Luxury Expenditures Policy
A. Purpose
The purpose of this policy is to establish parameters and internal controls governing the
expenditures of Mountain Valley Bank (together with its subsidiaries and controlled affiliates,
referred to hereafter as the Organization). Expenditures of the Organization should be
customary, prudent, consistent with applicable laws and regulations, and reasonably related to
the Organization’s business objectives and needs. This policy identifies expenditures that are
Mountain Valley Bank - Luxury Expenditures Policy
excessive or luxury expenditures, creates processes that are reasonably designed to eliminate
such expenditures, and establishes accountability for compliance. Routine operating expenses,
capital expenditures, and other reasonable expenses are not prohibited by this policy.
B. Authority
The Organization has authority to provide compensation and benefits that are reasonable.
This policy establishes a prohibition on expenditures that are excessive or luxury expenditures as
required by the Department of the Treasury’s Emergency Capital Investment Program
regulations (31 CFR Part 35), and as may be required by other statutes and regulations.
C. Responsibility
This policy is the responsibility of the Organization’s board of directors (board). The
board has approved this policy and will review compliance with this policy no less frequently
than annually, and summary data on excessive or luxury expenditures will be reported to the
board as part of the compliance review.
D. Scope
This policy applies to all employees, officers, and directors of the Organization with
regard to any expenditure of the Organization. In making any expenditure on behalf of the
Organization, employees, officers, and directors should consider whether the expenditure is an
excessive or luxury expenditure that is prohibited under this policy.
regard to any expenditure of the Organization. In making any expenditure on behalf of the
Organization, employees, officers, and directors should consider whether the expenditure is an
excessive or luxury expenditure that is prohibited under this policy.
E. Excessive or Luxury Expenditures
“Excessive or luxury expenditures” means excessive expenditures on any of the
following to the extent not reasonable or appropriate expenditures for business development,
staff development, reasonable performance incentives, or other similar reasonable measures
conducted in the normal course of the Organization’s business operations:
(1) Entertainment or events. This category includes fees, dues, tickets costs related to
social, athletic, artistic and dining clubs, activities, celebrations or other events, and similar
expenditures. Expenditures for charitable contributions and charitable events are not prohibited
under this policy. Entertainment or events expenditures in an amount less than $10,000 per
instance, and $30,000 on an annual aggregate basis per individual, are exempt from this policy.
(2) Office and facility renovations. This category includes costs and allowances for
office renovation, including expenditures related to furniture, art, office personalization, interior
finishing, design and decoration, and similar expenditures. Office and facility renovations
expenditures in an amount less than $250,000 per instance, and $500,000 on an annual aggregate
basis per individual, are exempt from this policy.
(3) Aviation or other transportation services. This category includes charter fees, tickets,
slip or docking fees, vehicle installment payments, reservation and travel agent expenses, and
similar expenditures associated with transportation services (e.g., airline, train, rental cars, or
vans). Mileage reimbursable according to current Internal Revenue Service mileage rates is
exempt from this policy. Transportation services in an amount less than $10,000 per instance,
and $30,000 on an annual aggregate basis per individual, are exempt from this policy.
The principal executive officer may establish or delegate to an appropriate executive
officer the authority to establish processes for reimbursement of reasonable travel expenditures,
which processes must be reviewed by executive management no less frequently than annually.
(4) Tax gross-ups. This category includes any reimbursement of taxes owed with respect
to any compensation. This category does not apply to tax equalization agreements for employees
subject to tax from a non-U.S. jurisdiction.
(5) Other similar items, activities, or events for which the Organization may reasonably
anticipate incurring expenses or reimbursing an employee for incurring expenses. Expenditures
related to other items not listed in the preceding categories are exempt from this policy in an
amount less than $10,000 per instance, and together with all expenditures permitted under this
policy, may not exceed $30,000 on an annual aggregate basis per individual.
For the avoidance of doubt, reasonable capital investments in technology, equipment, and
similar items that expand the long-term capability of an ECIP recipient to provide products and
services to its customers and community are not excessive or luxury expenditures.
The principal executive officer may establish or delegate to an appropriate executive
officer the authority to establish processes for the evaluation and approval of expenditures in the
preceding categories that are not luxury or excessive expenditures and that are not otherwise
exempt from this policy.
These processes must be reviewed by executive management no less frequently than annually, as
well as any additional threshold expenditure amounts per item, activity, or event, or a threshold
expenditure amount per employee receiving the item or participating in the activity or event
under this policy. Such approvals must be reported to the board of directors (which may be in an
appropriate summary form) no less frequently than annually.
following to the extent not reasonable or appropriate expenditures for business development,
staff development, reasonable performance incentives, or other similar reasonable measures
conducted in the normal course of the Organization’s business operations:
(1) Entertainment or events. This category includes fees, dues, tickets costs related to
social, athletic, artistic and dining clubs, activities, celebrations or other events, and similar
expenditures. Expenditures for charitable contributions and charitable events are not prohibited
under this policy. Entertainment or events expenditures in an amount less than $10,000 per
instance, and $30,000 on an annual aggregate basis per individual, are exempt from this policy.
(2) Office and facility renovations. This category includes costs and allowances for
office renovation, including expenditures related to furniture, art, office personalization, interior
finishing, design and decoration, and similar expenditures. Office and facility renovations
expenditures in an amount less than $250,000 per instance, and $500,000 on an annual aggregate
basis per individual, are exempt from this policy.
(3) Aviation or other transportation services. This category includes charter fees, tickets,
slip or docking fees, vehicle installment payments, reservation and travel agent expenses, and
similar expenditures associated with transportation services (e.g., airline, train, rental cars, or
vans). Mileage reimbursable according to current Internal Revenue Service mileage rates is
exempt from this policy. Transportation services in an amount less than $10,000 per instance,
and $30,000 on an annual aggregate basis per individual, are exempt from this policy.
The principal executive officer may establish or delegate to an appropriate executive
officer the authority to establish processes for reimbursement of reasonable travel expenditures,
which processes must be reviewed by executive management no less frequently than annually.
(4) Tax gross-ups. This category includes any reimbursement of taxes owed with respect
to any compensation. This category does not apply to tax equalization agreements for employees
subject to tax from a non-U.S. jurisdiction.
(5) Other similar items, activities, or events for which the Organization may reasonably
anticipate incurring expenses or reimbursing an employee for incurring expenses. Expenditures
related to other items not listed in the preceding categories are exempt from this policy in an
amount less than $10,000 per instance, and together with all expenditures permitted under this
policy, may not exceed $30,000 on an annual aggregate basis per individual.
For the avoidance of doubt, reasonable capital investments in technology, equipment, and
similar items that expand the long-term capability of an ECIP recipient to provide products and
services to its customers and community are not excessive or luxury expenditures.
The principal executive officer may establish or delegate to an appropriate executive
officer the authority to establish processes for the evaluation and approval of expenditures in the
preceding categories that are not luxury or excessive expenditures and that are not otherwise
exempt from this policy.
These processes must be reviewed by executive management no less frequently than annually, as
well as any additional threshold expenditure amounts per item, activity, or event, or a threshold
expenditure amount per employee receiving the item or participating in the activity or event
under this policy. Such approvals must be reported to the board of directors (which may be in an
appropriate summary form) no less frequently than annually.
F. Exceptions or Violations
Any exception or violation of this policy must be promptly reported to the Organization’s
(i) principal executive officer, (ii) officer with primary responsibility for the Organization’s
compliance function, or (iii) officer designated with primary responsibility for overseeing the
administration, monitoring, and compliance with this policy. Exceptions and violations must be
reported to the board of directors no less frequently than annually, or more frequently as the
nature and severity of violation may warrant. All employees, officers, and directors of the
Organization must adhere to this policy and will be held accountable for compliance. Any
employee or officer who violates this policy may be subject to disciplinary action up to and
including termination of employment.
Any employee or officer that is aware of any circumstance that may indicate a violation
of this policy is required to report such circumstance to their supervisor or the Organization’s
principal compliance officer or compliance group. The Organization prohibits retaliation against
any employee or officer for making a good faith report of actual or suspected violations of the
Organization’s code of conduct, laws, regulations, or other Organization policies, including this
policy. A finding of retaliation against any such employee or officer may result in disciplinary
action up to and including termination. Failure to promptly report known violations by others
may also be deemed a violation of the Organization’s code of conduct.
Employees and officers may ask questions, raise concerns, or report instances of noncompliance
with this policy and/or any of the existing underlying relevant policies by contacting
the following: compliance@mtnvalleybank.com or 423-949-2146.
the following: compliance@mtnvalleybank.com or 423-949-2146.
G. Certification
On an annual basis, the ECIP recipient will deliver to the Department of the Treasury a
certification, executed by two senior executive officers (one of which must be either the ECIP
recipient’s principal executive officer or principal financial officer) certifying that (i) the
Organization is in compliance with this policy and (ii) the approval of any expenditure requiring
the prior approval of any senior executive officer, any executive officer of a substantially similar
level of responsibility, or the board of directors (or a committee of such board), was properly
obtained with respect to each such expenditure