# DURHAM LEX INC.
## Accountable Plan for Employee Business Expense Reimbursement

**Adopted by Board Resolution on:** ______________, 2026
**Effective Date:** ______________, 2026

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### 1. Purpose
Durham Lex Inc. (the "Company") adopts this Accountable Plan under Treasury Regulation Section 1.62-2 to reimburse employees for ordinary and necessary business expenses they pay personally. Reimbursements that satisfy this Plan are deductible to the Company and excluded from the employee's gross income. Reimbursements that fail to satisfy this Plan are treated as taxable wages.

### 2. Eligible Expenses
The Company will reimburse business expenses that are ordinary, necessary, and incurred in the performance of services for the Company, including:
- Home office: the business-use portion of internet and mobile phone service.
- Software, SaaS, AI, and cloud infrastructure used for Company work.
- Business travel, lodging, and meals, subject to applicable limits.
- Office supplies and equipment used for Company work.
- A reasonable business-use share of home utilities and rent where part of the home is used regularly for Company work.

### 3. Home-Office Business-Use Percentages
The following default percentages apply unless a different allocation is documented and substantiated:

| Expense | Default business-use share |
|---------|----------------------------|
| Home internet | 50% |
| Mobile phone | 50% |
| Home utilities / rent | Based on the square footage of the dedicated work area as a share of total home area |

An employee may claim a higher percentage only with contemporaneous records supporting the higher business use.

### 4. Substantiation Requirements (Reg. 1.62-2(e))
For each expense, the employee must submit to the Company, within 60 days of incurring the expense:
1. The amount of the expense.
2. The date the expense was incurred.
3. The business purpose of the expense.
4. For mixed-use items, the business-use percentage claimed and the basis for it.

Original receipts or invoices must accompany each request. Requests without adequate substantiation will not be reimbursed.

### 5. Return of Excess Amounts (Reg. 1.62-2(f))
If the Company advances funds, any amount in excess of substantiated expenses must be returned to the Company within 120 days of the expense being incurred. Amounts neither substantiated nor returned within the required periods will be reported as taxable wages.

### 6. Timing of Reimbursement
The Company will reimburse approved, substantiated requests within 30 days of approval. The employee pays the underlying expense (for example, the home internet bill) personally and submits it for reimbursement. The Company will not pay personal accounts directly.

### 7. No Salary Reduction
Reimbursements under this Plan are paid in addition to, and not in substitution for, any salary or other compensation. Salary will not be reduced to fund reimbursements.

### 8. Administration and Recordkeeping
The President administers this Plan, reviews submissions, and approves reimbursements. The Company will retain all substantiation records for at least four years.

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**ADOPTED BY THE BOARD OF DIRECTORS OF DURHAM LEX INC.**

_______________________________
Sanoj Allen, President and Director
Date: ______________

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> **Draft for review.** Have the Company's accountant or attorney review and tailor this Plan (percentages, administrator, retention period) before adoption. Adopt by board resolution and keep the signed copy with the corporate records.