This policy statement fulfils the requirement placed upon F&C Bancorp, Inc., and F&C Bank (collectively, the "Bank"), by the American Recovery and Reinvestment Act to adopt a company-wide "excessive or luxury expenditures policy" (the "Policy"). The Policy's purpose is two-fold. First, it prohibits any Bank officer, director, employee or agent from making any excessive expenditures on entertainment and events, office or facility renovations or and aviation or other transportation services. Second, the Policy ensures that the Bank's expenditures for conferences, staff development, performance incentives and similar activities are reasonable. The specific provisions of the Policy are as follows:
1. Entertainment:
The Bank requires that all entertainment expenses be incurred for legitimate business purposes. Occasional client-centered functions, such as sporting or community events, dining, hunting, golfing or other events involving reasonable travel, do not violate the Policy. All entertainment expenses must be documented accurately.
2. Renovations:
The Bank requires that all renovations of facilities and office spaces conform with an approved project plan, which must be consistent with the Bank's current business and profitability plans. Exceptions to this provision are permissible only if a specific renovation projects relates to an emergency situation, such as an act of nature, and the expenditure is necessary to make the effected facility or office space operational. Renovations that would appear excessive or luxurious from the perspective of a reasonable shareholder are prohibited.
3. Conferences:
The Bank strongly encourages its staff to attend conferences that provide appropriate educational and client-development opportunities. However, the Bank will not pay for an employee to attend any conferences unless the conference relates to the financial services industry and correlates to the individual employee's job responsibilities. Occasionally, it may be appropriate for an employee's spouse to accompany the employee to such conferences. At times, it may be appropriate for the Bank to fund travel or conference expenditures of an employee’s spouse.
4. Employee Recognition/Holiday Parties:
The Bank believes that employee-recognition events and holiday parties serve an important role in fostering a productive work environment, showing appreciation to employees and acknowledging employee contributions. These events should occur within the Bank's general geographic area and should not be unreasonably expensive.
5. Board/Management Retreats:
The Bank's board of directors and/or officers may participate in company-sponsored retreats. Any such retreat should be used for educational or business planning purposes and should not involve unreasonable expenditures. Because appropriate planning is a vital part of the Bank's business success, no part of this policy should limit or otherwise discourage a retreat focused on strategic planning or board instruction.
6. Transportation:
Appropriate transportation is required for the Bank's directors, officers, employees and agents to travel to bank locations and conferences, to pursue business development opportunities and to conduct merger and acquisition research. However, such transportation should be conducted in the most cost appropriate way, with consideration to the Bank's legitimate business needs. Private air services are not allowed without the approval of the chairman of the board of directors.
7. Administration:
The Bank's chief financial officer ("CFO") is responsible for the Policy's day-to-day administration, while the chief executive officer ("CEO") is responsible for overall adherence to the Policy and for approving any exceptions. Following any approval of private air services by the chairman of the board of directors, the CFO and the CEO must certify that such approval was obtained. The CFO and CEO certifications must be maintained in the Bank’s corporate records.
The Policy and any amendments thereto must be posted on the Bank's website. A copy of the Policy must be provided to the U.S. Department of the Treasury and the Federal Deposit Insurance Corporation.