Screening Tools Used by Fortune 1000

1. Hire your Way to Higher EarningsWith Pre-Employment ScreeningPresented by:Si Lamm CPCU, Managing DirectorAmerican Tescor LLC, a division of Merchants Information Solutions, Inc.

2. Criminal Records Checks 88% Employment Verification 86% Drug Screening 78% Education Verification 74% Verification of Professional Licenses 59% MVR Checks 50% Credit History 39% Integrity Testing 7% Screening Tools Used by Fortune 1000 Confidential

3. Founded - 1979 by Dr. Peter Bullard Headquarters – Phoenix, Arizona Service Area – North America Testing Volume – 40,000+ Applicants Weekly Background InformationAmerican Tescor, LLC Confidential

4. 73 Questions about Theft, Drug Abuse, Violence & Lying. Identifies Applicants with “Entitlement Mentality”. 5th Grade Reading Level. Takes 20 Minutes. Tescor’s Electronic Behavioral Assessment Confidential

5. English plus 21 Foreign Language Versions. Audio Versions in English & Spanish. In Compliance with all State and Federal Hiring Guidelines. All Electronic Screening & Immediate Results 24/7/365 with/without Internet. Tescor’s Electronic Behavioral Assessment Confidential

6. Benefits of Tescor Screening • The Tescor Survey has proven to be a powerful tool in improving productivity, employee morale, and earnings. This is accomplished by Reducing: • Turnover Sick Leave Utilization • Employee Theft (Shrinkage) EAP Utilization • Workplace Violence Workers’ Comp Losses • Negligent Hiring Suits STD Losses • Disciplinary Actions LTD Losses • Terminations for Cause Group Medical Costs • Unemployment Insurance Auto Liability • FMLA Utilization EPL Claims Confidential

7. Controlled studies cover over 428,000 workers Time Frame – 1996 to 2009 # of Companies In Studies – 17 Average Claim Frequency Reduction – 54% Average Claim Severity Reduction – 21% Overall Average Loss Rate Reduction – 63% Measuring Tescor’s Impact In Reducing Workers’ Comp Losses

8. Data From A National Rental Company Study Period-24 Months Tescor ProducedA 15% Improvement in Turnover Confidential

9. Tescor’s Effect on Unemployment • Tescor Produced 87% Fewer Unemployment Claims & 89% Less Expensive Claims. • National Rental Company • Unemployment Claims Study Period 24 Months Confidential

10. Short Term Disability (STD) Study Period 12 Months In the study, 6,800 applicants were screened with the Tescor Survey. The Unscreened group had a claim frequency rate 40% higher than the Tescor Screened group. Confidential

11. Hospitality –Huntington Hotel Group, Hospitality Management Corp Food Processors – National Beef Car Rental Agencies - Hertz Long-Term Care – Kisco, Delta Healthcare, AccentCare Commercial Laundries – American Linen Supply (ALSCO) Staffing – TrueBlue, Inc., Joulé Staffing Services Transportation – KKW Trucking Manufacturers & Assemblers – Technicolor, Thor Industries Retail & Distribution – U-Haul, Johnstone Supply, Weis Markets Building Maintenance and Security – Levy Security, Pacific Building Care, American Building Maintenance Oil & Gas – Precision Drilling, Diamond Offshore Construction-Jaynes Corp, CLP Resources, Eplica Corp Cajun Industries Sample Industries Served By American Tescor Confidential

12. Electronic Delivery Systems Tescor on the Internet All Tescor systems provide instant results. Confidential

13. Internet: HR MagnetSample Results Confidential

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15. Tescor Scales

16. Sample Question: Excluding minor office supplies (pads, pens, etc.), what would you guess is the value of things you have secretly taken from work in the past 2 years? A. None B. $5 - $25 C. $26 - $500 D. $501 or more Serious and recent theft only. Excludes all amounts below $5. Theft Scale Confidential

17. Sample Question: Excluding pills you got from a doctor (prescriptions), which of the following drugs do you use? A. Cocaine, Coke, Snow, Crack B. LSD, Acid, Mescaline, Peyote C. Heroin, Opium D. None Only “current use” drug inquiries. Only job-related alcohol inquiries. Drug and Alcohol Scale Confidential

18. Sample Question: Suppose you were insulted. Would you hit the person who insulted you? A. Definitely would not B. Probably would not C. Probably would D. Definitely would Hostile individuals often interview well. Hostility often comes out in hidden ways. 99% of all applicants pass this scale. Hostility/Violence Scale Confidential

19. Sample Question: Since age 16, how often have you told a lie? A. Frequently B. Occasionally C. Rarely D. Never More than 90% of all applicants pass this scale. Faking Scale Confidential

20. Individuals engaging in aberrant behaviors tend to rationalize their behaviors as normal. Otherwise, they suffer from “cognitive dissonance,” an anxiety provoking state where one’s behaviors are in conflict with their values. The Science Behind Tescor Confidential

21. An individual who scores HIGH in any risk category (Theft, Drugs, Faking and/or Hostility) is considered a NONQUALIFIED applicant. Scoring the Tescor Survey Confidential

22. Validation ResearchNational Sample - 1,152,358 Applicants

23. Overall Risk Confidential

24. Passing Rates for Theft Scale Confidential

25. Passing Rates for Drug Scale Confidential

26. Passing Rates for Hostility Scale Confidential

27. Passing Rates for Faking Scale Confidential

28. Theft Behaviors Confidential

29. Drug Admissions Confidential

30. Drug and Alcohol Use Confidential

31. Only convictions are reported. Limited in geographic scope – by county or state. Not all states have statewide databases There are 3,380 counties in U.S. 25 states have automated less than 60% of their felony convictions. Most employee theft is never caught or reported. Identity theft will not be caught. Capture Rate: 6% Cost: $25 to $150. Comparing Screening Tools Criminal Background Checks Confidential

32. Most drugs (except marijuana) clear a user’s system in less than 72 hours. Web sites like “urineluck.com” sell clean powdered urine with 200% guarantee. Subject to legal challenges through faulty lab work, sample mix-ups, or chain of custody. Capture Rate: 5% Cost: $10 to $50 Comparing Screening ToolsUrinalysis Limitations Confidential

33. Study Background This Midwest based staffing company primarily serves the light industrial sector. They conducted urinalysis screening on all applicants who passed the Tescor Survey. All those who passed the urinalysis were then subject to criminal background checks. False Negative StudyMidwest Based Staffing Company Confidential

34. Study Period: 24 months 25,003 Workers Screened by Tescor 19,901 Workers Passed Tescor 80% Tescor Passing Rate Prior to implementing Tescor 5% Failed Urinalysis and 5% Failed for Adverse Background Check After Implementing Tescor: 142 (.7%) Passed Tescor and Failed Urinalysis 59 (.3%) Passed Tescor and Failed Background Check 201 (1%) Total Tescor False Negatives False Negative StudyMidwest Based Staffing Company Confidential

35. Thirty-eight percent to 50% of all workers’ compensation claims are related to the abuse of alcohol or drugs in the workplace. -U.S. Department of Labor Drug-using employees are five times more likely to file a workers’ compensation claim. -National Institute on Drug Abuse Drug and alcohol abuse in the workplace cause 65% of on-the-job accidents. -Department of Labor The Cost of High Risk Employees Confidential

36. Studies show that alcohol and other drug users use three times as many sick days. -National Council on Alcoholism & Drug Dependence Drug users are absent from work an average of five days per month due to drug use. -U.S. Department of Labor Substance abusers are 10 times more likely to steal from the company or from other employees. -U.S. Department of Labor The Cost of High Risk Employees Cont. Confidential

37. The U.S. Department of Commerce reported that the annual losses generated by poor hires, absenteeism, drug abuse and theft amount to $75 billion per year; and 30% of business failures are due to poor hiring practices. The Cost of High Risk Employees Cont. Confidential

38. Legal Compliance • Tescor has been “litigation free” throughout 30+ year history. • Screening tools must be either validated or non-discriminatory – Tescor is both. • Federal and State guidelines require protected classes to pass at a rate that is 80% or better, compared to the relevant class. Confidential

39. Passing Rates of Protected Classes By Race, Sex and Age White 80% Rule Non-White Male 80% Rule Female Under 40 80% Rule Over 40 Passing Rate (percent) Confidential

40. Tescor’s Effects on Workers’ Compensation

41. Common Denominators In Expensive Comp Claims • History of Absenteeism • History of Disciplinary Action • History of Prior Claims • History of Drug Abuse Confidential

42. Screened employees are less likely to file a claim. The screened employees’ average claim was smaller than the average claim filed by an unscreened employee. The screened employees’ claim variance was smaller than the unscreened employees’ claim variance. The average claim cost of all screened employees is less than average claim cost of all unscreened employees. The screened employees are less likely to file large claims (i.e., > $2000) than unscreened employees. Cornell University Findings Confidential

43. Overall Projected Workers’ Comp Loss Reduction Confidential

44. “The first duty of business is to survive and the guiding principle of business economics is not the maximization of profit – it is the avoidance of loss.” -Peter Drucker The Essence of Business Confidential

45. "In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you.” - Warren Buffet Hiring the Right People Confidential

46. Tescor Electronic Screening: Highly Effective Easy to Administer Generates Very High ROIs Tescor Screening Improves Earnings, Safety & Productivity Confidential

47. Tescor’s integrity test is a highly effective tool in reducing the costs associated with employees’ high risk behaviors. After using the Tescor Survey for a two year period, we conducted a comp benchmarking study for our California operations. Our projected saving was more than $10,000,000 in direct cost alone and greater than a 20 to 1 ROI.Using Tescor’s screening on new job applicants allows us to hire a higher quality employee which also means less turnover, employee theft, and hostile incidents in the workplace.Chris BurgerDirector of OperationsPacesetter Personnel Services Confidential

48. Workers’ Compensation The Tescor Group’s frequency was 47% lower. The Tescor Group’s severity was 9% lower. The combined savings was 52% on an Incurred basis. Confidential

49. On average INDIRECT costs outweigh the DIRECT costs by a 4:1 ratio. Direct Costs (Hard Costs) Medical Treatment Compensation Legal Cost Indirect Cost (Soft Costs from Cash) Time for Completing Reports  Investigation Time Loss of Productivity  Increased Work for Others Missed Schedules  Loss of Worker Seeking Medical Treatment  Cost of Replacement Paid Time for Treatment The Cost of Loss Confidential

50. Workers’ Compensation • Closed Claim Study • Study Period 48 Months Confidential