LUXURY EXPENDITURE POLICY
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.
Grand Capital Corporation and its subsidiary Grand Bank, prohibit 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 measures conducted in the normal course of business operations.
Entertainment or Events
Sponsorship of excessive entertainment or events is prohibited. Any single entertainment, sponsorship or other business development event costing in excess of $15,000 total or $3,000 per person (whichever is greater) requires the pre-approval of the CEO and CFO along with a documented stated business purpose and expected benefit derived by the bank.
Office and Facility Renovations
Office and facility renovations should be designed to enhance operational efficiency, comply with applicable building codes, maintain a safe work environment, and enhance the public image of the organization or such other worthwhile business purpose as may be identified by Grand Bank. Renovations that are extraordinary or excessive from a shareholder perspective are prohibited.
Aviation or Other Transportation Services
Transportation for Grand Bank staff to outlying locations, including conferences, business development events, in connections with reasonable performance incentives for employees or other business purposes should be done in a cost appropriate way for the bank. Excessive aviation or other transportation service expenditures are prohibited.
Other Activities
Other activities or events that are not reasonable expenditures for staff development, reasonable performance incentives, or other similar measures in the normal course of business operations are prohibited.
All employees of Grand Bank and its subsidiaries are subject to this policy and will be held accountable for compliance with this policy. Employees in violation of this policy will be subject to disciplinary action. Further, any violation of this policy must be promptly reported to the bank’s internal risk officer of the bank who will report such event(s) to the board of directors.
The CEO and CFO of the bank shall certify to the board, to the Department of the Treasury and to its primary regulator at least annually, in accordance with applicable government regulations and guidance, that Grand Bank has complied with the foregoing policy during the applicable period, and that all expenses requiring approval pursuant to this policy have been properly approved in accordance with the requirements of this policy.
