Hyperion Savings Bank
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Disclosures

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.

Hyperion Bank (Bank) prohibits 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 our business operations.

This policy applies to all employees of the Bank. Additionally, this policy specifies prohibited expenditures, approval procedures for expenditures which require prior approval, certification requirements of the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), the reporting of actual or suspected violations, and compliance monitoring.

Renovations:

All proposed office and facility capital improvements and/or renovations with a cost exceeding $5,000 must be approved in writing by the CEO prior to commencement of any such activities. All proposed office and facility capital improvements and/or renovations with a cost of $25,000 or greater must be approved by the Board of Directors prior to commencement of any such activity. An exception to this can be allowed if management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for customer use.

At no time should renovations be done that would have the appearance of being extraordinary or excessive from a shareholder perspective.

Employee Offices:

Employee's offices, including executive offices, shall be appropriate for the employee's position but not ostentatious in size, furnishings or decoration. Materials used to construct or renovate offices and facilities shall be selected on the basis of their quality, appearance, cost and durability, considering their intended use and avoiding opulence. All expenditure for constructing, renovating, or furnishing offices must comply with applicable Bank policies and procedures, which require Chief Executive Officer and/or Board of Directors approval, depending on the type and amount of the expenditure.

Entertainment:

Entertainment is defined as an activity that an employee or executive would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Bank's marketing efforts.

Our expectation is that all entertainment expenses incurred for the Bank's account would be for business purposes and used to drive business to the Bank. Occasional events such as taking customers or prospects on approved outings, playing golf, eating dinner or taking them to other events the customer/prospect would find pleasurable is a necessary part of the Bank's marketing efforts and is not deemed to be prohibited "entertainment" or a violation of this policy. These expenses should be documented, approved, and detailed as to the benefit derived by the Bank. Events and parties focused on customers for the purpose of attracting their business would not fall under this policy.

Holiday Parties:

We recognize that employee recognition/holiday parties are a valid part of the employee appreciation process. These events should be local in geographic nature, and costs should be in line with the Bank's approved annual budget.

Conferences:

We value growth and development of our employees and encourage them to attend conferences that are appropriate educational opportunities. These conferences should be related to the financial services industry and have a direct correlation to the employee's job and responsibilities. At times, it may be appropriate that a spouse(s) would travel to these conferences with the Bank's employee(s). Typically these conferences are sponsored by vendors, banking associations, or other industry related entities.

Board/Management Retreats:

Retreats should only be used for educational or business-planning purposes and associated expenses should be reviewed with the same discretion as all other expenses. Board education is a vital part of maintaining and keeping a dynamic director base, and this policy should not limit a retreat that is focused on strategic planning or education.

Aviation Services:

Transportation of Bank staff to outlying locations, including banking locations, conferences, for business development purposes, and other business purposes should be conducted in the most appropriate way for the Bank.

The appropriate employees of the Bank can be used as a resource, when appropriate, in determining which mode of transportation is the most appropriate for the Bank and its Shareholders. Modes of transportation to be used for analysis, for example, may consist of personal and/or company vehicles and commercial air or rail service. A determination or analysis of the mode of transportation will factor in cost, efficiency, and timeliness of travel.

Air travel on Bank business shall be by commercial airline or as a passenger on a third party-owned or leased aircraft paid for by the third party. Air travel by first or business class requires the prior approval of the Chief Executive Officer. The Bank does not own or lease, and does not intend to purchase or lease, any private aircraft for use by Bank employees or directors.

No aircraft may be chartered by an employee or director without the prior express consent of the CEO and the Chairman of the Board.

Reporting Violations; Disciplinary Action:

An employee or director who learns of a violation of this policy shall promptly report the violation to the Chief Executive Officer. Compliance with this policy is a condition of employment, and any violations thereof may result in disciplinary action.

Certification of Compliance:

The Chief Executive Officer and Chief Financial Officer shall certify at least annually that this policy is being followed and that the approval of any expenditure requiring prior approval of an executive officer or the Bank's Board or Directors was properly obtained with respect to each such expenditure.

Routing Number 036018969 NMLS 631177
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