BP US Domestic Relocation Policy Transferred Exempt and Experienced New Hires

Transcription

1 BP US Domestic Relocation Policy Transferred Exempt and Experienced New Date: Updated August 1, 2018 Version 3.1 Page 1

2 1 Purpose of This Policy Relocation Program and Policy Administration When to use this Policy, Applicability, and Effective Date Repayment Agreement Contractual Matters Before Starting the Process Relocation Costs / Expense Reimbursement Relocation Allowances Lump Sum Cost of Living Allowance (COLA) Miscellaneous Expense Allowance Selling the Transferee s Present Home Real Estate Agent Selection Home Sale Eligibility Marketing Assistance Home Sale Incentive Employee Generated Sale (Amended Sale) Guaranteed Offer Appraisal Process Home Inspections Calculation of the Guaranteed Offer/Offer Period Vacating the Home and Final Equity Reconciliation Mobile Homes Loss on Sale Assistance Duplicate Housing Current Renters: Lease Cancellation Destination Assistance Renting in the New Location Home Finding Assistance Home Purchase Assistance Eligibility for Home Purchase Assistance If an eligible homeowner chooses to purchase in the new location Page 2

3 10.3 Closing Costs on the Purchase Equity Advance New Home Financing Household Goods Shipment Automobiles Moves into/out of Alaska and Hawaii Preparing Oil/Gas Equipment That Ships with the Household Goods Self-Move Moves into/out of Temporary Housing Mobile Home Trailer Final Move Professional Re-certification Tax Considerations Tax Summary Chart APPENDIX: Cost of Living Allowance (COLA) Page 3

4 BP US Domestic Policy Summary* Transferred Exempt and Experienced New Must meet the distance test (i.e. 50 mile test). Eligibility Must complete relocation benefits within 1 year of work start date. Provided to offset expenses associated with: home finding trip, temporary living, travel to report to Lump Sum work, travel to return home to ship household goods and final move meals. Cost of Living Allowance (COLA) Miscellaneous Expense Allowance Broker Registration Marketing Assistance Home Sale Assistance Home Sale Incentive Loss on Sale Assistance Duplicate Housing Lease Cancellation Rental /Home Finding Assistance For current transferring employees, financial assistance may be provided if the new work location is deemed to have a higher cost of living than the old work location. Determined by BP s third party data provider. One-time allowance to offset incidental expenses. Equivalent to 10% of the transferee s annual salary, with a minimum of $4,500 and a maximum of $10,000. Relocation Counselor will register a referral with the transferee s real estate agent. Utilization of this program is required. Transferees are strongly encouraged to utilize the marketing assistance program. The list price must be no higher than 105% of the average of the most probable sale price of the two Broker s Market Analyses (BMA s). The transferee must be at least a 50% owner of the home and named in the title to the home. Transferees are eligible for an Employee-Generated (Amended) Sale and the Guaranteed Offer. Transferee s list price is to be adjusted to within 105% of the Guaranteed Offer, once received. 3% of the sale price. Must sell after authorization is processed by the relocation service provider and prior to expiration of Guaranteed Offer. Sale price can be greater than, equal to or within 95% of the Guaranteed Offer. Loss defined as the difference between the original purchase price and the sale price. 100% of the loss covered, up to $75,000 if the transferee obtains an Employee Generated (Amended) Sale. 90% of the loss covered, up to $75,000 if the transferee accepts the Guaranteed Offer or sells the home outside the Employee Generated (Amended) Sale process. (For current homeowners only) Reimbursement may begin 31 days after the transferee starts incurring duplicate expenses. Reimbursement until the close date on the former residence or three months, whichever comes first. If the transferee is required to pay a lease cancellation fee, the reimbursable amount is limited to the equivalent of up to three (3) months rent. Destination assistance coordinated by the relocation service provider for both rental and home finding. Home Purchase BP will cover most of the typical buyers closing costs on the transferee s new home purchase. Assistance See policy for eligibility requirements. Maximum advance amount will be equal to the lesser of actual funds required or 95% of the equity Equity Advance in the property. Household Goods Shipment Final Move Professional Recertification Coordination of packing, shipping and unloading provided by the Relocation Counselor. Automobiles: BP will pay to ship one (1) car if the move is less than 400 miles; two (2) cars if the distance is over 400 miles. See policy details for moves into/out of Alaska. Self-move options available reimbursement for trailer or truck rental available. Reimbursement for airfare, lodging (one night in old and one night in new location). If distance is less than 250 miles, mileage reimbursement at current IRS mileage rates, in lieu of airfare, for up to 2 vehicles. This provision is to support the employment transition needs of the transferee s spouse or partner. Tax Assistance BP will provide tax assistance (gross up) for certain taxable payments to assist with the additional federal, state and local income taxes and FICA. See policy for details. *Please refer to the policy document for complete details on each policy component. Page 4

5 1 Purpose of This Policy This document outlines the provisions that BP employees may be eligible to receive in respect to a US domestic relocation. It is the intent of this policy to cover specified reasonable costs and professional assistance associated with moving to the new location. The benefits incorporated into this policy are not intended to fit every conceivable individual situation or to be applied on a "keep whole" basis. Additionally, the provisions of this policy are intended to provide fair and appropriate levels of financial and relocation assistance for the disruption caused by a relocation, but not to seek to enrich or provide financial reward in line with individual performance/contribution. The BP domestic and international mobility policy framework (the mobility framework) is the parent document of this policy and sets out the governance framework for this and other mobility policies. 1.1 Relocation Program and Policy Administration BP has partnered with a relocation service provider to assist transferees in coordinating their relocation. Upon receiving a relocation authorization from BP, the relocation service provider will assign a dedicated Relocation Counselor who will be the transferee s primary point of contact throughout the relocation process. The Relocation Counselor will guide the transferee through every step, answer any questions and outline the information that the transferee needs to provide during the move process. The relocation service provider will not process the relocation authorization earlier than 60 days prior to the transferee s work start date. 2 When to use this Policy, Applicability, and Effective Date Relocation assistance described in this policy may be offered to Band B to D current employees and experienced new hires, and to current employees, experienced new hires, and PhD Challengers at Levels E to J to expedite relocations between BP Operations in the United States, excluding US territories and possessions. This policy is effective for US domestic relocations authorized on or after May 1, To be eligible for relocation assistance described in this policy, all of the following criteria must be met: The transferee must be relocated at the Company s request. The transferee must be a current or experienced newly hired employee. The transferee may be a current homeowner or a renter. The relocation must meet the distance and time test: Distance Test: The distance between the former residence and the new work location (as determined by BP) must be 50 miles or greater. Page 5

6 Time Test: The transferee must work at least 39 weeks in the new location during the 12-month period immediately following the relocation. The transferee must complete each provision for which the transferee is eligible as well as submit all expenses within one (1) year of the transferee s work start date or at any earlier date requested by BP or its relocation services provider. The transferee must move to within a reasonable distance of the new work location. The transferee s strategic performance unit/business unit/function may require that the transferee move within a specified mileage of the work location. One set of relocation benefits will be provided per household. If two or more BP employees are members of the same household and move together, only one package of relocation benefits will be paid. Family members covered under this policy include the transferee s spouse/partner and any dependent in accordance with the Domestic and International Mobility Policy Governance. 3 Repayment Agreement Moving an employee requires a substantial investment by BP. Therefore, if the employee voluntarily terminates his/her employment within two years from the work start date, the employee will be required to reimburse BP, as detailed in the Relocation Repayment and Deduction Authorization Agreement, for all of the financial assistance provided by BP specific to the relocation. The repayment agreement applies to current and new hire employees who are being transferred. 4 Contractual Matters This policy is not an employment offer, contract or guarantee of continued employment. The transferee s employment with BP is at-will, which means that it is not for any particular period of time, and may be terminated by the transferee or by BP at any time, with or without cause or notice. In addition, this policy may not be construed as a benefit plan, and payments under this policy will not be considered salary for purposes of benefit or compensation plans. While this program is intended to be ongoing, BP reserves the right to end, suspend or amend its relocation policy in whole or in part, at any time. Further, the Company retains ultimate discretionary authority to interpret the provisions of this policy and to determine eligibility for benefits. There will be no cash payments in lieu of utilization of any relocation components contained in this policy. At its sole discretion, BP may modify the terms paid in any given situation or to any given transferee. The Company s decisions regarding the application and interpretation of this relocation policy are final and binding. Page 6

7 5 Before Starting the Process NOTE: Before the transferee contacts a real estate agent in either the old or new location, the transferee must speak with his/her assigned Relocation Counselor to register the broker referral. BP utilizes a Broker Registration program through the relocation service provider in an effort to improve the quality of real estate agent selection and control costs. The transferee is expected to utilize this program in both the home selling and buying part of the relocation. The Relocation Counselor will provide access to qualified real estate brokers available in the transferee s community who specialize in servicing relocating employees. As part of this program, the agent(s) the transferee works with is required to pay a referral fee to the relocation service provider. Regardless of whether the transferee selects an agent on his/her own or accepts an agent referred by the relocation service provider, for Sarbanes-Oxley and BP Code of Conduct compliance reasons, the agent may not be an immediate relative of the transferee or his/her spouse or partner. For the purposes of this policy, an immediate relative would include a spouse or partner, parent or grandparent, sibling, aunt, uncle, niece or nephew. 6 Relocation Costs / Expense Reimbursement The Relocation Counselor will process and audit the transferee s relocation expense reports for those relocation expenses that will be directly reimbursed to the transferee. Payment will be made by BP Payroll. Receipts must be submitted for all expenses (where required) except tips, tolls and expenses paid with funds from the Lump Sum Payment and Miscellaneous Expense Allowance. Relocation expenses are separate and distinct from business expenses and must be submitted to the relocation service provider. Transferees should keep a copy of the submitted expense reports (including the receipts) for their records. Monthly credit card statements may not be used in lieu of original receipts. Expenses other than those expressly included in this policy will not be included in any lump sum payment nor be reimbursed. 7 Relocation Allowances 7.1 Lump Sum The relocation policy includes a lump sum benefit for expenses associated with the home finding trip, temporary living, travel to report to work, travel to return home to ship household goods, and final move meals. BP has determined that this lump sum benefit plan is fair to the transferee, eliminates significant administrative time, and allows transferees maximum flexibility in managing their relocation. Page 7

8 The funds are the transferee s to spend, as he/she deems necessary for expenses incurred in connection with the relocation. The transferee may retain any portion of these funds not spent. Any shortfall of funds is to be covered by the transferee at his/her expense. Transferees do not need to submit receipts for individual expenses, but should retain receipts for their personal records. The lump sum benefit and the Miscellaneous Expense Allowance are typically processed together and paid to the transferee in one payment. Both the lump sum and Miscellaneous Expense Allowance are paid via the relocation service provider through BP payroll. Tax assistance is provided for federal, state, and local income taxes and FICA. Calculation of the lump sum is based on data provided by Runzheimer International, an independent company that specializes in this area, and is based on the following parameters: Family size for home finding trip and final move meals. Authorized days for home finding trip: 4 days for a current renter, 7 days for a current homeowner. Authorized days for temporary living: employee only: 30 days for a current renter, 60 days for a current homeowner. Travel for home finding trip: employee and employee s family: 1 round trip, coach class airfare (business class airfare for flights exceeding 4 hours), 14-day advance purchase. If move distance is less than 250 miles, mileage at the current IRS mileage rate, in lieu of airfare. Travel for the report to work trip and the trip to return home to ship goods: employee only: 1 round trip, coach class airfare (business class airfare for flights exceeding 4 hours), 14-day advance purchase. If move distance is less than 250 miles, mileage at the current IRS mileage rate, in lieu of airfare. Lodging for home finding: employee and employee s family: full service hotel based on BP T&E business travel guidelines. Lodging for temporary living: employee only: one bedroom corporate apartment. Rental car costs (when applicable) for temporary living and house hunting trip: intermediate class rental car based on BP T&E business travel guidelines. Number of meals associated with house hunting, and final move trip, based on BP T&E business travel guidelines. If the transferee is relocating to Alaska, he/she will have additional incidental expenses due to the need to adapt to a different climate. To help offset some of those expenses, the transferee will be provided with an increased amount calculated by Runzheimer International that will be based on relocating family size. This is intended to help cover costs for such items as: winter clothing, snow tires, winter driving classes, and other aspects of daily life unique to Alaska. Page 8

9 7.2 Cost of Living Allowance (COLA) Current transferring employees may be provided with financial assistance for a specified period of time if he/she relocates to an area with a higher cost of living, as determined by BP. This assistance will be provided if the cost of living at the new work location, as determined by BP, is higher than at the old work location. This determination is based on information provided by Runzheimer International, an independent company that specializes in this area. The Relocation Counselor will advise the transferee if he/she qualifies for assistance. The transferee may perceive the area as high cost but the data provided by Runzheimer may not support that perception. Personal choice with regard to housing and lifestyle is a factor in that perception. BP is not responsible for the continuation of a standard of living to which the transferee has become accustomed. Replicating the old location square footage, price per square foot, amenities, etc. is not a goal of BP s program. The COLA is not subject to negotiation. For further information, please see the Appendix. The Relocation Counselor will provide the amount of the COLA for which the transferee is eligible and coordinate the delivery of the payment through BP s payroll. The transferee s new annual salary will be used in the COLA calculation. 7.3 Miscellaneous Expense Allowance The transferee will be provided with a Miscellaneous Expense Allowance to offset expenses associated with the relocation but not specifically covered by the program. The allowance is equivalent to 10% of the transferee s annual salary on the effective date of his/her work start date as indicated on the Employee Relocation Authorization Form, with a minimum of $4,500 and a maximum of $10,000. Tax assistance is provided for federal, state and local income taxes and FICA. Some examples of expenses which the allowance is intended to help offset are: Miscellaneous Expense Allowance - Description of Coverage Laundry and dry cleaning Prepaid fees, such as club dues, etc. which are forfeited due to the relocation Driver s license/automobile registration Cable TV, satellite, phone and utility hook-up/installation Connection of household appliances not performed by the moving company Non-reimbursable home sale and/or home purchase expenses Storage beyond the 60 days provided Newspapers and movies Meals during temporary living period. Pet transportation, boarding/kenneling and care Carpet and drapery cleaning/purchase/installation Cleaning of former or new residence/trash removal Shipment of items not covered under the movement of household goods program Additional tax obligations not covered by BP s Tax Assistance Page 9

10 NOTE: One Miscellaneous Expense Allowance will be provided per household. If two or more BP employees are members of the same household and are moving together, only one Allowance will be paid. 8 Selling the Transferee s Present Home Home sale assistance is provided to current homeowners. This section details the requirements that must be met in order to be eligible for all home sale related benefits. 8.1 Real Estate Agent Selection The Relocation Counselor will provide the transferee with access to a network of real estate companies and agents available in the transferee s community who specialize in servicing relocating employees. These agents have been specially trained to aggressively market the transferee s home and address issues that are unique to relocation. The transferee should interview a couple of agents to assess the agent s ability to effectively market the home. Once the transferee has chosen an agent and before the transferee begins working with him/her, the transferee is to notify the Relocation Counselor of his/her selection. BP is using a Broker Registration Program. The choice of agent remains the transferee s but the transferee is to contact the Relocation Counselor even if he/she has an agent in mind. The transferee should NOT sign a listing agreement until he/she has spoken with the Relocation Counselor, who will register the agent and will verify the agent s requested commission percentage. The listing agreement must include the Broker Exclusion Clause, which will be provided to the transferee by the Relocation Counselor. If the agent has any questions regarding the exclusion clause, the transferee should contact his/her Relocation Counselor before signing the listing agreement. The listing agreement should not include an administrative fee. BP will not pay this fee and if the transferee agrees to the administrative fee in the listing agreement, it will not be reimbursed. For Sarbanes-Oxley and BP Code of Conduct compliance reasons, the transferee s real estate agent may not be an immediate relative of the transferee or his/her spouse or partner. An immediate relative would include a spouse or partner, parent or grandparent, sibling, aunt, uncle, niece or nephew. 8.2 Home Sale Eligibility Home Sale Assistance is provided for the transferee s primary residence at the time of transfer. The transferee must be at least a 50% owner of the home and must be named in the title to the home. Assistance is limited to a detached single family dwelling or a two-family (duplex) home having a lot typical of residences in the immediate community, recorded on a single deed, and being free of excessive acreage, a condominium apartment or townhouse, an attached, fee-simple townhouse, or a mobile or modular home on a permanent foundation on land which the transferee owns. The home must be marketable. Page 10

11 Home Sale Assistance is limited to the Direct Reimbursement option for homes that include any of the following: A lot size of more than five acres. Synthetic stucco, and the transferee purchased the home while being relocated with BP under the BP relocation policy and the transferee s relocation was initiated on or after November 15, Composition board siding, and the transferee purchased the home while being relocated with BP under the BP relocation policy and the transferee s relocation was initiated on or after November 15, 2001, unless the home is located in Alaska. Uncorrected code violations or title defects. Deferred maintenance or unremediated defects as identified through initial home inspections completed by the relocation service provider. In addition, BP reserves the right to exclude homes from eligibility for Home Sale Assistance in any area, with the following attributes: Severe marketability problems. Zoning or easement disputes. Homes with unfinished construction and/or remodeling. Homes with any of the following conditions: structural problems, safety concerns, unremediated radon, termite infestation, siding, or mold issues. If the transferee questions the eligibility of his/her home, the transferee should contact the Relocation Counselor immediately to discuss the situation and determine how best to proceed. In case of a title deficiency, structural defect or toxic substance problem, corrective action may make the transferee s home eligible for Home Sale Assistance. In the event the transferee s home is not eligible for Home Sale Assistance, the transferee may be reimbursed for normal and reasonable selling costs associated with the sale of the transferee s property. Transferees should refer to the section entitled: Direct Reimbursement of Closing Costs. 8.3 Marketing Assistance To assist the transferee with selling the departure home, BP has arranged for Marketing Assistance. The transferee is strongly encouraged to actively participate in the Marketing Assistance Program. The Relocation Counselor will order two Broker s Market Analyses (BMA s) from two local real estate agents. The BMA s will provide initial information regarding the transferee s home along with suggestions for marketing. In addition, each agent will provide a recommended list price and expected sale price for the home. The results of the BMA s will be reviewed by the Relocation Counselor and shared with the transferee. The Relocation Counselor will encourage the transferee to price the home realistically. Studies show that a properly priced home will sell Page 11

12 faster than a home that was overpriced when initially exposed to the market. The transferee s initial list price must be no higher than 105% of the average of the most probable sale price of the two BMA s in order to be eligible for home sale related benefits. It is highly recommended that the transferee delay listing the home for sale until the BMA s and inspections are completed. Once the transferee s home is listed, the listing agent will communicate the results of advertising and open houses, as well as feedback from buyers and other real estate agents, to the Relocation Counselor. The Relocation Counselor will make recommendations to the transferee to adjust price, advertising, terms, or conditions accordingly. When the transferee receives an offer, he/she should contact the Relocation Counselor for review of the contract and negotiation assistance. THE TRANSFEREE IS NOT TO SIGN OR INITIAL THE PURCHASE AGREEMENT. During the review process, the Relocation Counselor will indicate any items that the transferee has agreed to which may not be in the transferee s best interest or may not be reimbursable under the BP relocation program. 8.4 Home Sale Incentive If the transferee secures a bona fide home purchase offer from a qualified buyer of the property, the transferee will be eligible for a Home Sale Incentive. The terms of the incentive are: 3% of the sale price. Must sell after the authorization is processed by the relocation service provider and prior to expiration of the Guaranteed Offer. Must sell and close through the Employee Generated Sale (Amended Sale) process. Sale price can be greater than, equal to or within 95% of the Guaranteed Offer, if applicable. The Home Sale Incentive is taxable income and all appropriate taxes will be withheld at the time of payment. The transferee is not eligible to receive a Home Sale Incentive if he/she accepts the Guaranteed Offer or sells the home outside of the Employee Generated Sale (Amended Sale) Process. 8.5 Employee Generated Sale (Amended Sale) An Amended Sale occurs when the transferee secures a bona fide home purchase offer from a qualified buyer. On behalf of BP, the Relocation Counselor will review the offer to make sure it is a bona fide sale from a financially qualified buyer. The Relocation Counselor will evaluate the offer s terms and conditions including the offer price, the buyer s financial capacity to perform, the length of time between the sale date and closing date, and any contingencies. BP will consider the offer to be bona fide if the Relocation Counselor s evaluation finds that the offer has a Page 12

13 probability for successfully closing. The relocation service provider will close the sale with the transferee and then at a later date, close a separate sale with the purchaser. For an Employee Generated Sale (Amended Sale) to take place, the following conditions must be met: The purchase agreement must not include any contingencies other than reasonable financing and/or inspection contingencies. The buyer is required to obtain his or her own financing. The closing date of the sale must be no later than 60 days from contract execution. BP s required inspections must be completed and issues resolved prior to contracting with the relocation service provider. If a defect should be discovered through a buyer s inspection or through some other means after BP purchases the transferee s property, BP accepts the responsibility and ownership to pay for and effect repairs. When the transferee receives an offer: The transferee is not to accept any offers verbally. The transferee does not take any money from the real estate agent or prospective buyer. The transferee does not sign or initial the purchase agreement or any documents, which could be construed as an acceptance.the transferee is to call the Relocation Counselor immediately. The Relocation Counselor will assist the transferee in determining whether or not the offer is in the transferee s best interest and whether the terms are acceptable. In addition, any items the transferee has agreed to that are not reimbursable under BP s relocation program will be identified. Some examples of non-reimbursable expenses are broker administrative fees, buyer s closing costs, buyer s inspections, repair allowances, and other items typically paid for by the buyer (sometimes called "negotiable items"). Once it has been determined that the offer is bona fide, the transferee is not to sign any documents pertaining to the sale with the buyer. The relocation service provider will sign all purchase agreements as seller. If the transferee s home sells above the Guaranteed Offer, the transferee s home will be purchased by the relocation service provider at the higher sale price and the relocation service provider s Contract of Sale will be amended to reflect that higher amount. If an offer comes in after the Guaranteed Offer has been established, the transferee can also sell the house equal to or slightly below the Guaranteed Offer, and still receive the benefit of the Guaranteed Offer. The transferee can negotiate an offer from a buyer as low as 95% of the Guaranteed Offer and the relocation service provider will purchase the transferee s home at the higher amount. As part of the Employee Generated Sale (Amended Sale) process, the transferee will contract with the relocation service provider. The Relocation Counselor will send the transferee a Contract of Sale, and Page 13

14 other necessary documents required to sell the transferee s home. The transferee will also be receiving a deed package under separate cover. All property owners must sign these documents. The Relocation Counselor will assist the transferee with every step of this process. 8.6 Guaranteed Offer On occasion, it may be a challenge to sell the transferee s home depending on the time of the year or the current real estate market. The Guaranteed Offer will be provided by BP as a safety net. The Guaranteed Offer is determined by an appraisal process which takes approximately 45 days, during which time the transferee should continue to market the home. 8.7 Appraisal Process To begin the appraisal process, the Relocation Counselor will provide the transferee with a list of qualified relocation appraisers in the transferee s area. The appraisers are continuously evaluated for accuracy, timeliness, and professionalism. The transferee is to select two appraisers (and one alternate) from a list provided by the relocation service provider. Once the appraisals are completed, the relocation service provider will average the two appraised values to determine the Guaranteed Offer. If the difference between the two appraised values is greater than 5%, a third appraisal will be ordered; in that case, the two closest appraised values will be averaged to determine the Guaranteed Offer. A relocation appraisal is based on a market approach and seeks to determine the anticipated sale price for the transferee s home, regardless of the price the transferee paid or the cost of improvements the transferee added. It is a prediction of the price a qualified buyer will pay for the transferee s house given a period of adequate exposure to the market, generally days. A relocation appraisal may apply a forecasting adjustment to reflect historical market trends and current market factors. BP utilizes a Worldwide Employee Relocation Council (WERC) Relocation Appraisal in order to ensure its buyout program is industry competitive and IRS compliant. WERC is the workforce mobility association for professionals who oversee, manage, or support US domestic and international employee transfers. 8.8 Home Inspections Homes are subject to passing various inspections to be eligible for the Home Sale Assistance program. The Relocation Counselor will order one or more technical inspections paid for by BP and for the benefit of BP, to assess the transferee s property for structural integrity, roof condition, building code compliance, termites and pests, and general home condition. Page 14

15 The inspections may include, but are not limited to: Pest/Termite General home Synthetic stucco/msv Structural Asbestos Well and/or septic Pool and/or spa Siding The various inspectors will contact the transferee or the transferee s real estate agent to schedule an appointment to inspect the home. The transferee should schedule these inspections as soon as possible. The relocation service provider cannot formalize the Guaranteed Offer until the inspection results are known. If the inspections indicate any necessary repairs, the transferee will be required to make the repairs or to agree to have the cost of repairs up to a total of $500, deducted from the transferee s equity before the Guaranteed Offer or Employee Generated Sale (Amended Sale) process is completed and any equity is disbursed to the transferee. If the total repair costs exceed $500, the transferee will be required to have the repairs completed immediately and will be subject to re-inspection by BP. Inspection results must be disclosed to all purchasers. 8.9 Calculation of the Guaranteed Offer/Offer Period The appraisers will forward the written appraisal report to the relocation service provider. The results of each appraisal will be reviewed for accuracy and consistency and all inspection data will be gathered before releasing the Guaranteed Offer to the transferee. Approximately three weeks after the last appraiser visits the transferee s home, the Relocation Counselor will contact the transferee to extend the Guaranteed Offer. Once the Guaranteed Offer has been calculated, a verbal presentation of the appraised value will be made by the Relocation Counselor. A Contract of Sale, and other necessary documents required to sell the transferee s home will be sent. The transferee will also receive a deed package under separate cover. All property owners must sign these documents. The Relocation Counselor will assist the transferee with every step of this process. Transferees have 90 days within which to accept the Guaranteed Offer after it has been verbally presented. Transferees are encouraged to continue marketing the home to the expiration date of the Guaranteed Offer. Once the transferee has received the Guaranteed Offer, the transferee s list price must be adjusted to within 105% of the Guaranteed Offer. The Guaranteed Offer is not negotiable and once the offer expires, the offer cannot be reinstated. If the transferee accepts the Guaranteed Offer, the transferee is not eligible for the Home Sale Incentive. If the transferee wishes to remain in the home after accepting the offer, the transferee may do so for up to 30 days from the date of acceptance. Page 15

16 All house-related expenses remain the transferee s responsibility until the transferee accepts the Guaranteed Offer or vacates the home, whichever is later. The Guaranteed Offer is a non-negotiable offer; BP does not allow an appeal process nor will BP direct the relocation services provider to pay a price different from the price determined by BP s established value determination process. Direct Reimbursement If the transferee rejects the Guaranteed Offer, the transferee may choose to sell the property on his/her own. If the transferee s home is not eligible for the Guaranteed Offer or if the transferee rejects the Guaranteed Offer, BP will provide direct reimbursement of reasonable and customary seller s closing costs provided that the transferee sells and closes on the home within one (1) year of the transferee s work start date. Under this option, the transferee will be reimbursed for the real estate agent s commission and other typical and customary seller s closing costs. Examples of reimbursable costs: Real estate commission (not to exceed local custom as per the relocation service provider). Abstract of title/lender s title insurance. Attorney fees. Documentary tax/excise stamps, tax certificates. Survey expenses. Inspection fees as required by lender (termite, radon, etc.). Escrow/conveyance fee. Local taxes/fees. Notary fees. Mortgage recording or discharge fees. Transfer taxes. The following costs are examples of items that will not be reimbursed: Homeowner warranties. Buyer closing costs. Concessions to the buyer (i.e. repair or decorating allowances, homeowner s association dues, or property tax credits). Buyer broker fees. In addition, any expenses the transferee incurs to: remove toxic substances, make the home marketable, repair damages, perform routine owner maintenance, remediate deficiencies indicated by the BP home inspections, correct title deficiencies, order additional inspections or dispose of excess acreage, will be the transferee s personal responsibility. These lists are not all-inclusive. Questionable items should be addressed with the Relocation Counselor before the scheduled closing. The relocation service provider will reimburse the transferee via BP payroll for the covered costs upon receipt of a completed relocation Page 16

17 expense report and a copy of the signed closing statement. The transferee will be required to attend the closing and he/she will not be eligible for the Home Sale Incentive. This reimbursement payment will be considered taxable income to the transferee and all appropriate taxes will be withheld at the time of payment with no tax assistance, except in instances where the transferee s home is not eligible for the Guaranteed Offer Vacating the Home and Final Equity Reconciliation The transferee must maintain his/her home both physically and financially until the transferee contracts with the relocation service provider or vacates, whichever is later. The date the relocation service provider contracts with the transferee or the date the transferee vacates the home, whichever is later, represents the date the transferee is no longer financially and physically responsible for the home. After formal acceptance of the Guaranteed Offer or the Employee Generated Sale (Amended Sale), the relocation service provider will assume responsibility for all mortgage payments, utilities, and maintenance as of the date of possession. Possession is defined as the day the transferee contracts or vacates, whichever is later. All expenses will remain the transferee s responsibility prior to the possession date. The transferee will receive his/her equity within 7 business days after the Relocation Counselor has processed the relocation service provider s Contract of Sale. Equity is the Guaranteed Offer, or sale price less all outstanding mortgages, non-reimbursable items, and applicable prorations for taxes, interest, association dues, etc. Before the transferee vacates the home, the transferee should contact the Relocation Counselor for instructions on utility transfers. The transferee should leave keys and garage door transmitters with the real estate agent Mobile Homes The transferee may move or sell his/her mobile home that is not on a permanent foundation. BP will pay the costs to move the transferee s mobile home as long as it does not exceed the total expense of selling and the expense of purchasing another home, and provided that the transferee s mobile home does not exceed state size limitations. BP will not pay to move mobile homes into or out of Alaska or Hawaii. If the transferee does sell the mobile home, BP will reimburse the transferee for reasonable and customary sale costs. Reimbursements for selling expenses are taxable income and will be included in tax assistance calculations. The Relocation Counselor will provide counsel on the sale but will not offer to purchase mobile homes Loss on Sale Assistance If the transferee sells his/her home at a sale price less than what the transferee paid, the transferee will be eligible for Loss on Sale Assistance, as detailed below. Loss on Sale Assistance will not be provided for any portion of the loss due to personal neglect or other failure on the transferee s part to maintain the home properly. Page 17

18 If the transferee obtains an Employee Generated (Amended) Sale, the transferee will be reimbursed 100% of the loss up to $75,000, defined as the difference between the original purchase price of the home (the recorded purchase price on the HUD-1 settlement statement) and the sale price. The transferee s mortgage balance is not a factor of this calculation. Capital improvements and/or personal labor may not be added to the original purchase price. If the transferee accepts the Guaranteed Offer or sells the home outside the Employee Generated (Amended) Sale process, the transferee will be reimbursed up to 90% of the loss as defined above, capped at $75,000. The loss payment will be coordinated by the relocation service provider. The Relocation Counselor will let the transferee know what documents are needed to submit for Loss on Sale Assistance. This assistance will be reported as taxable income and tax assistance will be provided Duplicate Housing If the transferee is currently a homeowner and the transferee purchases or rents a residence at the new location before selling the former residence, the transferee may be reimbursed for certain expenses related to maintaining the former residence, provided the transferee is actively marketing the home and participating in the Marketing Assistance Program. The duplicate housing benefit is not intended to cover deferred maintenance, seasonal clean-up and/or winterization of a lawn, emergency or non-emergency home repairs, maid service, home watch services, etc. Reimbursement may begin 31 days after the transferee starts to incur duplicate housing expenses (determined by the closing date on the transferee s new home or, if renting, the date on the transferee s new long-term lease agreement). The transferee will receive duplicate housing expense reimbursement until the closing date on the former residence or three (3) months, whichever comes first. The following expenses will be reimbursed: Mortgage interest for a 1st mortgage only. Real estate taxes. Homeowner s association dues. Homeowner s insurance, including the additional fee that may be required to provide for burglary and vandalism coverage for a vacant house. Lawn care, snow removal, pool maintenance (only for a vacant residence), and Utilities (only for a vacant residence). This provision applies, and is paid upon receipt of documentation substantiating payment of each expense, such as copies of tax bills, insurance premium notices, utility bills, etc. Duplicate expense reimbursement does not begin until the 31st day. Duplicate housing expenses are taxable income and will be tax assisted. Page 18

19 8.14 Current Renters: Lease Cancellation Once the transferee has been notified of the relocation, the transferee should locate a copy of the lease and review the lease cancellation terms. The transferee should also notify the landlord of the vacate date as soon as possible. The lease may contain a transfer clause, which would allow the transferee to cancel the lease. If the transferee is required to pay a lease cancellation fee, the reimbursable amount is limited to the lesser of three (3) months rent, the balance of the rent due under the terms of the lease, or the amount of any fee directly related to canceling the lease. The transferee is responsible for any damage payments or loss of security deposits. Homeowners are not eligible for lease cancellation. The transferee should obtain a receipt from the landlord for the lease cancellation fee. The receipt along with a copy of the transferee s old lease must be submitted to the relocation service provider for reimbursement. The lease cancellation fee is taxable income and will be tax assisted. Homeowners are not eligible for lease cancellation. 9 Destination Assistance 9.1 Renting in the New Location The Relocation Counselor will refer the transferee to a Destination Consultant, who will provide assistance in locating rentals in the new location. To avoid lease cancellation fees in the future, the transferee should insist upon a provision in the new lease stating that the cancellation charge will be waived, or perhaps reduced if BP relocates the transferee in the future. 9.2 Home Finding Assistance The relocation service provider offers a variety of services to help the transferee find a new community and select a home to purchase or to rent. These include counseling (where available) regarding mortgage prequalification, mortgage application, broker referral, settling-in services, local school options, apartment finding for renters, and dependent care programs in major cities in the United States. The transferee should not contact a real estate agent before calling the Relocation Counselor. 10 Home Purchase Assistance 10.1 Eligibility for Home Purchase Assistance To qualify for this provision, the transferee must meet the following criteria: The transferee must be at least a 50% owner of the former primary residence at the former location. The transferee must be at least a 50% owner of the property that he/she is purchasing. The transferee must initiate reimbursement for home purchase expenses within one (1) year of the transferee s work start date. If the transferee purchases a property that would be ineligible for Home Sale Assistance, the transferee will be ineligible to receive certain benefits covered by this policy should the transferee be relocated again with BP under a BP relocation policy. Page 19

20 10.2 If an eligible homeowner chooses to purchase in the new location The Relocation Counselor will provide the transferee access to a qualified real estate agent who will be able to provide specific information such as: Types and price ranges of available homes. Town and neighborhood data. Property tax information. Commuting information. Education, medical, religious and other information. Prior to contacting a real estate agent in the new location, the transferee is to contact the Relocation Counselor. The transferee will be provided access to real estate companies or agents in the new community who specialize in servicing relocating employees. These agents have been specially trained to address issues that are unique to relocation. Use of one of the suggested agents may relieve the transferee of any pressure he/she may feel in using the services of a friend, or acquaintance in the real estate field. Regardless of whether the transferee selects an agent on his/her own or accepts an agent referred by the relocation service provider, for Sarbanes- Oxley and BP Code of Conduct compliance reasons, the agent may not be an immediate relative of the transferee or the transferee s spouse or partner. For the purposes of this policy, an immediate relative would include a spouse or partner, parent or grandparent, sibling, aunt, uncle, niece or nephew. The transferee may also decide to build a home rather than buy an existing one. Relocation benefits are not increased for transferees who choose to build. The transferee should contact his/her Relocation Counselor for more information on the covered expenses Closing Costs on the Purchase There are many costs associated with the closing of a new home. BP will cover most of the typical buyer s closing costs on the transferee s new home purchase. Covered expenses may include (for the primary mortgage only and only one closing): Lender s origination charges. Lender s title insurance if paid by the buyer in the area and if required by the lender. Abstract or title search. Appraisal fee. Reasonable and customary attorney fees. Certified copies/document preparation fee. Credit report. Escrow fee. Customary home inspections, including any required by the lender. Notary fees. Page 20

21 Recording fees. Settlement or closing fee. Survey. Tax service fee. Items not covered include: Pre-paid escrow, discount or buy-down points or other mortgage fees, other than those listed above. Property tax, homeowner s insurance, association dues, and mortgage interest. Expenses normally charged to the seller. Buyer broker or agency fees. Owner s title insurance, unless it is required. Home Owner Warranty (HOW). Soil reports (geological surveys). Private mortgage insurance. Costs associated with a construction loan or bridge loan. Improvement assessments by state, city, county, taxing authorities. Any cost associated with the purchase of the new home which is not normally paid by the buyer, but which the transferee agrees to pay for any reason, will not be reimbursed. If the transferee is unsure about covered closing costs, the transferee should forward the Lender s Estimate to the Relocation Counselor to eliminate any misunderstandings of covered costs. Eligible closing costs are billed directly to BP when the transferee obtains a mortgage from one of the national lenders, or the transferee may claim Home Purchase Assistance prior to the closing by presenting a copy of the Loan Estimate of Closing Costs provided by the lender to the Relocation Counselor. Upon the closing of the transferee s new home, the transferee must send a copy of the Closing Statement to the Relocation Counselor. There will be a reconciliation of the Closing Statement and the Loan Estimate of Closing Costs. The transferee will be required to repay BP any excess funds advanced within 30 days after the actual closing date of the new home. Eligible closing costs are considered taxable income to the transferee and will be tax assisted Equity Advance If the transferee purchases a home at the new location before the sale of the old home, the transferee may receive an equity advance from the relocation service provider before accepting the Guaranteed Offer. Equity advances are available to those employees who are participating in the home sale program, fully cooperating with listing parameters, and are active participants in the Marketing Assistance Program. Equity is based on the Guaranteed Offer of the transferee s old home, less all outstanding encumbrances on the property, non-reimbursable closing costs and pro-rations. Page 21