IN THE NEWS! articles are provided for informational purposes only. You should always consult your tax advisor or legal professsion about your personal circumstances. When you click the link below for additonal information, you will leave the F&M Bank site and be transferred to a site not under the control of F&M Bank.
F&M Bank Revises Luxury Policy
This policy fulfills the requirements outlined in Section 111(d) of the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009 (“ARRA”) enacted on February 17, 2009. Under the interim final rule promulgated by the Department of Treasury (31 CFR Part 30), ARRA requires each recipient of funds under the Capital Purchase Program (“CPP”) of the Troubled Asset Relief Program to have in place a company-wide policy regarding excessive or luxury expenditures.
F&M Financial Corporation (the “Company”), its primary subsidiary, F&M Bank (the “Bank”), and the other Company’s subsidiaries, prohibit excessive or luxury expenditures on (i) entertainment or events, (ii) office and facility renovations, (iii) aviation or other transportation services and (iv) 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 of the Company. This policy applies to all employees, officers and directors of the Company and its subsidiaries including the Bank
Renovations: Renovations of facilities and office spaces should be relative to the approved project and current profit plan. An exception to this is allowed in the event management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for either employee or customer use. At no time should renovations be considered that would have the appearance of being extraordinary or excessive from a shareholder perspective.
Entertainment: Entertainment is defined as an activity that an employee, officer or director would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Company’s marketing efforts.The Company’s expectation is that all expenses paid by the Company should be for Company purposes, and used to steer and/or increase business to the Bank. Occasional events such as taking customers or prospects on trips, playing golf, eating dinner, taking them to other events the customer/prospect might find pleasurable is a 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.
Events and parties focused on customers for the purpose of attracting and/or further developing their business would not fall under this policy.
Conferences: The Board of Directors of the Company (the “Board”) encourages the Company’s employees to attend conferences that provide appropriate educational opportunities. These conferences should be related to the financial services industry and have a direct correlation to the employee’s job. Typically these conferences are sponsored by vendors, banking associations or other industry-related entities. At times it may be acceptable that a spouse travels to these conferences with the Company employee or director. In the event a spouse travels to the event, the spouse’s travel expenses will be paid by the Company upon prior approval of the Chief Executive Officer or Chairman of the Board, as applicable. If the prior approval request is denied the employee spouse is responsible for their spouse’s travel expenses.
Holiday Parties: The Board believes that a Company-wide annual holiday party and a Company-wide annual picnic are important in terms of employee appreciation and employee morale. Accordingly, this policy does not prohibit expenditures in conjunction with such events. Such employee events must be local; however, as neither overnight nor travel expenses will be paid by the Company. The expenses associated with such events should not cost the Company more than approximately an average day’s gross payroll (e.g., if the Company’s annual payroll is $9mm, divided by 260 work days, appropriate expenses would be approximately $35k). Other events, such as a Company picnic or the occasional department party, should be just a fraction of that cost and deemed reasonable by any appropriate standard.
Board Retreats: Board retreats may only be used for educational purposes with the corresponding expenses deemed reasonable by any standard. It is recognized that Board education is a vital part of attracting and maintaining a dynamic director base, and this policy does not prohibit a retreat that is focused on strategic planning or Board education.
Aviation Services: Transportation for Company staff to outlying locations, including but not limited to schools, conferences, business development meetings and merger and acquisition research, should be conducted in the most cost appropriate way for the Company. The Company’s Accounting Department will maintain, when appropriate, an analysis of trips to determine which mode of transportation is the most appropriate for Company employees. Modes of transportation to be used for such analysis, for example, may consist of vehicle, train, commercial air service and private air service. Private air services travel shall only be permitted upon approval of the Chief Executive Officer or Chairman of the Board. The selection of appropriate transportation services will be based on cost, efficiency and timeliness of travel.
Other Activities: Generally, the Company does not grant performance incentives in the form of travel or entertainment. If granted, however, such performance incentives shall not encourage or promote excessive or unnecessary risk-taking or manipulation of financial results. Any performance incentive granted in the form of travel or entertainment must be approved in advance by the Chief Executive Officer or the Chief Financial Officer.
All activities or events that are not reasonable expenditures for staff development, performance incentive in accordance with written plans and policies or other similar expenditures incurred in the normal course of business must be approved in advance by the Chief Executive Officer.
General: All expenses permitted under this policy shall be approved strictly in accordance with the established practices and procedures. Seminars and related travel must be approved in advance by the Director of Human Resources and the Chief Executive Officer or the Chief Financial Officer.
Anyone who becomes aware of a suspected or actual violation of this policy shall promptly report such violation to the Chairman of the Audit Committee of the Board, Frank Dill. Violation of this policy shall subject an individual to discipline up to and including termination of employment or removal from the Board, as applicable.
The Company’s Chief Executive Officer and Chief Financial Officer shall certify at least annually that the approval of any expenditure requiring prior approval of an executive officer of the Company or the Board was properly obtained with respect to each such expenditure.
On no less than an annual basis, all officers and directors of the Company and the Bank shall certify as to their understanding of and compliance with this Policy. This policy shall be effective as of August 18, 2009 and shall remain in effect through the last day on which the Company has an outstanding obligation to the Department of Treasury under the CPP (excluding the warrants to purchase common stock of the Company).
This policy may only be amended upon approval of the Board. This Policy, and any amendments thereto, shall be posted on this website and provided to the Department of Treasury and the FDIC.
Copyright © F&M Bank. All rights reserved. Member FDIC. Equal Housing Lender.
The content of this website is not designed or intended to provide authoritative financial accounting, investment, legal or other professional advice, which may be reasonably relied on by its readers. If expert assistance in this area is required, the services of a qualified professional should be sought.