Rules of the BP p.l.c. Performance Share Plan

 

Exhibit 4.1

BP p.l.c.

RULES OF THE BP p.l.c. PERFORMANCE SHARE PLAN

Adoption:              [•] 2006

 

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Telephone (44-20) 7456 2000
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Ref 01/145/G Rowlands-Hempel

 

 

 

 

Table of Contents

	Contents		Page
	1	Definitions			1
	2	Eligibility			2
	3	Granting Restricted Share Units			3
	4	Restricted Share Units			5
	5	Making Awards			5
	6	Leaving the Group before the end of the Restricted Period			6
	7	Variations in share capital, demergers and special distributions			8
	8	Exchange of Restricted Share Units		9
	9	Restrictions on issue of Shares		10
	10	Terms of employment		10
	11	General		11
	12	Changing the Plan and termination		13
	13	Governing law and jurisdiction		13
	Schedule 1 US			14
	Schedule 2 Restricted Cash Units			17

 

 

 

 

 

 

Rules of the BP p.l.c. Performance Share Plan

Introduction

This plan sets out the terms on which awards of shares will be made to certain employees of the Company and its Subsidiaries. Employees selected for participation in the Plan will be granted restricted share units giving them a conditional entitlement to an award of shares. The number of shares to be granted in respect of a restricted share unit may depend on the extent to which a performance condition is satisfied over the Financial Year prior to grant.

1	Definitions

In these rules:

“ Acquiring Company ” means a person who obtains Control of the Company;

“ ADS ” means an American depositary share representing ordinary shares of the Company;”

“ Award ” means an award of Shares under rule 5.1;

“ Award Date ” means the date on which an Award is made under any of rules 5.1, 6 or 7;

“ Business Day ” means a day on which the London Stock Exchange (or, if relevant and if the Designated Corporate Officer determines, any stock exchange nominated by the Designated Corporate Officer on which the Shares are traded) is open for the transaction of business;

“ Company ” means BP p.l.c.;

“ Control ” has the meaning given to it by Section 840 of the Income and Corporation Taxes Act 1988;

“ Dealing Restrictions ” means restrictions imposed by statute, order, regulation or Government directive, or by the Model Code or any code adopted by the Company based on the Model Code;

“ Designated Corporate Officer ” means the Group Chief Executive or other appropriate Corporate Officer authorised under the BP Management Framework and associated delegations;

“ Financial Year ” means the calendar year by reference to which the conditions relating to individual performance imposed under rule 2.2 are measured;

“ Grant Date ” means the date which the Plan Administrator sets for the grant of Restricted Share Units;

“ London Stock Exchange ” means London Stock Exchange plc;

“ Member of the Group ” means:

(i)

the Company; and

 

(ii)

its Subsidiaries from time to time; and

 

(iii)

any other company which is associated with the Company and is so designated by the Designated Corporate Officer;

 

 

 

 

“ Model Code ” means the UK Listing Authority Model Code for transactions in securities by directors, certain employees and persons connected with them;

“ Participant ” means a person who is participating in the Plan;

“ Performance Conditions ” means the conditions imposed under rule 3.3;

“ Plan ” means these rules known as “The BP p.l.c. Performance Share Plan” as changed from time to time;

“ Plan Administrator ” means the person or persons appointed by the Designated Corporate Officer as the plan administrator for the purposes of this Plan;

“ Regulatory Information Service ” means a service that is approved by the Financial Services Authority as meeting the Primary Information Provider Criteria and is on the list of the Regulatory Information Services maintained by the Financial Services Authority;

“ Restricted Period ” means the period determined by the Designated Corporate Officer and which will normally be 3 calendar years from the start of the calendar year in which Restricted Share Units are granted;

“ Restricted Share Unit ” means a conditional entitlement to an Award granted to a Participant;

“ Shares ” means fully paid ordinary shares in the capital of the Company or where the context requires ADSs (see rule 5.5); and

“ Subsidiary ” means a company which is a subsidiary of the Company within the meaning of Section 736 of the Companies Act 1985.

2	Eligibility

The Plan may be operated in respect of Participants who have been selected for a grant of Restricted Share Units by reference to a particular Financial Year (rule 2.1) or otherwise (rule 2.5).

2.1	Participation in respect of individual performance in a Financial Year

 

2.1.1

Under this rule 2.1, the Company may select any employee of the Company or any Subsidiary to join the Plan and become a Participant. Participation will be by reference to individual performance in a particular Financial Year. However, participation may not be extended to an employee who at the start of the Financial Year in which the Plan is to be operated is either (i) a director of the Company or (ii) an employee whose employment has been terminated whether or not such termination is lawful, unless in the case of (ii) the Designated Corporate Officer considers that special circumstances exist.

 

2.1.2

Rule 2.4 applies where a person has ceased to be an employee of the Company or Subsidiary or an event occurs as described in rules 7.2, 7.3 or 7.5 prior to the Grant Date.

 

2.2	Notice of Selection for Participation

Where a Participant has been selected to participate in the Plan under rule 2.1, as soon as practicable after the start of the Financial Year to which the Plan relates the Company will notify him of his selection for participation in the Plan and any conditions which need to be

 

 

 

 

satisfied in order for the employee to be made a grant of Restricted Share Units. The conditions may be different for different employees. The Company, subject to the approval of the Designated Corporate Officer, may waive or change such conditions in accordance with their terms or in any way the Designated Corporate Officer sees fit.

2.3	Joining the Plan during the Financial Year

If anyone is selected to participate in the Plan under rule 2.1 but after the start of a Financial Year in respect of which the Plan is being operated, his grant of Restricted Share Units (if any) may, at the discretion of the Designated Corporate Officer, be pro-rated by reference to the period between selection and the end of the relevant Financial Year as a proportion of the whole Financial Year.

2.4	Leaving employment before the grant of Restricted Share Units

 

2.4.1

A Participant who has been selected to participate in the Plan under rule 2.1 will not be eligible for the grant of Restricted Share Units if he ceases to be an employee of the Company or a Subsidiary at any time during the Financial Year in which the Plan is operated.

 

2.4.2

Where a Participant ceases to be an employee of the Company or a Subsidiary for any of the reasons set out in rules 6.2.1(i), (ii), (v), (vi), (vii) or 6.4, after the end of the relevant Financial Year but prior to the grant of Restricted Share Units, or where during that period an event described in rules 7.2, 7.3 or 7.5 takes place, then the Company may grant the Participant Restricted Share Units and an Award may be made to him.

 

2.5	Participation otherwise than in respect of individual performance in a Financial Year

 

2.5.1

Under this rule 2.5, the Company may select any employee of the Company or any Subsidiary for the grant of Restricted Share Units. Selection of employees and the grant of Restricted Share Units will be made without reference to individual performance in a particular Financial Year. However, Restricted Share Units may not be granted to an employee who on the Grant Date is either (i) a director of the Company or (ii) an employee whose employment has been terminated whether or not such termination is lawful, unless in the case of (ii) the Designated Corporate Officer considers that special circumstances exist.

 

2.5.2

For the avoidance of doubt, where a Participant has been selected to participate in the Plan under this rule 2.5, rules 2.2, 2.3, 2.4 and 3.1.1 do not apply.

 

2.6	Rights prior to the grant of Restricted Share Units

Selection for participation in the Plan does not entitle any Participant to the grant of Restricted Share Units and a Participant shall have no rights to or in respect of Restricted Share Units until a grant has been made to him.

3	Granting Restricted Share Units

 

3.1

Grant

 

3.1.1

Where a Participant has been selected to participate in the Plan under rule 2.1, as soon as practicable following the end of the Financial Year in which the Plan is

 

 

 

 

operated the Company will determine whether and to what extent the conditions, if any, set under rule 2.2 have been satisfied and how many Restricted Share Units should be granted in respect of each Participant.

 

3.1.2

Restricted Share Units granted under the Plan, and the terms of those Restricted Share Units, must be approved in advance by the Designated Corporate Officer.

 

3.2	Time of Operation

Restricted Share Units may only be granted within 42 days starting on any of the following:

3.2.1

the date of adoption of the Plan;

 

3.2.2

the day after the announcement of the Company’s results through a Regulatory Information Service for any period;

 

3.2.3

any day on which the Designated Corporate Officer resolves that exceptional circumstances exist which justify the grant of Restricted Share Units;

 

3.2.4

any day on which changes to the legislation or regulations affecting share plans are announced, effected or made; or

 

3.2.5

the lifting of Dealing Restrictions which prevented the granting of Restricted Share Units during any period specified above.

 

3.3	Conditions

 

3.3.1

Awards in respect of Restricted Share Units may be subject to the satisfaction of the Performance Conditions specified at the Grant Date. Performance Conditions may be different for different Participants.

 

3.3.2

The Company, subject to the approval of the Designated Corporate Officer, may waive or change the Performance Conditions in accordance with their terms or in any way the Designated Corporate Officer sees fit.

 

3.3.3

Notwithstanding anything else in the Plan, an Award will only be made in respect of Restricted Share Units to the extent that any Performance Conditions are satisfied or waived.

 

3.4	Statements

Each Participant will receive a statement setting out the terms of the Restricted Share Units as soon as practicable after the Grant Date. If any statement is lost or damaged the Company may replace it on such terms as it decides.

3.5	No payment

A Participant is not required to pay for the grant of Restricted Share Units.

3.6	Disclaimer of Restricted Share Units

Any Participant may disclaim all or part of his Restricted Share Units within 30 days after the Grant Date by notice in writing to any person nominated by the Company. If this happens, the Restricted Share Units will be deemed never to have been granted under the Plan. A Participant is not required to pay for the disclaimer.

 

 

 

 

4	Restricted Share Units

 

4.1	Terms of Grant

Restricted Share Units are subject to the rules of the Plan. The terms of the grant of Restricted Share Units, as determined by the Company and approved by the Designated Corporate Officer, must be notified to the Participant and must include:

4.1.1

the number of Shares which is comprised in an Award in respect of Restricted Share Units;

 

4.1.2

the Restricted Period; and

 

4.1.3

any Performance Conditions specified under rule 3.3

 

4.2

Rights

A Participant will have no rights of a shareholder (e.g. voting or dividends) in respect of Shares notionally comprised in Restricted Share Units.

4.3	Dividend equivalents

The number of Restricted Share Units granted to a Participant shall be increased as determined by the Plan Administrator to take account of the net dividends that would have been paid on the Shares subject to his Restricted Share Units during the Restricted Period (“ Additional Restricted Share Units ”). Additional Restricted Share Units will be credited to a Participant at the time dividends are paid. All Additional Restricted Share Units shall be subject to the rules of the Plan and the terms of the Restricted Share Units by reference to which they were granted, including the same Restricted Period.

The Designated Corporate Officer may at any time decide to disapply this rule 4.3 in relation to all or part of a special dividend or dividend in specie which may otherwise be included in rule 4.3.

5	Making Awards

 

5.1	Determination of Performance Conditions and making of Awards

As soon as practicable following the end of the Restricted Period (or at any other time where the rules or the terms of the Performance Conditions state that the Performance Conditions should be applied) the Designated Corporate Officer will determine whether and to what extent any Performance Conditions have been satisfied. The Designated Corporate Officer may decide to increase or decrease the number of Shares notified under rule 4.1.1 and which are to be awarded in respect of Restricted Share Units in accordance with the terms of any Performance Conditions. The Designated Corporate Officer may procure the transfer of such Shares subject to any conditions.

Once the determination is made under this rule 5.1 the Company will make an Award of Shares.

5.2	Consequences

To the extent that an Award has been made under any of rule 5, 6, or 7, the Company will procure the transfer of Shares to the Participant (or as he may direct) as soon as

 

 

 

 

practicable after the Award Date. The Participant will be entitled to all rights to Shares where the record dates fall after the date of transfer.

5.3

Lapse

If any Restricted Share Units lapse under the Plan an Award cannot be made and a Participant has no rights in respect of those Restricted Share Units.

5.4	Cash alternative

The Company in its absolute discretion may decide to satisfy Awards by paying an equivalent amount in cash (subject to the withholding provisions in rule 5.6 (Withholding)). The cash amount must be equal to the Market Value of the Shares on the Award Date of that Award.

For the purposes of this rule, “Market Value” means in relation to a Share on any day:

5.4.1

the middle market quotation (as derived from the Daily Official List of the London Stock Exchange) on the immediately preceding Business Day; and

 

5.4.2

in relation to an ADS the average of the highest and lowest trading prices of an ADS as derived from the New York Stock Exchange Inc. on the immediately preceding Business Day.

 

5.5

ADSs

The Plan Administrator may determine that Restricted Share Units and Awards will be in respect of ADSs and references in these rules to Shares and Restricted Share Units etc. shall be construed accordingly.

5.6	Withholding

The Company, any employing company or trustee of any employee benefit trust may withhold such amount and make such arrangements as it considers necessary to meet any liability to taxation or social security contributions in respect of Restricted Share Units or Awards. These arrangements may include the sale of any Shares on behalf of the Participant or the reduction in the number of Shares comprised in an Award.

6	Leaving the Group before the end of the Restricted Period

 

6.1	General rule on leaving employment

Unless rules 6.2 or 6.4 applies, if a Participant ceases to be an employee or director of a Member of the Group before the end of the Restricted Period, then all his Restricted Share Units lapse on the date of cessation and he shall not be entitled to any Shares.

6.2	Leaving in exceptional circumstances

 

6.2.1

If a Participant ceases to be an employee or director of any Member of the Group before the end of the Restricted Period for any of the reasons set out below, then his Restricted Share Units do not lapse and an Award may be made to him at the end of the Restricted Period in accordance with Rule 5.1. The Designated Corporate Officer will determine the number of Shares to be awarded in respect of Restricted Share Units. The reasons are:

 

(i)

ill-health, injury or disability;

 

 

 

 

(ii)

retirement at normal retirement age, or otherwise with the agreement of the Company;

 

(iii)

the Participant’s employing company ceasing to be under the Control of the Company;

 

(iv)

a transfer of the undertaking, or the part of the undertaking, in which the Participant works to a person which is not under the Control of either the Company or a Member of the Group;

 

(v)

redundancy, but only in circumstances which give rise to a redundancy payment;

 

(vi)

termination or severance by the Participant’s employer except where the Plan Administrator determines that an Award should not be made due to the conduct or performance of the Participant; or

 

(vii)

any other reason, if the Designated Corporate Officer so decides in any particular case.

 

6.2.2

The Designated Corporate Officer and the Plan Administrator must exercise any discretion provided for in rule 6.2.1(vii) within 30 days after they become aware of the cessation of the relevant Participant’s employment or office and where the discretion is not exercised in favour of the Participant the Restricted Share Units will be treated as having lapsed on the date of cessation.

 

6.3	Leaving after the end of the Restricted Period but before the making of an Award or the transfer of Shares

If a Participant ceases to be an employee or director of any member Group for any reason in circumstances where the Restricted Period has ended