Exhibit 10.5
 
Officer Relocation Policy
 

 

       
Eligible Group
Officers

 

       
Purpose
To establish a policy for the reimbursement of eligible expenses incurred when
an Officer is permanently transferred from one location to another at the
Company's request.
   

 

Objective
To provide financial relocation assistance to an Officer in order to maximize
the Officer’s performance and minimize inconvenience during the relocation.
   

 

Scope of Policy
This policy applies to an Officer who is required to relocate because he/she is
being permanently transferred (for no less than 12 months) at the Company's
written request to an assigned work location within the Company that is at least
sixty (60) miles from the Officer’s current assigned work location.  No
reimbursement will be allowed unless the Officer’s new residence is at least
forty (40) miles closer to the Officer’s new assigned work location than the
Officer’s prior residence is to the new assigned work location.
 
Expenses eligible for reimbursement are limited to those expenses set forth in
the “Covered Expenses” portion of this policy incurred by an Officer, spouse or
registered domestic partner of the Officer, or the Officer’s children who
currently reside with the Officer.
 
Nothing in this policy should be construed as a contract for employment for any
period of time or as altering the at-will nature of the employment relationship.
The Company has the right to terminate Officers for any or no reason at all, at
any time.
   

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Officer Relocation Policy, continued

       
Reimbursement
to the Company
Benefits under this policy will cease if an Officer resigns his/her employment
or is terminated for misconduct and/or poor performance.  In addition, if an
Officer resigns from his/her employment, or is terminated for misconduct and/or
poor performance within twenty-four (24) months of having commenced work at the
new assigned work location or other agreed upon time in writing, the Officer
will be required to reimburse the Company for any reimbursements associated with
the most recent move paid for by the Company under this policy.
 
   
Policy
Administration
This policy is administered by the Human Capital Management Department. The
Company will not be responsible for any action taken which is beyond the scope
of this policy.
 

 

Compensation
Committee
Discretion
The Compensation Committee of the Company can authorize reimbursement of a
higher level of expenses than this policy allows, at its discretion.
 

 

General Policy
An Officer is eligible to have his/her relocation expenses reimbursed after
relocating to a new assigned job location that is at least sixty (60) miles from
the Officer’s current assigned work location.  No reimbursement will be allowed
unless the Officer’s new residence is at least forty (40) miles closer to the
new assigned work location than the Officer’s prior residence is to the new
assigned work location.
 
·  Relocated Officers shall submit, in sufficient detail, documentation for all
expenses incurred to the Human Capital Management Department for approval and
reimbursement.
·  All relocation-related expenses are required to be submitted separately from
other types of reimbursable business expenses and are to be clearly marked
"Relocation Expenses."
 

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Officer Relocation Policy, continued

       
General Policy 
(continued)
·  Officers to be relocated should be made fully aware of the contents of this
policy. Because the determination of whether an expense is covered by this
policy is at the discretion of the Company, a relocating officer is encouraged
to obtain clarification from the Administration Manager for Human Capital
Management of any expense for which the nature as a covered expense may be
questionable or is unusual in nature prior to incurring such expense.  Any
questionable expenses should be resolved with the Administration Manager for
Human Capital Management before the expense is incurred.
 

 

Approvals
All requests for Officer relocation must be approved in writing by the direct
supervisor of the relocating Officer and the President and CEO prior to actual
relocation or commitment to the Officer.  An Officer Relocation Approval Form
(see form at the end of this policy statement) is required to be completed and
approved. In addition, any exceptions to this policy require the prior written
approval of the President and CEO.
 

 

 
 

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Covered Expenses

       
Overview
In order to alleviate the financial burden an Officer may incur in relocating at
the Company’s direction,  the Company will cover the following reasonable costs
subject to other limitations set forth herein:
· Realtor Fees, Closing Costs, and Lease Termination Fees;
· Moving Expenses;
· House-Hunting Trips;
· Temporary Living Expenses; and
· Tax Gross-Up.
   

 

Realtor Fees,
Closing Costs,
and Lease
Termination
Fees
 
An Officer will be reimbursed for reasonable realtor fees and reasonable closing
costs incurred by the Officer on the sale of his/her residence or lease
termination fees for Officers currently leasing a residence, associated with a
relocation required by the Company.  The reimbursement will be limited to the
lower of the actual realtor fees and closing costs paid or $36,000.  The Officer
must sell his/her house within one year from the date the Officer commences work
at the new assigned work location (or other time agreed to in writing) to
receive this reimbursement.
   

 

Moving
Expenses
 
An Officer will be reimbursed for the following reasonable moving
expenses  incurred:
·  packing and unpacking household goods;
·  transportation of goods, including up to two personal vehicles;
·  transportation of the Officer, spouse or registered domestic partner (RDP) of
the Officer, and the Officer’s children or children of the RDP, who reside in
the current residence and will reside in the new residence;
·  connecting appliances; and
·  transportation of household pets.
 
The above-listed moving expenses are reimbursable up to a limit of $20,000.  The
Officer is required to receive two bids for packing and unpacking household
goods and transportation of goods.  The Officer must include the bids in his/her
request for reimbursement, and any reimbursement will be limited to the lower of
the two bids.
   

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Covered Expenses, continued

       
Ineligible
Expenses
 
No reimbursement will be provided for the following expenses:
·  Moving or shipment of items such as livestock, boats, shrubs, construction
materials, more than two vehicles, or similar items requiring special handling;
·  Cleaning, maintenance or repair of the Officer’s former or new residence;
·  Removal or installation of permanently fixed items such as lighting fixtures,
fencing, patios, fireplaces, or the like;
·  Assembly or disassembly of swing sets, pool tables, waterbeds, outdoor
fixtures, appliances, or the like;
·  Purchase of fixtures, appliances, equipment or materials for new residence;
·  Tips or gifts to moving company representatives;
·  Any services performed by the Officer, the Officer’s dependents or relatives;
and
·  Any refundable deposit.
   

 

House
Hunting Trips
 
An Officer will be reimbursed for expenses incurred by the Officer and the
Officer’s spouse/registered domestic partner for two house hunting trips not to
exceed six calendar days in total.  House hunting trip expenses eligible for
reimbursement are limited to reasonable travel, lodging, meals and rental
vehicle expenses and are subject to the same requirements and limitations set
forth in the Travel Expense Reimbursement Policy.
 

 

Temporary
Living
Expenses
An Officer will be reimbursed for reasonable temporary housing expenses incurred
for up to 90 calendar days following the relocation while waiting to move into a
permanent residence.  If the temporary housing does not contain cooking
facilities, reimbursement under this category may include reasonable breakfast
and dinner expenses.  In no event may reimbursement under this category exceed
$3,000 per consecutive 30-day period (prorated for periods less than 30 days).
 

 

Temporary
Storage
 
An Officer will be reimbursed for temporary storage costs for up to 90
consecutive days after the day the Officer’s possessions are moved from the
former residence and before they are delivered to the new home.

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Covered Expenses, continued

       
Tax Gross Up
 
An Officer may receive a payment to cover the tax liabilities incurred as a
result of reimbursement of eligible expenses under this policy which are treated
as taxable wages, including the tax reimbursement itself (“tax gross- up”).  A
tax gross-up is intended to approximate the reasonably estimated income and
employment tax liabilities an Officer may incur in connection with
reimbursements under this policy and is not intended to determine an actual
amount by reference to an Officer’s actual tax profile.  As such, tax rates used
in the estimate will be based on an applicable marginal rate determined by
reference to employee-specific filing statuses, and only the Officer’s
employment-related data.
   

 

Market Loss
 
The Company will not reimburse any loss in market value associated with an
Officer’s disposition of property in connection with relocating.
   

 

Limitations
Relocation expenses eligible for reimbursement under this policy should be
incurred as soon as practicable after the date on which the Officer reports to
work at a new assigned work location.  Relocation expenses incurred after one
year of such date are not reimbursable under this policy without separate
approval of the President and CEO.
 
Depending upon the circumstances, all or a portion of the tax gross-up coverage
component of this policy may be restricted.
 

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Covered Expenses, continued

       
Example
 
 
 
 
 
 
 
 
 
Assume an officer sells his/her residence and incurs the following costs:
ü realtor fee of $40,000 (taxable)
ü other selling expenses of $2,000 (taxable)
ü packing and unpacking expenses of $3,000 (not taxable)
ü transportation of packed household goods of $12,000 (not taxable)
ü air fare to transport family of $2,000 (not taxable)
ü expenses associated with house-hunting trips of $2,500 (taxable)
ü temporary housing expenses of $5,000 (taxable)
ü combined federal/state/employment tax rate of 39%
 
Calculation of reimbursement:
 
Total expenses reimbursed that are taxable - $43,500
·  realtor fee of $40,000 + other selling expense of $2,000 – total limited to
$36,000
·  expenses associated with house-hunting trips - $2,500
·  temporary housing expenses - $5,000
Total taxable expenses reimbursed including tax gross up - $71,311
Total expenses reimbursed that are not taxable - $17,000
Total reimbursement - $88,311
   

 

Reimbursement
Obligation:
Before any reimbursement is made under this policy, an Officer will be required
to agree in writing that the Officer will reimburse the Company for any
relocation expenses paid if he/she should voluntarily leave the employment of
the Company or is terminated for misconduct and/or poor performance, within
twenty four months of relocating.
   

 

 
 

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OFFICER RELOCATION APPROVAL FORM

Name
 
Employee #
 
Relocation of
Assigned Work
Location - From:
 
 
 
To:
 
Relocation of
Residence -
From:
 
 
 
To:
 
Approximate dates of Relocation
 
Is this
move
budgeted?
Yes
 
No
 
Approvals
Senior Vice
President
 
President &
CEO
 

A Relocation Expense Estimate (see form on the following page) must be submitted
with this Officer Relocation Approval Form.
 
 

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Relocation Expense Estimate
Column A   
 
Column B
Column C
Column D
A 
 
Estimated market value of present home
   
B 
 
Realtor’s commission percentage in area
   
C 
 
Estimated  realtor’s fee (A times B)
   
D 
 
Closing costs on sale of present home
   
E 
 
Realtor’s fee plus closing costs (C plus D)
   
F 
 
If E exceeds $36,000 then use $36,000, otherwise include amount from line E
   
G 
 
House hunting trips
   
H 
 
Other taxable expenses
   
I 
 
Total taxable expenses (F plus G plus H)
   
J 
 
Tax rate for employment and income taxes (contact Tax Director)
   
K 
 
Total amount of reimbursement for taxable expenses including: gross up (I
divided by)1-J))  (Note: Place in Column D)
   
L 
 
Packing Expenses
   
M 
 
Transportation of goods to new location
   
N 
 
Transportation of Officer, Officer’s spouse or registered domestic partner, or
Officer’s children that currently reside with Officer, to new location
   
O 
 
Connecting appliances
   
P 
 
Other Moving Expenses
   
Q 
 
Total Moving Expenses (L+M+N+O+Q)
   
R 
 
Is the amount on line Q greater than $20,000?  If so, use $20,000, otherwise use
the amount on line Q.  Enter appropriate amount in Column D
   
S 
 
Total estimated reimbursement (add amount on Line K, Column D, to amount on Line
R, Column D)