BP 2007 Annual Report Download - page 85

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:
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Expiry dates Exercise price
Options outstanding (shares) of options per share
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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
Register of members holding BP ordinary shares as at
31 December 2007
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Number of Percentage of Percentage of
ordinary total ordinary total ordinary
Range of holdings shareholders shareholders share capital
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1-200 62,098 19.06 0.02
201-1,000 124,075 38.08 0.31
1,001-10,000 125,886 38.63 1.81
10,001-100,000 11,944 3.66 1.15
100,001-1,000,000 1,061 0.33 1.83
Over 1,000,000a779 0.24 94.88
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Totals 325,843 100.00 100.00
aIncludes JP Morgan Chase Bank holding 28.51% of the total ordinary issued share
capital (excluding shares held in treasury) as the approved depositary for ADSs, a
breakdown of which is shown in the table below.
Register of holders of American depositary shares as at
31 December 2007a
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Percentage of
Number of total ADS Percentage of
Range of holdings ADS holders holders total ADSs
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1-200 36,682 25.87 0.05
201-1,000 34,313 24.20 0.34
1,001-10,000 54,864 38.70 3.57
10,001-100,000 15,359 10.83 7.30
100,001-1,000,000 558 0.39 1.82
Over 1,000,000b12 0.01 86.92
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Totals 141,788 100.00 100.00
aOne ADS represents six 25 cent ordinary shares.
bOne of the holders of ADSs represents some 792,000 underlying shareholders.
As at 31 December 2007, there were also 1,597 preference
shareholders. Preference shareholders represented 0.44% and ordinary
shareholders represented 99.56% of the total issued nominal share
capital of the company as at that date.
Substantial shareholdings
The disclosure of certain major interests in the share capital of the
company is governed by the Disclosure and Transparency Rules (DTR)
made by the UK Financial Services Authority. Under DTR 5, we have
received notification that Legal and General Group Plc hold 4.60% of the
voting rights of the issued share capital of the company.
Related party transactions
Transactions between the group and its significant jointly controlled
entities and associates are summarized in Financial statements – Note 26
on page 134 and Financial statements – Note 27 on page 135. In the
ordinary course of its business, the group enters into transactions with
various organizations with which certain of its directors or executive
officers are associated. Except as described in this report, the group did
not have material transactions or transactions of an unusual nature with,
and did not make loans to, related parties in the period commencing
1 January 2007 to 19 February 2008.
Dividends
BP has paid dividends on its ordinary shares in each year since 1917. In
2000 and thereafter, dividends were, and are expected to continue to be,
paid quarterly in March, June, September and December. Former Amoco
Corporation and Atlantic Richfield Company shareholders will not be able
to receive dividends, or proxy material, until they send in their Amoco
Corporation or Atlantic Richfield Company common shares for exchange.
BP currently announces dividends for ordinary shares in US dollars and
states an equivalent pounds sterling dividend. Dividends on BP ordinary
BP ANNUAL REPORT AND ACCOUNTS 2007 83