BP » Topics » Employee Share Plans

This excerpt taken from the BP 20-F filed Mar 4, 2008.
Employee share plans
The following table shows employee share options granted.

      options thousands







   2007   2006   2005  







Employee share options granted during the yeara 6,004   53,977   54,482  

a For the options outstanding at 31 December 2007, the exercise price ranges and weighted average remaining contractual lives are shown in Financial statements – Note 41 on page 160.
   

BP offers most of its employees the opportunity to acquire a shareholding in the company through savings-related and/or matching share plan arrangements. BP also uses long-term performance plans (see Financial statements – Note 41 on page 160) and the granting of share options as elements of remuneration for executive directors and senior employees.
     Shares acquired through the company’s employee share plans rank pari passu with shares in issue and have no special rights, save as described below. For legal and practical reasons, the rules of these plans set out the consequences of a change of control of the company, and generally provide for options and conditional awards to vest on an accelerated basis.

Savings and matching plans
BP ShareSave Plan

This is a savings-related share option plan, under which employees save on a monthly basis over a three- or five-year period towards the purchase of shares at a fixed price determined when the option is granted. This price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract otherwise it lapses. The plan is run in the UK and options are granted annually, usually in June. Participants leaving for a qualifying reason will have six months in which to use their savings to exercise their options on a pro-rated basis.



Back to Contents

  81

 

BP ShareMatch plans
These are matching share plans, under which BP matches employees’ own contributions of shares up to a predetermined limit. The plans are run in the UK and in more than 70 other countries. The UK plan is run on a monthly basis with shares being held in trust for five years before they can be released free of any income tax and national insurance liability. In other countries, the plan is run on an annual basis, with shares being held in trust for three years. The plan is operated on a cash basis in those countries where there are regulatory restrictions preventing the holding of BP shares. When the employee leaves BP, all shares must be removed from trust and units under the plan operated on a cash basis must be encashed.
     Once shares have been awarded to an employee under the plan, the employee may instruct the trustee how to vote their shares.

Local plans
In some countries, BP provides local scheme benefits, the rules and qualifications for which vary according to local circumstances.
     The above share plans are indicated as being equity-settled. In certain countries, however, it is not possible to award shares to employees owing to local legislation. In these instances, the award will be settled in cash, calculated as the cash equivalent of the value to the employee of an equity-settled plan.

Cash plans
Cash-settled share-based payments/Stock Appreciation Rights (SARs)
These are cash-settled share-based payments available to certain employees that require the group to pay the intrinsic value of the cash option/SAR/restricted shares to the employee at the date of exercise/maturity.

Employee share ownership plans (ESOPs)
ESOPs have been established to acquire BP shares to satisfy any awards made to participants under the Executive Directors’ Incentive Plan, the Medium-Term Performance Plan, the Long Term Performance Plan, the Deferred Annual Bonus Plan and the BP ShareMatch plans. The ESOPs have waived their rights to dividends on shares held for future awards and are funded by the group. Pending vesting, the ESOPs have independent trustees which have the discretion in relation to the voting of such shares. Until such time as the company’s own shares held by the ESOP trusts vest unconditionally in employees, the amount paid for those shares is deducted in arriving at shareholders’ equity. (See Financial statements – Note 40 on page 158.) Assets and liabilities of the ESOPs are recognized as assets and liabilities of the group.
     At 31 December 2007, the ESOPs held 6,448,838 shares (2006 12,795,887 shares and 2005 14,560,003 shares) for potential future awards, which had a market value of $79 million (2006 $142 million and 2005 $156 million).
     Pursuant to the various BP group share option schemes, the following options for ordinary shares of the company were outstanding at 19 February 2008:






   Expiry dates   Exercise price
Options outstanding (shares) of options   per share  





352,819,401 2008-2016   5.0967-11.9210  

Further details on share options appear in Financial statements – Note 41 on page 160.


Major shareholders and related party transactions

This excerpt taken from the BP 20-F filed Jun 13, 2006.

Employee Share Plans

 
  2004

  2003

  2002

 
  (options thousands)

Employee share options granted during the year (a)            
Executive Directors' Incentive Plan   2,783   2,728   2,068
BP Share Option Plan   71,750   78,109   66,771
Savings-related schemes   5,861   23,922   9,719
   
 
 
    80,394   104,759   78,558
   
 
 

(a)
The exercise prices for BP options granted during the year were £4.22/$7.73 (weighted average price) for Executive Directors' Incentive Plan (2,783,333 options); £4.38/$8.01 (weighted average price) for 71,750,436 options granted under the BP Share Option Plan; and £3.86/$7.06 (5,860,991 options) for savings-related and similar plans.

        BP offers most of its employees the opportunity to acquire a shareholding in the Company through savings-related and/or matching share plan arrangements. Such arrangements are now in place in more than 80 countries. BP also uses long-term performance plans (see Item 18 — Financial Statements Note 39 on page F-79) and the granting of share options as elements of remuneration for executive directors and senior employees.

        During 2004, share options were granted to the executive directors under the EDIP. For these options, the option exercise price was the market value (as determined in accordance with the plan rules) on the grant date. The options granted to executive directors reflect BP's performance in terms of total shareholder return, that is, share price increase with all dividends reinvested, relative to the FTSE Global 100 group of companies over the three years preceding the grant as well as the underlying health of the business and the competitive marketplace. Options have not been granted in any year unless the criteria for an award of shares under the share element of the EDIP (see Item 18 — Financial Statements Note 39 on page F-79) have been met. Options vest over three years (one-third each after one, two and three years respectively) and have a life of seven years after the grant.

        Share options were also granted in 2004 under the BP Share Option Plan to certain categories of employees. Subject to certain vesting requirements, the options are exercisable between the third and 10th anniversaries of the date of grant. There are no performance conditions attaching to the options granted during the year.

        Under the BP ShareSave Plan (a savings-related share option plan), employees save on a monthly basis over a three- or five-year period towards the purchase of shares at a price fixed when the option is granted. The option price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract; otherwise it lapses. The plan is run in the UK and a small number of other countries.

        Under the BP ShareMatch Plan, BP matches employees' own contributions of shares, up to a predetermined limit. The shares are then held in trust for a defined minimum period. The plan is run in the UK and in over 70 other countries.

        The Company sponsors a number of savings plans covering most US employees. Under these plans, most employees may contribute up to 100% of their salary subject to certain regulatory limits. Most employees are eligible for a dollar-for-dollar Company-matched contribution for the first 7% of eligible pay contributed on a before-tax or after-tax basis, or a combination of both. The precise arrangement may vary in certain business units. Plan participants may invest contributions in more than 200 investment options, including a fund comprised primarily of BP ADSs. The Company's contributions

153



generally vest over a period of three years (0% for years one and two and 100% after completion of three years). Company contributions to savings plans during the year were $138 million ($130 million).

        An Employee Share Ownership Plan (ESOP) was established in 1997 to acquire BP shares to satisfy future requirements of employee share plans. The Company provides funding to the ESOP. Until such time as the Company's own shares held by the ESOP trust vest unconditionally in employees, the amount paid for those shares is deducted in arriving at shareholders' interest (see Item 18 — Financial Statements Note 35 on page F-72). Other assets and liabilities of the ESOP are recognized as assets and liabilities of the Company. The ESOP has waived its rights to dividends.

        During 2004, the ESOP released 14,156,047 shares (16,892,853 shares) for the matching share plans. The cost of shares released for these plans has been charged in BP's accounts. At December 31, 2004, the ESOP held 2,682,860 shares (7,811,544 shares), which had a market value of $26 million ($63 million).

        Pursuant to the various BP Group share option schemes, the following options for Ordinary Shares of the Company were outstanding at June 28, 2005:

Options outstanding

  Expiry
dates of
options

  Exercise
price
per share

(shares)

   
   
478,416,804   2005-2015   $4.22-$10.63

        Further details on share options appear in Item 18 — Financial Statements — Note 38 on page F-75.

154



ITEM 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


MAJOR SHAREHOLDERS

        At June 28, 2005, the Company has been notified that JPMorgan Chase Bank, as depositary for American Depositary Shares (ADSs), holds interests through its nominee, Guaranty Nominees Limited, in 7,004,020,650 ordinary shares (33.07% of the Company's ordinary share capital). Included in this total is part of the holding of the Kuwait Investment Office (KIO). Either directly or through nominees, the KIO holds interests in 715,040,000 ordinary shares (3.32% of the Company's ordinary share capital). The KIO does not have any different voting rights from the rights of other ordinary shareholders. At the same date, Barclays plc holds interests in 750,956,107 ordinary shares (3.52% of the Company's ordinary share capital) and Legal and General holds interests in 768,172,570 ordinary shares (3.57% of the Company's share capital).

        At the date of this report the Company has also been notified of the following interests in preference shares. Co-operative Insurance Society Limited holds interests in 1,475,538 8% 1st preference shares (20.40% of that class) and 1,789,796 9% 2nd preference shares (32.70% of that class). The National Farmers Mutual Insurance Society Ltd holds 945,000 8% 1st preference shares (13.07% of that class) and 987,000 2nd preference shares (18.03% of that class). Prudential plc holds interests in 528,150 8% 1st preference shares (7.30% of that class) and 644,450 9% 2nd preference shares (11.77% of that class). Royal & SunAlliance Insurance plc holds interests in 287,500 8% 1st preference shares (3.97% of that class) and 250,000 2nd preference shares (4.57% of that class). Ruffer Limited Liability Partnership holds interests in 750,000 9% preference shares (13.70% of that class).


RELATED PARTY TRANSACTIONS

        The Group had no material transactions with joint ventures and associated undertakings during the period commencing January 1, 2004 to the date of this filing. Transactions between the Group and its significant joint ventures and associated undertakings are summarized in Item 18 — Financial Statements — Note 42 on page F-82.

        In the ordinary course of its business the Group has transactions with various organizations with which certain of its directors are associated but, except as described in this report, no material transactions responsive to this item have been entered into in the period commencing January 1, 2004 to June 28, 2005.


ITEM 8 — FINANCIAL INFORMATION


CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

This excerpt taken from the BP 20-F filed Jun 30, 2005.

Employee Share Plans

 
  2004

  2003

  2002

 
  (options thousands)

Employee share options granted during the year (a)            
Executive Directors' Incentive Plan   2,783   2,728   2,068
BP Share Option Plan   71,750   78,109   66,771
Savings-related schemes   5,861   23,922   9,719
   
 
 
    80,394   104,759   78,558
   
 
 

(a)
The exercise prices for BP options granted during the year were £4.22/$7.73 (weighted average price) for Executive Directors' Incentive Plan (2,783,333 options); £4.38/$8.01 (weighted average price) for 71,750,436 options granted under the BP Share Option Plan; and £3.86/$7.06 (5,860,991 options) for savings-related and similar plans.

        BP offers most of its employees the opportunity to acquire a shareholding in the Company through savings-related and/or matching share plan arrangements. Such arrangements are now in place in more than 80 countries. BP also uses long-term performance plans (see Item 18 — Financial Statements Note 39 on page F-80) and the granting of share options as elements of remuneration for executive directors and senior employees.

        During 2004, share options were granted to the executive directors under the EDIP. For these options, the option exercise price was the market value (as determined in accordance with the plan rules) on the grant date. The options granted to executive directors reflect BP's performance in terms of total shareholder return, that is, share price increase with all dividends reinvested, relative to the FTSE Global 100 group of companies over the three years preceding the grant as well as the underlying health of the business and the competitive marketplace. Options have not been granted in any year unless the criteria for an award of shares under the share element of the EDIP (see Item 18 — Financial Statements Note 39 on page F-80) have been met. Options vest over three years (one-third each after one, two and three years respectively) and have a life of seven years after the grant.

        Share options were also granted in 2004 under the BP Share Option Plan to certain categories of employees. Subject to certain vesting requirements, the options are exercisable between the third and 10th anniversaries of the date of grant. There are no performance conditions attaching to the options granted during the year.

        Under the BP ShareSave Plan (a savings-related share option plan), employees save on a monthly basis over a three- or five-year period towards the purchase of shares at a price fixed when the option is granted. The option price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract; otherwise it lapses. The plan is run in the UK and a small number of other countries.

        Under the BP ShareMatch Plan, BP matches employees' own contributions of shares, up to a predetermined limit. The shares are then held in trust for a defined minimum period. The plan is run in the UK and in over 70 other countries.

        The Company sponsors a number of savings plans covering most US employees. Under these plans, most employees may contribute up to 100% of their salary subject to certain regulatory limits. Most employees are eligible for a dollar-for-dollar Company-matched contribution for the first 7% of eligible pay contributed on a before-tax or after-tax basis, or a combination of both. The precise arrangement may vary in certain business units. Plan participants may invest contributions in more than 200 investment options, including a fund comprised primarily of BP ADSs. The Company's contributions

147



generally vest over a period of three years (0% for years one and two and 100% after completion of three years). Company contributions to savings plans during the year were $138 million ($130 million).

        An Employee Share Ownership Plan (ESOP) was established in 1997 to acquire BP shares to satisfy future requirements of employee share plans. The Company provides funding to the ESOP. Until such time as the Company's own shares held by the ESOP trust vest unconditionally in employees, the amount paid for those shares is deducted in arriving at shareholders' interest (see Item 18 — Financial Statements Note 35 on page F-73). Other assets and liabilities of the ESOP are recognized as assets and liabilities of the Company. The ESOP has waived its rights to dividends.

        During 2004, the ESOP released 14,156,047 shares (16,892,853 shares) for the matching share plans. The cost of shares released for these plans has been charged in BP's accounts. At December 31, 2004, the ESOP held 2,682,860 shares (7,811,544 shares), which had a market value of $26 million ($63 million).

        Pursuant to the various BP Group share option schemes, the following options for Ordinary Shares of the Company were outstanding at June 28, 2005:

Options outstanding

  Expiry
dates of
options

  Exercise
price
per share

(shares)

   
   
478,416,804   2005-2015   $4.22-$10.63

        Further details on share options appear in Item 18 — Financial Statements — Note 38 on page F-76.

148



ITEM 7 — MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


MAJOR SHAREHOLDERS

        At June 28, 2005, the Company has been notified that JPMorgan Chase Bank, as depositary for American Depositary Shares (ADSs), holds interests through its nominee, Guaranty Nominees Limited, in 7,004,020,650 ordinary shares (33.07% of the Company's ordinary share capital). Included in this total is part of the holding of the Kuwait Investment Office (KIO). Either directly or through nominees, the KIO holds interests in 715,040,000 ordinary shares (3.32% of the Company's ordinary share capital). The KIO does not have any different voting rights from the rights of other ordinary shareholders. At the same date, Barclays plc holds interests in 750,956,107 ordinary shares (3.52% of the Company's ordinary share capital) and Legal and General holds interests in 768,172,570 ordinary shares (3.57% of the Company's share capital).

        At the date of this report the Company has also been notified of the following interests in preference shares. Co-operative Insurance Society Limited holds interests in 1,475,538 8% 1st preference shares (20.40% of that class) and 1,789,796 9% 2nd preference shares (32.70% of that class). The National Farmers Mutual Insurance Society Ltd holds 945,000 8% 1st preference shares (13.07% of that class) and 987,000 2nd preference shares (18.03% of that class). Prudential plc holds interests in 528,150 8% 1st preference shares (7.30% of that class) and 644,450 9% 2nd preference shares (11.77% of that class). Royal & SunAlliance Insurance plc holds interests in 287,500 8% 1st preference shares (3.97% of that class) and 250,000 2nd preference shares (4.57% of that class). Ruffer Limited Liability Partnership holds interests in 750,000 9% preference shares (13.70% of that class).


RELATED PARTY TRANSACTIONS

        The Group had no material transactions with joint ventures and associated undertakings during the period commencing January 1, 2004 to the date of this filing. Transactions between the Group and its significant joint ventures and associated undertakings are summarized in Item 18 — Financial Statements — Note 42 on page F-83.

        In the ordinary course of its business the Group has transactions with various organizations with which certain of its directors are associated but, except as described in this report, no material transactions responsive to this item have been entered into in the period commencing January 1, 2004 to June 28, 2005.


ITEM 8 — FINANCIAL INFORMATION


CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki