Travel and Entertainment Expense Management Policy

Transcription

1 Travel and Entertainment Expense Management Policy Created: July 21,

2 Contents Section 1: General Information... 3 Policy Purpose... 3 Responsibility... 3 Principles... 3 Compliance... 3 Expense Reporting Policy... 4 Documentation Requirements... 4 Receipts... 4 Expense Report Form... 5 Expense Report Approval... 5 Procurement... 5 Enforcement... 5 Exceptions to Policy... 5 Policy Effective Date and Review... 5 Employees Receiving Per Diem... 6 Section 2: Employee Travel... 6 Transportation Policies and Best Practices... 6 Alternatives to Travel... 7 Travel Meals and Entertainment... 7 Air Travel Policy... 7 Ground Transportation Policy... 8 Lodging Policy Business Expenses while Traveling Section 3: Meals and Entertainment Employee Meals Entertainment Meals with Customers Gifts Awards Section 4: Cell Phone Reimbursement Section 5: Non Reimbursable Expenses Credit Card Fees/Service Charges Employee Resignations and Transfers Fines

3 Section 1: General Information Policy Purpose The purpose of these guidelines is to ensure conformity with Company principles, and to: Ensure clarity in policy and consistent understanding among employees of business travel and entertainment policies/procedures; Provide guidance as to what travel, entertainment, and other business expense types are eligible for reimbursement (and not eligible for reimbursement); Ensure that authorized expenditures comply with tax requirements for deductibility. Responsibility Each employee is responsible for managing travel expenses. In particular: Principles All employees are responsible for reading, understanding, and complying with this policy and any other related guidelines established by his/her specific business location which have been approved by Company Executive management in advance. All designated employees with approval authority are responsible for reviewing transactions and expense reports for accuracy and compliance. The Accounts Payable Department is responsible for reviewing expense reports for clerical accuracy and proper coding. All employees are responsible for booking travel arrangements according to the guidelines of this policy. The Company will reimburse for expenses actually incurred consistent with business needs. The intent is that the employee should neither lose nor gain financially as a result of incurring legitimate business expenses. However, some items primarily personal may not be reimbursed. Employees must: Compliance Conduct Company business with integrity, in compliance with applicable laws. Not use personal advantage considerations when arranging travel, and must exercise good judgment toward incurring cost-efficient expenses (unless there is no added cost to the Company). Exercise good safety and health judgment in accordance with EPIC work site safety policies. Safeguard Company information and assets while traveling, avoiding compromising security. It is the responsibility of each employee to: Understand and comply with this Policy and to understand that expenses incurred outside of this policy will not be reimbursed. Manage and control business travel and entertainment costs (not to waste Company 3

4 funds on items inappropriate or unnecessary). Accurately document expense reports, with appropriate receipts, and submit them in a timely manner consistent with these guidelines. It is the responsibility of expense report approvers to: Ensure that his/her employees understand this policy. Promptly review expense reports for appropriateness and correctness, and to approve reimbursements within the Policy (and to reject those outside of the Policy without prior written approval). Individual locations are also responsible for the communication of these policies to their employees. Expense Reporting Policy Employees must submit expense reports timely and accurately for all business expense reimbursements. Expense reports should be completed on a weekly basis for the prior week of travel or expenses incurred. Expense reports must be submitted within 14 days from the date incurred. Untimely expenses will not be reimbursed. Documentation Requirements Employees are required to accurately and completely: Include necessary backup data and supporting receipts (see Receipts section below). Complete the required documentation for all entertainment expenses incurred, regardless of method of payment. Explain meals, entertainment, travel business purpose, and names of guests, as well as any unusual transactions or items in accordance with applicable tax requirements. Account for all tickets, company-provided advances, and funds returned. Provide a valid charge code for accounting distribution if the expense is job related. Retain the original receipts for all expenses in their records for a period of 1 year. All receipts requiring reimbursement should be scanned into a PDF file and submitted with their expense report. Receipts The following are required for reimbursement: All employees must submit itemized receipts (restaurant receipts need not be itemized. Credit card statements are not acceptable as support for expenses seeking reimbursement. Lodging receipts must be a detailed hotel bill An air travel receipt should be the passenger copy of the ticket and/or itinerary. Rental vehicle receipt must be the traveler s copy. Original amounts and dates must not be altered; however, restaurant tips incurred may be added to the receipt. If the original information is incorrect, the discrepancy must be explained. Approvers must verify that receipts are submitted and that expenses are reasonable, appropriate, and in accordance with this policy. 4

5 Cash expenses must be supported with formal, printed receipts. Where unavailable, generic receipts (one without establishment name) are acceptable if appropriately stamped or signed by the establishment. Employees should retain copies of all receipts before submission for later verification, if needed. Expense Report Form Employees are required to use the attached expense reporting from which is also available as an Excel file located on EPIC Piping s Intranet. All submitted reports should be signed by the employee and approved by their manager prior to submitting the expense report to Accounts Payable for reimbursement. Expense Report Approval The approver should normally be the employee s immediate manager/supervisor, or higher. The approver must have sufficient familiarity with the employee s responsibilities and company s policies/procedures. Specifically, they must approve that the expenses are: Procurement Proper, reasonable, and necessary for company business Submitted timely (see 14 day rule in Expense Reporting Policy, above) Validated with itemized supporting receipts (see Receipts, above) For procurement needs, employees must first contact the corporate procurement department so that EPIC s preferred suppliers may be used. This enables the Company to leverage volume purchases in contract negotiations and results in more favorable contracts, agreements, prices, etc. Enforcement The Company assumes no reimbursement obligations for expenses not in compliance with this policy. Employees who do not comply with this policy are subject to delay or withholding of reimbursement and/or disciplinary action up to and including termination. Exceptions to Policy Exceptions from, or deviations to this policy require prior written approval of the approving supervisor. Employee non-compliance will be recorded and provided to the Company s Executive Committee and approving supervisor as allowed by law. Policy Effective Date and Review The effective date of this policy is August 1, This policy will be reviewed as required, to ensure that the terms are current, fair, and representative of relevant corporate and industry conditions. The Company reserves the right to change this policy at any time, without prior notice. 5

6 Employees Receiving Per Diem Per Diem covers only personal meals, lodging, and incidentals and must be approved in advance and in writing by an authorized manager. Mileage allowances cover fuel, and auto operating expenses of a personal vehicle. If per diem is given, mileage can only be charged for the one trip to and from the jobsite (i.e. not for daily round trips, since per diems can only be made when employees stay away from home overnight). If per diem is not given, then mileage can be paid on a daily basis for miles to and from a temporary worksite. Mileage can never be given if the employee is using a company vehicle or is using a company fuel card. Valid entertainment (documented properly with names/titles, dates, locations, and business purpose/discussion as required by law) is not precluded by the receipt of per diem. Per Diem payments must be in accordance with the Company s per diem policy, and should never exceed the IRS/U.S. Government approved CONUS rates. Section 2: Employee Travel Transportation Policies and Best Practices Business travelers are required to use Corporate Travel Management, (see below for contact information) for business travel. Business travelers are required to use, consistent with business needs, the preferred airline, hotel, and vehicle rental options the travel agencies offer. Travel arrangements must be made without consideration of personal incentives or frequent flyer credits (unless there is no added cost to the Company). Travel plans should not result in additional expense or loss of time to the Company due to personal considerations, unless previously approved. Frequent traveler program credits are technically the property of the Company; however, the Company permits travelers to retain these credits, as it is impractical to track such items. Corporate Travel Management s Website and Contact Info Employees can access the Corporate Travel Management website via at the following link: ONLINE SUPPORT DESK: or onlinesupport@travelctm.com Available: Monday Friday 8:30am 6:30pm CST FULL SERVICE TRAVEL COUNSELORS: Available: Monday Friday 8:00am 5:30pm CT After Hours Code: F42A The following service fees will be charged by the travel site and are reimbursable by the company: Online (Concur Booking Tool) Online booking fee $10.00 (includes air, car, hotel in one invoice) Online Assist fee $15.00 Car/Hotel only $0.00 Online Support $0.00 6

7 Full Service Consultant Booked, Exchanged, or Unused Ticket Credit Applied Domestic Airline Tickets $35.00 International Airline Tickets $35.00 Car/Hotel only $0.00 After Hours/Emergency - $22.00 plus the consultant fee if ticket issued Alternatives to Travel Every employee must first consider if an alternative to travel such as teleconferencing or web conferencing can satisfy business objectives and reduce travel costs. Travel Meals and Entertainment Refer to Section 3 for guidance on reimbursement of meals and entertainment expenses while traveling. Air Travel Policy Travelers are required to: Accept the lowest logical airfare consistent with business needs. However, employees may elect to fly non-stop (over a lower-priced, connecting flight) provided the additional cost is less than $100 per direction, or if the connection would add more than 2 hours of travel time each way. Use economy/coach class for all domestic flights. Upgrades are acceptable as long as there is no added cost to the Company. Travel only on commercial or approved charter airlines. Employees may not fly their own or rented aircraft on company business unless they are specifically authorized in writing by corporate management. Advance Purchase Tickets From a cost/benefit approach, travelers should attempt to purchase airline tickets 7 30 days in advance for best fare prices. There usually is no price advantage for booking more than 30 days in advance. When airlines offer special fares, travelers can often achieve significant savings by booking weeks or months in advance. However, care should be taken as these fares are nonrefundable and carry numerous restrictions. Air Travel Class Employees who downgrade service may not apply or use the savings for personal gain of any kind. Employees must use economy/coach class for all domestic flights. Upgrades are acceptable as long as there is no cost to the company. Business class is acceptable for international travel originating in the U.S. of over six hours flight duration. First class air travel is only permitted (with prior management approval) in the following situations: Employee is traveling with Company senior officers, board members, or other senior managers Employee is accompanying a customer who is flying first class. 7

8 Significant discomfort is a factor due to an employee s physical condition, all of the above exceptions requiring prior approval from the CEO. Next class of service is permitted if the authorized class of service is not available and the business schedule does not permit travel at another time or on another carrier. Flight Insurance Flight insurance premiums are not reimbursable. Airport Parking Reimbursement for short-term and long-term parking at airports is permitted. However, due to excessive cost; employees should use long-term parking if the trip is over 3 days. The availability of airport shuttle service must be considered and used whenever possible, if less than taxi, airport limousine service, or parking and applicable mileage cost. Frequent Flier and Other Incentives, Flight Clubs, etc Travel must be booked without consideration of promotional incentives. Airline club membership costs are not reimbursable. Employees will not be reimbursed for tickets obtained with frequent flier miles or other airline incentives. Although these credits belong to EPIC, the Company permits employees to retain the benefit (e.g., airline miles) unless such incentives are in the form of cash or cash equivalent. Receiving direct cash equivalents from a vendor is contrary to the Company s business ethics policy and is not permitted. Luggage and Airline Charged Luggage Fees Luggage purchased for business trips is personal as is normal wear and tear on luggage and is NOT reimbursable. The company will reimburse employees for fees charged to check their luggage to their final destination. In no case will the company reimburse the employee for more than 2 pieces of checked luggage. Unused Company-Paid Tickets Employees holding unused passenger transportation tickets that have been prepaid by the Company must apply for a refund on behalf of the Company. If the passenger transportation ticket is nonrefundable, the approving manager must be made aware. This credit should be used on the next eligible flight. Non-Employee Tickets Travel expenses (airfare, lodging, meals, etc.) for non-employees (Spouse, children or other family members) is NOT a reimbursable cost. Exceptions may be approved in writing in advance only by the CEO. Ground Transportation Policy Vehicle Rental Policy When it is necessary to rent a vehicle, the cost of the rental plus tolls, fuel, and parking is reimbursable. Employees must consider round trip vehicle rental for travel when driving is more cost-effective than airline or rail (or if they need to transport bulky materials). Employees may rent a vehicle at their destination when it is less expensive than taxis, airport limousines shuttles, 8

9 etc., or if entertaining customers, or there are more than two (2) employees traveling together. Insurance coverage for rentals of 3 days or less offered by the rental company should be accepted in all circumstances. Insurance coverage for rental exceeding 3 days should be declined. Company insurance cards (by state) can be found on the EPIC Piping Intranet. Rental Car Size Guidelines The cost of mid-size (or smaller) cars will be reimbursed for employees traveling alone or in a group of up to three (3) employees, unless extenuating circumstances (e.g., medical, physical, etc.) dictate otherwise. Approval prior to booking is required for any vehicle larger than mid-size unless sold out or unavailable. Rental Car Upgrades and Accessories Employees may accept car rental upgrades only if there is no additional cost to the Company. Upgrade costs for GPS are not reimbursable. Returning Rental Cars and One Way Rentals All rental cars must be returned to the city of origin unless a one-way rental has been booked prior to travel. The vehicle must be returned in the condition received and at the specified time to avoid charges for damages or additional hours. Personal Vehicle on Company Business When practicable, a vehicle that is needed for company business should be rented with unlimited mileage as this will be more cost effective for the company. If a personal vehicle is approved i n a d v a n c e for a business trip, reimbursement shall be at the Company s stated mileage rate. Such rate is updated by the Company and cannot be more than the published accountable plan reimbursement rate set by the U.S. Internal Revenue Service. Use of a personal vehicle on an extended business trip or on a business trip that includes personal travel, must have the prior concurrence of the expense report approver. The approver must consider time, safety, and company liability before authorizing. Employees who use their vehicle on company business must meet state law insurance requirements. The Company will not reimburse an employee s personal vehicle insurance premiums or any accident damage to a personal vehicle. To be reimbursed for use of a personal car for business, employees must provide on the expense report: Purpose of the trip Date and location Receipts for tolls and parking Mileage log. Mileage Business travel reimbursement for use of an employee s vehicle is calculated using the corporate rate per mile. This allowance covers all operating expenses (fuel, oil, repairs, tires, maintenance, insurance, depreciation, etc.); therefore, no further expenses of this nature are reimbursable. Mileage between an individual s home and office is not reimbursable. In cases where employees drive directly from home to a local site that is not the normal workplace, the mileage in excess of their normal commute is reimbursable. Personal Car Insurance If an employee elects to use his or her own vehicle for business use, the Company s automobile insurance does not cover damage to their vehicle. Employees should notify their personal automobile insurance carrier if their personal vehicle will be used for business purpose because failure to do so may compromise or void the employee s coverage. 9

10 Company-Owned/-Leased Vehicles Reimbursable expenses for company-owned/-leased vehicles include gasoline, oil, antifreeze, maintenance, repairs, tires, washing, license plates, title registration fees, and safety checks, tolls, parking, and towing expenses in case of breakdown. Submit out-of-pocket expense receipts for these items as you would any direct out-of-pocket expenses. However, you must identify the company vehicle clearly on your receipts by including the vehicle s license plate number or EPIC asset number. Do not have major maintenance performed immediately prior to disposition of a company vehicle (new tires, etc.) except for safety reasons and with prior management approval. Personal Use of Company-Owned/-Leased Vehicles Company-owned/-leased vehicles should be used solely for business purposes (e.g., business trips, sales calls). This agreement to use a company-owned/leased vehicle for business purposes only is agreed to via an executed vehicle policy by any employee assigned a vehicle. Any trips to and from a regular place of work will be taxed under the applicable IRS commuting valuation rules for non-officers or non-control employees, and under the lease use method for other employees. Any other use is strictly prohibited. Employees assigned company vehicles should not use personal vehicles on company business except in emergencies and must explain the reason for use of a personal vehicle on the expense report. Site- assigned vehicles are for business use only. Reporting Vehicular Accidents for Personal and Company-Owned/-Leased Vehicles Employees must promptly report all accidents involving personal vehicles when used on company business and all accidents involving company vehicles regardless of use. For Company vehicles, accident reports must be filed in accordance with state/local law to the statutory authorities and also to the company s insurance carrier per corporate guidelines. The employee must also report accidents within 24 hours to line management. Accidents will be investigated and documented and EPIC Piping s Corporate EHS Manager will determine the requirements for further reports to management, including theft or vandalism. Reporting Vehicular Accidents for Rented Vehicles Immediately report accidents in rented vehicles to EPIC s Corporate EHS Manager and the vehicle rental company. If an accident occurs while on company business, the employee is only responsible for payment if the rental agreement is violated or if the damage exceeds the Company s liability amount. If the accident occurs while the employee is using the rented vehicle for personal use, this expense is not reimbursable. Best Practices Employees should decline insurance on all company business-related car rentals in excess of 3 days. Cancel any guaranteed reservations a minimum of two hours prior to scheduled car pickup to avoid no show charges. Return rental cars with a full tank of gas to avoid any refueling charges. Use taxis, airport or hotel shuttles, etc., if costs are lower than rental cars and parking. Lodging Policy The daily cost of lodging is a reimbursable expense when away from the normal work place on 10

11 company business. Such cost includes only the single occupancy room rate and applicable taxes. Hotel Upgrades Employees are required to reserve standard rooms only. Employees may accept room upgrades to suites or executive floor rooms only if the upgrade is at no additional cost to the Company. Costs of upgrades are not reimbursable. Hotel Cancellation Procedures Employees are responsible for canceling hotel rooms and must contact the hotel directly. Employees must request and record the cancellation number in case of billing disputes. Note: cancellation deadlines are based on local time at the hotel and may vary. Employees will not be reimbursed for no- show or cancellation charges unless there is sufficient evidence that the billing is in error (i.e., a cancellation number was obtained). Early Check-Out Procedures If the employee is required to check out earlier than stated on the reservation due to business requirements, any fee charged by the hotel for early check-out is reimbursable. The employee should consult with the hotel reservations desk to determine if a check-out fee is applicable. Hotel Health and Fitness Center Charges In general, hotels in the preferred properties program will provide health and fitness facilities at no additional charge. Fitness center and similar charges will NOT be reimbursed. Hotel Frequent Guest Programs Many hotels have frequent guest programs that reward travelers with free accommodations. Employees may retain awards from such programs. These programs must not influence hotel selection, or result in an increased cost beyond the cost that would be reasonable and customary in the area. Membership fees related to these programs are not reimbursable. Best Practices Keep the following in mind as to hotel accommodations: Attempt to minimize lodging costs by making reservations well in advance. Choose the level of accommodation commensurate with the trip s business objective. Cancel any guaranteed reservations by the appropriate time the day of arrival to avoid no show charges, as these charges are not reimbursed. Inquire, at check-in, if a lower rate is available. Review the bill for errors. Business Expenses while Traveling Dry Cleaning/ Laundry In the event that an employee s travel assignment is greater than five (5) consecutive business days, the company will reimburse the employees for reasonable costs for dry cleaning/laundry when a receipt is provided. Loss of Company Funds The loss of company funds, including transportation tickets, must be immediately reported in writing to the employee s management. The report should indicate the circumstances (amount of loss, date, time, place, police and other parties notified, names of witnesses, etc ). 11

12 Management may approve the loss as a reimbursable expense. If approved, the loss should be included on the expense report. The approved theft report, signed by management, must be submitted. Loss of Personal Property Loss of personal property incurred while traveling should be reported to the hotel, airline, personal insurance, or other agency. A claim should be filed immediately and acknowledgment obtained. All losses due to theft should be reported to the local police, and a theft report should be filed. Loss of personal property while on company business will NOT be reimbursed. Section 3: Meals and Entertainment Employee Meals Meals While on Business Trip Meals purchased while away from home overnight on company business are reimbursable expenses. When two or more employees traveling together dine jointly, it is recommended that the meal be reported on a joint bill. The senior-most employee should pay, but he/she must have his/her supervisor sign off and approve the expenses incurred (this does not require the senior employee to pay, only requires that the senior employee have his/her supervisor approve the expenses). Alternatively, separate bills may be obtained and reported. This will result in each employee getting his/her supervisor to approve the expenses incurred. Travel meals solely for employees should be reported as employee travel meals. Meals where clients, vendors, or other business guests are present should be reported as meals and entertainment. Appropriate receipts and substantiation must be submitted, including names of all persons in attendance. See the specific discussion of business entertainment rules, below: Business Meals Taken With Other Employees Employees may be reimbursed for business-related meals taken with other employees ONLY if one of the following circumstances applies: When a customer or supplier is present (including prospective customers or suppliers). This is considered meals and entertainment. When authorized by the employee s supervisor or manager for testimonial reward, recognition or other appropriate business purpose (including onsite meals associated with a business meeting). In no event shall EPIC-only meal charges that are offsite and frequent in nature be reimbursed. The frequent reimbursement of employee meals is considered to be taxable income and is not permitted. Thus, sporadic and infrequent reimbursement of items such as overtime meals is permitted, but never to the extent that the expenditure would become routine or normal. Offsite meetings with only EPIC employees present that are conducted for other legitimate business reasons (i.e. safety meetings, etc ) are reimbursable and should be listed as meals on their expense report. Day Trip Meals IRS regulations do not allow deductible reimbursement of meals incurred on day trips away from the usual place of employment (i.e. not away from home overnight) and these meals are NOT reimbursable. In limited cases, it may be appropriate to reimburse for day trip meals if the employee incurs substantially higher-than normal meal costs. These limited cases should be 12

13 noted and explained on the expense report. When a day trip extends well beyond the normal work schedule, the cost of an evening meal is reimbursable as an overtime meal and not as taxable income when reported as a business meal on the expense report. A business day trip meal for which a non-epic employee is present is also reimbursable as entertainment as long as the normal entertainment documentation rules are followed on the expense report (see entertainment guidelines below). Non Travel-Related Meals Employees eating together at their normal place of employment may not charge the cost to company expense unless the meal had a specific business purpose and such meals are infrequent in nature. It may be appropriate for business reasons for an employee, generally a member of management, to entertain another employee. When two or more employees dine jointly, it is recommended that the meal be reported on a joint bill. The senior-most employee should pay, but he/she must have his/her supervisor sign off and approve the expenses incurred (this does not require the senior employee to pay, only requires that the senior employee have his/her supervisor approve the expenses). Alternatively, separate bills may be obtained and reported. This will result in each employee getting his/her supervisor to approve the expenses incurred. Working Meals The cost of any food and refreshments served at an off-site business meeting involving non-epic employees is reimbursable as an entertainment expense, subject to the normal entertainment documentation rules. When business needs require work-related discussions during an on-site meeting to continue through the normal mealtime, food and beverage can be provided and the expense report should document the nature of the business purpose. Tipping Gratuities paid for services provided (bell service, skycap service, valet parking, doormen, housekeeping, etc.) should be reasonable and appropriately documented. For reimbursement purposes, tips for meal service should be reported in the total costs for each meal. Employees will be reimbursed if the amount is reasonable, based on destination and service rendered. Excessive tips greater than 20% will not be reimbursed. Entertainment Meals with Customers Due to IRS regulations, business entertainment should be reported and supported by the appropriate documentation. In order to be reimbursed, entertainment must be directly related to or associated with the act of conducting the company s business. Definition Business entertainment is defined as only occurring before, during, or after a business discussion or under conditions where the recipient would reasonably know that the object of such entertainment is to further business relations. General Any business entertainment expense, regardless of amount or method of payment, must be supported by the appropriate documentation. The detail shown must be sufficient to identify: Date and place of entertainment Nature of expenses (theater tickets, lunch, dinner, etc.) 13

14 Names of people involved (an identifiable group or individual names including company employees) Their business relationship to the Company and business purpose Amount of each separate expenditure If entertainment is provided in a place not normally conducive to a business discussion (theater, sporting event, etc.), show the date, time, duration, place, nature, and participants in the related business discussion preceding or following the entertainment. Payment for a single entertainment event should not be split between two or more employees one employee should account for total expenses. Entertainment expenses should be reported by the senior member of the sponsoring organization (i.e., local or logical host) who attended the event and approved by the next higher level of management. In certain instances, it may be appropriate for a subordinate to report the entertainment expense. In such instances, the expense report should be reviewed by the senior member and approved by the next higher level of management with appropriate authority who was not present at the event. Spouse s Entertainment Expenses Generally, entertainment costs are confined to EPIC employees and their business guests; spouses, companions, or other family members should not travel or be entertained at company expense except when their presence is required for a business purpose and specifically approved in advance by the CEO. For example, if an employee entertaining a business guest and his/her spouse and feels it is necessary to include the employee s spouse, the additional spouse-related cost may be included in the entertainment expense. Management must be consulted in advance. All persons should be clearly identified on the expense report, including a statement of the business purpose served by the spouse s presence. Direct away from home expenses associated with a spouse, companion, or other family member should be separated and reported separately, since they are not tax deductible. These rules are inapplicable if the spouse is also an EPIC employee with a job-related business purpose. Entertainment in the Home When more convenient or cost effective, reimbursable business entertainment may take place in an employee s home. Home entertainment expense must be carefully reviewed and approved in advance by management because: Such functions could be questioned by the IRS as not meeting the ordinary and necessary tests. The costs are not as readily definable as normal arm s-length (pure business) transactions. To be reimbursable, a clear business purpose must be the primary intent of the entertainment in the home (i.e., no significant incidental personal purpose should exist). Company funds are NOT to be used for social or personal events. Expenses must be itemized in the same detail normally required (i.e. original receipts, names, purpose, etc.). Only out-of-pocket expenses are reimbursable and significant quantities of purchased items should not revert to the host. The Acceptance of Entertainment or Gifts by an EPIC Employee The Business Ethics Policy states, Employees must neither seek nor accept for themselves or others gifts, favors, or entertainment without a specific business purpose from any person or business organization that does or seeks to do business with or is a competitor of the 14

15 company, except as common courtesies usually associated with business practices (e.g., candy, flowers). If the acceptance of gifts, favors, or entertainment would have the appearance of influencing the employee or the Company, they must not be accepted. Also, employees must not accept gifts, favors, or entertainment if they are not willing to have others know of the acceptance. An especially strict standard is expected regarding gifts, services, discounts, entertainment, or considerations of any kind from suppliers. If, for reasons of protocol or courtesy, it is appropriate to accept a gift or favor, the gift should be turned over to the appropriate senior financial representative for disposition as the Company deems in its best interest. In any case, it is never permissible to accept a gift in cash or a cash equivalent (e.g., gift cards, stocks or other forms of marketable securities) of any amount. Gifts Business Gifts Business gifts to any one person in excess of $25 aggregate cost in a year are not deductible for tax purposes. The business may determine appropriateness of gifts over $25. In any event, a complete record must be kept of all business gifts regardless of the amount, including the name of the recipient. Information on the expense report must include cost, date, and description of the gift, purpose, recipient, and the business relationship to the company. Receipts for business gifts are required for separate expenditures of $25 or more. Awards Safety Awards Awards presented to any employee by the company that are in excess of $100 in merchandise, cash or gift cards are considered taxable as W-2 income to the employee. In order to be reimbursed for such expenses, the following should be attached to the expense report: Prior written approval from one of the Sr. Executives of the company; a detailed listing to include the employee s name, employee ID number, amount of the award, the purpose of the award and the date the award was presented to the employee. Retirement Functions A retirement luncheon to demonstrate gratitude for past service may be appropriate, but must be approved in advance by management. The cost of a gift is generally not reimbursed by the Company unless it is of small value or prior approval by management. Section 4: Cell Phone Reimbursement The company will only reimburse Executives, Directors and Managers required to have a cellphone for the basic service, texting and data plans under the following scale: Executives & Directors - $80 per month Managers - $60 per month The company will not reimburse any employee for the cost of the mobile equipment or accessories purchased for their mobile equipment. Employees should choose the most cost effective plans for them that align with the reimbursement limits mentioned above. This reimbursement scale is intended to reimburse the employee for their business use of their personal cellphone. 15

16 Any employee reimbursement under this policy will require advance approval by Executive Management. Once approved, in order to receive this stipend you will only need to include the correct stipend amount on an expense report as Cell Phone Stipend in the description. This stipend will take effect will all personal cell phone bills dated after August 1, In the case where an employee is asked to travel overseas, additional charges related to the use of cellular service while on assignment will also be reimbursed with Executive approval as a separate line with the appropriate detail attached. Section 5: Non Reimbursable Expenses Credit Card Fees/Service Charges The cost of credit cards obtained by employees is not reimbursable. Late payment and bank service charges on personally owned credit cards are not reimbursable. Employee Resignations and Transfers Unless the function serves a business purpose, expenses for luncheons, dinners, gifts, or other costs on behalf of an employee who has resigned or is transferred are normally personal, and the expenses are not reimbursable by the Company. Fines Fines for traffic or parking violations incurred by employees traveling by automobile (personal, rental, or company-owned/-leased) on company business and/or personal time are not reimbursable. Corporate Membership Dues and Similar Club Dues Dues for memberships in the Company s name are NOT to be included on the expense report. Company policy on memberships and contributions require authorization and reporting under a separate procedure (check request, etc ). Meal club memberships are not deductible, and if incurred via a check request for business purposes, should be coded appropriately. Individual dues for membership in any club organized for social, pleasure, recreation, or similar purposes are not reimbursable, except with prior written CEO approval. If approved, the reimbursement must be reported as taxable income on the employee s W-2. 16