Integrity Standard - Gifts, Gratuities and Kickbacks

Policy:
We must maintain the highest standards of integrity and objectivity in dealing with vendors and service providers. We are prohibited from accepting or giving gifts or gratuities beyond common business courtesies of nominal value. Gifts or items of value must never be offered to or accepted from government employees. Under no circumstances will we accept or give kickbacks when obtaining or awarding contracts, services, referrals, goods, or business. A kickback means to willfully offer, receive, request or pay anything of value, even nominal value, in order to induce or reward referrals of business including goods or services.

We will not accept or offer gifts, gratuities or favors except those associated with common business courtesies of a nominal value of $50 or less given to or received from one source. The value of all gifts received in one year from all business sources must not exceed $150. Gifts exceeding this policy may be made to customers or other persons subject to President, Executive Vice President or Senior Vice President approval.

We must not offer or accept gifts of cash or cash equivalents to or from any current, former or potential vendor, customer, broker, or provider. Cash equivalents include checks, honorariums, money orders, stocks and saving bonds. Gift certificates and gift cards are not considered cash equivalents for the purposes of this Standard but are subject to the limitation on common business courtesies stated above.

Entertainment and meals offered or received by employees as part of legitimate business activity are not included in the $50 gift limit, but must be within the boundaries of reason and moderation. Generally, raffles and prizes that are part of an outside business activity are not considered gifts.

Although the Company does not set a dollar limit on gift giving among employees, it is important to always use reason and good judgment when giving or accepting a gift. Gifts of nominal value are always best and contributing to a gift should always be voluntary. A gift should never be given to another employee to influence, gain favor or show favoritism. In addition, Company-approved items provided to employees as recognition for a business achievement or as part of Company-sponsored events are not considered gifts for the purposes of this Standard but are subject to all applicable federal, state and local tax requirements.

Questions & Answers

Q. A vendor has invited me to its corporate headquarters to evaluate some new equipment which the Company is thinking of purchasing. The headquarters is in another city and the vendor has offered to pay all of my expenses. Is this okay?
A. No. You must avoid even the appearance that your decision to buy might be improperly influenced. If there is a business need to evaluate this equipment, the Company should pay all expenses.

Q. A vendor has offered me four tickets to the ball game. The face value of each ticket is $50.00. The vendor does not plan to attend the event. Is this entertainment or a gift? Can I accept the tickets?
A. No. The offer of these tickets would not be entertainment or an acceptable gift. Entertainment, such as sporting, arts, culture or charitable events must be part of a legitimate business activity and be within the bounds of reason and moderation. If the vendor will not be present then the event is not a legitimate business activity. Also, you may not accept the tickets as a gift since the value is $200.00 which exceeds the gift limit of $50 from one source.

Q. A group of Company employees worked with a consulting firm on an important special project. After successfully completing the project, the consultant presented each member of the group with an engraved pen and pencil set, which is under $50 in value, as a memento of the project. Is it okay to accept this gift?
A. Yes. This is a customary business courtesy and does not give the appearance of improperly influencing your judgment.

Q. Should Company employees accept compensation for participating in professional committees or panel discussions, or making presentations related to Company business?
A. No. Company employees may not receive compensation for such participation. Compensation for these types of activities is often referred to as an honorarium. If an honorarium is paid to an individual, it should be returned to the sender promptly with a declination letter explaining the Company’s policy, and a copy of the letter declining the honorarium should also be sent to the Compliance Officer.

Q. One of my co-workers is retiring and I would like to take up a collection in our department and buy her a gift. Is this okay?
A. Yes. You may take up a collection as long as your management approves and the contributions are voluntary. No one should feel pressured or coerced into contributing or contributing a specific amount toward the gift. Also, arrange to collect the money in a manner and/or during a time that is the least disruptive to the work area.

Remember, if you do not understand, or if you have any questions concerning, this Integrity Standard or any other part of the Code, contact your Supervisor, a higher level Supervisor, any of the Corporate Resources or call the Corporate Integrity HOTLINE
(1 800 838-2552).

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