|
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. Fidelity Financial Corporation and Fidelity Bank (Fidelity) 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. A. Prohibited Types of Expenditures The following expenditures are generally prohibited by this Policy:
The following types of expenditures require prior approval:
Employees should submit a written request for approval with a detail of projected expenses and justification to the Chief Executive Officer for approval. To allow sufficient processing time, employees/executives are required to deliver the approval request at least three days prior to the date of the reservation or expenditure. The Chief Executive Officer and the Chief Financial Officer of Fidelity shall provide written certification, in the form shown on Exhibit I, as to the Policy compliance of each such approval executed by the Chief Executive Officer. D. Reporting of Policy Violations An employee or director who learns of a violation of this Policy shall promptly report the violation to the Chief Executive Officer unless such violation relates to the Chief Executive Officer. A violation of this Policy by the Chief Executive Officer should be reported to the Chairperson of either the Audit Committee or the Compensation Committee. E. Accountability for Adherence to the Excessive and Luxury Expenditure Policy Compliance with this Policy is a condition of employment, and any violations thereof may result in disciplinary action, up to and including, discharge. F. Expenditure Guidelines Renovations: Renovations of facilities and office spaces should be relative to the approved project and current profit plan, and tracked in accordance with the Fixed Asset Policy of Fidelity. 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 or operational use. At no time should renovations be done that would have the appearance of being extraordinary or excessive. Entertainment: Entertainment is defined as an activity that an employee or executive would use corporate funds for business development purposes relating to a current customer or prospective customer, or to further enhance Fidelity's marketing efforts. Fidelity's expectation is that all expenses incurred, be for company purposes, and used to drive business to the Bank. Occasional events such as taking customers or prospective customers on trips, playing golf, eating dinner, or taking them to other events the customer/prospective customer would find pleasurable, is a necessary part of Fidelity's marketing efforts and is not deemed a "luxury" or a violation of this Policy, unless in conflict with Section A above. These expenses, however, should be documented and detailed as to the benefit derived by the Bank through the normal accounts payable process. Company sponsored events and parties focused on customers for the purpose of attracting their business would not fall under this Policy. Conferences: Fidelity encourages its 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 the attendees job. At times, it may be appropriate that a spouse travel to these conferences with Company attendees. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities. The Chief Executive Officer must approve all spousal or dependent travel and expenses. Since non-employee spousal and dependent travel and expenses are not typically deductible, such amounts may be treated as additional compensation to the employee on either a W-2 or a 1099, depending on the individual circumstances. Additional spousal or dependent expenses at conferences for tours, programs, recreation, etc. should be segregated as well for proper reporting as non-deductible expenses. Business meals or entertainment expense for customer spouses would require the same documentation as to name, business relationship, business purpose, etc. as any other participant. Employee Recognition/Holiday Parties: Fidelity feels that employee recognition/holiday parties are part of an employee appreciation process. These events should be local in geographic nature, and may include costs for such things as service awards and nominal door prizes. Board/Management Retreats: Retreats should only be used for educational or business planning 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 be construed to restrict a retreat that is focused on strategic planning or education. Aviation Services: Fidelity employees or executives requiring transportation to outlying locations, including bank locations, conferences, business development opportunities or merger and acquisition research, should be accomplished in a manner that is most cost-effective for Fidelity. Modes of transportation to be used may consist of vehicle, commercial air or rail service. The selection of transportation services will factor in cost, efficiency and timeliness of travel. Private air services are not allowed without the prior approval of the Chief Executive Officer. |
||||||||||||||
|
