Policy approved by the Board of Directors on: February 16, 2010.

 

 

The Board of Directors and Senior Management of Community Pride Bank Corporation (the “Company”) and its subsidiary Community Pride Bank (the “Bank”) are committed to fulfilling the requirements set forth in the Emergency Economic Stabilization Act of 2008 (“EESA”), as amended by 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.

 

The objective of this policy is to fulfill the requirement pursuant to the TARP Standards for Compensation and Corporate Governance as defined by the Department of Treasury (31 CFR Part 30) to have in place a company-wide policy regarding excessive or luxury expenditures as defined by the Department of the Treasury pursuant to EESA an ARRA. Community Pride Bank Corporation follows the Bank’s expense polices.

 

 

It is the policy of the Company that excessive or luxury expenditures on entertainment or events, office and facility renovations, air travel or other transportation services, and other similar items, activities or events for which the Company and its subsidiary may reasonably anticipate incurring expenses or reimbursing an employee for incurring expenses are prohibited to the extent that such expenditures are not reasonable expenditures for business development, staff development, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of business.

 

The Company is committed to fiscal responsibility. Based on our normal business practices, we have created policies that manage expenditures and ensure appropriate management oversight. These policies are reviewed and updated regularly to reflect changing business practices, laws and regulations. These expense policies are designed to provide principles for prudent spending across multiple expense types, while also allowing reasonable flexibility to accomplish business goals. These existing policies reasonably limit excessive or luxury expenditures.

 

This policy applies to the Company and each of its lines of business. It supplements other policies and is intended to address:

 

·        What may be considered an excessive or luxury expenditure

·        Pre-approval for any potential excessive or luxury expenditure when applicable

·        What is a prohibited excessive or luxury expenditure

·        Applicable reporting of excessive or luxury expenditures

·        Mandatory results of non-compliance with this policy

 

For the purpose of this policy, excessive expenditures are those that would reasonably be considered as beyond normal limits or lacking restraint for the normal course of the Company’s business.

 

 

1.                Entertainment is defined as activities for which an employee or management would use funds for business development purposes relating to current to prospective customers or to enhance the Company’s marketing efforts or perception in the market. Our expectation is that all expenses incurred for these activities would be for corporate purposes with the objective of attracting business. Expenditures for these purposes in the normal course of business are a necessary part of the marketing efforts and are not deemed as “luxury” or a violation of this Policy. Prior approval of expenditures for this purpose that are consistent with the prior practices is not required. These expenses should continue to be documented and detailed as to the benefit derived, through the normal accounts payable process.

 

2.                Conferences, Events and Retreats are defined to include meetings, conferences, and employee recognition events that are intended to provide the Board, management and employees with opportunities for individual and team education, development and recognition, business planning, market and industry networking, and related business purpose objectives. Meetings may include both those that are internally organized as well as those organized by other banks, trade associations, vendors or similar organizations. Occasionally, the Company’s organized meetings may be held in non-Bank facilities such as restaurants and hotels in order to accommodate the size of the group, facilitate better delivery of the meeting, or provide participants with a venue that is most conducive for the meeting’s purpose. Directors, management and employees may also participate in the meeting hosted by other business partners that have a clear business purpose. The anticipated costs associated with the meetings are generally included in the Board approved annual budget plan. Conferences typically offer educational, skill development and industry networking opportunities that enhance performance. These conferences are related to the financial services industry and have a direct correlation to attendee’s job. At times it may be appropriate that a spouse would travel to these events with attendee’s. Conference participation is subject to approval by the Senior Executive.

           Employee recognition/parties are part of an employee appreciation process.       These events should be local in geographic nature, and costs should be factored           in relation to be benefit derived.

 

3.                Renovations of Office and Facilities are permitted only if relative to the approved project and current budget. 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. Renovations must be in all regards consistent with the Company’s historical standards of utility and finish. The planning and cost of most significant renovations is primarily overseen by the CEO.

 

4.                Air Travel and Other Transportation Services to outlying locations, including conferences, business development purposes and other purposes should be conducted in the most appropriate manner. Permitted modes of transportation include automobiles and commercial air, bus or rail service. The selection of transportation services should include assessment of cost, efficiency and timeliness of travel.

 

5.                Senior Management are members of management such as a Chairman, President, Executive Officers, Chief Financial Officer, Senior Operations Officer and business unit leaders such as Executive Vice Presidents of Lending, Chief Lending Officer as well as Senior Vice President/Branch President’s.

 

 

The CFO is responsible for the day-to-day administration of this policy, and the CEO is accountable for overall adhere to this policy and must approve any exceptions. The respective CEO and the CFO shall certify to the Board annually that the provisions of this Policy are being enforced and are sufficient to provide reasonable assurance that the expenditures for such purposes are not excessive. Strict adherence to this Policy is mandated for all employees. Violations of this Policy shall be promptly reported to the Board of Directors and may result in a range of employee discipline, up to and including termination of employment.

 

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 compliance with 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 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.

 

This policy shall be subject to modification only with the approval of the Board stating the specific business rationale for the change in policy.

 

This Policy and any amendments hereto, shall be provided to the U.S. Department of the Treasury and the FDIC.