On February 17, 2009, the President of the United States signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA requires each recipient of funds under the Capital Purchase Program (CPP) of the Troubled Asset Relief Program (TARP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the United States Department of the Treasury. This policy fulfills our requirements under ARRA. The policy supplements policies that already exist in the Bank's human resources manual detailing guidelines for accepting gifts and hospitality and appropriate levels of travel expenditures. This policy applies to all employees of The Bank and all employees will be held accountable for compliance with this policy.
Included in the category of "excessive entertainment" are both foreign and domestic junkets that do not serve a demonstrated business and/or educational purpose but the sole purpose of the trip is to entertain. Quantitatively, we would define excessive as a single occurrence or event where the per capita expenditure exceed $2,000 and there is no educational component to the trip. Attendance at banking schools, Sheshunoff Roundtable meetings and vendor user group conferences would be considered acceptable expenses.
Renovations of bank buildings are designed to enhance efficiency, comply with fire codes and ADA requirements, maintain a safe, sanitary working environment and to enhance the bank's image in the community. In general, renovations will be part of the bank's capital improvement budget which is approved by the Board of Directors annually. An exception to this policy on renovation may occur if management must deal with an emergency situation such as an act of nature and extraordinary expense is involved in making the facility operational for staff or customer use.
Excessive transportation expenditures are prohibited. Transportation to conferences, meetings, etc., will be conducted in the most cost appropriate way for the Company. If an employee needs assistance in determining how best to travel, they should speak with their supervisor or member of senior management for assistance. The organization will not purchase or enter into a long term lease for any aircraft or vehicle without prior board approval, with the exception of ordinary replacement of current bank owned vehicles used by couriers, etc.
Expenses for employee gatherings or events should enhance staff development, celebrate employee milestones, are for the purpose of morale and team-building or are conducted in the normal course of operation of the business. Reasonable expenditures of this type may be made with approval of the President/CEO who will determine that they meet the bank's expense guidelines.
As noted above, major expenses are generally approved through the bank's capital improvement budget which is approved annually by the Board of Directors. If an unexpected expense occurs approval should be sought by discussing the event or expense with a member of the Management Executive Committee prior to the expense being incurred.
Any employees that suspect this policy is being violated must report their suspicions to the Chairman of the Audit Committee of the Board of Directors.