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ParentcompanynancialstatementsofBPp.l.c.
11.Share-basedpaymentscontinued
BPShareMatchPlans
ThesearematchingshareplansunderwhichBPmatchesemployees’owncontributionsofsharesuptoapredeterminedlimit.TheplansarerunintheUK
andinmorethan60othercountries.TheUKplanisrunonamonthlybasiswithsharesbeingheldintrustforveyearsbeforetheycanbereleasedfreeof
anyincometaxandnationalinsuranceliability.Inothercountriestheplanisrunonanannualbasiswithsharesbeingheldintrustforthreeyears.Theplan
isoperatedonacashbasisinthosecountrieswherethereareregulatoryrestrictionspreventingtheholdingofBPshares.WhentheemployeeleavesBP
allsharesmustberemovedfromtrustandunitsundertheplanoperatedonacashbasismustbeencashed.
Localplans
InsomecountriesBPprovideslocalschemebenets,therulesandqualicationsforwhichvaryaccordingtolocalcircumstances.
Employee Share Ownership Plans (ESOPs)
ESOPshavebeenestablishedtoacquireBPsharestosatisfyanyawardsmadetoparticipantsundertheBPshareplansasrequired.TheESOPshavewaived
theirrightstodividendsonsharesheldforfutureawardsandarefundedbythegroup.Untilsuchtimeasthecompany’sownsharesheldbytheESOPtrusts
vestunconditionallytoemployees,theamountpaidforthosesharesisdeductedinarrivingatshareholders’equity(seeNote8).Assetsandliabilitiesofthe
ESOPsarerecognizedasassetsandliabilitiesofthegroup.
At31December2010theESOPsheld11,477,253shares(200918,062,246sharesand200829,051,082shares)forpotentialfutureawards,which
hadamarketvalueof$82million(2009$174millionand2008$220million).
Share option transactions
Detailsofshareoptiontransactionsfortheyearundertheshareoptionplansareasfollows:
2010 2009 2008
Weighted Weighted Weighted
Number average Number average Number average
of exercise price of exerciseprice of exerciseprice
options $ options $ options $
Outstandingat1January 295,895,357 8.73 326,254,599 8.70 358,094,243 8.51
Granted 10,420,287 6.08 9,679,836 6.55 8,062,899 8.96
Forfeited (9,499,661) 7.88 (5,954,325) 8.81 (2,502,784) 8.50
Exercised (31,839,034) 7.97 (21,293,871) 7.53 (37,277,895) 6.97
Expired (1,670,227) 8.71 (12,790,882) 8.01 (121,864) 7.00
Outstandingat31December 263,306,722 8.75 295,895,357 8.73 326,254,599 8.70
Exercisableat31December 242,530,635 8.90 274,685,068 8.80 260,178,938 8.22
Theweightedaveragesharepriceatthedateofexercisewas$9.54(2009$9.10and2008$10.87).Fortheoptionsoutstandingat31December2010,the
exercisepricerangesandweightedaverageremainingcontractuallivesareshownbelow.
Options outstanding Options exercisable
Weighted Weighted Weighted
Number average average Number average
of remaining life exercise price of exercise price
Rangeofexerciseprices shares years $ shares $
$6.09–$7.53 54,821,144 2.68 6.36 39,231,453 6.40
$7.54–$8.99 115,187,261 1.71 8.19 112,551,834 8.17
$9.00–$10.45 21,827,393 3.54 9.88 19,276,424 9.98
$10.46–$11.92 71,470,924 4.81 11.14 71,470,924 11.14
263,306,722 2.90 8.75 242,530,635 8.90
Fair values and associated details for options and shares granted
2010 2009 2008
ShareSave ShareSave ShareSave ShareSave ShareSave ShareSave
3 year 5 year 3year 5year 3year 5year
Optionpricingmodelused Binomial Binomial Binomial Binomial Binomial Binomial
Weightedaveragefairvalue $0.06 $0.08 $1.07 $1.07 $1.82 $1.74
Weightedaverageshareprice $4.58 $4.58 $7.87 $7.87 $11.26 $11.26
Weightedaverageexerciseprice $5.90 $5.90 $6.92 $6.92 $9.70 $9.70
Expectedvolatility 22% 23% 32% 32% 23% 23%
Optionlife 3.5 years5.5 years 3.5years 5.5years 3.5years 5.5years
Expecteddividends 8.40% 8.40% 7.40% 7.40% 4.60% 4.60%
Riskfreeinterestrate 1.25% 2.00% 3.00% 3.75% 5.00% 5.00%
Expectedexercisebehaviour 100% year 4 100% year 6 100%year4 100%year6 100%year4 100%year6
TheparentcompanynancialstatementsofBPp.l.c.onpagesPC1–PC16donotformpartofBP’sAnnualReportonForm20-FasledwiththeSEC.
PC14BPAnnualReportandForm20-F2010