BP 2011 Annual Report Download - page 296

PC12 BP Annual Report and Form 20-F 2011
Parent company financial statements of BP p.l.c.
The parent company financial statements of BP p.l.c. on pages PC1 – PC14 do not form part of BP’s Annual Report on Form 20-F as filed with the SEC.
11. Share-based payments continued
Restricted share unit plans
Share unit grants under BP’s restricted plans typically take into account the employee’s performance in either the current or the prior year, track record
of delivery, business and leadership skills and potential. One restricted share unit plan for senior employees, used in special circumstances such as
recruitment and retention, normally has no performance conditions. Plans included in this category are the Executive Performance Plan (EPP), the
Restricted Share Plan (RSP), the Deferred Annual Bonus Plan (DAB) and, in part, the Performance Share Plan (PSP).
BP Share Option Plan (BPSOP)
Share options with an exercise price equivalent to the market price of a BP share immediately preceding the date of grant were granted to participants
annually until 2006. These options are not subject to any performance conditions and are exercisable between the third and tenth anniversaries of the
grant date.
BP Plan 2011
Share options with an exercise price equivalent to the market price of a BP share immediately preceding the date of grant were granted to participants in
2011. These options are not subject to any performance conditions and will be exercisable between the third and tenth anniversaries of the grant date.
Share Value Plan
In 2012, the group will launch a new performance plan known as the Share Value Plan (SVP) which will grant restricted share units with a three-year
performance period. The number of units granted is dependent on grade and country of operation. The performance measures are grade specific and
include: individual rating, balanced scorecard and TSR criteria. For the 2012 performance year, no further grants will be made under DAB. From 1 January
2012, no further grants will be made under CPP, EPP or PSP.
Other plans
For further information on BP’s savings and matching plans, including the BP ShareMatch plans and the BP ShareSave Plan, see page 158.
Share option transactions
Details of share option transactions for the year under the share options plans are as follows:
Share option transactions 2011 2010
Number
of
options
Weighted
average
exercise price
$
Number
of
options
Weighted
average
exercise price
$
Outstanding at 1 January 263,306,722 8.75 295,895,357 8.73
Granteda152,472,556 6.03 10,420,287 6.08
Forfeited (9,058,406) 7.22 (9,499,661) 7.88
Exercised (2,502,306) 7.64 (31,839,034) 7.97
Expired (29,717,854) 8.26 (1,670,227) 8.71
Outstanding at 31 December 374,500,712 7.73 263,306,722 8.75
Exercisable at 31 December 209,776,014 9.01 242,530,635 8.90
a Share options granted during 2011 include 142.5 million options awarded under the BP Plan 2011 with a fair value of $1.02 per option at the date of grant, determined using a binomial option pricing model
including assumptions for share price volatility, dividends and cancellations.
The weighted average share price at the date of exercise was $7.71 (2010 $9.54 and 2009 $9.10).
For options outstanding at 31 December 2011, the exercise price ranges and weighted average remaining contractual lives were as shown below:
Options outstandingaOptions exercisable
Range of exercise prices
Number
of
shares
Weighted
average
remaining life
Years
Weighted
average
exercise price
$
Number
of
shares
Weighted
average
exercise price
$
$5.66 – $7.22 199,571,741 7.51 6.11 37,283,772 6.37
$7.23 – $8.79 81,608,110 1.21 8.13 81,608,110 8.13
$8.80 – $10.35 22,264,187 2.73 9.83 19,827,458 9.92
$10.36 – $11.92 71,056,674 3.81 11.14 71,056,674 11.14
374,500,712 5.15 7.73 209,776,014 9.01
a Included within options outstanding at 31 December 2011 are options granted annually under the BPSOP until 2006 of 208 million options (2010 239 million options).