VOLUNTARY SEPARATION INCENTIVE PAYMENTS (BUYOUTS)

1. -- On May 13, 2004, the Office of Personnel Management approved HUD’s request to offer buyouts to assist the Department in completing its FY 2004 CAP and assist in achieving staffing reductions necessary for four over-ceiling offices. -- Up to 200 buyouts may be offered. Number of buyouts to be initially offered is 115 in the following over-ceiling offices: 37 - Community Planning and Development (CPD) 6 - Departmental Organization and Coordination (ODOC) 70 - Fair Housing and Equal Opportunity (FHEO) 2 - Healthy Homes and Lead Hazard Control -- Assistant Secretary Roy Bernardi will be updating employees in a broadcast today (May 14, 2004) at 2:00 p.m. Eastern Daylight time. A follow-up email will be sent to all employees after the broadcast. -- A “specific” notice announcing the buyout window and application process will be sent via email to all employees in the four over-ceiling offices no later than Monday, May 17, 2004. 1 VOLUNTARY SEPARATION INCENTIVE PAYMENTS (BUYOUTS)

2. -- Buyout window Opens 2:00 p.m., Eastern Daylight time (11:00 a.m. on West Coast), on Wednesday, May 19, 2004 Closes 5:00 p.m., Eastern Daylight time (2:00 p.m. on West Coast), on Friday, May 28, 2004 -- Applications will be approved on a “first-come, first-served” basis per position title and location. -- Eligible Employees are those who: occupy positions targeted for buyout in CPD, FHEO, ODOC or HHLHC; have been continuously employed with HUD for at least 3 continuous years without a break in service; voluntarily retire under early or optional retirement, or voluntarily resigns during the approved buyout period; apply for a buyout within the buyout window in accordance with the application procedures; and Agree to separate from the Department on or before July 24, 2004. 2 VOLUNTARY SEPARATION INCENTIVE PAYMENTS (BUYOUTS)

3. -- Ineligible Employees Presidential appointees Career and non-career Senior Executive Service appointees Schedule C employees Employees occupying positions that have been excluded from the buyout Employees on time-limited appointments Employees who, during the previous 24 months, received a recruitment or relocation bonus, or within 12 months of the separation date received a retention allowance Employees relocated to other positions/offices (under HUD’s relocation program) where relocation costs were incurred and the buyout offer falls within one year of the effective date of the relocation. Exceptions can be granted if employee reimburses HUD for all relocation costs Employees in receipt of a specific notice of involuntary separation for misconduct or unacceptable performance Employees who previously received any buyout payment by the Federal Government Reemployed annuitants Employees who are or would be eligible for disability retirement Employees with statutory reemployment rights or transfer to another organization 3 VOLUNTARY SEPARATION INCENTIVE PAYMENTS (BUYOUTS)

4. -- An employee may retire or resign to take a buyout. -- Employees who submit an application for a buyout based upon optional retirement or a voluntary early retirement must be eligible for retirement by July 24, 2004. -- A buyout payment is an amount equal to the employee’s calculated severance pay entitlement or $25,000, whichever is less. -- Benefits counseling will be available for employees. -- All applications will be accepted by fax only. No hand deliveries. -- No electronic applications will be accepted. -- Employees approved for a buyout may separate at anytime between the date of notice of approval through July 24, 2004. 4 VOLUNTARY SEPARATION INCENTIVE PAYMENTS (BUYOUTS)