non-work hours spent in an assigned training course.

B. Policies

Employees in Overtime Class I jobs who attend a Company-assigned training course receive overtime pay for non-work hours spent in the course. The overtime pay is based on the employees' normal overtime premium rates. Employees who voluntarily attend training courses do not receive overtime pay.

IX. Ramadan Time

A. General

Muslim employees receive time off for religious obligations during Ramadan without a reduction in salaries.

B. Policies

During Ramadan, Muslim employees work six hours a day but are paid their regular salaries. Muslim employees in Overtime Class I or III are paid overtime for work in excess of six hours in a work day. Employees in Overtime Class II are paid their regular straight time hourly rate for work in excess of six hours in a work day.


October 2, 2005

Appendix I: Overtime Approval Authorities

Type Duration Approval Authority

Class I Scheduled or Unscheduled As Required Department Heador as Delegated

Class III Shift Schedule & RemoteArea Work Location Actions(Built-in Overtime WorkSchedules)

As Required Department Head

Training Organization Actions(Teacher/Instructor Overtime)

As Required Department Head

All Other ActionsCumulative: within aTwelve Month Period

Up to 3 Months Department Head

Up to 6 Months General Manager

Up to 12 Months Administrative Area Head

Within a two year period More than 12 months Business Line Head


October 2, 2005

Appendix II: Schedule of Shift Allowance

Shift Work Schedule CodeShift Allowance as

Percent of Base Salary

Level I N12, R12 and R32 5%

Level II N13, R16, R18 and R19 7%

Level III R20, R21, R22, R23, R24, R25, R28, R29, R30, S12 and S13

10%

Note: N = Non Restricted ScheduleR = Restricted ScheduleS = Special Work ScheduleLevel I - 5% of the monthly base salary paid for work schedules that start before 0530 hours or end after 1800 hours.Level II - 7% of the monthly base salary paid for rotating shifts that cover 16 of the 24 clock hours.Level III - 10% of the monthly base salary paid for rotating shifts that cover 24 clock hours. These include 8 to 12 hour shifts per day.

Industrial Relations Manual for Asian EmployeesChapter 5: Benefit Programs

October 2, 2005

Chapter 5: Benefit Programs

I. General

In addition to the programs outlined or referred to in other Chapters of this Manual, the Company provides basic benefits programs.

This policy applies to all Asians employed on the "Saudi Riyal Payroll". In the case of each benefit, specific requirements may also apply.

All references to years in this policy are to Gregorian years, unless specifically stated as Hijrah years.

II. Basic Benefit Plans

This section summarizes benefit plans which are detailed in separate Plan Booklets and which are applicable to Foreign Contract Asian employees only. Employees and Management should refer to these booklets for details. In all instances, however, the Booklets only deal with plan highlights. The master insurance policy or complete Plan text legally governs all Plan operations.

Asian Indefinite Term Employment Agreement (ITEA), Chinese Asian Specified Term Contract (STC) and Foreign Contract Asian employees hired after June 2001 receive an Annual Benefits Supplement which is paid in lieu of providing alternative long term programs such as the Retirement Income Plan or Thrift Plan described in this section. Refer to Chapter 3, Over Base Salary Components for further details.

A. Supplemental Retirement Income Plan

The Supplemental Retirement Income Plan provides a lifetime retirement income at normal retirement age of 2% of the employee’s final two-year average pay multiplied by the total number of recognized years of service with the Company reduced by the annuity value of severance.

B. Thrift Plan

The Thrift Plan provides additional financial security by:

• encouraging participating employees to save; and• adding Company contributions to their savings.

A reward schedule establishes the percentage of employee savings which the Company will pay on termination of service. The schedule varies from 5% after one year's service to 100% after ten years' service.


October 2, 2005

III. Severance Award Plan

The Severance Award Plan provides an end of service award. It complies with the basic provisions of Article 87 and Article 88 of the Saudi Arab Labor and Workmen Law. Refer to Chapter 10, Terminations.

For Specified Term Contract employees, Severance Award payments are included, in total, in the Contract Completion Bonus. Refer to Chapter 2, Salary Administration.

A. Involuntary Termination

Employees are eligible for a Severance Award if:

• the Company terminates them for any reason other than cause;• they terminate as a result of a force majeure beyond their control; or• they die while employed in SAO.

The Severance Award equals:

• one-half month's pay for each of the first five years of continuous service with the Company or Subsidiary Companies;

• one month's pay for all remaining years of continuous service.

B. Voluntary Termination

If the employee resigns while employed in Saudi Arabia and gives thirty days written notice they are eligible to receive:

1. No Severance Award if less than two years of continuous service.

2. One-third of the Severance Award if two but less than five years of continuous service.

3. Two-thirds of the Severance Award if five but less than ten years of continuous service.

4. One hundred percent of the Severance Award if ten or more years of continuous service.

C. Non-Payment of Severance Award

The Severance Award will not be paid in the event of:

• Non-completion of a specified term contract, except as provided in III.A. above.

• Discharge for Cause• Deportation by SAG Order• Resignation with less than two years of continuous service• Resignation without thirty days written notice• Terminations according to the provisions of Article 83 of the Saudi

Arab Labor and Workmen Law.


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IV. Death Benefits

A. Ex-Gratia Benefit

If a regular employee dies as a result of a job-related accident or while commuting to or from work (industrial death), the Company will pay to his beneficiaries indicated below an ex-gratia amount equal to 24 months base pay with a minimum of SR200,000. If death was not job related nor while commuting to or from work, the amount of the ex-gratia payment is 12 months base pay only. This payment is paid in a lump sum. It does not include any Severance benefits required by the Saudi Arab Labor and Workmen’s Law.

B. Approval Authority

The Area Personnel Administrator approves payment of Death Benefits.

C. Priority of Beneficiaries

If an employee dies, payment will be made as a gift to beneficiaries in the following order:

1. Beneficiary(s) as recorded by the employee on Company records.

2. Spouse or spouses in equal shares.

3. Children of the deceased in equal shares.

4. Parents of the deceased in equal shares.

5. Brothers and sisters of the deceased in equal shares.

If none of the above exist, no death benefits gift is made.

V. Short Term Disability Benefits - Foreign Contract Employees

The Company has established a program to protect the income of Foreign Contract employees during periods of temporary disability due to industrial or non-industrial illness or injury.

A. Industrial Disability

In case of short-term disability resulting from an industrial injury or an occupational disease, employee will continue to receive his full pay salary according to the Hazards Branch of the Saudi Arab Social Insurance Regulations. Employee’s organization is required to coordinate K-time reporting with the Workmen’s Compensation Division of Employee Relations Services Department. For cases that are not approved by GOSI as industrial related, employee’s department must convert the employee’s time reporting from K-time to M-time.


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B. Non-Industrial Disability

Upon the completion of each continuous service year, employees receive an allocation of days at full or three quarter pay for that year.

1. Reinstatement of Benefits

An employee who has been disabled and has returned to full time regular work for at least ninety-one consecutive days has the full annual allocation reinstated -- as if no days had been taken. Any "L", "X" or "P" time taken by employee during the ninety-one day period will not affect eligibility for reinstatement of the full annual allocation. An employee who has been disabled, has returned to full time regular work, but again becomes disabled from the same or different disability before ninety-one days, is entitled to the total number of full and three quarters days of regular compensation to which his/her service entitles him/her, less any benefits already received.

2. Exception

Additional non-industrial Short Term Disability days of pay do not accrue during periods of disability. No additional days are credited when an employee's anniversary service date falls during a period of disability. However, when an employee returns to active duty following the disability, he/she will be credited with any days of pay to which he/she may be entitled.

C. General Provisions

1. Accumulation of Partial Disability Days

When an employee is removed from duty by the Medical Department on partial day disability (for example: four hours of disability time daily for fourteen consecutive days), the employee's daily reported time should show the specific number of disability hours and regular

Years of Completed Continuous Service

Days Allocation at Full Base Pay

Days Allocation at 3/4 Base Pay

Less than 1 30 60

1 30 60

2 30 60

3 42 48

4 56 38

5 77 52

6 98 66

7 119 80

8 140 94

9 161 108

10 or more 182 122


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work time hours for each day. As appropriate, the partial disability time used by the employee is counted against his/her short term disability benefits. For more details on this subject, refer to the "M" Time and/or "K" Time sections in the Time Reporting Manual.

2. Termination of Service

The right to benefits under this Plan terminates on the effective date of an employee's termination of service. However, in case of a Foreign Contract employee (non-ITEA) hired prior to July 1, 2001 or signed his employment agreement with the Company prior to July 1, 2001 and terminates under the Permanent & Total Disability Program (PTD) as a result of a non-industrial injury or illness, the employee will be eligible for payment in-lieu-of unused M-time.

3. Disability at Time of Termination

Depending on the type of termination as set out below, an employee who has a non-industrial or industrial disability at termination may receive benefits up to the equivalent of the accrued benefits if:

• the employee reports the disability to the Company prior to termination; and

• the Medical Department confirms it as disabling.

a. Normal Retirement

An employee shall receive accrued benefits until his/her normal retirement, after which date the employee shall receive medical care as determined by the Medical Department (attending physician).

b. Early Retirement

An employee may choose to defer early retirement, in which case he/she shall receive accrued benefits until the earlier of the date of expiration of such benefit or the date of his/her normal retirement, and then receive only medical care as determined by the Medical Department (attending physician). If the employee chooses not to defer early retirement he/she shall be treated as under "a." above.

c. Resignation

A resigning employee shall receive accrued benefits until the effective date of resignation.

d. Discharge

An employee discharged for cause shall receive accrued benefits until the effective date of discharge.

Note: An employee who resigns or is discharged for cause and who has not exhausted disability benefits under "c." or "d." above may, upon the recommendation of the Director - Personnel, receive an extension of benefits up to their full accrued benefits if:


October 2, 2005

• he/she is unable to work because of the disability;• he/she requires specified medical care or treatment where he/

she will be unable to work for six months after termination.

4. Vacation/Leave of Absence Without Pay (X-time)

Employees who become disabled for more than three consecutive days during a period of vacation or leave of absence without pay (X-time) are eligible for benefits under this Plan. The Medical Department must recommend benefits. The Supervisor, Saudi Riyal Personnel Unit approves non-industrial disability cases. The Administrator, Workmen’s Compensation Division of Employee Relations Services Department must approve industrial disability cases. The recommendation and approvals are usually based on medical certification prepared and signed by the employee’s attending physician. The employee should submit the certification to the Company within two weeks of return to work after vacation/leave of absence without pay (X-time).

5. Benefits Not Assignable

Disability benefits and payments are not assignable. They are not an asset in a deceased employee's estate.

6. Company Records and Decision

The Company's records are conclusive. Its decision is final in determining the Company benefits and disability payments due any employees at any time.

7. Granting M-times by MDF

For employees providing acceptable evidence of illness from an MDF attending physician, supervisory personnel should accept up to a maximum of 2 consecutive days of Medical Leave without the concurrence of the Medical Organization Regional Offices or Area Personnel Offices. If more than 2 days of "M" time is needed, then the approval of Medical Organization Regional Office is required.

VI. Short Term Disability Benefits - Indefinite TermEmployment Agreement and Chinese Specified Term Contract

Short term disability benefits provide for salary continuation for employees unable to work due to non-industrial disability or illness. The maximum benefit is thirty (30) days of full pay and sixty (60) days of three quarter (3/4) pay in any one year period, on a cumulative basis, from the date employee was granted "M" time. The one-year period covers the time from one anniversary service date to the next anniversary date.

When an employee is removed from duty by the Medical Department on partial day disability (for example: four hours of disability time daily for fourteen consecutive days), the employee's daily reported time should show the specific number of disability hours and regular work time hours for each day. As


October 2, 2005

appropriate, the partial disability time used by the employee is counted against his/her short term disability benefits. For more details on this subject, refer to the "M" Time section in the Time Reporting Manual.

For short term disability benefits involving industrial injury or illness, please refer to section IX of this chapter.

VII. Permanent and Total Disability Benefits

This plan provides eligible Foreign Contract employees with a supplemental monthly annuity if they become permanently and totally disabled from an industrial or non-industrial injury or illness. To be eligible, employees must have at least six months of continuous service.

A. Benefit Amount

The Company pays eligible employees a supplemental monthly annuity, regardless of their age when disabled. The supplement is that amount necessary to bring the monthly income up to 65% of his/her final monthly base salary after taking into account:

• monthly annuity value of the lump sum benefits under the Severance Award Program. Refer to Section III of this Chapter;

• primary Social Insurance benefits, if any; and• monthly annuity value of any industrial or non-industrial disability

payments under the Labor Law.

Employees hired prior to July 1, 2001 or who signed employment agreements with the Company prior to July 1, 2001 and terminate under the Permanent & Total Disability Program (PTD) will be eligible for payment in-lieu of unused medical time. The unused medical time is calculated based on the employee’s completion of each continuous service year at the time of termination. For termination due to non-industrial illness or injury, refer to table included in section V.B. for calculating remaining balance of unused M-time. For termination due to industrial-related illness or injury, refer to the table below for calculating the remaining balance of unused K-time. Both "M" and "K" days utilized will be used to determine the remaining balance of unused medical days.

Years of Completed Continuous Service

Days Allocation at Full Base Pay

Days Allocation at 3/4 Base Pay

Less than 1 30 334

1 30 334

2 30 334

3 42 322

4 56 308

5 77 287


October 2, 2005

B. Injury or Illness Following Normal Retirement Age

If an employee is declared totally and permanently disabled after normal retirement age, they may receive benefits under the Supplemental Retirement Income Plan.

C. Condition

To be eligible for Social Insurance disability benefits, the Social Insurance Medical Review Board must declare the employee permanently and totally disabled. If an employee is not eligible for Social Insurance disability benefits, employee must then be declared permanently and totally disabled by the Company's Medical Review Board in order to be eligible for benefits from the Company.

VIII. Layoff Benefit Plan

The layoff benefit plan provides a lump sum end of service payment to eligible Foreign Contract employees who are laid off due to lack of work.

IX. Industrial Injury Benefits

Employees receive industrial injury benefits/full pay according to the Hazards Branch of the Saudi Arab Social Insurance Regulations. Employee’s organization is required to coordinate K-time reporting with the Workmen’s Compensation Division of Employee Relations Services Department. For cases that are not approved by GOSI as industrial related, employee’s department must convert the employee’s time reporting from K-time to M-time.

The employee’s supervisor should notify Workmen’s Compensation Division, Employee Relations Services Department within seven days of the date of the employee’s injury/illness. Workmen’s Compensation Division is obligated to report any industrial injury to Social Insurance Organization (GOSI) within three (3) days from the date of reporting the accident. This includes the following:

A. Work Related Injuries

• Any injury suffered by the employee performance of work.• Any injury suffered by the employee during his traveling from his

home to his workplace and back.

6 98 266

7 119 245

8 140 224

9 161 203

10 or more 182 182


October 2, 2005

• Any injury suffered by the employee during his working hours while going to or coming from his meal or prayer place.

• Any injury suffered by the employee in the course of travel, carrying out an assigned mission, within the Kingdom.

B. Occupational Diseases

• Any of the diseases listed in the Occupational Diseases Schedule• Any of the diseases established to be contracted by reason of work

It is mandatory that work related injuries, as mentioned above, be reported to Workmen’s Compensation Division in the appropriate time with the required forms. Failure to report such injuries may deprive the employee of his right to industrial injury benefits and may deprive the Company from claiming reimbursement for medical treatment expenses and the Disability days ("K" time).

X. Continuous Service

Certain employee benefits and privileges are based on the length of continuous service from a Continuous Service Date as established by the Company.

A. Establishment of Continuous Service Date

Refer to Chapter 1, Employment.

B. Non-Retroactivity of Benefits on Reinstatement

In the event of reinstatement and reconstruction of an employee's service (refer to Chapter 1, Employment) benefit computations which are based on an employee's service date use the reconstructed service date. Any service-based benefits payable in the first year after rehire are paid as if the employee were a new hire. After the employee has completed one year of continuous service, the service date is reconstructed, and benefits are then based on the full service accrued. No additional benefits are paid retroactively for the first year.

C. Repayment of Severance Benefits on Reinstatement

Upon reinstatement and reconstruction of service an employee must repay the Company all severance benefits received on termination. If an employee with a reconstructed service date terminates current employment before refunding all of the severance benefits previously paid to him, the unrepaid balance is offset against any current severance benefits payment. This provision applies to both legal and ex-gratia termination awards.


October 2, 2005

D. Rehires - Participation in Benefit Plans (Foreign ContractEmployees)

A rehire is an individual who is re-employed by the Company but he/she does not qualify for reinstatement of prior service (refer to Chapter 1, Employment).

1. Supplemental Retirement Income Plan - Rehire of Annuitant

Monthly Plan benefits are discontinued effective on the rehire date. Upon subsequent retirement, the original annuity is reinstated plus any additional amounts based on Plan accruals for the period of service after the rehire date.

2. Supplemental Retirement Income Plan - Rehire of Non-Annuitant

All periods of prior continuous service are recognized to determine vesting in Plan benefits when rehire date is on or after November 20, 1979 and:

• the break-in-service is 24 months or less, or• the break-in-service is less than the prior period in service.

However, Plan benefits are calculated solely on the period of service after the rehire date.

3. Thrift Plan

When the rehire date falls on or after November 20, 1979 all periods of prior continuous service are recognized to determine the position on the vesting schedule.

4. Other

Except as provided above the continuous service date is the rehire date for the purpose of determining benefit eligibility.

XI. Service Award Program

A. Objective

The primary objective of the Service Award Program is to acknowledge and extend appreciation for an employee's continuous service.

B. Eligibility

Eligibility for Service Awards is based on continuous service.

C. Awards

Employees receive Service Award symbols or gifts when they complete service intervals of 5 years. Awards begin with the 5th year of continuous service. The Personnel Department, through the Service Awards Group maintains an electronic catalogue for review and gift selection by employees.


October 2, 2005

Employees with 30 years of service may accept a cash option in lieu of the service award. Special provisions apply to employees with 35, 40 and 45 years service (see H below).

D. Administration

The Personnel Department is responsible for the Service Award Program. Prior to the employee's anniversary date, electronic forms are mailed to eligible employees and their Supervisor/Department Representatives. The supervisor insures that the employee submits the selection form on line. The Service Award must be claimed within two years from eligibility date or it will be forfeited unless the employee is on an OOK work/training assignment.

E. Presentation of Awards

The frequency and type of award ceremony are determined by factors such as:

• Relative length of service of eligible employees;• Number of employees becoming eligible within a particular span of

time;• Geographical location and organization assignment of employees; and• The individual preference of the eligible employee.

The following guidelines encourage general uniformity throughout the Company. However, reasonable deviations may be made at the discretion of the Department Head or at the request of the employee. The employee does not need to attend a formal ceremony to receive a service award.

1. Five and Ten Year Service Awards

The employee's immediate supervisor (but not lower than Unit Head), usually presents the award at or near the regular worksite, and generally at a regular communications or safety meeting. The Company does not provide refreshments or photographic coverage.

2. Fifteen and Twenty Year Service Awards

The employee's Division Head (or immediate supervisor if employee is Division Head or higher) usually presents these awards on a monthly or quarterly basis as appropriate within each Department. Light refreshments may be served. A reasonable number of employees from the Division or Department are invited to attend. This includes the employee's immediate supervisor and the Department Head. If awards within more than one Division are involved, then the Department Head is Master of Ceremonies.


October 2, 2005

3. Twenty-Five Year Service Awards

The employee's Department Head usually presents these awards at a luncheon. These luncheons may be scheduled monthly or quarterly and may be combined with award luncheons for employees completing 30 or more years of service, as appropriate within each Department.

Employees receiving awards may invite a maximum of four personal guests, including family members. In addition, the employee's immediate supervisor and intervening levels of Management, as appropriate, should be invited.

4. Thirty, Thirty-Five, Forty, and Forty-Five Year Service Awards

The Vice President/General Manager of the employee's organization usually presents the award at a luncheon. These luncheons should be scheduled within three months of the employee's anniversary date.

Employees receiving awards may invite a maximum of six personal guests, including family members. In addition, the employee's immediate supervisor and intervening levels of Management, as appropriate, should be invited.

F. Termination Year

Employees who terminate after serving any part of the 5th, 10th, 15th, 20th, 25th, 30th, 35th, 40th, and 45th year of service receive the appropriate service award provided that employees’ departments notify the Service Awards Group. Termination can be due to early or normal retirement, death, PTD, CMC, resignation with 30 days notice, and any Company option termination. Employees who are terminated for cause are not eligible for this benefit.

G. Special Leave for Long Service

Employees who complete 30 years of continuous service or more receive cash awards in addition to special leave with pay in accordance with the table in section H below. The leave may be taken immediately or in conjunction with the next scheduled vacation, or at a time which is convenient for both the employee and the Company, provided such leave is taken no later than the end of the year following the year in which it is earned. If the leave is not taken, it is forfeited.

Normal or early retirees, PTDs, CMCs, and beneficiaries of deceased employees can be paid cash-in-lieu of the special leave, even if the employee has completed only part of the year to the anniversary milestone. Employees’ departments are required to notify the Service Awards Group in advance.


October 2, 2005

H. Long Service Cash Award

Employees are granted the following special long service cash award and special leave as follows:

* or Service Award Item

XII. Medical and Dental Services

A. Definitions

1. SAMSO is the abbreviation for Saudi Aramco Medical Services Organization. SAMSO facilities include all hospitals and clinics that are run and operated by Saudi Aramco.

2. CF are local Contracted Facilities in the form of hospitals and clinics that the Company has contracted with to provide certain medical services to employees and their eligible dependents whenever the Company determines the need for the service to be outside SAMSO.

3. DMF are Saudi Aramco Designated Medical Facilities local hospitals and clinics that the Company has entered in agreement with to provide medical and dental care to employees and eligible dependents.

B. Eligibility

Saudi Aramco provides medical care to employees and eligible dependents with full-time residence in Saudi Arabia as defined in Chapter 12, Section IV of the I.R. Manual. Dependents qualifying for Educational Assistance Plan (EAP) benefits are also eligible for medical care. If the son/daughter is not pursuing full-time studies, then alternate proof of dependency acceptable to the Company must be submitted.

C. Medical And Dental Care System

The Company provides medical and dental care to Asian employees and their eligible dependents under two systems. These systems were developed for the convenience of the employees and their eligible dependents, and for the Company's operating requirements. The two systems are:

1. SAMSO Facilities

Service Length Service Award Special Leave Days

30 Years of Service SR 32,000* 7 Days

35 Years of Service SR 35,000 14 Days




October 2, 2005

The following category of Asian employees and their eligible dependents, may elect to receive their medical and dental care, subject to SAMSO's discretion, in SAMSO and/or Contracted Facilities (CF):

a. Asian employees who were receiving medical and dental care in SAMSO facilities and/or CF prior to January 1, 1994 and their eligible dependents.

b. Asian employees hired on or after January 1, 1994 and their eligible dependents who reside in Company housing in Dhahran, Abqaiq, Ras Tanura and Udhailiyah.

c. Asian employees and their eligible dependents who transfer because of Company operational requirements and upon their transfer reside in Company housing in Dhahran, Abqaiq, Ras Tanura and Udhailiyah.

d. Asian female employees who qualify under a., b. or c. above, are eligible for medical and dental care in the SAMSO clinics designated for SC 11+ employees.

e. Employees on temporary assignment in Eastern Province, and their eligible, company-authorized accompanying dependents, are entitled to full medical care in a SAMSO facility close to the employees temporary work location for the duration of the assignment only. Area Personnel Offices will provide the employee with a letter detailing to SAMSO the names of all authorized recipients of medical and the start and end date of the temporary assignment.

2. Saudi Aramco Designated Medical Facility (DMF)

The following category of Asian employees, and their eligible dependents, may elect to receive their medical and dental care in a DMF:

a. Asian employees who were receiving their medical care in SAMSO facilities prior to January 1, 1994 and their eligible dependents.

b. Asian new hires after January 1, 1994 who reside in Company housing in Dhahran, Abqaiq, Ras Tanura and Udhailiyah and their eligible dependents.

The following category of Asian employees, and their eligible dependents, are eligible only to receive their medical and dental care in a DMF:

a. Asian employees who were receiving medical and dental care in a DMF prior to January 1, 1994 and their eligible dependents.

b. All employees hired on or after January 1, 1994, and their eligible dependents, if they do not reside in Company housing in Dhahran, Abqaiq, Ras Tanura and Udhailiyah.


October 2, 2005

The following rules apply to all individuals who receive their full medical and dental care in a DMF:

a. Employees and/or their eligible dependents, who receive their medical and dental care in a DMF must complete the appropriate form and select the facility of their choice. The form and the approved list of facilities are available at Area Personnel Offices.

b. Employees and/or their eligible dependents, do not have to select the same facility, nor do they have to be under the same system (e.g., some eligible members of the family may be in the SAMSO system, if they qualify, while other members of the same family may select a DMF for their medical and dental care).

c. Employees and/or their eligible dependents, who voluntarily elect to receive their medical and dental care in a DMF will not have the option to return to SAMSO facilities at any time in the future.

d. Employees and/or their eligible dependents, may elect to change their DMF only once in a 12 month period

Note: An employee who becomes ill while on duty may receive EMERGENCY medical and dental care at a SAMSO facility next to his/her work place, provided that he/she expects to return to work the same day, otherwise medical care should be received from the employee's DMF.

D. Cost of Medical and Dental Services

The Company pays all doctor, hospital and pharmacy costs for covered services whether incurred in SAMSO, CF and/or DMF. Services that are not covered are:

1. Eyeglasses and eye refraction, other than safety glasses

2. Cosmetic or plastic surgery including liposuction and gastric stapling

3. Any dental care other than basic dental care for individuals electing their full medical service in a Saudi Aramco Designated Medical facility and certain oral surgery or treatment for accidental injury to natural teeth

4. Chiropractic treatments

5. Podiatry

6. Herbal therapy

7. Acupuncture

8. Learning disabilities

9. Long-term referrals to include speech and rehabilitation therapy


October 2, 2005

10. Keratotomy

11. Weight loss clinics

12. In vitro fertilization

13. Custodial Care

Employees and eligible dependents receiving dental services in a SAMSO facility are charged for the service. The charge is made to the employee's account according to Company-established rates.

Employees who elect to have their medical care in a DMF will be entitled to free basic dental care in the facility. Basic dental care is defined in the contract with the DMF and generally includes annual examinations, cleanings, and simple fillings and extraction. Dental services in any DMF that are not covered as basic dental care are the responsibility of the individual, and the Company is not responsible for such charges.

E. Referral

1. The Medical Referral Plan

In the event of difficult or complicated cases, that cannot be treated at SAMSO or DMF, employees and their eligible dependents may be referred by SAMSO to specialist medical centers, both in-Kingdom and out-of-Kingdom, as determined by the Medical Referral Committee. The provisions, approval and processing of referrals are described in G.I. 151.001.

2. Self Referral Medical Plan

a. Objective

The Company provides medical care to its employees and their eligible dependents, in SAMSO, CF or DMF. Every effort should be made by the employee and the dependent to use the applicable facility. However, under some unusual circumstances, employees may refer themselves or their eligible dependents to an outside facility for treatment. The Company may approve reimbursement of certain expenses incurred by the employee, after-the-fact provided certain conditions are met.

b. Eligibility

Same as in Section XII.B. above.

c. Conditions

• The employee or dependent must first have made a reasonable effort to obtain treatment in the facility where they are registered.

• The outside treatment was necessary, justified and beneficial as perceived by SAMSO.


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• The emergency medical treatment received must be of life-or-limb-threatening in nature as determined by the Medical Referral Committee.

• The plan does not cover cost of medical emergencies that take place during the employee's vacation.

d. Expenses Covered

• 100% of diagnostic work and treatment unless otherwise specified

• 80% of surgery cost, including surgeon, consultant, anesthetist fees, anesthesia, operating room and recovery room

• 65% of transportation cost including justified family escort as determined by Medical Services

e. Expenses Not Covered

The following expenses are not covered:

• Living expenses, including lodging, meals, taxis, telephone, laundry, etc.

• Dental treatment, dental prosthetic appliances, eye refraction, prescription glasses, hearing aids, cosmetic procedures, chiropractic treatments, podiatry, herbal therapy, acupuncture, learning disabilities, Temporo mandibular joint treatment, pain clinics, infertility evaluation treatment, long-term referrals to include speech and rehabilitation therapy and procedures performed by non-physicians.

f. Claim and Reimbursement

The employee should initiate a memo addressed to the Employee Relations Services Department explaining the circumstances under which he or his eligible dependent was treated in an outside medical facility, with the following information:

• Nature of health problem, symptoms noticed and reasons for seeking treatment outside SAMSO or the regular DMF

• Name and address of the hospital or physician who treated the patient

• Exact amount and currency claimed for reimbursement in total, with breakdown for medical and transportation expenses.

• Originals of following documents:- Doctors report describing diagnosis, symptoms,

history, treatment given and surgery performed, if any

- Other medical reports, such as lab reports, x-rays, etc.


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- Hospital bill, giving dates of admission and discharge and itemized expenses

- Bills of professional services such as physician, surgeon, anesthesiologist, radiologist, pathologist, etc.

- Bills of other medical hospital services, supplies and medications

- Receipts of bills paid.

The Employee Relations Services Department (ERSD) reviews the claim for eligibility. ERSD forwards the claim to the Medical Referral Committee to review if the actual treatment is covered. The Medical Referral Committee forwards the claim to Medical Planning & Fiscal Affairs Department to authorize payment. All payments will be based on the reasonable and customary charges for the treatment provided. SAMSO may request an examination of the patient who received treatment.

Employee Relations Services Department is responsible to communicate the results to the employee.

F. Release and Confidentiality of Employee and Dependent MedicalInformation

1. Medical and Dental information

Medical and dental information includes all records maintained at Saudi Aramco Medical Services Organization (SAMSO) facilities, on an inpatient or outpatient basis pertaining to the medical and dental care of individuals and all pre-employment medical evaluations.

Included are medical and dental records, x-rays, slides, photographs, dental study models; information contained in the records (such as x-ray and laboratory reports, EKG trackings and similar data; and all information derived from the records (such as summaries, medical reports and all other types of information regardless of its characterization).

Also included are medical and dental information provided by outside physicians, dentists or institutions, including information related to the pre-employment medical evaluation or provided to assist in the care of a patient.

2. General

All employee and dependent medical and dental records are classified as confidential Company property and are administered and maintained in a manner which protects that confidentiality. Saudi Aramco's Medical Organization releases medical and dental information on employment candidates, current employees, and dependents in accordance with the following general guidelines:


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a. Information for Supervisors

• If an employment candidate's or employee's medical condition requires the imposition of specific job limitations, SAMSO will inform the employee's supervisor (or the Personnel Director, as appropriate) of those job limitations, to include dates for which employees are to be removed (released) from duty.

• An employee's supervisor may request information from SAMSO about an employee, using Form SA-3941 - Medical Examination Request/Notice. The treating physician or the senior physician may respond to such requests by only giving the employee's supervisor information about the expected duration of the employee's absence for medical reasons and medically necessary work limitations.

b. Physical Examinations

• SAMSO will advise the Personnel Director as to the medical fitness of an employment candidate and of any job limitations which may be applicable to the candidate. SAMSO will further advise the Personnel Director as to whether the employee and his dependents meet medical standards for Saudi Aramco sponsorship for expatriate residence in Saudi Arabia. Specific medical information, including diagnosis and treatment, will not be divulged.

• SAMSO conducts regular periodic physical examinations of certain categories of employees (such as ship crews, divers, firefighters, security and other personnel) to determine their continued medical fitness for duty. The employee's department is informed of the employee's fitness status.

• SAMSO conducts regular periodic physical examinations of employees who may be exposed to occupational hazards. The employee's department is informed if any employee has received an occupational exposure or overexposure and must be removed from duties which carry the risk of further exposure for any period of time (temporary or permanent).

c. Medical Referrals

• When a patient is referred by SAMSO to another hospital or health care facility (whether in-Kingdom or out-of-Kingdom) for any reason, the appropriate medical and dental information (as determined by SAMSO) will be provided to the attending physician at the facility to which the patient is being referred.

• If a patient has referred himself/herself to another hospital or health care facility, then he/she may request a copy of his/her SAMSO medical record or a medical summary of his/her treatment. He/she must sign an authorization for


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release of medical information (see Paragraph d. below). A fee for copying SAMSO-maintained medical records and for providing medical summaries will be charged in accordance with an established fee schedule.

d. Requests for Medical Records

Requests for medical records or copies of medical records will be granted under the following circumstances:

• Any patient may request copies of his/her medical or dental records, portions of his/her medical or dental records or medical or dental summary. Such requests must be made in writing. Form MED-6002 - Authorization for Release of Medical Information must be completed and signed by the patient. The patient may authorize such information to be released to himself/herself or to another individual or an institution.

The patient's request may be made to the Medical Liaison Office in the Dhahran Health Center or to the Business Offices in medical facilities in the Districts. A charge is assessed for producing copies of the medical/dental records and for providing medical/dental summaries.

• In the event the patient is a minor (under the age of 18 years) or an incompetent adult (not physically or mentally capable of giving consent or of understanding that he/she is giving consent for the release of medical or dental information), the patient's parent, legal guardian or an adult member of his/her family may make the request on the patient's behalf and give consent for the release of the patient's medical or dental information.

• In the event that the patient is deceased, his/her executor or the administrator of his/her estate may make the request and give consent for the release of the patient's medical or dental information. In such cases, the executor or administrator of the estate shall provide SAMSO a copy of his or her authorization to act on decedent's behalf with the request.

• When required by the Saudi Arab Government either in accord with existing governmental regulations or through the Saudi Aramco Government Affairs Organization.

• When requested by the Saudi Aramco Law Department or Director, Employee Relations Services Department, or his designee, for claims evaluation and litigation purposes or for any other reasonable purpose as determined by the Executive Director, SAMSO.


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• By the SAMSO Epidemiology Services Unit in order to notify the Ministry of Health of all Government mandated reportable conditions or conditions of public health importance, in accordance with Saudi Arab Government regulations.

• When requested by other hospitals or health care facilities in which the patient is CURRENTLY being treated, upon written proof that the patient is currently being treated therein.

• To the Saudi Arab Government, General Organization for Social Insurance, Occupational Hazards Branch, or the Saudi Aramco Employee Relations Services Department and/or the Saudi Aramco Law Department for the purpose of determining an individual's eligibility for workmen's compensation benefits, PTD or other Company benefits. The following are sent by SAMSO to the Employee Relations Services Department:- Reports from the Medical Review Board about the

permanent and total disability (PTD) evaluations.- The completed Form SA-3208: Request for Medical

Treatment of Injury or Occupational Disease.- The completed Form SA-2968: Evaluation of

Impairment Due to Industrial Injury.- Reports from treating physicians on casual

relationship between present illness or injury and summary of any past similar episodes.

As necessary and as determined by the Employee Relations Services Department Head, the foregoing information may be provided to the Law Department for the purpose of assisting in the evaluation of an individual's eligibility for workmen's compensation benefits.

XIII. Physical Examinations

Prior to leaving Saudi Arabia on repatriation vacation, employees and eligible dependents are eligible for a Pre-departure Physical Examination. Examinations are by appointment which are to be made at least 30 days prior to departure. In conjunction with the examination, all necessary inoculations will be dispensed. All doctor, service and pharmacy costs are without charge.

XIV. Executive Health Program

As determined by the Executive Compensation Advisor or the Supervisor - Salary Administration Unit, certain senior level employees are eligible to participate in the Executive Health Program. This program provides continuous personalized health guidance on a voluntary basis. It includes thorough physical examinations


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normally performed annually at the Dhahran Health Center, or consultation services to the employee's personal physician when requested and approved in advance by the Medical Director.

XV. Retirement Parties

Retirement parties can be arranged to express Company appreciation towards retiring employees. Type of party, i.e., refreshments, luncheon or dinner, will be at the discretion of the retiring employee's Department Head. Costs shall be limited to:

• For Refreshments - SR 1,000.00• For Luncheon/Dinner - SR 3,000.00

Farewell gifts for employees leaving an organization may not be purchased with Company funds. Departmental Management should not sponsor the collection of monies from employees for farewell gifts; such collections, if taken, should be employee initiated.

Industrial Relations Manual for Asian EmployeesChapter 6: Vacations & Holidays

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Chapter 6: Vacations & Holidays

I. General Policies

These policies cover Asian employees. They outline vacation and holiday provisions which are competitive, consistent with operating requirements, and in compliance with Saudi Arab Government labor laws.

These policies do not cover Special Work Schedule employees. Their vacations and holidays are included in their work schedules.

Exceptions to these policies require concurrence by the Director, Personnel Department, or his designee, unless other management approvals are indicated.

For employees at the Department Manager level and above, vacation plans and exceptions to policy are subject to approval by the appropriate higher level of management.

HOLIDAYS

The Company recognizes official Saudi Arab holidays as well as certain special holidays. Due to operating requirements, the Company normally limits holiday periods to no more than five successive days, including regularly scheduled days off. In establishing the annual Company Operational Calendar, each work week normally includes at least two successive regularly scheduled work days. The President & Chief Executive Officer must approve any exceptions.

The Company grants between 9 and 11 paid holidays a year.

VACATIONS

The Company provides paid vacations so that employees can get away from their work environment on a regular basis and return rested and productive. Travel expense allowances and paid travel time are also provided to encourage repatriation vacations.

II. Definitions

A. ADVANCED CREDITS -- Vacation credits which are made available to an employee even though they may not have been earned by service. Employees under the Annual Vacation Plan are advanced a full year's vacation on January 1 of every calendar year.

B. ASSOCIATED COMPANIES -- Aramco Services Company (ASC), Aramco Overseas Company B.V. (AOC B.V.), Aramco Associated Company (AAC), Saudi Refining, Inc., Saudi Petroleum International, Inc., Bolanter Corporation N.V., Pandlewood Corporation N.V., Saudi Petroleum Overseas Ltd., Vela International Marine Ltd., and any other subsidiary Company hereafter designated an Associated Company by Saudi Aramco.


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C. BRIDGING -- Bridging is the special handling of scheduled days off that may fall before or after 'Id Al-Fitr and 'Id Al-Adha holidays.

D. COMPANY HOLIDAYS -- Days off for recognizing particular events or for relaxation.

E. DEFERRED VACATION CREDITS -- Vacation credits which are not used in the calendar year in which they are authorized to be used. They are postponed, with appropriate approval, for use in the next calendar year.

F. EARNED VACATION CREDITS -- Vacation credits which have been earned at a specified rate by completing periods of service.

G. ELIGIBLE FAMILY MEMBERS -- See Chapter 12, Housing, Section IV, for definition.

H. HAJJ LEAVE -- Refer to Chapter 9, Leaves of Absence, for policies and definition of this leave.

I. INDEFINITE TERM EMPLOYMENT AGREEMENT (ITEA) -- An employment agreement which defines no specific limit on the period of employment.

J. LOCAL LEAVE -- A paid leave of absence taken either in or out-of-Kingdom. Repatriation transportation and travel expenses are not Company-paid.

K. RANDOM USE OF VACATION -- An authorized absence using vacation credits at any time other than the employee's repatriation vacation.

L. REPATRIATION VACATION -- An extended paid leave of absence granted to an expatriate employee at specified intervals to permit visits home. The Company pays travel time between Saudi Arabia and the designated point-of-origin and a travel allowance for the employee and eligible dependents.

M. SCHEDULED DAYS OFF -- Designated regular non-work days (e.g., "weekend" days).

N. CHINESE SPECIFIED TERM CONTRACT -- An Employment Agreement which defines a specific limitation employment, usually two years.

O. VACATION CREDITS -- Vacation days earned by or advanced to employees during employment with the Company.

III. Holidays

A. Company Holidays

1. Saudi Festival Days

a. 'Id Al-Fitr

Three days holiday following the 29th day of the month of Ramadan according to Um Al-Qura calendar.


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b. 'Id Al-Adha

Four days holiday starting on the day of the Wagfah at 'Arafat (9th day of Dhu-Al-Hijjah).

c. National Day

One day holiday observed on the first day of Libra (on September 23rd).

2. Special Holidays

The Company may from time to time designate additional special holidays.

B. Bridging

During 'Id Al-Fitr and 'Id Al-Adha holidays, employees with supervisor’s prior permission may use "L" or "X" time to bridge the scheduled days off and the holidays without affecting eligibility for regular weekend pay for the scheduled days off.

Employees may bridge these days only if they work at least one day in the week before and one day in the week after the bridged holiday. Personnel Department announces the bridging period and the affected scheduled days off ahead of the start of each of the two 'Id holidays.

Bridging is not authorized in conjunction with repatriation vacation or with Company paid business travel.

C. Random Use of Vacation Credits for Special Occasions

1. Local Observances

If an employee requests, Management may authorize leave without pay or random use of vacation for special occasions such as the following Shi'ite memorial days:

8th - 10th of Muharram

28th of Safar

21st of Ramadan

2. International Holidays

Non-Muslim employees, on work schedules other than shift/tour operations, are permitted to schedule random use of vacation credits on December 25 and January 1 (if these dates fall on a weekend, then the next scheduled workday may be requested as a vacation day). Random use of vacation credits for those on work schedules other than shift/tour schedules will be authorized on these dates if requested and scheduled in advance. If vacation credits are not available for use, then leave without pay may be taken on the above dates.


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Shift workers may request use of vacation credits in advance for the above dates but approval is subject to operational requirements.

D. Holidays Affecting Pay

1. 'Id Al-Adha Holidays Falling Within Pilgrimage Leave Period

Employees on paid or unpaid Hajj leave (see Chapter 9, Leaves of Absence) receive regular pay for Company-observed 'Id Al-Adha holidays which fall within the leave. 'Id Al-Adha holidays are not counted as part of paid Hajj leave time.

2. 'Id Holidays Deferred to Termination Date

Employees are paid their straight time hourly rate for 'Id holidays deferred until termination.

3. Holiday Pay Following Termination Date

a. An employee who terminates employment in Saudi Arabia on a day immediately prior to a Company-recognized holiday(s) receives normal holiday pay for the holiday(s).

An employee who has already used his/her vacation and as a result has a negative vacation balance also receives normal pay for the holiday(s) as long as he/she works the last work day immediately before the holiday(s).

b. For Company-recognized holidays not immediately following the termination date, a terminating employee receives normal holiday pay only if he/she has enough earned vacation credits to carry his/her time from the date of termination through the last calendar day immediately prior to the holiday(s). An employee who does not have enough unused earned vacation credits at the time of termination to carry his/her time through the last calendar day prior to the holiday is not entitled to the holiday pay.

Vacation credits after termination include earned days off, earned "L" days and one-way travel day(s).

4. Holidays Falling Within Vacation Credits After Retirement

An employee who retires and takes vacation immediately prior to the effective date of retirement is paid for the holidays falling within that vacation.

5. Holiday Pay Ineligibility

Employees do not receive pay for holidays falling within:

a. Sick leave periods. However, the employee receives non-industrial disability benefits (Refer to Chapter 5, Benefits).

b. Unauthorized absence when holidays are surrounded by full days of "Z" time.


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c. Unauthorized absence following a 27-day Hajj leave.

d. Unauthorized absence following a vacation.

e. Authorized leave of absence without pay when the total period of leave without pay exceeds 27 days.

6. Saudi Aramco Holidays Falling Within a Business or Temporary Assignment

The holidays may not be credited to employees. Employees are eligible only for the holidays in the assignment location.

IV. Annual Vacation Plan - Foreign Contract, ITEA, and Chinese STC Employees

A. Applicability

The Annual Vacation Plan applies to all Foreign Contract, Indefinite Term Employment Agreement (ITEA), and Chinese Specified Term Contract employees.

B. Vacation Eligibility

1. First Repatriation Vacation After Saudi Aramco Service Commences

Generally a new employee must complete one full year of service to be eligible for an initial repatriation vacation. This vacation must commence before the end of the year in which the first service anniversary falls. However,

• the vacation may commence before completion of 12 months service, if the service anniversary falls within the vacation period; and

• the initial vacation for an employee who completes 12 months service in the final quarter of any given year may be delayed and scheduled in the first quarter of the next following year, without affecting eligibility for another repatriation vacation in that year.

2. Second and Subsequent Repatriation Vacations

Employees are eligible for a second repatriation vacation any time after January 1st of the year following the first Saudi Aramco service anniversary. Subsequent vacations are granted every following January 1. These vacations must commence within the calendar year in which they are granted.

3. Final Repatriation Vacation in Year that Saudi Aramco Service Terminates

A terminating employee is not eligible for a repatriation vacation in the final year of Saudi Aramco service unless the vacation commences at least 3 months prior to scheduled date of final departure.


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This provision applies to any termination of Saudi Aramco service, voluntary or involuntary, including retirements.

4. Exceptions

Approval of Executive Management is required to deviate from the above scheduling provisions.

C. Annual Vacation Credits

1. Annual Amount

Employees are granted paid vacations as follows:

2. Advance of Vacation Credits

Employees are advanced a full year's vacation every January 1. These credits are available to be taken at any time during the year (with appropriate approval) for repatriation vacation and random use.

Credits cannot be borrowed from a future calendar year for use in a current calendar year. Exceptions require approval of Executive Management.

When an employee terminates, he must repay any Regular Vacation Credits which have been advanced and taken but not earned by service at the time of termination. Special Vacation Credits are considered earned when granted and are not subject to these repayment provisions.

3. Use of Credits Earned in Year of Arrival

Vacation credits that will be earned by a new hire in the calendar year of arrival in Saudi Arabia (i.e., days earned from Saudi Aramco hire date through December 31 of the arrival year) are advanced and can be used in the year of arrival for local leaves. Vacation credits not used by December 31 of the arrival year can be carried forward for use in the following year, up to a maximum of 15 days. Credits in excess of 15 days are paid to the employee at the rate of pay in effect on December 31.

Calendar Day

RegularVacationCredits

SpecialVacationCredits

Total Calendar DayVacation Credits

Per Year

Salary Code10 and below 28 2 30

Salary Code11 and above 36 2 38


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4. Earning Rate for Regular and Special Vacation Credits

Regular Vacation Credits

Regular Vacation Credits are earned at the rate of 2-1/3 or 3 days per month of service, depending on the employee's salary code. Prorated credits are earned for partial months of service at the time of employment or termination in accordance with the following vacation accrual schedule. Vacation credits are not earned during any period of leave without pay ("X" time) exceeding 30 days. When the period of leave without pay ("X" time) exceeds 30 days, the vacation credits earning rate will be computed in accordance with the following vacation accrual schedule:

SC 03 - 10 Employees

SC 11+ Employees

In addition, employees who are retiring do not earn vacation credits for "X" time taken immediately prior to their effective retirement date.

Special Vacation Credits

Employees on the active payroll on January 1 of each year will be granted 2 Special Vacation (calendar day) Credits in addition to their Regular Vacation Credits. Employees who join the Company or return from out-of-Kingdom Chapter 8 temporary or extended Chapter 14 training assignments after January 1 but on or before December 31 of each year will be granted 1 additional Special Vacation Credit. Special Vacation Credits are considered earned by the employee when granted.

Days of Month Employment (or Leave) Starts or Ends

Credits Earned

Initial Month of Employment (or Leave Ends)

Final Month of Employment (or Leave Starts)

1st - 6th 2 None

7th - 19th 1 1

20th - Last None 2

Days of Month Employment (or Leave) Starts or Ends

Credits Earned

Initial Month of Employment (or Leave Ends)

Final Month of Employment (or Leave Starts)

1st - 10th 3 1

11th - 20th 2 2

21st - Last 1 3


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Employees are eligible to use their Special Vacation Credits for random use, short leaves or to combine them with their annual vacations. As with the use of any vacation credits, employees must request use of and obtain supervisory approval to use these additional vacation credits in advance of their intended use. See Section III.B of this Chapter for random use of vacation credits for special occasions.

5. Promotion to a Job Salary Code 11 and Above

An employee in Salary Code 10 or below promoted to Salary Code 11 or above receives vacation credits of 3 days per full calendar month of service. The new earning rate begins the first day of the month the promotion is effective.

D. Travel Time

Round trip travel times listed in Appendix I are given to employees in addition to the vacation accrual. The travel time is not charged against vacation credits.

E. Repatriation Travel Costs

The Company pays cash-in-lieu, economy class airfare and 20% (Foreign Contract) or 10% (ITEA) and Chinese STC travel expense allowance plus a local taxi allowance to and from the Company-approved in-Kingdom departure airport (see Chapter 16, Section II.D.3) for an employee and eligible family members if:

1. The vacation equals or exceeds 14 vacation days (that is, the employee uses "L" days, exclusive of travel time, scheduled days off, holidays, "X" time, etc.), and the employee remains out-of-Kingdom for at least 14 calendar days.

2. Repatriation vacation travel expenses have not been paid for employees and/or dependents during the current calendar year (except for cases under Paragraph B.1 above, where two repatriation vacations in the calendar year can be authorized).

3. Eligible dependents have resided in Saudi Arabia a minimum of six months since their arrival irrespective of the employee's eligibility for vacation.

4. Dependent travel is taken within 90 days and in conjunction with the employee's regularly scheduled repatriation vacation.

An employee loses his family status if his wife is absent from Saudi Arabia for a total of more than 120 calendar days (exclusive of authorized time such as vacation, emergency leave, business trip accompaniment etc.):

1. In any calendar year, or

2. In the 6-month period covered by the fourth quarter of any calendar year and the first quarter of the following calendar year.


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He must reimburse the Company 50% of the round-trip ticket cost and travel allowance he received for the non-returning family members. Subsequently, if the employee is reapproved for family status, the Company pays the family's return travel costs if they arrive in the SAO at least six months prior to the employee's vacation in the next year.

Refer to Chapter 16, Local/International Transportation, for information on the route and means of transportation.

F. Scheduling of Repatriation Vacations

After completion of one year's service, a repatriation vacation must be taken every calendar year. Vacations will be scheduled by Management, taking into account operating requirements and employee preferences to the extent possible. Normally, repatriation vacations should be separated by an interval of six (6) months minimum, and eighteen (18) months maximum.

A vacation which commences before the end of a year and extends into the following year is considered taken in the year it commences.

G. Length of Repatriation Vacations

A repatriation vacation must include at least 14 vacation days, exclusive of other time off such as travel time, holidays, etc.

H. Deferred Vacation Credits/Buy-Out of Vacation Days After Year ofArrival

Employees are expected to take a repatriation vacation every calendar year, and are also expected to use all of their vacation credits every year unless they are deferred (Refer to Section C.3. of this Chapter).

Subject to operating requirements, deferral of vacation credits into the following year is permitted for up to a maximum of 15 days. More than 15 days deferral requires approval of the employee's Executive Head and should only be given for compelling business or personal reasons.

In unusual circumstances and where justified by business considerations, a buy-out of unused vacation days in excess of 15 days can be authorized only during the last three months of the year. Requests for buy-out require the employee’s Executive Head approval and concurrence of the:

1. Area Personnel Administrator for vacation credit buy-out requests for 60 days or less.

2. Personnel Director for vacation credit buy-out requests for 61 days or more.


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I. Vacation Credit Use

Vacation credits are used on a calendar basis. This means credits are cancelled by both scheduled work days and scheduled days off. However, if an employee works at least one day in the week in which a vacation commences, the scheduled days off in that week do not count against vacation credits.

In addition to repatriation vacation, employees may use available vacation credits for local leaves or extending weekends. In approving such random use of vacation credits, Unit Heads should ensure that employees have at least the minimum 14 vacation days available for their regular annual repatriation vacation.

J. Recall and Early Return from Vacation

Employees are expected to take all the vacation days for which they have been scheduled.

The Company should not recall employees before their vacation ends unless required by operations. Recalls from vacation require approval by the Department Head.

Voluntary early returns are not permitted without approval of the Department Head.

Unused days resulting from authorized recalls or early returns carry over for future use, subject to the limit of 15 days allowed for deferral of credits into the following year.

K. Late or Non-Return from Vacation

Employees who do not return to work following the end of vacations may be subject to termination. (Refer to Chapter 10, Terminations) If the employee is not terminated, and if the reason for late return is acceptable to the Company, the employee may elect to charge the extended absence either to available vacation credits or to leave without pay.

L. Holidays and Rescheduled Days Off Within a Vacation Period

Holidays may be scheduled or unscheduled. Scheduled holidays are those specifically indicated on the Company calendar. Unscheduled holidays are announced only when they are observed. Therefore, they are not specifically indicated in the Company calendar.

Scheduled holidays falling within a local leave or a repatriation vacation period are added to this vacation period. Unscheduled holidays do not affect this period. However, they are added to the employee's future vacation credits.

Rescheduled days off which fall within a local leave or a repatriation vacation period are treated the same as scheduled holidays and are added to this vacation period.


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M. Business Assignments in Conjunction with Vacations

When the Company directs an employee to take a business assignment in conjunction with a repatriation vacation, the employee may either:

• extend the vacation by the length of the business assignment; or• return as originally scheduled and reduce the number of vacation days

used by the length of the assignment.

Department Heads (or above) must approve all business assignments in conjunction with vacations.

To avoid duplication of travel costs, temporary OOK business assignments should be scheduled, operations permitting, consecutively with the employee's scheduled vacation; otherwise, if practical, the employee's vacation should be rescheduled consecutively with the OOK business assignment.

N. Employees Assigned Temporarily to an Associated Company

An employee temporarily assigned to an Associated Company will carry any unused vacation credits to that company. During the first twelve months of the assignment, these Saudi Aramco policies apply to the employee for calculation of earned credits, scheduling, etc. For assignments beyond 12 months, refer to Chapter 8, Out-of-Kingdom Assignments.

O. Employees Completing Temporary Assignments

1. Temporary Assignments of Less Than Six (6) Months:

Employees may carry back unused vacation credits, but must wait at least ninety (90) days following return to Saudi Arabia before taking a repatriation vacation.

2. Temporary Assignment of Six (6) Months or More Where Family Has Accompanied:

To minimize Company-paid travel costs, employees should take their repatriation vacation before or in conjunction with return to Saudi Arabia.

Exceptions require the prior approval of Executive Management. They are only granted for critical operating reasons. The test in all cases is Company need, not employee desire.

P. Sickness While on Vacation

Refer to Chapter 9, Leaves of Absence.

Q. Vacation Accounting at Termination

The Company pays for vacation credits which have been earned but not taken at time of termination. The effective date of termination for different types of termination is defined in Chapter 10. (Foreign Contract retirees are permitted to remain on the payroll while taking final earned vacation


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credits. If a retiree terminates during a month and does not have enough vacation credits to carry him/her through the end of the month, he/she must be carried on "X" time through the last day of the month in which he/she retires.)

Conversely, employees repay the Company for Regular Vacation Credits which have been taken but not earned at time of termination. In either case, payment is made at the employee's regular rate of pay at time of termination.

An exception to the repayment provision is made in case of an employee's death when vacation taken but not earned is not recovered. Additionally, should an employee (or dependent) die while on vacation, the return to Kingdom portion of travel monies paid is not required to be repaid.

The Special Vacation Credits referred to in Paragraph C.1. above are considered earned when granted and are not subject to these repayment provisions.

R. Vacation Excess Baggage

1. SC 11+ Foreign Contract Employees

In conjunction with annual repatriation vacations, the Company reimburses accompanied excess baggage charges up to a maximum of twenty (20) kilograms to and/or from the recognized airport nearest employee's point-of-origin and Saudi Arabia.

Outbound shipments may be made up to 30 days prior to departure from Saudi Arabia; inbound shipments may be made up to 60 days after return from vacation.

Employees may ship their personal effects as excess baggage, or elect to send all or part of their personal effects as unaccompanied baggage, airfreight, airmail or surface shipment. Maximum total reimbursement is limited to the equivalent one way cost of shipping 20 kilograms of accompanied excess baggage.

The employee is responsible for making all shipping arrangements and for clearance of the shipment through customs. The Company does not reimburse the employee for customs duties or excess insurance and is not responsible for any loss or damage to baggage or shipments. For reimbursement employee must present an acceptable receipt or other proof of payment no later than 90 days after return from vacation.

Reimbursement payments are not made for shipment of automobiles/trucks, motorcycles, boats, golf carts and pets.

2. Indefinite Term Employment Agreement (ITEA) and Chinese Specified Term Contract (STC) Employees

An excess baggage allowance is provided equal to the cost of twenty (20) kilograms of accompanied excess baggage from Saudi Arabia to the recognized airport nearest the employee's point-of-origin.


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Appendix I: Authorized Repatriation Travel Time

Note: Round trip travel may be extended to 4 days if the employee comes from a remote village for which a 2-day round trip travel time is insufficient as determined by the Company.

Country Travel Time Round Trip Points of Origin

India 2 days Bombay, Delhi, Gulaothi, Poona.

Pakistan 2 days Hyderabad, Karachi, Lahore, Lyallpur, Montgomery, Multan, Pasrur, Peshawar, Rawalpindi, Gujranwala, Campbelpur, Wazirabab.

Bangladesh 2 days Dacca Area

Philippines 4 days All Areas

Singapore 2 days All Areas

Sri Lanka 2 days Colombo Area

Thailand 2 days Bangkok Area

China 4 days All Areas

Industrial Relations Manual for Asian EmployeesChapter 7: In-Kingdom Assignments

October 2, 2005

Chapter 7: In-Kingdom Assignments

I. General

Company business and operational requirements may direct temporary or permanent changes in employee work assignment locations within the Kingdom. The Company covers employees' reasonable additional expenses, which it determines appropriate for the assignment duration and location, incurred beyond normal expenses and resulting from the work location change.

II. Definitions

A. BUSINESS ASSIGNMENTS:

1. BUSINESS ASSIGNMENT WITHIN THE SAO -- Brief business trip away from the normal work site which may require overnight hotel stay.

2. TEMPORARY ASSIGNMENT (TA) WITHIN THE SAO -- Duration of up to one year at an assignment location beyond daily commuting distance from the employee's regular workday residence/permanent residence.

3. LOAN ASSIGNMENT WITH IN-KINGDOM JOINT VENTURE COMPANIES -- Temporary work assignment with one of Saudi Aramco’s in-Kingdom Joint Venture Companies (JVC) located beyond daily commuting distance from employee’s regular workday residence/permanent residence.

B. PERMANENT REASSIGNMENTS WITHIN THE SAO -- Permanent assignment to a new work location (area change).

III. Business Assignments

A. For Business Assignments within Saudi Arabia (including those to Bahrain via the Causeway), the following provisions apply:

1. To locations where a hotel stay is necessary, employees receive:

a. Reimbursement for actual and reasonable expenses for lodging, food and incidentals.

b. Company furnishes transportation or reimburses employee-purchased travel. Use of personal auto for business purposes within Saudi Arabia is prohibited and related expenses are not recognized.


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c. In-Kingdom Temporary Assignment Allowance

This allowance is only applicable to temporary assignments within Saudi Arabia. See Section III.B.2 of this Chapter for more details.

d. Reimbursements for approved automobile rental costs in accordance with the following provisions:

1. The Company reimburses approved automobile rental costs to include liability and collision/loss damage insurance coverages for required business travel. Rental of autos while on Company business must be approved in advance by notation on the appropriate travel documents.

2. The Company also will reimburse employees for the following insurance programs when such insurance is not included as part of basic auto rental costs.

a. Loss Damage Waiver (LDW)

b. Liability Insurance Coverage (LIC)

c. Collision Damage Waiver (CDW)

d. Third Party Liability (non-U.S. locations only).

The employee needs to determine at the time of rental if the above insurance coverages are provided as a part of the rental contract rate. If not included, the employee should accept such coverages.

Insurances, other than the above, are for the employee's account.

3. Rental cars are to be obtained from the Company's corporate rental car agencies with reservations made through the Global Travel Services of Materials Traffic Department.

e. Reimbursement for entertainment and business meals only if authorized in advance by the Expense Report (Form SA-165) approving authority.

2. To Company locations where overnight accommodation is required and utilized, eligible employees may receive:

a. Free food; or

b. Meal allowance (See Section VII of this Chapter for specific policy provisions covering meal allowance eligibility for family and single/bachelor status employees).


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3. To Bahrain via the Causeway, employees receive:

a. Reimbursement for actual and reasonable expenses for lodging, food, transportation and incidentals. Requests for receipt of the designated per diem in lieu of reimbursement for actual and reasonable expenses is at the discretion of the employee’s department.

b. In lieu of reimbursement of actual transportation expenses, employees may elect to receive a non-accountable transportation allowance of SR 100 to cover round trip travel expenses.

c. Reimbursements for approved automobile rental costs to include liability and collision/loss damage insurance coverage for required business travel. For specific policy provision, refer to Section III.A.1.c. of this Chapter.

4. When requested and authorized in advance to entertain Company guests, the employee may be reimbursed, based on the following:

a. An unaccountable allowance per guest (including employee) in accordance with those amounts specified in Appendix II.3 of this Chapter, or

b. Actual and reasonable expenses as supported by original receipts and other supporting documentation.

B. Temporary Assignments (TA) Within Saudi Arabia (Area Change) are distinguished by:

• Duration of up to one year, except for employees whose assignments may be extended up to 3 years due to unique work requirements, with the approval of their Executive Management and concurrence of Director, Personnel; and

• The TA location is beyond daily commuting distance from the employee's regular workday residence/permanent residence. Temporary work locations falling 80 or more kilometers distant from employee work day residence/permanent residence are considered to be beyond daily commuting distance.

1. Documentation

Note: The above documentation is required for all Temporary Assignments within Saudi Arabia, regardless of the distance between the current work location and the temporary work location.

Duration Documentation

5 - 29 days Memo to File

30 days or more SA-8000 Form - See Employee Information System (EIS) Manual


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TA does not alter the employee’s regular position, salary code, base salary or overtime class applicable to his/her regular assignment (See Chapter 2, Section X.).

2. Entitlements

a. Employees receive the following:

Note: The costs for employee TA expenses/entitlements should be normally charged to employee’s permanent home organization, unless the receiving organization is benefiting from the assignment such as in the case of acting/vacation relief assignments in which case the costs should be borne by the new organization.

(1) Entitlements for periods exceeding 1 year in case of Temporary Assignments approved for extension on exceptional basis up to 3 years by employee’s Executive Management and concurred by Director, Personnel will still be signed by employee’s Department Head, provided the initial exceptional approval for extension is obtained. If the employee’s Temporary Assignment will be in excess of one year, employee has the option of being administered under the TA provisions or relocating family to the new work location and receiving the applicable Permanent Transfer Allowance(s).

(2) See Section VII of this Chapter for full policies covering meal allowance payment while on Temporary Assignment.

Entitlement Up to 30 Days

31 to 90 days

91 Days to 1 Year

Bachelor Housing

Department Head

Department Head

Department Head(1)

Meal Allowance(2)

Unit Head Division Head

Department Head(1)

Transportation between Permanent Residence & TA locations(3)

NA NA NA

Personal Vehicle Shipment Allowance(4)

NA NA NA

In-Kingdom Temporary Assignment Allowance (IKTA)(5)

NA NA NA


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(3.a) Transportation at Start, End of TA and during Scheduled Days off (weekends):

As applicable, transportation is provided through Company operated flights, Company buses/vehicles, commercial flights or taxi fare reimbursement.

(3.b) Daily Transportation Assistance is paid only to employees living in local community and commuting daily to a temporary work location less distant than 80 kilometers from employee residence. The assistance is equivalent to SR45 for each day of actual commuting during the assignment. Form SA-60, Payment Authorization, is used to initiate the payment.

(4) Personal Vehicle Shipment Allowance: Employees who own and ship their personal vehicle to the Temporary Assignment location are eligible for this unaccountable allowance when the Temporary Assignment is 180 or more consecutive days and the new work location is 350 or more kilometers distant from current work location.

• The allowance is paid for shipment of one vehicle only and is based on the distance moved between the old and the new work location as follows:

• The allowance is processed by the Area Personnel Office and charged to employee’s organization code.

(5) Employees are eligible for IKTA allowance when they are re-assigned temporarily to In-Kingdom work locations, including business assignments within Saudi Arabia and loan assignments with IK Joint Venture Companies. The allowance is paid monthly and it is equivalent to 7% of an eligible employee’s base pay, irrespective of salary code or position, up to the mid-point of Salary Code 17. To be eligible for the allowance, employee must meet the following criteria:

1. The temporary assignment work location must be located 80 or more kilometers from employee’s workday residence.

2. The duration of the temporary assignment must be more than 60 consecutive days.

The following employees/situations will not attract payment of the allowance:

1. Employees assigned to Specified Locations. These employees receive the applicable Specified Locations Allowance (SLA).

Distance Moved (Kms) Round Trip Amount

350 - 500501 - 1,000

1,001 - or more

SR300SR700SR900


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2. Employees on temporary or business assignments within the Kingdom, who receive the daily per diem and/or relocation allowance. Note: Employees who receive itemized reimbursement for their temporary or business assignment expenses on actual cost basis are eligible for IKT.

3. Employees who receive the IK Project Mobility Allowance.

4. Employees who are assigned/loaned to Aramco Gulf Operations Company Ltd. (AGOC)

The IKTA allowance is paid when employee is on Paid Personal Leave ("P" Time); and Medical Leave ("M" and "K" Time). IKTA is not paid when employee is on Vacation Leave ("L" Time); Authorized Leave Without Pay ("X" Time); Unauthorized Leave Without Pay ("Z" Time); and Authorized Medical Leave Without Pay ("W" Time).

Authority to approve the IKTA allowance is identical with approvals required for salary merit increase actions for the particular salary codes concerned. Chapter 2 of the Industrial Relations Manual contains these approval authorities.

b. Transient bachelor housing is not provided to employees assigned to an area falling within daily commuting distance. Daily commuting distance means any work location falling less than 80 kilometers from employee residence. Exception to the 80-kilometer reference point for providing bachelor housing requires the approval of the employee’s General Management or above. If an exception for providing transient bachelor housing is approved, the employee becomes eligible for Meal Allowance.

3. Exceptions

a. An employee reassigned within the same area or to another area which is within daily commuting (less than 80 kilometers) of his/her daily or days off residence is not eligible for Temporary Assignment benefits (e.g., Meal Allowance and transient bachelor housing.

b. Meal Allowance is not paid when free food is provided.

c. Only lunch Meal Allowance is paid for one-day assignments, when the new work location is 80 or more kilometers distant from employee residence.

C. Loan Assignment with In-Kingdom Joint Venture Companies

The Loan Assignment is a temporary work assignment with any of Saudi Aramco’s in-Kingdom Joint Venture Companies (JVC) located beyond daily commuting distance from the employee’s regular workday residence/permanent residence.

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1. Entitlements

Benefit 1 Year or Less Loan Assignment More than 1 Year Loan Assignment

Housing At Assignment Location

Same as in Temporary Assignment (TA) within Saudi Arabia (free temporary bachelor housing at joint venture company).

Employee has option to occupy either free bachelor or family Housing at Joint Venture Company (JVC). Also, expatriate employees are charged hypothetical rent if there are no ongoing SAO housing costs.

Taxes Employee is reimbursed for income tax, if required by assignment location.

Same as 1 year or less loan assignment.

GOSI Expatriate employees continue to be covered in the Health Hazards Branch of GOSI.


Transportation To/From Assignment Location(Initial & Final)

Same as in Temporary Assignment within Saudi Arabia (round-trip air or taxi travel, as required, between employee permanent residence and Temporary Assignment location).


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Saudi Aramco Housing

Same as in Temporary Assignment within Saudi Arabia (if living in Company housing, employee can retain Saudi Aramco housing).

Employee has option to vacate or keep Saudi Aramco housing as per IR Manual, Ch.12, concerning retention or disposition of housing during Temporary Assignments.

Personal Effects Shipment

NA Company moves personal effects or the applicable Relocation Allowance is paid (see below).

Relocation Allowance

NA Pay Relocation Allowance (for both family & bachelor status employees).

Meal Allowance Treat same as in Temporary Assignment within Saudi Arabia (Meal Allowance @SR100 or SR120 per day depending on location*).

With approval of employee’s Department Head, meal Allowance @SR100 or SR120 per day depending on location* is paid for the first 90 days of the assignment.

* For Schedule of Meal Allowances, see Section VII.B.5 of this Chapter.

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In-Kingdom Temporary Assignment Allowance (IKTA)

Eligible for the 7% IKTA allowance when the temporary assignment is more than 60 consecutive days. See Section III.B.2 "Entitlements" of this Chapter. Employees loaned to Aramco Gulf Operations Company Ltd.) (AGOC) are not eligible for this allowance.

Treat same as 1 year or less loan assignments.

Local Transportation

As applicable, provide Company transportation or pay daily & days-off Transportation Allowance.

If employee’s family relocates to the new work location, only daily transportation is required (company-provided transportation or Saudi Aramco daily Transportation Allowance). If employee’s family doesn’t relocate, treat same as under 1 year or less loan assignments.

Medical Care Employee continues in SAMSO or Designated Medical Facilities, as applicable. Also, free medical care is provided by JVC at assignment location.

Treat same as 1 year or less loan assignments.

Benefit Plans Participation

Remains same. Remains same.

Vacation Apply Saudi Aramco’s normal vacation policy.

Same as 1 year or less loan assignments.

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Holidays/Work Hours

Subject to those at company of assignment.


Family Accompaniment

Same as in Temporary Assignment within Saudi Arabia (not recognized).

Family may accompany; no limit on number of children.

Business Travel

Employee follows policy of Joint Venture Company.


Salary Administration (Merit & Promotion)

Saudi Aramco’s normal policy continues.


Personal Vehicle Shipment

Personal Vehicle Shipment Allowance (PVSA) is paid when loan period is 6+ months and new temporary location is 350+ kms. Refer to Section III.B.2.a. in this Chapter for further details on PVSA.


Cash Advance Employee option. Same as 1 year or less loan assignments.

Note: Extension of loan period beyond 1 year as approved by employee’s Executive Management and concurred by Director of Personnel entitles loanee for continuation of Temporary Assignment benefits throughout the extended period.


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2. Documentation

a. Sending departments should coordinate with the Area Personnel Office the issuance of a Letter of Understanding (LOU) to be approved by employee’s Business Line Head and the Director of Personnel. The LOU is prepared in accordance with the applicable provisions mentioned under item #1 above, "Entitlements".

b. Form SA-8000 should be initiated and approved by the employee’s Department Head.

c. Any other documentation, as required by the Technical Services Agreement between Saudi Aramco and the respective Joint Venture Company, should be prepared by employee’s department.

IV. Permanent Reassignment Within Saudi Arabia

A. Duration

Reassignment is a permanent change of SAO work location.

B. Documentation

Reassignments are documented by the form SA-8000. Refer to the Employee Information System (EIS) Manual.

C. Personal Effects

1. For employees reassigned from quarters in one Company community to another, the Company assists in packing and moving personal and household effects. When required, the Company provides one round trip to the sending location to coordinate packing and moving personal effects. Where regularly scheduled Company transportation (air or bus) is available, employees may not claim travel expense nor receive taxi chits.

2. For employees not resident in Company communities, moving from one local community to another, the Company provides a Relocation Allowance to cover packing and shipping expenses.

3. Refer to Chapter 11 - Relocation Shipments Within the Kingdom, for further details on Company policy covering personal effects movement assistance.

D. Relocation Allowance

1. Eligibility

Employees whose permanent reassignment is 50 kilometers or more between work locations and which also results in the relocation of their residence/household more than 50 kilometers are eligible for an


October 2, 2005

unaccountable Relocation Allowance to help defray expenses of establishing a new household and for packing/moving of household effects. IN ADDITION:

a. The permanent assignment must be scheduled to be at least one year's duration.

b. An employee who moves his family within one year of commencing his permanent assignment is eligible for the family status Relocation Allowance. The family status payment will be offset by any prior bachelor Relocation Allowance payment received by the employee. The payment will be based on the salary in effect when the transfer occurred.

c. Employees who permanently transfer to/from any Specified Location are not eligible for the Relocation Allowance. However, if a family move occurs as a result of the transfer, the employee is eligible for the applicable family Relocation Allowance applied on the distance between the family’s old and new residence locations. Employees who transfer from Specified Locations to Non-Specified Locations are eligible for a Relocation Allowance only if the new days-off residence is different from the old days-off residence.

d. As an exception, transferees between Yanbu and Rabigh (though less than 350 kms) are eligible for the amounts of the Relocation Allowance of 350 kms or more. Similar exceptions, if any, will be approved by the Personnel Director.

2. Allowance

The Relocation Allowance is applicable to all types of residence relocations as illustrated below:

Family StatusRelocation Allowance

Single/BachelorRelocation Allowance

Relocation 350 kms or More

3 Months Base SalaryMinimum SR40,000Maximum SR60,000

1 Month’s Base SalaryMinimum SR10,000Maximum SR20,000

Relocation Less than 350 kms

1 1/2 Base SalaryMinimum SR20,000Maximum SR40,000

1/2 Base SalaryMinimum SR5,000Maximum SR15,000


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The above two allowances will be applicable to all moves where a private residence is involved, i.e., camp to private residence, private residence to private residence, and private residence to camp.

* SC3-10 female employees living in family camps and other employees in SC3-10 jobs which are extension of "professional ladder" jobs in SC11+ are all eligible for SR3,000.

The Relocation Allowance is considered to be an advance payment that will be earned if the employee remains employed at his new work location for a period of 90 days.

3. Payment

The receiving Area Personnel Office is responsible for controlling, initiating and effecting payment of this allowance upon receipt and verification of:

• SA-8000 specifying permanent reassignment/transfer to a new work location 50 kms. or more distance from the current work location.

• In addition, employees qualifying for the Relocation Allowance based on a family status move must provide proof of family relocation of 50 kms. or more through one of the following means acceptable to the Area Personnel Office: Company housing assignment record, housing lease or purchase contract, school enrollment records or transfer of family medical files to the new residence location.

• Claims for payment must be submitted within one year of the date of transfer. The Personnel Director or his designate may authorize payments beyond one year for cases supported by legitimate reasons.

E. Housing and Meal Allowance/Per Diem

Managers should coordinate employee permanent reassignments with housing availability in the receiving location. This minimizes employee inconvenience and optimizes use of Company housing. (See Chapter 12)

Family Status Relocation Allowance

Single/Bachelor Relocation Allowance

Relocation between Company provided housing (camps). Company Moves personal effects

SR6,000 SC11+ & female employees*

SR3,000

SC3-10

SR1,000


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1. Permanent Assignment to Areas Where Company Bachelor Housing Exists

• For compelling personal reasons, Managers may approve payment of Meal Allowance and assignment to Company transient bachelor housing at the new work location, if available, for up to 90 days. The Meal Allowance is intended to cover extra meal expenses incurred by employee, in addition to any other miscellaneous or incidental expenses during the initial period of employee’s permanent transfer.

• Extension of temporary bachelor housing (without Meal Allowance) for compelling personal reasons beyond the initial 90 days requires the approval of employee’s Administrative Area Head. This approval is limited to extension of up to 90 days only.

2. Permanent Assignment to Areas Where Company Bachelor Housing Doesn’t Exist

For compelling personal reasons, Managers may approve payment of per diem to cover lodging, meals and incidentals for up to 90 days, provided the new work location is 150 kilometers or more distant from current work location. For details on per diem rates for in-Kingdom locations, see Appendix II.1.

Notes:

• A Temporary Assignment (TA) within SAO immediately preceding a permanent reassignment to the same location reduces the employee’s eligibility for Meal Allowance/Per Diem by the number of days on TA.

• EP family status expatriate employees reassigned permanently to other provinces will continue to retain family housing in EP and be eligible for temporary free bachelor housing at the new work location for indefinite period, with Executive Management approval.

F. Lease Cancellation Financial Assistance

1. Eligibility

Employees with twelve continuous months of recognized Company service who are permanently reassigned between job assignment locations are eligible for financial assistance.

Eligible employees that are required to change their residence locations as a result of a permanent transfer between job assignment locations within the Kingdom receive financial assistance when the following conditions are met:

• The former residence is more than 50 kilometers from the new work assignment location.

• The new residence is within 50 kilometers of the new work assignment location.


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2. Financial Assistance - Lease Cancellation

Employees permanently transferred between job assignment locations within the Kingdom and who cancel a lease on their residence at the Company's prior work assignment location within six months following the effective date of transfer are eligible for the following reimbursement:

• Unexpired Term of Lease -- Maximum reimbursement equivalent to three months rent. Cleaning and damage costs are not reimbursed.

3. Verification

Reimbursements are made for necessary expenses verified by copy of cancelled lease agreements.

4. Exclusions

Employees reassigned under provisions of "In-Kingdom Temporary Assignment" policies are ineligible for reimbursements under this policy.

V. Loan of Saudi Aramco Employees to Vela International Marine, Ltd.

Loan Agreements and Letters of Understanding are to be used for the loan of Saudi Aramco employees to Vela International Marine, Ltd. (contact Area Personnel Office for current Loan Agreement and Letter of Understanding).

These letters are to be signed by each Saudi Aramco employee assigned on a regular (full time), basis to Vela. Temporary Project or Special Project personnel temporarily performing services for Vela or providing services to Vela are not to execute these forms.

The appropriate Area Personnel Office provides guidance to proponent Departments on assignments and their applicable policies.

VI. Business/Transient Expenses

These policies cover authorized business and transient living expense reimbursements. They apply worldwide to the Business Assignment relocations described in the foregoing Sections of this Chapter. They do not apply to Education or Development Assignments.

A. Documentation/Forms

1. Form SA-165, Expense Report

Employees must complete an expense report according to instructions on the form's reverse side and provisions set forth in this Chapter. Approved expense reports must be submitted to the Voucher


October 2, 2005

Processing & Receivable Unit, Compensation, Benefits & Employee Tax Accounting Department, within thirty days of completing assignments.

2. Form SA-60, Payment Authorization

This form covers local (SAO) expense reimbursements for meal allowances and local taxi fares, supported by necessary documents and approved by employee's Department Head.

3. Cash Advance

To obtain a cash advance, a Payment Authorization (Form SA-60), approved by the Department Head, is submitted to the Industrial Services Vouchers & Misc. Payment Unit, Materials Services & Payable Accounting Department, at least seven working days prior to the required date.

Cash advances are usually obtained for assignment transient living expenses and housing security deposits/rent prepayments (last month’s rent). A separate Payment Authorization (Form SA-60) is required for each type of cash advance, e.g., transient living expenses and housing security deposits/last month’s rent payments.

Cash advances must be accounted for on a timely basis by submitting an approved Expense Report (Form SA-165) in accordance with the following schedule.

a. Employees on assignments of 60 days or less must account for the cash advance(s) within 30 days of completing the assignment.

b. Assignments of 61 days or more:

1. Transient Living Expenses cash advance(s) must be accounted for monthly, after each full month from the assignment commencement.

2. Security Deposit & Last Month’s Rent cash advances must be accounted for at the end of the lease or within 30 days after the assignment is completed, whichever is applicable.

Cash advances not settled in accordance with the above schedule will be subject to full recovery through payroll deduction and repayment on installment basis is not permitted. In such cases, the cash advance approving authority and the employee (through his management) are sent a notice of planned payroll recovery and asked to advise if there are any valid reasons why such recovery should not occur.

The revolving cash advance account for the Aviation Department will be administered according to Aviation Department internal procedures.


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B. Expense Approvals/Authorization

Approval authorities are set forth in the Automated Approval Authority System. The Controller reviews Expense Reports for Corporate Management for compliance to policy and other limitations. Authority limited to expenses identified as an element of the approved Net Direct Expenditure Budget.

1. Acceptable Expenses

Approving authorities must determine that expenses claimed are necessary and reasonable. Proof of expenditures is required when practical to obtain. Any individual expenditures over $25.00 claimed must be accompanied by an original receipt. If original receipts are missing or no receipts are available, approving authorities may approve Expense Reports provided the amounts are not substantial, reasons are stated on the Expense Report, and these instances are not repetitive.

The normal standards for Business Expenses are:

• Business Class for international air transportation;• First class hotels for lodging; and• First class restaurants for meals.

Expenses for using a higher standard are to be approved only when justified by the circumstances.

a. Lodging

Employees are expected to seek lodging in first class hotels. Luxury class hotels are not acceptable and are to be avoided.

When the employee travels at Company expense, reimbursement is for a single occupancy room, if available. When spouse accompaniment is authorized, a double occupancy room is authorized. When authorized children of the employee accompany the employee (transient living on Temporary Assignments only), and is authorized to claim reimbursement for their expenses, reimbursement is authorized for the most economical accommodations available, in a hotel of the guideline standard, consistent with the age and sex of the accompanying children. The Company does not pay duplicate hotel expenses covering the same date(s), but at different locations, unless family members authorized to accompany are left at one location while the employee travels to another for Company directed business. Lodging furnished by the Company (so identified) is to be shown on the Expense Report, even though not paid for by the employee.

b. Meals

Meal expenses are variable depending on the availability of convenient dining facilities, the duration of the stay in a given location, the duration of the total assignment, and the personal


October 2, 2005

eating habits of the employee. These factors are considered when approval authorities review the reasonableness of meal expenses.

c. Entertainment and Business Meals

Employees are reimbursed for reasonable expenses incurred in entertaining individuals who can influence Company business. The nature and extent of such entertainment or business meals should normally be authorized in advance by the approving authority. When circumstances warrant, the Company reimburses entertainment or meals costs for employees and their non-Company guests. Such expenses are to be reported as follows:

1. Give reason and identify as "entertainment" and/or as a "business meal".

2. Give name and type of establishment, names, titles, or other business designation of participants and general nature of business discussion. A large group may be identified by general categories; for example, 8 Company Directors, Minister of Petroleum and 4 Government officials, etc.

3. When the occasion precedes or follows a business discussion, the date, duration, place, and nature of the discussion must also be noted.

d. Miscellaneous Expenses

Employees may be reimbursed for reasonable and necessary costs such as:

• Transportation to/from arrival/departure terminals• Local transportation• Local and long distance business telephone calls• Business telegrams, facsimile, cables and internet• Business travel• Tips• Laundry, cleaning and pressing

e. Other Expenses

1. Required material purchases made for the Company may be included on the expense report, provided the purchase does not exceed $200.00 for any single requirement and is supported by original receipt.

2. Excess Baggage. The Company may reimburse costs of a reasonable quantity of excess baggage (normally limited to 10 Kg.) against original receipts.


October 2, 2005

3. Credit Card membership fee.

For employees who regularly take business trips, the Company may reimburse the basic annual membership fee (excluding spouse’s fees or any other charges above basic membership fee) for their personal American Express credit card. No other maintenance charges will be covered. The Department Head must concur and attach the fee stub to the first expense report covering Company business travel after payment of the annual fee. Employees are eligible for reimbursement if:

a. Employee has made three or more business trips outside the area of permanent assignment within a twelve month period; or

b. Employee is normally assigned thirty days or more in a twelve month period outside the country of permanent assignment.

When the employee has a subsidized credit card, the amount granted as a cash advance should normally be limited to $25 per day.

2. Per Diem

All employees are generally reimbursed on an actual expense basis. However, if employees are claiming only their own expenses, they may opt to request the designated per diem for each full (24 hour) day of a Business Assignment, except for Business Assignment in Bahrain, in which case approval to pay per diem is at the discretion of employee’s department. A full day is defined as the cumulative 24-hour period from the time employee departs for the assignment from his/her residence until he/she returns to the same residence at the end of the assignment.

Current In-Kingdom per diem amounts for business travel purposes are in Appendix II.1.

Per diem payment covers working days only. No per diem is paid during days off/weekends, unless employee is required by his department to stay at the worksite during days off/weekends for operational reasons.

a. Per Diem Limitations

Employees may claim per diem only for the inclusive full (24 hour) days. Actual expenses are to be itemized and reported for:

1. Partial days (i.e. less than 24-hour periods at the end of assignment). For Temporary Assignment within Saudi Arabia, employee may claim Meal Allowance instead of reimbursement of actual expenses.


October 2, 2005

2. When claiming for authorized dependents, both dependents' and employee's expenses must be itemized.

3. When the employee chooses not to itemize his own and his dependents' transient expenses, the single status per diem amount is deemed to cover the whole family (including himself) and is the maximum amount which can be claimed.

b. Expenses Covered by Per Diem

Per diem is designed to cover the following expenses in full; thus, it is the maximum amount allowed for these items. They need not be itemized or supported by receipts:

• Lodging• Meals• Local transportation• Local telephone calls• Tips• Laundry, cleaning and pressing

c. Meals & Incidental Per Diem

Employees on In-Kingdom (IK) business assignment who claim actual expenses for hotel are eligible to claim the IK Meals & Incidental per diem listed in Appendix II.1.

d. Additional Expenses

Employees must itemize the following business expenses to be reimbursed in addition to per diem:

• Check-in/check-out costs• Long distance business telephone calls• Business telegrams, facsimile, cables and internet• Transportation to/from arrival/departure terminal• Business travel• Entertainment and business meals

e. Company Housing Availability

Employees on in-Kingdom Business or Temporary Assignments are expected to occupy Company housing, if available, and be paid the applicable Meal Allowance rather than per diem or reimbursement of actual expenses. Exceptions to this policy require the approval of employee’s Administrative Area Head.


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VII. Free Food or Meal Allowance

A. General

The Company grants free food or a meal allowance under certain circumstances. The Company's objectives in granting these are:

• to provide food so the employee can complete an assignment; or• to pay extra meal expenses incurred in complying with special

Company requirements.

B. Policies

1. The Company provides meal or meal allowance, if free food is not practical, when an employee is:

a. Directed to work an additional unscheduled two or more hours before or after the normal work period. The Company pays the allowance for the meal normally taken at that time of day. Unscheduled overtime occurs when an employee is advised of the overtime requirement on the same day that the overtime is required.

Advanced scheduling of overtime on workdays, scheduled days off or holidays disqualifies the payment of meal allowance(s) until such time as actual work time is two or more hours in duration beyond that which the employee was notified he would be scheduled to work.

An exception to the above is extended to employees who are directed to work during days-off and/or holidays for 4 consecutive hours or more without a meal break.

b. Directed to continue work without the normal lunch break and provided such action is unscheduled, that is, the employee is advised on the same day that work is required through the lunch break; in such cases, a lunch allowance is paid.

c. Directed to work temporarily at another location provided that the new work location is 80 kilometers or more distant from current employee residence. Employees are paid Meal Allowances for meals normally taken at the temporary work location. The Meal Allowances are intended to cover extra meal expenses incurred by employees, including other incidental expenses such as laundry, in-Kingdom telephone calls, etc.,. During the month of Ramadan, regular Meal Allowances are continued for eligible Muslim employees on temporary assignments, similar to non-Ramadan time. That is, the Company pays for three meals a day (breakfast, lunch, dinner).


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d. On on-call status (see Chapter 4, Overtime and Shift Premiums, for a definition of on-call status) and required to remain at a location away from his/her regular work days or days off residence. The Company pays meals or allowances falling within the on-call period.

e. Called-in (see Chapter 4, Overtime and Shift Premiums, for a definition of call-in) to work beyond the normal work period during regular work days. The Company pays meals or allowances falling within the called-in period.

f. Directed to work 4 or more consecutive hours during days off or holidays without normal meal breaks. The Company gives free meals or a meal allowance for the meals normally taken at that time of day.

g. Commuting between the work site and days off residence for the scheduled days off, and is directed to work on holidays or days off. If the employee is unable to spend the days off at that residence, he/she receives free meals or meal allowances until the beginning of regular work days, or return to the days off residence.

h. On family status or single/bachelor status reassigned permanently to a location in Saudi Arabia and occupying Company transient bachelor housing in the new location. The entitlement is normally for 90 days and requires approval of employee’s Department Head. This policy does not apply if the employee has been offered and has declined suitable permanent Company housing, as determined by the Area Manager responsible for assignment of employee housing. Free meals or meal allowances end on the date the housing offer is declined.

Employees reassigned permanently to a location in Saudi Arabia where Company bachelor housing is not available may be eligible for payment of per diem up to 90 days, when the new work location is 150 or more kilometers from current work location. Payment of the per diem requires the approval of employee’s Department Head. For more details, see Section IV, Item "F" "Housing and Meal Allowance/Per Diem".

2. Specified Locations

Employees assigned to reside at Company bachelor camp Specified (hardship) Locations, receive free meals or meal allowances. Refer to Chapter 3, Appendix I for the locations.

3. Food Service Employees

All food service employees in Company Food Service operations receive one meal for every eight hours work. The meal consists of a main dish, two vegetables, salad, beverages and dessert.


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4. Month of Ramadan

During the month of Ramadan, eligible Muslim employees are paid the appropriate meal allowances, (i.e., Breakfast, Lunch and/or Dinner) provided they work two or more unscheduled overtime hours in addition to their normal non-Ramadan work schedule. For example, if a Muslim employee's normal non-Ramadan work schedule is eight hours, then an overtime meal allowance is only paid when the employee works two or more unscheduled overtime hours beyond an eight hour work day.

However, if free food is provided Muslim employees, the food is not given during fasting hours.

Ramadan does not affect meal or meal allowances for non-Muslim employees.

5. Amount of the Meal Allowances

The amount of the regular meal allowances, along with any exceptions for various locations, are as follows:

Notes:

a. Employees assigned to Deep Desert Convoys receive the same Meal Allowance mentioned under "Other Locations" above.

b. All dining facilities at Specified Location (hardship) Allowance Locations are operated on a non-cash basis and meals are provided at no charge to the employee. See Chapter 3, Appendix I for these locations.

c. Employees working temporarily at Tapline locations are paid eligible meal allowances as mentioned under "Other Locations" above.

d. Payment of the Meal Allowance to employee reassigned temporarily or permanently within Saudi Arabia is intended to cover extra meal expenses incurred by employee, including other miscellaneous/incidental expenses such as laundry, in-Kingdom telephone calls, etc.

e. Meal allowance payment covers working days only. No meal allowance is paid during days off/weekends, unless employee is required by his department to stay at the worksite during days off/weekends for operational reasons.

Meal Jeddah/Riyadh Other Locations

Breakfast SR26.00 SR 15.00

Lunch 44.00 40.00

Dinner 50.00 45.00

Total SR120.00 Total SR100.00


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6. Approval Authorities for Meal Allowances

a. Meal Allowances for Temporary Assignments within Saudi Arabia:

(1) Approval of Meal Allowance for Temporary Assignments extended by exception beyond one year are signed by employee’s Department Head, provided the extension is initially approved by the employee’s Executive Management and concurred by the Director of Personnel. The maximum allowable extension is up to 3 years.

b. Meal Allowances for Permanent Reassignments:

Up to 30 consecutive calendar days Unit Head

31 to 90 consecutive calendar days Division Head

91+ consecutive calendar days up to one year period(1)

Department Head

Up to 90 consecutive calendar days Department Head


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Appendix I: Housing Allowances and Related Tables

Appendix I.1: Housing Spendable (Hypothetical Rent) Deduction Guidelines

In-Camp Housing

Out-of-Camp (Local Community) Housing

Employees who live in the local community and who accept Temporary Assignments will continue to receive the Rental Assistance Allowance if they meet any of the following criteria:

(1) Are in Saudi Arabia on married status and accept the assignment on a bachelor (unaccompanied) basis.

(2) Principal married status residence in Saudi Arabia is a rental unit on a long-term lease, and such lease covers the total period of the assignment and cannot be broken.

Length and Type of Assignment

In-Camp House Status Rent Charged

HypotheticalRent

Deduction

Business Assignment(1-60 days)

Employee Retains Housing Yes No

Temporary Assignment(61 days to less than 6 months)

Employee Retains Housing (family remains in Company housing)

Yes No

Temporary Assignment(6 months or more)


Yes No

Employee Permanently Relinquishes Housing or Returns House to Community Services for Utilization

No Yes


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Appendix II: Miscellaneous

Appendix II.1: Per Diem Amounts for Business Assignments in Saudi Arabia

Notes:

(1) When employee holds a Company-subsidized credit card, per diem advances are normally limited to $25.00 per day.

(2) Per diem amounts authorized are the appropriate amounts in effect during the dates of the assignment.

(3) Use of these per diems for Saudi Aramco or Affiliated Company employees should occur only when Company transient or other housing is not available. Payment of these per diems should occur only when verification of inability to house employees is obtained from Community Services. Exceptions to this policy require the approval of employee’s Administrative Area Head.

Cities Full Per Diem Meal & Incidental Per Diem Rates

Saudi Arabia(3) Dammam/Al Khobar/Dhahran SR 670 SR 220

Riyadh/Jeddah SR 740 SR 245

Yanbu/Medina SR 660 SR 220

Al-Qassim SR 490 SR 160

Al-Jouf/Najran SR 620 SR 205

Tabuk SR 640 SR 210

Al-Hasa SR 590 SR 195

Khamis Mushait/Abha/Taif SR 690 SR 220

Not Listed SR 450 SR 150


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Appendix II.2: Business Assignment Meal Allowance/Per Diem Amounts - Returning Saudi Aramco Employees

When employees on Temporary Assignments outside Saudi Arabia return to Saudi Arabia on interim Business Assignments, they receive transient Meal Allowance or per diem amounts to cover meals, incidental expenses and local transportation as follows:

• Meal Allowance @SR120 per day if the interim Business Assignment is to Riyadh or Jeddah and @SR100 per day if the assignment is to any other in-Kingdom Company location. The Meal Allowance is paid when employees are provided Company housing or when they live at home in non-Company facilities with their families.

• Employees who do not reside at home nor in Company quarters and who are resident in approved local hotels may be provided the per diems contained in Appendix II.1, subject to the approval of the Department Head. When actual expenses claimed exceed the appropriate per diem, they must be fully documented. They are reimbursed only if the appropriate member of Executive Management approves.


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Appendix II.3: Entertainment Allowance

Unless larger amounts have been specifically authorized, Saudi Aramco employees authorized to entertain Company guests may be reimbursed for entertainment expenses (including own) based on the following schedule:

(1) Department Manager must approve if actual expenses claimed exceed the maximum.

Event Unaccountable Allowance per Guest(1)

Breakfast/Coffee SR 12.00

Lunch SR 22.00 (including hors d'oeuvres and refreshments)

Dinner SR 34.00 (including hors d'oeuvres and refreshments)

Reception SR 14.00 (including hors d'oeuvres and refreshments)

Industrial Relations Manual for Asian EmployeesChapter 8: Out-of-Kingdom Assignments

October 2, 2005

Chapter 8: Out-of-Kingdom Assignments

I. General

Company business and operational requirements may direct temporary or permanent changes in employee work assignment locations. The Company covers employees' reasonable additional expenses, which it determines appropriate for the assignment duration and location, incurred beyond normal expenses and resulting from the work location change.

Note: Provisions in this Chapter do not apply to Education or Development Assignments out-of-Kingdom. (See Chapter 14, Personnel Development)

II. Definitions

A. BUSINESS ASSIGNMENT OUTSIDE SAUDI ARABIA -- Up to and including the 60th day of assignment outside the Kingdom of Saudi Arabia.

Note: Employees are not eligible for Business Assignments to the U.S. if a Loan Agreement is required (Business Assignments of 1-30 days generally do not require a Loan Agreement).

B. TEMPORARY ASSIGNMENTS OUTSIDE SAUDI ARABIA (Also known as "Chapter 8 Assignments") -- Assignment of 61 days or more days for the Company’s convenience to fill a position at an affiliate, subsidiary, joint venture or project when there is clear and definite intent to return the employee to the Saudi Arabia at conclusion of the Temporary Assignment. Employees are not eligible for Temporary Assignments to the U.S.

C. PERMANENT TRANSFERS -- Permanent assignment from Saudi Aramco to the payroll and administrative control of an affiliated or subsidiary company is not possible.

III. Business Assignments

A. For Business Assignments to Bahrain via the Causeway, employees receive:

1. Reimbursement for actual and reasonable expenses for lodging, food, transportation and incidentals.

2. In lieu of reimbursement of actual transportation expenses, employees may elect to receive a non-accountable transportation allowance of SR 100 to cover round trip travel expenses.

3. Reimbursements for approved automobile rental costs to include liability and collision/loss damage insurance coverage for required business travel. For specific policy provision, refer to Section III.B.5. of this Chapter.


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4. When requested and authorized in advance to entertain Company guests, the employee may be reimbursed, based on the following:

a. An unaccountable allowance per guest (including employee) in accordance with those amounts specified in Appendix II.3 of this Chapter, or

b. Actual and reasonable expenses as supported by original receipts and other supporting documentation.

B. Business Assignments Outside Saudi Arabia (60 days or less)

1. Authorization/Documentation

a. Authorities listed in Management Guide must approve Company business travel. This is normally initiated through preparation of Form SA-225 - Travel Order. Assignments in conjunction with repatriation vacation must be approved by a Department Heads (or above) and authorized through appropriate remarks on Form SA-5974 - Travel Payment Authorization.

b. Depending on the length of the assignment, Business Assignments to certain locations must be documented by a Loan Agreement between the Company and an associated/subsidiary or joint venture company (Aramco Overseas Company B.V. or Saudi Petroleum, Ltd.) Employees are not eligible for Business Assignments to U.S. locations if Loan Agreements are required.

Section VI of this Chapter describes conditions requiring documentation and applicable procedures.

c. All Business Assignments outside of Saudi Arabia are subject to Saudi Aramco Income Tax Services Group's approval via Itinerary Form SA-7017 (for U.S.A. assignments), SA-7017-1 (for non-U.S.A. assignments), and SA-7017-2 (for U.K. assignments), and SA-7017-3 (for California assignments), which must be prepared and forwarded to the Income Tax Services Group (Compensation, Benefits & Employee Tax Accounting Department), along with Form SA-225 for approval.

2. Compensation/Benefits

A Saudi Aramco based employee on a Business Assignment remains on the Saudi Aramco payroll and continues to receive the applicable Saudi Aramco base salary, standard overbase and benefits. Documented emergency medical treatment is reimbursed while the employee is on Business Assignment.

3. Family Accompaniment

a. Spouse Accompaniment

The Company may approve spouse accompaniment on a Business Assignment at Company expense. Approval authority is the employee's Executive Management. Application is made


October 2, 2005

by submission of Form SA-7547, Request for Spouse Accompaniment. Forms are available from the Area Personnel Offices.

Guidelines for spouse accompaniment, applicable to all locations, are:

1. The spouse may accompany an employee on a Business Assignment once in a twelve-month period (12 months must have passed after the end of the last spouse accompanied trip) when:

• Employee has completed three (3) Business Assignments within the past twelve (12) months; and

• Employee's Business Assignments outside Saudi Arabia reach a cumulative total of thirty days, excluding this trip and travel days, within the past twelve (12) month period.

2. An employee's assignment must be at least fourteen days (excluding travel time) for spouse accompaniment. (See Appendix II.4 to determine eligibility.)

Exceptions to these guidelines require the approval of the employee's Business Line Head.

b. Children Accompaniment

The Company does not pay for children to accompany an employee on Business Assignment, except in conjunction with repatriation vacation. The Director, Personnel and a member of Corporate Management must give prior approval to any exceptions and such exceptions shall be noted on Form SA-225.

4. Expenses for Lodging, Meals and Miscellaneous

a. Employee's Expenses

The Company reimburses employees for necessary and reasonable expenses incurred. (See Section V)

b. Spouse's Expenses

If the spouse is authorized to accompany the employee, the Company reimburses expenses within established procedures, including authorized stopover expenses for the spouse who travels separately. (See Section V)

When the spouse accompanies the employee, but the employee is subsequently assigned to another location, the Company reimburses the spouse's actual expenses for lodging, meals and miscellaneous expenses. They must be separately identified on the expense report.


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c. Children's Expenses

In those extraordinary circumstances where the Company authorizes children to accompany the employee, only transportation and visa fee reimbursement are provided. No living expenses or baby-sitting costs are covered.

d. Company Subsidized Credit Cards

For employees who regularly take business trips, the Company may reimburse the basic annual membership fee (excluding spouse’s fees or any other charges above basic membership fee) for their personal credit card. No other maintenance charges will be covered. The Department Head must concur and attach the fee stub to the first expense report covering Company business travel after payment of the annual fee. Employees are eligible for reimbursement if:

1. Employee has made three or more business trips outside the area of permanent assignment within a twelve month period; or

2. Employee is normally assigned thirty days or more in a twelve month period outside the country of permanent assignment.

e. Travelers' Check Fees for Business Assignments

Traveler's check fees are reimbursed to employees through expense report procedures.

5. Automobile Expenses

a. The Company reimburses approved automobile rental costs to include liability and collision/loss damage insurance coverages for required business travel. Rental of autos while on Company business must be approved in advance by notation on the appropriate travel documents.

b. The Company also will reimburse employees for the following insurance programs when such insurance is not included as part of basic auto rental costs.

1. Loss Damage Waiver (LDW)

2. Liability Insurance Coverage (LIC)

3. Collision Damage Waiver (CDW)

4. Third Party Liability (non-U.S. locations only).

The employee needs to determine at the time of rental if the above insurance coverages are provided as a part of the rental contract rate. If not included, the employee should accept such coverages.


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Insurances, other than the above, are for the employee's account.

c. Rental cars are to be obtained from the Company's corporate rental car agencies with reservations made through the Global Travel Services of Materials Traffic Department.

6. Visa Requirements for OOK Assignment

Refer to Chapter 16, Local/International Transportation, Appendix I.

Employees are not eligible for Business Assignments to the U.S.A. if the assignment requires a Loan Agreement with ASC.

7. The number of travel days approved by the employee’s organization may be influenced by the destination and work requirements of an assignment. The urgency to conduct business, need for rest, traveling conditions, etc., influence the travel days required. The maximum number of travel days in each direction is either one (1) or two (2) days. Assignments to the Middle East, North Africa and Europe are one day in each direction, while assignments to North America and to the Far East (beyond Singapore) are up to two days in each direction.

IV. Temporary Assignments Outside Saudi Arabia

Employees on Temporary Assignments are generally under the administrative control and jurisdiction of AOC B.V. or SPL which are responsible for non-U.S. assignment locations. As applicable, upon arrival at the assignment location, employees should report to the responsible Industrial Relations Organization of AOC B.V. or SPL or Senior Management Representative at the assignment location.

A. Duration

Temporary Assignments outside Saudi Arabia are for 61 days up to the extent required to cover a full project or a Company-directed work assignment. The Letter of Understanding provided to the employee should state the Temporary Assignment duration. If the ending date cannot be specifically determined, then an estimated date should be used. Extensions to an assignment will be handled by separate memoranda either confirming or revising the initial provisions of the Letter of Understanding between the Company and the employee and will be approved by the same approval authority specified in Section IV.C of this Chapter.

Termination of a Temporary Assignment due to completion of the project or work assignment prior to the scheduled end date of the assignment should be approved by the employee’s Department Head. Termination of a Temporary Assignment for reasons other than completion of the project or work assignment requires the approval of the Business Line Head.


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B. Definition/Limitations

The expense of Temporary Assignments precludes their use for other than compelling business reasons. Under no circumstances shall the Temporary Assignment provisions be used for training, compassionate or employee convenience.

1. Position Assignments

Temporary Assignments will not be made to fill permanent positions on approved AOC B.V. or SPL organization charts. Exceptions when clearly identified and justified must receive advance approval (see Approval Authority below).

2. Location Eligibility

Employees are not eligible for Temporary Assignments to U.S. locations.

C. Approvals and Clearance Requirements

Area Personnel Administrators’ endorsement for policy compliance and approval of the appropriate Business Line Head must be secured in advance of placing any employee under Temporary Assignment provisions or extensions thereof.

The Director of Personnel is to advise the Business Line Head if an employee does not have approximately one year of Company service in order for the Business Line Head to reconfirm that there is a strong and compelling need for the employee's assignment.

D. Documentation

Before offering or discussing Temporary Assignment provisions with potential assignees, proponent Managers must secure advance approval for the proposed Temporary Assignment including a statement on the position to be filled, itinerary, compelling business reason(s) and employee tax and visa status. This substantiation should be attached to the completed Letter of Understanding which in turn must receive approval as per Section IV.C.

1. An approved e-8000 is required for all on Temporary Assignment employees with the following action taken:

a. New work and residence location proposed for the Temporary Assignment should be indicated.

b. Overbase components which pertain to payment of Saudi Aramco compensation including Industrial Security Bonus, Specified Location Allowance, Shift Premium, Travel Allowance and Transportation Allowance will be discontinued, upon commencing the Temporary Assignment.

c. Any work schedule with built in excess hours should be reduced to a standard 5-day, 40 hour per week basis.


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2. Employees on Temporary Assignment will not be separated from Saudi Aramco. The employee remains on the Saudi Aramco payroll.

3. A Loan Agreement, Letter of Understanding and Temporary Assignment Summary are necessary for all assignees. These documents are available from Area Personnel Offices or HR Infocenter Website on Saudi Aramco Intranet.

4. All other necessary documentation is the same as shown in Sections III.B.1 and VI of this Chapter.

E. Compensation

Transfers to Temporary Assignment status should occur on the first of the month if operationally feasible to do so or if a change in base salary is involved. Applicable overbase monthly payroll components (Commodities and Services, Housing, Tax, etc.) are paid/deducted on a pro-rata basis, if the employee is eligible for the particular component during a part of the month.

1. Base Salary

Regular Base Salary continues for the duration of the Temporary Assignment. Merit and promotional increases will continue according to Company policy at the assignment location.

2. Expatriate Premium

Since Expatriate Premium is normally included in SAO salaries in varying and unidentified amounts for Other Arabs, employees are not eligible for additional payment and the SAO salary continues for the duration of the assignment.

3. Overseas Cost Difference (OCD)

On Temporary Assignments the OCD is adjusted to reflect changes in the following three components:

a. Commodities & Services (C&S) Component

The C&S component is calculated by applying a C&S index appropriate for the assignment location to the Asian spendable income amount appropriate of the employee’s base salary. A married employee with family at the location of the assignment receives the C&S component for family status. A single employee receives the single C&S component appropriate for the location of the assignment. A married employee in bachelor status at the location of the assignment whose family remains in Saudi Arabia receives the family C&S component for Saudi Arabia. The C&S index, which may vary over time, will be determined by the Compensation Division of the Employee Relations Policy & Planning Department on a case by case basis.


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Employees on Temporary Assignment commence receiving the applicable C&S component in the month in which their transient status ends. In cases where the employee's family joins him/her at a later date, the C&S component will be changed accordingly.

The C&S component for Arabic-speaking countries (if applicable) will be reduced by the amount related to the cost of food and beverage after completing the first three years of the assignment.

b. Housing Component

The housing component consists of the employee’s assignment location Housing Allowance and a hypothetical rent, appropriate for the employee's salary code (see Appendix I).

1. The Housing Allowance

a. The Housing Allowance is an all inclusive allowance intended to cover average rental expenses for an apartment or house, furniture and standard appliances (stove, refrigerator, washer, dryer and television) and average expenses for basic utilities (except telephone) and taxes, if any. Separate reimbursements for furniture rentals are not made. The allowance, based on consultant, housing cost data is designed to reflect average housing expenditures experienced by expatriates at given salary levels in the city of assignment. Under this concept, it is understood that some employees may elect to spend out-of-pocket money, in addition to their housing spendable amount, to obtain the apartment or house they choose. Other employees may realize some savings by choosing less costly housing. The Housing Allowance, therefore, should be regarded as an amount provided by the Company to assist employees on Temporary Assignment in meeting their housing expenses.

b. Housing Allowances are reviewed periodically and may be adjusted (upward or downward) from time to time.

c. Housing Allowances and Housing Allowances Factors for all OOK locations are available from the Area Personnel Offices.

d. Housing Allowances are expressed in the currency of the host country and will converted monthly at the payroll exchange rate. The amount of Housing Allowance for single and bachelor employees is equal to 80% of the amount for married employees with


October 2, 2005

up to two children at the assignment location. Families with three or more children receive 115% of the basic family allowance.

e. In certain cases, and with Executive Management approval, an employee who converts from family status to bachelor status may be allowed to retain his family housing allowance for the period required to effect lease cancellation. Such period will in no case exceed 12 months from the date of the family’s departure.

f. All costs associated with household relocation at an assignment location which result from an employee’s conversion from family to bachelor or bachelor to family status are for the employee’s personal account.

2. Hypothetical Rent

a. The principle governing hypothetical rent dictates that the deduction will normally be applied if the employee has no ongoing housing costs in Saudi Arabia during the Temporary Assignment. If there are ongoing costs, it will normally not be subtracted. Hence a married employee living in Company housing who vacates this housing and takes his family on Temporary Assignment will normally have a hypothetical rent subtraction. If the employee leaves his family in Company housing there will be ongoing costs and will normally not be subjected to a hypothetical rent charge. Appendix I.1 outlines in more detail when hypothetical rent is deducted.

b. Asian housing spendable amounts are available from your Area Personnel Office.

Note: Employees continue to accrue housing points at the Saudi Aramco rate for the duration of the assignment.

Limitations

Home purchases are not approved in assignment locations where adverse tax consequences for the Company would result. Any commitment made to purchase a house in any area of Temporary Assignment must have the specific written approval of the appropriate local Industrial Relations Administrator. Failure to secure this approval will release the Company from any obligation to reimburse taxes in the country where the house purchase was made.

c. Tax Component

Foreign income taxes levied on Company source earnings are reimbursed by the Company.


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1. Employee Business Expense Deductions

Employee must retain receipts for all Temporary Assignment business expenses, including cancelled checks and other evidence showing temporary living expenses, i.e., receipts for car rental, furniture and housing rental, utilities, telephone, food costs, laundry, etc. Receipts for all expenses, however small, should be submitted to the Company-provided tax preparer to determine their deductibility under the tax law of the country or countries to which the employee is assigned. Should any business expenses be disallowed by a taxing authority due to employee’s lack of documentation, the Company will not reimburse the related additional taxes.

Employee business expenses used as deductions on employee tax returns will, in turn, be utilized by the Company in determining the level of tax reimbursement. Expenses used by the Company and disallowed by the tax law of the assignment location will result in the additional tax being reimbursed to the employee.

Whenever possible, for expenses should be paid by check. Copies of personal bank statements, canceled checks, etc., should be retained for 4 years after the completion of the assignment.

2. Other Tax Deductions

Reimbursement on Company source income may also take into account standard deductions, allowable foreign tax credits, moving expenses (if any) or other standardized items generally allowed as deductions by taxing authorities. Reimbursement may also take into account interest expense and property taxes to the extent of housing component included in the Standard Overbase where residence purchase with Company approval was made by employee.

3. Minimizing Tax Exposure

To minimize tax exposure on Temporary Assignments, appropriate visa and residency requirements must be met and employees must avoid activities which will violate the visa definition and place them in a taxable position.

Employees are not eligible for Temporary Assignments to US locations. Therefore, Company tax calculations will assume that employees have maintained their foreign residency status and are eligible to take advantage of all items of income excludable from taxability and the standard complement of deductions available to a foreign resident on assignment outside the country of the employee’s residence.


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All income taxes (including jurisdictional national, state and local taxes) on Saudi Aramco source income which may be levied by the assignment location host governments will be reimbursed by the Company under its tax reimbursement policies. Therefore, employees must avail themselves of Company-provided tax advisors to ensure that the most favorable tax treatment is obtained. In general, if the employee loses any favorable tax treatment through action by the Company, the employee may be entitled to reimbursement on Saudi Aramco source income as well as non-Saudi Aramco source income. If, however, the employee should lose favorable tax treatment through the employee’s actions such as unauthorized absences, termination by the Company for cause, resignation or such other actions as may be determined by the Company in its sole discretion, the employee could be liable for income taxes on all income regardless of its source. In that event, the employee might be entitled to receive only the hypothetical taxes, if any, on the employee’s base salary which taxes were taken into account in determining the employee’s monthly compensation.

F. Benefit Plan Participation

Except for medical and dental benefit plan coverage, employees on Temporary Assignment continue to participate in benefit plans the same as employees assigned permanently in Saudi Arabia. However, if an employee’s service terminates during a Temporary Assignment and the laws of the country of assignment require the Company (or its affiliate) to pay the employee any termination or retirement benefits, the applicable Saudi Arab Severance Award payment from the Company to the employee will be reduced by the value of all such benefits actually paid.

Medical coverage for employee and accompanying eligible dependents is similar to the one provided to employees assigned to SAO. Employees are responsible for the cost of any dental and optical treatment for themselves and their eligible accompanying dependents.

Except for emergency cases, the participant must obtain prior Company approval for any psychiatric treatment and/or hospitalization and provide a signed medical information release form.

G. Vacations and Holidays

In order to avoid duplicate transportation costs to the Company, repatriation vacation should normally be scheduled to commence/end in conjunction with the Temporary Assignment. (Refer to Chapter 6)


October 2, 2005

1. Vacations

Employee s continue to accrue vacation at the same rate as regular employees permanently assigned in Saudi Arabia. Repatriation travel payment from the assignment location to the employee’s point-of-origin will be provided for the duration of the assignment.

2. Holidays

Employees are subject to the holiday and work hours policy of the company of assignment and observe the same holidays and hours of work (including Ramadan) as regular employees, beginning with the onset of the Temporary Assignment.

H. Shipment of Effects

1. Airfreight

Employees are eligible for the following unaccompanied personal effects airfreight entitlement to and from the assignment location:

2. Surface Shipment

If the assignment is 12 months or longer, a surface shipment may be sent to and from the assignment location. any weight over the applicable maximums will incur an excess weight charge to be paid by the employee. Employees are responsible for payment of all customs duties on personal effects/household goods shipped to their home country. See Chapter 11, for further details.

a. Single and Bachelor Status Assignments

Employees are eligible for a surface shipment of personal effects not to exceed 575 kilograms (1,268 pounds) to and from the assignment location. Any weight over 575 kilograms will incur an excess weight charge to be paid by the employee. Employees are responsible for payment of all customs duties on their personal effects/household goods shipped to their home country.

b. Family Status Assignments

Employee and spouse are eligible for a surface shipment of personal effects not to exceed 925 kilograms (2,000 pounds) to and from the assignment location. Each approved accompanying child is authorized additional 75 kilograms (165 pounds) to and from the assignment location. Any weight over 925 kilograms and additional 75 kilograms for each approved child will incur an excess weight charge to be paid by the

Employee Only - Two Type "E" Containers

Employee and Family - Three Type "E" Containers


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employee. Employees are responsible for payment of all customs duties on their personal effects/household goods shipped to their home country.

3. Cash-in-Lieu Option for Returning Shipment to Saudi Arabia

Employees completing their Chapter 8 assignment have the option to either have the Company ship their personal effects to Saudi Arabia in accordance with applicable policies or they have the option to elect a cash amount in lieu of the Company making this shipment. For employees electing cash-in-lieu payment, it must be taken for both the airfreight and, if applicable, surface shipment. Requests for a cash-in-lieu payment should be processed through the Personnel Department within 120 days of completing the Chapter 8 assignment. Cash-in-lieu payment rates are subject to periodic review and adjustment to reflect Company shipping costs. Current rates are as follows:

I. Family Accompaniment

1. Family Resides With Employee at OOK Assignment Location (Employee Family Status)

An employee on a Temporary Assignment may be accompanied or joined, at Company expense, on a one time basis by eligible family members who are resident in Saudi Arabia provided their stay at the assignment location complies with the following criteria:

a. The employee's family must reside at the assignment location for a minimum of one-half of the assignment duration excluding the employee’s approved period of vacation and emergency leaves. The employee’s business travel outside the country of assignment is also excluded.

b. Conversion from bachelor to family status is not authorized if the expected remaining duration of the family’s stay at the employee’s assignment location is less than one-half of the assignment duration.

Cash-in-lieu Payment Rate

Chpt. 8 Location Status Air Freight Surface

Far East Single/Bachelor SR13,300 SR7,100

Family SR19,900 SR13,100

Middle East Single/Bachelor SR2,200 SR2,900


North America/Europe & Rest of the world

Single/Bachelor SR5,600 SR4,900



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c. Once a family status employee converts to bachelor status, authorization to have a family rejoin the employee at Company expense will not be authorized.

d. Employees are to provide written notification to the assignment location Senior Management Representative of any change in the employee’s family status at the assignment location. This written notification must include the family member’s arrival or departure date and be received by the Senior Management Representative within two weeks of the family member’s arrival or departure.

Should the employee fail to comply with any of the above provisions (a. through d.), the employee will be required to repay the Company, the full amount of any overpayments which the Company determined have been made to the employee for allowances and entitlements, such as, Settling-In and Housing Allowances, personal effects shipments, dependent’s education assistance, commodities and services payments, transportation expenses and any other expenses related to the assignment.

Exceptions to the above provisions (a. through d.) require the written approval of the employee’s Executive Management and the concurrence of the Personnel Director.

2. Bachelor Status With Family to Join and Reside With Employee at OOK Assignment Location Within 120 Days

An employee may elect to begin the Temporary Assignment bachelor status with eligible family members joining the employee at the host location provided that:

a. The employee’s family joins the employee at the assignment location within 120 days or less from the beginning of the Temporary Assignment.

b. The employee provides acceptable documentation supporting the family’s permanent residence at the assignment location.

Entitlements

When employees satisfy above criteria (a and b) the following entitlements are provided:

c. Family Status personal effects air and surface shipment allowances.

1. Any portion of the air freight (E boxes) maybe used by the employee upon his departure to the assignment location. The remaining balance may be used by the family if they begin residence at the assignment location within the 120 day period.


October 2, 2005

2. The surface shipment entitlement may be utilized by the employee upon his departure. Or, the entitlement may be deferred for the family’s use provided they begin residence at the assignment location within the 120 day period.

Splitting the surface shipment entitlement between the employee’s departure and the family’s departure is not permitted.

d. Vacation credits are earned as referenced in IV.G of this chapter.

e. Until the family resides with the employee at the assignment location, the employee will receive bachelor status:

1. Settling In Allowance

2. Housing Allowance

3. Commodities and Services component of the OCD.

f. Once the employee provides the Personnel Department substantiating documentation that the eligible family members have joined the employee at the assignment location within 120 days or less from the beginning of the Temporary Assignment, the employee may be eligible to receive:

1. The family status Settling In Allowance retroactive to the start date of the Temporary Assignment less any bachelor status Settling In Allowance amounts previously paid.

2. The family status Housing Allowance retroactive to the month the employee moved out of transient lodging and into permanent type housing, less any bachelor Housing Allowance amounts previously paid.

g. When employees do not satisfy the criteria specified above (I.2):

1. The employee’s eligibility for retroactive balance of payments for the family status Settling-In and Housing Allowances are lost.

2. Employees will be required to repay the Company for the personal effects surface shipment amounts greater than the bachelor status personal effects weight limitation.

3. Settling-in allowance and shipment of personal effects from Saudi Arabia will be provided only once during the Temporary Assignment period or extensions thereof (refer to Section IV.H&L).

4. The Company provides family accompaniment travel to and from the assignment location on a one time basis. If an employee’s family abandons (permanently departs the assignment location) family


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status at the assignment location, the Company will provide final return air transportation to Saudi Arabia or employee’s point of origin.

5. Spouse accompaniment on Business Assignments during a Temporary Assignment to an affiliated, subsidiary or joint venture company is covered by that company’s policies. Saudi Aramco’s policies are not applicable.

6. Family remains in Saudi Arabia or Permanently Departs the Assignment Location for Saudi Arabia (Employee Bachelor Status)

A married employee whose family is resident in Saudi Arabia may elect a Temporary Assignment bachelor status or convert from family status to bachelor status during the Temporary Assignment.

Entitlements

a. Family Visitation

Vacation Eligibility and Scheduling for Bachelor Status Temporary Assignment

Bachelor status employees are eligible for two "family visitation leaves" and one repatriation vacation during each twelve months of the Temporary Assignment. The repatriation vacation policy is referenced in Section IV.G of this Chapter.

In either the initial year of the Temporary Assignment or upon conversion to bachelor status, employees are eligible for one interim family visitation leave for every completed 4-month period of bachelor status service as per the following table:

Notes:

1. Subject to operational requirements, initial interim family visitation leaves (as applicable) can be scheduled between 3 - 5 months service and 7 - 9 months service.

2. Employees who have not taken their repatriation vacation travel upon conversion to bachelor status are entitled to one of their trip(s) paid on economy class basis.

Effective Date of Temporary Assignment or Conversion to Bachelor Status

Earned Trip Entitlement Prior to January 1 of the Following Year

January 1 thru April 30 2 Seasonal Economy Excursion trips (1)(2)

May 1 thru August 31 1 Seasonal Economy Excursion trip (1)(2)

September 1 thru December 31 0 Trips


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In the second and subsequent 12 month segments of bachelor status Temporary Assignment, employees are authorized to take three family visitation trips (including repatriation vacation), normally at about 4-month intervals. However, to provide maximum operating flexibility to Management, trips may be scheduled at reasonable intervals any time during the calendar year.

3. Approval of Executive Management is required to deviate from the above scheduling provisions. Deviations in two or more consecutive years require approval of the Business Line Head.

b. Annual Vacation Credits

Bachelor status Temporary Assignment employees are eligible for a total of 48 calendar days vacation per year. They are earned as follows:

Regular Vacation Credits

Four days per month of Temporary Assignment. Prorated credits are earned for partial months at the start of the bachelor status Temporary Assignment, conversion to bachelor status Temporary Assignment, or conclusion/termination of the Temporary Assignment in accordance with the following vacation accrual schedule. Vacation credits are not earned during any period of leave without pay ("X" time) exceeding 30 days. When the period of leave without pay ("X" time) exceeds 30 days, the vacation credits earning rate will be computed in accordance with the following vacation accrual schedule:

Employees who are retiring do not earn vacation credits for "X" time taken immediately prior to their effective retirement date.

Special Vacation Credits are not provided to employees on Temporary Assignment.

Bachelor Status Employees

Credits Earned

Days of Month Employment/conversion to Bachelor Status (or Leave) Starts or Ends

Initial Month of Temporary Assignment Conversions to Bachelor Status (or Leave Ends)

Final Month of Temporary Assignment (or Leave Starts)

1st - 7th 8th - 15th 16th - 23rd 24th - Last

4 3 2 1

1 2 3 4


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c. Use of Vacation Credits

1. For each 12 months of Bachelor Status Temporary Assignment, only credits actually earned at the time of departure can be used for interim family visitation leaves and annual vacation.

Whenever possible, the family visitation leaves should be combined with business travel requirements.

Credits cannot be advanced from a future 12 month periods for use in the current 12 month period. Exceptions are not permitted.

When an employee terminates, he must repay any credits which have been taken but not earned by service at the time of termination.

2. Minimum Leave for Family Visitation Leaves

In order to receive a travel payment, the employee must take at least 12 vacation days plus 2 travel days and must remain outside the country of assignment at least 14 days. See Paragraphs h., and i. below of this Section for further details on travel payment eligibility.

3. Minimum Leave for Annual Vacation

In order to receive a travel payment, the employee must take at least 14 vacation days. Refer to Chapter 6, Section IV. and paragraph f., h., and i. below of this Section for further details on travel payment eligibility.

d. Travel Time

Based on the employee’s country of assignment, either two (2) or four (4) days round trip travel time is added to the annual repatriation vacation. Travel time for the two interim leaves is two days round trip. In both cases, travel time is not charged to vacation credits.

e. Travel Costs

The Company provides seasonal economy excursion class travel for the employee’s two family visitation trips, plus 10% incidental allowance or cash-in-lieu as an employee elected alternative. For repatriation vacation entitlement, please refer to Chapter 6 and Section IV.G of this Chapter.

To receive a travel payment, the family visitation trip must equal or exceed 12 vacation days (that is, the employee uses "L" days, exclusive of travel time, scheduled days off, holidays, "X" time, etc.), and the employee remains out of the assignment country for at least 14 calendar days.


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f. In Lieu Visit by Wife and Children

Once during each 12 months of the bachelor status Temporary Assignment, the employee may elect to have his spouse and authorized children visit him at the OOK assignment location in lieu of one of his interim family visitation trips to Saudi Arabia. In this case, the employee forfeits the two days travel time associated with the interim family visitation trip to Saudi Arabia.

The Company will provide seasonal economy excursion air travel tickets to the employee’s visiting spouse and authorized visiting children (up to approved in-policy limits) from Saudi Arabia to the assignment location. Cash in lieu for travel is not available. The employee will also be paid a Family Assistance Allowance of $3,000 for the visiting spouse and $1,500 for each authorized visiting child. A Company paid visit by the spouse and children may not commence during the three month period prior to the employee’s schedule end of Temporary Assignment.

g. Employees Completing Temporary Assignments

With Department approval, employees may carry back unused vacation credits and take vacation/leave following return to Saudi Arabia.

h. Change in Marital Status

In the event of change in marital status resulting from legal separation, divorce or death of employee’s spouse, the employee becomes ineligible for the above bachelor status vacation provisions and is instead covered under the regular Annual Vacation Plan described in Section IV.G.

The employee must inform the Company of any such change in marital status on a timely basis. Failure to do so is cause for disciplinary action and repaying the Company the full amount of amount any overpayments which the Company determines has been made to the employee.

i. Vacation Entitlement When Converting to Single or Family Status

In the year of conversion from bachelor to single or family status, the employee should request that one of his family visitation trips on bachelor status be paid economy class basis and considered his annual vacation. After the conversion date, vacation travel is not paid in the year of conversion unless the employee has not received any paid travel while on bachelor status.

j. Converting from Bachelor to Family status

Bachelor status employees are permitted to convert to family status. However, bachelor status employees that elect a Company paid in lieu visit to the assignment location by


October 2, 2005

approved spouse and children (reference f. above) may only convert to family status four months after the dependents’ departure from the assignment location. Employees are responsible for providing acceptable original documentation reporting the dependents’ actual departure date.

Converting from bachelor to family status must also comply with the policy provisions set forth in Section IV.I.1. of this Chapter.

J. Air Transportation Procedures

1. Air travel standards and related policies applicable to overseas assignments are covered in Chapter 16.

2. Administration of air travel transportation for employees on Temporary Assignments is as follows:

a. Annual vacation travel is via economy class air travel and is charged to the Personnel Department. For locations not within the U.S./Canada, Europe and Far East, requests for cash in lieu of Company-purchased tickets are submitted to the Area Personnel Office for verification of air fare amounts and eligibility.

b. Family visitation/spouse in lieu and R&R (when applicable) travel and related payments are charged to the employee's sponsoring department expense account. All such travel should be accomplished via Company-purchased tickets on commercial account airlines via most direct routings. ASC administers this program for employees assigned to North America and AOC administers this program for employees assigned to Europe and Far East locations. For locations other than ASC or AOC locations, the employee's sponsoring department is responsible for administration of family visitation, spouse in lieu and R&R travel, to include reimbursement of tickets via expense reports when Company-purchased tickets cannot be arranged. All reimbursements will be limited to seasonal economy excursion travel via the most direct route on commercial account airlines.

For information concerning OOK locations that may qualify for R&R travel and the associated administrative procedures, contact the Area Personnel Office.

c. Emergency leave travel is charged to the employee's sponsoring department expense account. All such travel should be accomplished via Company-purchased tickets on commercial account airlines via the most direct routing. For locations other than ASC locations, the employee's sponsoring department is responsible for coordinating emergency leave travel and obtaining Company-purchased tickets. In usual circumstances, when travel is reimbursed to an employee, such reimbursement is for least cost economy excursion travel via commercial account airlines.


October 2, 2005

d. Initial/final travel for Temporary Assignments is via Company-purchased tickets charged to the employee's sponsoring department account. Such travel is via commercial account airlines. (Refer to Chapter 16).

e. Business travel is charged to the employee's sponsoring department account and is provided via Company-purchased tickets.

All Company-purchased ticket requests for authorized Temporary Assignment travel should be submitted to the Global Travel Services of Materials Traffic Department - Dhahran who will arrange delivery of such tickets to the concerned traveler.

K. Transient Living Expenses

Temporary Assignments generally involve a transient period in a hotel or similar accommodation pending arrangement of permanent type quarters. During this period, the employee and any authorized accompanying family member are reimbursed for reasonable and actual expenses for room, meals, local transportation and miscellaneous expenses. (See Section VI of this Chapter.)

1. Initial Transient Period

The initial transient period is normally 14 days or less. However, in unusual circumstances and with proper justification, the assignment location Senior Management Representative may extend the transient period to a maximum total of 45 days.

2. End of Assignment Transient Period

A final transient period of up to 14 days may be granted at the conclusion of the Temporary Assignment, if required, when permanent-type housing must be released preceding departure from the assignment location. In unusual circumstances and with proper justification, the assignment location Senior Management Representative may extend the final transient period up to a maximum total of 30 days.


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L. Settling-In Allowance

1. Unaccountable Settling-In Allowance

a. Entitlement

Employees on Temporary Assignment outside Saudi Arabia will receive an unaccountable Settling-in Allowance in local currency equivalent to:

b. Coverage

The unaccountable Settling-in Allowance is intended to assist in meeting any expenses related to the employee establishing residence at the assignment location, e.g., driving license, additional clothing, housing alteration, outfitting and redecoration, plus miscellaneous expenses for non-refundable fees, such as utility hookup, telephone equipment, etc., and linens, cooking and eating utensils, appliances, etc.

c. Payment

The unaccountable Settling-in Allowance is approved and processed on Form SA-8344, Miscellaneous Payment Disbursement, by the appropriate Area Personnel Office prior to employee’s departure. This allowance is paid once, any subsequent changes in the employee’s OOK assignment status (family, bachelor or single) will have no effect (up or down) on this allowance. The allowance is charged to the employee’s Department by Personnel Department.

Payment of an unaccountable Settling-in Allowance for subsequent relocations during the Temporary Assignment is paid each time a Company-directed work location change occurs.

2. Accountable Settling-In Reimbursements

a. Entitlement

The Company reimburses additional costs at non-U.S. locations when necessary. With the assignment location Senior Management Representative’s prior approval, the following expenses may be reimbursed.

1. Costs of approved third-party housing search service when directed by the Company.

2. Reasonable legal fees and rental commission necessary to arrange rental quarters.

Location Single/Bachelor Family

All locations other than USA & Canada

One month’s assignment location Housing Allowance amount plus $5,000


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3. When security deposits and "last month’s rent" are paid at the beginning of the lease, the required money is advanced to the employee by the Company and repaid to the Company by the employee at the end of the lease or within 30 days after assignment is completed, whichever is applicable.

4. Unavoidable lease cancellation costs are reimbursed by the Company when satisfactory evidence of such payment is presented.

b. Payment

The employee must obtain the assignment location Senior Management Representative’s approval prior to undertaking the above expenses. The Senior Management Representative is responsible for processing expense reimbursement through expense report procedures. The approved expenses are charged to the proponent Department’s account.

c. Limitations

These accountable settling-in reimbursements apply only to rental quarters for Temporary Assignment and in no event are paid to assignees who elect to purchase housing at locations where this is authorized.

3. Unaccountable Resettlement Allowance

Upon return to Saudi Arabia the employee may request from the appropriate Area Personnel Office and receive an unaccountable settling-in payment of either SR4,000 (Family Status at Temporary Assignment location) or SR2,000 (Bachelor/Single Status at Temporary Assignment location). The allowance is charged to the Receiving Department by Personnel Department.

4. Transient Period Expense Reimbursement For Returning Family Status Employees

Family status employees who are living in the local communities and their assignment is more than one year in duration are provided either the SR4,000 Settling-in Allowance or up to 14 days of transient period expense reimbursement. Reasonable and actual expenses incurred during the transient period should be claimed through submission of an Expense Report (form SA-165) and charged to the employee’s new organization account. Expenses must be itemized and per diem should not be provided during the transient period since there is no way of knowing who requires transient accommodation and incurs related expenses. An exception to this policy applies to bachelor status employees whose work locations are beyond a daily commuting distance from their off camp family residence locations - they will be provided with the option of either Company bachelor transient housing (if available) or the 14 days transient period.


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M. Local Transportation

1. During the first ninety (90) days at the assignment location, the employee is eligible for reimbursement, through expense report procedures, for actual and reasonable transportation expenses incurred. Within this period, the employee has a one-time option of selecting one of the following transportation arrangements:

a. Being reimbursed for one rental car, to include liability and collision/loss damage insurance coverages, obtained through corporate rental arrangements between the Company and designated auto rental agencies for the assignment's duration. Such reimbursement shall not exceed the maximum rental costs for automobiles of mid-size categories available at that location under the corporate rates for rentals available to Company employees. Employees electing to utilize auto rentals are responsible for paying all operating expenses of the auto, such as gasoline, toll fees, parking charges, excess mileage, and similar items which are not covered in the basic rental fee.

The Company also will reimburse employees for the following insurance programs when such insurance is not included as a part of the basic rental costs.

1. Loss Damage Waiver (LDW)

2. Liability Insurance Coverage (LIC)

3. Collision Damage Waiver (CDW)

4. Third Party Liability (non-U.S. locations only).

The employee needs to determine at the time of rental if the above insurance coverages are provided as a part of the rental rate. If not included, the employee should accept such coverages.

Insurances, other than the above, are for the employee’s account.

Rental cars are to be obtained from the Company's corporate rental car agencies with reservations made through the Global Services Unit of Materials Traffic Department.

b. Receiving an all inclusive transportation allowance for the duration of the assignment as follows:

Employees who elect to receive the transportation allowance in lieu of corporate rate auto rentals are fully responsible for paying all operating and other expenses, including periodic

Assignment Location Daily Amount

North America & Middle East $25

Europe & Far East $35


October 2, 2005

inspection fees, for any auto purchased or leased by them. As a minimum, employees must purchase and maintain in full force, at all times during the period of vehicle ownership or lease, liability insurance with sufficient limits (at least $300,000 for ASC locations) to meet the financial responsibility laws of any legal jurisdiction in which the vehicle may be operated. Employees assigned to ASC must annually provide ASC with proof that they have purchased the required insurance coverage in order to remain eligible for the allowance. Moreover, all employees will be responsible for paying all taxes associated with their ownership or lease of any such vehicle and shall ensure that the same is periodically inspected and licensed in accordance with the requirements of local laws. Employees who elect the Transportation Allowance agree that they will provide to the Company documentation sufficient to allow full tax deductibility of the Transportation Allowance amounts provided.

Once either of the above options is selected, the employee will continue with that option for the duration of the assignment.

Under either of the above options, should the employee be directed to use his vehicle for business travel or trips, other than local trips at his assignment location, he is eligible for reimbursement of actual business travel expenses incurred related to mileage, toll fees, parking charges, etc., through expense report procedures. In respect to gasoline expenses, the employee may use the current U.S. Government Internal Revenue Service fixed rate per mile/kilometer reimbursement amount; alternatively, the employee may claim the actual amount for gasoline expenditure for the trip as supported by original receipts.

2. Local Transportation Assistance During Vacations

The employee continues to be eligible for the transportation allowance or reimbursement for auto rental expenses. The vacation auto rental expense reimbursement is limited to the actual cost but cannot exceed the amount that would have been paid in the city of assignment.

For example, if an employee’s cost for auto rental in the city of assignment is $30.00 per day and the vacation auto rental cost is $40.00 per day, the maximum reimbursement is $30.00 per day. If the vacation auto rental were $20.00 per day, the reimbursement would be the actual cost of $20.00 per day.

3. Employees or dependents who operate an automobile at the assignment location must comply with all laws and regulations applicable to licensed operators of vehicles, to include obtaining required examinations or licenses. Any fines incurred for violation of traffic or other laws are for the employee's account.


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4. The employee's eligibility for the Transportation Allowance is fully reinstated only when the employee is reassigned internationally during his Temporary Assignment status outside of Saudi Arabia.

5. In selected locations (e.g., Tokyo) where the rental of a car may not be suitable, an allowance or subway pass may be paid in lieu of the car rental option.

N. Education for Children

1. General

Dependents eligible for Educational Assistance Plan (EAP) participation may commence or continue plan participation on the same basis as if the employee was resident in Saudi Arabia (reference Chapter 15).

2. Tuition

a. Non-Home Country Locations

Eligible dependent children residing with the employee at the assignment location receive private day school tuition assistance for kindergarten through the 9th Grade (or its equivalent as defined by the Company’s EAP office). Beyond Grade 9, Standard EAP provisions apply.

b. Home Country Locations

Eligible dependent children residing with the employee at the assignment location will receive tuition assistance by required by public schools.

3. Travel

Authorized EAP student travel frequency, including post-High School as authorized under the Educational Assistance Plan, is at the same level as if the employee continued to reside in Saudi Arabia. Company-paid transportation entitlements under EAP are based on round trips from Temporary Assignment location to school for duration of the assignment.

4. Exceptions

Exceptions to the above require the approval of Director, Personnel.

O. Local Language Instruction for Employee

Limited local language instruction for employees and approved accompanying spouses assigned to non-Arabic and English language countries is available at the discretion and approval of the assignment location Senior Management Representative.

The employee must request approval for the language training prior to incurring the expense. Reimbursement is made through expense report procedures and charged to the sponsoring department’s account.


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P. Business Recreation, Social & Health Club Membership

Employees assigned to affiliated or subsidiary companies outside North America are eligible for individual or corporate membership in assignment location associations, organizations or clubs as appropriate for the employee’s business need. Reimbursable expenses are initiation fees, membership fees, deposits and taxes. The employee is responsible for any monthly dues, assessments, use fees, taxes or other expense associated with the membership. The employee must also agree to return to the Company any deposits, initiation fees or other refunded expenses at the conclusion of the membership.

The Saudi Aramco Vice President responsible for the assignment location must provide prior approval to the employee before incurring the specified expenses. The same signature authority is required to approve reimbursement of the specified annual expenses. Reimbursement is provided through expense report procedures and charged to the proponent’s account.

Q. Housing and Personal Effects Storage in Saudi Arabia

1. Employees Living in Company Housing

Housing policy for employees living in main family camp permanent or temporary housing immediately prior to their Temporary Assignment is governed by Chapter 12.

If the employee's Temporary Assignment is six months or more and he has a permanently assigned Company housing unit prior to the Temporary Assignment, one of the following options is selected:

a. Housing Utilization: Subject to the approval of the Admin Area Head-CB&OS, the employee's house is turned over to Community Services for use while on the Temporary Assignment. The same house will be reassigned to the employee at the end of the Temporary Assignment; or,

b. Relinquishing House/Priority Housing Assignment: The employee's house is relinquished to Community Services. The employee is given a housing assignment on a priority basis at the end of his Temporary Assignment; or,

c. Retaining the House: The employee accepts the Temporary Assignment on bachelor status. His spouse and authorized family members must remain resident in the Company assigned housing unit during the Temporary Assignment.

For assignments of six or more months, rent will be discontinued if the employee temporarily or permanently relinquishes his housing.

When required, the Company's Personal Effects Unit will store the employee's personal effects during the Temporary Assignment plus 30 days storage grace period starting from the assignment end date, and any vacation days remaining over the 30 days grace period.


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2. Employees Not Living in Company Housing

a. Personal Effects Storage Assistance Eligibility

Employees departing for a Temporary Assignment of 12 months or longer who do not reside in Company housing and have not resided in Company housing within 3 months prior to the commencement of the assignment, and do not have effects stored by Saudi Aramco, are eligible for Personal Effects Storage Assistance.

b. Personal Effects Storage Assistance Allowance Payment

Employees are eligible for the following assistance:

1. The Company will reimburse all reasonable and actual expenses of up to SR 7,000 for married status and up to SR 3,500 for single/bachelor status employees for packing, delivering, return, and unpacking of an employee's personal effects. The maximum payment amounts are inclusive of required and/or optional insurance.

2. The Company will reimburse an additional amount of up to SR 1,000 per month for married status and up to SR 500 per month for single/bachelor status employees for storage of an employee's personal effects. The maximum payment amounts are inclusive of required and/or optional insurance.

3. Reimbursement for packing and/or delivery, including insurance, will normally be paid prior to the commencement of the assignment. Reimbursement for storage, including insurance, will normally be paid on a semiannual basis.

4. Documentation satisfactory to the Company of expenses from a Saudi Aramco approved packing/storage facility is necessary to effect reimbursement.

Eligibility for personal effects storage assistance is extended for a 30-day grace period starting from the assignment end date plus any vacation days remaining over the 30 days period.

c. Lease Cancellation

The Company reimburses reasonable and actual unavoidable lease cancellation costs in Saudi Arabia before Chapter 8 assignment commencement when satisfactory evidence of such payment is presented.


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R. Continuation in the Assignment

In order to continue in the Temporary Assignment, the Company expects the conduct of the participant and accompanying dependents to be of a high standard at all times. They are expected to exhibit behavior, character and attitude that are acceptable to the Company, the host and Saudi Arabian Governments, and the assigned organization.

V. Business/Transient Expenses

These policies cover authorized business and transient living expense reimbursements. They apply worldwide to the Business Assignment relocations described in the foregoing Sections of this Chapter. They do not apply to Education or Development Assignments.

A. Documentation/Forms

1. Form SA-165, Expense Report

Employees must complete an expense report according to instructions on the form's reverse side and provisions set forth in this Chapter. Approved expense reports must be submitted to the Voucher Processing & Receivable Unit, Compensation, Benefits & Employee Tax Accounting Department, within thirty days of completing assignments.

2. Form SA-60, Payment Authorization

This form covers local expense reimbursements for meal allowances and local taxi fares, supported by necessary documents and approved by employee's Department Head.

3. Cash Advance

To obtain a cash advance, a Payment Authorization (Form SA-60), approved by the Department Head, is submitted to the Industrial Services Vouchers & Misc. Payment Unit, Materials Services & Payable Accounting Department, at least seven working days prior to the required date.

Cash advances are usually obtained for assignment transient living expenses and housing security deposits/rent prepayments (last month’s rent). A separate Payment Authorization (Form SA-60) is required for each type of cash advance, e.g., transient living expenses and housing security deposits/last month’s rent payments.

Cash advances must be accounted for on a timely basis by submitting an approved Expense Report (Form SA-165) in accordance with the following schedule.

a. Employees on assignments of 60 days or less must account for the cash advance(s) within 30 days of completing the assignment.


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b. Assignments of 61 days or more:

1. Transient Living Expenses cash advance(s) must be accounted for monthly, after each full month from the assignment commencement.

2. Security Deposit & Last Month’s Rent cash advances must be accounted for at the end of the lease or within 30 days after the assignment is completed, whichever is applicable.

3. If applicable, cash advances for tuition cost of private day school in the first year of the assignment must be accounted for within 90 days from the assignment commencement.

Cash advances not settled in accordance with the above schedule will be subject to full recovery through payroll deduction and repayment on installment basis is not permitted. In such cases, the cash advance approving authority and the employee (through his management) are sent a notice of planned payroll recovery and asked to advise if there are any valid reasons why such recovery should not occur.

The revolving cash advance account for the Aviation Department will be administered according to Aviation Department internal procedures.

B. Expense Approvals/Authorization

Approval authorities are set forth in the Automated Approval Authority System. The Controller reviews Expense Reports for Corporate Management for compliance to policy and other limitations. Authority limited to expenses identified as an element of the approved Net Direct Expenditure Budget.

1. Acceptable Expenses

Approving authorities must determine that expenses claimed are necessary and reasonable. Proof of expenditures is required when practical to obtain. Any individual expenditures over $25.00 claimed must be accompanied by an original receipt. If original receipts are missing or no receipts are available, approving authorities may approve Expense Reports provided the amounts are not substantial, reasons are stated on the Expense Report, and these instances are not repetitive.

The normal standards for Business Expenses are:

• Business Class for international air transportation;• First class hotels for lodging; and• First class restaurants for meals.


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Expenses for using a higher standard are to be approved only when justified by the circumstances.

a. Lodging

Employees are expected to seek lodging in first class hotels. Luxury class hotels are not acceptable and are to be avoided.

When the employee travels at Company expense, reimbursement is for a single occupancy room, if available. When spouse accompaniment is authorized, a double occupancy room is authorized. When authorized children of the employee accompany the employee (transient living on Temporary Assignments only), and is authorized to claim reimbursement for their expenses, reimbursement is authorized for the most economical accommodations available, in a hotel of the guideline standard, consistent with the age and sex of the accompanying children. The Company does not pay duplicate hotel expenses covering the same date(s), but at different locations, unless family members authorized to accompany are left at one location while the employee travels to another for Company directed business. Lodging furnished by the Company (so identified) is to be shown on the Expense Report, even though not paid for by the employee.

b. Meals

Meal expenses are variable depending on the availability of convenient dining facilities, the duration of the stay in a given location, the duration of the total period of absence from Saudi Arabia, and the personal eating habits of the employee. These factors are considered when approval authorities review the reasonableness of meal expenses.

c. Entertainment and Business Meals

Employees are reimbursed for reasonable expenses incurred in entertaining individuals who can influence Company business. The nature and extent of such entertainment or business meals should normally be authorized in advance by the approving authority. When circumstances warrant, the Company reimburses entertainment or meals costs for employees and their non-Company guests. Such expenses are to be reported as follows:

1. Give reason and identify as "entertainment" and/or as a "business meal".

2. Give name and type of establishment, names, titles, or other business designation of participants and general nature of business discussion. A large group may be identified by general categories; for example, 8 Company Directors, Minister of Petroleum and 4 Government officials, etc.


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3. When the occasion precedes or follows a business discussion, the date, duration, place, and nature of the discussion must also be noted.

d. Miscellaneous Expenses

Employees may be reimbursed for reasonable and necessary costs such as:

• Transportation to/from arrival/departure terminals• Local transportation• Local and long distance business telephone calls• Business telegrams, facsimile, cables and internet• Business travel• Tips• Laundry, cleaning and pressing

e. Other Expenses

1. Required material purchases made for the Company may be included on the expense report, provided the purchase does not exceed $200.00 for any single requirement and is supported by original receipt.

2. Excess Baggage. The Company may reimburse costs of a reasonable quantity of excess baggage (normally limited to 10 Kg.) against original receipts. (Not applicable for Temporary Assignments outside Saudi Arabia.)

3. Credit Card membership fee. (See Section III.B.4.d. of this Chapter.)

4. Employees incurring U.K. Community Charges "Poll" Tax as a result of a Company-directed assignment in the United Kingdom may be reimbursed for such taxes via expense report, provided original tax receipts are attached.

5. During the initial transient period of Temporary Assignments outside Saudi Arabia (reference Section IV of this Chapter), baby-sitting expenses may be reimbursed provided the:

a. Expense is incurred in the initial transient period.

b. Temporary Assignment outside Saudi Arabia is family status.

c. Expense is incurred to provide care for pre-school age children when spouse is required to be away.

d. Expense is substantiated by receipt or verifiable by invoice evidence showing date and time.


October 2, 2005

2. Per Diem

All employees are generally reimbursed on an actual expense basis. However, if employees are claiming only their own expenses, they may opt to request the designated per diem for each full (24 hour) day of a Business Assignment, except for Business Assignment in Bahrain in which case approval to pay per diem is at the discretion of employee’s department. A full day is defined as the cumulative 24-hour period from the time employee arrives at the out-of-Kingdom assignment location until he/she departs that assignment location. Any expenses incurred outside this period or incurred during travel between international locations should be submitted for reimbursement on a reasonable and actual basis. Note: Flight travel/airport transit time does not count towards determining the 24-hour per diem period.

Current transient status per diem amounts for business travel purposes are shown in Appendix II.2 of this Chapter.

When Saudi Aramco employees on Temporary Assignments return to Saudi Arabia on interim business trips, the per diem amounts shown in Appendix II.2 apply.

a. Per Diem Limitations

Employees may claim per diem only for the inclusive full (24 hour) days. Actual expenses are to be itemized and reported for:

1. Partial days (i.e. less than 24-hour periods at the end of assignment). For Temporary Assignment within Saudi Arabia, employee may claim Meal Allowance instead of reimbursement of actual expenses.

2. When claiming for authorized dependents, both dependents' and employee's expenses must be itemized.

3. When the employee chooses not to itemize his own and his dependents' transient expenses, the single status per diem amount is deemed to cover the whole family (including himself) and is the maximum amount which can be claimed.

b. Expenses Covered by Per Diem

Per diem is designed to cover the following expenses in full; thus, it is the maximum amount allowed for these items. They need not be itemized or supported by receipts:

• Lodging• Meals• Local transportation• Local telephone calls• Tips


October 2, 2005

• Laundry, cleaning and pressing

c. Meals & Incidental Per Diem

Employees on Out-of-Kingdom (OOK) business assignment who claim actual expenses for hotel are eligible to claim the OOK Meals & Incidental per diem portion

d. Additional Expenses

Employees must itemize the following business expenses to be reimbursed in addition to per diem:

• Check-in/check-out costs• Long distance business telephone calls• Business telegrams, facsimile, cables and internet• Transportation to/from arrival/departure terminal• Business travel• Entertainment and business meals• For U.K. assignments, any expenditures for Community

Charges "Poll" Tax.

VI. Loan Agreement, Letter of Understanding, Temporary Assignment Summary - Saudi Aramco Employees

These policies and procedures are appropriate for the loan of Saudi Aramco employees to subsidiary and/or joint venture Companies while on business (60 or less days) or temporary (61 or more days) assignment outside Saudi Arabia.

Current Loan Agreements, Letters of Understanding, and Temporary Assignment Summary appropriate for each assignment location are available from Area Personnel Offices.

Employees are not eligible for any assignment to ASC (USA) locations which require a Loan Agreement.

A. Conditions Requiring Loan Agreements/Letter of Understanding

Depending on the assignment location and/or duration, employees must be placed on loan, as shown:

Location(1) Duration of Business Assignment

Documentation(4)

U.S.A.(2) 1 - 30 days None generally required.

31 - 60+ days (3)

United Kingdom(5)


October 2, 2005

Notes:

(1) For locations not listed, consult with the Law Department.

(2) Saudi Aramco Law Department, Tax Counsel must be consulted in advance of assignments to states other than California or Texas.

(3) Not eligible since Loan Agreements are generally required for assignments in excess of 30 days.

(4) For all assignments of 61 or more days in duration, a Letter of Understanding and Temporary Assignment Summary are also required.

(5) Assignments to Saudi Petroleum Overseas Ltd.(SPOL) require Loan Agreements with SPOL, rather than AOC B.V.

1. Effect of Loan Agreement

Employees, while covered by a Loan Agreement, are under the general direction of and perform services on behalf of the appropriate subsidiary or joint venture company to which loaned. If the assignment purpose is a matter of primary Company interest, the subsidiary or joint venture company is requested to provide required services under the relevant Services Agreement between the two companies.

2. Loaned Employees' Status

Employees covered by Loan Agreements are carried on the Saudi Aramco payroll and charged against authorized Saudi Aramco manpower. Salary administration, benefit plan participation, job title and vacation accrual continue unchanged.

• Recruiting Activities 1 - 60+ days Loan Agreement with Aramco Overseas Co. B.V.

• Non-Recruiting Activities

1 - 10 days None required.

11 - 60+ days Loan Agreement with Aramco Overseas Co. B.V.

Japan 1 - 90 days None required.

91 or more days Loan Agreement with Saudi Petroleum, Ltd.

Netherlands / Greece 1 - 10 days None required.

11 - 60+ days Loan Agreement with Aramco Overseas Co. B.V.

Italy 1 - 60 days None required.

61+ days Loan Agreement with Aramco Overseas Co. B.V.


October 2, 2005

3. Temporary Assignments (assignments exceeding 60 days)

Saudi Aramco employees on Temporary Assignment at AOC B.V., SPOL, Ltd. and SPI are covered by Loan Agreements since the employee is retained on Saudi Aramco’s payroll.

Employees are not eligible for Temporary Assignment at ASC since Loan Agreements are required.

B. Responsibilities and Procedures for Applicable Loan Agreement, Letter of Understanding and Related Forms and Documents

1. Proponent (Sending) Department is responsible for:

a. Preparing Forms SA-225 or SA-5973, 7017 (for U.S.A. assignments), 7017-1 (for non-U.S.A. assignments), 7017-2 (for U.K. assignments), and 7017-3 (for California assignments) and forwarding them to the Income Tax Services Group for approval. If the Business Assignment is in conjunction with repatriation vacation, Form 5974 must accompany the 7017, 7017-1 and/or 7017-3 to the Income Tax Services Group for approval. (Note: These forms are sent to the Tax Group along with the Loan Agreement, Letter of Understanding and Temporary Assignment Summary.)

b. Preparing applicable Loan Agreement, Letter of Understanding and Temporary Assignment Summary and forwarding them to the Area Personnel Office.

1. Deviations from the standard Loan Agreement require the prior approval of the Law Department and the Director, Personnel. Deviations from the Letter of Understanding and Temporary Assignment Summary require the prior approval of the Director, Personnel, and the Law Department if involving tax-related matters.

2. After the employee signs the documents, the originals are to be forwarded to the Area Personnel Office, along with the following documents:

• (USA) ASC Temporary Assignment approval letter signed by ASC President.

• SA-225 or SA-5973, approved by sponsoring organization and Tax Group.

• 7017 (and 7017-3, if necessary) or 7017-1, approved by Tax Group.

• 3447, approved by all parties.• 167-1 (see c. below).• SA-8000, authorizing change of location.• Advice Document (see f. below).


October 2, 2005

• The Unaccountable Settling-in Allowance will be initiated and paid when the approved SA-8000 is received by the Area Personnel Office via the miscellaneous payment disbursement form (SA-8344).

• Letter from Business Line Head and showing name(s) of approved assignee(s).

Note: After being signed by Personnel, the Letter of Understanding and related items are then sent to the Administrative Area Head for his signature.

c. Preparing Form SA-167-1 (Request and Authorization for Shipment of Personal Effects and Household Goods) if the employee is making an eligible air and/or surface shipment, and forwarding it to the Personal Effects Unit.

d. Timekeeping according to Company timekeeping policy and procedures.

e. Notifying the Compensation, Benefits & Employee Tax Accounting (CB&ETA) Department and the Materials, Services & Payable Accounting Department and the Area Personnel Office of any deviations from dates contained in Loan Agreement/Letter of Understanding as executed.

f. Coordinating with and advising the receiving subsidiary or joint venture company at least two weeks before any loan assignment begins. Such advice should contain:

• Starting date and approximate length of assignment;• Whether spouse and children accompaniment is

authorized;• Special assistance the receiving company should give;• Date of last repatriation vacation; and• Arrangements for expense reports/cash advances/auto

rental.

A copy of the advice is to be sent to the Area Personnel Office.

g. Advising employee of assignment terms and administering employee in accordance with the appropriate policies on travel/expense reports, etc.

h. Working with the subsidiary, joint venture or contractor to secure a visa for the employee when appropriate.

i. Request relocation assistance for employee when appropriate.

2. Area Personnel Office

a. Provides to requesting organizations current Loan Agreements, Letter of Understanding and Temporary Assignment Summary appropriate for the assignment location.


October 2, 2005

b. Provides guidance to proponent Saudi Aramco Departments on assignments and applicable policies as detailed in the Industrial Relations Manual.

c. Reviews and forwards the Loan Agreement and Letter of Understanding to the Administrator of Area Personnel Division for signature. Personnel then forwards the Letter of Understanding and related items to the Administrative Area Head.

d. Sends the original Loan Agreement plus two copies to the receiving subsidiary or joint venture company for completion.

e. Sends two copies (if applicable) of the Loan Agreement (unsigned by the receiving company) and one copy of the Letter of Understanding and Temporary Assignment Summary to the Compensation, Benefits & Employee Tax Accounting Department.

f. Returns a copy of the Loan Agreement (unsigned by the receiving company) to the employee's Department for: 1) Departmental file; and 2) copy to Director, Career Development (if applicable).

g. Returns the original of the Letter of Understanding to the employee's Department for: 1) Departmental file; 2) copy to Director, Career Development (if applicable); 3) Administrative Area Head, sponsoring organization; 4) Housing Control Office (if applicable); 5) Administrator, Social Insurance and 6) employee.

h. Returns copy of Temporary Assignment Summary for Department file and employee; with a copy to Social Insurance; sends original to the employee’s personnel file.

i. When the signed Loan Agreement is received from the receiving company, sends a copy to employee's Personnel file.

3. Law Department

The employee’s Letter of Understanding must be endorsed by the Law Department’s Tax Counsel.

When Management is unable to determine whether a Business Assignment requires a Loan Agreement, they should consult the Law Department.

4. Compensation, Benefits & Employee Tax Accounting Department

a. Income Tax Services Group reviews the business itinerary and approves the Passport Clearance Request.

b. Income Tax Services Group briefs employees on tax implications and Company tax policy applicable for the assignment location.


October 2, 2005

c. If appropriate, bills the employee's compensation and cost of benefits to the receiving company.

d. Bills the receiving company for the non-payroll costs associated with the loan of the employee.

5. Receiving Company. Employees assigned to AOC, SPOL or SPL locations.

a. An officer of the receiving company signs the Loan Agreement and releases for distribution as follows:

• Original and one copy to be retained by the receiving company.

• One copy to be returned to the Saudi Aramco Area Personnel Office for the employee's Personnel file.

b. Absorbs assignment costs, as appropriate, such as compensation, transportation, visa fee, travel and expense costs.

c. If requested, helps the employee find housing.

d. Arranges return transportation to Saudi Arabia for the employee (spouse and children if authorized to accompany) when the assignment ends.

e. Advises the Saudi Aramco Department Head and Personnel, in writing, of the assignment termination date. This should be done prior to the employee's return to Saudi Arabia.

f. Advises appropriate Saudi Aramco payroll office and Income Tax Services Group of any personal income taxes paid on behalf of the employee.

g. If applicable, initiates Form SA-167-1 for movement of the employee's personal effects/household goods upon completion of his assignment.

h. If Company housing is required, advises the Saudi Aramco housing office 90 days in advance of the employee's return.

i. Processes Medical expense reimbursement request to Finance in accordance with Finance General Instruction No. 211.060.

VII. Loan of Saudi Aramco Employees to Vela International Marine, Ltd.

Loan Agreements and Letters of Understanding are to be used for the loan of Saudi Aramco employees to Vela International Marine, Ltd. (contact Area Personnel Office for current Loan Agreement and Letter of Understanding).


October 2, 2005

These letters are to be signed by each Saudi Aramco employee assigned on a regular (full time), basis to Vela. Temporary Project or Special Project personnel temporarily performing services for Vela or providing services to Vela are not to execute these forms.

The appropriate Area Personnel Office provides guidance to proponent Departments on assignments and their applicable policies.

VIII. Loan of Saudi Aramco Employees to ASC Locations

Temporary Assignments to ASC locations for Saudi Aramco Asian employees are not permitted at this time. For further details contact the Law Department.


October 2, 2005

Appendix I: Housing Allowances and Related Tables

Appendix I.1: Housing Spendable (Hypothetical Rent) Deduction Guidelines

In-Camp Housing

Out-of-Camp (Local Community) Housing

Employees who live in the local community and who accept Temporary Assignments will continue to receive the Rental Assistance Allowance if they meet any of the following criteria:

(1) Are in Saudi Arabia on married status and accept the assignment on a bachelor (unaccompanied) basis.

(2) Principal married status residence in Saudi Arabia is a rental unit on a long-term lease, and such lease covers the total period of the assignment and cannot be broken. Also, evidence of such lease agreement rental payment must be at least 3 months prior to the assignment commencement.

Length and Type of Assignment

In-Camp House Status Rent Charged

HypotheticalRent

Deduction

Business Assignment(1-60 days)

Employee Retains Housing Yes No

Temporary Assignment(61 days to less than 6 months)


Yes No

Temporary Assignment(6 months or more)


Yes No

Employee Permanently Relinquishes Housing or Returns House to Community Services for Utilization

No Yes


October 2, 2005

Appendix II: Miscellaneous

Appendix II.1: Per Diem Amounts for Business Assignments

Notes:

(1) When employee holds a Company-subsidized credit card, per diem advances are normally limited to $25.00 per day.

(2) Per diem amounts authorized are the appropriate amounts in effect during the dates of the assignment.

Out-of-Kingdom Locations

Per diem amounts for out-of-Kingdom locations can be obtained through the Compensation, Benefits and Employee Tax Accounting Department/Voucher Processing and Saudi Riyal Receivables Accounting Unit (873-2728/873-2757), or E-Forms, 165 Expense Report Instructions.


October 2, 2005

Appendix II.2: Business Assignment Meal Allowance/Per Diem Amounts - Returning Saudi Aramco Employees

When employees on Temporary Assignments outside Saudi Arabia return to Saudi Arabia on interim Business Assignments, they receive transient Meal Allowance or per diem amounts to cover meals, incidental expenses and local transportation as follows:

• Meal Allowance @SR120 per day if the interim Business Assignment is to Riyadh or Jeddah and @SR100 per day if the assignment is to any other in-Kingdom Company location. The Meal Allowance is paid when employees are provided Company housing or when they live at home in non-Company facilities with their families.

• Employees who do not reside at home nor in Company quarters and who are resident in approved local hotels may be provided the per diems contained in Appendix II.1, subject to the approval of the Department Head. When actual expenses claimed exceed the appropriate per diem, they must be fully documented. They are reimbursed only if the appropriate member of Executive Management approves.


October 2, 2005

Appendix II.3: Entertainment Allowance

Unless larger amounts have been specifically authorized, Saudi Aramco employees authorized to entertain Company guests may be reimbursed for entertainment expenses (including own) based on the following schedule:

(1) Department Manager must approve if actual expenses claimed exceed the maximum.

Event Unaccountable Allowance per Guest(1)

Breakfast/Coffee SR 12.00

Lunch SR 22.00 (including hors d'oeuvres and refreshments)

Dinner SR 34.00 (including hors d'oeuvres and refreshments)

Reception SR 14.00 (including hors d'oeuvres and refreshments)


October 2, 2005

Appendix II.4: Spouse Accompaniment on Business Assignments (All Locations)

Has employee completed three Business Assignments within past 12 months?

NO------------

Spouse not eligible.

||| YES|

Has employee accumulated 30 OOK business days-excluding this trip and travel days-in last 12 months?

NO------------


||| YES|

Has spouse accompanied employee on Business Assignment within past 12 months?

YES------------


||| NO|

Is this assignment 14 days duration (Excluding travel days)?

NO------------


||| YES|

Spouse can accompany.

Industrial Relations Manual for Asian EmployeesChapter 9: Leaves Of Absence

October 2, 2005

Chapter 9: Leaves Of Absence

I. General

The Company may grant leaves of absence to employees if:

• The reason is acceptable within the guidelines of the specific leave; and• The leave does not conflict with operating requirements.

Leaves of absence with pay protect against loss of earnings. They may be granted because of emergencies or other personal reasons acceptable to the Company. Leaves of absence protect service continuity under certain approved circumstances.

The Company grants leaves of absence for specific reasons. Therefore, an employee on leave must report to Personnel any change in status which affects the intent, conditions, or purpose of that leave.

II. Medical Leave of Absence

A. General

The Company recognizes that employees may become ill or injured, and be unable to work. If the employee provides acceptable evidence, the Company will grant a Medical Leave of Absence. Acceptable evidence must be a satisfactory statement from the attending physician or a government official.

B. Policy

1. Non-Industrial Illness/Injury ("M" Time)

Refer to Benefit Programs, Chapter 5, for the length of a Medical Leave of Absence and the benefits payable.

2. Industrial Illness/Injury ("K" Time)

The length of a Medical Leave of Absence and benefits payable during such leave are specified in Benefit Programs, Chapter 5 of this Manual.

C. Approvals

1. Non-Industrial Illness/Injury

The Medical Organization and the Area Personnel Administrator have joint approval for leaves of absence associated with non-industrial injuries or illness.


October 2, 2005

2. Industrial Illness/Injury

The Administrator, Workmen's Compensation is responsible for leaves of absence as a result of industrial disabilities.

III. Paid Education Leave, Training Assignments, and In-Camp Educational Programs

Refer to Personnel Development, Chapter 14.

IV. Emergency Leaves of Absence

A. General

The Company recognizes that employees may have traumatic or tragic personal circumstances. They may be unable to work for a brief period of time. In certain situations, which are supported by proper documentation, the Company may authorize time off with pay and paid air travel.

B. Policy

1. An emergency leave of absence with pay may be granted if the Company believes an employee must be present to fulfill responsibilities resulting from:

• The death of the employee's child, spouse, parent, brother, sister, or grandparent;

• The critical illness of the employee's child, spouse or parent which could result in death within a short period of time; or

• Other unusual, personal circumstances which require an employee's immediate presence if it cannot otherwise be resolved nor postponed until the normally scheduled vacation. (Examples of situations that normally do not qualify under this provision are: on-going care of aged parents, distraught spouse, non-critical hospitalization, court hearings, property destruction.)

The Company requires acceptable evidence of any of the above before paying for time not worked or transportation.

2. Evidence of Emergency

The employee must provide the Company with acceptable evidence of the emergency. A physician's verbal or written statement detailing the patient's critical condition and the need for the employee's presence, or a copy of death certification are examples of acceptable evidence.

a. With acceptable evidence prior to departure, the employee is granted a paid leave. The Company provides transportation assistance as described in Unit D below.


October 2, 2005

b. Without acceptable evidence prior to departure, leave without pay may be granted. Transportation costs are charged to the employee's personal account. When the employee returns and furnishes acceptable evidence, the leave will be changed to a paid leave. Transportation costs will be reimbursed or transferred to the Company's account according to the guidelines in Unit D below.

C. Duration of Leave

1. Provided the employee is not on repatriation vacation at the time of the emergency, or the emergency is not the death of a brother, sister, or grandparent, the maximum period of leave with pay is determined by the location of the emergency according to the following schedule:

(#) Earned days off and holidays falling within the leave are recorded as "P" time. Emergency leave normally commences the day of travel unless the employee has completed a full day of work on that day, in which case the leave commences the following day.

2. When an employee is on repatriation vacation and an emergency situation occurs which qualifies under existing policy, paid time off for the emergency leave is limited to a maximum of four (4) calendar days. (No additional air travel is paid as a result of the emergency.)

3. For an emergency resulting from the death of a brother, sister, or grandparent, the employee is eligible for up to three (3) days leave with pay regardless of the location of the emergency. The employee must travel to the place of mourning in order to be eligible for the leave with pay.

Note: The above eligibility for leave with pay is not extended to employees who are out-of-Kingdom at the time of the emergency. Exceptions require the approval of the Area Personnel Administrator.

Location Of Emergency Length of Leave Including Travel Time(#)

Saudi Arabia - In the Province of Job Assignment

Up to 4 Consecutive Calendar Days

Saudi Arabia - Outside the Province of Job Assignment, or in a Remote Area


North Africa, Europe, India, the Middle East, Pakistan, and Asia (up to a point no further than Singapore)


The United States, Canada, Points East of Singapore and All Others



October 2, 2005

D. Air Transportation Assistance

Provided the employee is not on repatriation vacation at the time of the emergency, the Company arranges and pays for air transportation for certain emergencies. Air transportation, when provided, is paid or reimbursed based on the least cost and most direct route to the airport nearest the emergency. The Company pays for family members only when they have approval to reside with the employee at the assignment location. Employee transportation costs are paid regardless of assignment location. Air transportation costs for any family members not mentioned below are charged to the employee's account.

(1) Emergency leave may be provided in respect to a stepparent if it can be clearly demonstrated (e.g., court documents or other acceptable support) that the stepparent actively participated in the raising of the employee (or his spouse) as a child through much or all of the age through high school completion. Emergency leave can only be granted for one parent i.e., emergency leave is not permitted for both a father and a stepfather.

No transportation assistance is provided in the event of critical illness or death of a brother, sister, or grandparent or grandchild.

Emergency Involving

Nature of Emergency Company Pays Transportation for

Natural, Adopted or Stepchildren (who are/were regular members of the employee's household)

Death, Critical Illness Employee, Spouse and Children under Six

Same as above Serious Emergency Either Employee or Spouse

Spouse Death, Critical Illness, Serious Emergency

Employee and Children

Employee Death, Critical Illness, Serious Emergency

Spouse and Children

Male Employee’s Parent/Stepparent(1)

Death, Critical Illness, Serious Emergency

Employee

Female Employee’s Parent/Stepparent(1)

Death, Critical Illness Employee and Children under Six

Spouse’s Parent/Stepparent(1)

Death, Critical Illness Spouse and Children under Six

Spouse’s Child by Previous Marriage (who hasn’t resided with employee)

Death, Critical Illness Spouse and Children under Six


October 2, 2005

In the event the emergency occurs near the employee’s planned/ scheduled vacation, consideration can be given to advancing the vacation at either the employee’s request, or at the Department’s request for operational reasons. Such consideration is based on the facts and circumstances of each case e.g., operational requirements, family or bachelor status employee, children in school, visas, etc. If advanced, the vacation is taken in conjunction with the emergency leave and only vacation (interim leave) travel monies are paid. Travel days are restricted to those already provided for the vacation.

E. Approval Authority

V. Hajj Leaves of Absence

A. General

The Company recognizes the importance of the pilgrimage to Makkah for employees of the Islamic Faith. Once during Company employment, a qualified employee may be granted a Hajj Leave of Absence with pay, if operating requirements permit.

B. Policy

In addition to 'Id Al-Adha Holidays and earned scheduled days off, Hajj Leaves of Absence with pay for 14 days may be granted to an employee who:

• Is a Muslim;• Has 5 or more Gregorian years of continuous service; and• Has never been granted a Hajj Leave while employed by the Company

No employee may receive pay-in-lieu of Hajj Leave.

If operating requirements permit, a Hajj Leave Without Pay may also be granted to employees of the Islamic Faith for a maximum of 30 days including any paid leave days, 'Id Al-Adha Holidays, and earned scheduled days off.

In deciding whether to grant a Hajj Leave, supervisors should consider the operating needs of the department. Senior employees and those with the longest years of Company service have priority.

Required Concurrence

Required Approval

Length of Leave

Up to 14 Days Area Personnel Administrator

As Delegated by the Department Head

Transportation Costs Area Personnel Administrator

As Delegated by the Department Head


October 2, 2005

C. Approval Authority

VI. Marriage Leaves of Absence

A. General

The Company grants a leave of absence with pay to an employee for marriage and celebration of the event.

B. Policy

An employee may initially be granted a 3 day Marriage Leave of Absence without pay ("X" Time) to get married. Upon return from the leave, the leave will be changed to a paid leave ("P" Time) if the employee presents acceptable evidence of the marriage to the Company. Acceptable evidence is a marriage license or marriage certificate issued by the proper authorities.

If a female employee terminates to get married, she may be granted 3 days pay. She must get married within 30 days of her termination date and submit proof of marriage within 90 days from the date of termination to be paid a full Severance Award and "P" time. Refer to Terminations, Chapter 10 in this Manual.


VII. Leaves of Absence Involving SAG

A. General

The Company may grant a Leave of Absence under certain circumstances when an employee appears at Saudi Arab Government offices.

B. Policy

1. When the Employee Is the Plaintiff

Employees are paid for time spent at the Saudi Arab Government Labor Office in connection with hearings on their grievances, if they:

• Continue on the job according to the Grievance Procedure;

Period of Leave Required Approval

Up to 14 Days Unit Head

Over 14 Days Department Head

Length of Leave Required Approval

Up to 3 Days Unit Head


October 2, 2005

• Notify their supervisor that they intend to appeal the Company's decision to the Labor Office; and

• Return to their job immediately after the Labor Office session.

2. When the Employee is a Witness

a. Called by the Company

Employees are granted a Leave of Absence with Pay for all time spent in connection with Saudi Arab Government hearings. Employees are paid additional straight time pay reported as "P" time if called to appear during non- scheduled work hours. In addition to approval authority listed in C. below, the Director, Employee Relations Services Department must recommend approval of all "P" time given the employee.

b. Called by Saudi Arab Government

Employees are granted a Leave of Absence with Pay for all time spent in connection with Saudi Arab Government hearings, regardless of whether their testimony is for or against the Company's position. Employees are paid additional straight time pay reported as "P" time if called to appear during non-scheduled work hours. In addition to approval authority listed in C. below, the Director, Employee Relations Services Department must recommend approval of all "P" time given the employee.

c. Voluntary

Employees who voluntarily appear as witnesses without having been called by or through the Company are not eligible for a Leave of Absence with Pay. The absence is authorized without pay ("X" time). Refer to Section XI of this Chapter for approval authorities required for leaves without pay.

3. Personal Business

Provisions of this policy do not apply to personal business such as name change, birth certificates, requests for personal appearance concerning private matters (e.g., debts, family support) from Saudi Arab Government or its entities, etc. Refer to Section XI on Leave of Absence Without Pay.

4. Imprisonment by Saudi Arab Government

An unauthorized absence ("Z" time) without pay is recorded for employees imprisoned by Saudi Arab Government authorities. For requests to convert the "Z" time into authorized leave of absence with or without pay ("P" or "X" time), the Area Personnel Administrator reviews the case and consults with the Law Department as applicable. The Director of Personnel is authorized to approve, if appropriate, converting the "Z" time into "P" or "X" time.


October 2, 2005

C. Approval Authority for Labor Case/Witness "P" Time

When an employee has a Labor Case hearing (referred to in Paragraph B.1) or is called as a witness by the Company or the Government (Paragraph B.2), the Director, Employee Relations Services Department must recommend "P" Time of any duration prior to the appropriate authority below approving the time.

VIII. (Unassigned)

IX. Birth of a Child

A. General

The Company may grant a one-day paid leave when a male employee's child is born. The leave may be deferred and used in conjunction with employee’s next annual vacation. The employee must provide acceptable evidence of the birth. Acceptable evidence is the "Notice of Live Birth" issued by the Company Medical Department or other official birth certificate.


X. Housing Relocation/Furniture Delivery Leave

A. General

The Company grants a one-day leave of absence with pay ("P" time) for an employee to relocate his/her personal effects and home furnishings when such move results from the following:

• An employee's major furniture shipment is delivered following an out-of-Kingdom assignment.

• When major initial furniture is delivered.• An employee moving from one house to another within the Company

housing• An employee taking an NOC (Company-approved family status) and

moving out, or an NOC approved to move into Company housing.

Length of Leave Required Concurrence Required Approval

Up to 14 Days None Unit Head

15 to 30 Days None Division Head

Over 30 Days Director - Personnel Department Head

Length of Leave Required Approval

1 Day Unit Head


October 2, 2005

For Company-initiated permanent transfer between areas, the Company grants employee a Leave of Absence With Pay ("P" time) as shown below to enable employee to relocate his/her personal effects and home furnishings to the new location.

Employees who are required to be available at home to oversee the packing of their shipments at time of termination will be given the time off from work as necessary. This time off will be reported as regular time.


The above leave is approved by the employee’s Unit Head.

XI. Leaves of Absence Without Pay

A. General

The Company may grant leaves of absence without pay for reasons other than those covered in this chapter if:

• the reason is acceptable to the Company; and• the leave does not conflict with operating requirements.

Leaves of absence without pay are normally restricted to a cumulative total of 60 days within a 12-month period, including the period covered by the current leave request.

Leaves of absence without pay protect service continuity under approved circumstances. Certain benefit plans may be interrupted. Consult with the Personnel Department for further information.

The Company grants leaves of absence without pay for specific reasons. Therefore, an employee on leave must report to Personnel any change in status which affects the intent, conditions or purpose of that leave.

Distance Moved (Kms) Single/Bachelor Move Family Move

50-349 1 day 2 days

350+ 2 days 3 days


October 2, 2005


XII. Professional Certification Examination Leave

A. General

The Company may grant a leave of absence without pay to an employee to take examinations required for professional certification.

B. Policy

The Company may grant a leave of absence without pay of 14 days, excluding travel time, for an employee to complete certification examinations. The employee may use accrued paid vacation rather than lose income on a leave. The employee is responsible for transportation costs. No Company assistance is provided.


Approval authorities required for up to 14 days leave of absence without pay are listed in Section XI of this Chapter.

XIII. Vacation Leaves

The Company uses the term "leave" to refer to certain periods of vacation, such as local leave or repatriation leave. Chapter 6, Vacations, contains specifics on these periods.

Length of Leave Required Concurrence Required Approval

1 - 5 days None Unit Head

6 - 15 days None Division Head

16 - 30 days None Department Head

31 - 60 days None Executive Management

When cumulative leaves of absence, including current absence request, within a 12-month period will equal or exceed 60 days

Area Personnel Administrator

Executive Management

61 days or above (Single Leave)

Area Personnel Administrator

Business Line Head


October 2, 2005

XIV. Administration

A. Late Return From a Leave of Absence

Employees must return to work on or before the first working day after their leave of absence expires. If they fail to return, they may be terminated effective on the first calendar day after the leave expires. An employee may be terminated only if the Area Personnel Administrator attempts to contact the employee to:

• determine why the employee has not returned; and• notify the employee of possible termination.

If an emergency prevents the employee from returning on time, he/she must request an extension through the appropriate Personnel Administrator. On return to work, the employee must provide acceptable evidence of the emergency.

B. Holidays During a Leave of Absence

1. Leaves With Pay

With the exception of 'Id Al-Adha Holidays during paid Hajj Leave, holidays that occur during a Leave of Absence With Pay (including Emergency Leave) will not extend the length of the leave.

2. Leaves Without Pay

An employee on a Leave of Absence Without Pay of 27 days or less receives pay for any holiday that occurs during the leave. If the leave exceeds 27 days, there will be no holiday pay for a holiday which falls within the leave. Nor will the Company extend the leave because of a holiday.

3. Exceptions

An employee on a Hajj Leave of Absence Without Pay is paid for Company recognized 'Id al-Adha holidays that occur during the leave.

In rare and unusual cases the Director of Employee Relations may designate one or more Company-paid holidays in recognition of a SAG function or dignitary. Should this occur, an employee on Leave With Pay will have the leave extended by the holiday. An employee on Leave Without Pay that exceeds 27 days will be paid for the holiday but will not have the leave extended.

C. Transportation

Except for specific Emergency Leaves of Absence, employees who are granted a Leave of Absence, With or Without Pay, should make their own travel arrangements. Expenses for such travel arrangements may be charged to the employee's personal account.


October 2, 2005

D. Effect of Leaves on Vacation

Authorized leave of absence without pay ("X" time) or unauthorized absence ("Z" time) of 30 days or less will not affect vacation credit accrual. If the "X" time or "Z" time exceed 30 days, vacation credit accruals will be reduced for the period of absence. The reduction is rounded to the nearest day for the total duration of the leave.

In all situations except confinement by Saudi Arab Government authorities, when an employee is granted a leave of absence without pay, the Company will consider a request to apply vacation credits ("L" time) against all or part of the leave ("X" time). The employee may prefer this alternative to losing income.

E. Effect of Unpaid Leaves on Annual Benefits Supplement

A leave of absence without pay for 30 days or less does not effect the Annual Benefits Supplement. If the leave exceeds 30 days, the supplement is paid on a pro-rata basis and is reduced for the entire period of absence.

F. Continuous Service

An employee's continuous service is protected during a leave of absence, if the employee returns to work as scheduled.

If illness or injury prevents an employee's return to work as scheduled, service may be protected under the provisions of the policy on continuous service.

G. Illness Incurred While on Leave

1. Illness During Vacation Time (L-time) and During Authorized Leave Without Pay (X-time)

Employees who are ill for four or more consecutive days receive pay for non-industrial disability ("M" time) when they submit acceptable evidence of the illness to the Company.

Refer to Section II of this Chapter for approval authorities.

2. Illness During Unauthorized Leave Without Pay (Z-time)

Employees who are ill while on unpaid leave are ineligible for disability pay ("M" time).

Industrial Relations Manual for Asian EmployeesChapter 10: Terminations

October 2, 2005

Chapter 10: Terminations

I. General

A. Scope

This policy applies to involuntary and voluntary terminations of Asian employees.

B. Intent

Employees ending their Company service are treated in a consistent, uniform manner, based upon the type of termination. The Company considers individual circumstances where medical, financial, legal, force majeure, personal, and similar factors are significant in the employee's termination.

Termination actions must conform to the applicable sections of the Kingdom of Saudi Arabia Labor and Workmen Law.

C. Definitions

Refer to Chapter 1, Employment.

II. Authority to Terminate, and Documentation

The approved authority levels for sanctioning terminations and paying Severance Award Plan benefits are listed in Appendix I.

Terminations are documented on Form 1180-C, Personnel Separations. Refer to GI.100.503 for complete information on this form.

III. Types of Terminations

A. Involuntary

An involuntary termination is a severing of the employee's services at the initiation and request of the Company or in keeping with Government Regulations. Where appropriate, employees receive thirty (30) days written notification of the impending termination. The notice details the reason(s) for termination. However, the notice is given only when the proper authority has approved the action (see Section II).

B. Voluntary

A voluntary termination is a resignation initiated by the employee. The employee must give management thirty (30) days prior written notice to be eligible for the Severance Award Plan benefits. This requirement is waived


October 2, 2005

if the resignation is due to circumstances justifying termination for cause. The thirty (30) day notice period may include any earned vacation days that are authorized to be taken within the notice period.

IV. Treatment of Termination - Involuntary

The terminations listed in Articles 83 and 87 of the Kingdom of Saudi Arabia Labor and Workmen Law are considered involuntary.

A. Company Option

The Company may terminate an employee for the following reasons:

• Inability to adjust to prevailing working and living conditions;• In the mutual best interest of the employee and the Company;• Unsatisfactory job performance if the employee has completed the

ninety (90) day probationary period.• If the employee commits one or more offences as specified in the

Internal Work Rules.

Prior to termination for unsatisfactory job performance, or for the committing of one or more offences as specified in the Internal Work Rules, the employee is counseled and warned to improve performance to normal levels, and/or correct his conduct.

Please refer to Section V for the general provisions covering warning notice and corrective guidance procedure. If termination is required, the authorized approvals outlined in Appendix I are necessary.

1. Effective Date

The last day worked is the effective date of termination. All salary components and benefits are paid for the days the employee’s departure is delayed by Company processing requirements.

2. Severance Benefits


B. Medical

An employee may be terminated for industrial or non-industrial injury/illness. The Executive Director - Medical Services recommends that the employee be terminated and the Director - Employee Relations Services Department concurs to the termination. Approval for termination is in accordance with current approval authorities to terminate (see Appendix I of this Chapter).

1. Industrial

If an employee is unable to perform work due to an industrial injury or illness, disability benefits may be payable.


October 2, 2005

If an employee is declared permanently and totally disabled, employment is terminated as of the date jointly determined by the Executive Director - Medical Services and the Director - Employee Relations Services Department. Any unused short term disability benefits are paid to the employee in a lump sum.

If an employee is not declared permanently and totally disabled, employment is terminated when short term disability benefits are exhausted and if medical records confirm that the employee was disabled for either:

• at least ninety (90) consecutive days; or• a total of one hundred and twenty (120) days during the

preceding twelve-month period.

The termination date is jointly determined by the Executive Director - Medical Services and the Director - Employee Relations Services Department.

2. Non-Industrial

An employee with an incapacitating disability may be terminated when:

• short term disability benefits are exhausted• medical treatment is completed, or• the degree of disability has been determined


The Executive Director - Medical Services and Director - Personnel establish the termination date.

C. Termination for Cause

The Company initiates a Termination for Cause. The Company takes this action when the employee has violated Company rules and regulations. These violations include, but are not limited to, those specified in Article 83 of the Saudi Arab Labor and Workmen Law. The Law Department and the Coordinator of Labor Relations must be able to sustain the termination reasons.

1. Procedure

The appropriate Area Personnel Administrator makes a careful analysis of all circumstances leading to recommendations for this action.

The Area Personnel Administrator confers with the Law Department and the Coordinator of Labor Relations prior to each termination to assure:

• proper documentation is prepared• the termination is legally supportable


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2. Effective Date

The termination date is the last day worked.

D. Repatriation by Request of the Saudi Arab Government

If the Saudi Arab Government asks an employee to leave the Company's area of operation in Saudi Arabia, he/she is terminated. This may or may not be considered termination for cause depending on the circumstances surrounding the action.

1. Effective Date

The termination date is the day the Company receives notice of the Government's request.

2. Additional Information

An employee convicted of a major crime is terminated on or about the date of conviction.

E. Failure of Probation

The Company may terminate an employee within the first ninety (90) days of employment if he/she is unable to perform the job satisfactorily. This complies with Article 83, Paragraph 6 of the Saudi Arab Labor and Workmen Law. Refer to Chapter 1, Employment, Section V.

F. Lack of Work

Termination for lack of work may become necessary as a result of factors such as, but not limited to:

• Declining volume of business• Reduction in manpower positions• Reorganization which results in consolidation of functions• Elimination of functions• Discontinuance or shutdown of a part of the Company's operations• Replacement by a Saudi Arab national.

G. Failure to Report to Work

The employee must return to work on or before the first working day following the expiration of an authorized leave or vacation. If the employee fails to return or does not report to work within five days, the employee's supervisor advises the appropriate Area Personnel Administrator who contacts the employee by registered letter or cable to:

• determine reason(s) for not reporting to work• advise employee of possible termination


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If an emergency prevents the employee from reporting, leave or extension of leave must be requested through the appropriate Area Personnel Administrator. Upon return to work, the employee must provide appropriate documentation to retain active employee status.

1. Drop from Payroll

The employee's Supervisor initiates the change of status form on the tenth (10th) day following the mailing date of the notice of termination letter. If it is determined, before termination, that the employee was absent for excusable reason(s), the employee may be reinstated as provided in Chapter 1, Employment.

If an employee is fifty (50) or more years of age and has fifteen (15) or more years of service, retirement benefits are paid upon the employee reporting to the Asian Personnel Office and the termination being processed. The employee's retirement takes effect the first of the month following the date of termination.

2. Effective Date

If the employee is terminated for unauthorized absence or non-return from authorized leave/vacation, the effective date of termination is the date immediately following the tenth (10th) day following the mailing date of the termination notice.

H. Retirement for Foreign Contract Employees

1. Normal Retirement (as defined by the Retirement Income Plan text)

Normal Retirement is the first day of the calendar month following the month in which an employee reaches age 60 Gregorian years.

2. Early Retirement (as defined by the Retirement Income Plan text)

Early Retirement is the first day of any month after age fifty (50), if the employee has at least fifteen (15) years of service.


The benefit provisions of the Retirement Income Plan are contained in Chapter 5, Benefit Programs.

The appropriate Area Personnel Administrator can give additional information.

I. Employment Termination at Age 60

ITEA employees are not permitted to work beyond the end of the month in which they reach age 60 Gregorian. Chinese Specified Term Contracts should not extend beyond the end of the month in which the employee reaches age 60 Gregorian.


October 2, 2005

J. Severance Award

In the event employment ends (except discharge for cause or drop from payroll), the Company pays the eligible employee a Severance Award as provided in Articles 87 or 88 of the Saudi Arab Labor and Workmen Law.

Refer to Chapter 5, Benefit Programs, for additional information.

V. Warning Notice and Corrective Guidance Procedure

A. General

The Company motivates employees to attain the highest levels of performance and conform to standard work rules and regulations. In the event an employee’s job performance is less than satisfactory, or if he violates the work rules and regulations, the Company attempts to improve performance and/or correct his conduct through counseling. However, a repetition of the same type or any other types of the offences specified in the Company’s approved Internal Work Rules may result in the issuance of one or more warning notices, dismissal warning notice, or immediate termination, depending on the type of the offence.

B. Counseling

The supervisor is responsible for counseling the employee and highlighting his deficiencies at work. He discusses with the employee methods of improving job performance and/or correcting his conduct.

The supervisor evaluates the offence committed by the employee and determines the appropriate administrative action to be taken (counseling, memo to file, or warning notice), with the intent of correcting employee’s deficiencies and achieving maximum productivity. The counseling session is properly documented. The documentation includes: date of session, items discussed and remedial action(s) recommended by the supervisor to the employee.

C. Progression of Warning Notices

The administrative procedure to issue warning notices and corrective guidance report is as follows:

First Warning

If an employee commits for the first time one or more of the offences listed in Type I of the Schedule of Offences and Penalties specified in the Internal Work Rules, he may be issued a written warning describing the offence and explaining how he could correct his conduct.

The supervisor duly completes form SA-3247, Warning Notice, for issuing the first warning. The supervisor also completes form SA-2004, Corrective Guidance Report, in which he includes a description of all the circumstances surrounding the offence/incident, as well as an explanation of how the


October 2, 2005

employee could overcome his deficiencies. The supervisor sends a copy of the Warning Notice (SA-3247) and the original copy of the Corrective Guidance Report (SA-2004) on a timely basis to the Area Personnel Office.

Second Warning

If an employee commits for the second time one or more of the offences referred to above, he may be issued a second written warning describing the offence, emphasizing the seriousness of repeated violations of Company rules, and explaining how he could correct his conduct.

The same form used for the first warning notice is also used for the second warning notice. That is, the supervisor duly completes form SA-3247, Warning Notice, for issuing the second warning. The supervisor also completes form SA-2004, Corrective Guidance Report, providing details about the offence/incident and explanation of how the employee could overcome his deficiencies. The supervisor sends a copy of the Warning Notice (SA-3247) and the original copy of Corrective Guidance Report (SA-2004) on a timely basis to the Area Personnel Office.

Dismissal Warning

If an employee commits for the third time one or more of the offences referred to above; or, if he commits for the first time one or more of the offences listed in Type II of the said Schedule, he may be issued a dismissal written warning describing his latest offence, outlining his previous offences, explaining how such conduct could be corrected, re-emphasizing the seriousness of repeated violations of Company rules, and warning him that the committing of any further offence shall result in the termination of his service.

The supervisor duly completes form SA-3248, Dismissal Warning Notice, for issuing the dismissal warning, specifying the most recent offence as well as a summary of the employee’s previous offences. The supervisor also completes form SA-2004, Corrective Guidance Report, providing details about the offence/incident and explanation of how the employee could overcome his deficiencies. The supervisor sends a copy of the Dismissal Warning Notice (SA-3248) and the original copy of the Corrective Guidance Report (SA-2004) on a timely basis to the Area Personnel Office.

D. Review of Warning Notices

The supervisor reviews the First and Second Warning Notices or the Dismissal Warning Notice issued in accordance with the above procedure six months following the date of issue. If the deficiency in job performance or employee’s conduct has been overcome during the six month period, the First/Second Warning Notice or the Dismissal Warning is removed from the employee’s file and destroyed in the presence of the employee. However, a dismissal warning notice may be retained in the employee’s file for a further period of reasonable duration based on the seriousness of the offence.


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E. Termination of Service

1. Termination of Service After Prior Warning

If an employee commits for the fourth time one or more of the offences listed in Type I of the Schedule of Offences and Penalties specified in the Internal Work Rules; or if he commits for the second time one or more of the offences listed in Type II of said schedule, he shall be subject to termination of his service with payment of the notice period and termination award based on length of service in accordance with the Saudi Labor and Workmen Regulations.

The supervisor sends a letter bearing the Department Head signature to the Area Personnel Administrator requesting a review of the case and seeking advice and concurrence to the recommended termination.

2. Termination of Service for Cause (Without Warning)

If an employee commits an offence subject to the provisions of Article 83 of the Saudi Labor and Workmen Regulations (Type III of the Schedule of Offenses and Penalties of the Company’s Internal Work Rules), he shall be subject to immediate termination of service without payment of termination award or notice period, provided the employee is given a chance to state his reasons for objecting to the termination.

Please refer to Section IV, Paragraph C for the policy guidelines covering Termination for Cause.

VI. Reinstatement of Terminated Employees

Former employees for whom reinstatement has been ordered, or for whom the basis of termination has been altered by the Saudi Arab Government Labor Office, may have the amount of their pay for time not worked subject to individual negotiations. Any Severance Award made must be repaid prior to reinstatement.

For individuals who are re-employed by the Company, refer to Chapter 1, Employment.

VII. Treatment of Terminations - Voluntary

When the termination is employee-initiated, the action is classified as a resignation.

A. Effective Date

The effective date of resignation is the last day worked. See Section III.B for additional information on thirty (30) day notice period.


October 2, 2005

B. Severance Award

If an employee with two or more years of service voluntarily resigns and provides the Company with thirty (30) or more days written notice prior to the termination date, the employee is eligible for a Severance Award, as provided in Article 88 of the Saudi Arab Labor and Workmen Law.

For additional information on Severance Award, refer to Chapter 5, Benefit Programs.

VIII. Marriage of Female Employees

A regular female employee who marries someone in-Kingdom must resign and may apply to work on a hourly payroll, (Casual, IK Local Hire or Saudi Arab Hourly Payroll, as applicable) if she wishes to live with her husband and establish a family with him.

A female employee who resigns to get married receives severance pay as per Article 87 of the Saudi Labor Law, provided that marriage occurs within 30 days from the termination date and the proof of marriage (e.g. marriage certificate) is submitted to the Company within 90 days of the termination date.

A "regular" female employee who becomes pregnant during employment may resign or will be terminated. In both cases, she will receive severance as per Article 87 of the Saudi Labor Law.

IX. Exit Interview/Questionnaire

Prior to leaving the Company, each employee is interviewed or provided with a Final Departure Questionnaire by a Personnel Department representative. The purpose of this interview or questionnaire is to learn:

• why the employee is leaving the Company;• any recommendations for improving policies or operating methods; and• where appropriate, the employee's interest in resuming work with the

Company.

X. Letter of No Objection (Release)

To comply with Saudi Arab Government Regulations governing movement of manpower between employers, an employee who is ending Company employment and wants to work in Saudi Arabia for another employer must have a "Letter of No Objection". The Company may or may not grant such a letter, depending upon thorough consideration of the conditions and circumstances in each case.

A. The Company may provide the employee with the "Letter of No Objection" under the following limited circumstances:


October 2, 2005

1. Employees who resign with at least thirty (30) days notice, and their placement with another employer will be beneficial to Saudi Aramco.

2. Employees terminated at Company option if:

• the employee's job has been eliminated and the employee's services are no longer needed; or

• the employee has been replaced by a Saudi Arab, and the employee's services are no longer needed.

3. Employees leaving under circumstances in which their termination is obviously preferred or advantageous to the Company.

4. Employees in good standing who have reached normal retirement age.

B. The Company does not provide the employee with the "Letter of No Objection" under the following circumstances:

1. Employees who do not satisfy the terms of their employment agreement. This includes employees:

• discharged for cause;• dropped from the payroll;• resigning without sufficient notice; or• terminated at Company option for performance which does not

fully meet job requirements. Appropriate documentation must exist in employee's file when "Letter" is denied on basis of performance.

2. Foreign Contract employees who receive lay-off separation benefits, except where the separations clearly resulted from their being excess to the Company's manpower needs and/or their jobs were eliminated.

3. Employees who elect early retirement unless such action is beneficial and/or preferred by the Company

4. Employees who resign unless such action qualifies for favorable consideration under paragraph A.1 or A.3 of this section.

C. Procedure

Except for Company option terminations (as per paragraph A.2 of this section), the employee must request a "Letter of No Objection" through his/her Department Head. The Department Head forwards the request with his recommendation to the Area Personnel Administrator. The Coordinator - Labor Relations must approve the recommendation (except in unusual situations not addressed above which require approval of the Director - Personnel). If approved, the Area Personnel Administrator prepares the "Letter of No Objection". Refer to Chapter 1, Employment, Appendix II, for a sample "Letter".


October 2, 2005

Employees who are terminated as a result of Company option (as per paragraph A.2 of this section) may send their request for a "Letter of No Objection" directly to the Area Personnel Office for approval and issuing. In these cases, it is not necessary for the Department Head or Labor Relations to also approve the request.

"Letters of No Objection" must be authenticated by the Ministry of Foreign Affairs to facilitate granting of re-employment visas by a Royal Saudi Consulate or Embassy. It is the terminating employee's responsibility to obtain this authentication as part of his departure procedure. Authentication for terminated employees out-of-Kingdom are obtained by Saudi Aramco Affairs - Eastern Province when requested by Area Personnel Administrators.


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Appendix I: Approval Authorities to Terminate

Notes:

(1) The Area Personnel Administrator concurs on all resignations.

(2) For employee age 60 termination or retirement, approval authority level is Department Head; in the case of a SC 3-10 employee age 60 termination or retirement, the Department Head may redelegate the approval. If the age 60 employee is Department Head or higher, then the next higher approval authority is required.

Salary Code Level Approval Authority

18 and Above President & Chief Executive Officer

15 - 17 Corporate Management

11 - 14 Executive Management

10 and Below General Management or Department Head

Physicians

Salary Code Level Approval Authority


Industrial Relations Manual for Asian EmployeesChapter 11: Shipment Of Effects

October 2, 2005

Chapter 11: Shipment Of Effects

I. General

The Company pays to ship certain property owned by employees. Such shipments are limited to the categories of property, weight allowances, and methods of shipment described in this policy.

This Chapter is intended to give a general overview of personal effects and household goods shipping policies. Policy details and associated administrative procedures are contained in the respective Shipping Instruction Booklets given to employees making shipments either to or from Saudi Arabia. It is important that employees making shipments read the applicable booklet.

II. Applicability

This policy applies to Asian employees.

III. Definitions

A. ASIAN EMPLOYEES -- Employees from China, India, Pakistan, Philippines, Sri Lanka, Bangladesh, Thailand, or Singapore.

B. FOREIGN CONTRACT EMPLOYEE -- An employee whose Employment Agreement may be extended indefinitely following satisfactory completion of an initial provisionary period of one year. Employees from India and Pakistan are normally hired under Foreign Contract Employment Agreements.

C. INDEFINITE TERM EMPLOYMENT AGREEMENT (ITEA) -- An employee whose Employment Agreement is valid for an unspecified period. Employees from Far Eastern Asian countries (Philippines, Thailand, etc.) are normally hired under such agreements.

D. SPECIFIED TERM CONTRACT -- An employee whose Employment Agreement is valid for a specified period, normally two years. Employees from China are normally hired under such agreements.

E. ELIGIBLE DEPENDENT -- See Chapter 12, Housing, Section IV, on Eligible Family Members for a definition.

F. POINT-OF-ORIGIN -- See Chapter 16, Local/International Travel, for a definition.


October 2, 2005

IV. Initial Relocation Shipments -- Employees from China, the Philippines, Singapore, Bangladesh, Sri Lanka and Thailand - (ITEA)

A. Single/Bachelor Status Employees on Indefinite Term Employment Agreements (ITEA) and Chinese Specified Term Contracts (STCs)

1. Accompanied Baggage

The Company reimburses the employee for up to fifty (50) kilograms of excess baggage charges. The reimbursement is limited to the distance between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

2. Unaccompanied Airfreight

If the employee does not use the accompanied excess baggage provision, the Company will reimburse him/her for the cost of one shipment of effects via unaccompanied baggage or airfreight. The costs are limited to the equivalent of fifty (50) kilograms of excess accompanied baggage referred to above. The employee must arrange to clear the shipment through Saudi Arab Government Customs.

3. Surface Shipment

a. Salary Code 03-10 Male Employees

Company-paid surface shipments are not authorized.

b. Salary Code 03-10 Female Employees

Female employees are eligible to make a one-time relocation shipment at the time of hire of up to 475 kilograms (1,000 pounds) from the point-of-origin.

c. Salary Code 11+ Employees

Male and female employees are eligible to make a one-time relocation shipment at the time of hire of up to 2,275 kilograms (5,000 pounds) from their point-of-origin.

These shipments must be handled by Company-designated shipping agencies.

B. Family Status Employees on Indefinite Term Employment Agreements (ITEA)


The Company reimburses the employee for excess baggage charges limited to:

Employee 50 kilograms

Spouse 50 kilograms


October 2, 2005

The reimbursement is limited to the distance between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.


If the employee does not use the accompanied excess baggage provision, the Company will reimburse him/her for the cost of one shipment of effects via unaccompanied baggage or airfreight. The costs are limited to the equivalent of the excess accompanied baggage referred to above. The employee must arrange to clear the shipment through Saudi Arab Government Customs.

3. Surface Shipment

New employees are eligible to make an initial relocation shipment of personal effects, furniture and appliances from their point-of-origin. The total weight of this shipment may not exceed the following:

This shipment must be handled by Company-designated agencies and is ordinarily made at the time of hire.

An employee initially eligible for family status, but traveling as a bachelor, is allowed with prior approval to defer his shipment and combine it with his family's shipment when they join the employee in Saudi Arabia. Such deferral of the employee's shipment cannot exceed one year. If the employee elects to send a portion of his 2,275 kilograms shipment at the time of employment, any unused weight allowance is forfeited and not credited to the remaining family allowance.

If employee converts from bachelor status to NOC family status, he is eligible to make a one-time-only shipment from country-of-origin at the time the employee's spouse leaves for Saudi Arabia. Maximum weight of shipment is:

The Company does not provide storage facilities for employees converting to NOC status in Saudi Arabia. The employee is responsible for storing all items shipped.

Each Eligible Dependent 25 kilograms

Employee 2,275 kilograms (5,000 lbs.)

Spouse 2,275 kilograms (5,000 lbs.)

Each Eligible Dependent (under age 19)

475 kilograms (1,000 lbs.)





October 2, 2005

V. Initial Relocation Shipments - Employees from India or Pakistan - (FC)

A. Employees in Salary Codes 03-10


Male Employees -- The Company provides a baggage allowance equivalent to the cost of 50 kg. of excess baggage between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

Female Employees -- The Company reimburses the employee for up to ten (10) kilograms of excess baggage charges. The reimbursement is limited to the distance between Saudi Arabia and the recognized airport nearest the employee's point-of- origin.


Male and Female Employees -- Unaccompanied airfreight at Company expense is not authorized.

3. Surface Shipment

Male Employees -- Surface shipments are not authorized.

Female Employees -- Are eligible to make a one-time relocation shipment at the time of hire of up to 475 kilograms (1,000 pounds) from point-of-origin. This shipment must be handled by the Company-designated agency.

B. Employees in Salary Codes 11+

1. Single/Bachelor Status Male and Female Employees

a. Accompanied Baggage

The Company reimburses the employee for up to ten (10) kilograms of excess baggage charges.

b. Unaccompanied Airfreight

Unaccompanied airfreight at Company expense is not authorized.

c. Surface Shipment

New employees are eligible to make an initial relocation shipment of up to 2,275 kilograms (5,000 pounds) consisting of personal effects, furniture and appliances from their point-of-origin.

This shipment must be handled through the Company-designated agency and is made at the time of hire.


October 2, 2005

2. Family Status Employees

a. Accompanied Baggage

The Company reimburses the employee for up to ten (10) kilograms of excess baggage charges for the employee and each accompanying dependent.

b. Unaccompanied Airfreight


c. Surface Shipment

New employees are eligible to make an initial relocation shipment of personal effects, furniture and appliances from the point-of-origin. The weight of this shipment may not exceed the following:

This shipment must be handled by Company-designated agency and is ordinarily made at the time of hire.

An employee initially eligible for family status, but traveling as a bachelor, is allowed with prior approval to defer his shipment and combine it with his family's shipment when they join the employee in Saudi Arabia. Such deferral of the employee's shipment cannot exceed one year. If the employee elects to send a portion of his 2,275 kilograms shipment at the time of employment, any unused weight allowance is forfeited and not credited to the remaining family allowance.

If employee converts from bachelor status to NOC family status, he is eligible to make a one-time-only shipment from point-of-origin at the time the employee's spouse leaves for Saudi Arabia. Maximum weight of shipment is:

The Company does not provide storage facilities in Saudi Arabia for employees converting to NOC status. The employee is responsible for storing all items shipped.

Employee 2,275 kilograms (5,000 lbs.)








October 2, 2005

VI. General Conditions - Overweight Charges, Storage in Saudi Arabia, and Shipment Entitlement if Hired Outside Home Country

A. Overweight Charges

The specified weight allowance is the maximum weight that can be shipped at Company expense. Should either an incoming or outgoing shipment exceed the applicable weight allowance, the additional cost will be charged to the employee based on the Company’s current composite rate per kilogram of shipping, including customs duties if applicable.

B. Storage in Saudi Arabia

The Company does not ordinarily store the employee's shipment. However, if the Company housing assignment is deemed insufficient by the Company to accommodate the surface shipment, the employee will be allowed access to the surface shipment prior to placing it in storage in Saudi Arabia in order to select those items required for delivery to the assigned quarters. This access is allowed on a one-time basis at Company expense to remove required furniture and/or full boxes of personal effects. A box may not be opened to remove part of its contents. The balance of the shipment will be stored at Company expense until such time as the employee acquires (or could have acquired) an accommodation deemed large enough by the Company to accept the personal effects. Storage beyond this period must be paid by the employee. See Chapter 12, Section IX for details of storage policy.

C. Shipment Entitlement if Hired Outside Home Country

An employee hired outside his/her home country may utilize his/her Saudi Aramco surface shipment entitlement at the time of hire to send personal effects from the present employment location and/or the employee's home country. When combined, such shipments may not exceed the employee's total weight entitlement. If the employee is unable to return to his/her home country at the time of hire, then that portion of the shipment entitlement may be deferred and taken not later than the employee’s first annual repatriation vacation.

VII. Articles Subject to Confiscation or Censorship

All articles entering Saudi Arabia are subject to the scrutiny of Saudi Arab Customs Officials.

No material (printed, pictures, statues, paintings, etc.) contrary to Muslim or Saudi Arab beliefs and morality will be allowed into the Kingdom. This prohibition extends to religious, political and sexual material. No material which could be construed as anti-Islamic should be shipped, and no religious material (including bibles) which could be considered as material for proselytization of a faith other than Islam should be imported. Prohibition of religious materials is applicable to


October 2, 2005

religious symbols such as the cross, rosaries, and Christmas trees/ornaments. Political material considered to be critical of the Kingdom and its foreign or domestic policies will be confiscated and may subject the owner to investigation by the Saudi Arab Government. Printed matter, paintings, photographs, statues and drawings which are prurient in nature, designed to effect a sexual response, or display the human form partially undressed or nude are subject to confiscation. The Company will not honor claims for the loss, damage, destruction or confiscation of contraband articles described above and in Section A below.

Importation of narcotics, alcohol or derivatives of such substances is strictly forbidden and will subject the offender to fines, imprisonment and/or deportation. Offenders convicted of drug importation are subject to the death penalty.

A. Articles Subject to Confiscation

• All games of chance, including cards, chess sets, dice, etc.• All weapons and firearms, whether real or ornamental, including guns,

knives, bows and arrows, ammunition, fireworks, etc.• Military uniforms or military equipment of any kind.• Any alcoholic beverage, including any food item containing alcohol.

The employee is liable for Saudi Arab Government actions if alcoholic beverages/foods are confiscated.

• Items used in preparation of alcoholic beverages such as wine-making kits, books on wine or beer manufacturing.

• Any kind of narcotic or medicine, including vitamins, cough syrups, etc. Employees requiring medication containing narcotics should obtain a letter from their doctors testifying that such treatment is necessary. Where possible, such medicines should be hand-carried into the Kingdom rather than included in shipments of personal articles.

• Any type of radio transmitter or communications equipment or radio receiver with VHF, main or police bands.

• Any type of recording device which can be concealed on the person.• Any statue, figurine, object or image deemed contrary to Islamic

morality.• Pornographic pictures, magazines, books, films and video tapes,

including any picture displaying nudity.• Foodstuff of any kind including those in sealed containers such as tea,

spices, candy and jams.

B. Articles Subject to Censorship

• All phonograph records and tape recordings.• All exposed film, including prints, slides, movies, and video tapes.• All books, magazines, periodicals, and other printed matter.


October 2, 2005

VIII. Articles Not Accepted for Shipment

A. The following items listed below are not included in shipping weight allowances and are therefore not accepted for shipment by the Company.

Employees who wish to ship these items to Saudi Arabia must make arrangements directly with shipping agents and custom brokers of their choice. The Company does not become involved in any way and all charges associated with such shipments are paid by employees directly to the agents and brokers they select. These items are:

• Automobiles and automotive equipment, including motorcycles, motorbikes, go-carts and go-cart kits, motorized golf carts, trailer kits, garage kits, spare parts and accessories

• Surfboards, Windsurfers, boats, boat kits, outboard, inboard, combination outboard/inboard marine engines, and spare parts and accessories for same

• Pre-formed hot tubs, jacuzzis and swimming pools• Building materials including, but not limited to, lumber, nails, roofing

material, shingles and siding, PVC pipe, etc.• Articles for private enterprise or resale• Air conditioners• Industrial machinery• Tobacco• Collections of high weight or volume• Pets, pet food• Fertilizer, soils, peat moss, clay, etc.• Consumable supplies such as laundry and dishwashing soaps and

detergents, toilet paper, paper towels, cleaning tissues, cleaners, disposable diapers, etc.

• Equipment/supplies for "self-directed community groups"• Items purchased for, or owned by, another employee• Any item which, due to its construction, assembly, material, size or

shape, precludes safe and reasonable handling and transportation.

B. Employees are not allowed to ship the following types of items. Such articles will be removed from the shipment and neither the agency nor Saudi Aramco will be responsible for resulting loss or damage. The cost of removing such items from an employee's shipment is charged to the employee's personal account.

1. Hazardous Materials

• Combustible liquids• Corrosive liquids• Explosives• Flammables• Compressed gases


October 2, 2005

2. Live plants, seeds, fruit, flowers, etc.

3. Valuables

• Bank bills• Currency• Deeds• Drafts• Jewelry• Furs• Precious metals

4. Foodstuff of any kind including those in sealed containers such as teas, spices, candy and jams.

Unsafe materials found in shipments are removed and destroyed without notification.

IX. Shipment of Pets

Certain kinds of pets are not allowed into Saudi Arabia. Additional information should be obtained from the Personnel Department.

Employees must pay import and export shipping costs for pets allowed into the Kingdom.

X. Customs Duties

The Company pays duty on normal imports into Saudi Arabia except on articles which should not have been accepted for shipment (Section VIII).

XI. Items of High Value or Unusual Nature

The Company reserves the right to refuse or accept responsibility for loss or damage to items considered to be:

• of exceptionally high value (e.g., sterling silver services, expensive rugs, or other household furnishings valued in excess of $2,500); or

• unusual in nature (e.g., works of art, heirlooms, antiques).

Packing and shipping costs of such items are Company paid. However, neither the Company nor its contractor will assume responsibility for loss or damage unless Company approval is acquired prior to shipment.

Because of the irreplaceable nature of items of sentimental value, claims for loss or damage are limited to the actual value of the items. In the case of photographs, negatives, slides and home movies, claims for loss or damage are limited to the cost of replacement film and processing.


October 2, 2005

Neither the Company nor its contractor will be responsible for loss or damage to furs, fur coats, jewelry (including costume jewelry), watches, precious stones, precious metals, personal papers, bank bills, currency, deeds, drafts, notes, or other valuable papers or collections.

XII. Claims for Loss or Damage

For lost or damaged items discovered on the date of shipment delivery and identified on shipment inventory forms, the employee may be reimbursed on the basis of the lost or damaged item's cash value at destination less depreciation, or the damaged item may be repaired if considered to be repairable.

Employees must submit receipts, invoices, sales slips, etc., when asked to substantiate the value of items lost or damaged.

Insurance settlement may require inspection of the items claimed for damage. The employee must keep damaged items until authorized to dispose of them.

Neither the Company nor its contractor assume responsibility for costs incurred as a result of delays, non-delivery, or delivery of articles in damaged condition.

All claims are administered in accordance with the detailed claims instructions and conditions contained in the employee's shipping instruction booklet provided in connection with the shipment.

Any exceptions to the claims for loss or damage policy are to be administered by the Materials Traffic Department who will review such cases and make recommendations to their Management for approval.

XIII. Export Shipments from Saudi Arabia

A. Terminated Employees and Retirees

1. Terminated Employees (ITEA) from Philippines, Singapore, Bangladesh, Sri Lanka and Thailand

a. Shipment of Effects

The Company pays to ship personal effects, household items, appliances, and furniture owned by a terminating employee. They are shipped to the employee's country-of-origin. Cash in lieu of shipment of effects is not authorized.

1. Single/Bachelor Status Employees

• Accompanied Baggage

The company reimburses the employee for up to fifty (50) kilograms of excess baggage charges. The costs are limited to the distance between Saudi Arabia and the recognized airport nearest the employee’s point-of-origin.


October 2, 2005

• Unaccompanied Air Freight

If the employee does not use the accompanied excess baggage provision, the Company will reimburse him/her for the cost of one shipment of effects via unaccompanied baggage or airfreight. The costs are limited to the equivalent of the excess accompanied baggage referred to above.

• Surface Shipment

SC3-10 Male employees are not eligible for a surface shipment.

SC3-10 Female employees (to include Chinese STC employees) are eligible to surface ship personal effects to their country-of-origin in accordance with the following table:

SC3-10 female employees hired on or after September 1, 1999, and who live in furnished Company housing (i.e., unit of 500 sq. ft. or less) at the time of final shipment, will have a final shipment entitlement of 700 kgs. (1,500 lbs.). Employees hired prior to September 1, 1999 will retain their current shipping privileges in accordance with the above table, regardless of the size of their housing unit.

In place of the Company-arranged final shipment, SC3-10 female employees may elect to receive a cash-in-lieu payment (based on employee’s service) as established by the Company. Current cash-in-lieu payment amounts are available from the Employees Shipment Unit. These amounts are subject to periodic review and adjustment to reflect the Company’s shipping costs. Departing employees with less than 90 days of service, and who did make a surface shipment to Saudi Arabia when they were hired, are not eligible to receive cash-in-lieu.

Years of Service* Weight Allowance

Under 5 700 kgs. (1,500 lbs.)

5 - (less than) 8 1,150 kgs. (2,500 lbs.)

8 - (less than) 10 1,600 kgs. (3,500 lbs.)

10 or more 2,050 kgs. (4,500 lbs.)


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SC 11+ Male and Female employees are eligible to ship personal effects to their country-of-origin in accordance with the following weight allowance table:

2. Family Status Employee

• Accompanied Baggage


The costs are limited to the distance between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

• Unaccompanied Airfreight

If the employee does not use the accompanied excess baggage provision, the Company will reimburse him/her for the cost of one shipment of effects via unaccompanied baggage or airfreight. The costs are limited to the equivalent of the excess accompanied baggage referred to above.

• Surface Shipment

The Company pays for export packing, inland freight, ocean shipping, and insurance charges to surface ship personal and household effects to the employee's country-of-origin in accordance with the following weight allowance table:

Years of Service* Entitlement

Less than 10 3,175 kgs. (7,000 lbs.)

10 - 19 3,850 kgs. (8,500 lbs.)

20+ 4,550 kgs. (10,000 lbs.)

Employee 50 kilograms

Spouse 50 kilograms

Each Eligible Dependent 25 kilograms

Years of Service* Entitlement

Less than 10 7,700 kgs. (17,000 lbs.)

10 - 19 9,075 kgs. (20,000 lbs.)

20+ 10,450 kgs. (23,000 lbs.)


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b. Storage

The Company pays storage costs, incurred by the terminated employee at the point-of-destination, for a maximum of thirty (30) days at the Company contractor's designated storage facility, with the exception that employees who are terminated as part of the Expatriate Layoff (Surplus) Program are allowed up to 90 days surface shipment storage.

c. Customs Duties

The employee must pay any customs duties.

2. Terminated or Retiring Employees from India or Pakistan

a. Salary Codes 03-10


Single/Bachelor Status Male Employees -- The Company provides employee a baggage allowance equivalent to the cost of 50 kg. of excess baggage between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

Females and Family Status Employees -- The Company provides employee and each eligible accompanying dependent a baggage allowance equivalent to the cost of 10 kg. of excess baggage between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

2. Surface Shipment

Female Employees -- Female employees are eligible for a surface shipment of personal effects to their country-of-origin in accordance with the following table:

SC 3-10 Foreign Contract female employees hired on or after September 1, 1999, and who live in furnished Company housing (i.e., unit of 500 sq. ft. or less) at the time of final shipment, will have a final shipment entitlement of 700 kgs. (1,500 lbs.). Employees hired prior to September 1, 1999 will retain their current shipping privileges in accordance with the above table, regardless of the size of their housing unit.

Years of Service* Weight Allowance

Under 5 700 kgs. (1,500 lbs.)

5 - (less than) 8 1,150 kgs. (2,500 lbs.)

8 - (less than) 10 1,600 kgs. (3,500 lbs.)

10 or more 2,050 kgs. (4,500 lbs.)


October 2, 2005

In place of the Company-arranged final shipment, SC3-10 female employees may elect to receive a cash-in-lieu payment (based on employee’s service) as established by the Company. Current cash-in-lieu payment amounts are available from the Employees Shipment Unit. These amounts are subject to periodic review and adjustment to reflect the Company’s shipping costs. Departing employees with less than 90 days of service, and who did make a surface shipment to Saudi Arabia when they were hired, are not eligible to receive cash-in-lieu.

Family Status Employees -- The Company pays to surface ship personal effects to the employee's country-of-origin in accordance with the following entitlement table:

3. Airfreight Shipment

Airfreight shipments at Company expense are not authorized.

4. Customs Duties

The employee must pay any customs duties.

5. Storage of Company-Assigned Surface Shipment

The Company pays storage costs at the Company contractor's designated storage facility for a maximum period as follows:

• thirty (30) days for terminated employees; and• ninety (90) days for retired employees or for

employees terminated as part of the Expatriate Layoff (Surplus) Program.

b. Salary Codes 11+ Male and Female Employees


The Company provides employee and each eligible accompanying dependent a baggage allowance equivalent to the cost of 10 kg. of excess baggage between Saudi Arabia and the recognized airport nearest the employee's point-of-origin.

Eligible for Retirement at Time of Shipment


Not Eligible for Retirement at Time of Shipment



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2. Surface Shipment

Employees are eligible to ship personal effects/household goods to their country-of-origin in accordance with the following weight allowance schedule:

3. Airfreight Shipment

A terminating employee is eligible for one airfreight shipment. The allowance of IATA "E" type air cargo boxes are as follows:

a. Employee with ten (10) or more Gregorian years of service:*

b. Employee with one (1) but less than ten (10) Gregorian years of service:*

c. Employee with less than one (1) Gregorian year of service:*

* As determined by continuous service date.

4. Customs Duties

The employee must pay customs duties levied at the destination point.

Entitlement

Years of Service* Family Single/Bachelor

Less than 10 7,700 kgs. (17,000 lbs)

3,175 kgs. (7,000 lbs)

10-19 (new entitlement) 9,075 kgs. (20,000 lbs)

3,850 kgs. (8,500 lbs)

20+ 10,450 kgs. (23,000 lbs)

4,550 kgs. (10,000 lbs)

Employee Only Two Type "E" Containers

Employee and Family Three Type "E" Containers

Employee Only One Type "E" Container

Employee and Family Two Type "E" Containers

Employee Only One Type "E" Container

Employee and Family One Type "E" Container


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5. Storage

The Company pays storage costs at the Company contractor's designated storage facility for a maximum period as follows:

Retirees

• thirty (30) days for airfreight shipment.• ninety (90) days for surface shipment.

Terminating Employees

• thirty (30) days for surface shipment, with the exception that employees who are terminated as part of the Expatriate Layoff (Surplus) Program are allowed up to 90 days surface shipment storage.

c. Shipment to Other than Country-of-Origin

If an employee wishes to make his/her shipment to other than the country-of-origin, he/she will be required to pay in advance any additional shipping costs that are involved which exceed those to the point-of-origin.

B. Death of the Employee - China, the Philippines, Singapore, Bangladesh, Sri Lanka, Thailand, India, Pakistan

1. Single/Bachelor Status Employee - Surface Shipment

After the Company receives Saudi Arab Government authorization, the Company pays to ship the employee's personal effects to the employee's country-of-origin.

2. Family Status Employee - Surface Shipment

The Company pays to surface ship a reasonable amount of personal effects, household items, furniture, and appliances. They will be shipped to the employee's country-of-origin.

3. Airfreight

a. All Salary Codes 03-10 and Far East Asian Salary Codes 11+

Airfreight shipments at Company expense are not authorized.

b. Salary Codes 11+ Foreign Contract

The surviving family is eligible for one airfreight shipment as follows:

Single/Bachelor Status Employee

One Type "E" Container

Family Status Employee Two Type "E" Containers


October 2, 2005

4. Customs Duties

The deceased employee's family or estate must pay customs duties levied at the destination point.

5. Storage Costs

The Company pays surface shipment storage costs for a maximum of thirty (30) days at the Company contractor's designated storage facility.

6. Cash-In-Lieu

Cash-in-lieu of shipping costs is not authorized.

C. Divorce, Legal Separation, Abandonment or Permanent Departure of Spouse

An employee with a permanently departing spouse is eligible to send personal effects and household goods to a location within the employee’s country-of-origin in accordance with his family status final shipment entitlement.

The surface (and if applicable, the airfreight shipment) entitlement for the employee upon his final departure is any unused balance of the family departure shipment. The minimum time between packing the spouse’s departure shipment and the employee’s final shipment should be at least 3 months.

D. Excess Furniture Shipment For Move to a Smaller House

For employees living in Company housing, an excess furniture shipment of up to 925 kgs. (2,000 lbs.) is permitted for an employee who moves to a smaller Company housing unit that cannot accommodate all his household and personal effects. Eligibility is based either on a reduction in the number of bedrooms and the new house being at least 15% smaller in size than the previous unit, or a reduction in housing unit size of 30% if there is no reduction in the number of bedrooms. This one-time surface shipment of excess furniture/household goods can be made to the employee’s Company recognized point-of-origin. Costs to any other location that exceed those to the point-of-origin are for the account of the employee. The amount of weight shipped reduces the employee’s final surface weight entitlement. The shipment should be made within two months of a move to a smaller housing unit.

E. Employee-Paid Storage Period

In addition to the initial Company-paid storage period of an employee’s surface shipment in the destination country, the employee may arrange with the shipping contractor for employee-paid storage and insurance for a further period. The total period of Company-paid/employee-paid storage should not exceed twelve months, otherwise all storage removal and delivery costs will be at the employee’s expense.


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F. Articles Not Accepted for Shipment

Articles not accepted for export shipment from Saudi Arabia are identified in Sections VII, VIII, and IX.

XIV. Out-Of-Kingdom Temporary Assignments

A. Unaccompanied Airfreight

Employees are eligible for the following unaccompanied airfreight shipment of effects at Company expense to and from the new assignment location:

B. Surface Shipment

If the assignment is 12 months or longer, a surface shipment may be sent to and from the assignment location. Any weight over the applicable maximums will incur an excess weight charge to be paid by the employee. Employees are responsible for payment of all customs duties on personal effects/household goods shipped to their home country.

1. Single and Bachelor Status Assignments

Employees are eligible for a surface shipment of personal effects not to exceed 575 kilograms (1,268 pounds) to and from the assignment location. Any weight over 575 kilograms will incur an excess weight charge to be paid by the employee. Employees are responsible for payment of all customs duties on their personal effects/household goods shipped to their home country.

2. Family Status Assignments

Employee and spouse are eligible for a surface shipment of personal effects not to exceed 925 kilograms (2,000 pounds) to and from the assignment location. Each approved accompanying child is authorized additional 75 kilograms (165 pounds) to and from the assignment location. Any weight over 925 kilograms and additional 75 kilograms for each approved child will incur an excess weight charge to be paid by the employee. Employees are responsible for payment of all customs duties on their personal effects/household goods shipped to their home country.

C. Excess Weight Charges

The employee pays the cost of preparing and shipping personal property exceeding the above allowances. Excess weight shipments will be authorized only when the employee has agreed to reimburse the Company for costs incurred in shipping the excess weight.

Employee Only Two Type "E" Containers

Employee and Family Three Type "E" Containers


October 2, 2005

D. Customs Duties

Employees pay customs duties levied by their home country. Customs duties levied by other host governments are Company paid.

E. Storage

Storage-in-transit for surface and airfreight shipment is permitted for up to 45 days while the employee is in temporary (e.g., hotel) accommodation awaiting availability of rented accommodation.

F. Cash-in-Lieu Option for Returning Shipment to Saudi Arabia

Employees completing their Chapter 8 assignment have the option to either have the Company ship their personal effects to Saudi Arabia in accordance with applicable policies or they have the option to elect a cash amount in lieu of the Company making this shipment. For employees electing cash-in-lieu payment, it must be taken for both the airfreight and, if applicable, surface shipment. Requests for a cash-in-lieu payment should be processed through the Personnel Department within 60 days of completing the Chapter 8 assignment. Cash-in-lieu payment rates are subject to periodic review and adjustment to reflect Company shipping costs. Current rates are as follows:

XV. Relocation Shipments Within the Kingdom

The Company provides moving assistance to employees as follows:

A. The Company moves the effects of employees relocating from one Company housing to another Company housing. The Company packs and transports the employee’s personal effects, household items, appliances and furniture to the new location.

B. Employees who are permanently transferred to a new work location beyond 50 kilometers from their present work location, and, as a result of the transfer, they relocate their residence/household on their own more than 50 kilometers eligible to receive the Relocation Allowance. See Chapter 7 for details on this allowance.

Cash-in-lieu Payment Rate

Chpt. 8 Location Status Air Freight Surface

Far East Single/Bachelor SR13,300 SR7,100


Middle East Single/Bachelor SR2,200 SR2,900


North America/Europe & Rest of the world

Single/Bachelor SR5,600 SR4,900



October 2, 2005

C. The Company pays the following Moving Assistance Allowance when employee relinquishes Company housing and personal effects are moved by the Company. This allowance is paid only in case of a personal move out of Company housing when no work location change or job transfer is involved. The Company pays the allowance in lieu of transporting the employee’s furniture, household effects, etc.

As applicable, the allowance is paid when the employee provides a clearance from Company housing to the Area Personnel Office. Claims for payment are to be submitted within one year of the date of relocation. In unusual circumstances, Area Personnel Administrators may process claims beyond this time period.

XVI. Personal Effects Shipment for Newlyweds

A. Eligibility

Regular Work Schedule, single status male Saudi Aramco employees who marry following their relocation to Saudi Arabia are eligible for a personal effects shipment, provided their new spouse is authorized by the Company to reside in Saudi Arabia. A bride who is already, or has previously been, an employee of the Company or wife of another employee is not entitled to this shipment allowance unless her return to the Kingdom is one year or more since her final departure from the Kingdom as an employee or spouse of another employee.

The Company pays costs for the shipment of effects for one spouse per employee; therefore, an employee who relocates more than one spouse to Saudi Arabia does so at his own expense. On an exception basis, a Regular Work Schedule employee whose spouse has died is eligible for a newlywed shipment if he remarries, provided the new spouse meets eligibility guidelines. This exception requires the approval of the Director, Personnel.

B. Accompanied Baggage


Distance Moved Family Status Employee

Bachelor/Single Status Employee

1 through 200 Kilometers SR 800 SR 400

201 through 349 Kilometers SR 2,200 SR 1,100

Spouse 10 kilograms

Each Eligible Accompanying Child (under age 19)

10 kilograms


October 2, 2005

C. Unaccompanied Airfreight


D. Surface Shipment

One surface shipment from the spouse's point-of-origin is authorized for personal effects, furniture, and appliances. Excess cost over and above what it would have cost to ship from the employee's point-of-origin will be charged to the employee. The shipment must be made through Company-designated shipping agents and may not exceed:

The surface shipment must be made at the time the spouse relocates to Saudi Arabia.

XVII. Vacation Excess Baggage

Refer to Chapter 6, Vacation and Holidays, Section IV.

XVIII.Exceptions

Unless noted otherwise, any exception to this policy requires the prior written approval of the Vice President - Employee Relations and Training.


Each Eligible Accompanying Child (under age 19)


Industrial Relations Manual for Asian EmployeesChapter 12: Housing & Families

October 2, 2005

Chapter 12: Housing & Families

I. General

The Company provides housing for employees based on eligibility requirements.

II. Applicability

This policy applies to all Asian employees employed by the Company or who are within the Company's administrative control.

III. Definitions

The following terms are found within the policy. For complete information on eligibility requirements, etc., refer to the specific policy statement.

A. ASIAN EMPLOYEE -- An employee whose country of recruitment (point-of-origin) is either the Philippines, India, Pakistan, Sri Lanka, Thailand, Bangladesh, or Singapore.

B. ASSOCIATED COMPANIES -- Aramco Services Company (ASC), Aramco Overseas Company B.V. (AOC B.V.), Aramco Associated Company (AAC), Saudi Refining, Inc. (SRI), Saudi Petroleum International, Inc. (SPI), Bolanter Corporation N.V., Pandlewood Corporation N.V., Saudi Petroleum Overseas Ltd., Vela International Marine Ltd., and any other Subsidiary Company hereafter designated an Associated Company by Saudi Aramco.

C. BACHELOR 03-10 HOUSING -- Bachelor quarters for Salary Code 03-10 male employees.

D. BACHELOR STATUS EMPLOYEE -- An employee who is married but who is not accompanied by Company-authorized family members at the employee's work/residence location.

E. DOMESTIC HELPER -- A person employed by a Saudi Aramco employee to perform household duties.

F. FAMILY STATUS EMPLOYEE -- An employee who is married and is accompanied by Company-authorized family members at the employee's work/residence location.

G. HOUSING POINT PRIORITY SYSTEM -- A system used by employees to acquire, by bid, permanent housing. Housing points are based on salary code and recognized years of continuous service.

H. INITIAL HOUSING -- An employee's first Company-assigned housing unit.


October 2, 2005

I. INTER-AREA TRANSFEREE -- An employee permanently transferred between the Company's operating areas (e.g., Dhahran to Ras Tanura, etc.).

J. LOANEE -- A person who is loaned to Saudi Aramco pursuant to the Agreement for Technical Services between Saudi International Services Company (SISCO) or one of the Subsidiary or Associated Companies and Saudi Aramco.

K. MAIN FAMILY CAMP -- Family camps consisting of family housing, female housing, male Salary Code 11+ bachelor housing, recreational facilities, schools, etc., located at Dhahran, Abqaiq, Ras Tanura and Udhailiyah.

L. NO OBJECTION CERTIFICATE (NOC) FOR FAMILY STATUS -- Sponsorship by the Company for bringing eligible family members to reside with the married employee in Saudi Arabia.

M. NON-PROFESSIONAL EMPLOYEE -- An employee assigned to a job which does not require a college degree.

N. PERMANENT IN-CAMP HOUSING -- Housing within Company Main Family Camps. This housing varies in construction dates, but it is generally larger, with more amenities than temporary in-camp housing.

O. PROFESSIONAL EMPLOYEE -- An employee assigned to a job requiring a college degree.

P. REGULAR WORK SCHEDULE (RWS) -- A general designation for work schedules (irregular, normal, and/or restricted) which are not Special Work Schedules (SWS).

Q. REMOTE AREA -- A Company assigned location that may qualify for a Specified Location Allowance.

R. SPECIAL WORK SCHEDULE (SWS) -- A work schedule which spans a specified number of consecutive work days with built-in overtime followed by a specified number of consecutive days off (e.g., 42 days work followed by 21 days off).

S. SUPPLEMENTARY MANPOWER/CONTRACTOR EMPLOYEE -- A person employed by a Supplementary Manpower Contractor or a Contractor Company. Housing policies are coordinated by the Contractor - Industrial Relations Division.

T. SINGLE STATUS EMPLOYEE -- An employee who is unmarried.

U. TEMPORARY HOUSING -- A housing unit assigned by the Company to an employee for less than 5 years.

V. TRANSFEREE -- A person employed by Star Enterprise or one of the Subsidiary or Associated Companies of Saudi Aramco who is transferred to Saudi Aramco. To be considered as a transferee, both Saudi Aramco and the prior employer must recognize the employee's service as accrued with each other for qualified benefit and welfare plans and final average pay for retirement plan benefits.


October 2, 2005

W. VISITOR -- A person whose visa (if required) is sponsored by an employee. The Company approves the visitor temporarily residing with the employee in Company quarters for a specified period of time.

IV. Eligible Family Members

The Company authorizes certain family members of Regular Work Schedule SC 11+ employees to permanently reside with the employee in Saudi Arabia, provided they meet the Company's established residency and medical requirements. Employees eligible for family accompaniment are as follows:

Eligible family members are the employee's spouse, as designated in his NOC or family status request, and children who meet the requirements as outlined in the paragraph below.

When the spouse is a permanently authorized resident, children who meet the following eligibility requirements may reside in Saudi Arabia:

• Unmarried children of the employee and spouse who have not passed their 19th birthday (children 18 years old or younger).

• Unmarried children of the employee or resident spouse who are regular members of the employee's household and in the permanent legal custody of the employee or spouse, provided the children have not passed their nineteenth birthday (children 18 years old or younger). In cases where an employee is legally married to more than one spouse and his children are regular members of the household of a spouse who is living out-of-Kingdom, such children are not eligible for in-Kingdom residence.

• Other minor children who have not passed their 19th birthday (children 18 years old or younger) who become fully dependent upon the employee and for whom permanent legal custody is granted to the employee.

• Any children referred to in the paragraphs listed above must be pursuing their education with normal continuity through the completion of high school in order to be eligible for residence in Saudi Arabia.

• Normal continuity of education will be considered to exist when the child is temporarily physically incapacitated, or when the child's presence in Saudi Arabia is necessitated as a result of a change in schools where semester break schedules do not coincide.

Residency requests for other family members should be referred to Area Personnel Administrators.

Category Family Accompaniment Eligibility

Physicians On-Call and SC 15+ Employees

Immediate; Subject to Satisfying Saudi Government Residency Requirements

SC 11-14 Employees In Accordance with No Objection Certificate Program in Section XXIII


October 2, 2005

While in Saudi Arabia family members are expected to conduct themselves according to recognized Company standards of conduct. Failure by any family member to meet and conform to these standards will be cause for withdrawal of Company authorization of residency in Saudi Arabia.

V. Visitors and Guests

A. Visitors

With Company approval, and provided the Saudi Arab Government issues a visitor's visa, relatives of employees may visit. Visitors must be:

• Employee's non-resident spouse.• Employee's non-resident child(ren).

Other eligibility requirements are:

• Employee's housing assignment is within a Main Camp or in suitable local community housing. It is either family housing or permanent bachelor housing not less than a Studio size unit and single occupancy dwelling type.

• Relative's visit will not result in more than two occupants per bedroom.

• Adult supervision is provided for school-age relatives.• Relative possesses a Company-sponsored Saudi Arab Government

visa.• Visitor request form has been approved by the Company.• Maximum length of spouse visit is no longer than 90 days subject to

the length of the visitor's visa issued by the Saudi Arabian Government.

• Minimum period between visits by spouse is 180 days as measured from the date of exit from the last visit.

Note: Refer to Chapter 5, Medical Services, for emergency medical and dental care requirements for Company-authorized visitors on visitor's visas.

B. Guests

Guest is defined as an acquaintance invited to spend time for a period not to exceed 7 days at the employee’s Company provided housing. Guests should be sponsored by a Company employee who resides in the Family Housing Area. Guests are expected to conduct themselves according to recognized Company standards of behavior while in the Family Housing Area. Employees will be responsible for the misdeeds or misbehavior of their guests. Guests who fail to conform to these standards will be requested to leave the Company Family housing Area and subsequently will not be permitted to spend time at the employee’s Company provided housing.


October 2, 2005

VI. Eligibility for Company Housing

Employees are eligible for Company-assigned housing as follows:

A. Male Employees

1. Bachelor/Single Status Employees in Salary Codes 03-10

Employees are eligible for double occupancy quarters in 03-10 Bachelor Camps or remote area camps.

2. Bachelor/Single Status Employees in Salary Codes 11+

Regardless of actual marital status, employees are eligible for bachelor housing within the Main Family Camps, provided the employee has not received a Rental Assistance Allowance.

3. Family Status Employees who are Physicians On-Call or in Salary Codes 15+

Family status employees are eligible for family housing within the Main Family Camps.

4. Other Family Status Employees in Salary Codes 14 and Below

Employees in Salary Codes 11-14 are not eligible for Company-provided housing and must arrange for independent housing in the local community.

B. Female Employees

All females are housed within the Main Family Camps in female designated housing.

VII. SC 11+ Male and All Female Initial In-Camp Housing

A. Applicability

1. Salary Code 15+ Employees and Physicians On-Call

Employees in Salary Code 15+ and physicians who are on-call are immediately eligible for initial in-camp bachelor or family housing, as applicable, within the Main Family Camps based on availability of housing and 90 days prior notice of the arrival date in Saudi Arabia.

2. Female Employees

Female employees are assigned initially to temporary housing within the Main Family Camps based on the availability of housing and 90 days prior notice. SC 03-09 employees are assigned to double occupancy housing, which does not have a rental charge.


October 2, 2005

3. Male Single/Bachelor Employees (Salary Codes 11 through 14)

Salary Code 11 through 14 male single/bachelor status employees are assigned initially to temporary housing within the Main Family Camps based on the availability of housing and 90 days prior notice.

4. Promotion to Salary Code 11+

Male single/bachelor status employees promoted to Salary Codes 11+ are immediately eligible to relocate into permanent bachelor housing within the Main Family Camp through the Housing Point Priority System.

B. Assignment of Initial In-Camp Housing

1. Male Single and Bachelor Status Employees in Salary Codes 11 through 14

Based on availability of housing, the employee may be assigned single occupancy bedroom with shared bath, kitchen, and living room facilities.

2. Employees in Salary Codes 15+ and Physicians On-Call

The employee is assigned in-camp housing based on the following bedroom requirements:

a. One Bedroom

1. Bachelor Status employee.

2. Single Status employee.

b. Two Bedroom

1. Families without children.

2. Families with children not eligible for residence in Saudi Arabia.

3. Families with one eligible child.

c. Three Bedroom

Families with two or more eligible children.

Note: Certain types of three bedroom houses will require minimum number of children as designated by CB&OS for each area.

Family status employees are initially assigned in-camp family housing. The assignment is based on the employee's salary code and number of dependents. Depending on the housing unit assigned, the employee may be required to live in the initial house for either 2 or 5 years, or may be immediately eligible to bid for housing through the Housing Point Priority System.


October 2, 2005

Employees with 4 or more dependent children (under age 19) require the approval of the Senior Vice President of the proponent organization (normally secured at the time of employment) prior to securing family residence visas/Company housing.

3. Exceptions

Exceptions to this housing policy for housing assignments require the concurrence of the Out-of-Policy Committee and the approval of the Director, Personnel.

C. Furnishings

In-camp accommodations are furnished with basic furniture and major appliances. These furnishings may be used free of charge for a four-month period from the occupancy date (see Section XIII for further detail on furniture rental charges). An initial gift pack consisting of linens, dishes, silverware and cooking utensils is provided to new hire employees.

VIII. Housing Point Priority System/Permanent In-Camp Housing

Housing points are used by eligible employees to acquire permanent housing. The Housing Point Priority System provides an equitable means for assigning permanent in-camp housing.

The available housing supply at each Company housing location is segregated into housing bid lists that address the needs of the various groups of employees based on their housing eligibility. Factors used in allocating housing to a particular bid list include whether it is bachelor or family housing, initial or permanent housing, number of bedrooms, overall size of housing, type (style), number of homes available, etc. The Area Housing Office has more detailed information on housing bid lists and their applicable eligibility rules.

Employees accrue housing points on the following basis:

A. Position Factor Points

The number of points assigned to each employee depends upon salary code placement. An employee permanently appointed to a position is assigned the position factor points of the position, regardless of the actual rate of pay.

1. Position Factor Points

Salary Code Position Factor Points

5 5

6 6

7 7

8 10

9 20


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2. Salary Code 20 and Above

For administrative purposes, a 200-point position factor is used for employees in Salary Code 20 and above. Where there are problems connected with priority listings, the Housing Office lists the total accumulation, using a 200-point position factor for each competing employee in Salary Code 20+ and secures from the Executive Compensation Office the ranking of each employee competing for the assignment.

Irrespective of housing points, Management may elect to make direct housing assignments for employees in Salary Code 20 and above. (See Special Assignments of Housing, Section VIII.F.3.)

B. Continuous Service Factor Points

Saudi Aramco regular employees accrue one-half point per month of continuous service.

Employees who become eligible for points during any day of a particular month receive point credit for the entire month. No credit is given for previous foreign or domestic service where continuous service is not recognized by Saudi Aramco.

C. Foreign Service Factor Points

Points accrue to an employee, effective with the Saudi Aramco hire date, at a rate of one point (1) per month. Employees who become eligible for points during any day of a particular month receive full point credit for the entire month.

A transferee with fully recognized service for Saudi Aramco qualified benefit plans and final average pay for retirement plan purposes is to be granted foreign service factor housing points for previous foreign service occurring during the period of recognized continuous service.

10 30

11 40

12 50

13 65

14 80

15 100

16 120

17 140

18 160

19 180

20 & Above 200


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The employee’s Foreign Service Factor Points and applicable Continuous Service Factor Points are combined. They will normally equal one and one-half (1 1/2) points per month, except for recognized Continuous Service periods with ASC and affiliated companies prior to transferring to Saudi Aramco.

D. Temporary Assignment Factor Points

Employees temporarily assigned to a work assignment within or outside their country-of-origin continue to accrue one and one-half (1-1/2) points per month.

E. Point Ties

In instances of ties for total point accruals, the position factor prevails. If position factor points are the same, the employee's continuous service date is the determining factor. When employee's continuous service dates are the same, the lowest employee number determines assignment.

F. Bidding for In-Camp Housing

1. Housing Size

Based on availability of housing, the size of house for which an employee may bid is determined by the number of bedrooms required as follows:

a. One Bedroom

Single or bachelor status male or female

b. Two Bedroom

1. Families without children

2. Families without eligible children

3. Families with two eligible children

c. Three Bedroom

1. Families without children

2. Families with two eligible children

3. Families with three eligible children

4. Families with four eligible children

Note: Certain types of three bedroom houses will require minimum number of children as designated by CB&OS for each area.

d. Four Bedroom

Families with four to six eligible children


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e. Five Bedroom

Families with five to eight eligible children

Note: Four and five bedroom houses are not available for initial in-camp housing.

Employees may elect to receive housing offers with fewer bedrooms than for which they are eligible if the housing assignment would not result in more than two occupants per bedroom. If employees select a smaller home, they forfeit eligibility to compete for larger houses until they are eligible for a convenience move.

Employees converting from bachelor to family status who have 4 or more dependent children (under age 19) require the approval of their Senior Vice President prior to securing family residence visas and being placed on a bid list.

2. Executive Housing

Family status employees in Salary Code 15 and above may compete for executive family housing, based on bedroom requirements and the Housing Point Priority System.

Single status employees in Salary Code 15 and above have first choice for permanent bachelor housing as it becomes available. Housing assignments for Salary Code 15+ single status employees are made according to the Housing Point Priority System.

3. Special Assignments of Housing

The President & Chief Executive Officer may make special assignments of housing outside the Housing Point Priority System or bedroom requirement eligibility. Generally, these special assignments are typically made to employees assigned to General Manager positions or above.

All such assignments outside the Housing Point Priority System, to include those above, shall be documented in writing.

G. Convenience and Other Type Moves Through Bidding

1. Convenience Move

A convenience move is a move other than the initial move into a permanent house. It is made at the employee's request for any reason except:

• An increase in bedroom requirements;• Company-initiated transfer;• Promotion to Salary Codes 15+;• Change in status to an approved, permanent Department Head

position; or• Change in status from Family to Bachelor or Bachelor to Family.


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2. Frequency of Convenience Moves

An employee is allowed a maximum of two convenience moves during his/her entire continuous service period in a particular operating area of the Company (Dhahran, Ras Tanura, Abqaiq, Udhailiyah). Employees may not request convenience moves until they have occupied the current permanent house for five years.

Employees returning to Company permanent housing from a Chapter 8 Temporary assignment or Chapter 14 Training Assignment, who had relinquished or elected utilization of their Company permanent housing upon commencement of their assignment, will have time in their housing unit prior to their OOK assignment counted towards the five year waiting period for a convenience move. Time spent on the assignment does not count towards the five year waiting period. Only houses with approved home improvements could be kept for utilization with the prior approval of the Vice President, CB&OS.

3. Other Type Moves

The following moves are not counted as convenience moves and they have different residency requirements in current housing than the normal five-year residency period for a convenience move:

An employee converting from single/bachelor status to married status may bid on permanent family housing 90 days prior to the expected arrival date of his spouse, provided he presents proof of his marriage. If unsuccessful in bidding, he may be assigned initial in-camp family housing by the Company depending on housing availability, the size of his current accommodation and the number of dependents.

H. Housing Acceptance/Subsequent Declination

1. Acceptance

When the Company notifies an employee of successfully competing for an available dwelling, he/she must sign the Housing Assignment Agreement (SA-3383) within two working days. Otherwise, the dwelling is awarded to the next competing employee.

Status Minimum Residency Requirements

Promoted to SC 15+ 2 Years

Promoted to Department Head 2 Years

Increase in Bedroom Requirement No Minimum

Transferred to another Operating Area No Minimum

Change in status from Family to Bachelor or, if eligible, Bachelor to Family

No Minimum


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2. Subsequent Declination

If the employee declines the assignment, either after being notified of the successful bid award or after signing the Housing Agreement Form, the following penalty will be invoked.

• Employee's name will be removed from all housing lists for 120 days.

• The penalty period of 120 days will be effective from the date of signing the declination form.

If the house was declined within 5 working days of the housing offer closing, it will be offered to subsequent bidders from this offer. If the house was declined after 5 working days, it will be reoffered to all eligible employees on the points priority list.

I. Inter-Area Transfers

1. Male Employees Permanently Transferring Beyond Daily Commuting Distance and All Female Employees

Provided 60 days notice is given, these employees are eligible for temporary/initial housing at the new location in accordance with their eligibility category. These employees are also eligible to place their names on the applicable bid list 90 days prior to the date of transfer. If required, female inter-area transferees will be directly assigned housing as they are not eligible to commute.

2. Male Employees Permanently Transferring Within Daily Commuting Distance (e.g., Dhahran to/from Abqaiq or Ras Tanura)

These employees are expected to commute between operating areas if no temporary/initial housing can be made available at the new location. An employee's name may be placed on the applicable bid list at the new location 90 days prior to the date of transfer.

3. Employees Transferred from Remote Locations

Eligible employees will be assigned a temporary unit in the new work location and may compete for housing through the Housing Point Priority System. If housing is not available in the new work location, housing may be assigned in an adjacent work location.

4. As applicable, transferring employees are eligible to bid on, or are assigned, a house based on their current bedroom number eligibility. Married status SC 15+ employees are eligible for at least a three bedroom house.

J. Absences from the Kingdom

1. Out-of-Kingdom Temporary Assignments

Employees are eligible to compete for housing during business/ education/training assignments 61 days or more if:


October 2, 2005

• The employee occupied Company family housing at the commencement of the assignment; and

• The assignment is on bachelor status; and• The employee's spouse remains resident in-Kingdom.

Employees out-of-Kingdom on family or single status assignments are not eligible to compete for housing during business/education/training assignments 61 days or more.

2. Vacation/Emergency Leaves

Employees must notify the Housing Office in writing when they are authorizing another Company employee to accept or decline housing offers on their behalf during the period of temporary absence.

IX. Storage of Personal Effects

A. Bachelor/Single Status Employees Resident in SC 11+Housing

Personal effects of bachelor/single status employees will be stored at Company expense when:

• employee is permanently assigned to a remote location from a family camp housing location; or

• employee is temporarily assigned to a SC 11+ housing unit that is fully furnished, i.e., the basic house rent includes the cost of furnishings, and the employee has insufficient housing points to obtain permanent bachelor accommodation of 700 sq. ft. or greater; or

• employee is temporarily assigned from one unit to another that is significantly smaller in size than the permanent unit, in which case only the excess furniture will be stored, (i.e., for renovations, returning Chapter 8 employees).

Bachelor/single status employee personal effects storage charges will become the employee's responsibility at the time:

• employee refuses to bid on a permanent housing unit of 700 sq. ft. or greater, that could have been obtained with the number of housing points employee possesses; or

• employee rejects assignment to a bachelor housing unit of 700 sq.ft. or greater.

B. Family Status Employees Resident in Company Housing

1. Personal effects of family status employees will be stored at Company expense when:

• employee is reassigned from one district to another and is temporarily assigned furnished housing while:- bidding on permanent housing,


October 2, 2005

- occupying temporary furnished housing which does not meet the employee's approved bedroom requirement.

• employee is assigned housing that meets his bedroom requirements, yet it is measurably smaller than the typical permanent housing the employee could expect to obtain through the Housing Point Priority System. In such cases, an employee is eligible for Company-paid storage under the following guidelines:

• new hire employee is initially assigned a temporary housing unit which does not meet his bedroom requirement, or a housing unit from which furniture is traditionally not removed (i.e., trailers).

2. Family status employees personal effects storage charges will become the employee's responsibility at the time the employee in temporary housing refuses to bid on or accept permanent housing assignments which meet his bedroom requirements.

C. Access to Storage

Employees will be allowed one access to their personal effects storage and then one final delivery at Company expense. All other access requirements to the storage will be for the employee's account. These guidelines do not allow the opening of a packing box. Employees may remove the whole box from storage but not partial contents of the box.

X. Retention of Housing During Temporary Assignments of Less Than Six Months

During temporary assignments of less than six months, employees continue to pay rent and are responsible for their Company-assigned housing.

XI. Disposition of Housing During Temporary Assignments of Six Months or More

If an occupant of main family camp housing is out-of-Kingdom or out-of- Eastern Province for six months or more on a temporary assignment, the following provisions apply to Company housing:

Assigned Housing Meeting Bedroom Requirements

Storage Allowed at Company Expense if Unit is Smaller Than

2 Bedroom Unit 1,300 sq. ft.

3 Bedroom Unit 1,500 sq. ft.


October 2, 2005

A. Main Family Camp Permanent Housing

If the employee occupies permanent housing, he has the option of selecting one of the following:

1. Housing Utilization: Subject to the approval of the Area Manager-CB&OS, the employee's house is turned over to Community Services for use while the employee is on temporary assignment. The employee is to be returned to this house upon completion of his temporary assignment. The temporary assignment period does not count toward the 5-year convenience move eligibility period. If, during the utilization period, the employee requests that the house be fully renovated, the returning employee must then occupy the house for 5 years (exclusive of additional temporary assignments) to be eligible for a convenience move. Minor renovations to the house do not affect the 5-year convenience move eligibility.

2. Relinquishing House/Priority House Assignment: The employee is to relinquish his house for permanent reassignment to a new occupant. Upon completion of the employee's assignment, the employee is to be offered one house assignment in the employee's work location of the same house type, if available. This house assignment is to be made outside of the Housing Point Priority System, i.e., on a priority basis. If no houses of the same type are available in the employee's work location, the employee will be offered one house assignment of the same or similar house type in an adjacent work location, if available. If the employee rejects both priority house assignments as offered, or if the same or similar house type is not available, then the employee will be assigned to a temporary house meeting his bedroom requirement. The employee may obtain permanent housing through the Housing Point Priority System.

3. Retention of Family Housing: If the employee occupies permanent family housing, he may retain the family house if he accepts the temporary assignment on bachelor status and:

• his spouse and authorized family members continue to reside in the house during his temporary assignment, and

• the employee remains on bachelor status during the temporary assignment.

The employee continues to pay rent on the family house and remains responsible for personal effects in the house while on temporary assignment. The employee also remains responsible for landscape, gardening and maintenance (refer to Section XIV of this Chapter) of the house and accepts full responsibility for damage which may occur during his absence.

The employee's spouse and authorized family members may continue to use authorized Company facilities during the employee's temporary assignment.

If the employee converts to family status during his temporary assignment, he is no longer eligible for this option.


October 2, 2005

Company housing rent in Saudi Arabia is discontinued for employees electing either the Housing Utilization or Relinquishing House/Priority Housing Assignment option. In such cases, the Company's Personal Effects Unit will store the employee's personal effects during the temporary assignment period.

B. Temporary In-Camp Housing

If the employee occupies temporary in-camp housing, he must relinquish assignment to his unit which will be reassigned to another employee. Upon return, the employee is assigned temporary housing and may obtain permanent housing through the Housing Point Priority System.

C. Employee-owned carpets and other items that require special handling are removed and reinstalled at Company expense. The employee's personal and household effects will be packed and stored through the Company's Personal Effects Unit.

D. The employee's sponsoring Department must provide advance written notice to the Area Housing Office when an employee has an out-of-Kingdom or an out-of-Eastern Province assignment of six months or more. The Department must also give at least 90 days notice prior to the scheduled return date. In regard to Paragraph A above, it may be necessary to place a returning employee in temporary housing pending availability of the utilized house or a similar house to that occupied prior to the assignment.

XII. Relinquishment of Housing

A. Housing assignments are relinquished when any of the following conditions exist:

(Note: For loss of eligibility for Educational Assistance Plan benefits due to absence of spouse, see Chapter 15 - Schooling for Children.)

1. Termination of Employment

The employee may retain housing until the effective date of termination. Up to 30 days additional time may be granted with the approval of the Director, Personnel. Additional time beyond 30 days requires the recommendation of the employee's Department Head and the approval of the Vice President, Employee Relations and Training.

2. Divorce/Legal Separation/Permanent Family Departure/Desertion/ Voluntary Absence of Spouse for Any Reason

An employee loses his family status and his eligibility for family housing if his wife is absent from Saudi Arabia for a total of more than 120 calendar days (exclusive of authorized time such as vacation, emergency leave, business trip accompaniment, etc.):

a. In any calendar year, or


October 2, 2005

b. In the 6-month period covered by the fourth quarter of any calendar year and the first quarter of the following calendar year.

The employee may retain family housing for a maximum of 120 days following the spouse's departure date. An additional period beyond the 120 days may be granted upon endorsement of the Out-of-Policy Committee and approval of the Director, Personnel.

3. Spouse's Death/Disappearance/Extended Absence from the Kingdom for Medical Treatment

The employee may retain family housing for a maximum of one year with the endorsement of the employee's Executive Management and concurrence of the Director, Personnel. Additional time beyond one year may be granted upon concurrence of the Out-of-Policy Committee and the approval of the Director, Personnel.

B. Bachelor Status Employees Converting to Family Status

Employees in Salary Codes 11-14 currently residing in bachelor status who receive authorization from the Company for their family to reside in Saudi Arabia are required to relinquish their Company-assigned bachelor quarters prior to their family's arrival in the Kingdom.

C. Employees Permanently Transferring to Remote Areas

1. Employees occupying housing units in main camps will be assigned housing in the remote area to which they have been transferred.

2. Single or bachelor status employees assigned to remote area housing must relinquish their assigned main camp bachelor unit within 90 days of their transfer. This does not apply to employees assigned to selected remote locations that do not provide housing on a continuous basis (e.g., offshore and mobile onshore camps).

3. Family status employees are not required to relinquish their main camp family housing.

XIII. Monthly Rental Fees

A. Housing

Employees occupying temporary or permanent housing pay a monthly rental rate (including utilities). The rate established for the unit assigned, paid through payroll deductions, includes refrigerator, stove/oven, dishwasher (if provided) and trash compactor (if provided).

B. Furniture and Appliances

1. Basic furnishings are Company-provided at no charge to eligible employees for up to a four-month period from the date of occupancy. This allows time for the employee to receive his personal effects shipment and/or to buy furniture/appliances locally.


October 2, 2005

2. Employees eligible for the four-month, free furniture rent period are:

• New hires, rehired employees, loanees or transferees.• Inter-area transferees who have not fully utilized the four-

month time period granted.• Inter-area transferees to and from Yanbu.

3. In unusual cases, resulting from delayed receipt of personal effects through no fault of the employee, the Area Manager of Community Services may extend the four-month free furniture rent period until such time as the personal effects relocation shipment is received by the employee.

4. Employees returning from out-of-Kingdom temporary assignments are eligible for Company-provided basic furnishings at no charge for up to one month.

C. Rent Reimbursement

Rent charges are reimbursed to the employee during out-of-Kingdom temporary assignments when:

• the employee normally pays rent on Company-provided housing; and• the housing is unoccupied by any of the employee's family members;

and• the cost of temporary quarters out-of-Kingdom is not Company-paid

nor reimbursed; and• the employee submits an approved expense report to his Department

for rent reimbursement.

XIV. Landscape, Gardening and Maintenance

A. Landscape and Gardening

Employees assigned to in-camp housing are responsible for the maintenance and appearance of assigned yards at their own expense. Such maintenance is to include:

• Provide sufficient water.• Trim grass, shrubs and hedges to maintain a good appearance and to

allow unobstructed visibility at street intersections.• Keep yards and driveways free from materials, debris and garbage.• Park boats, automobiles, motorcycles and similar equipment only in

areas intended for parking.• Obtain prior approval from the Home Improvement Office to build

fences, garages, carports, pet pens or similar structures.


October 2, 2005

B. Maintenance

The Company makes the following housing repairs without charge to the employee. Maintenance includes:

1. Electrical repairs

2. Air conditioning repairs

3. Plumbing repairs

4. Structural repairs

5. Roofing repairs

6. Exterior painting

7. Masonry repairs

8. Telephone repairs

9. Repairs to Company-owned appliances

The Company does not repair/maintain garden walls, fences, patios, sheds, garages, etc., built by the employee.

XV. Home Improvement

A. Subject to the approval of the appropriate Community Services Area Manager, residents permanently assigned to certain permanent housing may improve their housing with specified home improvements. All improvements are at the occupant's expense and are subject to:

• Approval by the Home Improvement Office• Company acceptance of the Contractor• Company inspection and control• Company acceptance of the finished work

B. Eligible House Types

Permanently-assigned houses may be improved/modified only with prior Company approval.

C. Eligible Improvements

Improvements on permanently-assigned housing are limited to:

• Converting Garage to Room• Patio and/or Sunscreen• New Garage• Converting Carport to Garage• Privacy Walls• Sliding Glass Doors and Windows• Interior Changes - subject to approval by Home Improvement Office


October 2, 2005

• Swimming Pool and/or Hot Tub• Replacing Carpet with Ceramic Tiles

Room additions will be permitted, based on justifiable family space requirements only, subject to structural and architectural feasibility.

D. Construction

All work must be done by a Company-approved contractor working from drawings approved by the Home Improvement Office. All material must be to Saudi Aramco's standards for both quality and safety. The standards of construction must conform to Company engineering standards.

E. Restrictions

The location of improvements is to be such that neighbors are not adversely affected. There are also restrictions in the placement of walls or fencing, extending home improvements beyond the front of the house, etc. Complete information on these restrictions is available from the Home Improvement Office.

F. Preconstruction Assistance

Complete information and assistance is available from the Home Improvement Office.

G. Swimming Pools and Hot Tubs

Swimming pools and hot tubs, including associated work, are permitted but are entirely at the resident's expense and subject to all required approvals, including those for water/electricity availability.

Residents are responsible for all maintenance, safety features, security and liability requirements. Residents may be requested to remove these items, at the resident's expense, if so directed by the Company, at the time the resident vacates the house.

H. The Company intends that projects be completed within an agreed upon timetable. The Company reserves the right, when a resident does not complete a project in a timely manner, to arrange for completion and to charge the resident's personal account or to have the project dismantled at the resident's expense.

XVI. SC 03-10 Bachelor Housing

A. Applicability

Male employees in jobs in Salary Codes 03 through 10, who are in Saudi Arabia on bachelor/single status, are eligible for bachelor housing assignments in 03-10 Bachelor Camps.


October 2, 2005

B. Location

03-10 Bachelor Camps are near Main Camps in Dhahran, Ras Tanura, Abqaiq, Udhailiyah, and remote areas.

C. Furnishings

Accommodations are furnished with basic furniture and linens at no cost to the employee.

D. Monthly Rental Fee

Unless the terms of employee's contract provides for rent-free accommodations, employee pays a monthly rental rate (including utilities) established for the unit assigned. The fee is paid through payroll deductions.

E. Accommodations

Room assignments are double occupancy with shared bathroom facilities.

Eating facilities are located in nearby buildings.

F. Preferred Quarters/Single Occupancy

Employees are eligible to compete for newer/preferred quarters and/or single occupancy quarters (when available) through the Housing Point Priority System.

When two employees request newer/preferred quarters on a double occupancy basis, they may combine their housing points.

G. Housing Point Priority System

Employees accrue housing points on the following basis:

1. Position Factor Points

The number of points assigned to each employee depends on his salary code.

Salary Code Position Factor Points

03 30

04 40

05 50

06 60

07 70

08 80

09 90

10 100


October 2, 2005

2. Service Factor Points

Points accrue effective with continuous service dates at one (1) point per month. Employees eligible for points during any day of a particular month receive full point credit for the entire month.

3. Point Ties

In instances of ties for total point accruals, the position factor prevails. If position factors are the same, the employee's continuous service date is the determining factor. When employees' continuous service dates are the same, the lowest employee number determines assignment.

H. Visitors

Residents of 03-10 Bachelor Camps are not authorized to have female visitors. Male visitors may be authorized provided their visit does not require overnight accommodation in the Camp.

I. Facilities

Employees with assigned quarters in 03-10 Bachelor Camps or remote area camps may use all facilities provided within the Camp.

J. Relinquishment of Assigned Quarters

1. Leave of Absence -- During an employee's absence on an authorized leave of absence in excess of fourteen days, his quarters may, at the Company's option, be reassigned to another employee.

2. Termination of Employment -- The employee may retain his quarters until the effective termination date.

XVII. Consultant Housing

The Labor Relations Division of Contractor Industrial Relations monitors housing for consultants.

XVIII.Remote Area Housing

Employees on job assignments in Company-designated remote areas are assigned bachelor quarters on the following basis:

Bathroom, kitchen or dining hall, and lounge or recreational facilities are shared.

Housing and food in selected remote areas are free to the employee.

Salary Codes 11+ Single Occupancy

Salary Codes 10 & Below Double Occupancy


October 2, 2005

Single or bachelor status employees permanently reassigned from Company main housing locations to remote housing locations must relinquish their housing. If the housing assigned to a SC 11+ employee at the remote location is smaller than that previously assigned, then the employee's excess personal effects will be stored at Company expense.

XIX. Transient Housing for Employees on Temporary Assignment (TA)

Employees on Temporary Assignment (within Saudi Arabia) to an area beyond the daily commuting distance of 80 km may be provided with transient housing on bachelor status, subject to availability, for a period of up to one year. Refer to Chapter 7 of the IR Manual for more details.

XX. Transient Housing for Regular Work Schedule Employees Assigned to Remote Locations

A. Regular Work Schedule employees permanently assigned to live and work in Company-designated remote locations live free of charge in temporary quarters near Company main camps during their days off when:

• they do not have family members living within the Eastern Province; and

• they would not otherwise have access to recreational, shopping, banking facilities etc., available to them during their days off.

B. Frequency

The frequency of transient housing usage is subject to control by the employee's management and is based on the availability of housing.

C. Applicability

Regular Work Schedule employees are eligible if they:

• are assigned to areas other than Dhahran, Abqaiq, Ras Tanura, Udhailiyah or Yanbu;

• do not have housing assigned in one of the foregoing main camp areas, or housing elsewhere in the Eastern Province for their days off use; and

• have no family members living within the Eastern Province.

D. Facilities

Employees, regardless of salary code level, are eligible, free of charge, for available double occupancy transient housing accommodations. This housing is located within 03-l0 bachelor camps or Company main camps and is assigned, based on employee housing eligibility.


October 2, 2005

E. Transportation

Employees may use Company transportation services to travel between remote locations and main camp areas free of charge. The sponsoring organization must arrange and pay for special transportation, if required.

F. Meals

Employees using transient housing are responsible for their own meals.

G. Rent

The employee's Department will be charged for transient housing.

H. Approval Authority

The Department Head, or his designee, approves days off transient housing assignments for remote area employees.

XXI. Unauthorized Occupancy

Company quarters are for the exclusive use of assigned employee occupants. Employees have no authority to reassign quarters to other persons or to permit occupancy of unregistered persons. Unauthorized occupants may be immediately evicted. The employee is subject to the Company's disciplinary procedures for any unauthorized use of Company housing.

XXII. Caretaker

Residents of Company quarters may assign a caretaker for security and maintenance purposes during their temporary absence due to vacation or Business Assignments. Residents may arrange for a caretaker to temporarily reside in their assigned housing provided the person nominated is authorized to live in the Family Camp housing.

XXIII.Pet Ownership

A. The Company allows residents of Salary Code 11+ family camps to maintain pets such as cats, birds, dogs and horses within the main family camp compounds. Owners of pets must be members of the Arabian Kennel Club, a self-directed group, and satisfy all regulations as issued by the Club and Community Services in regard to pet care and maintenance.

B. Residents of multiple occupancy buildings are not eligible to be pet owners nor to maintain pets in their Company housing units.

C. All pet owners are financially responsible for the health care and vaccinations of their pets, maintenance of Kennel Club membership and meeting Saudi Arab Government and Company requirements for pet control and conduct.


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XXIV. Facilities Utilization

A. All Female Employees and Male Salary Code 11+ Employees

All female employees and male employees in Salary Codes 11+ (including authorized family members) may use Salary Code 11+ facilities provided by the Company within the Main Family Camps, including beach facilities located near the Main Family Camps. Facility use is governed by the applicable policies for each facility.

B. Male Salary Codes 03 - 10 Employees

Male employees in Salary Codes 03-10 may use Company facilities in any 03-10 Camp.

Females are restricted from 03-10 Bachelor Camps.

XXV. No Objection Certificates (NOC's) for Family Status

A. General

The objective is to expand family status eligibility for Asian married employees who are in SC 11-14 level positions.

B. Policy

1. Salary Codes 11-14

Married employees in Salary Codes 11-14 may request the Company to initiate NOC sponsorship for bringing eligible family members for residence in Saudi Arabia. The following requirements determine eligibility for sponsorship, but actual admission is dependent upon employee and family members obtaining family status visas from the Saudi Arab Government.

2. Eligibility for Sponsorship

• Employee must be married; on a Regular Work Schedule; in Salary Codes 11-14; with performance meeting normal requirements of the job; and

• Employees in Salary Code 14 must have completed one (1) year of service.

• Employees in Salary Codes 11-13 must have completed three (3) years of service (may be reduced to one (1) year for some professions).

Requests for waiving the above minimum service requirements for eligibility of NOC family status sponsorship require the approval of employee’s Executive Management and the concurrence of the Director of Personnel Department.


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Employees with four or more eligible dependent children require the approval of their Executive Management and the concurrence of the Vice President, Employee Relations & Training.

Employees who previously received a family resettlement allowance are ineligible for NOC sponsorship.

C. Housing

Salary Codes 11-14 employees approved for family status are eligible to receive a Rental Assistance Allowance, and are responsible for obtaining independent housing in local communities. On an exception basis, employees are eligible for permanent Company bachelor quarters only when assigned to work in remote areas.

D. Personal Effects Movement

1. Initial Shipment

Employees are entitled to a family status personal effects shipment when their family joins them. Details are provided in Chapter 11.

2. Moving In/Out of Company Main Camp Housing

Employees moving in/out of Company bachelor or family camp housing as a result of family status change or becoming eligible for in-camp housing are entitled to a personal effects movement allowance. Details are provided in Chapter 11, Section XV.

XXVI. Independent Housing/Rental Assistance Allowance

A. General

Family status employees who are ineligible for Company-provided housing are responsible for arranging their own independent family housing in the local community.

B. Rental Assistance Allowance

The Rental Assistance Allowance, paid eligible employees to assist in obtaining housing accommodations in independent housing, is two (2) months base pay, with a maximum of SR 80,000 per year (Hijrah), minimum SR 11,000. Any salary changes (merit or promotional increase) that take effect after payment is made will not attract an additional allowance payment.

C. Eligibility

Married employees in Salary Codes 11-14 who qualify for family status under NOC policy are eligible to apply for this allowance.

Married employees who are currently residing in or who qualify for main camp family housing are not eligible to apply for this allowance.


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D. Employees on Temporary Assignment

1. An employee normally eligible for the allowance who is relocated at Company convenience on a temporary assignment for less than six (6) months and lives in Company housing during this period does not lose his eligibility for the allowance. The Rental Assistance Allowance continuation beyond 12 months is permitted when employee is in temporary Company housing, provided the Temporary Assignment is approved for extension beyond 12 months by the employee’s Executive Management and concurred by the Director of Personnel.

2. An employee on an out-of-Kingdom temporary assignment of twelve (12) months or more in duration may qualify for an unaccountable personal effects storage assistance if certain conditions are met. Refer to Asian Industrial Relations Manual, Chapter 8, Section IV for details.

E. Employees Living in Jeddah or Riyadh

Employees living in Jeddah or Riyadh have special provisions of this housing policy which apply to them. Details can be found in Saudi Arab Manual, Chapter 17 - Section IV - Jeddah/Riyadh Industrial Relations Policy.

XXVII.Intra-Area Transfer Allowance

A. General

Residents of Saudi Aramco camps who vacate assigned Company housing at Company direction and relocate to another housing unit within the same camp/district are paid an Intra-Area Transfer Allowance to help defray expenses of establishing a new household and to recognize the inconvenience of such a move. Guidelines for eligibility of the Intra-Area Transfer Allowance are as follows:

1. The employee must be resident in permanently assigned Company housing in Saudi Aramco camps.

2. The move must be a permanent move from the assigned housing unit. On an exception basis, temporary intra-area Company-directed housing moves of six months or more are considered permanent for purposes of Intra-Area Transfer Allowance eligibility. Employees may receive the allowance upon moving out of their current quarters; however, they are not eligible for the allowance again if moving back to their original or other quarters at the end of the dislocation period.

3. The move must be a Company initiated move due to removal of hazardous material, renovation, removal of service or other Company specific reasons.


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B. Allowance Amount

(1) SC 3-10 female employees living in family camps are eligible for the Intra-Area Transfer Allowance of SR 1,000.

C. Payment

The Area Personnel Office makes payment of this allowance upon certification by the Area Manager of Community Services of the Company-directed move.

XXVIII.Exceptions

Exceptions to this policy require the written approval of the Senior Vice President - Industrial Relations or his designated representative.

Family Camp Residents (SC 11+) Amount

Family Status Relocation SR 2,000

Single/Bachelor Status Relocation SR 1,000(1)

Bachelor Camp Residents (SC3-10 Male) Amount

Single/Bachelor Status Relocations SR 250

Industrial Relations Manual for Asian EmployeesChapter 13: Employee Communications

October 2, 2005

Chapter 13: Employee Communications

I. General

The system of internal communications facilitates free flow and exchange of employee/Company oriented information throughout the organization.

II. Intent

Management wants to promptly inform employees of all matters which influence their work or their status under Company policies and programs.

III. Definitions

A. DROP FROM PAYROLL -- If an employee is absent without permission for more than fourteen (14) consecutive days, he/she is dropped from the payroll.

B. PETITION -- A formal written request from employee(s) to Management asking for a specific action or response.

C. UPWARD COMMUNICATIONS -- An inquiry from employee(s) to Management.

IV. Means of Communications

A. Communications Meetings

The Chief Executive Officer, or designee, convenes a weekly meeting with Executives and Department Heads. They exchange information intended for downward communication. Each Department Head conducts weekly communications meetings within their organization.

B. Weekly Highlights and Notices

This publication is an adjunct to the Chief Executive Officer's Communications Meeting. It includes informational items concerning personnel assignments, major operational activities, and notices of general concern to employee groups.

C. Notices/Management Messages

1. The Department Head who changes a policy or program affecting major employee groups initiates the Company notice announcing the change.


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2. The Vice President - Employee Relations and Training determines if a Management message should be released on:

• major policy or program changes;• new policies or programs affecting major employee groups; or• responses to employee inquiries on the Company's position on a

subject of significant interest.

3. The Employee Relations Policy and Planning Department assists in preparing employee notices.

D. Formal Publications

The Public Relations Department writes and distributes publications containing items on:

• employee activities;• significant corporate news; and• the history/cultural heritage of the geographic regions in which the

Company maintains operations and interests.

The Public Relations Department also considers publishing employee-originated news items and articles.

E. Formal Training Programs

To help supervisors administer their work groups, the Training Department conducts training courses in supervisory development. These courses include sessions which explain the background and current application of policies and programs affecting major employee groups. The sessions allow supervisors to discuss existing policies and programs. The supervisors can examine employees attitudes and opinions in relation to policy and program objectives.

F. Annual Report of Operations

The Public Relations Department prepares and distributes to all employees an Annual Report describing the highlights of Company operations from the preceding year.

The Public Relations Department also distributes outside the Company. This focuses attention on:

• employee contributions to the success of operations;• the employee's role in the Company; and• the Company's role in supporting local industry and surrounding

communities.


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V. Petitions and Upward Communications

A. General

All signed or anonymous petitions, written or oral complaints, suggestions, or questions are communication items deserving investigation and resolution.

Supervisory personnel should immediately refer petitions and upward communications to the appropriate Area Personnel Administrator. The receiving supervisor should write out any oral upward communication. This facilitates the Company's response.

B. Response to a Petition

The Department Head, under whose jurisdiction the petition falls, and the appropriate Area Personnel Administrator:

• investigate the request(s);• determine what action, if any, should be taken; and• implement any action.

Where existing policy is not applicable, the Department Head obtains the agreement of the Area Personnel Administrator before communicating any response or implementing any action.

If the response requires interpretation of the provisions of the Saudi Arab Government Labor Law, the Area Personnel Administrator consults Labor Relations before communicating with the employee(s).

VI. Grievances

An employee has a complaint which should be answered if he/she states to the immediate supervisor that the Company's treatment in a given case is in conflict with the Company's intent; is unfair; or inequitable. If the employee's supervisor is unable to promptly resolve the complaint, or fails to act, the complaint becomes a grievance. The employee's grievance is handled as quickly as possible.

A. Grievance Procedure

The grievance procedure consists of a series of four (4) hearings.

1. First Level Hearing

The immediate supervisor's response to the complaint is the first level hearing. The employee may request a Personnel Advisor to be present. If the employee does not accept this hearing's solution, the grievance is scheduled for a second level hearing within seven (7) days.


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2. Second Level Hearing

The employee's Division Head conducts the second level hearing. A Personnel Advisor is present. If the employee does not accept this solution, the grievance is scheduled for a third level hearing within seven (7) days.

3. Third Level Hearing

The employee's Department Head conducts the third level hearing. A Personnel Advisor is present. If the employee does not accept this solution, the grievance is scheduled for a fourth level hearing within seven (7) days.

4. Fourth Level Hearing

The appropriate General Manager, Executive Director or Vice President conducts this hearing. A Personnel Supervisor, or designee is present. The decision is the Company's final position.

If the grieving employee is a Division Head or higher, the final level hearing is still conducted by the appropriate General Manager, Executive Director or Vice President.


a. Pay For Time Spent In Grievance

The aggrieved employee is excused from work without loss of pay when attending scheduled grievance hearings. The Company may summon the employee in connection with grievance proceedings.

b. Employee's Rights Under The Law

An employee's rights or remedies under the laws of the Kingdom of Saudi Arabia are not restricted, limited or otherwise affected by anything in this policy/procedure.

c. Terminated Employees

Any terminated employee except a drop from payroll may exercise the privilege of the grievance procedure provided the grievance is registered by the later of:

• within seven (7) days of being notified of the impending termination; or

• within seven (7) days of the occurrence causing the complaint.

Time spent in pursuing the grievance after the effective termination date is not subject to compensation.


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d. Dropped From Payroll

If dropped from the payroll, the employee may use the grievance procedure by returning to the Company and requesting reinstatement within thirty (30) days of the effective termination date.

e. Reinstatement

If the grievance hearing determines the termination was unwarranted, the employee is reinstated with full pay retroactive to the effective termination date.

VII. Personnel Records

The Director - Personnel establishes, maintains and controls personnel files on each employee. These records are the Company's official record on each employee. They incorporate basic Company documents, primary records and communications on the background and employment history of each employee. Any employee may, on request, review the contents of his/her personnel file in the presence of his/her Division Head, Personnel Advisor or other Supervisor. No documentation, record, or correspondence may be removed from an employee's personnel file without prior agreement and direction from the Director - Personnel.

VIII. Language

The Company intends to communicate with employees by using clear, concise statements. Both Arabic and English languages are used in Company communications as appropriate for the recipient group. If appropriate, the communication is prepared and distributed simultaneously in both Arabic and English.

IX. Reproduction of Copyrighted Material

The written permission from the publisher must accompany a request to reproduce publications bearing a "Copyright" or "Rights Reserved" notice. However, the Law Department may waive the requirement by signing the printing order.

Certain Company-purchased equipment comes with limited quantities of material on how to calibrate, operate or maintain it. This material may be reproduced if the requests include the statement:

"This is copyrighted material - being reproduced only for calibration, operation, or maintenance purposes."


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X. Confidentiality of Information

The Company is willing to share information with employees on a broad basis. The Company restricts information only when it may be essential to internal functions; and could adversely affect the Company's competitive position if it were generally known outside the Company. All employees, regardless of organizational level, should handle confidential information with discretion. They should apply this judgement to operations information, individual personnel actions and any preliminary discussions of policy and program changes prior to an official announcement.

The Company regards as confidential:

• information pertaining to Company activities;• correspondence exchanged between the Saudi Arab Government or any of

its responsible officials and the Company; and• meetings held involving the Company and the Government.

The Saudi Arab Government prohibits disclosing this information to a third governmental or non-governmental party without the prior written approval of the Ministry of Petroleum and Mineral Resources. This restriction may be waived on a case by case basis upon obtaining the prior written approval of the Law Department.

Industrial Relations Manual for Asian EmployeesChapter 14: Personnel Development

October 2, 2005

Chapter 14: Personnel Development

I. Educational Refund Plan

A. General

The Company refunds part of the educational costs incurred by employees who are enrolled in an academic course which will contribute to their ability to do their current job.

B. Applicability

Provisions of this policy apply to all Saudi Aramco employees who have a minimum two years of service with the Company, and a performance rating of "Good" or better at the time of application.

C. Policy

1. Selection of Course

a. For an individual course to qualify for an educational refund, it must be of mutual benefit to the Company and the employee. There should be a direct relationship between the course contents and the employee’s current job and/or ladder/career path. The course should also lead to improvement in the job knowledge and ability to do the job.

The course should not duplicate subjects offered by in-house training programs.

b. For a degree program, there is no blanket approval for the entire degree. A separate ERP application form should be submitted for each course for individual review and approval. Only those courses which are directly related to the employee’s current job and are not duplicate subjects offered by in-house training programs will be eligible for refund.

The employee may take:

• regular class schedules, e.g. UPM courses after work hours, courses taken while on home leave;

• correspondence study programs;• online/Internet courses; or• extension courses.

Course(s) must be selected from:

• U.S. institutions which are accredited by Accreditation Agencies recognized by the U.S. Department of Education, Council on Higher Education Accreditation; or


October 2, 2005

• other non-U.S. institutions approved in advance by the Director - Career Development.

2. Course Selection/Enrollment Approvals

To qualify for an education refund, an ERP application form endorsed by the employee’s Department Head, should be submitted to the Competencies Development Division for CDD approval. The form must be submitted at least three (3) weeks before the commencement of the course to allow enough time for each application to be given proper consideration.

A course/outline/description of the course objectives and contents should be attached to the ERP form before submission to the Competencies Development Division.

If an application is submitted after the start up date of the course of program, it is regarded as an out of policy application and requires the approval of the employee’s General or Executive Management.

3. Education Refund Allowances

When an employee completes the approved course with at least a passing grade of "C" (or equivalent grade) for undergraduate courses and a "B" for graduated courses, he/she is eligible for a refund of the following expenses, for subject to the restrictions mentioned below:

• tuition and registration• laboratory fees• required texts, and• customs and postage fees

In cases where there is a high one-time registration fee for a total program, the Company may prorate the payment of the registration fee on a per course basis based on the total number of courses in the program.

The employee must submit a grade report and receipts for expenses.

The maximum refund for correspondence courses, regular session, online/Internet, extension courses in or outside Saudi Arabia is:

- Ninety percent (90%) of approved expenses up to a maximum of $3,500 for each applicant/employee per calendar year. Approval of employee’s Admin. Area Head is required to reimburse amounts exceeding this limit. The excess amounts, if approved, are charged to employee’s department.

4. Courses Completed While on Temporary Business Assignments Out-of-Kingdom

Employees on business assignments can be reimbursed, on an in-policy basis, for courses or seminars completed OOK while on temporary assignments. Prior approval/agreement of the employee’s


October 2, 2005

SAO proponent organization after coordination with the OOK host company should be obtained before the employee is authorized to enroll in any of the courses or seminars.

5. Exceptions

Exceptions to this policy require the prior approval of the Director - Career Development.

D. Administration

The Competencies Development Division of the Career Development Department administers the Educational Refund Plan.

II. Professional, Management and Supervisory Training Programs

A. General

The Leadership Development Division provides training and development opportunities for GC11-17 professionals, supervisors, superintendents, and PDPs through facilitating programs and consulting, both within the context of organizational development.

B. Applicability

Prerequisites for programs are to be found, along with program descriptions, in the TLC (The Learning Center) website.

C. Policy

1. Supervisory & Professional Development Programs

a. Open enrollment programs for which training coordinators reserve places by badge number through the SAP system.

b. No-shows will not be permitted to enroll in a TLC program for a period of six months unless the TLC has a written justification for the no-show from the manager.

c. Participants will not receive certification if absent without proper justification for more than 30 minutes per training day from any program.

2. Leadership Programs

a. Intact programs which are scheduled via the TLC’s Leadership and OD Team.

b. Candidates are selected by the Department Head.

c. Candidates are required to attend pre- and post-program sessions and meetings.


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d. Candidates should also complete pre- and post-program exercises and action plans.

e. Supervisors of participants are required to actively support the participant’s involvement and engage in follow-up work.

3. Organizational Development Initiatives

These HR related initiatives are made at the request of Department Heads to the Administrator of TLC.

The consulting process requires the following steps:

a. Needs Analysis in response to management’s request.

b. Recommendations to management.

c. Service Agreement.

d. Consulting initiative (a training/development program may be part of this).

e. Measurement of performance improvement (carried out by the organization)

f. Feedback to management.

g. Closure.

4. Operational Excellence Programs

a. Programs for GC14+ employees, designed to enhance the participant’s business acumen.

b. Administration Areas receive invitations to propose candidates to the TLC.

III. PERFORMANCE MANAGEMENT PROCESS (PMP)

A. Applicability

The Performance Management Process (PMP) applies to all regular employees in Salary Codes 03 and above. This includes all full time casuals and employees on short-term educational or developmental assignments. Part-time casuals and teachers in Saudi Aramco Schools (who are evaluated at the end of each school year) are not included in the program. Concepts of the program apply to Professional Development Employees (PDP’s), except timing of performance evaluation and merit increases is different (see paragraphs E&F).


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B. Purpose

For Saudi Aramco to be successful, all employees must fulfill their role and contribute to the goals of the organization. To accomplish this, employees need to understand what is expected of them and recognize the impact their efforts have on meeting the objectives of the company. We do this through "Performance Management".

Performance Management is the process by which we align an individual’s contributions with organizational goals, assess and develop employee’s competencies, evaluate employee’s performance, and provide feedback to guide improvement.

C. Objectives

The Performance Management Process (PMP) is designed to:

• Improve the performance of Aramco and its employees. Employees’ efforts are aligned to meeting organizational goals.

• Enable supervisors and employees to plan and review performance. Performance Management provides structure and accountability for managing performance. This will help both the supervisors and their employees set and meet expectations.

• Provide a forum for career planning discussions. Employees’ performance plans can act as a guide for career planning. Through regular performance reviews, employees can work with their supervisors to build development plans that align their career aspirations with organizational goals.

• Document performance in a consistent and valid approach for use in personnel administration, succession planning and career development/training.

D. Procedure

1. Performance Management Process (PMP) Review

Performance Management Process (PMP) is not a once-a-year activity to provide a performance category. It is a continuous, three-phase cycle of planning, managing, and reviewing performance. Within each phase, the supervisor and the employee will both have responsibilities. PMP is not something to be done to employees. It is an activity undertaken with employees. It is a partnership.

Each year, Supervisors will be required to conduct annual performance reviews on their employees and this activity will be accomplished by utilizing the SAP-PMP system.

2. Three Phase Cycle:


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• Planning (Set Criteria)

The process starts in January each year. The employee and supervisor review objectives from the operating plan for their department, division, or unit and determine how the employee will contribute. The supervisor and employee work together to develop and document key work goals and performance expectations for the coming year.

• Develop and Manage Performance

The performance plan provides a standard for measuring individual progress through the year. The PMP system also provides objective criteria, or ’Elements’ to ensure performance expectations are clear. Throughout the cycle, supervisors and employees will track and document progress and accomplishments as they occur and revise plans as necessary. The Development tab should be used during this period to assign development goals based on identified improvement suggestions. These performance review meetings should be held once every 3 months. Surprises will be eliminated if employees have already received clear and consistent feedback in periodic performance review meetings with their supervisors.

• Evaluate Performance (End of the Year)

In December, at the end of the annual cycle, the information obtained during the year is gathered together, including employee self-review and multi-source feedback data. The data is summarized to develop a complete assessment on what has been accomplished, and how results have been achieved. Supervisor and employee review results. Annual performance reviews should be conducted with all employees.

3. Documentation and Record Retention

All completed PMP performance appraisals will be permanently stored within the SAP-PMP system and are fully accessible to SAP programs and end-users. Hard copies are not required for archiving or recordkeeping purposes.

E. Salary Administration

Performance appraisals ratings (PR’s) directly influence merit salary increases for all employees, including PDP’s. For further information, refer to Chapter #2, Salary Administration.

F. Responsibility

1. Responsibility for conducting effective PMP performance appraisals reviews and employees’ end of year discussions rests with line managers as part of their overall responsibility for employee development.


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2. Responsibility for program administration and Company-wide coordination of PMP performance appraisals reviews and performance ratings for salary administration purposes is as follows:

3. Responsibility for SAP-PMP system design/development and future modifications rests with Employee Relations Policy & Planning (ERP&P).

IV. Membership Dues - Professional Associations

1. General

a. Asian employees in professional job categories are eligible, with Department Head approval, for reimbursement of the annual membership cost in a Professional Association. Reimbursement is normally limited to one membership. However, Department Heads who feel that membership in two professional associations will significantly contribute to the overall professional development of their employees may reimburse their employees the annual cost of membership in two professional associations.

b. When the employee’s Department requires the employee to maintain a professional license to fulfill job duties, then the fees for such license are reimbursable by the Company. Reimbursement is normally limited to one license, unless there is a strong justification for maintaining more than one.

In cases where it is not required to maintain a professional license, a Department may reimburse the fee when, as determined by the employee’s Department Head, it is in the Company’s best interest for the employee to voluntarily maintain the license.

2. Criteria

a. Professional Association must be directly related to the employee's profession in the Company.

b. Reimbursement includes initial membership fee, examination, annual dues and postage, if any, associated with receipt of normally distributed association publications.

3. Payment

Employee Group Responsibility

PDP’s Director - Career Development

SC3-17 Director - Personnel

SC18+ Executive Compensation


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Reimbursement requires Department Head's approval on Form SA-60 with the concurrence of the Director, Career Development Department.

4. Exceptions

Exceptions to the policy on Membership Dues for Professional Associations require the approval of the Vice President - Employee Relations & Training.

Industrial Relations Manual for Asian EmployeesChapter 15: Schooling for Children

October 2, 2005

Chapter 15: Schooling for Children

I. Company Operated Schools

A. General

The Company operates schools in Main Camp areas for eligible dependent children. These policies cover the scholastic education of Saudi Aramco employees' eligible dependents who attend Company schools within the Kingdom of Saudi Arabia.

B. Eligibility

In order for a student to be eligible to attend a Company operated school, the student's parents must both live in Saudi Arabia and reside in in-camp family housing. In addition, a child must:

• be at least five (5) years of age on or before August 31 of the year they would begin to attend Kindergarten.(1)

• be six (6) years of age on or before August 31 of the year they would begin to attend Grade 1 (1)

• not have completed Grade 9.• be free from learning disabilities.• be proficient in English, as this is the language used in instruction.• be approved for school enrollment and appropriate grade placement

by the Director of Pupil Personnel and Special Student Services.

(1) School Principals have the option of admitting a student who was born in the month of September if the child is deemed to be physically, emotionally and intellectually capable of being successful at the grade level.

C. Screening of Dependents

Upon accepting the Company's offer of employment, the employee must complete a form which:

• collects information on the child's previous education and normal learning aptitudes.

• requires the employee's acknowledgment that the Company has a limited ability to educate dependents with special needs.

II. Educational Assistance Plan

A. General

These policies apply to eligible dependents of Asian employees based in Saudi Arabia on the Saudi Riyal Payroll, i.e., Foreign Contract Salary Codes 07 and above and ITEA Salary Codes 11 and above, who attend school


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outside the Kingdom of Saudi Arabia or non-Company schools within the Kingdom. The schools selected by the employees are subject to the approval of the Company. For this policy, the term "Asian" includes Indian and Pakistani Nationals (Foreign Contract) and Filipino, Sri Lankan, Thai and Bangladesh Nationals (ITEA). These policies are called the Educational Assistance Plan (EAP).

This Chapter is intended to give a general overview of Educational Assistance Plan policies. Policy details and associated administrative procedures are contained in the booklet entitled, Educational Assistance Plan (EAP) Parent Guidelines, which is published each year by the EAP Office and provided to employees who utilize EAP benefits.

B. Intent

The Company provides its family status expatriate employees with financial assistance for certain educational expenses arising out of their employment abroad.

III. EAP Eligibility

A. Eligible Employees

To be eligible for EAP assistance, an employee must have Company-approved family status in Saudi Arabia. Family status must be established by the physical presence of the employee's family, particularly the spouse, in Saudi Arabia and be so maintained throughout the duration of the assistance.

An employee loses his family status if his wife is absent from Saudi Arabia for a total of more than 120 calendar days (exclusive of authorized time such as vacation, emergency leave, business trip accompaniment, etc.):

1. In any calendar year, or

2. In the 6-month period covered by the fourth quarter of any calendar year and the first quarter of the following calendar year.

EAP benefits cease on the day the wife leaves Saudi Arabia and subsequently does not return for residence on a permanent basis.

B. Eligible Dependents

To be eligible for EAP assistance, a dependent child must satisfy the requirements for residence in or visitation to Saudi Arabia as a regular member of the employee's family and household. Refer to Chapter 12, Housing and Families. In addition, such a dependent child must:

• Be enrolled full-time in a school approved by the Company;• Have uninterrupted educational progress;• Be dependent upon the employee for substantial support;


October 2, 2005

• Be a tax dependent as defined by the tax laws of the employee's country of origin;

• Never have been married, never worked full-time, or never have joined full-time military service; and

• Be less than 26 years of age.

C. Children of Former Marriage

Children of a former marriage, whether the offspring of the employee or the spouse, who are and have been regular members of an employee's household may receive EAP assistance. An employee must establish the child's eligibility for EAP assistance by:

• Submitting an acceptable legal document which extends to the employee or spouse permanent custody rights which are greater than those of the dependent child’s other parent. While different courts and jurisdictions use a variety of terms to describe custody arrangements, the employee or spouse should have custody equivalent to either: (a) sole legal custody; or (b) joint legal custody combined with physical custody. This requirement will not apply if the dependent was not a minor subject to a custody order at the time of the parent’s divorce or remarriage, or if other circumstances precluded a custody determination of the child;

• Proving, to the Company's satisfaction, that the employee now and has in the past exercised full care, custody, control and financial responsibility for the dependent child; and

• Claiming the child as a tax dependent.

Support payments, visitation privileges, or other partial or temporary custody arrangements, do not satisfy the requirements for establishing a child as a regular member of the employee's household in Saudi Arabia.

Children of a former marriage who are not regular members of the employee's household (i.e., living with ex-spouse, grandparents, etc.; partial financial support from employee; not a legal ward of the employee) are not eligible for any EAP assistance.

D. Employees on Chapter 8 Out-of-Kingdom Assignments

Married status employees in Saudi Arabia who are placed on temporary assignment to an out-of-Kingdom location may commence or continue Education Assistance Plan participation on the same basis as if the employee was resident in Saudi Arabia. Refer to Chapter 8 for further details.

E. Loss of Eligibility

A student-dependent is no longer eligible for EAP assistance when any of the following occurs:


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• Employee fails to abide by the intent of the EAP Plan by not fulfilling essential obligations of the plan, e.g., not notifying the Company of school changes; discontinuing education; not verifying enrollment; or submission of false information to obtain EAP funds.

Submission of false information is cause for termination of employment and/or action by the Saudi Arabian Government authorities.

• Status as an approved dependent as defined in Section III.B above changes (e.g., marriage, employment, or part-time studies).

• Student enrollment in a school not approved by the Company.• Full-time school attendance is interrupted or discontinued for a

lengthy period of time for any reasons such as, but not limited to: maladjustment, academic failure, personal difficulties, drug or alcoholic abuse, etc.

• The employee permanently departs Saudi Arabia due to transfer or termination of employment for any reason including resignation, involuntary termination, transfer, retirement, or death.

• The family permanently departs Saudi Arabia due to separation, divorce, sickness, death, etc., and the employee converts to bachelor or single status.

F. Re-qualification for EAP

Employees who become ineligible for EAP assistance due to transfer, bachelor status, etc., may re-qualify when the circumstances leading to their becoming ineligible change, such as when they:

• are reassigned to Saudi Arabia and/or• resume Company-approved family status.

Dependent children who become ineligible for EAP assistance, due to interruption or discontinuation of school, may re-qualify depending upon the circumstances and the duration of the absence.

1. If the interruption is four (4) weeks or less of schooling, the student may re-qualify and may be eligible for EAP school change and/or school vacation travel.

2. If the interruption is more than four (4) weeks of schooling, but less than one full academic year (measured from the time the student leaves one school and starts attending another), requalification may be permitted only after a full review of the case. Whether or not requalified, the student is not eligible for any EAP travel or tuition assistance during the period of interruption. The Coordinator of the Personnel Staff Services Division must approve requalifications.

3. Normally, the Company does not permit re-qualification after an interruption from school of more than one year. However, the Coordinator of Personnel Staff Services Division may review and approve such re-qualifications in exceptional circumstances.


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IV. Types of EAP Assistance

Three types of EAP assistance are described in the following sections - Tuition, Room and Board; Transportation (in-Kingdom and Out of Kingdom); and Miscellaneous Related Expense.

A. Tuition, Room and Board

Assistance for tuition, room and board depends upon the grade level which the student attends and whether the school is located within or outside the Kingdom of Saudi Arabia and whether the dependent is a day or boarding student.

1. Definitions

a. REQUIRED SCHOOL BOOKS -- classroom texts required for a school's regular instructional program. They do not include books for optional supplementary reading such as background reference works, dictionaries, encyclopedias, etc.

b. ROOM AND BOARD -- the school charges for room, food, and institutional laundry.

c. TUITION -- registration and other fees for enrollment and required instruction, to include in-Kingdom transportation as outlined in Section IV.B. It does not include:

• charges for supplies, school lunches, uniforms, health insurance, special tutoring while attending in-Kingdom schools (1);

(1) Special tutoring charges from out-of-Kingdom schools are reviewed on a case-by-case basis. To be eligible for consideration within EAP maximum reimbursement levels, tutoring must be required by the school and intended to help avoid academic failure. Dependents screened out for residency in Saudi Arabia due to learning disabilities are covered under separate EAP provisions.

• costs of optional activities such as music, dancing;• costs of special sports instructions, recreational activities,

excursions, or trips, etc.

2. Elementary and Junior High School (Grades K-9, U.S. System)

a. In Kingdom

1. Salary Code 07 through 10 (Foreign Contract only)

The Company pays tuition, transportation and other mandatory fees to an established maximum for non-Company operated schools approved by the Company in the local community.


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2. Salary Code 11 and Above

For employee dependents eligible for in-camp housing, the Company provides schools within the main family camps at no charge. Alternatively, the employee may send dependents to non-Company operated schools in the local community. With approval, the Company pays tuition, transportation and other mandatory fees to an established maximum.

For employee dependents not eligible for in-camp housing, the Company pays tuition, transportation and other mandatory fees to an established maximum for approved non-Company operated schools in the local community.

Except for kindergarten level instruction, in unusual circumstances when there is no adequate home country curriculum available in an in-Kingdom school, the employee may engage a private tutor or enroll the dependent in a bona fide correspondence course. The tutors or correspondence courses must be approved by the Company. The Company pays fees for this education, up to hourly and annual maximums. If an employee has a dependent in any local school he may not use a tutor for another dependent.

3. Age of EAP Eligibility

The following principals govern the earliest age at which the Company will provide in-Kingdom educational assistance for non-Company operated schools:

• A child must be at least five (5) years of age on or before the start of Kindergarten.

• A child must be at least six (6) years of age on or before the start of Grade 1.

• A child's age is calculated based on the calendar used by the school (Hijra or Gregorian).

• A student who is within 30 days of the above entrance age requirement may be eligible for EAP benefits if he is accepted for admission at the grade level.

• When a student enters kindergarten in a Hijra based school system, the student will normally only receive assistance for grade 1 in a Hijra based school system. If the student transfers to a Gregorian based school system for grade 1, then the Gregorian age six (6) entrance requirement must be met in order to qualify for grade 1 EAP assistance.


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b. Out-of-Kingdom

The employee must pay all expenses for out-of-Kingdom education of a student-dependent in grades K-9 (U.S. system). For eligible children in these grades, however, transportation assistance is available per Section IV.B.3.a. below.

Refer to paragraph 3.c below for exception to grade 9 EAP policy for ITEA Asian Filipino employees.

3. Senior High School

Secondary or high school education includes completion up to the equivalent of the 10th, 11th or 12th grade under the U.S. system, or the 9th, 10th or 11th grade under the Philippine system applicable to ITEA-Asian Filipino employees (refer to 3.c. below). Since there are few schools for secondary or high school education within the Kingdom, the employee may choose to have student-dependents continue their education outside of Saudi Arabia.

a. Boarding Students

The Company reimburses 90% of tuition, room and board costs for high school boarding students up to a Company-established maximum. A limited number of other expenses, such as required school books, standard evaluation tests and laboratory fees, are also reimbursable items. They are subject to the maximum total payment.

b. Day Students

If student continues secondary education in-Kingdom in a local community school approved by the Company, tuition, transportation and other mandatory fees are paid up to a Company-established maximum.

For out-of-Kingdom schools, the Company provides 90% of the tuition costs incurred by day students up to a Company-established maximum. In addition, separate assistance is provided to cover 90% of third party room and board expenses to another maximum. The Company does not pay room and board expenses if the student lives with the employee's dependent son, daughter or ex- spouse, or if the student lives in a dwelling owned or rented by employee and/or spouse.

c. ITEA-Asian Filipino and Sri Lankan Students - Grade 9

Filipino and Sri Lankan students are eligible for out-of- Kingdom EAP benefits beginning with grade 9, provided school entrance is under the home country educational system. Maximum eligibility for EAP benefits for Filipino students will remain at three years (grades 9, 10 and 11).


October 2, 2005

Students who elect to attend grade 9 in the in-Kingdom schools are not eligible for a repeat of grade 9 under the home country educational system.

4. College/University

The Company does not provide assistance for tuition, room and board for college and university education. (Travel assistance is provided as described in section C.3.c. below)

5. Other Post-High School Education

The Company does not provide assistance for tuition, room and board for any type of post-high school education or training.

B. In-Kingdom Transportation

The actual and reasonable transportation charge for approved in-kingdom schooling may be 100% reimbursed against acceptable receipts, provided the amount falls both within the approved maximum transportation reimbursement level and the overall EAP maximum reimbursement level.

Reimbursement is for school-supplied transportation to/from the school, provided the employee's family residence is located more than one-half kilometer from the school. If a school certifies it does not supply transportation service, then reimbursement may be claimed for a commercially arranged transportation agreement, e.g., taxi, subject to the provisions of this policy and administrative procedures established by the EAP Office. No reimbursement is made for school transportation provided by a parent, relative or friend.

C. Out-of-Kingdom Transportation

1. General

The Company provides eligible student-dependents with accountable travel assistance in conjunction with their approved out-of-Kingdom education. The type and amount of assistance depends on the grade in which the student is enrolled and the school's location as well as the employee category. The maximum assistance is based on the applicable one way or round trip distances as follows:

2. Initial Travel

a. Residing in SAO

KSA/Point-of-Origin • Salary Code 07-10 Foreign Contract

• All ITEA

KSA/London Salary Code 11+ Foreign Contract


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1. A student dependent residing in the SAO who becomes eligible for EAP assistance upon enrollment in the 9th or 10th grade of an out-of-Kingdom school receives one-way least cost air travel to the school on a one-time only basis. The maximum transportation payment is as follows:

2. Whenever possible, enrollment should take place during a family repatriation vacation. When this happens, travel for the student is considered initial EAP travel, not repatriation travel. When the student travels to the school in conjunction with the employee's repatriation, the fare is paid to the school via the employee's point-of-origin if that travel is taken (tickets to be verified by the EAP Office).

3. If repatriation travel is taken prior to entering out-of-Kingdom EAP schooling, the student will be eligible for initial travel, provided he/she has stayed in the Kingdom for a minimum period of 30 days following the repatriation travel.

4. A student eligible for out of Kingdom EAP travel assistance is automatically ineligible for any further repatriation vacation travel allowance as a family member, and his name should not be included on the employee's repatriation Travel Payment Authorizations.

b. Newly Arrived in Saudi Arabia

Eligible dependents of new employees in Saudi Arabia in school Grades 9 and above may be eligible for one-way travel from student's last residence to new school, provided the new school is not in the same vicinity.

A student who accompanies a newly-assigned family to Saudi Arabia is eligible for the travel assistance described in paragraph a.1., above, provided he or she is in residence in Kingdom for at least 20 days before departing to attend school.

3. Student Travel During School Years

Foreign Contract SC 7-10 KSA/Point-of-Origin.

Foreign Contract SC 11+ KSA/London.

ITEA SC 11+ KSA/School or Point-of-Origin (whichever is greater) if the school is in the country-of-origin. If the school is not in the country-of-origin, then the maximum payment is to point-of-origin.


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EAP transportation assistance during the school year minimizes lengthy periods of family separation. It allows high school students to rejoin their families during school vacations.

Refer to Section IV.C.8.c. for maximum reference points for EAP travel payments by eligibility category, i.e., Foreign Contract SC 7-10, SC 11 & above, and Indefinite Term Employment Agreement (ITEA) employees.

a. Elementary and Junior High

Student dependents attending primary level schools out-of-Kingdom receive one (1) round trip per year to visit Saudi Arabia. Assistance is based on a least cost round trip.

b. Senior High School

1. Salary Codes 07 through 10 (Foreign Contract only)

Students attending an approved out-of-Kingdom high school, including Bahrain, receive one economy excursion (high season) round trip per year to visit Saudi Arabia.

2. Salary Codes 11 and Above

Students attending an approved out-of-Kingdom high school, except in Bahrain, receive three (3) economy excursion (high season) round trips per year to visit Saudi Arabia.

Students attending high school in Bahrain receive eight (8) economy round trips per year (School/KSA/ School), and one (1) economy excursion (high season) round trip (KSA/Point-of-Origin/KSA) per year.

c. College/University

1. Salary Codes 07 through 10 (Foreign Contract only)

Students attending college or university receive one (1) economy excursion (high season) round trip per year to visit Saudi Arabia, with a maximum of three (3) trips during their entire college career. Trips may not be deferred.

2. Salary Codes 11 and Above

College student-dependents, who are full-time students at an approved college or university or in an approved trade school, are generally eligible for two EAP economy excursion (high season) trips per year, School/KSA/School, during the first four years of school, with a final fare of School/Point-of-Origin, if school is not near point-of-origin. During the first three years of college, one trip each year may be Point-of-Origin/KSA/Point-of-Origin, if greater distance than the school. One of the two EAP trips


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during each year may be deferred for use after the first four years of study, but from fifth year on can be used at the rate of only one trip per year. The maximum number of trips that can be taken during the college career is eight. (Note: School airfare maximum payment is based on London airfare for Salary Code 11 and above Foreign Contract employees. See Section IV.C.8 for details on construction of airfares.) Additional administrative rules are as follows:

• All trips (unless deferred) must take place before undergraduate degree graduation and before the student's twenty-sixth birthday. Deferred trips must be taken while the student is a full-time student and prior to degree graduation. Note: The final trip in the semester of graduation must occur prior to the end of classes within that semester.

• All trips from the fourth year of college onwards, including deferred trips, are paid on the basis of School/KSA/School (max: London/KSA/London).

• For a student who first becomes eligible for EAP benefits while enrolled in college, the eight-trip total allowance is reduced by one trip for every previous year since high school graduation, whether the student was in college or not.

• For a student re-enrolling in EAP, all previous trips count against the eight-trip total allowance. The allowance is also reduced by one trip for: every year of college completed while not covered under EAP; each year of non-participation in EAP; or for a semester/term absence from school.

4. Final Travel

On a one-time basis only, the Company pays final travel assistance from school location to the employee's point-of-origin up to a maximum of KSA to Point-of-Origin for Foreign Contract SC 07-10 and all ITEA employees. The maximum for Foreign Contract SC 11 and above employees is London to KSA. This applies to a student-dependent who is no longer eligible for EAP due to:

• termination from school (voluntary or involuntary) with no intent to return to school.

• completion of education (graduation or equivalent from either high school or college, but not both).

• conversion of parent-employee to bachelor or single status through separation, divorce, spouse's death, etc.

• termination of employee from Saudi Aramco employment (including resignation, involuntary termination for cause or not for cause, permanent transfer, temporary assignment, retirement or death).


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Once provided, the dependent does not receive final travel assistance for subsequent school re-enrollment.

5. Change of School

Provided the school is not farther than the employee's country-of-origin, transportation assistance for a change in school may be provided. The Company reviews and approves the reason for the change. Assistance is limited to one way travel via the most direct, economical route from the old school to the new school. When possible, school change travel should take place during a major vacation period, thereby using a portion of one of the trips provided for visiting the SAO. Change of school assistance is generally granted when changing from high school to college, or due to involuntary academic failure. It is usually not granted for change of school due to serious misconduct or other malicious activity.

Note: No assistance will be provided if the school change occurs within the U.S. or Canada, or to/from Europe and the U.S. or Canada.

6. Parent Accompaniment for Initial Enrollment (Salary Codes 11 and Above Employees)

a. Family Residing in SAO

Either the employee or spouse may utilize one of the student's initial year's EAP trips as parent-in-lieu travel to accompany a child entering an out-of-Kingdom High School if:

• the child is entering an out-of-Kingdom school for the first time; and

• it is not possible to complete enrollment during the family repatriation vacation; and

• the employee is not otherwise paid by the Company for the trip (e.g., business, emergency, repatriation).

The child involved will have his/her initial year's EAP trip(s) reduced by one trip.

b. New Family Arrivals

For newly-arrived families, one parent may utilize one of the student's trips to accompany a child entering an out-of-Kingdom High School if:

• the child is entering a school not previously attended; and• it is not possible to complete enrollment prior to family

arrival in Saudi Arabia; and• the school is not in the vicinity of the family former

residence; and


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• the employee's or spouse's departure date for Saudi Arabia does not fall within the one month period prior to or following commencement of the regular new school year. Exceptions require the approval of the Coordinator, Personnel Staff Services Division.

The child involved will have his/her initial year's EAP trips reduced by one.

c. Proof of Travel

The parent accompaniment trip is taken on an accountable basis. Proof of travel to the school is required by submitting used airline tickets to the EAP Office upon return. Other travel documentation may be required if the airline ticket is not to the student location.

d. Enrollment While Not in the Kingdom

If enrollment is accomplished while on repatriation vacation or prior to initial arrival in Saudi Arabia and additional travel costs are incurred, reimbursement will be made. Proof of travel is required. Maximum payment is based on the student's airfare entitlement. If this option is utilized, the student involved will have his/her initial year's EAP trip entitlements reduced by one. The difference between any monies advanced for the student's trip and the amount reimbursed to the parent is refundable to the Company.

7. Parent Travel In Lieu of High School Student

For Salary Code 11 and above employees, the employee or the employee's spouse may visit the student, instead of having the high school student return to Saudi Arabia. Assistance is limited to the amount which would have been provided to the student. The trip may not be combined with any other Company paid trips (e.g., business, emergency leave, repatriation).

Parent-in-lieu travel is restricted to High School (pre-college/university) students and is limited to one parent-in-lieu trip per family per year. This is an accountable trip. Proof will consist of a used airline ticket and other evidence as necessary, showing that the trip was to the student's school or that the student and parent were together at a location other than the dependent's school, and presentation of the parent's passport showing used exit/ re-entry visa.

When a parent-in-lieu trip is utilized, all High School (pre-college/university) dependents will have one trip decreased from their entitlement.

8. Construction of Fares


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a. General

Transportation allowance is based on airline transportation via the most direct route between the foreign assignment location and the approved airport nearest the school. The allowance is calculated using the economy excursion cost of tickets for all school locations except Bahrain. Local taxi fare to and from the airport in Saudi Arabia is included in the transportation allowance payment. The employee must pay land transportation costs to and from the school or point-of-origin airport.

b. One-Way Fares

For initial travel, one-way fare is based on travel from KSA to the school location up to the maximum allowed as stated in Section IV.C.2.

For final travel, one-way fare is based on travel from the school location to the employee's point-of-origin up to the maximum allowed as stated in Section IV.C.4.

For school change travel, one-way fare is based on travel from the old school to the new school, provided the new school is not further from KSA than the employee's point-of-origin (or London for Salary Code 11 and above Foreign Contract employees). When possible, the change should be made during a regular school break in conjunction with regular EAP travel.

c. Round Trip Fares

Depending on employee category, economy excursion round trip IATA airfares for school locations other than Bahrain (see Section IV.C.3.b. for Bahrain travel policy) are based on assumed travel School/KSA/School (or, if applicable, Point-of-Origin or London to KSA for SC 11+ Foreign Contract and Point-of-Origin to KSA for ITEA employees). It is also assumed the ticket is purchased in the country of destination if the cost there is higher than if purchased in KSA.

The maximum distance on which airfare payment is based by employee category is as follows:

Foreign Contract - Salary Codes 7 - 10

Economy Excursion Airfare (one trip)

Cash payment is based on the equivalent economy excursion airfare School/KSA/School, with a maximum payment of Point-of-Origin/KSA/Point-of-Origin.


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Foreign Contract - Salary Codes 11 and Above

Indefinite Term Employment Agreement (ITEA) Employees - Salary Codes 11 and Above

D. Miscellaneous

1. Student Baggage

The Company pays for the one-time shipment of a maximum of fifty (50) kilograms of a student's baggage (accompanied or equivalent cost) in each of the following situations:

• Initial entry to high school (KSA to school, or last residence location to school).

• School change (old school to new school; no assistance within U.S. or Canada, or to/from Europe and the U.S. or Canada).

• High school to college (local high school to college location; no assistance within U.S. or Canada, or to/from Europe and the U.S. or Canada).

Economy Excursion Airfare (two trips for high school and one for college)

Cash payment is based on the equivalent economy excursion airfare School/KSA/School, with a maximum payment of London/KSA/London.


Cash payment is based on the equivalent economy excursion airfare School or Point-of-Origin/KSA/School or Point-of-Origin, with a maximum payment of London/KSA/London if the school is greater than point-of-origin.

Economy Excursion Airfare (two trips for high school and one for college)

Cash payment is based on the equivalent economy excursion airfare School/KSA/School if school is in home country; otherwise, maximum cash payment is Point-of-Origin/KSA/Point-of-Origin.


Cash payment is based on the equivalent economy excursion airfare School/KSA/School or Point-of-Origin (whichever is greater) when school is in home country; otherwise, maximum cash payment is Point-of-Origin/KSA/Point-of-Origin.


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• Final travel (high school or college location to employee's point-of-origin; no assistance within U.S. or Canada, or to/from Europe and the U.S. or Canada).

Note: Maximum shipping locations are equivalent to maximum travel locations as stated in Section IV.C.1.

2. Summer Storage - Salary Codes 11 and Above

The Company reimburses up to Saudi Riyals 375.00 annually for storing a student's belongings during the summer vacation.

3. Other Assistance

The Company reimburses an employee for actual and reasonable expenses required for obtaining a student's passport, passport photographs and visas and for each immunization required for entry into Saudi Arabia. Related costs such as mailing, telephone, transportation, etc., are not reimbursable.

V. Method of EAP Payment

A. Tuition, Room and Board

For purposes of this policy, a "school year" is the period beginning with the fall school term and ending at the end of the summer vacation period for the Northern Hemisphere or the seasonal equivalent for the Southern Hemisphere.

Maximum allowance for tuition, room and board is based on a full school year term (twelve months less summer vacation period). For partial year attendance (e.g., due to late enrollment, school change, etc.), the annual maximum reimbursement is proportionately reduced according to the amount the employee actually paid for the partial year compared to the regular full year charges.

Payment for tuition, room and board for the full year is normally made at the beginning of the school year upon submission of EAP application form with supporting documentation. If a student enrolls after the beginning of the year, payment for a partial year is made as soon as practical after the employee submits a request.

B. Transportation

Accountable transportation assistance for all EAP student-dependent travel is paid in advance on a trip-by-trip basis just prior to each trip as it is taken during the academic year. Travel allowance for each trip is not advanced unless school attendance has been satisfactorily verified according to Section VI. The student-dependent must travel to the Kingdom for each trip entitlement, or the advanced monies are refundable to the Company.


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C. Miscellaneous

Payments for miscellaneous items (e.g., baggage assistance, summer storage, passports, visas) are made as soon as practical after the employee submits a reimbursement request with the supporting documents.

VI. EAP Verification of Attendance and Travel

A. Attendance Verification

To qualify for any Educational Assistance Plan benefits, an employee must verify, to the Company's satisfaction, that the student-dependent is attending an approved school. Although tuition, room/board and travel are paid in advance, approval is not final until acceptable attendance proof is submitted (e.g., a letter from the Registrar's Office verifying full-time attendance).

The Company does not authorize EAP assistance for employees who will not verify attendance or dependent status. If the employee does not submit satisfactory verification, he must repay any EAP prepayments.

B. Student Transportation Verification

As specified in Section V, the student-dependent must travel to the Kingdom for each trip entitlement, or any advanced monies are refundable to the Company(1). Travel to the Kingdom is verified as follows:

Student on Residence Visa with Single Exit/Re-entry - When a student leaves and enters the Kingdom on a single Exit/Re-entry Visa, the return is automatically tracked by the Company's Passport Monitoring System.

Student on Visitor Visa or Residence Visa with Multiple Exit/ Re-entry - After the student enters the Kingdom, the passport must be presented to the EAP Office in Dhahran (or Area Personnel Office if living in districts).

Employees and students are advised to retain other proof of travel (e.g., used airline tickets, boarding pass) in case questions should arise as to actual visitation to the Kingdom.

(1) The only exceptions to this requirement of student travel to the Kingdom are when a parent elects to accompany the student-dependent for initial school enrollment in accordance with Section IV.B.6 and when the parent elects a parent-in-lieu of high school student trip in accordance with Section IV.B.7.


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C. Parent-In-Lieu Trip or Parent Accompaniment Verification

When a parent-in-lieu trip is taken and the dependent is met at the school location, the used airline ticket of the parent must be submitted to the EAP Office as verification. The ticket must normally be to an airport close to the school, otherwise, further proof of the visit, such as hotel receipts, car rental, etc., must also be submitted.

When a parent-in-lieu trip is taken, and the dependent is met at a location other than the school, the used airline tickets of both the parent and the dependent must be submitted to the EAP Office. If air travel for the student-dependent does not take place to the third location, other supporting documents such as hotel receipts, car rentals, or other relevant documentation confirming the parent and child meeting, must be provided to the EAP Office for verification.

When a parent accompaniment trip is taken at the time of initial school enrollment, the trip is to be verified by submission of the used airline ticket. The ticket must normally be to an airport close to the school; otherwise, further proof of the accompaniment such as hotel receipts and car rental must also be submitted.

VII. Revision or Loss of EAP Assistance

A change in a student's or employee's situation, due to a variety of reasons, could result in a revision or loss of EAP assistance. In such cases, adjustments in any assistance paid, or to be paid, are made as soon as practical following notification of the change. Any overpayments or payments for which the employee is no longer eligible are recovered, retroactively, if necessary.

An exception to this repayment occurs when the employee is transferred to ASC or reaches the normal retirement age (Company-mandated employment termination at age 60). In such cases, Company advanced EAP assistance will not be recovered for the remaining portion of the current school year.

A. Change of School

Any change of school by the student must be reported to the EAP office and be approved before EAP assistance will be given. If approved, the student receives one-way transportation, within limits, from the old to the new school, with the exception that no assistance will be provided for a school change within the U.S. or Canada, or from the U.S. or Canada to Europe or vice versa. If the change occurs during the regular school year, baggage assistance is also provided, if necessary. However, the employee must pay all school change transportation costs if the change is due to disciplinary reasons. Transportation assistance for school vacations is adjusted to correctly reflect the new school's location. The Company may also provide additional assistance for tuition, room and board for the new school, if applicable. However, when combined with the assistance previously granted for the old school, their total may not exceed the maximum reimbursable amount allowed per school year.


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B. Partial Year

A student newly eligible for EAP, who enrolls only for a partial school year, receives partial EAP assistance. Assistance for tuition, room and board is based on the amount the school charges for the remainder of the year. Transportation assistance is limited to the remaining school vacation periods. The Company may also pay initial one-way travel assistance plus baggage allowance, if necessary, from the SAO or last residence to the school location.

If a student terminates schooling or becomes ineligible for EAP during the school year and remains out of school or ineligible for the remainder of the year, the employee must repay:

• transportation assistance applicable to the remaining school vacation periods; and

• any prorated portion of tuition, room and board assistance advanced by the Company.

If the dependent is a day student, the employee must repay that portion of third party room and board assistance applicable to the remainder of the school year.

A student may receive final travel assistance, on a one-time basis only, if he/she does not intend to return to school in the future. Once paid, however, final travel assistance is not provided for any subsequent schooling.

C. Repeat Year

The employee must obtain the approval of the Coordinator of the Personnel Staff Services Division for EAP assistance for a repeated year. Only one repeat is permitted for Grades 1-9 and one for Grades 10-12. The employee must repay any unauthorized, inadvertent payments.

D. Loss of Eligibility

When an employee loses EAP eligibility by converting to bachelor status, or by leaving Saudi Arabia permanently, the Company recovers any payments made for tuition and/or room and board, for boarding or day schools, on a prorated basis, as established by the Company. In cases where the wife departs Saudi Arabia, her departure date will be used in determining EAP monies refundable to the Company.

Student receives assistance for final travel from the school location to the employee's point-of-origin. Baggage assistance is included, if necessary.

E. Early Completion of High School

If a student completes high school (or the equivalent) substantially before the end of the normal school year, the Company adjusts EAP assistance. Transportation assistance previously granted is adjusted as outlined in Section VII.B., on partial year attendance except that the trip which would have applied to the school vacation immediately following early graduation


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is counted as part of the high school allowance. The Company pays transportation for one-way travel from the high school to college, plus baggage assistance, if necessary. The Company recovers excess tuition, room and board only if the employee receives a refund from the boarding school. Third party room and board is refundable to the Company on a prorated basis upon early completion of High School.

VIII. Miscellaneous EAP Provisions

A. Repatriation Vacation

EAP travel assistance and repatriation vacation travel allowance are mutually exclusive. Therefore, student dependents who are eligible for EAP travel assistance are thereby ineligible for the employee's repatriation vacation allowance.

B. Travel Schedule -- Salary Codes 07 through 10

1. Length of Stay

The Company expects the student to spend nearly all of the vacation period with his/her family in Saudi Arabia. At least one-half of the school vacation must be spent in the SAO (not less than 28 days during the extended school vacation; nor less than 10 days during the brief periods). If a student fails to stay the required time, he/she loses eligibility for transportation assistance for that period.

2. Deferred or Postponed Trip

EAP travel cannot be deferred or postponed. If a trip for which a student was eligible was not taken during the applicable academic year, it is forfeited. It cannot be taken in a subsequent year.

C. Travel Schedule -- Salary Codes 11 and Above

Regardless of the actual school vacation dates, and unless otherwise noted, the employee may schedule the student's EAP travel when it appropriately meets the family's needs, provided the EAP travel occurs within or near the end of the school year period (e.g., prior to the start of the next school year).

IX. EAP Authorities and Responsibilities

A. General

1. The Personnel Department is responsible for the proper administration of these policies.

2. Appropriate steps are taken by the Personnel Department to ensure that:

• these policies are not deliberately abused by an employee; and


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• employees or students who receive EAP assistance meet the eligibility requirements.

3. Complaints of abuse are investigated to satisfy the above requirements and preserve the integrity of the Educational Assistance Plan.

4. The Employee Relations Policy and Planning Department is responsible for annually reviewing and establishing maximum tuition, room and board reimbursements.

B. Out-of-Policy Requests

The employee submits a request for an out-of-policy action, in writing, to his Department Head for endorsement, only after the employee has discussed the situation thoroughly with the EAP office. The request is then submitted to the Out-of-Policy Committee for recommendation to the Director of Personnel.

C. Special EAP Benefits

The Special EAP Committee has the responsibility of recommending to the Coordinator, Personnel Staff Services Division, for approval, specialized out-of-Kingdom education in the employee's home country for student-dependents whose physical, mental, or learning disability needs cannot be adequately provided for by the student's in-Kingdom school. The Special EAP Committee reviews each case, determines the type of assistance to be provided, and recommends approval. The school and program placement must be appropriate to the student's disability and is approved by the Saudi Aramco Schools Division, and their decision is referred to the Special EAP Committee for the Committee's consideration and review.

Industrial Relations Manual for Asian EmployeesChapter 16: Local/International Transportation

October 2, 2005

Chapter 16: Local/International Transportation

I. Local Transportation

A. Local Work Bus Transportation

1. General

The Company assists employees in commuting between their residences and work locations. This assistance consists of:

a. Daily work bus transportation from/to local communities within 50 kilometers of reporting locations or work sites.

b. Daily work bus transportation between Company assigned housing and reporting locations or work sites.

c. Daily work bus transportation between work reporting locations and work sites.

d. Days off transportation for eligible employees to local communities or to Company assigned housing beyond 50 kilometers from the workday residence location.

e. A transportation allowance, if no work bus transportation is available for eligible daily and days off commuters.

Employees living in the local community in one district and permanently working in another district are not eligible to use inter-area bus transportation for daily commuting or to receive a transportation allowance.

2. Transportation from/to Local Communities

a. Daily work transportation is normally provided to/from Eastern Province local communities within 50 kilometers of work reporting locations or work sites, provided the rates of utilization, location of employees’ residences, cost and other factors justify the provision of bus service.

b. The Company may, at its discretion, provide daily work transportation to/from local communities which are more than 50 kilometers from work reporting locations or work sites on a case by case basis and after evaluation of certain parameters which are specific to each combination of residence and work locations. The parameters referenced include bus availability, cost of bus service versus paying a transportation allowance, travel time, bus utilization by employees, safety concerns, and work schedules.


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c. The Company furnishes local transportation service only to communities which are accessible by paved roads. The road must be in satisfactory condition in the judgment of the Transportation Department to safely accommodate large commercial buses.

d. To meet the needs of the majority of users, the Company provides bus services on main routes. The number of bus routes to, between and within communities is determined by the Superintendent, Area Transportation Division in the respective area.

3. Transportation from/to Company Housing and within the Main Camps

a. All employees, regardless of residence location, may use Company transportation from terminals within the main camps to work locations.

b. Transportation is provided when the normal walking distance is more than one (1) kilometer from Company-assigned housing to a reporting location or transportation terminal.

c. Transportation is provided when the normal walking distance is more than one (1) kilometer from a reporting location/transportation terminal to a work location.

d. Transportation for noon meals is provided between work sites and Saudi Aramco company-owned community residence locations and dining facilities, with routes and schedules as needed to match the prevailing midday break.

4. Bus Schedules

a. Workhaul bus services are designed to meet the prevailing working hours at each Saudi Aramco area of operations. No services are operated to meet other working hours for particular organizations.

b. In order to minimize Primary Route travel times (from residence locations to work reporting locations or work locations), work-bound Secondary Routes (from work reporting locations to work locations) are scheduled to reach some work locations later than the formal work starting time. Similarly, some home-bound Secondary Routes start from some work locations earlier than the formal work quitting time. This late arrival/early departure should normally not exceed 15 minutes each way and be kept to a minimum time period whenever possible.

5. Transportation of Trainees between Job Sites and from Job Sites to Training Facilities.

Transportation of trainees between job sites and from job sites to training facilities is provided by the trainees’ organization. No special or additional buses are provided to transport trainees between job sites or between job sites and training facilities.


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6. Approval Authority for New Services

The establishment of new bus services to and from housing areas and worksites outside the Dhahran, Abqaiq, Ras Tanura, Udhailiyah, and Tanajib Saudi Aramco communities requires the joint approval of the Vice President, Employee Relations & Training, and Executive Director, Industrial Services.

7. Alternate Transportation

Alternate transportation is furnished, as specified in Section H.3, when:

a. An employee is required to work overtime which prevents him from utilizing his normal daily or days off transportation.

b. The employee is not a recipient of daily or days off transportation allowances between the work site/days off residence/work days residence locations (for exception, see Section H.3).

c. Company-provided transportation service is not available within 30 minutes after required overtime work on regular scheduled work days, or overtime work on scheduled days off is completed.

d. A days off commuter in Company-assigned quarters is proceeding to his days off residence immediately upon completion of overtime work.

e. An employee on a 14/7 work schedule whose days off and family residence locations are outside the province of his work location, and who is unable to utilize the Company plane service for travel to/from his days off location, is provided a Company-purchased economy class round trip air ticket between the airport nearest his work location and the airport nearest his days off residence at the time he proceeds to his days off location.

B. Local Transportation Allowance for Daily and Days OffCommuters

1. General

The Company provides transportation allowances only when employees are not able to use the local transportation service. (See Appendix II for amounts and eligibility distances)

Employees living in main camp Company-provided housing or in the local community of one district and permanently working in another district are ineligible for transport allowance consideration as they are expected to live in the district where their work is.


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2. Daily Allowances

Daily transportation allowances may be provided when employees reside in local communities or Company assigned housing but no local transportation services are provided within 1 km. of the employee’s residence.

3. Days Off Allowances

Days off transportation allowances may be provided when employees:

• occupy Company assigned quarters at Specified Locations as a work day residence; and

• reside on their days off in local communities or Company assigned housing to which regular transportation is not provided within 1 km. of the employee’s residence.

Specified Locations employees commuting to days-off locations, including those locations outside the province of work locations, are also paid the allowance.

4. Amount of Allowances

The allowance is determined by the distance between employee's residence and the nearest point from which Company provided bus service is available, not the distance between residence and work location. For example, if an employee resides sixty-five (65) kilometers from his work location, but Company-provided bus service is available at a point thirty (30) kilometers from his residence, he receives the 1 - 50 km. commute allowance amount.

5. Application

The monthly allowance is prorated for any portion of a month during which an eligible employee establishes inability to use the Company-provided bus transportation service or in which he becomes ineligible.

New hires, transferees (in/out of the Company), and terminees are only paid the allowance for hours worked in Saudi Arabia in the month of hire, transfer or termination.

Employees are required to promptly notify their Department when their Workday Residence (or Days-off Residence, if working in a Specified Location [Hardship] Allowance area) changes. This will enable their Personnel record to be updated via a SA-8000 and Transportation Allowance eligibility to be reviewed.

The SA-8000 requesting Transportation Allowance payment should state in the remarks section the reason for Transportation Allowance eligibility e.g., work location not served by Company bus service, no Company bus service within 1 km. of residence, work schedule does not match times of Company bus service, etc.


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6. Application During Time Off and Business/Temporary Assignments

The Transportation Allowance is paid when the employee is on any of the following:

• Paid Personal Leave ("P" Time)• Medical Leave ("M" and "K" Time)• Business and Short Term Temporary Assignments of up to 60

Days, including Those Recorded as "D" Time in the United States

The Transportation Allowance is not paid when the employee is on any of the following:

• Vacation Leave ("L" Time)• Authorized Leave Without Pay ("X" Time)• Unauthorized Leave Without Pay ("Z" Time)• Authorized Medical Leave Without Pay ("W" Time)• Temporary Assignments of More Than 60 Days, including Those


7. Exceptions

Unique Transportation Allowance payment cases are reviewed by the Area Personnel Administrator and approved on an exception basis.

C. School Buses

1. General

The Company provides transportation for the dependent children of employees who reside in Company-provided main camp housing and who attend Company-operated schools within the main camps, selected local Saudi Arab schools off camp and Dhahran Academy (for Dhahran residents).

2. Routes and Schedules

Routes and schedules are established on the basis of bus availability, distance, school schedules, and number and locations of residences of students.

3. Main Camp Services

Bus service is normally provided to children whose on camp residence is more than three-quarters (3/4) of a kilometer walking distance from their school. However, children living a shorter distance from school may be transported if the Loss Prevention Department determines that prevailing conditions warrant doing so.

In the main camps, bus service is normally provided between the schools and designated school bus stops in the morning for start of classes, at lunch time, and upon completion of classes.


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4. Off Camp Services

The dependent children of Saudi Arab employees residing in the main camps are normally provided bus service to local schools in the morning for the start of classes and in the afternoon upon the completion of classes. Similar services are made available to eligible dependents of expatriate employees who reside in Company-provided housing in Dhahran and who attend Dhahran Academy.

Off-camp transportation is limited to approved schools within the proximity of the main camp. New students are expected to attend existing off-camp schools for which Company transportation is already provided. Transportation service to an additional school, which requires another bus, is reviewed by the Transportation Department and, if applicable the Personnel/ERP&P Departments, as to the need to service the new school.

The Company does not provide transportation for inter-district schooling requirements.

5. Intersession Services

School bus services are provided on a limited basis during school intersession periods. Routes and schedules are established to correspond with peak periods of tutoring and enrichment activities.

D. Other Regularly Scheduled Bus Services

The Company provides other regularly scheduled bus services as described below. Routes and schedules are established by the Manager, Transportation Department.

1. Inter-Area Buses

Regularly scheduled bus transportation is provided between the Company's main camps to enable employees to travel on temporary work assignments and to permit employees and eligible dependents to avail themselves of social, medical and recreational facilities. Employees living in Company main camps in one district and who permanently work in another district are also eligible to use the inter-area bus service for daily commuting.

2. Shopper Buses

Bus transportation is provided for eligible residents of the main family and bachelor camps to nearby local shopping areas.

3. Medical Buses

a. Bus transportation is provided from Company clinics in other areas to the Dhahran Health Center for employees and their dependents who have been referred for treatment in Dhahran, and to visit members of their immediate families who are patients.


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b. Bus transportation is provided for employees and their dependents between their local communities and Company clinics.

E. Special Buses

Subject to equipment availability, the Company provides special bus transportation services for Company-sponsored activities. Special bus services are requested by submission of a Special Bus Service Work Order (SA 7525) approved by Division Head or above.

F. Assigned Light Vehicles

1. General

a. The Company, through the Transportation Department, assigns light vehicles to organizations for use by employees who have valid, full time, all day and everyday work related needs for transportation in and between work areas, which cannot be met by U-Drive or bus services.

b. Assigned light vehicles are provided for work related, Company business use only. Except as specifically set forth in paragraph 2 below, assigned vehicles are not to be used for personal business or recreational purposes, for commuting between residence and work locations, or for daily or regular travel between Saudi Aramco's major operating areas. They should not leave work areas or Company parking areas except for work related purposes, and should not be parked at residences after work or on weekends and holidays. Refer to Industrial Security GI 710.010, section 6 (Intent of Using Assigned Vehicles).

c. Vehicles are assigned to functions or jobs, not to individual employees personally. Assigned vehicles are only provided for functions that involve field work, not for staff personnel who normally remain at their permanent offices, with only occasional activities elsewhere.

d. Criteria governing assignment of light vehicles, procedures for requesting assignments, and approvals required, are specified in General Instruction 1245.001.

2. Authorized After Hours Use

a. Assigned vehicles may be authorized for use after normal working hours when:

1. a vehicle is required to meet the needs of employees subject to frequent after hours emergency call out; or


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2. in the judgment of a Department Head, after hours use is justified as being in the best interests of the Company, based on special circumstances surrounding a particular employee's work duties, worksite, residence location, or special work requirements.

b. Vehicles authorized for after hours use are identified by either red or yellow windshield stickers issued and applied by Industrial Security, as outlined below.

3. After Hours Use Stickers

a. Industrial Security will issue either a red or yellow After Hours Use sticker, based on user qualifications, as follows:

1. Red Stickers: For vehicles used by employees whose job duties require response to all emergency situations involving fire, safety or Government Affairs activities, on a 24 hour/day basis; such vehicles will be permitted access to sites of emergency situations.

2. Yellow Stickers: For all other vehicles for which After Hours Use is authorized in accordance with the requirements of paragraph 2.a. above.

b. Application for After Hours Use stickers is made on Form SA-6462, Company Vehicle Sticker Request. All applications for stickers must be endorsed by the user organization Department Head, the Manager of Industrial Security in the respective area, and approved by the user organization's Administrative Area Head.

c. When authorized for After Hours Use, as evidenced by a sticker on the windshield, assigned vehicles may be:

1. used for commuting between residence and work locations;

2. parked at residences after normal working hours, including weekends and holidays;

3. used for travel to and from Company sponsored social or recreational functions.

d. Vehicles with red After Hours Use stickers may also be available for personal use within the Main Camps or local community in which the employee who is assigned such a vehicle resides.

e. Vehicles with yellow After Hours Use stickers may not be used for travel, with or without family members, to shopping or recreational areas or facilities, within or outside the Main Camps.


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G. U-Drive Vehicles

1. Purpose

U-Drive vehicles are available to provide eligible personnel with auto transportation for single work related trips of short duration, for which neither a vehicle assigned to the user's organization nor other company provided transportation is available.

2. Eligibility

U-Drive vehicles may be used by male employees who have valid Saudi Arabian driving licenses by processing a U-Drive Service Request (ZTUV669) with the required approval. Refer to GI 1245.001 for rules governing eligibility requirements for the Authorized User List maintained by the Transportation Department under SAP R/3 Finance and Logistics/SAP U-Drive.

3. Restriction on Use of U-Drives

a. U-Drive vehicles are to be used for work related purposes only and not for personal business or recreation.

b. Vehicles are normally to be used only during employees' regular working hours.

c. Vehicles are not normally to be retained for extended periods or overnight.

d. Vehicles are not to be used for travel between Saudi Aramco Main Camps. Employees are to use the scheduled inter-area buses for this travel and, if further travel is required, obtain U-Drive vehicles at the U-Drive location nearest their ultimate destination.

e. Vehicles are to be used on a per-trip basis only. Users must sign vehicles out only when ready to embark on their trips, and must return them promptly upon completion thereof.

Violation of these restrictions may result in loss of U-Drive privileges.

4. Driver Service

a. This service is designed to provide transportation in certain instances when other transportation services are not available. Employees eligible to use U-Drive vehicles should use the service when one way transportation is needed, or the duration of the stay at the destination is such that a U-Drive vehicle would be left unavailable for other use for an extended period.

b. Employees not authorized to drive U-Drive vehicles may use Driver Service for a single trip by processing a U-Drive Service Request (ZTUV669) with the required approval under SAP R/3 Finance and Logistics/SAP U-Drive.


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H. Workhaul Passenger Vans

1. Workhaul passenger vans may be operated by proponents, with the concurrence of the applicable transportation organization, if the volume of service is not sufficiently large to justify the operation of bus services administered by the transportation organization.

2. Passenger vans are provided by the applicable transportation organization and permanently assigned to the proponent for specified services. The proponent is responsible for scheduling, supervision, fueling, safety reporting and all other day-to-day aspects of the use of these vehicles.

3. Passenger van services are provided by the applicable transportation organization with or without drivers. If drivers are provided for remote area operations, the proponent organization is responsible for arranging driver meals and accommodation.

4. Passenger vans may also be driven by regular employees, in addition to their normal duties, provided that the employees’ normal work does not exceed eight hours and the total commuting driving time does not exceed two and a half hours per day. Alternatively, contract drivers may be utilized.

I. Saudi Aramco Service Vehicles (SASVs)

1. General

a. Saudi Aramco Service Vehicles (SASVs) are privately-owned vehicles operated by owners who have contracted with Saudi Aramco to provide taxi services exclusively to the Company within the main camps and to and from other areas. Additionally, Limousine services are provided by the Transportation Department through a concession agreement with an operator company.

b. SASVs/Limousine services may be used for personal transportation by employees and dependents, or for Company business, as defined in paragraph 3 below.

2. Personal Use

The primary purpose of the SASV/Limousine service is to provide supplementary and alternative personal transportation for employees and their dependents on a cash-fare basis in camp and to surrounding locations.

3. Company Business Use

a. Employee Commuter Transportation

The Company, through the Transportation Department, may arrange for employees to use SASVs/Limousine services at Company expense to travel to or from work ONLY under the following circumstances:


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1. When Transportation Department is requested to provide alternate transportation for employees required to work overtime and the appropriate transportation allowances or bus transportation, as defined in Section A.4. above, is not available; or

2. When there is a breakdown or failure of the employee's regular bus service, and such failure is verified by the Transportation Department; or

3. When an employee's work schedule is changed for a period of less than 28 days and regular bus transportation is not available; or

4. When employees are required to work on their scheduled days off or holidays. If an SASV/Limousine service is not provided, employees are eligible for reimbursement of actual taxi fares, or an amount equivalent thereto. In the absence of established taxi fares, an allowance in lieu should be determined by the Transportation Department.

The cost of service arising due to breakdowns as described in paragraph 2 above is borne by the Transportation Department.

Usage of SASVs/Limousine services due to the reasons in paragraph 1, 3 or 4 above is at the user organization's expense. Alternatively, user organizations will reimburse eligible employees for expenses actually incurred in using local taxis or SASVs/Limousines at one way rates applicable between employee's residence and work location.

Employees who receive daily transportation allowances are also ineligible for taxi fares when required to work overtime on a regularly scheduled work day.

Employees who work on their regularly scheduled day off are treated in accordance with 4. above.

b. Delivery Service

The Company may use the SASV/Limousine service for delivery of small shipments of materials which are needed on an urgent basis. Such usage is at user organization expense.

c. SASV/Limousine Payments

User organizations may pay each SASV for multiple trips with one monthly SA-60 Payment Authorization for direct deposit to the driver’s bank account. Contact the Transportation Department’s Passenger Services Foreman for details. Limousine payments are made through the regular invoice processing system.


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J. Driving Licenses

1. General

In order to drive a motor vehicle in the Kingdom, all individuals must possess a valid Saudi Arabian or Gulf State driving license. The minimum age requirement is eighteen (18) Hijrah years except that a temporary driving license may be issued to a seventeen (17) year old. The Company assists employees by processing their applications. Operating a motor vehicle of any type without a valid license may subject individuals to legal sanctions and, in some instances, disciplinary action by the Company.

2. Temporary License

Newly hired employees possessing a valid driving license from another country whose resident permits (Iqama) have not yet been processed may obtain a temporary Saudi Arab license, which is valid for ninety (90) days.

3. Permanent License

Permanent driving licenses are only issued to those individuals who have a permanent Residence Visa endorsed in their passports.

4. Renewal of Permanent License

Permanent licenses for light passenger vehicles are valid for five (5) years. Professional driving licenses are valid for three (3) years. At least one month prior to the expiration date, employees must submit a renewal application.

5. Professional Driving License

The Saudi Arab Government requires individuals who operate trucks or heavy duty machinery to obtain appropriate licenses. These licenses are issued to non-Saudi Arabs only when the interest and growth of the country dictate and the applicant is hired to work as a professional driver.

6. International Driving License

These licenses are not widely recognized or accepted by governmental authorities in Saudi Arabia. Consequently, while individuals with visitors' visas may use these licenses, it is not recommended unless absolutely necessary.

K. Private Vehicles

1. General

The purchase and registration of private vehicles, the transfer of title and payment of any associated fees, including insurance, are the employee's responsibility. This includes automobiles, motorcycles, campers, vans, electric carts and sand buggies, as well as boats.


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2. Proper Operation of Vehicles

The privilege of owning and operating private vehicles carries with it attendant responsibilities:

• All drivers must familiarize themselves with and observe the Traffic Regulations of the Kingdom of Saudi Arabia.

• All drivers must observe the posted speed limits, parking restrictions and other traffic rules, including procedures for reporting accidents, established within Company camp areas.

• All vehicles operated within Company camp areas must have the appropriate windshield sticker, obtainable from the Industrial Security Department.

• Repeated offences may lead to disciplinary action, including withdrawal of the right to operate a vehicle within Company areas.

L. Assignment to a New Work Location

When employees are assigned to a new work location in one of the Main Camp areas and a change in residence location is required, the Company furnishes transportation or an allowance for moving reasonable amounts of personal effects. (See Chapter 7, In-Kingdom Assignments and Chapter 11, Shipment of Personal Effects.)

M. Liability Incurred while using Company Vehicles

1. General

Company employees and other authorized drivers who use Company vehicles in Saudi Arabia are insured against third party liabilities (known as driver’s license insurance) through Self-Insurance/Bail Bond Certificate for Saudi Aramco owned or rented/leased vehicles. The Company indemnifies injured third parties who suffered loss (bodily injury, death, property damage) as a result of a motor vehicle accident involving Company vehicle.

2. Settlement of Third Party Liability

A Saudi Aramco authorized driver who incurs a third party liability while using a Company owned or rented/leased vehicle should show the Saudi Aramco Self-Insurance/Bail Bond Certificate, a copy of which is kept in all vehicles, to the Traffic Police officer. He must fully cooperate with the Police Officer investigating the accident, but should not voluntarily admit liability, sign any statements, offer or promise settlement of claim.

The driver should immediately contact the nearest Saudi Aramco Industrial Security Control Center which, in turn, notifies the respective Saudi Aramco Affairs Area Department.


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The Saudi Aramco Affairs area representative handles all the formalities related to the accident and settles any related claims against the employee. The area representative collects all external documents related to the accident such as Traffic Accident Report, copies of the repair estimates and spare parts quotes, and Repair Permit. Refer to GI211.071-Settlement of third party liabilities incurred while using Company vehicles-for detailed procedures.

3. Corrective Action

Although settlement of third party liability can not be refused by the Company, the driver’s Department Head may take appropriate disciplinary measures, based on the Traffic Accident Report, against an employee when his actions violate Company or Department regulations regarding use of Company vehicles.

4. Reimbursements for Fines

Drivers are not reimbursed for fines imposed on them for violating Saudi Government traffic regulations.

II. International Transportation

A. General

1. The Company pays transportation costs for employees and their authorized accompanying eligible dependents for business, temporary, training/educational assignments and other approved personal travel requirements provided for in accordance with Company policy.

2. A dependent authorized to receive Company-paid travel when traveling with a Company business traveler is authorized to travel in the same class of service as the business traveler. The dependent must actually accompany the business traveler on the same flight(s) to qualify for this provision; otherwise, dependent travel is by economy class.

3. An employee traveling with another business traveler or in a group is to travel in the class of service authorized for himself/herself. Upgrading, at Company expense, to accompany another employee who is traveling in a higher class of service is not authorized.

4. When applicable, paid travel time to points-of-origin east of Saudi Arabia to Singapore is one day each way. Two days travel time, each way, may be authorized for locations beyond Singapore or to certain remote village locations, when determined necessary by the Company.


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5. Exceptions to the provisions of this policy require the approval of Executive Management or the Presidents of ASC or AOC B.V. This includes route deviations, ticketing other than provided for in B.2. below and upgrades in travel standards for employees and consultants/contractors traveling on Company business.

B. Travel by Commercial Airline

1. The Traffic Division, through its Global Travel Services (GTS) contractor, is authorized to purchase commercial airline tickets, via the most direct route, for the traveler in accordance with the standards indicated in Appendix III of this Chapter.

2. To the maximum extent possible, GTS is to make reservations for Company-paid tickets with those airlines with which the Company has special commercial arrangements. Should a traveler, for personal reasons, request off-direct route travel, an upgrade in travel class, or airline service not covered by the Company's special commercial arrangements, the excess cost is charged to the employee's personal account.

C. Income Tax Services Group Review

Out of Kingdom Temporary Assignments under Chapter 8 of this Manual, all business assignments to the United Kingdom (UK) of UK nationals and all business assignments to California are subject to review by the Income Tax Services Group of the Compensation, Benefits & Employee Tax Accounting Department. Their review and endorsement is obtained by submission of an itinerary form. Itinerary form SA-7017 is required for Chapter 8 Temporary Assignments to the U.S.; form SA-7017-1 is required for such assignments outside the U.S. Form SA-7017-2 is required for business travel to the UK by UK nationals, and form SA-7017-3 is required for all California assignments. Global Travel Services should not issue commercial airline tickets unless this requirement is met. No itinerary form or Income Tax Services Group endorsement is currently required for short-term business trips to other locations.

D. Special Company-Paid Travel

1. Emergency Leave

See Chapter 9, Section IV.

2. Educational Assistance Plan (EAP)

See Chapter 15, Section IV.

3. Repatriation Vacation

a. Transportation and Travel Expense Components

1. The Company pays an amount for each employee and eligible family member. It is based on the cost of economy class round trip, direct route air fare between the


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Company-approved airport nearest the employee's days-off residence and point-of-origin. It includes recognition of peak season rates, when appropriate.

2. The Company provides an additional percentage of the airfare amount to cover ground transportation, food, lodging and incidental expenses en route as shown in the following table:

3. A local taxi allowance to and from the airport in Saudi Arabia is also paid.

The employee must take at least 14 vacation days ("L" Days), excluding travel time, and must spend 14 days out-of-Kingdom to be eligible for these payments. Otherwise, the payments must be refunded.

b. Business Trip in Conjunction with Repatriation Vacation

1. An employee receives a full repatriation vacation cash settlement based on air travel from Saudi Arabia to his point-of-origin. Combined business travel, which causes travel costs to exceed the amount of the repatriation cash settlement and which is known at the time that repatriation is planned, is paid in advance.

2. Any business travel that is approved subsequent to the start of repatriation travel is reimbursed provided that total travel costs are in excess of the repatriation cash settlement. The excess cost is reported on an expense report for reimbursement.

c. Temporary Assignment in Conjunction with Vacation

1. A repatriation vacation cash settlement is paid to those temporary assignees who use fourteen (14) or more days of accrued vacation credits en route. One way travel days, travel expenses and economy airfare are paid for the employee and eligible family members from Saudi Arabia to the Company approved airport nearest his point-of-origin and from point-of-origin to the new assignment location.

Category Travel Expense Component

Foreign Contract 20% of applicable economy air fare

Indefinite Term Employment Agreement

10% of applicable economy air fare


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2. Temporary assignees who use less than fourteen (14) days accrued vacation credits en route to the assignment location receive one way travel days, economy air fare and one half the amount provided for repatriation travel expenses for the employee and eligible family members.

3. Temporary assignees who travel to the assignment location direct, travel in accordance with Appendix III.

d. Leave of Absence in Conjunction with Repatriation Vacation

1. The Company pays for round trip travel when an employee is granted a leave of absence without pay in conjunction with repatriation vacation and is scheduled to return to Saudi Arabia immediately following the vacation and additional authorized leave period.

2. When the date of return from leave is indefinite or extends more than a full calendar year from the departure date, the Company pays only one way travel costs and travel time.

4. Marriage of Male Employees after Employment or conversion to family status and travel to Saudi Arabia

a. When a male employee who is eligible for family status marries or becomes eligible for family status after being employed in Saudi Arabia and requests that his wife reside with him in Saudi Arabia, his wife and eligible dependents are authorized to receive a commercial air travel settlement which is paid from the wife's former home, but in no event is the travel settlement calculated for any point further than the employee's point-of-origin. Payment is made in conjunction with the wife's initial travel to Saudi Arabia. Included in the payment are economy airfare and 10% of the airfare for travel expenses.

b. While residing with her husband in the SAO, the wife and dependents become eligible for all applicable transportation and travel provisions to and from the employee's point-of-origin.

c. Prior to traveling to Saudi Arabia, the wife must comply with the Company's processing requirements and the Kingdom of Saudi Arabia entrance/residence regulations pertaining to health standards, visas, etc.

5. Female Employees Resigning to Marry

a. A female employee who resigns to marry is authorized to receive a commercial air travel settlement which is equal to one way economy air fare to her point-of-origin, plus one half the amount provided under repatriation vacation for the travel expense component and one travel day.


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b. When a former female employee marries a regular employee eligible for family status, the Company provides her a commercial air travel settlement which covers her return to Saudi Arabia from the place where the marriage takes place, but not more distant than her husband's point-of-origin. This payment is made only if the travel is actually taken at the time of and in conjunction with the marriage. The payment is economy air fare and one half the amount provided under repatriation vacation for the travel expenses, if an overnight stop is necessary.

6. Departure of Dependents from Saudi Arabia without Employee

a. Any or all family members may be returned one time, at the employee's request, to the point-of-origin. The Company provides a commercial air travel settlement for affected family member(s) equivalent to that under paragraph 7 below, except no travel time is calculated.

1. If the family member(s) is subsequently approved for return to Saudi Arabia, and the employee has not taken a repatriation vacation after the family member(s) departure, the employee is to pay travel expenses for the return to the Kingdom. The next repatriation vacation settlement for the family member(s) is reduced by one half. This reinstates funds for payment of termination repatriation travel.

2. If the family member(s) is approved for return to Saudi Arabia subsequent to the employee already having taken a repatriation vacation, then the Company will provide transportation to the Kingdom for the affected member(s).

3. The affected family member(s) would be eligible for normal repatriation travel expenses for the next repatriation vacation provided they reside in Saudi Arabia six months prior to the next repatriation vacation.

b. The Company for any justifiable reason may request an employee's family or any member thereof to leave Saudi Arabia. The Company provides a travel settlement for affected family member(s) equivalent to that under paragraph 7 below, except no travel time is calculated.

7. Termination of Employment

a. When an employee terminates, the employee, and family as applicable, receives a commercial air travel settlement equal to the cost of one way economy air fare from Saudi Arabia to the employee's point-of-origin for all the family members, plus one half the amount provided under repatriation vacation for the travel expense component and one day travel time. The travel expense component is also intended to cover pre-departure


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temporary living expenses. Terminating employees may also be paid excess baggage costs as described in Chapter 11, Section XIII.

b. Employees with less than one year of continuous service who voluntarily resign or are terminated for cause, receive the same travel arrangements, but are not paid a travel day.

c. Payment of the travel settlement discharges the Company's obligation to transport the employee and any eligible family members to the Company approved airport nearest the established point-of-origin. This also applies to a terminated employee who obtains local employment.

E. Passports and Visas

An integral part of travel for employees is the possession of a valid passport and appropriate visas. Within Saudi Arabia, the Passport and Permits Unit of the Personnel Department is responsible for obtaining work and residence permits, exit and exit/re-entry visas, passport renewals and processing requests for visitor visas.

1. Fees and Levies

a. The Company pays the normal costs of certain fees and levies otherwise incurred by the employee and eligible resident family members. These costs include:

• initial passport (when necessary)• passport renewal• entry visa for Saudi Arabia• work and residence permit• exit and re-entry visa for Company business travel,

repatriation vacation, emergency leave and medical referral

• exit and re-entry visa and visitor visa for students covered by the Educational Assistance Plan

• foreign visa for Company business travel• exit visa for final repatriation• medical examinations/tests required for a visa• translation/authentication fees

b. The following costs are for the employee's account:

• exit and re-entry visa for personal travel• foreign visa for personal travel and repatriation vacation• visitor visa and related medical examinations/tests for

relative(s) of employee


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• OOK medical examinations/tests to secure a Saudi Arabia entry visa for dependents who, at the employee's option, have stayed OOK beyond the validity of their exit/re-entry visa

2. Passport Clearance and Visa Requests

a. Employees are responsible for initiating passport clearance and visa request, with proper approvals, for the following:

• "Travel Payment Authorization/Passport Clearance", for repatriation vacation and other travel for employees and eligible dependents, via "e-leave" processing (ZHRO2940), through their departments.

• "Visitor Visa Request" (form SA-3127), to obtain visitor visa for Saudi Arabia for eligible relatives specified in Chapter 12, Housing and Families, and for Education Assistance Plan (EAP) students, through area Personnel Offices.

b. Requests for Company sponsored/business visitors to Saudi Arabia are processed through the Visitors Office, Dhahran, using "Visitor Data Sheet" (form SA-655). Refer to G.I. 850.001.

c. Relatives other than eligible family members may, under certain conditions, visit employees in Saudi Arabia. Refer to Chapter 12, Housing and Families.

3. Visa Requirements for Assignment of non-U.S. Citizens to the U.S.A.

Employees who travel to the United States on business, training and educational assignments are required to secure the proper visa sponsored by the Company.

Applicants must make an appointment to visit the U.S. Embassy in Riyadh in person in order to submit the required documents and be interviewed at the same time.

The types of visas used for the appropriate purposes are listed in Appendix I of this Chapter. In order to avoid immigration and tax problems, employees and managers should be aware of the various visa requirements, application procedures and processing leadtime.

a. U.S. Taxes

The type of visa used is relevant to, but not completely controlling for, U.S. tax purposes. The Internal Revenue Service regulations are covered in Publication No. 518, "Foreign Scholars and Educational and Cultural Exchange Visitors" and Publication No. 519, "U.S. Tax Guide for Aliens."

b. Documents and Forms Required

For employee/dependent applications for U.S. non-immigrant visas, the following is required:


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• Passport must be signed and valid at least six months beyond the end of the visa application period.

• Health and Vaccination Certificate.• Global Travel Order form 225 for business travel• Letter from Personnel and/or Career Development, if

applicable• U.S. Department of State forms accompanied by two

passport photographs:• DS-156 Non-Immigrant Visa Application• DS-157 Supplemental Non-Immigrant Visa

Application• DS-158 Contact Information and Work History

These application forms can be downloaded from the U.S. Department of State web site: http://travel.state.gov/visaforms.html

• For Personal travel, bank statements or financial guarantee are required.

• Other documents, e.g., old passports, may also be required.

c. Depending on visa applied for, one or more of the following, or other, forms may also be required:

• U.S. Immigration and Naturalization Services (INS) Form I-20 "Certificate of Eligibility for Non-Immigrant Student Status - For Academic and Language Students" for "F-1" visas signed by the college or university

• U.S. INS Form I-129B "Petition to Classify Non-Immigrant as Temporary Worker or Trainee" or I-129S "Non-Immigrant Petition Based on Blanket L Petition from Aramco Services Company (ASC) for "H" and "L" visas

• International Information Agency Form IAP-66 from the college or university for "J" visas.

• Company sponsorship letter issued by the Career Development Department for "F" and "J" visas and the Personnel Department for all other visas.

• U.S. Consulate Form I-129B "Petition to Classify Non-Immigrant as Temporary Worker or Trainee" for "H" and "L" visas.

d. Normally, visas are issued which provide for one entry into the U.S.A. When it is known in advance that the employee will need to leave the U.S. and re-enter during the assignment period, a Multiple Entry Visa should be requested. The issuance of Multiple Entry Visas is governed by a system of international reciprocity i.e. if the applicant's home country grants multiple


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entry visas to U.S. citizens, the U.S. grants them to citizens of that country. The request will be made in the Company sponsorship letter issued by Personnel.

e. Employees should be aware that they may be inconvenienced by special registration procedures upon arrival in the U.S. These procedures may include being fingerprinted, photographed, asked to show documents and interviewed about the length and purpose of visit. Employees could be separated from family members during this process. Also, if subject to these special registration procedures, employees who stay in the U.S. for 30 or more days may be required to visit an INS office sometime from the 30th to 40th day in the U.S.

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Appendix I: Visa Requirements for Assignment of Non-U.S. Citizens to the U.S.A.

Visa Use

Location of Approving U.S. Gov’t. Office

Letter Initiated/ Sponsorship By Duration U.S. Tax Liability

Normal Processing Time

B-1 - Temporary Business Visitor Short-Term business Saudi Arabia Personnel Admission normally authorized for six months. May be authorized up to 12 mos. Six month extensions up to 18 months are authorized.

Pays U.S. Social Security Tax; pays Federal Income Tax if in U.S. over 90 days or earns more than $3,000.

Two weeks.

B-2 - Temporary Visitor for pleasure

Tourists, medical visitors, visitors for pleasure, dependents of B-1 visitors (initiated by employee)

Saudi Arabia Personnel Admission for requested period of stay, normally 3 months, 12 months maximum.

N/A Two weeks.

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Visa Use




F-1 Student Students in formal programs at colleges, universities, institutes approved by Attn. Gen.

USA Career Development and Personnel

Admission authorized for 12 months renewable until course of study completed.

Does not pay U.S. Social Security Tax; exempt from Federal Income Tax on salary from Saudi Aramco. Individuals bearing this type visa are required by US tax authorities to file informational IRS form 8843 for each tax year of assignment.

Two Months

F-2 - Student’s Family (spouse and children)

Family of student with F-1 visa. Family members may not work.


Same as F-1. N/A Dependent application accompanies F-1 application.

H-1B - Temporary Workers coming to U.S. to perform services in a "specialty occupation", e.g., an occupation that requires: 1) the theoretical and practical application of a body of highly specialized knowledge; and 2) a bachelor’s or higher degree in the specialty occupation or equivalent experience & training.

Outstanding professional to perform exceptional temporary services.

USA Employee’s Department and Personnel

Initial period of stay of up to three years. Renewable for up to a maximum total period of six years.


3 - 6 months. Labor Condition Application (LCA) must be filed with and certified by the U.S. Department of Labor before an H-1B petition will be accepted by the INS.

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Visa Use




H-2B - Temp. Worker in Non-Agricultural Position

Aliens perform temporary service or labor in Non-Agricultural position where bona fide need exists.


Limited to period specified in Labor Certification filed with application. Three years maximum.

Same as H-1. 3 - 6 months.Employer must demonstrate that there are no qualified U.S. workers who can fill the position, and Labor Certification from DOL is required.

H-3 - Trainee Industrial or business training in company offices or plants of affiliates or outside companies. Alien cannot engage in employment that will displace a U.S. worker.


Limited to maximum time training can reasonably take, generally not more than two years.

Same as H-1. 2 - 6 months.

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Visa Use




J-1 - Exchange Visitor Persons coming to participate in D.O.S. approved training/development program involving on-the-job business, rotational, or industrial training in company offices or plants of affiliates or outside companies, may be combination of schooling and industrial training.


Limited to periods stated in application subject to the following maximums: Industrial/business trainees - 18 months; graduate nurses - two years; students - time necessary to complete degree program so long as clearly progressing in degree program; M.D.’s - time necessary to complete their residence program.

Does not pay U.S. Social Security Tax; exempt from Federal Income Tax on salary from Saudi Aramco. Individuals bearing this type visa are required by US tax authorities to file informational IRS form 8843 for each tax year of assignment.

2 - 3 weeks.

J-2 - Exchange Visitor’s Family (spouse and children)

Family accompanying trainees with J-1 visa.


Same as J-1. N/A Dependents application accompanies J-1 application.

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Normal processing time for executives, managers and professionals falling under ASC’s blanket petition is 3-4 weeks. Location of Approving U.S. Government Office is in Saudi Arabia. These and other processing times in the chart above may sometimes be significantly longer.

Visa Use




L-1A&B - Intra-Company Transfer Employees of a foreign based company who have been employed for at least one year, and who are being transferred to a subsidiary or affiliate to fill an executive/ managerial position or a position that requires specialized knowledge.


Initial period of three years, extendible to a maximum of seven, for executives/ managers and five years for specialized knowledge employees.


1 - 3 months.

L-2 - Family of Intra-Company Transferee

Family accompanying transferee with L-1 visa.


Same as L-1. N/A Dependents application accompanies L-1 application.


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Appendix II: Local Transportation Allowances

Daily Commuters

Days Off Commuters

MALE

Current Zone Zone 1 Zone 2

Distance 1 - 50 km 51+ km

Commuter Allowance SR 300 SR 450

FEMALE

Current Zone Zone 1 Zone 2 Zone 3 Zone 4

Distance 1 - 20 km 21 - 35 km 36 - 50 km 51 + km

Commuter Allowance SR 365 SR 515 SR 665 SR 800

Current Zone Zone 1 Zone 2 Zone 3

Distance 1 - 50 km 51 - 110 km 111+ km

Commuter Allowance SR 100 SR 170 SR 285

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Appendix III: Commercial Air Travel Authorized

(Footnotes are listed on the following page.)

____________________________________________________________________________________________________________________________| | Class of Travel Authorized | || Type of Company-Paid Air Travel |Least | | | | Company-Paid || |Cost(1)| Economy |Business(2)|First(3)| Travel Expenses || | | | | | || I. Business Travel which includes Business Trips, Temporary| | | | | || Assignments (See Note (10)), and Medical Referrals | | | | | || (See Note (8)) | | | | | || | | | | | || A. Travel Within: | | | | | || 1. North America | | (4) | | |Actual & Reasonable || 2. Europe | | (5) | | | " " || 3. Saudi Arabia & Gulf Cooperation Council States | | (6) | | (6) | " " || 4. All Areas Other than 1, 2 & 3 Above | | | X | | " " || | | | | | || B. Travel Between: | | | | | || 1. North America & Europe | | | X | |Actual & Reasonable || 2. North America & Saudi Arabia | | | X | | " " || 3. Europe & Saudi Arabia | | | X | | " " || 4. All Locations Other than 1, 2 & 3 Above | | | X | | " " || | | | | | || II. Employment Interviews & Initial New Hire Travel | | (9) | /9 | |Sec Ch. I, Sec VI & VII|| | | | | | ||III. Training and Educational Assignments | | | | | || | | | | | || A. SC 3-10 | X | | | |Actual & Reasonable || B. SC 11+ | | | X | | " " || | | | | | || IV. Special Company-Paid Travel | | | | | || | | | | | || A. Emergency Leave | X | | | |None || B. Educational Assistance Plan | (7) | (7) | | |None || C. Repatriation Vacation | | (7) | | |See Sect. II.D.3 || D. Termination of Employment | | X | | |See Sect. II.D.7 || E. Temporary Assignment Family Visitation | (10) | | | |10% of airfare (11) || F. Rest & Relaxation (R&R) | (11) | | | |Specific Per Diem Amt. |


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FOOTNOTES FOR APPENDIX III: COMMERCIAL AIR TRAVEL AUTHORIZED

(1) "Least Cost" is defined as being the least cost ticket available at the time the travel booking is made.

(2) Business class travel will be used to the maximum extent possible. If business class is unavailable on any portion of a trip itinerary, the traveler is ticketed in the next lower class of travel for that portion of the trip. Excess baggage charges incurred as the result of a downgrade in travel class will be reimbursed. The traveler does not upgrade to first class regardless of the required travel time.

(3) Department Heads permanently assigned to the position and eligible Salary Code 18 and above employees are authorized to travel first class on business travel.

(4) ASC may purchase discounted economy/coach fares for ASC business travelers if such satisfies the organization's transportation requirements.

(5) AOC may purchase the next higher fare for AOC business travelers when the normal IATA economy fare is not available on flights within Europe.

(6) Economy class for SC 3-10 employees and first class for SC 11+ employees (See Note (8) for out-of-Kingdom medical referral air travel).

(7) Cash-in-lieu of Company purchased tickets is standard policy.

(8) Business class travel standards apply to employee and dependent for out-of-Kingdom medical referrals unless the patient's condition requires a higher standard of service as approved by the Medical Review Committee. Accompanying medical staff travel same class as patient. Authorized accompanying family members travel same class as patient unless traveling separately, in which case economy travel standards apply.

(9) Economy class for SC 3-10 employees and business class for SC 11+ employees if available, otherwise economy.

(10) Family visitation air travel (exclusive of annual repatriation travel) to Saudi Arabia for married employees on bachelor status Temporary Assignments is provided on a seasonal economy excursion basis. Except for excess baggage charges, reasonable and actual travel expenses are reimbursed.

(11) Rest and Relaxation (R&R) travel for single and married status employees and their qualifying family members are provided seasonal economy excursion airfare for specific OOK locations. Cash-in-lieu is not available. Specific per diem assistance is provided.

Industrial Relations Manual for Asian EmployeesChapter 17: Miscellaneous

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Chapter 17: Miscellaneous

I. Domestic Helpers and Housemaids

The Company provides assistance in the procurement of domestic helpers and housemaids to work in the households of eligible employees. Refer to Chapter 17 of the Saudi Arab Industrial Relations Manual for the full policy statement.

II. Fire Brigade

A. General

The Company provides fire fighting equipment and trained fire fighters to meet the needs for fire protection in industrial and residential areas on an around-the-clock basis.

B. Regular Fire Brigade Employees

The fire control function is staffed with regular full-time employees assigned to approved work schedules. Fire training for regular firemen is conducted on a daily basis with instructions given by the Fire Chief, Deputy Chief and Fire Captains. The regular firemen also participate in other fire training conducted during their scheduled hours of work.

Policies applicable to regular fire brigade employees are those contained in the respective chapters of this Manual (i.e. Chapter 1, Employment, Chapter 2, Salary Administration, etc.)

C. Volunteer Fire Brigade

To supplement the regular firemen during emergencies, volunteer fire brigades are maintained. The volunteer fire brigades are composed of high caliber, dependable employees, fully trained in fire fighting.

1. Candidates are nominated to the Volunteer Fire Brigade by the Area Fire Chief. The concurrence of the candidate's Division Head and the Medical Department are required.

2. Membership in the Volunteer Fire Brigade is documented with the proper personnel record change form for payroll and personnel records. The employee's volunteer job title and compensation rates must be indicated. The volunteer's job title and corresponding compensation rates are approved by the Fire Chief or Fire Marshall.

3. Each volunteer fireman receives a minimum of two hours training per week. Attendance at drills is mandatory. Drills are conducted outside the volunteer's normal work hours.

4. Volunteer firemen are compensated for training time at the "Drill Rate" appropriate for their volunteer job category.

Industrial Relations Manual for Asian EmployeesChapter 17: Miscellaneous

October 2, 2005

5. Volunteers, who report to a fire or answer an alarm outside their normal work hours, are compensated at the appropriate "Fire Fighting Rate".

6. In the event of a call-out during normal work hours, the volunteer will receive his regular pay and in addition will be compensated at the appropriate "Fire Fighting Rate".

7. The Area Fire Control Division is responsible to report actual fire fighting hours to the volunteers' regular department for time keeping purposes.

8. Volunteer firemen will be released to respond to emergencies as required by the Area Fire Chief.

9. "Drill Rates" and "Fire Fighting Rates" are established by Employee Relations Policy & Planning and can be obtained from the Manager, Fire Protection Department.

III. Yanbu Industrial Relations Policy

The Yanbu Industrial Relations policy applies to employees of all nationalities and salary codes. The policy is in Chapter 17 of the Saudi Arab Industrial Relations Manual.

IV. Jiddah/Riyadh Industrial Relations Policy

The Jiddah Industrial Relations policy applies to employees of all nationalities and salary codes. The policy is in Chapter 17 of the Saudi Arab Industrial Relations Manual.

V. Tapline Industrial Relations Policy

The Tapline Industrial Relations policy applies to employees of all nationalities and salary codes. The policy is in Chapter 17 of Saudi Arab Industrial Relations Manual.

VI. Telephone Expense Reimbursement Policy

Employees may be reimbursed for long distance business-related telephone charges, including business calls between Saudi P&T telephone zones. A copy of the telephone bill, substantiating the reimbursement claim, should be attached to the expense report. Division Heads should approve only actual and necessary long distance business call charges.