Gifts and Entertainment Policy - Texas

GIFTS AND ENTERTAINMENT POLICY -- TEXAS

Company Name: [________________________________]
Policy Number: [____]-GEP-TX
Effective Date: [__/__/____]
Last Revised: [__/__/____]
Policy Owner: [________________________________] (Chief Compliance Officer)
Approved By: [________________________________] (General Counsel / Board of Directors)

TABLE OF CONTENTS

1. Purpose and Scope
2. Applicable Laws and Regulations
3. Definitions
4. General Policy Statement
5. Prohibited Gifts and Entertainment
6. Monetary Thresholds and Approval Requirements
7. Texas-Specific Gift Restrictions for Public Servants
8. Gifts Involving Federal and Foreign Government Officials
9. Commercial Business Gifts and Entertainment
10. Travel and Hospitality
11. Charitable and Political Contributions
12. Logging, Recordkeeping, and Reporting
13. Pre-Approval Process
14. Training Requirements
15. Enforcement and Disciplinary Action
16. Reporting Violations and Non-Retaliation
17. Policy Governance and Review
18. Acknowledgment
19. Annex A: Gift and Entertainment Approval Form
20. Annex B: Gift Log Template
21. Sources and References

1. PURPOSE AND SCOPE

This Gifts and Entertainment Policy ("Policy") establishes standards and procedures governing the giving, receiving, and reporting of gifts and entertainment by all personnel of [________________________________] ("Company") who operate in or have dealings connected to the State of Texas. The Policy is designed to:

• Prevent actual or perceived conflicts of interest, bribery, or corruption
• Ensure compliance with the FCPA, Texas Penal Code, Texas Ethics Commission rules, and all applicable anti-corruption statutes
• Provide clear guidance on permissible and prohibited gifts and entertainment
• Protect the Company's reputation and maintain public trust

Applicability. This Policy applies to:

☐ All employees, officers, and directors of the Company
☐ Temporary workers, interns, and consultants acting on behalf of the Company
☐ Third-party agents, representatives, and intermediaries
☐ Joint venture partners where the Company exercises management control
☐ Any person authorized to act on behalf of the Company in Texas

2. APPLICABLE LAWS AND REGULATIONS

2.1 Federal Law

• Foreign Corrupt Practices Act (15 U.S.C. 78dd-1 et seq.): Prohibits payments of anything of value to foreign government officials to obtain or retain business. Criminal penalties up to $250,000 and five years imprisonment (individuals); $2,000,000 (entities) per violation.
• Anti-Kickback Statute (42 U.S.C. 1320a-7b): Prohibits offering, paying, soliciting, or receiving anything of value to induce referrals for federal healthcare program services.
• Federal Bribery Statute (18 U.S.C. 201): Prohibits bribing federal public officials.

2.2 Texas State Law

• Tex. Penal Code 36.02 (Bribery): A person commits an offense if they intentionally or knowingly offer, confer, or agree to confer any benefit on a public servant as consideration for the public servant's decision, opinion, recommendation, vote, or other exercise of discretion. Bribery is a second-degree felony (2-20 years imprisonment; up to $10,000 fine).
• Tex. Penal Code 36.08 (Gift to Public Servant): A public servant in a regulatory, inspection, investigation, or custodial agency commits an offense if they solicit, accept, or agree to accept any benefit from a person subject to their jurisdiction. Similarly, public servants involved in civil or criminal litigation for the state may not accept benefits from interested parties. Violation is a Class A misdemeanor (up to one year in jail; up to $4,000 fine).
• Tex. Penal Code 36.09 (Offering Gift to Public Servant): A person commits a Class A misdemeanor if they offer, confer, or agree to confer any benefit on a public servant that they know the public servant is prohibited by law from accepting.
• Tex. Penal Code 36.10 (Exceptions): Sections 36.08 and 36.09 do not apply to: (a) fees prescribed by law; (b) benefits the public servant is lawfully entitled to or for which legitimate consideration is given independent of official status; (c) gifts on account of kinship or personal/professional/business relationships independent of official status; (d) food, lodging, transportation, and entertainment accepted as a guest in certain contexts; (e) certain political contributions; (f) items with a value of $50 or less (excluding cash or negotiable instruments).
• Tex. Gov't Code 572.051: Standards of conduct requiring state officers and employees to not accept or solicit any gift, favor, or service that might reasonably tend to influence them in the discharge of official duties or that they know is being offered with the intent to influence their official conduct.
• Tex. Gov't Code 305.024: Restricts lobbyist expenditures on members of the legislature and executive branch officials; requires reporting of expenditures exceeding $114.20 per day for food and beverages.
• Texas Ethics Commission: Administers and interprets ethics laws; issues advisory opinions on gifts, honoraria, and conflicts of interest.

3. DEFINITIONS

"Gift" means anything of value for which the recipient does not provide equal or greater consideration.

"Benefit" under the Texas Penal Code (Tex. Penal Code 1.07(a)(7)) means anything reasonably regarded as economic gain or advantage, including benefit to any other person in whose welfare the beneficiary is interested.

"Public Servant" under Texas law (Tex. Penal Code 1.07(a)(41)) includes elected officials, appointed officeholders, government employees, candidates for public office, persons serving on government committees or boards, attorneys at law engaged in state litigation, jurors, and arbitrators.

"Entertainment" means meals, sporting events, cultural events, social gatherings, or other hospitality activities provided to or received from a third party in connection with business.

"Public Official" (broader Company definition) includes any person holding a government position at federal, state, local, or foreign level, including foreign government officials under the FCPA.

4. GENERAL POLICY STATEMENT

The Company prohibits all personnel from directly or indirectly offering, giving, soliciting, or accepting any gift, entertainment, or other thing of value that:

• Is intended to, or could reasonably appear to, improperly influence a business decision
• Creates or appears to create a conflict of interest
• Violates any applicable law, regulation, or contractual obligation
• Is excessive, lavish, or disproportionate to the legitimate business purpose

All gifts and entertainment must be:

☐ Lawful under all applicable federal, state, and local laws
☐ Reasonable in value and appropriate to the business context
☐ Given or received openly and transparently
☐ Properly documented and reported in Company records
☐ Approved in advance where required by this Policy

5. PROHIBITED GIFTS AND ENTERTAINMENT

The following are strictly prohibited regardless of value:

☐ Cash or cash equivalents (gift cards exceeding $25, prepaid debit cards, money orders, negotiable instruments, cryptocurrency)
☐ Gifts or entertainment intended to influence a government decision, contract award, regulatory outcome, or business transaction
☐ Any benefit to a Texas public servant that the public servant is prohibited from accepting under Tex. Penal Code 36.08
☐ Gifts during active procurement, bid evaluations, audits, or regulatory proceedings involving the donor/recipient
☐ Facilitation or "grease" payments unless legally required for personal safety with immediate General Counsel approval
☐ Adult entertainment, gambling activities, or events at venues that would bring disrepute to the Company
☐ Personal services, home improvements, or payments to family members of business contacts
☐ Per diem payments to third parties
☐ Travel expenses for family members without separate CCO approval

6. MONETARY THRESHOLDS AND APPROVAL REQUIREMENTS

All thresholds are in U.S. dollars. The Company applies the more restrictive of this Policy or applicable law.

7. TEXAS-SPECIFIC GIFT RESTRICTIONS FOR PUBLIC SERVANTS

7.1 Tex. Penal Code 36.08 -- Prohibited Gifts to Public Servants

A public servant in a regulatory, inspection, or investigation agency commits an offense by soliciting, accepting, or agreeing to accept any benefit from a person subject to their jurisdiction. This is a strict prohibition -- there is no de minimis exception for regulatory contexts.

Similarly, public servants in agencies with custody of prisoners and those conducting civil or criminal litigation for the state face equivalent restrictions.

7.2 Tex. Penal Code 36.10 -- Statutory Exceptions

The prohibitions in Sections 36.08 and 36.09 do not apply to:

☐ Fees prescribed by law
☐ Benefits the public servant is lawfully entitled to, or for which legitimate consideration is given independent of official status
☐ Gifts on account of kinship or personal, professional, or business relationships independent of official status
☐ Food, lodging, transportation, and entertainment accepted as a guest (subject to context)
☐ Political contributions authorized by law
☐ Items with a value of $50 or less, excluding cash or negotiable instruments
☐ Plaques, awards, or mementos of nominal intrinsic value

7.3 Company Policy (Stricter Standard)

☐ Pre-approval required from the CCO for any gift to a Texas public servant, regardless of value
☐ Company limit: $50 per Texas public servant per calendar year (matching the statutory exception threshold)
☐ Cash and negotiable instruments are always prohibited -- the $50 exception does not cover cash
☐ Before providing any gift, the Company must determine whether the recipient is subject to Tex. Penal Code 36.08 (regulatory/inspection/investigation/litigation capacity), in which case no gift of any value is permissible absent a statutory exception
☐ All gifts must have a documented, legitimate business purpose
☐ No gifts coinciding with pending decisions, applications, or regulatory matters

7.4 Lobbyist Expenditure Rules (Tex. Gov't Code 305.024)

If the Company employs or retains registered lobbyists, expenditures on legislators and executive branch officials exceeding $114.20 per day for food and beverages must be reported. The Compliance Department must coordinate with the Company's government relations function to ensure proper reporting.

7.5 Texas Ethics Commission Advisory Opinions

Employees should consult with the CCO before relying on any exception, as the Texas Ethics Commission's advisory opinions provide binding interpretive guidance that may narrow or expand statutory exceptions in specific circumstances.

8. GIFTS INVOLVING FEDERAL AND FOREIGN GOVERNMENT OFFICIALS

8.1 Federal Officials

☐ Comply with 5 C.F.R. Part 2635 ($20 per occasion / $50 annual limit from prohibited sources)
☐ Pre-approval from CCO required

8.2 Foreign Officials (FCPA)

☐ Strict pre-approval from General Counsel for any gift of any value
☐ Must be lawful under the official's home country laws
☐ Company must pay vendors directly; no cash reimbursements
☐ All expenditures accurately recorded in books and records

9. COMMERCIAL BUSINESS GIFTS AND ENTERTAINMENT

Gifts and entertainment involving non-government commercial parties are permissible provided they:

☐ Are modest, infrequent, and proportionate to the business relationship
☐ Have a legitimate business purpose
☐ Do not coincide with active contract negotiations, renewals, or competitive bidding without CCO pre-approval
☐ Comply with the recipient's employer policies
☐ Fall within the monetary thresholds in Section 6
☐ Are accurately recorded in expense reports and gift logs

10. TRAVEL AND HOSPITALITY

When the Company pays for third-party travel or hospitality:

☐ Written pre-approval from the CCO and General Counsel is required
☐ Economy-class air travel only unless business justification is approved
☐ Lodging at standard business-class hotels; no luxury accommodations without CCO approval
☐ Written agenda with legitimate business activities required
☐ No side trips, personal excursions, or spousal/guest travel at Company expense
☐ Company must pay vendors directly; no cash reimbursements
☐ All travel documented with itineraries, receipts, and attendee lists

11. CHARITABLE AND POLITICAL CONTRIBUTIONS

11.1 Charitable Contributions

Charitable contributions connected to a business counterparty or government official require CCO and General Counsel pre-approval, due diligence, and documentation.

11.2 Political Contributions

• Must comply with the Texas Election Code (Title 15) and Texas Ethics Commission reporting requirements
• Corporate political contributions are permitted in Texas (unlike many states), subject to reporting obligations
• No Company political contributions without General Counsel and Board approval
• Employees' personal contributions must not be made at the Company's direction

12. LOGGING, RECORDKEEPING, AND REPORTING

12.1 Gift Log

All gifts and entertainment given or received with a value exceeding $25 must be recorded in the centralized Gift and Entertainment Log. Each entry must include:

☐ Date of gift/entertainment
☐ Name and title of recipient/donor
☐ Organization/entity affiliation
☐ Government official/public servant status (specify agency and whether subject to Tex. Penal Code 36.08)
☐ Description and fair market value (USD)
☐ Legitimate business purpose
☐ Approving manager/officer
☐ Receipt or documentation attached

12.2 Retention

All records must be retained for a minimum of seven (7) years.

12.3 Quarterly Review

The Compliance Department shall conduct quarterly reviews to identify patterns, threshold issues, and documentation gaps.

13. PRE-APPROVAL PROCESS

☐ Complete the Gift and Entertainment Approval Form (Annex A) at least five (5) business days before the planned gift or event
☐ For exigent circumstances, notify the CCO within 24 hours and complete the form within 48 hours
☐ Obtain retroactive approval within five (5) business days

14. TRAINING REQUIREMENTS

☐ All employees: initial training within 30 days of hire; annual refresher
☐ Enhanced training for sales, procurement, government relations, and business development
☐ Training must cover FCPA, Tex. Penal Code 36.02/36.08/36.09/36.10, Texas Ethics Commission guidance, and this Policy
☐ Training records maintained for at least five (5) years

15. ENFORCEMENT AND DISCIPLINARY ACTION

Violations may result in:

☐ Verbal or written warning
☐ Mandatory supplemental training
☐ Suspension of gift/entertainment privileges
☐ Forfeiture of bonus or incentive compensation
☐ Demotion, reassignment, or termination
☐ Referral to law enforcement

Potential legal exposure includes:

• FCPA criminal and civil penalties
• Tex. Penal Code 36.02 (Bribery): second-degree felony (2-20 years; up to $10,000 fine)
• Tex. Penal Code 36.08/36.09: Class A misdemeanor (up to 1 year; up to $4,000 fine)
• Texas Ethics Commission enforcement actions and civil penalties

16. REPORTING VIOLATIONS AND NON-RETALIATION

16.1 Reporting Channels

☐ Direct supervisor or manager
☐ Chief Compliance Officer: [________________________________]
☐ General Counsel: [________________________________]
☐ Anonymous Ethics Hotline: [________________________________]
☐ Email: [________________________________]

16.2 Non-Retaliation

The Company prohibits retaliation against any individual who reports a suspected violation in good faith. The Texas Whistleblower Act (Tex. Gov't Code Chapter 554) provides statutory protections for public employees who report violations of law in good faith; additional federal protections (Sarbanes-Oxley 806, Dodd-Frank) may apply.

17. POLICY GOVERNANCE AND REVIEW

• Policy Owner: Chief Compliance Officer
• Review Frequency: Annually, or upon material changes in applicable law
• Approval Authority: General Counsel and Board of Directors
• Next Scheduled Review: [__/__/____]

18. ACKNOWLEDGMENT

I, the undersigned, acknowledge that I have received, read, and understand this Gifts and Entertainment Policy.

Employee Name: [________________________________]
Employee Signature: [________________________________]
Title/Department: [________________________________]
Date: [__/__/____]

ANNEX A: GIFT AND ENTERTAINMENT APPROVAL FORM

ANNEX B: GIFT LOG TEMPLATE

SOURCES AND REFERENCES

• Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1 et seq. -- https://www.law.cornell.edu/uscode/text/15/78dd-1
• Tex. Penal Code Chapter 36 (Bribery and Corrupt Influence) -- https://www.ethics.state.tx.us/statutes/ch36_39.php
• Tex. Penal Code 36.08 (Gift to Public Servant) -- https://codes.findlaw.com/tx/penal-code/penal-sect-36-08/
• Tex. Penal Code 36.09 (Offering Gift to Public Servant)
• Tex. Penal Code 36.10 (Exceptions)
• Tex. Gov't Code 572.051 (Standards of Conduct)
• Tex. Gov't Code 305.024 (Lobbyist Expenditures)
• Texas Ethics Commission -- https://www.ethics.state.tx.us/
• Texas Ethics Commission Guide for State Officers and Employees -- https://www.ethics.state.tx.us/resources/guides/Gofficers-employEthics.php
• Anti-Kickback Statute, 42 U.S.C. 1320a-7b
• Federal Bribery Statute, 18 U.S.C. 201

This document is a template provided for informational purposes only and does not constitute legal advice. It must be reviewed and customized by a qualified attorney licensed in Texas before implementation.