Employee Severance Guide 2/28/13

Transcription

1 Employee Severance Guide DRAFT 2/28/13

2 About This Guide This guide has been prepared for those eligible regular full-time and part-time employees of Citizens Property Insurance Corporation ( Citizens or the Company ) whose employment with the Company has been involuntarily terminated, without Cause, due to position elimination, reduction-in-force, program discontinuation, business reorganization or other types of involuntary terminations of employment, as determined by the Company. This guide contains important information on how Citizens will administer an eligible employee s Severance Payments and benefits in the event they are involuntarily terminated. Affected employees are encouraged to read this guide in conjunction with their benefits plans. This guide can be revised anytime to reflect the changes to Citizens policies. If employees have any questions regarding the Citizens Severance Policy (the Policy ), they should contact the Human Capital Management department. Contents Introduction... 3 Important Terms... 4 Eligibility for Severance Payments and Benefits... 6 General Release... 7 Re-employment... 7 Summary of Severance Payments... 8 Continuation of Benefits... 9 Administration Other Things to Consider Timeline of Important Events Summary of Current Continuation & Conversion Options Helpful Contact Information Frequently Asked Questions Page 2 of 26 Employee Severance Guide 02/26/13

3 Introduction Eligible Citizens employees whose positions have been eliminated, discontinued or are soon to be involuntarily terminated by the Company have a number of important decisions to consider. For example, affected employees need to review their benefits, start thinking about whether to continue any of them, and decide next steps regarding their career transition in finding a new position. Citizens recognizes that this is a difficult situation, and is committed to doing its part to support individuals whose positions have been eliminated or employment has been terminated, without Cause. Each affected employee will be eligible to participate in Severance Payments and benefits, based on his or her position level and years of service with the Company. Employees are encouraged to also refer to Citizens benefits plan summaries in order to fully understand all of the plan options available so they can make the most of their separation package with the Company. If employees have any questions regarding this Policy and any other Citizens' benefits plans, they should contact the Human Capital Management department. Please note, this guide can be revised at any time to reflect changes to Citizens policies and benefit plans. In addition, please note that although this guide provides a description of the impact of your termination on various Citizens compensation and benefits programs, you should consult the official Summary Plan Descriptions and Summaries of Material Modifications or other official documentation for those other compensation and benefits programs for more detailed descriptions which contain important information about your rights and responsibilities under those programs. Naturally, as always, in the case of any conflict, the applicable official plan documents will control. This guide serves as the Summary Plan Description for the Policy. Page 3 of 26 Employee Severance Guide 02/26/13

4 Important Terms Please keep the following terms in mind when reading this guide: Comparable Position A comparable position is one for which an employee is qualified, and that does not require the employee to take a reduction in base pay, to change days of work, to experience a shift variance of more than 3 hours per day, or to make an unreasonable commute from home. The determination of reasonable commute is based upon an assessment of the employee s current commute, and is considered to be 50 miles one way from the employee s home to office/official work location. A comparable position may be in the same or lower pay grade than the employee was in prior to the job elimination, if the salary and other criteria are otherwise unchanged. Coverage Ending Date The last day that the eligible employee receives Severance Payments. Except as otherwise set forth in each applicable benefit plan document and/or insurance contract or policy, benefit plan coverage may generally be continued until the last day of the month that includes the Coverage Ending Date. Last Day of Active Employment The last day an employee is scheduled to work at their job. Usually, this is the same date as their position elimination date. Notice Period The point of time from the date an employee is informed of his or her position elimination or involuntary termination, without Cause, through the Last Day of Active Employment. In most instances, employees will work through their notice period; in only exceptional cases, some employees may receive paid, non-working notice (administrative leave). Position Elimination Date The day an employee stops actively working in his/her position, and the employee s job ends. Severance Payments Payments of severance that are made with the same frequency as the employee s normal wages during his or her active employment, in accordance with the normal payroll practices of Citizens and subject to applicable tax withholding obligations. Lump sum payments will not be made for severance. Assuming that the eligible employee signs and returns a General Release of Liability to Citizens within 45 days of his or her Last Day of Active Employment (and allows the 7-day revocation period to expire), Severance Payments shall commence on the first normal Page 4 of 26 Employee Severance Guide 02/26/13

5 payroll period of Citizens following the later of: (i) the expiration of 7 days of Citizens' timely receipt of such signed General Release of Liability, or (ii) the Last Day of Active Employment. Termination Date The date an employee is no longer considered an employee and is their last day of employment with Citizens. Termination for Cause Cause includes, but is not limited to, material failure to perform their assigned job duties and responsibilities, insubordination, gross misconduct, fraud, any violation of Citizens ethics policy, standards of conduct or policy and procedure or any type of misconduct (as defined in Section (30) of the Florida Statutes). Employees terminated for Cause are not qualified to receive Severance Payments or benefits. Page 5 of 26 Employee Severance Guide 02/26/13

6 Eligibility for Severance Payments and Benefits In order to be eligible for Severance Payments and benefits, an employee must be classified as a regular Citizens employee, remain in good standing until his or her Termination Date and be terminated for one of the following reasons: Position elimination Reduction-in-Force Outsourcing or out-tasking Program discontinuation Business reorganization Office closing (other than relocation due to forced evacuation of an office) Certain other types of involuntary terminations of employment, as determined by the Company Severance will not be paid if an employee terminates for Cause or for any reason other than those listed above (or fails to timely provide a signed General Release of Liability to Citizens (and allow the 7-day revocation period to expire)). This includes, but is not limited to: Inability to perform the requirements of the position Poor performance Voluntary resignation Retirement Failure to report to work or return from leave of absence Excessive absenteeism or lateness Accepting an offered comparable position within the Company Declining a transfer to comparable employment within the Company Violation of Citizens policies or procedures, insubordination, unwillingness to perform duties of a position, dishonesty, or other misconduct Any other type of termination that does not constitute an involuntary separation from service For purposes of the above eligibility rules, employees will be considered a Citizens employee if they are classified as a regular, full-time or part-time employee of Citizens scheduled to work at least *30 or more hours per week. Employees are not considered regular employees of Citizens if they have more than half of their income from the Company reported on Form 1099 or if they are classified as temporary (either full or part-time), are paid by fee under contract, or are otherwise a contract employee or student intern. *Exception part-time employees scheduled less than 30 hours per week who were grandfathered with benefits effective December 31, 2012, (and remain in grandfathered status at the time of separation) are eligible to receive Severance Payments and benefits under this Policy. If a grandfathered employee increases the number of hours that they work to 30 hours or more per week, that employee will automatically lose their grandfathered status and be subject to the guidelines stated above. Page 6 of 26 Employee Severance Guide 02/26/13

7 General Release of Liability To receive Severance Payments and benefits, all eligible employees are required to sign and return a General Release of Liability (using the form provided by Citizens) within forty-five (45) days of their Last Day of Active Employment in order to receive Severance Payments and benefits from Citizens. No Severance Payments shall be paid to the eligible employee unless such eligible employee signs and returns the General Release of Liability to Citizens within this 45-day period. If an employee signs a General Release of Liability, he or she will have 7 days to revoke their decision. If an employee refuses to sign the General Release of Liability, he or she will only be paid through the end of their notice period and receive leave payout in accordance with Citizens leave policy, if applicable. Employees will also not be eligible for Severance Payments and benefits if they: Do not sign a General Release of Liability and timely provided to Citizens (or timely revoke such General Release of Liability), or Are offered a comparable position within the Company, whether they accept or decline the position, or Accept another position of any kind within the Company, or Voluntarily terminate their employment prior to the end of their notice period, or Are terminated for Cause before the start of their Severance Payment period Re-employment with the Company If an employee accepts another job at Citizens, while receiving Severance Payments and benefits, his or her payments will cease upon the start date of the new position with the Company. Page 7 of 26 Employee Severance Guide 02/26/13

8 Summary of Severance Payments Because an employee s amount of Severance Payments depends on their position level and completed years of service at the time of their termination, it is important to understand how Citizens defines and calculates severance. Week of Pay An employee s weekly salary or hourly base rate times 40 hours or for part-time employees, their regularly scheduled hours worked at the time of termination. The weekly rate does not include any overtime, lump sum amounts, shift differentials or other types of premium pay. Holiday hours are counted as time worked in the computation of pay. Years of Service An employee s full year of service is 12 complete months of service, as determined by the employee s date of hire. If an employee has less than a full year of service or 12 months between their employment anniversary and Last Day of Active Employment, that time does not count toward his or her years of service or Severance Payments and benefits. However, employees with less than one year of service will be eligible for the same Severance Payments as employees with one year of service. Severance Payment Schedule Employee Level Non-Managers - Assistant Directors *Directors - Senior Directors *VP & Above Weeks of Severance * 1 week per year of service * Min of 2 weeks pay * Max of 6 weeks pay * 2 weeks per year of service * Min of 4 weeks pay * Max of 12 weeks pay * 4 weeks per year of service * Min of 12 weeks pay * Max of 20 weeks pay * Directors and above will have an individual employment agreement which includes Severance Payments and benefits as outlined in this Policy. These increased levels of Severance Payments and benefits for Directors and above will not be paid unless an individual employment agreement is in place prior to the Last Day of Active Employment including such increased Severance Payments and benefits. Page 8 of 26 Employee Severance Guide 02/26/13

9 Continuation of Benefits Affected eligible employees who are scheduled to receive Severance Payments will also continue to receive most of their same benefits from Citizens that they received while employed. Benefits During Severance Employees receiving Severance Payments will generally keep the same benefits coverage that they had on their last day of active employment, for those benefits that are eligible to continue (depending upon the terms of each applicable benefit plan document and/or insurance contract or policy). Note that coverage for some plans, such as long-term disability benefits, ends on a terminated employee s last day of active employment, and payroll deductions will end on that date. Also, Severance Payments are not considered eligible compensation for retirement savings plans; however, employees will continue to accrue vesting service toward any benefit an employee may have under such plans to the extent permissible under the terms of such plans. All other benefit contributions will be deducted from an employee s Severance Payments the same way as they are from all other regular, active employees paychecks. If an employee s Severance Payments extend from the end of one calendar year into the beginning of another, s/he will have the opportunity to change benefits elections during the annual enrollment period. While an employee is receiving Severance Payments, the only other time s/he can voluntarily change benefits coverage is if a qualifying change in family status occurs, such as marriage, divorce, or the birth or adoption of a child these are the same restrictions that apply for active employment. An employee s job elimination or termination does not count as a qualifying change in family status, so benefits coverage cannot be voluntarily changed when a job ends. Coverage also cannot be cancelled, except as required by the applicable benefit plan document and/or insurance contract or policy. Continuing or Converting Benefits The Company s continuation of benefits generally ends on the last day of the month during which the Coverage Ending Date takes place. If an employee receives severance, his or her Coverage Ending Date is the day that Severance Payments end. Although the Company s continuation of benefits normally ends on the last day of the month during which the eligible employee s Coverage Ending Date occurs, the employee may have the opportunity to continue or convert health care group benefit plans, such as medical, dental, and vision coverage, through COBRA continuation coverage, at his/her own expense for up to 18 months from the date coverage ends. Most other benefit plans automatically cease upon an employee s last day of active employment and cannot be continued or converted. Page 9 of 26 Employee Severance Guide 02/26/13

10 Administration Citizens Severance Policy, in addition to all other employment-related policies of the Company, is under the administration and responsibility of the VP of Human Capital Management, who reports into the President/CEO of the Company. The VP of Human Capital Management shall have the power to construe and interpret the terms of the Policy in his or her sole discretion. REVIEW PROCESS Employees may seek a review of the application of this Policy as applied to their specific severance agreement. The following review process is applicable to the employees under this Policy. The employee may file a request for review to the Vice President-Human Capital Management within forty-five (45) days of receipt of such agreement. The employee or his duly authorized representative: 1. May request in writing that the Vice President-Human Capital Management review the issues raised; 2. May review pertinent documents; and 3. May submit issues and comments in writing. The decision on review shall be made within fifteen (15) days of receipt of the request for review, unless special circumstances require an extension of time, in which case a decision shall be rendered as soon as possible, but no later than thirty (30) days after receipt of a request for review. The decision shall be made in writing, shall be written in a manner to be understood by the employee and shall include specific references to the provisions of the agreement and or Policy on which such decision is based. Amendments and Terminations Citizens reserves the right to amend, modify, suspend or terminate this Policy, in whole or in part, at any time by action of the President/CEO; provided that no such amendment, modification, suspension or termination shall impair the rights of eligible employees. Not a Contract of Employment Nothing contained in this Policy will be held or construed to create any liability upon Citizens to retain any employee in its service. This Policy does not affect or diminish the atwill nature of employment with Citizens. Citizens reserves the right to terminate the employment relationship at any time, with or without Cause. Page 10 of 26 Employee Severance Guide 02/26/13

11 Other Things to Consider To ensure that employees make the most of their benefits available to them when employment ends, the following benefit options should be considered: Flexible Spending Accounts Determine if you have money left in the health care reimbursement plan (HCRA, also called the Flexible Spending Account, or FSA). To claim an expense from the health care reimbursement plan, you must have incurred it before your participation in the plan ended, otherwise, the funds you have in the plan would be forfeited unless you continue the plan under COBRA and incur expenses during this period. Remember that even though you can continue the health care reimbursement plan under COBRA, in most cases this would only make financial sense if you have a significant balance in the plan that would otherwise be forfeited, because your continued contributions to the plan will be after-tax. You should also plan carefully if you participate in the dependent care reimbursement plan (which cannot be continued under COBRA). File any claims under the HCRA and the dependent care reimbursement plan before March 30 of the following calendar year. Otherwise, unused funds in your reimbursement account will be forfeited. Assess your benefit needs for the future: Determine whether you will have new needs, such as caring for a baby or for dependent care for a child or a disabled dependent. While you are receiving Separation Payments, the only other time you can change your flexible benefits is if you have a qualifying change in family status, such as marriage, divorce, or the birth or adoption of a child. (These are the same change restrictions that apply during active employment.) Your job elimination does not count as a qualifying change in family status, so you will not be able to change your benefits now or when your job ends. You are also not able to cancel your coverage. (There is one exception; if you are contributing to the dependent care plan when your employment ends, you can change or stop your contributions if your need for dependent care services changes at that time.) Retiree Medical Coverage If you are at least age 55 and have at least 6 years of applicable service with the Company as of your last day worked, you may be eligible to continue medical benefits by electing the retiree portion of the Medical Plan, depending upon the specific terms of the plan document and/or insurance contract or policy. See the Benefits Guide for details. Cobra The temporary continuation of some group health plan benefits is available under the federal law known as COBRA. COBRA generally allows you to continue coverage for up to 18 months Page 11 of 26 Employee Severance Guide 02/26/13

12 following your termination date (or 29 months if you are disabled on your last day worked or become disabled within 60 days after the start of COBRA continuation coverage, and are eligible for a Social Security disability award). Under COBRA, you will pay significantly more for your benefits each month than you do now, and you will have to pay your contributions with after-tax dollars. When you continue benefits under COBRA, you pay the entire cost of the coverage. As an active employee, only the employee portion of the contribution is deducted from your paycheck, and you don't see the amount that Citizens contributes for your coverage. Citizens contribution for your coverage is usually much more than you contribute. Under COBRA, in addition to the entire contribution, you are also required to pay a two-percent administrative fee. Here are some of the key points to keep in mind about continuing benefits under COBRA: Ceridian will automatically send you an application to continue benefits under COBRA, when your Company-provided group health plan benefits end. In order to continue your benefits under COBRA, you must submit your completed application within 60 days of your last day worked or the date you are notified about COBRA, whichever is later. You do not have to continue all the benefits that you are eligible to continue. If you are enrolled for medical, dental, and vision coverage as of your last day worked, you are eligible to continue all three, but you may choose to continue just one or two, if you prefer. If you continue benefits under COBRA, you should submit your first payment with your completed COBRA election form (but not later than 45 days after you apply for COBRA continuation) and submit future payments promptly, or your continuation will be canceled without the possibility of reinstatement. If you continue benefits under COBRA and the Company has an annual enrollment period, you will be eligible to participate in that enrollment, and can make changes to your elections for the benefits you continued under COBRA. The only other time you can make changes to your elections is if you have a qualifying change in family status. COBRA has a number of other important provisions, particularly if you are disabled. Retirement Savings Plan As noted previously, severance pay is not considered eligible compensation for the Retirement Savings Plan (RSP). About The Retirement Savings Plan At termination you must decide how to handle the vested balance in your RSP account. (Any Company contributions that have not vested by your termination date will be forfeited.) It is important that you consider all the options available to you for handling your RSP balance. Page 12 of 26 Employee Severance Guide 02/26/13

13 Your distribution options for your vested RSP balances are: Leave it in the RSP (only available if your vested account balance is over $1,000) Take a lump sum cash distribution, or Roll your vested balance into another qualified retirement plan or IRA. Call Lincoln Financial Services at , for information on your vested RSP balance or for more information on the tax implications of any RSP distributions, so you can decide which approach will give you the greatest benefits. Before you make any decisions about your RSP account, you should consult with your personal financial advisor for information about the tax treatment and any tax penalties that may apply to your distribution. Once you make your decisions, Lincoln Financial Services can arrange for any direct rollovers or other distributions. If You Have an Outstanding Retirement Savings Plan (RSP) Loan If you borrowed money from your RSP account and are still repaying the loan, please read the following information which explains what will happen to your outstanding loan balance. As long as you are receiving separation payments, your regular loan repayments will continue to be deducted from your regular bi-weekly paycheck. Upon termination of employment, outstanding loan balances are immediately due (as stated in the terms of the loan) unless you make arrangements to continue repaying the loan. Please note: For purposes of outstanding RSP loans, your official termination date is considered to be the last day you receive separation payments. If, upon your official termination date (as described above), you have an outstanding RSP loan balance and wish to continue making loan payments, you must call Lincoln Financial Services at within 30 days and request a loan payment booklet in order to continue making payments via certified check or money order in accordance with the terms of your loan(s). Official Termination Date for Purposes of Outstanding RSP Loans For purposes of outstanding RSP loans, your official termination date will be the last day you receive severance payments. While receiving severance payments, your loan payments will continue to be made from your bi-weekly paychecks. Page 13 of 26 Employee Severance Guide 02/26/13

14 Timeline of Important Events What When Importance Annual Benefit Enrollment Each Fall If your position elimination date or your termination date is the following year, it is important to enroll for that year's benefits, to position yourself to meet your benefit needs. Last Day of Active Employment Your Manager will advise you You must sign a General Release of Liability (and allow the revocation period to expire) to receive Severance Payments. Certain benefits will continue during the Severance Payment period (depending upon the terms of the applicable benefit plan documents and/or insurance contracts or policies). Coverage Ending Date This is the earlier of when you secure full-time employment outside the Company or the last day of the month when Severance Payments end. Benefit coverage under certain Company-sponsored plans ends this day. You may continue and/or convert some coverage (depending upon the terms of the applicable benefit plan documents and/or insurance contracts or policies). Termination Date Life Insurance Conversion Deadline Application Deadline for COBRA Continuation Retirement Plan Payout Information Deadline for submitting Healthcare and Dependent Care Reimbursement Claims for prior calendar year Date an employee is no longer considered an employee and is their last day of employment with Citizens, which is usually the same date as when your severance payments end. 31 days after the earlier of when you secure full-time employment outside the Company or when severance payments end (or date you receive the COBRA notification letter if later) 60 days after the earlier of when you secure full-time employment outside the Company or when Severance Payments end (or date you receive the COBRA notification letter if later) Call Lincoln Financial Services after severance payments end. March 30 th each year Benefit coverage under certain Company-sponsored plans may end this day or the last day of the month that includes this day, depending upon the terms of the particular benefit plan and/or the applicable insurance contract or policy. You may continue and/or convert some coverage. Deadline for converting certain life insurance coverage to individual policies without having to submit proof of insurability Deadline for applying to continue benefits under COBRA You must call Lincoln Finical Services at to request information. If you have any claims for covered expenses incurred in the prior calendar year (while you are covered under the Health Care Reimbursement and Dependent Care Reimbursement plans), you must submit those claims by March 30 of the current year, or unused funds will be forfeited. Page 14 of 26 Employee Severance Guide 02/26/13

15 Summary of Current Continuation & Conversion Options Plan Regular Employee Option to Continue Option to Convert to Coverage Ends Group Coverage Individual Coverage Medical Plan Last day of the month Yes, Under COBRA No during which Coverage Ending Date occurs (i.e., the last day that Severance Payments ends) Dental Care Plan Last day of the month Yes, Under COBRA No during which the Coverage Ending Date occurs Vision Care Plan Last day of the month Yes, Under COBRA No during which the Coverage Ending Date occurs Healthcare reimbursement Last day of the month Yes, Under COBRA No Plan during which the Coverage Ending Date occurs Life Insurance Plan End of Notice Period No You will have 31 days from your date of separation to submit your application for conversion/portability to Sun Life Financial. Salary Continuation (STD, LTD, FMLA, W/C) Dependent Care Plan End of Notice Period No No Last day of the month during which the Coverage Ending Date occurs No No Page 15 of 26 Employee Severance Guide 02/26/13

16 Helpful Contact Information Provider Instructions Contact Information Vacation and Sick Leave Employees who separate from the organization will be paid their earned vacation leave (prorated for the current year) at 100% and their earned sick leave (prorated of the current year) at 25%. Please refer to Human Resources Ceridian Benefit Services COBRA (Consolidated Omnibus Budget Reconciliation Act) If applicable, your medical, dental and vision benefits will be covered through the end of the month in which your Coverage Ending Date takes place. By law you will be given the option to continue your group health benefits through COBRA. Citizens will notify Ceridian Benefit Services of your qualifying event. Your COBRA instructions, forms and rates will be mailed to the address on file with Human Resources Blue Cross Blue Shield Capital Health Plan Certificate of Creditable Coverage Blue Cross Blue Shield Medical (HMO and PPO) Capital Health Plan (HMO Tallahassee only) Blue Cross Blue Shield and Capital Health Plan automatically issues certificates of creditable coverage to you when your coverage under your employer group health plan terminates to the most current address on file. To request a certificate of creditable coverage, please contact your health insurance provider. Blue Cross Blue Shield Capital Health Plan Medcom Flexible Spending Accounts If applicable, your Flexible Spending Account (FSA) will be covered through the date of separation. Participants may submit claims for eligible dependent care expenses and/or medical expenses incurred up to the date of separation and submitted within 90 days after date of separation. Medcom Flexible Spending Accounts Lincoln Financial Group Citizens 457b/401a and FWUA Frozen 401k If applicable, Citizens will send termination notice to Lincoln Financial. Employee must contact Lincoln for termination options. PO Box 7876 Fort Wayne, IN Page 16 of 26 Employee Severance Guide 02/26/13

17 Sun Life Financial Term Life Insurance During your exit interview, Citizens will provide you with Sun Life Conversion and Portability packets. You will have 31 days from your date of separation to submit your application for conversion/portability to Sun Life Financial. Group Life Conversion Sun Life Financial One Sun Life Executive Park Wellesley Hills, MA Unum If applicable, Citizens will send termination notice to the Unum. Employee must contact Unum for their options Merrill Lynch 529 College Savings Plan If applicable, to continue contributing to the plan, complete an Automated Funding Source Enrollment form on Traveler s Auto Insurance If applicable, Citizens will send termination notice to the Traveler s. Employee must contact Wachovia Insurance Services for their options The Principal FWUA Pension Plan (JAX ONLY) If the employee was hired prior to July 31, 2002, Citizens will submit an application to the Principal Company. You will be sent a benefit calculation and paperwork in the mail in 2-3 weeks from Human Resources. If the benefit is <$5,000, the payment will automatically be distributed. If >$5,000 the employee will have the option to payout, rollover, etc. Additional forms will be included with your benefits calculations, please complete and mail back to Human Resources. Principal Financial Group s Client Contact Center Principal Life Insurance Company P.O. Box 9394 Des Moines, IA Page 17 of 26 Employee Severance Guide 02/26/13

18 Frequently Asked Questions Position Elimination Decision Process Q. How were employees selected? A. Generally, when positions are eliminated, employees performing those positions are displaced. When we need to reduce the number of like positions (as in a multiple incumbent situation), we typically look at performance, tenure and in certain cases, skills needed. Q. If I have any concerns about how the decision that impacted me was made, with whom can I speak? A. If you have concerns about your displacement, you can call , and ask to speak with your local Human Resources or Employee Relations Representative. Timelines / Notice Period Q: How much notice will employees be given prior to their last day? A: Citizens will provide employees with the appropriate amount of time based on business needs. Employees will generally receive a minimum of two weeks notice prior to their scheduled last day. In keeping with Company practice, most people will receive more notice but it will depend upon the nature of the reduction and, in some cases, there may be business reasons justifying a shorter notice period. Citizens will also comply with all regulations that govern employee reductions. Q. When is my last day of work? A. Your manager will inform you of your last date of work during your notification discussion. Q. What is a notice period? A. A notice period is the period of time between when an employee is notified that he/she has been impacted and his/her last day of work. Q. Can my last date worked be adjusted? If I want to leave sooner, will it have any impact on my severance pay? A. Any adjustment requests to last day worked will be looked at on a case by case basis. Adjustment requests must be accompanied by a business justification and reviewed and approved by Business Unit Management and the Director of Human Resources. Q. Do I need to work up until the last date you have given me? Can my notice be non-working? A. Employees must work through the end of their notice period in order to be eligible for severance pay, unless both Business Unit Management and the employee agree that non-working notice would be more appropriate. Again, adjustments requests must be accompanied by a business justification and reviewed and approved by Business Unit Management and the Director of Human Resources. Job Openings and Opportunities Q: Will I be eligible to apply for positions in other departments or business units? A: Yes. We encourage you to post for jobs that are of interest between now and your last scheduled date of employment. Displaced employees may post for open positions within the company regardless of previous performance ratings, time in job requirements and/or performance counseling. Please be aware that a job may be offered to you regardless of whether you posted for it. If you are offered and do not accept a comparable position, you will forfeit your eligibility for Severance Payments. After your last day of employment, you must apply as an external applicant through the company website at Page 18 of 26 Employee Severance Guide 02/26/13

19 Q. If I am offered a new position at Citizens while receiving severance pay, what happens to my severance pay? A. If you accept the position while you are receiving severance payments, your severance payments will end. Q: If I am placed in a job, will I have to remain in that position to meet time in job requirements (6 months) before posting for another job? A: If you are placed in a position without posting for the position, you will not be required to fulfill the 6-month time in job requirement. Employees in this situation are eligible to post for other opportunities prior to meeting the time in job requirement because we recognize that other available opportunities might be more appealing to the employee and that the employee who was placed may not have had input into the placement decision. If, however, you post into a position, you will be required to meet the time in job prior to being eligible to post out. Q: What if I have talked to a hiring manager (in person or on the phone), but never actually applied for a vacant position. Is this still considered posting for a position? A: No. The activity described is not considered a "posting" but is more of a general inquiry into opportunities. Certainly, an employee may wish to learn more about a given position prior to applying for it. As a displaced employee, you are encouraged to utilize your network of contacts to ask questions and to research positions so that you can make good, informed decisions regarding positions you may be considering. Keep in mind, however, that an employee does not necessarily have to be interviewed for a comparable job offer to be extended. A hiring manager can offer an employee a specific position without the employee having posted or interviewed for the job in question. Provided the job is determined to be comparable, the employee would then have to make a decision regarding accepting the position or leaving Citizens at the conclusion of the notice period without eligibility for severance payments. Q: If I apply for a position, but change my mind later, can I withdraw my application prior to being offered the job and still be eligible for severance pay? A: Yes. If you participate in the job posting process, you can withdraw the application prior to being offered the job, and still maintain eligibility for severance payments. If you are considering this, you are encouraged to notify the hiring manager verbally immediately upon making this decision and to submit written confirmation of this request to the hiring manager as well. It is important to note, however, that a comparable position may be offered to an employee who has not posted for it or who has withdrawn a posting. Once a comparable position has been offered, the employee is no longer eligible for severance payments. Q. What is a comparable position? A. A comparable position is defined as one that requires similar knowledge, skills and abilities as your previous role and does not require an employee to take a reduction in pay, to change days of work, to experience a work schedule variance of more than three hours per day or to make an unreasonable commute from their home(s). A job does not have to be in the same department or business unit to be considered comparable and may be in the same or lower pay grade level as the current job, as long as base pay is not affected. Q: If you apply for a position within your same pay grade, shouldn't you be able to keep your current salary? A: A displaced employee who posts for a position would be subject to the salary s/he and the hiring manager agree upon. Factors such as Market Pay Ranges, Geographic Indicator Codes, and internal equity are all taken into consideration in the process. Q: Does a displaced employee with the same experience have priority over other people applying for the same position? Page 19 of 26 Employee Severance Guide 02/26/13

20 A: Citizens is committed to redeploying displaced individuals where it is possible. In the event a displaced candidate is competing for an open position with other candidates, the displacement status is a "tie-breaker", all other factors being equal. The employees' overall experience levels, skill-sets, and interview (among other criteria) might also be considered in the selection process. However, given two candidates with virtually identical backgrounds and qualifications, the displaced candidate should be given hiring preference. Q. What is the policy regarding whether jobs are posted or people slide into roles? A. Management retains the discretion to place a displaced employee into a position without completion of the recruitment process. The employee must meet the minimum qualifications to perform the job. Additionally, the position would typically be similar to the one the employee currently holds, or was a position or capacity the employee previously held at Citizens. Such actions/requests must be accompanied by a business justification and reviewed and approved by Business Unit Management and the Director of Human Resources. Q. What happens if I am mid-way through the application/selection process and my notice period comes to an end? A. You will be considered as an internal candidate for any positions that you have posted for during your notice period. After your severance payments end, you may continue to apply for positions as an external candidate. Q: Will I be eligible to return to Citizens when business conditions improve? A: We encourage you to continue to identify any open opportunities and apply as an external candidate for those positions. The most qualified candidate will be selected for any open position. Q. Who will keep me informed of opportunities/help me leverage all avenues to stay with Citizens? A. Current and former employees are responsible for seeking out opportunities through Citizens Career page. We encourage you to check for new opportunities periodically. Other Employment Q. Will I get a reference from Citizens? How do I ask for it? A. Citizens references are processed through Human Resources. HR will confirm the employee's dates of employment, job title history, and salary in cases where the former employees provide approval. HR does not provide information regarding the reason for termination. Former employees and third party verifiers can also call (and ask for Human Resources) for assistance. CI: What if I leave Citizens before my last scheduled working day? A: If you voluntarily leave prior to your last scheduled workday with Citizens, you will be considered to have voluntarily terminated and will not be eligible for severance payments or benefits. Q: What if I'm receiving severance payments and find another job outside the Company. Will I still continue to receive bi-weekly severance payments? A: Yes, severance payments will continue after you begin new employment. However, all benefits will cease if you are receiving benefits. You must notify Human Resources of your new employment. Q. What happens if I get a part-time job while I am eligible for severance payments? A. You will continue to receive any severance payments for which you are eligible. Q. Before my termination, I was working two jobs: one with Citizens and one with another company. Will I be eligible to receive severance payments even though I am continuing at my second job? A. If you held a second job or were self-employed while working for Citizens, and you continue that work while looking for a new job, you will remain eligible for severance payments. Page 20 of 26 Employee Severance Guide 02/26/13

21 Q. What happens to my severance payments if I receive retirement benefits? A. If you are disqualified from state unemployment benefits because you are receiving retirement benefits, you will continue receiving your remaining severance payments. Q. What happens to my severance payments if I become disabled while receiving severance payments? A. If you become disabled and unable to work while receiving severance pay, the state unemployment agency may consider you unavailable for work. As a result, your state unemployment benefits may be suspended until you are no longer disabled. If your unemployment insurance benefits are suspended, you will continue to receive severance payments. Severance Payments Q. What are Severance Payments? A. Severance Payments are designed to help eligible employees bridge the financial gap between the end of their Citizens position and the beginning of their next employment. Severance Payments are based on your regular weekly base pay and paid through biweekly "Severance Payments." You receive Severance Payments in addition to any state unemployment benefits that may be payable to you. Severance Payments are subject to federal, state and local (where applicable) income taxes. Besides tax withholding, other deductions may apply to your Severance Payments. If deductions for child support or other legally required deductions were withheld from your paychecks, those deductions will continue to be withheld from your Severance Payments. If you continue any employee benefits while unemployed, your payments for those benefits also will be deducted from your Severance Payments. Q. Who is eligible for Severance Payments? A. Generally, impacted individuals who are not offered comparable jobs or able to find internal positions with Citizens, and are still in good standing, will be eligible to receive Severance Payments to assist in their career transition if they sign and timely return a General Release of Liability to the Company (and allow the 7-day revocation period to expire). Q. Can I receive my Severance Payments in a lump sum, rather than biweekly payments? A. No. Q: If I receive Severance Payments and then a position within Citizens becomes available in a few months, how am I affected? A: If you are rehired prior to the end of the Severance Payment period, your Severance Payments will cease at the time of placement in the position. Q: If I have an anniversary during the Severance Payment period, will I be eligible for additional weeks of Severance Payments? A: No. Severance Payments eligibility is based on completed years of service. Your completed years of service are determined from the last day of your notice period. Q. What type of agreement will I need to sign before I receive Severance Payments? A: You will need to sign and timely return a General Release of Liability (on the form provided by the Company) to the Company and allow the 7-day revocation period to expire in order to receive any Severance Payments. Q: What if I don't sign the General Release of Liability? A: If you do not sign the General Release of Liability, or if you change your mind and revoke it within 7 Page 21 of 26 Employee Severance Guide 02/26/13

22 days after you have signed it, you will not be eligible to receive Severance Payments or certain other benefits described in the General Release of Liability. Q: What kind of turn-around can I expect on receiving a copy of my signed General Release of Liability? A: A photocopy of the fully signed General Release of Liability will be returned to the employee's home address on file via US mail. In general, an employee should expect to receive a photocopy of the General Release of Liability, including all appropriate signatures, within approximately two weeks of submitting the General Release of Liability to Citizens. In order to expedite this process, we make the following recommendations: Ensure the required signatures have been affixed to the original document. This includes your own signature and that of a witness. The witness can be any adult, other than a member of Citizens management. These signatures should be dated in the space provided. Do not sign "for Citizens". HR will sign the General Release of Liability for Citizens after a final review of the document. Do not make any alterations or edits to the document. If you require clarification regarding the contents of the document, please call Human Resources at for discussion of your questions and further guidance. Retain a copy of the signed document for your own files. Return all pages of the signed, original General Release of Liability document to the appropriate address noted below. Be responsible for submitting your own General Release of Liability. Do not entrust this document to a co-worker, manager or any other third party for follow-through. Without this document, the Severance Payments required under this agreement cannot be processed. Please send the original General Release of Liability to Human Resources. Your delivery options are: US Mail, Overnight Delivery or Interoffice Mail. (Fax copies are not accepted). US Mail or Overnight Delivery Citizens Property Insurance Corporation Human Resources Insert address for delivery Interoffice Mail Human Resources Insert location/title for delivery Q: Once I return my General Release of Liability, when will I receive my Severance Payments? A: After signing the General Release of Liability, you will have one week to revoke it if you change your mind. After that week has passed, Citizens will provide your information to the Payroll Administrator. You don't need to do anything else to start payments of your Severance Payments. Once you have submitted your signed General Release of Liability within the 45-day review period, Severance Payments shall commence on the first normal payroll period of Citizens following the later of: (i) the expiration of 7 days of Citizens' timely receipt of such signed General Release of Liability, or (ii) the Last Day of Active Employment. Your benefits will be reinstated without interruption back to your last working date. Q: If I have not signed and returned my General Release of Liability by my last working day, what happens to my Severance Payments and benefits? A: You are encouraged to use as much of the allowed 45-day review time as needed to fully consider the General Release of Liability. If you have not signed and returned your General Release of Liability by your last working day, your Severance Payments and applicable benefits will be suspended until the signed General Release of Liability is timely received (and the 7-day revocation period expires) and is submitted for processing. Q. Will my Severance Payments be included on my W-2 from Citizens? A. Yes. Your Severance Payments will be subject to ordinary income taxes. Q. To whom can I go for questions on my eligibility for Severance Payments? Page 22 of 26 Employee Severance Guide 02/26/13