Excessive and Luxury Expenditure Policy
Introduction
Nationwide Bank Shares and its subsidiary, CharterWest National Bank, are committed to complying fully with the requirements of the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA requires each recipient of funds under the Capital Purchase Program (CPP) of the Trouble 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.
CharterWest National Bank prohibits the excessive or luxury expenditures on office or facility renovations, entertainment and events, aviation and other travel, and any other activities that are not reasonable expenditures for business development, conferences or staff development conducted in the normal course of business operations.
Renovations
Expenditures for individual office renovations, office furnishings, remodeling or redecoration of which the aggregated cost exceeds $20,000 are prohibited without prior approval of the CharterWest Board of Directors. An exception to this can only 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.
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 the Company's marketing efforts.
Our expectation is that all expenses incurred to the Bank would be for company purposes, and used to drive business to the Bank. 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 necessary part of the Company's marketing efforts and is not deemed as luxury or a violation of this Policy. These expenses should be documented and detailed as to the benefit derived by the Bank.
Conferences
We encourage our staff to attend conferences that are appropriate educational opportunities. The conferences should be related to the financial services industry and have a direct correlation to their job. At times is 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.
Holiday Parties
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.
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 limit a retreat that is focused on strategic planning or education.
Aviation Services
Transportation for Company staff to outlying locations, including bank locations, conferences, business development and meetings with customers should be conducted in the most cost appropriate way for the Company. 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. Use of private air services is not allowed. All commercial carrier travel should be booked in a method to facilitate obtaining the lowest reasonable rate in coach class.
Reporting Violations
Any employee or director who learns of a violation of this policy must promptly report this violation to the President or Board of Directors.
Certification
The President and Chief Financial Officer will certify, at least annually, that this policy is being followed and that the approval of any expenditure requiring approval under this policy has been obtained.
| 