Luxury Expenditure Policy
Limitation on Luxury Expenditures Policy
September 29, 2009
The American Recovery and Reinvestment Act of 2009 requires that recipients of TARP investments develop a written policy placing certain limitations on what certain individuals or government agencies may deem to be luxury expenditures. Avenue Bank (“bank”) and Avenue Financial Holdings, Inc. (“company”) prohibit excessive or luxury expenditures and events, officer 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 in other similar measure conducted in the normal course of business operations. This policy is not intended in any way to limit or restrict the normal and customary expenditures for business development, employee moral or training or the ongoing operation of the bank or the company.
Entertainment or Marketing Events; Conferences
Sponsorship of excessive entertainment or marketing events is prohibited. Entertainment is considered to be any activity in which corporate funds are used for business development purposes relating to a current or prospective customer or to otherwise enhance the marketing efforts of the bank or the company. This includes both foreign and domestic junkets that do not serve a demonstrated business purpose. Occasional events such as taking customers or prospects on trips, playing golf, eating meals or taking them to other events that the customer/ prospect would find pleasurable is a necessary part of the marketing efforts and is not deemed as a “luxury” or a violation of this policy. Excessive entertainment or an excessive event is quantitatively defined as any single occurrence or event where the per capita expenditure exceeds $2,000. Conferences for staff or board members of the bank or the company are permitted if they are related to the financial services industry and have a direct correlation to the staff member’s job. By way of example, the Sheshunoff CEO Roundtable, recognized trade association conferences, conventions and training, off-site planning meetings and off-site board of directors meetings are considered a normal part of the successful operation of the bank and the company and are not considered excessive events.
Office and Facility Renovations
Office and facility renovations should be designed to: enhance operational efficiency, comply with applicable fire codes and ADA requirements, maintain a safe, sanitary and clean working environment, enhance the public image of the organization, improve employee morale, or such other worthwhile purpose as may be identified by the organization. Quantitatively office and facility renovations may be deemed excessive if the all in cost of the renovation exceeds $200 per square foot. By way of example, relocating or adding to movable worker stations, improving the air flow or temperature, altering the wall, ceiling or lighting configuration of a work or storage space, establishing a new branch office or sales office are not considered excessive by their very nature. Expenditures that management deems necessary to deal with emergency situations, such as an act of nature or expenditures necessary to make a facility operational for customer use are excluded from this policy.
Aviation or Other Transportation Services
Excessive aviation or other transportation services expenditures are prohibited. The organization will not purchase or enter into a lease on any fixed wing aircraft, rotary-wing aircraft, watercraft, rail car, or over the road vehicle with seating for eight or more individuals without prior board approval.
Other Similar items, Activities or Events
Expenses for activities or events should enhance staff development, provide reasonable performance incentives for employees, or otherwise be conducted in the normal course of the operation of the business. Local employee recognition/holiday parties are considered part of a regular employee appreciation process and are permitted. Expenditures of this type may be made in the sole discretion or the chief executive officer, the president or their designated agent and are not considered excessive.
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