L. B. Foster Company
Leased Vehicle / Car Allowance Policy SP-P-10
Revised 06/09/04 Supersedes 10/16/2002
1. GENERAL POLICY
It is the policy of the L.B. Foster Company to provide a leased
vehicle or vehicle allowance to employees holding one of the following
positions:
o Chairman and President;
o Corporate Officer;
o District Sales Manager, General Manager, or Product Manager with
a job level of 12 or above;
o Other Managers with a job level of 15 or above;
o Outside Sales Person or Sales Manager with a job level between
6 and 11 or;
o An eligible employee who drives 12,000 business miles annually.
2. PURPOSE
The purposes of this Policy are to reduce Company expenses by avoiding
personal automobile mileage reimbursement for present business use and
to provide a competitive benefit to attract and retain qualified
personnel for eligible management and sales positions; to establish
procedures for complying with appropriate safety regulations and to
minimize L. B. Foster's risk exposure.
3. ELIGIBILITY
...............................................................................................................................
Monthly
Class: Group: Policy: Deduction for
Leased Vehicle:
...............................................................................................................................
A Chairman, President and CEO Leased Car or $800 monthly Car Allowance. $100
...............................................................................................................................
B Corporate Officers Leased Car or $700 monthly Car Allowance. $85
...............................................................................................................................
Sales Managers General Manager, or Leased Car or $500 monthly Car Allowance. $75
Product Manager with a job grade
C of 12 and above and other managers
with a job grade of 15 and above.
...............................................................................................................................
Outside Sales personnel and Sales
Managers with a job grade between
D 6 and 11; other eligible Leased Car $60
participants who drive in excess
of 12,000 business miles annually.
...............................................................................................................................
See Addendum for Current Vehicle Selection
...............................................................................................................................
4. ELIGIBLE DRIVER
Except in emergencies, driving of a Company vehicle shall be
limited to employee and the employee's spouse over the age of
twenty-five (25).
5. RESPONSIBILITY
A. Plan Participants
1. An eligible employee within class A, B, or C may choose
between a Company leased vehicle or a monthly car allowance. An
employee within class D shall receive a Company vehicle.
a. Car Allowance guidelines
1) Eligible employees cannot opt out of the Company leased
vehicle option until the current car lease has expired or
the vehicle has reached 60,000 miles. The Company may
require the employee to continue driving the vehicle if the
book value exceeds the Fair Market Value of the vehicle
until such time that the disposal of the car will not result
in a financial loss to the Company.
2) The monthly car allowance amount is set by employee class
on an annual basis and is paid as additional income in the
employee's regular paycheck. The car allowance is considered
additional income by the IRS and is taxed accordingly. An
employee receiving a car allowance is responsible for the
payment of any and all associated federal, state, and local
taxes.
3) An employee receiving a car allowance is required to have
available, as required by business needs, a late model four
(4) door vehicle. The vehicle is to be clean externally and
internally and is presentable for Company business at all
times.
2. When a new Company Leased vehicle is ordered, the employee may
purchase options, beyond Company established base options, avail-
able on his or her vehicle model. Payment is due before delivery
of the vehicle. The leasing company will provide information
regarding payment and applicable sales and or state tax.
3. It shall be the responsibility of each employee receiving a
Company leased vehicle to monitor and report odometer readings as
of each November 1st and on the date his/her vehicle is replaced
to validate personal mileage. These odometer readings are to be
turned into the Payroll Department during the first week of
November on the Company Automobile Odometer Form. (Attachment
SP-P-10.1)
4. If a form is not received, mileage estimates from fuel and
maintenance records will be used, and will be reported as 100%
personal miles and reported as such on the employee's W-2. It
shall be the responsibility of each employee to maintain records
documenting all business and personal mileage usage in accordance
with record keeping requirements which may, from time to time, be
required by the Internal Revenue Service, and to note this on the
Company Automobile Odometer Form. (Attachment SP-P-10.1)
5. The driver is responsible for operating the vehicle in a safe
manner. The use of seat belts is mandatory for the driver and all
passengers. Operating a motor vehicle while under the influence
of alcohol or illegal drugs is prohibited.
6. It is the employee's responsibility to notify their Manager of
any change in the employee's physical status or if the employee
is taking any medications labeled with a warning that the
medication could impair his/her driving.
7. If any driver of a Company leased vehicle or an employee
receiving a car allowance, is issued a citation for DUI (driving
under the influence), their Company vehicle/car allowance
privileges will be suspended until the outcome of the charge is
determined in a court of law. If convicted for DUI, that driver
will have their Company leased vehicle/car allowance privileges
revoked for a minimum one (1) year period. Pre-trial suspension
will be counted towards the one (1) year.
a. In addition, other disciplinary actions may be levied up to
and including termination.
b. Decisions on reinstatement of Company car privileges after a
suspension will be based on consultations with the Risk
Manager and in compliance with Foster's current automobile
insurance carrier's requirements.
8. If any employee is issued a second DUI citation, the privilege of
a company-leased vehicle will be removed permanently.
9. Leased vehicle participants are required to adhere to the
maintenance schedule under the leased vehicle maintenance
program.
10. While assigned to an employee, Company vehicles must be carefully
maintained and kept clean in a manner properly representing the
Company. When returned from employee use, vehicles should be
clean and free of alteration or damage beyond normal wear and
tear.
11. All employees receiving a car allowance must show proof of
insurance annually by submitting a proof of insurance to Human
Resources. This must be done in January of each year.
12. All participants in this program shall be required to execute
SP-P-10.2 (Acknowledgment of Driver Requirements) and SP-P-10.1
(Company Automobile Odometer form) on an annual basis.
Failure to adhere to these policies can result in loss of Company car
privileges, and/or disciplinary actions up to and including termination.
B. Accounting and Payroll Departments
It shall be the responsibility of the Accounting and Payroll
Departments to maintain and verify the records of all Leased
Vehicle Plan participants with regard to payroll deductions,
individual taxability calculations and W-2 reporting.
C. Human Resources Department
1. It shall be the responsibility of the Human Resources
Department to monitor the fleet of Company leased
automobiles in service, to provide lease values, to ensure
that the appropriate forms are provided to each driver, and
acquire and dispose of all Company leased automobiles.
2. The Vice President, Human Resources shall be responsible for
the interpretation and application of the provisions of the
Leased Vehicle Plan.
3. The Human Resources Department shall obtain a copy of a
newly hired employee's driver's license prior to authorizing
the use of a company vehicle.
4. The Human Resources Department shall be responsible for
obtaining an application and completing a Motor Vehicle
Record (MVR) check on all new hires that may be required to
drive as part of their assigned duties and no less than
annually thereafter. Any employee with excessive violations
or accidents may lose their leased vehicle privileges based
on the requirements of the fleet insurance carrier.
5. The Human Resources Department and the Finance Department
will be responsible for investigating all accidents.
D. Division Management and the Vice President of Human Resources
will be responsible for approving any car assignments or
allowance and may, at his or her discretion, reject assignment of
a Company vehicle or authorizing the receipt of a car allowance.
6. PRACTICE
A. Pursuant to the Tax Reform Act of 1984, the value of the personal
use of an employer provided automobile must be included in the
employee's income and subjected to withholding tax.
B. The annual lease value of an automobile shall be based the
manufacture's invoice price plus 4%.
C. The percentage of personal usage of the annual lease value shall
represent an additional non-cash item which shall be included as
employee taxable income.
D. The annual lease value shall include all maintenance and
insurance but will not include the annual fuel cost for the
leased vehicle.
E. Fuel shall be valued at the current calendar year IRS established
rate, per personal mile driven for employees driving company
leased vehicles.
F. The driver of a company-leased vehicle is to use the fuel and
maintenance card to charge fuel, maintenance, and repair
expenses. Those expenses that cannot be charged through the fuel
and maintenance program shall be reimbursed through the Weekly
Expense Report. For body damage and repairs refer to 10(c).
G. 90 days prior to turning in a Company leased vehicle, all
maintenance expenses must be approved by Human Resources.
H. Employees who receive a car allowance will be reimbursed via the
Company expense report at the per mile rate established by the
IRS annually.
I. Monthly deductions for Company leased vehicles shall be
classified on the employee pay stub as federal withholding tax.
J. The annualized dollar value of the Company automobile personal
use benefit will appear as additional earnings on the employee
pay stub and W-2.
7. TRANSFER
The transfer of any Company provided automobile between employees
must be authorized by the Human Resources Department and Division
Officer(s).
8. REPLACEMENT
A. Company leased vehicles may be eligible for replacement not
earlier than the assigned length of the lease expires or 60,000
miles, whichever occurs first. Replacement Vehicle orders will
not be approved and entered by the Human Resources Department
until the vehicle has reached 60,000 miles. The employee's
Manager may require the eligible employee to continue driving the
vehicle if the book value exceeds the Fair Market Value of the
vehicle until such time that the disposal of the car will not
result in a financial loss to the Company.
B. All vehicle lease terms will be established based on the average
number of annual miles traveled for each individual position.
Annual Miles Term
-----------------------------------------------
0-13,000 60 Mos
13,001-17,000 50 Mos
17,001-20,000 45 Mos
20,001-23,000 40 Mos
23,001 and Up 36 Mos
C. Drivers may purchase their assigned vehicle at lease end for the
current wholesale fair market value (established by the Human
Resources Department) plus all taxes, title, licensing, delivery
and any other related costs. The value of the vehicle will then
be adjusted for any driver-paid options.
D. Vehicles not purchased by the assigned driver will be offered to
all Company employees through the use of Lotus Notes and posted
on employee bulletin boards at each L.B. Foster location, with
maximum one (1) vehicle purchase per employee per year. The
asking price will be established by the Human Resources
Department and the car will be sold to the highest bidder via
sealed bid auction. The Human Resources department will dispose
of vehicles not sold through the internal employee auction
process.
E. Any employee who purchases a vehicle under this standard practice
is responsible for all financing, pick up of vehicle, sales tax,
and must sign an "As Is" bill of sale that will be placed in
their personnel file. Payment in full to the leasing Company is
required prior to release of the vehicle's title. The final sales
transaction is solely between the leasing company and the
purchaser of the vehicle and L.B. Foster has no involvement in
the title transfer.
9. TERMINATION OF EMPLOYMENT
The immediate supervisor of a terminated employee shall be
responsible for ensuring that the terminated employee deposits
the leased vehicle and keys at the Company facility prior to or
on the day of termination. The employee is to complete form
SP-P-10.1 and return it to the Payroll Department or they will be
charged 100% personal mileage usage for that year.
10. ACCIDENT/LOSS RESPONSIBILITY/INSURANCE
A. Personal property -The Corporate Vehicle Insurance Plan does not
cover personal articles. Employees must secure their own
insurance.
B. Company property - Samples, literature, equipment, and supplies
which are in the direct possession of an employee shall be the
responsibility of the employee if lost, stolen, or damaged.
C. Accident and loss reports - All accidents regardless of fault or
amount of damage and property losses must be reported immediately
to the employee's manager and the Insurance Department by
personal contact and by use of the Preliminary Property Loss
Report. Refer to SP-F-I.5 for the automobile accident claim
procedures and SP-F-I.6 for reporting property loss.
11. TRAFFIC VIOLATIONS
A. Employees will be solely responsible for any fines and fees
associated with traffic or parking violations or any other motor
vehicle infraction. Failure to reimburse the Company (for any
delinquent fine or fee) within 60 days of notification of the
amount due will result in deduction from the employee's paycheck.
B. Employees must notify the Human Resources department regarding
any status changes in their driving license due to traffic
violations. Failure of such notification may result in discipline
up to and including termination.
This policy is subject to changes by the Company at any time with or without
notice.
/s/Robert J. Howard 06/10/04 /s/S L Hasselbusch 06/06/04
- --------------------- ----------- --------------------- --------------
Robert J. Howard Date Stan Hasselbusch Date
VP - Human Resources President & CEO
ADDENDUM
Vehicle selections and options may be changed from time to time with the
approval of the Chief Executive Officer.
2004 Model Year Vehicle Options
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Class: Vehicle Option
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A Choice of Car
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B Buick LeSabre Custom
Pontiac Bonneville SE
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C Chevrolet Impala
Pontiac Grand Prix
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D Chevrolet Malibu
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Pickup Truck Chevrolet Silverado
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Company Ordered Cars are generally equipped with the following options:
o V6 Engines
o Automatic Transmissions
o Air conditioning
o Cruise Control
o Power Driver Seats
o AM/FM Radio with single CD player
o Power Windows and Door Locks
o Floor Mats
o Tilt Wheel
o Power side mirror(s)
o Remote keyless entry
SP-P-10.1
Leased Vehicle Odometer Form
***Form must be received by November 10th or 100% personal use will be used. ***
Employee: Cost Center
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Employee #: Driver's License #:
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Your assigned vehicle is used for:
[] Business and personal use [] 100% Personal use
Your license plate #: State in which licensed:
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PART A: Current Leased Vehicle Information
(To be completed by all employees assigned a leased vehicle)
Car #: Year, make, and model:
------------------------- ---------------------------
License plate #:
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Odometer
Reading Change Business Personal
-------------- ----------------- --------------- ---------------
November 1, N/A N/A N/A
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Or the date vehicle was put into service.
October 31,
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PART B: Replaced Leased Vehicle Information
(To be completed by all employees who were assigned more than one
leased vehicle between November 1st and October 31st)
Car #: Year, make, and model:
------------------------- ---------------------------
License plate #:
------------------------------------
Odometer
Reading Change Business Personal
-------------- ----------------- --------------- ---------------
November 1, N/A N/A N/A
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Date vehicle
retired
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I certify to the best of my knowledge that this form represents a true and
accurate reading of my L. B. Foster leased vehicle as of
----------------------------------
I also understand that I may be subject to tax penalties if I cannot
substantiate the business use of this automobile and I further authorize the
Company to obtain a State Motor Vehicle Driver History Report on me including
any medical information contained therein.
Signature _____________________________ Date ____________________
SP-P-10.2
Acknowledgment
Please check off the appropriate box indicating your choice and sign at the
bottom.
Company Leased Vehicle [ ]
- --------------------------------------------------------------------------------
I, , acknowledge that I have
read and will comply with
all requirements contained
within the Company's
leased vehicle policy.
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Print Name
Monthly Car Allowance [ ] Class A, B, and C only
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I, , acknowledge that I have
valid proof of insurance
and I have attached a
copy of the insurance to
this acknowledgement.
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Print Name
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Driver's signature Date