BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

BP US Domestic Relocation Policy Transferred Exempt and Experienced New Hires

Date: Updated August 1, 2018

Version 3.1

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

1 Purpose of This Policy ...... 5 1.1 Relocation Program and Policy Administration ...... 5 2 When to use this Policy, Applicability, and Effective Date ...... 5 3 Repayment Agreement ...... 6 4 Contractual Matters ...... 6 5 Before Starting the Process ...... 7 6 Relocation Costs / Expense Reimbursement ...... 7 7 Relocation Allowances ...... 7 7.1 Lump Sum ...... 7 7.2 Cost of Living Allowance (COLA) ...... 9 7.3 Miscellaneous Expense Allowance ...... 9 8 Selling the Transferee’s Present Home ...... 10 8.1 Agent Selection ...... 10 8.2 Home Sale Eligibility ...... 10 8.3 Marketing Assistance ...... 11 8.4 Home Sale Incentive ...... 12 8.5 Employee Generated Sale (Amended Sale)...... 12 8.6 Guaranteed Offer ...... 14 8.7 Appraisal Process ...... 14 8.8 Home Inspections ...... 14 8.9 Calculation of the Guaranteed Offer/Offer Period...... 15 8.10 Vacating the Home and Final Equity Reconciliation ...... 17 8.11 Mobile Homes ...... 17 8.12 Loss on Sale Assistance ...... 17 8.13 Duplicate Housing ...... 18 8.14 Current Renters: Cancellation ...... 19 9 Destination Assistance ...... 19 9.1 in the New Location ...... 19 9.2 Home Finding Assistance ...... 19 10 Home Purchase Assistance ...... 19 10.1 Eligibility for Home Purchase Assistance ...... 19

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

10.2 If an eligible homeowner chooses to purchase in the new location ...... 20 10.3 Costs on the Purchase ...... 20 10.4 Equity Advance ...... 21 10.5 New Home Financing ...... 22 11 Household Goods Shipment ...... 23 11.1 Automobiles ...... 24 11.2 Moves into/out of Alaska and Hawaii ...... 25 11.3 Preparing Oil/Gas Equipment That Ships with the Household Goods ...... 25 11.4 Self-Move ...... 25 11.5 Moves into/out of Temporary Housing ...... 26 11.6 Mobile Home Trailer ...... 26 12 Final Move ...... 26 13 Professional Re-certification ...... 27 14 Tax Considerations ...... 27 Tax Summary Chart ...... 28 APPENDIX: Cost of Living Allowance (COLA) ...... 29

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

BP US Domestic Policy Summary* Transferred Exempt and Experienced New Hires

• 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 work, Lump Sum travel to return home to ship household goods and final move meals. Cost of Living • For current transferring employees, financial assistance may be provided if the new work location is Allowance (COLA) deemed to have a higher cost of living than the old work location. • Determined by BP’s third party data provider. Miscellaneous Expense • One-time allowance to offset incidental expenses. Allowance • Equivalent to 10% of the transferee’s annual salary, with a minimum of $4,500 and a maximum of $10,000. Broker • Relocation Counselor will register a referral with the transferee’s . 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 two Assistance 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. Home Sale • Transferees are eligible for an Employee-Generated (Amended) Sale and the Guaranteed Offer. Assistance • Transferee’s list price is to be adjusted to within 105% of the Guaranteed Offer, once received. • 3% of the sale price. Home Sale • Must sell after authorization is processed by the relocation service provider and prior to expiration of Incentive 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 Loss on Sale (Amended) Sale. Assistance • 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) Duplicate • Reimbursement may begin 31 days after the transferee starts incurring duplicate expenses. Housing • Reimbursement until the close date on the former residence or three 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 Finding • Destination assistance coordinated by the relocation service provider for both rental and home 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. • Maximum advance amount will be equal to the lesser of actual funds required or 95% of the equity Equity Advance in the . • Coordination of packing, shipping and unloading provided by the Relocation Counselor. Household Goods • Automobiles: BP will pay to ship one (1) car if the move is less than 400 miles; two (2) cars if the distance is Shipment 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). 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. • This provision is to support the employment transition needs of the transferee’s spouse or partner. Professional Re- certification • 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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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, 2018 .

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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

 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 relocating employee’s employment ends 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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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 .

• Rental car costs (when applicable) for temporary living and 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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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 . Newspapers and movies

. Prepaid fees, such as club dues, etc. which . Meals during temporary living period. are forfeited due to the relocation

. Pet transportation, boarding/kenneling . Driver’s license/automobile registration and care

. Cable TV, satellite, phone and utility . Carpet and drapery hook-up/installation cleaning/purchase/installation

. Connection of household appliances not . Cleaning of former or new performed by the residence/trash removal

. Shipment of items not covered under the . Non-reimbursable home sale and/or movement of household goods program home purchase expenses . Additional tax obligations not covered by . Storage beyond the 60 days provided BP’s Tax Assistance

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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 , and being free of excessive acreage, a 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.

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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. • containing synthetic stucco (EIFS); Manufactured/Adhered Stone Veneer or composition board siding. • Uncorrected code violations or title defects. • Deferred maintenance or un-remediated 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.

• 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

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

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 , 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

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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

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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 90-120 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.

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The inspections may include, but are not limited to:

. Pest/Termite . Asbestos . General home . Well and/or septic . Synthetic stucco/MSV . Pool and/or spa . Structural . 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.

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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 . • 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 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

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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.

8.10 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 pro- rations 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.

8.11 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.

8.12 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.

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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.

8.13 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.

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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 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.

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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. • , 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.

10.3 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. • 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.

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• 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 . • 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.

10.4 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 on the property, non-reimbursable closing costs and pro-rations.

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The following items or pro-rated amounts will be withheld from the equity advance:

• Principal balance on any mortgages. • Mortgage interest on all mortgages calculated to the end of the transferee’s Guaranteed Offer period. • Any property taxes that are due, but not yet payable, calculated to the end of the transferee’s Guaranteed Offer period. • Repairs to the home, if necessary.

The maximum advance amount will be equal to the lesser of actual funds required or 95% of the equity in the property. This advance can be disbursed 7- 10 days before the scheduled new home closing. The transferee must supply the following to the Relocation Counselor:

• Documentation of need (i.e., copy of new home purchase contract and Loan Estimate). • A fully executed Promissory Note acknowledging the repayment obligation.

Note the following: • An equity advance is granted only for the purpose of purchasing a new residence. 100% of the advance must be used toward the purchase of a new home. • The equity advance will be deducted from the transferee’s final equity once the transferee accepts the Guaranteed Offer. • If the transferee does not accept the Guaranteed Offer, the equity advance is due and payable on the expiration date of the Guaranteed Offer.

10.5 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 Counselor) to discuss types, rates and requirements for application even before he/she begins the home selection process. (Note: The COLA mortgage subsidy option can only be administered through one of the financial institutions recommended by BP. Transferees should refer to the Relocation Counselor for further information.)

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11 Household Goods Shipment The Relocation Counselor will coordinate the physical movement of the transferee’s household goods. To ensure enough time to make arrangements, the transferee should contact the Relocation Counselor in the early planning stages of the move. The Relocation Counselor 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.

• 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 Counselor 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.

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• 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.

• 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 Counselor.

An extra pick-up or delivery stop is permissible if approved in advance by the Relocation Counselor 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 Counselor 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.

11.1 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 Counselor can provide details.

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11.2 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 . One “D” container . Family Size 2 . One “LDN” container . Family Size 3 . One “LDN” plus one “E” container . Family Size 4 . One “LDN” plus one “D” container . Family Size 5 . Two “LDN” containers . Family Size 6 or more . 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.

11.3 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.

11.4 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.

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11.5 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.

11.6 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 Counselor 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 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 Counselor will advise the transferee of his/her options.

12 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,

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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. 13 Professional Re-certification This provision is to support the employment transition needs of the transferee’s spouse or partner. BP will reimburse actual, reasonable and necessary out-of- pocket expenses related to professional re-certification up to a maximum reimbursement of $1,800. Tax assistance is provided.

14 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.

Payments subject to tax withholding in compliance with IRS regulations will appear on the transferee’s W-2 for the year in which the payment was disbursed. BP will provide tax assistance (“gross-up”) to assist with 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. 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.

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.

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Note: • The transferee is solely responsible for maintaining all records and receipts necessary to claim any allowable federal (and where applicable, state and local) income tax deductions. • The transferee is responsible for all of the information contained in the transferee’s tax returns. BP and the relocation service provider accept no liability for information contained in the transferee’s returns. • The transferee should keep records and receipts of all expenses to manage the tax return filing process at year-end. • In January of the year following the year in which the transferee moves, a year-end tax reporting statement itemizing all relocation expenses will be prepared and sent to the transferee from the relocation service provider. • The transferee should consider consulting a professional tax advisor for details on the tax implications of the relocation. Along with seeking the assistance of a professional tax advisor, the transferee should consider reading the following IRS publications: o Publication 523 – Tax Information on Selling the Home.

Tax Summary Chart

Reimbursement Added to W-2 Taxable Income Tax Assistance Lump Sum Payment Yes Yes Yes Cost of Living Allowance Yes Yes No (COLA) Miscellaneous Expense Yes Yes Yes Allowance Home Sale Incentive Yes Yes No Guaranteed Offer No No N/A Employee Generated/ No No N/A Amended Sale Title Transfer Expenses Yes Yes Yes Direct Reimbursement of Yes Yes No Closing Costs Loss on Sale Assistance Yes Yes Yes Duplicate Housing Yes Yes Yes Lease Cancellation Yes Yes Yes New Home Closing Costs Yes Yes Yes Final Move Travel Yes Yes Yes

Household Goods Yes Yes Yes Shipment Storage of Household Yes Yes Yes Goods Professioinal Re-certification Yes Yes Yes

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APPENDIX: Cost of Living Allowance (COLA)

PURPOSE

The intent of this program is to provide assistance to existing BP employees moving to a high cost of living location at BP’s request, including any new hire employees relocating to Alaska. The assistance is designed to provide the transferee with temporary financial support to offset some of the increased cost that he/she may experience as he/she acclimates to the new location. The cost of living support will be phased out over time (three years for all states except Alaska where the phase out occurs over six years). BP maintains a competitive salary program and will not compromise its integrity by providing indefinite cost of living payments. The relocation service provider will coordinate the administration of the cash payments via payroll. The transferee’s new annual salary will be used in the COLA calculation. . Transferees who decide to rent in the new location and who are eligible for financial assistance are only eligible for a cash payment.

CALCULATION

BP uses Runzheimer International, an independent company that specializes in this area, to determine the living cost differences between the transferee’s existing work site and the new location. The new location will be based on the work site location, or, if within a territory with no physical office, the major city within the territory. If there are multiple major cities within the territory, or there is no major city, the new location will be based on the location within the territory with the most business.

Living costs include income tax, housing, transportation and goods and services expenditures, based on a representative standard of living for the transferee’s income, family size and housing situation (rent or own). Income will reflect the transferee’s new annual base salary. By using representative standards of living, rather than using individual lifestyles, BP provides fair, equitable and objective cost of living assistance to all eligible transferees.

Runzheimer is the only source that will be used to determine the actual benefit under this policy.

If the analysis determines that the cost to live in the new location is higher than the existing work site location, cost of living support will be provided.

The following table depicts an example of how BP determines the term and amount of the payments for moves within the lower 48 States:

Cost-of- Payout Payout Percentage Living Percentage of of Differential Amount Eligibility Payment Differential Eligible Mortgage Term Year Amount Subsidy Limit * 3 Years 200% 200% 1st 100% 100% 2nd 67% 67% 3rd 33% 33%

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EXAMPLE:

Annual Cost of Living Differential = $5,000:

1st Year Payment = $5,000 2nd Year Payment = $3,350 3rd Year Payment = $1,650 Total Payment = $10,000

*If the transferee chooses the mortgage subsidy option, payouts will be applied to a temporary reduction in interest rate for up to the maximum of 3 years. Amounts used to qualify can vary based on product, loan amount and interest rate. If the entire differential cannot be used toward a mortgage subsidy within one year, the transferee may receive the remainder under the cash payment option detailed below.

The following table depicts an example of how BP determines the term and amount of the payments for moves into Alaska:

Cost-of- Payout Payout Percentage Living Percentage of of Differential Amount Eligibility Payment Differential Eligible Mortgage Term Year Amount Subsidy Limit * 6 Years 350% 350% 1st 100% 100% 2nd 80% 80% 3rd 70% 70% 4th 50% 50% 5th 30% 30% 6th 20% 20%

EXAMPLE:

Annual Cost of Living Differential = $5,000

1st Year Payment = $5,000 2nd Year Payment = $4,000 3rd Year Payment = $3,500 4th Year Payment = $2,500 5th Year Payment = $1,500 6th Year Payment = $1,000 Total Payment = $17,500

*If the transferee chooses the mortgage subsidy option, payouts will be applied to a temporary reduction in interest rate for up to the maximum of 6 years. Amounts used to qualify can vary based on product, loan amount and interest rate. If the differential cannot be used toward a mortgage subsidy within one year, the transferee may receive the remainder under the cash payment option detailed below.

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APPLICATION OPTIONS When the analysis determines that cost of living support is warranted, the transferee may:

1. Receive cash payments of the cost of living support, OR 2. Apply the cost of living support to the mortgage buy down (mortgage subsidy), OR 3. Receive cost of living support as a combination of the cash payment and mortgage buy down subsidy.

If the transferee receives the mortgage subsidy or the combination of the cash payment and subsidy, the payout may not exceed the cash payout amounts, nor the payout duration indicated in the table for the respective cost of living index.

CASH PAYMENT OPTION BP provides cost of living support over three years (or six years if moving to Alaska). The first payment will be made upon receipt by the relocation service provider of a copy of the transferee’s signed home purchase or lease agreement. If the transferee continues to be eligible, he/she will receive the remaining payments near the anniversary date of the first payment.

The payout is calculated at the time of the move and is not adjusted for subsequent salary changes. Federal, and applicable state and/or local income tax, Social Security tax up to the annual limit, and Medicare tax will be withheld. In an actual calculation, the destination state tax will apply. Tax assistance is not provided on cash COLA payments.

TEMPORARY MORTGAGE BUY DOWN (MORTGAGE SUBSIDY) A temporary mortgage buy down is a subsidy paid by BP to reduce the interest rate and monthly payments on the transferee’s mortgage for the first three years (or six years if moving to Alaska) in the new location. A buy down addresses the need to assist the transferee with mortgage payments while he/she adapts to a higher cost area.

Under BP’s temporary mortgage buy down program, the national lender issues a mortgage to the transferee at a fixed interest rate called the “note rate”. The note rate is typically set at the prevailing market rate for 30-year fixed-rate mortgages.

The first years of the loan are subsidized by BP up to the amounts indicated in the tables above. As the subsidy diminishes over time, the buy down rate gradually increases in planned increments to the note rate. When the transferee’s subsidy eligibility term is reached, the subsidy stops, the buy down rate equals the note rate, and the transferee continues making monthly payments at the note rate for the remainder of the mortgage term.

The transferee must be able to independently meet the lender’s affordability criteria at the note rate in order to use the mortgage subsidy benefit. The temporary mortgage buy down is available only if the transferee secures his/her mortgage through one of BP’s national mortgage lenders. If the transferee refinances, cost of living support will continue provided the transferee uses the same mortgage company. Each month, an amount

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BP US Domestic Relocation Policy – Transferred Exempt and Experienced New Hires

equal to the mortgage interest subsidy paid on the transferee’s behalf to the lender will be reported as taxable income to the transferee through payroll. This amount will appear on his/her W-2 at the end of the year.

Given that no two relocations or personal fiscal circumstances are identical, the Company encourages the transferee to obtain professional advice before deciding which financial assistance option to select. Once the transferee has made a selection, that decision is irrevocable.

Annually, BP will fund (through the transferee’s chosen lender) a net subsidy amount – i.e., after deduction of amounts calculated by BP to cover estimated taxes or required tax withholding – to be applied by the lender toward the transferee’s aggregate monthly mortgage payment obligations. In order to satisfy tax withholding rules, BP will advance, on the transferee’s behalf, estimated taxes directly to tax authorities (generally assuming supplemental wage tax rates) on the annual net payment to the mortgage holder. While these tax amounts advanced on the transferee’s behalf will be includable in his/her W-2 taxable income, BP will process an offsetting hypothetical tax deduction payroll entry to offset the additional income from these tax/withholding advances on BP’s net payment to the lender. Tax assistance is not provided on mortgage subsidy COLA payments. (The transferee should pursue with his/her own personal tax advisor any issues related to the transferee’s ability to deduct the net mortgage subsidy amount for federal, state, and/or local income tax purposes.)

SUBSEQUENT RELOCATION If the transferee is relocated again to an equal or lower cost area, the COLA will be discontinued as of the start date in the new destination location. If the transferee is relocated to a higher cost area, the COLA will be re- calculated and the transferee will receive a new COLA once he/she meets the eligibility requirements to activate a COLA.

The transferee must continue in BP employment in the destination location to maintain eligibility to receive COLA financial assistance, including instances where the employee is on an international assignment governed by Core or TIR policy types. Employees on an international rotator assignment or an assignment governed by the Short Term Assignment (STA) policy will continue to be eligible. Any unpaid amounts at the transferee’s termination of employment will be forfeited, without regard to the reason for termination and without regard to the otherwise scheduled time of payment.

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