The Board of Directors (“Board”) of Anchor BanCorp Wisconsin Inc. and its subsidiaries (“Company”) adopted this Excessive or Luxury Expenditure Policy (“Policy”) in order to fulfill the requirements of the Emergency Economic Stabilization Act of 2008 (“EESA”), as amended by the American Recovery and Reinvestment Act of 2009 (“ARRA”). The ARRA requires each recipient of funds under the Capital Purchase Program of the Troubled Asset Relief Program (“TARP”) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the United States Department of the Treasury (“UST”). The Board has determined that all directors and employees of the Company shall be subject to the policies set forth herein with respect to all Covered Expenditures (as defined below). Each director and employee of the Company is expected to read, understand and comply with the standards set forth in this Policy. This policy shall be posted on the Company’s website.
I. Prohibited Excessive or Luxury Expenditures
The Company prohibits excessive or luxury expenditures on (i) entertainment and events, (ii) office and facility renovations, (iii) aviation and other transportation services and (iv) other similar activities and events (collectively, “Covered Expenditures”) to the extent that such Covered Expenditures are not reasonable expenditures for staff development, reasonable performance incentives or other similar reasonable measures conducted in the normal course of the Company’s business operations.
The following are specific policies relating to Covered Expenditures:
Entertainment and Events
Entertainment. The use of Company funds by a Company director or employee or entertainment other than for business development purposes relating to current customers, prospective customers or to further the Company’s acquisition of customers, retention of customers or other revenue-generating efforts and other than for reasonable and appropriate purposes necessary to conduct the ongoing operations of the Company, is prohibited. Entertainment includes, but not limited to, trips, golf outings, meals, sporting events, concerts, performances and other similar activities that Company directors or employees or customers would find pleasurable. Periodically, it may be appropriate for a spouse to participate in entertainment activities with Company attendees. In such instances, the director or employee shall be financially responsible for covering the expenses incurred in connection with spouse travel to conferences or sponsored events. In the Company’s various markets, in connection with entering into sponsorship arrangements or separately, the Company enters into suite arrangements and/or acquires tickets. Designated Company managerial colleagues approve the sponsorship arrangements and acquisition of tickets and approve their usage within the Company. Documentation supporting the appropriate business development purpose is maintained.
Events. The Company’s directors and employees are encouraged to attend conferences that are appropriate educational opportunities. These conferences shall be related to the financial services industry and have a direct correlation to the duties and responsibilities of such director or employee. Periodically it may be appropriate for a spouse to travel to these conferences with Company attendees. In such instances, the director or employee shall be financially responsible for covering the expenses incurred in connection with spouse travel to conferences or sponsored events. Occasional retreats for educational or strategic business planning purposes are permitted under this Policy, so long as the expenses associated with such retreats are reasonable. Employee recognition events and holiday parties are an important part of the Company’s employee appreciation program. These events shall be reasonable in cost and scope.
There is no threshold amount at or above which an entertainment activity or event would be considered prohibited. All entertainment activities and events are to be considered on a case-by-case basis and are subject to the approval procedures listed below.
Office and Facility Renovations
Renovations of office space or facilities shall (i) be reasonable in scope and cost, (ii) relate to a project approved by management and (iii) be undertaken by the Properties Department. The Properties Department is responsible for compliance with all safety and code standards, including, but not limited to, fire codes, Americans with Disabilities Act requirements and environmental laws. The Properties Department is also responsible for complying with corporate standards for furniture, fixtures and equipment and office image standards. All office and facility renovations are subject to the capital and expense budgeting processes of the Company. An exception to this Policy will be made in the event that management, in its discretion, determines that it must make expenditures when confronted with an emergency, such as an act of nature, to make a Company facility operational for employee and customer use.
Aviation and Transportation Services
Transportation for directors and employees of the Company relating to travel associated with bank locations, board meetings, conferences, retreats, business development trips and merger and acquisition research, as applicable, shall be conducted in a cost appropriate manner, taking into account the efficiency and timeliness of such travel. Modes of transportation may consist of vehicle, commercial air or rail service. The Employee Expense Policy shall be followed in every instance.
The following are prohibited:
- The reimbursement of any non-business related expenses incurred by directors or employees of the Company;
- The reimbursement of any expenses incurred by an immediate or extended family member of a director or employee of the Company, except for situations where a reasonable business purpose exists; and
- The reimbursement of any expenses incurred which would otherwise be prohibited under the Company’s Employee Expense Policy or Code of Conduct policy.
II. Approval Procedures
The following set forth the approval procedures relating to Covered Expenditures:
Entertainment and Events
Entertainment expenditures in excess of $5,000 per occurrence must be submitted in writing by the business unit senior executive officer (or his or her designee) and pre-approved by the submitting colleagues Executive Management Committee’s member and by the General Counsel or Chief Financial Officer.
Event expenditures in excess of $5,000 must be submitted in writing by the business unit senior executive officer (or his or her designee) and pre-approved by the submitting colleague’s Executive Management Committee’s member and by the General Counsel or Chief Financial Officer.
Office and Facility Renovations
All office and facility renovations must be submitted in writing by the business unit senior executive officer (or his or her designee) and pre-approved by the submitting colleague’s Executive Management Committee’s member and by the General Counsel or Chief Financial Officer.
Aviation or other Transportation Services
Commercial aviation and other transportation related services must be reviewed and approved by the employee’s immediate supervisor/manager and must be consistent with the relevant parts of the existing Employee Expense Policy.
Any other activities that may be deemed excessive or luxury expenditures should be discussed with the business unit senior executive officer (or his or her designee) or with the General Counsel.
Exceptions to this Policy shall only be granted with the pre-approval of the Chief Executive Officer, which will be reported to the Company’s Audit Committee. All exceptions will be documented.
Each employee shall report any violation of this Policy of which he or she is aware to his or her immediate supervisor, who shall report the matter to the Internal Auditor. Directors shall report violations of this Policy directly to the Internal Auditor. Failure to report actual or perceived violations of this Policy may result in disciplinary actions taken by the Company against any employee who knew of and/or participated in a violation of this Policy. Any violation of this Policy ultimately shall be reported promptly to the Company’s Audit Committee and General Counsel.
IV. Accountability and Periodic Review of Policy
The Audit Committee of the Board of Directors shall have oversight responsibilities relating to this Policy. The Internal Auditor shall review annually adherence to this Policy. In addition, at least annually, sufficient time will be allocated during one of the regular meetings of the Board for a general review of this Policy’s requirements in light of the requirements of EESA and ARRA, as the same may be amended from time to time. If it is determined that this Policy needs to be revised because of amendments to EESA or ARRA or other relevant regulatory agencies, or because of changes to the policies of Treasury or other regulatory agencies having jurisdiction over the Company, the Board, after consulting with counsel, may make the necessary changes to this Policy.
V. TARP Reporting Requirements
The Chief Executive Officer and Chief Financial Officer shall, within ninety (90) days of the completion of each fiscal year, any part of which is during any period in which the Company has an outstanding obligation to the UST, certify that the Company and its employees have complied with this Policy during any part of the most recently completed fiscal year and that any expenses requiring approval of the Board, a committee of the Board, a senior executive officer or an executive officer with a similar level of responsibility, were properly approved, in each case in accordance with the requirements under the Interim Final Rule released by the UST or any subsequent regulations promulgated by the UST.
Any amendment to this Policy shall be approved and adopted by the Board. Such an amendment shall be provided to the UST and the Office of Thrift Supervision and shall be posted on the Company’s website within ninety (90) days after adoption by the Board.
Effective as of September 14, 2009
Revised as of June 30, 2010