EMPLOYEE BENEFITS COMPANY HOLIDAYS Generally, the Branch offices are closed on the following holidays: New Year's Day Memorial Day Independence Day Labor Day Thanksgiving Day plus the following Friday Christmas (Each year an announcement will be made as to when the Branch offices will be closed.) If a Company holiday occurs on Sunday, it is observed the following Monday. Holidays which occur on Saturday are observed the preceding Friday. Holiday Pay Full salary is paid to regular full-time employees for each Company holiday that occurs on a regularly scheduled workday. In the case of terminating employees, full pay will be included if the holiday occurs on the final workday of the workweek. Part-time/temporary employees are only paid for time worked. An employee who is on leave of absence will not receive holiday pay. RELIGIOUS HOLIDAYS Religious holidays other than the regular Company holidays listed above may be taken as vacation time or time off without pay. EMPLOYEE BENEFITS/7100-1
VACATION General Vacation Rules Vacations may be taken at any time during the calendar year earned as long as the dates requested are approved by the Branch Manager. Only regular full-time employees may earn vacation. Vacations should generally be taken one day or more at a time, but may be taken in one-half day increments if approved by the Branch Manager. Seniority of the employee is considered in scheduling the time of vacation. Maternity leave will not affect vacation days earned. Length of Vacation First and second calendar year of employment: During the first and second calendar year of employment, an employee will earn one day of vacation for each completed full month of service, up to 10 days each year. Vacation may not be taken until earned. Beginning with the third calendar year of employment, vacation days are earned as of January 1. A calendar year begins on January 1 and ends on December 31 of the same year. A newly hired employee begins his/her first calendar year on the day that he/she is hired and completes the first calendar year on December 31 of the same year. Third calendar year and beyond: Calendar Years of Service Vacation Days 3-5 10 6 11 7 12 8 13 9 14 10-15 15 16 16 17 17 18 18 19 19 20 and beyond 20 EMPLOYEE BENEFITS/7100-2
VACATION (Continued) Vacation Pay Terminating employees who have not used earned vacation time will be paid for that time on their last day of work. Employees taking maternity leave may be paid for all earned vacation due on the last day of work before the leave begins, or the vacation may be carried over until the employee returns to work. Keep in mind that vacation days cannot be carried over into the next calendar year. Employees beginning maternity leave in one calendar year who during that leave notify the Company in the next calendar year that they will not return to work will not have vacation pay due for the second calendar year. Holidays When a paid holiday falls within an employee's vacation period, the holiday does not count as vacation time. Military Leave Regular full-time employees who enter military service and return to work may take a vacation during the year of return. Vacation earned will be based on previous active employment plus military service. EMPLOYEE ASSISTANCE PROGRAM Liberty National maintains an employee assistance program, simply known as EAP - Liberty Lifeline. Liberty Lifeline is designed to offer help to employees and their families with personal problems that affect their job performance and well-being. Any problem of a personal nature, such as alcohol, drugs, emotional matters, financial planning, domestic problems, legal strife, or marital difficulty that affects the well-being of the individual is given special attention. The program provides skilled counseling and/or consultation with a strong emphasis on achieving better job performance by solving the problem and providing peace of mind. All employees and their immediate families are eligible to use Liberty Lifeline. The Company provides Liberty Lifeline as an employee benefit. Liberty Lifeline is not a treatment center but is a center for initial counseling. If other services outside the program are needed, they will be fully explained. The decision to use them, however, is left up to the employee. No employee s job security or advancement opportunities are affected by a request for assistance. All calls are confidential between the employee and Liberty LifeLine. EMPLOYEE BENEFITS/7100-3
EMPLOYEE ASSISTANCE PROGRAM (Continued) The cost of the first three Liberty Lifeline sessions is paid by the Company. If Liberty Lifeline suggests other professional assistance or additional sessions, the employee will be told what costs to expect and the extent to which the group medical insurance plan covers those costs. Employees are encouraged to call (205) 933-7442 in Birmingham, Alabama, outside Birmingham, but within the State of Alabama (800) 367-0101 or outside Alabama (800) 338-9277. This number is available 7 days a week and 24 hours per day. SERVICE BONUS A bonus is paid in appreciation for years of credited service to the Company. It is determined as follows: Years of Credited Service As of December 25th Net Award After Taxes 4 weeks but less than 3 months $30.00 3 months but less than 1 year $35.00 l year $40.00 2 years through 15 years $40.00 plus $10.00 per year of service after 1 year. Over 15 years $180.00 plus $20.00 per year of service over fifteen years. No maximum. An employee must have been employed on or before December 26 in order to have one year's service by December 25. Part-time employees receive $20.00 if employed over four weeks. The bonus is paid on or about December 15. Employees on sick leave or maternity leave receive the award, but employees on disability, family, or military leave are not eligible. ANNUAL GIFT An annual gift is given to each full/part-time office employee who is on the active payroll on the last working day preceding the Christmas holidays. EMPLOYEE BENEFITS/7100-4
WELFARE BENEFIT PLANS The Company provides sick leave benefits to all full-time, regular employees. The Company bears 100% of the costs of this benefit. In addition, the Company provides group life, disability and medical benefits to full-time, regular employees who elect to participate. Administrative costs are borne by the Company while benefit costs are shared between the Company and the plan participants. All full-time, regular employees may elect to purchase dental benefits. The employee pays the cost of this benefit. See the publication Summary Plan Descriptions for details concerning any welfare benefit plan(s) in which you may participate. RETIREMENT PLANS Regular full-time employees who complete a year of service are eligible to participate in one or more retirement plans sponsored by the Company. A year of service is any anniversary year in which the employee completes 1000 or more hours of service. 1. For those first hired on January 1, 1995 or later, employees are automatically enrolled n the Liberty National Life Insurance Company 401K Plan at a contribution rate of 3% of payroll. The employee contribution is pre-tax; that is, it reduces taxable compensation. The Company contributes an additional 35 cents for each dollar of employee contributions, up to 6% of compensation. Employees may chose among a wide array of investment options. Benefits are fully vested after 7 years of service. In addition, eligible employees who have attained age 21 also participate in the Liberty National Defined Contribution Plan. This plan works like a profit sharing plan. Employees do not contribute to the plan. Each year, at its discretion, the Company may make a contribution to the Plan. Each participating employee receives a share of this contribution according to a formula based on compensation and age. Benefits are fully vested after 7 years of service. 2. For those first hired before January 1, 1995, employees may elect to participate in the Torchmark Corporation Savings and Investment Plan. This plan is similar to the 40lK Plan except there is no automatic enrollment. Employee contributions are made on an after-tax basis and the Company contributes an additional 50 cents for each dollar of employee contributions, up to 6% of compensation. Benefits are fully vested after 6 years of service. In addition, eligible employees who have attained age 21 also participate in the Liberty National Life Insurance Company Pension Plan for Non-Commissioned Employees. This plan is a defined benefit plan providing for a lifetime monthly income beginning at age 65. The benefits are calculated according to a formula based on compensation and years of service. Benefits are fully vested after 5 years of service. Early retirement benefits are available for employees who have at least 15 years of service and who have attained at least age 55. EMPLOYEE BENEFITS/7100-5
RETIREMENT PLANS (Continued) 3. The Profit Sharing and Retirement Plan of Liberty National Life Insurance Company provides benefits for employees first hired before March 6, 1981. See the publication Summary Plan Descriptions for details concerning any retirement plan(s) in which you may participate. Retirement The Company complies with the Age Discrimination Act of 1978 which affects the mandatory retirement date of Company employees. Although the normal retirement age for purposes of all Company employee benefit plans is age 65, there is no mandatory retirement age. The act does not cover employees in bona fide executive or high policy making positions who have held these positions for two years prior to their proposed retirement and who will receive nonforfeitable retirement benefits from the Company of at least $44,000 annually. Company policy requires retirement of these employees at age 65. Decisions as to who falls under this provision will be made on a case-by-case basis. The date of retirement for employees of the Company will be the last day of any work week (Friday) following their eligibility and election for retirement. OTHER MISCELLANEOUS BENEFITS Lunch The lunch period is one hour. Employment Date Adjustment An employee with a break in service receives credit for all prior service with any Torchmark Company as follows: An employee who returns before a break in service occurs recovers all prior service immediately. A break in service occurs when an employee fails to work a minimum of 500 hours in his or her most recent anniversary year. An employee who returns after a break in service must wait one year before receiving credit for prior service. EMPLOYEE BENEFITS/7100-6
OTHER MISCELLANEOUS BENEFITS (Continued) In addition to recovering prior service, returning employees recover all other benefits based on length of service, such as length of vacation and service awards. The Field Personnel Department maintains records of prior service and notifies the Branch Manager when an adjustment has been made. Payroll Deduction Accounts Employees may authorize weekly payroll deductions for the following purposes listed below. Use Form R-1150, which is available in the Payroll Department. Purchase of Torchmark Corporation common stock - Stock shares are purchased once each month. The number of full shares purchased depends on the market price and the balance in the account. Purchase of United States Savings Bonds - Bond are purchased once each month in the denomination(s) specified by the employee. Purchase of Mutual Funds - Employees may purchase shares of mutual funds from the United Group sponsored by Waddell & Reed Financial, Inc., formerly an affiliate of Torchmark Corporation. The minimum purchase per fund is $5.00 per week and up to 4 funds may be purchased each week. Policy Loan Repayments - Deductions are applied weekly to reduce policy loans. Life Insurance Premium Discounts Any regular full-time employee may purchase certain types of life insurance at a discount. Premiums may be deducted from an employee's payroll on a weekly basis if authorized. Life insurance for certain family members also qualify for the employee discount. For more information please see your Liberty National insurance agent. Temporary and part-time employees are not eligible for premium discounts. Service Recognition Employees who celebrate a 30-year anniversary or who become age 60 after 25 years of service are presented with their choice of a wrist watch or a grandfather clock. Telephone Service Employees may use Company telephones for local personal calls, but calls should be held to a minimum in order to keep lines free for Company business. EMPLOYEE BENEFITS/7100-7