BP US Domestic Relocation Policy Hourly and Non-Exempt Employees. Date: Updated June 1, 2104 Version 2.0

Transcription

1 BP US Domestic Relocation Policy Hourly and Non-Exempt Employees Date: Updated June 1, 2104 Version 2.0

2 1 PURPOSE OF THIS POLICY RELOCATION PROGRAM AND POLICY ADMINISTRATION WHEN TO USE THIS POLICY, APPLICABILITY, AND EFFECTIVE DATE CONTRACTUAL MATTERS BEFORE STARTING THE PROCESS RELOCATION COSTS / EXPENSE REIMBURSEMENT RELOCATION ALLOWANCES LUMP SUM MISCELLANEOUS EXPENSE ALLOWANCE SELLING THE TRANSFEREE S PRESENT HOME REAL ESTATE AGENT SELECTION HOME SALE ELIGIBILITY MARKETING ASSISTANCE BUYER VALUE OPTION SALE (BVO) DIRECT REIMBURSEMENT HOME INSPECTIONS VACATING THE HOME AND FINAL EQUITY RECONCILIATION MOBILE HOMES 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: CLOSING COSTS ON THE PURCHASE 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 Page 2

3 10.5 MOVES INTO/OUT OF TEMPORARY HOUSING MOBILE HOME TRAILER FINAL MOVE TAX CONSIDERATIONS TAX SUMMARY CHART Page 3

4 BP US Domestic Policy Summary* Hourly and Non-Exempt Employees Must meet IRS 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. Miscellaneous One-time allowance to offset incidental expenses. Expense Equivalent to 5% of the transferee s annual salary, with a minimum of $2,500 and a maximum of Allowance $5,000. Broker Relocation Coordinator will register a referral with the transferee s real estate agent. Registration Utilization of this program is required. Transferees are strongly encouraged to utilize the marketing assistance program. Marketing The list price must be no higher than 105% of the average of the most probable sale price of the Assistance two Broker s Market Analyses (BMA s). Home Sale The transferee must be at least a 50% owner of the home and be named in the title to the home. Assistance Transferees are eligible for a Buyer Value Option (BVO) Sale. BP will pay the costs to move a mobile home as long as the cost does not exceed the total expense of selling and purchasing another home; and it does not exceed state size limitation. Mobile Homes BP will not pay to move mobile homes into or out of Alaska and Hawaii. If the mobile home is sold, BP will reimburse the transferee for reasonable and customary sale costs. (For current homeowners only) Reimbursement may begin 31 days after the transferee starts incurring duplicate housing Duplicate expenses. Housing Reimbursement until the close date on the former residence or five months, whichever comes first. Lease If the transferee is required to pay a lease cancellation fee, the reimbursable amount is limited to Cancellation the equivalent of up to three (3) months rent. Rental /Home Destination assistance coordinated by the relocation service provider for both rental and home Finding finding. Assistance 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. Coordination of packing, shipping and unloading provided by the Relocation Coordinator. Household Automobiles: BP will pay to ship one (1) car if the move is less than 400 miles; two (2) cars if the Goods distance is over 400 miles. Shipment See policy details for moves into/out of Alaska. Self move options available reimbursement for trailer or truck rental available. Reimbursement for class airfare, lodging (one night in old and one night in new location). Final Move If distance is less than 250 miles, mileage reimbursement at current IRS mileage rates, in lieu of airfare, for up to 2 vehicles. BP will provide tax assistance (gross up) for certain taxable payments to assist with the additional Tax Assistance 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 Coordinator who will be the transferee s primary point of contact throughout the relocation process. The Relocation Coordinator 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 authorized moves of current full-time hourly and non-exempt employees of BP operations in the U.S, excluding US territories and possessions. This includes hourly and non-exempt employees that are homeowners and renters. External hires are not eligible for the relocation assistance described in this policy. This policy is effective for US domestic relocations authorized on or after June 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 full-time hourly or non-exempt employee. The transferee may be a current homeowner or a renter. The relocation must meet the IRS 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 greater than the distance between the former residence and the former work location. For example: Old home to new job = 60 miles Old home to old job = 8 miles Difference = 52 miles Time Test: The transferee must work at least 39 weeks in the new location during the 12-month period immediately following the relocation. Page 5

6 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. 3 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. 4 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 Coordinator to register the broker referral. BP utilizes a Broker Referral 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 Coordinator 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. Page 6

7 5 Relocation Costs / Expense Reimbursement The Relocation Coordinator 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. 6 Relocation Allowances 6.1 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. These 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: 15 days for a current renter, 30 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 is at the current IRS mileage rate, in lieu of airfare. Page 7

8 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 is at the current IRS mileage rate, in lieu of airfare. Lodging for home finding: employee and employee s family: full service hotel. 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. Number of meals associated with house hunting, temporary living, and final move trip, based on standard business travel meal costs. 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. 6.2 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 5% 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 $2,500 and a maximum of $5,000. 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 Telephone calls Pet transportation, boarding/kennelling 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 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. Page 8

9 7 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. 7.1 Real Estate Agent Selection The Relocation Coordinator 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 several 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 Coordinator 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 Coordinator 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 Coordinator, 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 Coordinator. If the agent has any questions regarding the exclusion clause, the transferee should contact his/her Relocation Coordinator 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. 7.2 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 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. 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, Page 9

10 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, or mold issues. If the transferee questions the eligibility of his/her home, the transferee should contact the Relocation Coordinator 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. 7.3 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 Coordinator 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, the agents will provide a recommended list price and expected sale price for the home. The results of the BMA will be reviewed by the Relocation Coordinator and shared with the transferee. The Relocation Coordinator will encourage the transferee to price the home realistically. Studies show that a properly priced home will sell 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 Coordinator. The Relocation Coordinator will make recommendations to adjust price, advertising, terms, or conditions accordingly. Page 10

11 When the transferee receives an offer, he/she should contact the Relocation Coordinator 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 Coordinator 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. 7.4 Buyer Value Option Sale (BVO) A Buyer Value Option Sale (BVO) occurs when the transferee secures a bona fide home purchase offer from a qualified buyer. On behalf of BP, the Relocation Coordinator will review the offer to make sure it is a bona fide sale from a financially qualified buyer. The Relocation Coordinator will evaluate the offer 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 Coordinator s evaluation finds that the offer has a 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 a BVO 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 Coordinator immediately. The Relocation Coordinator 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. The relocation service provider will send a Contract of Sale and other necessary documents required to sell the home to the Page 11

12 transferee for signature, and the home will be purchased by the relocation service provider at the sale price. The transferee will also be receiving a deed package under separate cover. All property owners must sign these documents. The Relocation Coordinator will assist the transferee with every step of this process. 7.5 Direct Reimbursement If the transferee s home is not eligible for the Buyer Value Option, BP will provide direct reimbursement of reasonable and customary seller s closing costs provided that the transferee sells 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 Coordinator 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 expense report and a copy of the signed HUD-1 statement. The transferee will be required to attend the closing. This reimbursement payment will be considered taxable income to the transferee and tax assistance will be provided. Page 12

13 7.6 Home Inspections Homes are subject to passing various inspections to be eligible for the Home Sale Assistance program. The Relocation Coordinator 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. The inspections may include, but are not limited to: Pest/Termite General Home Synthetic stucco Structural Asbestos Well and/or Septic Pool and/or Spa Composite board 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 BVO 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 BVO sale 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. 7.7 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 BVO 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 Coordinator has processed the relocation service provider s Contract of Sale. Equity is the sale price, less all outstanding mortgages, non-reimbursable items and applicable pro-rations for taxes, interest, association dues, etc. Before the transferee vacates the home, the transferee should contact the Relocation Coordinator for instructions on utility transfers. The transferee should leave keys and garage door transmitters with the real estate agent. Page 13

14 7.8 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 Coordinator will provide counsel on the sale but will not offer to purchase mobile homes. 7.9 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 five (5) 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 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. Page 14

15 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. 8 Destination Assistance 8.1 Renting in the New Location The Relocation Coordinator 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. 8.2 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 Coordinator. 9 Home Purchase Assistance 9.1 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. 9.2 If an eligible homeowner chooses to purchase in the new location: The Relocation Coordinator 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 Coordinator. 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 Page 15

16 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 Coordinator for more information on the covered expenses. 9.3 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. 1% loan origination fee. 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. 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. Page 16

17 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 Good Faith Estimate to the Relocation Coordinator 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 Good Faith Estimate of Closing Costs provided by the lender to the Relocation Coordinator. Upon the closing of the transferee s new home, the transferee must send a copy of the HUD-1 Closing Statement to the Relocation Coordinator. There will be a reconciliation of the HUD-1 form and the Good Faith 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. 9.4 New Home Financing To simplify the process of applying for a mortgage, BP has established a relationship with national mortgage lenders. The use of these lenders is voluntary, though there are certain advantages provided to the transferee if he/she obtains the loan through one of the program lenders. The following features are offered: Mortgage pre-qualification. A variety of mortgage products. No advance application fee. Application by telephone and mail. Closing costs are billed directly to BP. The transferee is encouraged to contact the lender of choice (contact information can be obtained from the Relocation Coordinator) to discuss mortgage loan types, rates and requirements for application even before he/she begins the home selection process. 10 Household Goods Shipment The Relocation Coordinator will coordinate the physical movement of the transferee s household goods. To ensure enough time to make arrangements, the transferee should contact the Relocation Coordinator in the early planning stages of the move. The Relocation Coordinator will arrange for a professional mover to contact the transferee to assess packing and shipping requirements and to plan times for packing, pickup and delivery of the transferee s household goods to the new home, and explain the claims process. The following expenses to move normal household goods from the transferee s old location to the new location will be paid: Packing, loading and transportation. Unloading and initial placement of furniture. Unpacking. Page 17

18 Disconnection and reconnection of appliances. One debris pick-up within 45 days of delivery for any crates and cartons the transferee unpacks (this does not include personal trash). Storage up to 60 days when the transferee is required to vacate the home at the old location before the transferee is able to occupy a home at the new location. If the transferee is unsure about whether some of the items are considered normal household goods, the Relocation Coordinator can provide clarification. Non-covered Moving Expenses. Transportation of items not covered under this policy include (but are not limited to): Building supplies such as lumber, wall board, sand, cement, bricks, insulation, shingles, fences. Boats or canoes, 14 feet and over, or motorized over 10 horsepower. Coal or firewood and/or other flammable or hazardous materials. Coin and/or stamp collections, currency, jewelry, furs, securities, wine, precious metals or stones. Collectibles. Important documents. Frozen foods and/or perishables. Pets and/or livestock. Doghouses, tree houses, dog runs. Storage sheds, playhouses and swing sets Trailers for camping and utility. Free standing hot tubs. Above ground swimming pools. Yard ornaments including concrete furniture, statues, gazebos, wishing wells. Any item too large for two people to handle safely. Non-Covered Services Related to Moving: The following services are not covered under this policy: Appraisals of antiques and/or high value items. Disassembly and/or reassembly of playhouses, portable hot tubs, above ground swimming pools, satellite dishes, storage sheds. Removal and/or reinstallation of antenna. Removal and/or hanging of curtains and drapes. Removal and/or reinstallation of permanently attached objects such as carpeting, drapery fixtures or rods, electrical fixtures, mirrors or pictures, plumbing fixtures, attached shelving. Removal of goods from attics or crawl spaces not accessible by permanent stairwell or other easy access. Page 18

19 Electrical or plumbing services over and above normal appliance hook-up (i.e., installing a water line, gas line or upgrading an outlet). These lists are not all-inclusive, and the transferee should discuss any questions with the Relocation Coordinator. An extra pick-up or delivery stop is permissible if approved in advance by the Relocation Coordinator and provided the stop is en route to the transferee s new location. The maximum charge allowed for an extra stop is $100. Pick-up and delivery dates for household goods are scheduled Monday through Friday only. The household goods will be insured up to a maximum of $200,000 for possessions that are being transported to the new location or held in storage. Should the transferee need additional insurance coverage, the transferee may be required to substantiate the estimate by providing a copy of the transferee s Homeowner's Personal Contents policy page to the Relocation Coordinator indicating the transferee s coverage amount and/or other documentation as determined by BP, prior to an increase in the insurance coverage beyond $200,000. Charges for shipping household pets, additional insurance on items of extraordinary value or any out-of-policy expenses, are the transferee s responsibility and may be offset by the Miscellaneous Expense Allowance, if applicable 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. Any cars shipped must meet eligibility requirements. The Relocation Coordinator can provide details Moves into/out of Alaska and Hawaii In addition to the standard shipment detailed above, employees moving into or out of Alaska and Hawaii are allowed an air shipment based on family size, as follows: Family Size 1 Family Size 2 Family Size 3 Family Size 4 Family Size 5 Family Size 6 or more One D container One LDN container One LDN plus one E container One LDN plus one D container Two LDN containers Two LDN plus one E container The air shipment is intended for basic living necessities that the transferee may need while waiting for the household goods shipment to arrive. In addition, transferees moving in or out of Alaska may separately ship one recreational boat or vehicle of up to 14 feet in length Preparing Oil/Gas Equipment That Ships with the Household Goods In support of BP s corporate focus on safety, oil/gas powered equipment such as motorcycles, small recreational vehicles, riding lawn mowers, push lawn mowers, yard equipment, chain saws, weed eaters, etc., will be properly prepared, at BP s expense, to ship with the transferee s household goods. Proper shipment preparation requires the oil and gas to be drained from the equipment by a certified professional company. Equipment not properly drained and ready to ship on packing day must be shipped as a second shipment at the transferee s expense and responsibility. Page 19

20 10.4 Self Move For safety reasons, BP does not encourage transferees to do a self move. However, if the transferee chooses to do this, in lieu of a professional mover, the transferee may choose one of the following options: Option 1: The transferee will be reimbursed for the use of a trailer attached to the transferee s own vehicle to transport all or part of the personal effects. The transferee will be reimbursed for the trailer expense at 4 cents per mile in addition to the Company s normal mileage rate for the use of the transferee s own vehicle. A receipt for the trailer rental must be submitted to the relocation service provider for reimbursement. Option 2: The transferee will be reimbursed for renting a truck for moving the personal effects. Truck rental expense and fuel for the truck will be reimbursed. Receipts for the truck rental and gas must be submitted to the relocation service provider for reimbursement. Additionally, the transferee will be reimbursed final move mileage for driving the transferee s vehicle to the new location Moves into/out of Temporary Housing The transferee may choose one of the following options if he/she needs to move into temporary living quarters: The transferee will be reimbursed for a self move from his/her old location to temporary living quarters at the new location. The transferee will then be reimbursed for a self move into permanent quarters at the new location. The transferee may have the van line move a partial shipment (up to 50% of goods) into the temporary quarters and the remainder of the transferee s shipment into storage, provided the shipments are delivered consecutively. The van line will then move the transferee s household goods from both the temporary living quarters and the storage facility into the transferee s permanent residence when appropriate Mobile Home Trailer A mobile home trailer is defined as a regular, single body structure with permanent wheels attached. The wheels and tires may be removed when the trailer is stationary. If the transferee s principal residence is a mobile home trailer, certain expenses related to moving it are covered; however, if the cost of moving the trailer exceeds its value, the Relocation Coordinator will discuss other options with the transferee. If the transferee s mobile home trailer is to be moved, the following will be reimbursed: Packing and unpacking normal household furnishings and personal effects, and insurance for loss or damage to them while in transit and storage. Removal and reinstallation of blocks, anchors and existing under-skirting. Moving non-concrete steps and disassembly of outside buildings. Disconnecting and reconnecting gas, electricity and water to existing hook-ups. Attaching wheels/tires for the move and removing them for set-up in the new location. State permits, tolls and escort fees. Storage at point of origin or destination. The cost of wheels, tires and tubes, or other accessories not listed, are not covered under this policy. If the transferee moves the trailer with his/her own vehicle, the Page 20

21 transferee will be reimbursed at 4 cents per mile for the actual pulling of the trailer, in addition to the Company's normal mileage rate for the use of the transferee s own vehicle. If the transferee does not want to move the trailer him/herself, or is not able to, the Relocation Coordinator will advise the transferee of his/her options. 11 Final Move Lodging and travel associated with the final move trip are reimbursed separately (from the lump sum payment). The transferee will be reimbursed for coach class airfare (business class airfare for flights exceeding 4 hours), 14-day advance purchase, for the transferee and his/her relocating family. If the move distance is less than 250 miles, mileage will be reimbursed at the current IRS mileage rate, in lieu of airfare, for up to two vehicles driven to the new location. In addition, reimbursement for one night's lodging at the old location (after the transferee s furnishings have been removed from the former home), and one night's lodging immediately upon arrival at the new location, plus one night's lodging for every 400 miles travelled should the transferee drive to the new location will be provided. Additional expenses incurred, including those while awaiting delivery of household goods, will not be reimbursed. Actual receipts will need to be submitted to the relocation service provider for reimbursement. Some of these expenses are excludable from income; those that are not will be tax assisted. 12 Tax Considerations The IRS considers all expenses paid to the transferee, or on the transferee s behalf, as taxable benefits except those expenses associated with: The sale of the transferee s home through the relocation service provider. The household goods shipment. Storage of household goods for the first 30 days. Final move expenses, excluding meals, and mileage over the current federal excludable rate. Payments subject to tax withholding in compliance with IRS regulations will appear on the transferee s W-2 for the year that the payment was disbursed. BP will provide tax assistance ( gross-up ) to assist with the additional federal, state and local income taxes and FICA. Payments which are not tax assisted are identified as such in this policy and noted on the tax summary table located on the following page. During the year, tax assistance calculations are based on supplemental rates. At the end of the year, a true up adjustment is made to adjust the tax assistance rate to the marginal rate associated with the transferee s net taxable earnings. Other income such as investments, spousal income, or itemized exemptions will not be considered. It is important to note that the tax assistance provided may not always result in exact or complete gross-up of applicable expenses. The transferee will be responsible for any additional tax liability not covered by the tax assistance calculation; he/she should consider using the Miscellaneous Expense Allowance for this purpose. Moves delayed beyond the permitted 12-month IRS rule may not receive tax assistance, at BP s discretion. Tax assistance amounts are paid directly to the applicable federal, state, and local agencies on the transferee s behalf. They will be reported in the withholding boxes on the transferee s W-2. BP is not responsible for, nor will the transferee be reimbursed for, any federal or state capital gains taxes related to the sale of the transferee s home. Page 21