This Policy fulfills the requirements under the Emergency Economic Stabilization Act of 2008 ("EESA"), as amended by the American Recovery and Reinvestment Act of 2009 ("ARRA") enacted February 17, 2009. EESA requires each recipient of funds under the Capital Purchase Program ("CPP") of the Troubled Assets Relief Program ("TARP") to have in place a company-wide policy regarding excessive or luxury expenditures as identified by the Secretary of the Department of the U.S. Treasury ("Treasury"). This Policy shall remain in effect during the time period for which Treasury owns any debt or equity securities of TCB Holding Company. (the "Company") acquired under the CPP.
The Company and its subsidiaries prohibit excessive or luxury expenditures for the following:
- entertainment and events;
- office or facility renovations;
- aviation or other transportation services; or
- other activities or events
that are not reasonable expenditures for conferences, staff development, reasonable performance incentives, or other similar measure conducted in the normal course of business operations of the Company and its subsidiaries.
This Policy is intended to supplement the Company's and its subsidiaries' general practices concerning business expenses and the reimbursement of the same. General out-of-pocket business expenditures and ordinary business expenses incurred by the Company's and it subsidiaries' employees in the ordinary course of business, consistent with past practices, are not intended to be covered by this Policy. Accordingly, any expenditures identified above which would exceed the authorization limits pursuant to the Company's and its subsidiaries' general practices concerning business expenses and the reimbursement of the same or any expenditures identified above not covered by such general practices must be approved by the Company's Chief Executive Officer or the Chief Financial Officer in advance.
Expenditures for renovations of facilities and office spaces should be reasonable in amount and scope, relative to the approved project and current profit plan, and tracked within the accounts payable policy of the Company and its subsidiaries. An exception to this can be allowed if management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for customer use. At no time should renovations be done that would have appearance of being extraordinary, or excessive from a shareholder perspective.
Entertainment is defined as an activity that an employee or executive officer would use corporate funds for business development purposes relating to a current customer or prospective customer, or to further enhance the Company's and its subsidiaries' marketing efforts.
Our expectation is that all entertainment expenses incurred would be for the Company's or its subsidiaries' purposes, and used to drive business to the Company and its subsidiaries. Occasional events such as taking customers or prospects on trips, playing golf, eating dinner, or taking them to other events the customer/prospect would find pleasurable is a necessary part of the marketing efforts and is not deemed as "luxury" or a violation of this Policy, provided that such expenditures are not excessive in amount or scope. All entertainment expenses shall be documented and detailed as to the benefit derived by Company or its subsidiaries and shall be approved through the normal approval and accounting process.
We encourage our staff to attend conferences that are appropriate educational opportunities, and attendance at conferences that are related to the financial services industry and have a direct correlation to the employee's job shall not violate this Policy. At times it may be appropriate that a spouse would travel to these conferences with attendees. Typically these conferences are sponsored by vendors, banking association, or other industry related entities. Expenditures for conferences, including related travel expenses, must not be excessive in amount or scope and must be approved through the normal approval and accounting process.
Employee Recognition/Holiday Parties:
We feel that employee recognition/holiday parties are part of an overall employee appreciation program and are not luxurious or excessive in nature. These events should be local in geographic scope and may include costs for such things as service awards and nominal door prizes. As a general rule, each such event should not cost more than an average day's payroll for the participating employees, though exceptions may be approved on a case-by-case basis.
Retreats should be used only for educational or business planning purposes, and they should be reviewed and approved in the same manner and with the same discretion as all other business expenses. Board education is a vital part of maintaining and keeping a dynamic director base, and this Policy should not limit a retreat that is focused on strategic planning or education, provided that expenditures for the retreat are not excessive in amount or scope.
Aviation and other Transportation Services:
Transportation for the Company's and its subsidiaries' employees to outlying locations, including bank locations, conferences, business development purposes and merger and acquisition research, should be conducted in the most cost appropriate way for the Company and its subsidiaries. Modes of transportation to be used may consist of vehicle, rail service or commercial air services. The selection and approval of transportation services will factor in cost, efficiency and the required timeframe for the travel, and expenditures for transportation services shall be documented and approved through the normal approval and accounting process.
All employees of the Company and its subsidiaries are required to adhere to this Policy. Failure to obtain the necessary prior approval from the Chief Executive Officer or Chief Financial Officer shall result in the denial of expense reimbursement for any such expenditures requiring prior approval under this Policy. Any employee failing to adhere to this Policy shall be subject to discipline. Any violation of this Policy shall be promptly reported to the Company's Senior Risk Officer. The Senior Risk Officer is responsible for monitoring compliance with this Policy. At least annually, this Policy shall be reviewed and the Chief Executive Officer and Chief Financial Officer shall certify that the requisite approvals under this Policy were properly obtained with respect to the expenditures identified above.
This Policy, and any amendments hereto, shall be posted on the Company's website and provided to the Treasury and the Company's primary federal regulator.