This policy fulfills the requirements under the American Recovery and Reinvestment Act
of 2009 (ARRA) enacted February 17, 2009. ARRA 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. All employees of Georgia Primary Bank are subject to this Policy and will be held accountable for compliance with this Policy.
Georgia Primary Bank prohibits excessive or luxury expenditures on 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.
Role of the Board of Directors:
The board of directors is required by the TARP Standards for Compensation and Corporate Governance as defined by the Department of the Treasury (31 CFR Part 30) to adopt a policy regarding excessive and luxury expenditures. The Board has oversight responsibility for the Bank’s compliance with the requirements of TARP Standards for Compensation and Corporate Governance as defined by the Department of the Treasury (31 CFR Part 30). In support of its oversight responsibilities, the Board shall have the following roles:
- The board of directors must review and approve this policy on an annual basis, or, in the event of subsequent amendments to the TARP Standards for Compensation and Corporate Governance as defined by the Department of the Treasury (31 CFR Part 30), in such time frame required by the amendment.
- The board shall review any exceptions to this policy at the next regularly scheduled meeting subsequent to the granting of the exception.
Role of Executive Management:
Executive management shall include Chief Executive Officer, Chief Financial Officer (“CFO”), and Senior Lending Officer(SLO). Executive management is responsible for the effective implementation of this policy. To that end, executive management shall have the following roles:
- Monitor expenditures addressed by this policy to ensure compliance with this policy.
- Document and justify any exceptions to this policy and report exceptions to the board.
- Promptly recommend modifications of this policy to the board to ensure it remains
compliant with the TARP Standards for Compensation and Corporate Governance as defined by the Department of the Treasury (31 CFR Part 30) as it may be amended.
- Ensure that this policy is posted on the bank website.
Renovations of facilities and office spaces should be relative to the approved current business plan, and tracked within the capital expenditure policy of the Company. 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 the appearance of being extraordinary, or excessive.
Entertainment is defined as an activity that an Employee or Executive would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Company’s marketing efforts. Excessive entertainment or an excessive event is defined as any single occurrence or event where the activity is not designed to enhance the marketing efforts of the bank or support business development efforts of the bank
Our expectation is that all expenses incurred to the Bank would be for company purposes, and used to generate business for the bank.
We encourage our staff to attend conferences that are appropriate educational opportunities. These conferences should be related to the financial services industry and have a direct correlation to their job. At times it may be appropriate that a spouse would travel to these conferences with Company attendees. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities.
This Policy would EXCLUDE reward conferences if the purpose is meant to be a reward, or
would have no value of education to the employee or executive.
Travel expenses to conferences or sponsored events for the spouse of an employee of Georgia Primary Bank will be the responsibility of the employee and not a reimbursable expense unless the spouse is also required to be in attendance at the conference or sponsored event.
We feel that holiday parties are part of an employee appreciation process. Holiday parties should be local in geographic nature, and should not cost the Company more than an average day’s payroll per employee, on average. (If the payroll is $2M annually divided by 260 days, equals $8K in expense available for an appropriate holiday party).
Board Retreats should only be used for educational purposes, and should be kept in
consideration, and looked at in the same view and discretion as all other 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.
Events and parties focused on customers for the purpose of attracting their business would not fall under this policy.
Transportation for Company staff to conferences, business development purposes and merger and acquisition research, should be conducted in the most cost appropriate way for the Company. Modes of transportation to be used for the analysis, for example may consist of vehicle, commercial air service and private air service. A determination of transportation analysis will factor in cost, efficiency and timeliness of travel.
Excessive aviation or other transportation services expenditures are prohibited.
Other Similar Items, Activities or Events:
Other similar items, activities or events for which the Bank may incur expenses, or reimburse an employee for incurring expenses, which are not specifically addressed elsewhere in this policy shall be for legitimate business purposes and reasonable in nature and amount.
All meetings or events attended by the executive management and/or board members shall be devoted to specific business purposes. Participating senior executive officers and board members shall be responsible for any expenses incurred for non-business related activities, and shall promptly reimburse the Bank for any such expenses if paid by Bank.
Any violations of policy, in conjunction with the expenditures outlined in this Excessive or
Luxury Expenditures Policy, will be reported to the board on the next regularly scheduled board meeting. All employees, including staff, can and must report known violations to the executive management or the board of directors. Employees violating the provisions in this policy may be subject to discipline, up to and including termination.
Annually, CEO and CFO shall certify as to their understanding of and compliance with this