Non-qualified plans overview

Transcription

1 Non-qualified plans overview November 2016

2 The BP non-qualified plans described in this brochure are: Non-qualified plan type Plan name Enrollment (automatic or optional) Savings Plans (pages 25 29) BP Excess Compensation (Savings) Plan BP Excess Benefit (Savings) Plan BP Deferral Savings Restoration Plan TNK-BP Savings Restoration Plan Automatic if you are eligible to participate Pension Plans (pages 30 41) BP Excess Compensation (Retirement) Plan BP Excess Benefit (Retirement) Plan BP America Inc. Supplemental Retirement Accumulation Plan BP Supplemental Executive Retirement Benefit Plan TNK-BP Supplemental Retirement Plan Automatic if you are eligible to participate Deferred Compensation Plans (pages 42 43) BP Deferred Compensation Plan II BP Deferred Compensation Plan Closed for new deferrals since 2011 The information in this document regarding the Deferred Compensation Plan II ( DCP II ) constitutes part of a prospectus covering securities that have been registered under the Securities Act of The complete BP prospectus incorporates the following materials by reference: This Overview (except those sections describing plans other than DCP II); The descriptions of the investment options in the Investment Options Guide (available on Fidelity s NetBenefits website and BP s LifeBenefits website), including all updates; The current BP Annual Review; and All documents incorporated by reference in the above documents and future supplements to or replacements for the above documents.

3 What s inside About this overview...3 Introduction...4 Eligibility and participation...5 Section 409A distinctions...6 Distribution election deadline...7 Enrolling/changing elections...7 Beneficiary designation...7 Termination of employment or separation from service...10 Vesting...10 Keeping track of your plan benefits...11 When you leave BP...11 Payment options under the non-qualified plans...12 Pre-2005 Benefits distribution options...12 Post-2004 Benefits distribution options...14 Changes to existing Post-2004 Benefits distribution elections (push-out distribution elections)...17 If you die...19 Tax considerations Effect of Internal Revenue Code Section 409A...21 Internal Revenue Code Section 409A penalties Investment choices Your investment allocation...24 Non-qualified savings plans...25 How the company match continues...25 BP Excess Compensation (Savings) Plan BP Excess Benefit (Savings) Plan...27 BP Deferral Savings Restoration Plan TNK-BP Savings Restoration Plan Non-qualified pension plans BP Excess Compensation (Retirement) Plan BP Excess Benefit (Retirement) Plan BP America Inc. Supplemental Retirement Accumulation Plan (SRAP) FROZEN BP Supplemental Executive Retirement Benefit (SERB) Plan TNK-BP Supplemental Retirement Plan Non-qualified pension calculation examples

4 Deferred Compensation Plans FROZEN TO NEW DEFERRALS...42 Distribution elections and options...42 Involuntary distributions under the DCP and DCP II...42 DCP II hardship withdrawals DCP 20% penalty withdrawal General information Administrator Claims and appeals Amendment and termination Additional information Forms Pre-2005 Benefit Deferrals for the BP Deferred Compensation Plan Election/Change of Post-Service Deferral Distribution Schedule...47 Instructions Non-Qualified Pension Distribution Election Forms Non-Qualified Pension Distribution Election Form for Pre-2005 Benefits...51 Non-Qualified Pension Distribution Push-Out Election Form for Post-2004 Benefits Instructions Non-Qualified Savings Distribution Election Form Non-Qualified Savings Payment Election Form for Pre-2005 Benefits Beneficiary Designation Form Documents filed with the Securities and Exchange Commission

5 About this overview This Overview summarizes the terms and conditions of the BP non-qualified plans referenced on the inside front cover. As used in this Overview, the term non-qualified plan(s) is used when describing information that applies to all of the plans. The specific plan name is used when describing information that s unique to that specific plan. Throughout this Overview, you generally refers to: You (the eligible employee) when describing elections (e.g., how to make a distribution election); and You or your beneficiary(ies) when describing the notional investments and distribution provisions of a plan, as well as tax considerations. A notional investment is the amount which would be reflected in an account if the investment was funded. The sponsor of these plans is BP Corporation North America Inc. However, BP plc is jointly responsible for the financial obligations under these non-qualified plans. 3

6 Introduction BP offers non-qualified plans for several reasons: To enable you to earn additional retirement benefits after you reach the Internal Revenue Service ( IRS ) limits for the related qualified plans (the BP Retirement Accumulation Plan ( RAP ), the BP Retirement Resource Account ( RRA ), the BP Partnership Savings Plan ( PSP ) and the BP Employee Savings Plan ( ESP )) through the Excess Compensation and Excess Benefit Plans (for Retirement and Savings). To provide supplemental pension benefits in certain situations. If your qualified pension or savings plan benefits are affected by IRS limits, or if you have previously deferred compensation under DCP or DCP II, you automatically participate in one or more of the non-qualified plans sponsored by BP. However, any distribution and/or investment elections must be made separately for each non-qualified savings plan. Otherwise your investments will be subject to the default distribution election 14 months following your separation from service for benefits earned after 2004 ( Post-2004 ) and the default investment option currently the age-appropriate Target Date Fund. There are some important differences between the BP qualified pension and savings plans (such as the RAP and the ESP) and the BP non-qualified plans. These differences include: Any accounts established for you under non-qualified plans are notional. This means that your account balances are represented by recordkeeping entries rather than actual funds set aside to pay your benefits. Non-qualified plan benefits are unfunded and payable from corporate assets when due, rather than from a trust fund. BP s obligation to pay the accrued benefit or account balance to you in the future is an unsecured general corporate obligation. In the event of bankruptcy, you would have the same rights as any other general creditor. Non-qualified plan distributions cannot be rolled into another qualified plan or into an Individual Retirement Account (IRA). Non-qualified plan benefits are not insured by the Pension Benefit Guaranty Corporation (PBGC) or any other entity. Therefore, your right to receive payment of the funds in the future is subject to the risk of the company s insolvency. Non-qualified plan benefits are payable to plan participants and beneficiaries only. As a result, Qualified Domestic Relations Orders (QDROs) are not accepted for BP s non-qualified plans. Most of BP s U.S. non-qualified plans incorporate by reference (from the qualified plans) the definitions of compensation, eligible pay, earnings and similar terms. Please be aware that if you are employed in IST, or are employed as a trader, originator, charterer, freight trader or similar role in another business unit, certain limits may apply to the amount of your bonus that is included in compensation under the non-qualified plans. For more details on these limits, see the Summary Plan Descriptions (SPDs) for the qualified pension and savings plans on bp.com/lifebenefits. Note: Benefits under non-qualified plans are not assignable and cannot be claimed by creditors. Distributions from non-qualified plans are generally taxable at the time of distribution although employment taxes are generally payable at the time compensation is deferred, or benefits are credited or accrued. It is in the sole discretion of the Company, any debt, obligation, or other liability owed by a Participant to the Company or an employee benefit plan maintained by the Company may be deducted from any amounts payable under these plans. All distributions will be made only in cash (by check) and will not be made in BP American Depository Shares ( ADSs ) or other securities. The following changes, effective July 1, 2011, also apply to the non-qualified plans: 4.8% interest rate ceiling for heritage benefits and SERB; Part B additional cash balance benefit added to frozen heritage benefits; Preservation of Amoco Temporary Annuity benefit; and SERB accruals extended to eligible participants through December 31,

7 Eligibility and participation Non-qualified pension and savings plans You re eligible to participate in a non-qualified pension or savings plan if you are (or were prior to your separation from the BP Group) an active participant in the RAP or the ESP, and if any of the following apply: If you previously deferred any compensation under a BP Deferred Compensation Plan (DCP and DCP II) that would have been considered eligible pay under the RAP and/or the ESP had it not been deferred, you automatically participate in the BP Excess Compensation (Retirement) Plan and the BP Deferral Savings Restoration Plan. If your eligible pay exceeds the IRS qualified plan compensation limit in any given year ($270,000 for 2017), you automatically participate in the BP Excess Compensation (Retirement) Plan and the BP Excess Compensation (Savings) Plan. If your annual benefit under the RAP exceeds the IRS qualified plan limit ($215,000 in 2017), you automatically participate in the BP Excess Benefit (Retirement) Plan. If your annual additions (which include all your contributions and BP s contributions) to the ESP exceed the annual additions limit established under Section 415 of the Internal Revenue Code ($54,000 in 2017; note that catch-up contributions do not count toward this limit), you automatically participate in the BP Excess Benefit (Savings) Plan. If you re a TNK-BP employee who terminated from BP prior to January 1, 2009 with the company s consent to accept immediate employment with TNK-BP, or you went on leave of absence to become an employee of a BP affiliate in Russia (including Rosneft) in order to provide services to TNK-BP, or you terminated from BP on or after January 1, 2012 with the company s consent to accept immediate employment with TNK-BP, you automatically participate in the TNK-BP Supplemental Retirement Plan and TNK-BP Savings Restoration Plan. If you re a band D or higher employee on the U.S. payroll between January 1, 2002 and April 30, 2011, you automatically participate in the BP Supplemental Executive Retirement Benefit Plan. Effective May 1, 2011, the BP Supplemental Executive Retirement Benefit Plan is closed to new entrants including rehires, unless a special exception applies. If you re a grandfathered heritage BP employee who was promoted to level F or above prior to January 1, 2005, you automatically participate in the BP Supplemental Retirement Accumulation Plan (SRAP). If you previously participated in the BP Solar and Wind Non-Qualified Plan and had a balance on December 11, 2013 that was transferred to the BP non-qualified plans, you may become eligible on December 12, 2013 for the BP Excess Compensation (Savings) Plan, the BP Excess Benefit (Savings) Plan, the BP Deferred Compensation Plan II and the BP Deferral Savings Restoration Plan. Effective January 1, 2015 if you are a Lower 48 employee you will not be eligible to actively participate in these plans and will be covered under the BP Lower 48 Non-Qualified Plan. 5

8 PRE 05 POST 04 Section 409A distinctions Section 409A of the Internal Revenue Code, which took effect January 1, 2005, imposes stringent restrictions on the design and distribution rules of non-qualified plans including the requirement that distribution elections be made before the compensation being deferred is earned. In order to comply with Section 409A and preserve pre-409a flexibility, our non-qualified plan benefits have been broken into two distinct components Pre-2005 Benefits and Post-2004 Benefits and a different set of distribution rules applies to each component. Throughout this Overview, material specific to Pre-2005 Benefits has been flagged in orange, and material specific to Post-2004 Benefits has been flagged in blue. Pre-2005 Benefits (NOT subject to Section 409A) 1. Benefits that were accrued and vested under a non-qualified pension plan before January 1, 2005 (and any associated notional earnings). 2. Amounts that were credited and vested under a non-qualified savings plan before January 1, 2005 (and any associated notional earnings). 3. Compensation that was deferred under a deferred compensation plan before January 1, 2005 (and any associated notional earnings). Post-2004 Benefits (ARE subject to Section 409A) 1. Benefits that accrue or vest under a non-qualified pension plan after December 31, 2004 (and any associated notional earnings). 2. Amounts that are credited or vested under a non-qualified savings plan after December 31, 2004 (and any associated notional earnings). 3. Compensation that is deferred under a deferred compensation plan after December 31, 2004 (and any associated notional earnings). See When you leave BP beginning on page 11 for distribution details. If you were hired or became eligible and participate in the BP non-qualified plans on or AFTER January 1, 2005: The Pre-2005 Benefits information does not apply to your benefits. If you were hired PRIOR to January 1, 2005 and were eligible and participated in BP s non-qualified plans, and were vested on December 31, 2004, then both Pre-2005 Benefits and Post-2004 Benefits information pertains to you. If you were hired PRIOR to January 1, 2005 and were eligible and participated in BP s non-qualified plans, but were NOT vested on December 31, 2004, all your non-qualified benefits will be considered Post-2004 Benefits. If you have been rehired by BP and you have a non-qualified benefit based on your prior BP employment, your rehire will not affect your existing non-qualified benefit distribution elections regardless of whether or not such distributions have commenced. 6

9 PRE 05 POST 04 Distribution election deadline If you wish to make a class year distribution election under any of the non-qualified savings plans with respect to amounts to be credited in 2017, you must do so by December 31, See Enrolling/changing elections (below) for details. Enrolling/changing elections The following three pages summarize the various non-qualified plan elections currently available to you for each of the three types of non-qualified plans. Please note: All non-qualified pension elections and any Pre-2005 savings elections must be made via paper forms. (Forms are included starting on page 46 of this Overview and may also be found online on the Fidelity NetBenefits website). Elections for Post-2004 Benefits under the non-qualified savings plans and the DCP II must be made online on the Fidelity NetBenefits website during the annual election period. See Post-2004 Benefits distribution options (page 14) and Pre-2005 Benefits distribution options (page 12) as well as the applicable enrollment/change forms and instructions for detailed information about making and changing your distribution options. Beneficiary designation When you participate in the BP non-qualified plans, you should designate a beneficiary to receive any benefits that may be payable from your account in the event of your death. You can name one person, more than one person, or a trust or other legal entity as your primary beneficiary. You can also name a secondary beneficiary, or contingent beneficiary, to receive your account in the event your primary beneficiary(ies) dies before you. If you name more than one primary beneficiary and one of those beneficiaries does not survive you, his/her benefits will be shared equally among any remaining beneficiaries of the same type (primary or contingent), except to the extent otherwise provided on the applicable beneficiary form. Payment will be made to your contingent beneficiary(ies) only if there is no surviving primary beneficiary(ies). To designate your beneficiary or change your designation, contact BP Retirement Services at Fidelity online or by phone. Properly complete any required forms, such as a notarized consent, and return them to BP Retirement Services at Fidelity for your new or changed beneficiary designation to become effective. (Forms are included starting on page 46 of this Overview and may also be found online on the Fidelity NetBenefits website). If required forms aren t completed properly or accepted by BP Retirement Services at Fidelity, your designation is not valid. Your beneficiary designation cannot be changed by anyone after your death. No beneficiary can refuse to accept his/her benefit. 7

10 PRE 05 POST 04 December deadline The following chart summarizes elections that need to be made by the end of December Non-qualified Savings Plan By December 31, 2016 You ll need to make distribution elections for your 2017 class year credits online via the Fidelity NetBenefits website. Otherwise, your class year distribution will be subject to the default election (a lump sum 14 months following your separation from service). Don t forget to review the investment allocation for these benefits and make any desired changes. Changing your Pre-2005 distribution elections Non-qualified Savings Plan You may change your distribution elections for Pre-2005 Benefits at any time up to 60 days prior to your employment termination date. Distribution elections must be submitted via a paper election form and mailed to Fidelity. A copy of this form is included on page 57. If you do not make a valid distribution election, your Pre-2005 Benefits will be paid to you as a lump sum in January of the year following your termination of employment. Non-qualified Pension Plan You may continue to change your distribution elections for Pre-2005 Benefits at any time up to 60 days prior to your employment termination date. Distribution elections must be submitted via a paper election form and mailed to Fidelity. A copy of this form is included on page 51. After December 31, 2008, all new distribution elections must reflect the same timing and form of payment for all non-qualified pension plans. If you do not make a valid distribution election, your Pre-2005 Benefits will be paid to you as a lump sum in: January of the year following your termination of employment (for all plans except the BP Supplemental Executive Retirement Benefit Plan); or January of the year following your commencement of benefits under the BP Retirement Accumulation Plan (for the BP Supplemental Executive Retirement Benefit Plan). Deferred Compensation Plan You may continue to change your distribution elections for Pre-2005 deferrals under the DCP (not DCP II) at any time up to 60 days prior to your employment termination date. Distribution elections must be submitted via a paper election form and mailed to Fidelity. A copy of this form is included on page 47. If you do not make a valid distribution election, your Pre-2005 deferrals will be paid to you as a lump sum in January of the year following your termination of employment. Different deadlines may apply if you re involuntarily terminated (except for cause). See page 13 for details. 8

11 POST 04 Changing your Post-2004 distribution elections Non-qualified Savings Plan Distribution elections must be made each year for amounts anticipated during the upcoming year, plus any associated earnings. Because distribution elections for Post-2004 Benefits are applied on a class year basis, any distribution election you make during this annual distribution election period will only impact amounts to be credited or vested during 2017 (and any associated earnings). For any class year after 2004 for which you did not submit a distribution election, your class year benefit will be paid to you as a lump sum 14 months following your separation from service. You may change your distribution elections via the Fidelity NetBenefits website for the 2005 through 2016 class years by making a push-out distribution election (additional five-year deferral). See page 17 for details. Non-qualified Pension Plan If you did not submit a distribution election by December 31, 2008, your Post-2004 Benefits will be paid to you as a lump sum 14 months following your separation from service, unless a valid push-out distribution election is made. As long as the plan rules are met, you may make a push-out distribution election (additional five-year deferral) to further delay payment for Post-2004 Benefits. See page 17 for details. All push-out distribution elections must be made by completing a new Non-Qualified Pension Distribution Push-Out Election Form for Post-2004 Benefits. See page 49 for more information. All non-qualified pension distribution elections must reflect the same timing and form of payment for all the non-qualified pension plans. Deferred Compensation Plan II As long as plan rules are met, you may change your distribution elections via the Fidelity NetBenefits website for the 2005 through 2011 class years by making a push-out distribution election (additional five-year deferral). See page 17 for more information. Depending on the specific plan benefit, termination of employment and separation from service can have different meanings. See Termination of employment or separation from service on page 10 for details. 9

12 PRE 05 POST 04 Termination of employment or separation from service Termination of employment For Pre-2005 Benefits, which are not subject to Section 409A, your distribution elections are generally triggered by your termination of employment i.e., the date you leave the BP payroll. Separation from service Section 409A changed the rules governing when distributions can be made. Post-2004 Benefits fall under Section 409A. One change under Section 409A is that a separation from service is required, rather than a termination of employment. Some circumstances that would qualify as a termination of employment do not qualify as a separation from service. For instance, if you retire from the company but continue providing services to the company as a consultant or independent contractor on a 50% reduced schedule, this would not qualify as a separation from service for purposes of Section 409A. However, garden leave is generally considered a separation from service for Section 409A purposes because no services are being performed. In addition, certain events extending over 6 months (such as leaves of absence) are also treated as a separation from service for distribution purposes. For example, for Post-2004 Benefits you may be considered to have separated from service if you have not returned to active service after a leave of absence (other than a military leave or a medical leave) for six months. For TNK-BP, separation from service is required for distribution of both the Pre-2005 Benefits and Post-2004 Benefits. In this Overview termination of employment is generally used to refer to the distribution trigger applicable to both Pre-2005 Benefits and Post-2004 Benefits. However, separation from service is used in those instances where termination of employment may not be the distribution trigger with respect to Post-2004 Benefits. Note: If you have been rehired by BP and you have a non-qualified benefit based on your prior BP employment, your rehire will not affect your existing non-qualified benefit distribution elections regardless of whether or not such distributions have commenced. 10 Vesting The vesting rules for each non-qualified plan mirror the vesting rules for the corresponding qualified plan. Non-qualified pension plan benefits vest under the same circumstances as benefits under the RAP. Generally, this means that your non-qualified pension plan benefits vest after you have completed at least three years of vesting service with BP. Note: Certain other provisions may apply as described in the RAP plan document. Non-qualified savings plan accounts vest under the same circumstances as your company match account under the ESP. Generally, this means that your non-qualified savings plan accounts will vest after you have completed at least three years of vesting service with BP. Note: Certain other provisions may apply as described in the ESP plan document. You re always 100% vested in your DCP and DCP II accounts.

13 PRE 05 POST 04 Keeping track of your plan benefits BP Retirement Services at Fidelity is the recordkeeper for the non-qualified plans described in this Overview. You can access information about your non-qualified benefits online and by phone (see Additional information on page 45 for contact details). When you leave BP When you leave BP, the distribution of your plan benefits will be in accordance with your distribution elections on file, as long as you meet any required deadlines for making your elections, as discussed in this section. For the DCP II and the other Post-2004 non-qualified savings accounts, you must make a distribution election at the time of deferral (before crediting of the account). For the other non-qualified plans, it s important that you make your distribution elections, even if you re not planning to begin receiving your benefit any time soon. If you don t submit a timely election for each type of plan, you ll miss the opportunity to determine when and how your benefits will be paid to you, or in the event of your death, to your beneficiary. Very important! If you made a valid distribution election for your non-qualified pension plan Post-2004 Benefits by December 31, 2008, that election is still valid. If you did not make an election by that date, or if you are a new non-qualified pension plan participant, the default election (a lump sum payable 14 months after your date of separation) applies. The only changes you can make to your non-qualified pension plan Post-2004 Benefits after December 31, 2008, are push-out distribution elections as described on page 17. In addition, all your non-qualified pension distribution elections must reflect the same timing and form of payment. If there are conflicting elections between two or more non-qualified plans as of December 31, 2008, benefits will be paid based upon default hierarchy procedures, which means the distribution election under the BP Excess Compensation (Retirement) Plan will govern all distributions. Also note that different rules apply to Post-2004 Benefits and Pre-2005 Benefits and that plan distributions are subject to taxes. See Post-2004 Benefits distribution options (page 14), Pre-2005 Benefits distribution options (page 12) and Tax considerations (page 20) for details. 11

14 PRE 05 Payment options under the non-qualified plans Pre-2005 Benefits distribution options When your BP employment ends, your benefits will be distributed according to the last election you have on record (in good order) with Fidelity 60 days prior to termination. If you have not made a valid election, your benefits will be distributed in January following your termination of employment (or, for SERB benefits, in January following your RAP benefit commencement date). Because these payment options are different from those available under the qualified plans (i.e., ESP and RAP), you may choose to begin receiving your benefits at a different time from when you receive benefits under the qualified plans. Your payment options include: Lump-sum payment: A one-time payment of the entire value of your benefit. Installments: Equal payments made monthly, quarterly or annually over a fixed period you select. Only one distribution election is permitted for all Pre-2005 non-qualified pension benefits. For the Pre-2005 non-qualified savings benefits, you may make a separate payment election for each nonqualified savings plan or you may designate that a single election will apply to multiple non-qualified savings plans. Note: Elections for Pre-2005 Benefits may be made for the DCP (but not for the DCP II). You may commence distribution of your Pre-2005 Benefits as early as one month following your termination of employment (or, for SERB benefits, one month following your RAP benefit commencement date, unless immediately employed by TNK-BP). If the involuntary termination exception discussed on page 13 applies to you, the earliest benefit commencement date is six months after your employment termination date. All non-qualified plans, except the SERB, require that all benefit payments must be paid no later than 180 months following your employment termination. SERB benefit payments cannot commence until the commencement date of your RAP benefit and must be paid to you within 180 months following that date. If you don t make a payment election by the applicable deadline, you ll automatically receive a lump-sum payment of your plan benefit in the January following your employment termination date, or, in the case of SERB benefits, in the January following commencement of your RAP benefit. 12

15 PRE 05 How to elect a payment option for Pre-2005 Benefits under the non-qualified plans A valid election for Pre-2005 Benefits must be on record with BP Retirement Services at Fidelity at least 60 days prior to your employment termination date. If you re involuntarily terminated, other than for cause, with inadequate notice (generally less than 60 days), you may make a valid election until the earlier of: days following your employment termination; or 2. The date distribution would otherwise have commenced under the plan. You may commence payment of your Pre-2005 Benefits as early as one month following your termination of employment, or for SERB, one month following commencement of your RAP benefit. To make a distribution election for Pre-2005 Benefits, you must submit a paper distribution election form that can be downloaded from or requested from a phone representative at BP Retirement Services at Fidelity. Copies of the forms are also available beginning on page 46 of this Overview. After December 31, 2008, all new non-qualified pension distribution elections must be the same for all non-qualified pension plans, meaning they all must commence on the same date and specify the same form of payment. Note: The exact rules for making a payment election are explained in detail on the applicable form. It s important that you review and understand the rules for each plan under which you have a balance. 13

16 POST 04 Post-2004 Benefits distribution options When you separate from service, your benefits are distributed according to the latest valid election, or if you have not submitted a distribution election, the default distribution for the plan. Because non-qualified plan payment options are different from those available under qualified plans (i.e., the ESP or RAP), you may begin receiving your qualified and non-qualified benefits at different times. Section 409A of the Internal Revenue Code governs non-qualified deferred compensation plans such as those described within this Overview. Your payment options include: Lump-sum payment: A one-time payment of the entire value of your benefit. Installments: Equal payments made monthly, quarterly or annually over a fixed period you select. For the non-qualified pension plans, a single payment election must apply to all plans in which you participate. For the non-qualified savings plans: You must make a separate distribution election for each plan in which you participate. Separate distribution elections for the non-qualified savings plans apply to each Post-2004 class year. You may generally commence distribution of your Post-2004 Benefits under the non-qualified savings plans as early as six months following your separation from service if elections are submitted timely. Distributions must end no later than 180 months after your separation from service. Note: When enrolling on the Fidelity NetBenefits website, it s possible to select a distribution date beyond the 180-month maximum. However, the plan rules only allow a maximum deferral of 180 months. If you elect a date beyond the 180-month maximum, any unpaid residual amount in your account will be paid in a lump sum in the 180th month after your separation from service. 14

17 POST 04 How to elect a payment option for DCP II benefits All DCP II deferrals are Post-2004 Benefits and are subject to a separate distribution election for each deferral year ( class year elections ). The DCP II has been closed to new deferrals since If you want to make changes to existing distribution elections (i.e., push-out distribution elections), please see Changes to existing Post-2004 Benefits distribution elections (push-out distribution elections) on page 17. Note: A push-out distribution election will not be valid for in-service distribution elections made for 2005 base pay or 2006 bonus. (In-service distribution elections are not available under the DCP II for any other class years.) Post-2004 Benefits How to elect a payment option for non-qualified pension plans The entire benefit under each non-qualified pension plan that accrues or vests after December 31, 2004 will be subject to a single distribution election. If your Post-2004 Benefit distribution elections are not consistent, the timing and form of payment for your BP Excess Compensation (Retirement) Plan Post-2004 Benefit (by election or under the default provision) will govern your other non-qualified pension plans. Post-2004 Benefit elections on file as of December 31, 2008, are still valid. After that date, the only change allowed to existing distribution elections is a push-out distribution election, as described on page 17. If a valid Post-2004 Benefit distribution election was not on file with BP Retirement Services at Fidelity by December 31, 2008, or you first participated after December 31, 2008, Post-2004 Benefits will be paid in a lump sum 14 months following your separation from service date. The one exception is a push-out distribution election, provided appropriate conditions are met. Non-qualified pension plan distribution elections for Post-2004 Benefits must be submitted via a paper election form (available on page 53 of this Overview, online from or upon request from a Fidelity phone representative). Note: The installment payments are determined based upon the lump-sum value just before the payment commences and on the applicable interest rate. The interest is based on the 30-year Treasury Bond interest rate in effect at the first payment date. This determination methodology creates level installment payments. 15

18 POST 04 Post-2004 Benefits How to elect a payment option for non-qualified savings plans Post-2004 Benefits under each non-qualified savings plan that are credited or vested after December 31, 2004 are subject to a separate distribution election for each plan year ( class year elections ). You must make a separate class year election for each non-qualified savings plan in which you participate. Distribution elections must be made no later than December 31 of the plan year before the plan year in which the deferrals or accruals occur. If you don t make a distribution election each year for each plan in which you participate (meaning a valid distribution election is not on file with BP Retirement Services at Fidelity by the deadline), contributions for that plan year will be subject to the default provision and will be paid as a lump sum 14 months following your separation from service date. If you want to make changes to existing distribution elections (i.e., push-out distribution elections), please see Changes to existing Post-2004 Benefits distribution elections (push-out distribution elections) on page 17. Post-2004 Benefits distribution elections for the non-qualified savings plans must be made online at BP Retirement Services at Fidelity via NetBenefits at To make your elections, proceed as follows from the NetBenefits home page: 1. From the home page, select one of your BP non-qualified savings plan accounts. 2. Click on the Distributions tab. 3. Choose the election you wish to change and click Change Elections. Note: Select Change Elections even if you re making an election for the first time. 4. On the next screen, review your current election and click Select Payment Options if you wish to proceed. 5. Choose your new election. (Keep in mind that all accruals must be distributed from the plan within 180 months following your separation from service.) 6. Click Continue. 7. Review your election and click Submit. 8. Print a copy of the confirmation screen for your records. 9. Proceed to the next BP non-qualified savings plan account. Be sure that you have made all your decisions prior to starting your online election process. The system may timeout if your session remains inactive for a long period. 16

19 POST 04 Changes to existing Post-2004 Benefits distribution elections (push-out distribution elections) In general, distribution elections for Post-2004 Benefits are irrevocable after: December 31, 2008 for the non-qualified pension plans. The year prior to the accrual period for the non-qualified savings plans and the DCP II. One exception is that you re able to push-out or further delay existing distribution elections on file if each of the following conditions listed below are met. This option is available even after you re no longer employed by BP: The payment must be deferred for a period of at least five years past the existing distribution date on file. Remember, no payment can be made later than 180 months after separation from service. The change must be made at least 12 months prior to the previously scheduled payment date. Changes received after that deadline are invalid. Changes to a prior election may not take effect until at least 12 months after submission of the new election. Note: Any changes you make will have the effect of re-starting the measurement of this 12 month standard. Note: If your existing election on file is for installments, the date of the first scheduled installment will be the measuring standard to determine whether the above conditions are satisfied. Example 1 Non-qualified savings plan distribution timing Joe didn t make a distribution election for a Post-2004 Benefit under his non-qualified savings plan. As a result, his distribution is to occur under the plan default provision (14 months after separation from service). If Joe wants to make a push-out distribution election, he will need to make that election within two months after the date of his separation. Joe is allowed to make a push-out distribution election for a payment commencing between 74* months and 180 months following the separation from service date. All distributions must be paid within 180 months following separation from service. * 74 months is the original default of 14 months plus a minimum push-out of 60 months. 17

20 POST 04 Example 2 DCP II distribution timing During last year s election, Joe elected to receive a lump-sum distribution from his DCP II benefit six months after the date of his separation from service. Joe later decided to delay this distribution by 10 years and he logged onto NetBenefits to push-out the distribution date for 10 years past his date of separation from service. However, Joe separated from service six months after making that push-out distribution election. Under these circumstances, he didn t satisfy the condition that the new election must be made at least 12 months prior to the originally scheduled distribution date. In this case, the attempted push-out distribution election is invalid and Joe will receive his distribution based on his prior election. Example 3 Non-qualified pension plan distribution timing Joe first became eligible in 2009 for a non-qualified pension benefit. He has no Pre-2005 benefit. Since it is after December 31, 2008, his distribution for a Post-2004 Benefit under his non-qualified pension plan will occur under the plan default provision (14 months after separation from service). If Joe wants to make a push-out distribution election, he will need to make that election within two months after the date of his separation. Joe is allowed to make a push-out distribution election for a payment commencing between 74* months and 180 months following the separation from service date. All distributions must be paid within 180 months following separation from service. * 74 months is the original default of 14 months plus a minimum push-out of 60 months. 18

21 If you die The designated beneficiary(ies) on record at BP Retirement Services at Fidelity for each of your non-qualified plans will receive the full value of your benefits remaining in that plan if you die before you received them. If you don t have a beneficiary election on record, your benefits will be paid to your surviving spouse (same sex or opposite sex) if applicable, otherwise to your estate. The benefits will be paid to your designated beneficiary(ies) according to your most recent distribution election on record. Effectively, your beneficiary will assume any valid distribution election you have made, even if installment payments have already commenced. Exceptions to this rule are: If your beneficiary is your estate, payment will be made in a lump sum as soon as administratively practicable. Your beneficiary may not push-out the distribution election. If you make a push-out distribution election and you die before it becomes effective, it will not be valid and your prior election will apply. If you die, your beneficiary(ies) may designate beneficiaries. If you would like to add beneficiaries, or change your beneficiary elections on record, either contact BP Retirement Services at Fidelity at or complete and return the Beneficiary Designation Form on page

22 Tax considerations All distributions from the non-qualified plans are regular income for federal income tax purposes and are subject to federal income tax withholding, generally at 25%, or 39.6% if your taxable income from supplemental wages has exceeded $1 million for the year. Distributions may also be subject to state and/or local income taxation, depending on your personal circumstances and the jurisdictions involved. Withholding requirements and procedures may also vary for any state or local taxable amounts. Your interests under the non-qualified plans are also generally subject to Social Security/Medicare ( FICA ) taxes. You are subject to FICA taxes annually as notional pay credits or contributions accrue and vest in your accounts under the plans. For employees who are participants in the Excess Compensation (Retirement) Plan and who may have made partial FICA tax payments, there will be a true-up calculation following termination to see if any additional taxes are due. Participants will be notified when FICA taxes are payable if withholding cannot be taken from a scheduled distribution. Under the DCP II, FICA taxes must be paid on or as soon as practicable after the award date with respect to deferred bonus awards, and on the applicable payroll date with respect to deferred base pay. Certain municipalities also subject deferred bonus awards to local taxation at the time of award and subject deferred base pay to local taxation on the applicable payroll date. The applicable FICA taxes (and any applicable municipal taxes due as of the award date) on any deferred bonus amount will be withheld from the payment of any bonus amount not deferred and, if necessary, from regular salary on or as soon as practicable following the bonus award date. This will require that you plan your personal finances accordingly, as the net pay received in any affected paycheck could be significantly reduced from what you normally receive, depending upon the amount of FICA taxes due on your deferred bonus award. You should be aware that future tax law changes could adversely affect your deferrals under the DCP II and could subject you to earlier taxation and/or penalty taxes. Note: You re strongly encouraged to consult with your own personal tax advisor concerning the tax implications of your participation in and any distributions from these non-qualified plans. 20

23 PRE 05 POST 04 Effect of Internal Revenue Code Section 409A The non-qualified plan distribution rules are complicated with somewhat different rules applying by plan type (i.e., deferred compensation, pension or savings) and even within the same plan based on when the plan benefit was earned. Much of the complication stems from Section 409A of the Internal Revenue Code, which took effect January 1, Section 409A imposed stringent restrictions on the design and distribution rules of non-qualified plans including the requirement that distribution elections be made before the compensation being deferred is earned. Because BP wanted to preserve as much of the pre-409a flexibility as possible, the restrictions under Section 409A apply only to non-qualified plan benefits earned, awarded or vested after January 1, Therefore, the treatment of non-qualified benefits has been separated into two distinct components Pre-2005 Benefits and Post-2004 Benefits. The following table summarizes the impact of 409A rules on each type of plan: Non-qualified plan type Savings Plans Pension Plans Deferred Compensation Plans Pre-2005 Benefit (NOT subject to Section 409A) Amounts that were credited and vested under a non-qualified savings plan before January 1, 2005 (plus any associated notional earnings) Benefits that were accrued and vested under a non-qualified pension plan before January 1, 2005 All accounts under the BP Deferred Compensation Plan (the predecessor plan to the DCP II) or any of the grandfathered heritage deferred compensation plans Post-2004 Benefit* (ARE subject to Section 409A) Amounts that are credited or vested under a non-qualified savings plan after December 31, 2004 (plus any associated notional earnings) Benefits that accrue or vest under a non-qualified pension plan after December 31, 2004 All accounts under the DCP II (relating to base pay earned or bonus awarded after December 31, 2004 (plus any associated notional earnings or amounts deferred)) * See also Internal Revenue Code Section 409A penalties on page

24 Internal Revenue Code Section 409A penalties Post-2004 Benefits are subject to Section 409A penalties. If a plan is deemed not to be in compliance in design or operation, significant penalties may be assessed. If a penalty were assessed, the penalties could apply to your accruals and may include an immediate income tax assessment, plus a federal penalty tax of 20 percent and interest. For purposes of these penalties, there is mandated aggregation among like plans. Section 409A noncompliance penalties may be imposed on you even if you had no part in the plan s noncompliance or if the plan s noncompliance was attributable to BP or a BP administrator. BP will not indemnify participants for penalties. 22

25 Investment choices Your non-qualified savings plan(s) account(s) and DCP/DCP II deferrals are notionally invested at your direction in one or more investment options that correspond with and track the performance of the investment options available in the BP Employee Savings Plan (ESP). You should have received a copy of the Investment Options Guide (available on Fidelity s NetBenefits website and BP s LifeBenefits website), and any updates to the Guide describing the investment options for the ESP. You may view the Guide online via NetBenefits at or you may contact BP Retirement Services at Fidelity to request a copy (see Additional information on page 45 for contact details). While each of the notional investment options offers the opportunity for investment gain, each also presents a risk of investment loss. You ll bear all investment risk with respect to your account and the investment elections you make. You could lose all or a portion of any amounts deferred under the non-qualified savings plans, the DCP and/or the DCP II. The investment options currently available are shown in the chart below. These options are subject to change at any time. ASSET CLASS Target Date Short-Term Stable Value U.S. Fixed Income International Fixed Income U.S. Equity Global Equity Company Stock INVESTMENT OPTIONS Target Date Retirement Fund Target Date 2020 Fund Target Date 2025 Fund Target Date 2030 Fund Target Date 2035 Fund Target Date 2040 Fund Target Date 2045 Fund Short-Term Investments Fund Income Fund U.S. Fixed Income Fund U.S. Fixed Income Fund Short Duration U.S. Treasury Inflation Protected Securities (TIPS) Bond Fund World Government Bond Index Fund ex U.S. S&P 500 Index Fund Equity Index Fund Value Equity Index Fund Growth Russell 2000 Index Fund International Equity Index Fund Emerging Markets Index Fund BP Stock Fund (unitized) Target Date 2050 Fund Target Date 2055 Fund Target Date 2060 Fund 23

26 Your investment allocation You may elect or change (exchange) your investment allocation (also known as your investment direction ) for current balances or future contributions credited to the non-qualified savings plan(s), DCP and DCP II at any time. Any amount credited to your account will be notionally invested according to the allocation election on file for that plan and that class year. Under the DCP II, if you deferred both types of compensation (base pay and bonus), you may choose a single allocation applicable to both deferral elections or you may choose individual allocations for each deferral type. When no investment allocation is submitted for a class year, the amount credited is notionally invested in the default investment option used in the ESP at that time currently the age-appropriate Target Date Fund. Exchange requests confirmed before the close of market on business days normally 4 p.m. Eastern Time will be processed at that day s closing prices. Exchange requests confirmed after the close of market or on weekends or holidays will be processed at the next available closing prices. Trades may be subject to short-term trading or equity wash restrictions, if applicable. In certain unusual situations the Administrator, in his discretion, may impose restrictions on transactions in any of the notional investment options available. If an exchange transaction is delayed, it will be priced according to the prices in effect on the day the transaction is completed. To make or change your notional non-qualified savings plan investments, DCP and DCP II benefits, go online to the NetBenefits website at or call BP Retirement Services at Fidelity directly at or (outside the U.S.). For more information, see the election guide available on NetBenefits. 24

27 Non-qualified savings plans How the company match continues When you reach certain IRS limits in your savings plan, your BP company match continues to accrue in a non-qualified savings plan. The following chart shows how the process works. Qualified Savings Plan Your contribution + BP match Non-Qualified Excess Plans BP match Non-Qualified Savings Plans IRS Limits* $54,000 IRS 415 limit, including pre-tax, Roth, post-tax and company match contributions (the catch-up contributions do not count against this limit); and/or $270,000 IRS compensation limit IRS limits If you reach either of these IRS limits, your contributions automatically stop until the beginning of the next year Company match Even if the above IRS limits are reached, your company match will continue through to the end of the year. The matching contributions will be directed to the appropriate non-qualified plan. At the start of the next calendar year Unless you make a change to your contribution elections, your original contribution type (pre-tax, Roth or post-tax) and contribution percentage will automatically begin again. * 2017 IRS limits. These limits change annually. Your notional match rate under the non-qualified BP Excess Compensation (Savings) Plan and BP Excess Benefits (Savings) Plan is based on your elected employee contribution rate under the qualified savings plan at the time any non-qualified benefit is credited. As a result, to receive the full value of the company s match (100% on the first 7%* of eligible pay you contribute), you ll need to be contributing at least 7%* at the time you reach the IRS limit. * 3% for GBS Americas. 25

28 BP Excess Compensation (Savings) Plan Eligibility and participation Non-Qualified Savings Plans If you participate in the BP Employee Savings Plan (ESP) or Partnership Savings Plan (PSP) and your annual eligible pay exceeds the IRS qualified plan limit ($270,000 in 2017), you re eligible to participate in the BP Excess Compensation (Savings) Plan. Once you reach this limit by law, no additional compensation can be considered for purposes of the ESP. You ll receive a notional company match to your Excess Compensation (Savings) Plan account for each pay period in which your year-to-date eligible pay exceeds the IRS qualified plan limit. Action Action needed. You should make an investment election (see page 24 for details about default investment elections). needed. You should make a distribution election (see Enrolling/changing elections on page 7). Action needed. You should review your beneficiary designation for this plan and update if desired. How the plan works Here s how your benefit will be calculated after your eligible pay reaches the limit: Your total company match is calculated without regard to IRS compensation restriction. This amount is reduced by the sum of the following two components: 1. The company match in the ESP calculated applying the limit on compensation; and 2. The company match credited under the BP Excess Benefit (Savings) Plan (see page 27). The notional company match will be based on your contribution percentage in effect under the ESP at the time your eligible pay exceeds the qualified plan limit and will be notionally invested at your direction in one or more investment options that correspond with and track the performance of the investments in the ESP (see Investment choices on page 23). Note: In the ESP, before-tax and Roth 401(k) contributions automatically become after-tax contributions once the elective deferral limit (IRS 402(g) limit) ($18,000 in 2017; $24,000 if you re eligible for catch-up contributions) is reached. Accordingly, unless you affirmatively elect to stop your employee contributions, you ll continue to receive company matching contributions under the ESP (up to the annual additions limit ($54,000 in 2017). 26

29 BP Excess Benefit (Savings) Plan Eligibility and participation You automatically become eligible for benefits under this non-qualified plan if the annual additions to your ESP or PSP account exceed the IRS qualified plan annual additions limit ($54,000 in 2017). Note: Before-tax and Roth 401(k) catch-up contributions do not count toward this limit. Action Action Action needed. You should make an investment election (see page 24 for details about default investment elections). needed. You should make a distribution election (see Enrolling/changing elections on page 7). needed. You should review your beneficiary designation for this plan and update if desired. Non-Qualified Savings Plans How the plan works Annual additions are the sum of your before- and after-tax contributions (including Roth 401(k) contributions but excluding catch-up contributions) and the company match contributions to your ESP account. This total is then measured against the $54,000 annual additions limit. You ll receive a notional company match to your Excess Benefit (Savings) Plan account for each pay period after your cumulative annual additions exceed the IRS qualified plan annual additions limit. This notional company match will be notionally invested at your direction in one or more investment options that correspond with and track the performance of the investments in the ESP (see Investment choices on page 23). 27

30 BP Deferral Savings Restoration Plan Eligibility and participation You automatically become eligible to participate in the BP Deferral Savings Restoration Plan (DSRP) if: Non-Qualified Savings Plans You participate in the ESP; and You elected to defer compensation that would otherwise be counted as eligible pay under the ESP into the DCP or DCP II. Action Action needed. You should confirm that your investment elections are aligned with your investment objectives (see page 24 for details about default investment elections). needed. You should review your beneficiary designation for this plan and update if desired. How the plan works Because the DCP was frozen to new deferrals effective January 1, 2005 and the DCP II was frozen to new deferrals effective January 1, 2011, there will be no additional company match credits under the DSRP. If you deferred compensation under the DCP II, a notional company match of 7%* of the amount you deferred was credited to your DSRP account. This crediting occurred as soon as administratively possible following the payment of your base pay or annual bonus and was notionally invested at your direction in one or more investment options that correspond with and track the performance of the investments in the ESP (see Investment choices on page 23). If the compensation you deferred into the DCP is distributed to you while you re an active employee, the notional company match credited to your DSRP account based on that deferral will be debited (subtracted) from that account. However, any earnings attributable to the match contribution will remain in the DSRP. The matching contribution debited from the DSRP will be credited in the ESP. * 3% for GBS Americas. 28

31 TNK-BP Savings Restoration Plan Eligibility and participation You re automatically eligible to participate in the TNK-BP Savings Restoration Plan if you re: A TNK-BP employee who terminated from BP prior to January 1, 2009 with the company s consent to accept immediate employment with TNK-BP (or an affiliate supporting the TNK-BP venture); A BPES employee supporting TNK-BP or other Russian joint ventures who took a leave of absence from your prior position to accept immediate employment with BPES; or A TNK-BP employee who terminated from BP on or after January 1, 2012 with the company s consent. Action Action needed. You should make an investment election (see page 24 for details about default investment elections). needed. You should make a distribution election (see Enrolling/changing elections on page 7). Non-Qualified Savings Plans Action needed. You should review your beneficiary designation for this plan and update if desired. How the plan works Your TNK-BP account will be credited each month with a 7%* notional company match for TNK-BP employees or 10% notional company match for BPES employees, as if you were still eligible to contribute to the ESP. This notional company match is calculated without regard to legal restrictions on qualified plans that limit either: Eligible pay; or Annual additions to your plan. This company match credit will be notionally invested at your direction in one or more investment options that correspond with and track the performance of the investments in the ESP (see Investment choices on page 23). * 3% for former GBS Americas employees. 29

32 Non-qualified pension plans Note: If you elect to defer receipt of your qualified pension benefit beyond termination of employment or separation from service, as applicable, please be aware that interest will not be accrued on unpaid non-qualified benefits until your RAP benefit commencement date. BP Excess Compensation (Retirement) Plan Non-Qualified Pension Plans Eligibility and participation If you deferred compensation under the DCP or DCP II Plan in any plan year, or if your eligible pay under the BP Retirement Accumulation Plan (RAP) exceeds the qualified plan limit ($270,000 in 2017), the company will establish an Excess Compensation (Retirement) Plan account in your name and you ll receive a notional monthly benefit accrual. How the plan works Here s how these benefit accruals are determined under the Excess Compensation (Retirement) Plan: Your total benefit accrual under the RAP is calculated without regard to the IRS compensation limit on your eligible pay and including any compensation you have deferred under the DCP and DCP II. Then your actual RAP benefit is calculated, applying the IRS limits and excluding any deferred compensation. The difference between the two preceding calculations is your benefit accrual under the Excess Compensation (Retirement) Plan. Qualified Pension Plan Non-Qualified Excess Compensation (Retirement) Plan If you previously participated in the DCP or DCP II or your eligible pay exceeds the IRS limit ($270,000 in 2017), your Excess Compensation (Retirement) Plan makes up the difference had you not 1) deferred compensation or 2) exceeded the IRS limit A RAP (Retirement Accumulation Plan) prior to IRS limit or DCP/DCP II participation B Retirement Accumulation Plan (RAP) IRS limit $270,000 IRS COMPENSATION limit or total amount based on your salary (post DCP/DCP II election) C Non-qualified Excess Compensation (Retirement) Plan A B = C (amount credited to your non-qualified Excess Compensation (Retirement) Plan) 30

33 PRE 05 POST 04 Your Excess Compensation (Retirement) Plan benefit, if any, is determined as of the first of the month following your termination of employment or separation from service. Interest will be credited from the point you commence your qualified benefit until this non-qualified benefit is distributed. The Pre-2005 Benefit is credited with interest at a fixed rate of 4.90% per annum. The Post-2004 Benefit is credited monthly with interest at the 30-year Treasury Bond rate for the fourth month prior to the current month. If you were eligible to participate in this plan or any component of the BP Retirement Accumulation Plan prior to January 1, 2016 the minimum annual interest crediting rate is 5%; otherwise, the minimum annual interest crediting rate is 2%. (If you elect installment payments, the interest rate used to determine the installments is the 30-year Treasury Bond rate in effect for the fourth month prior to the non-qualified benefit commencement date.) You can find the latest rates on LifeBenefits at Documents/pq/Interest-Table-Comm-update-current-rates.aspx. Please see pages 37 and 39 for examples of the calculations. While you re employed with BP, your Excess Compensation (Retirement) Plan Opening Account if you have one will receive monthly regular and supplemental interest crediting rates that, when compounded, will yield an annual rate that is 150% of the regular interest crediting rate, as defined under the RAP. Note: You ll have an Excess Compensation (Retirement) Plan Opening Account if you had accrued a grandfathered heritage non-qualified pension plan benefit as of the date immediately preceding plan harmonization. Amoco: June 30, ARCO: December 31, Castrol: December 31, Non-Qualified Pension Plans If you re eligible for a grandfathered heritage benefit under the RAP, the benefit paid under the Excess Compensation (Retirement) Plan will be the greater of the benefit under the grandfathered heritage plan formula or the cash balance formula. To determine this benefit: The total benefit under the cash balance formula is compared with the total benefit under the grandfathered heritage formula (without regard to the legal restrictions on your eligible pay and including deferred compensation). The larger of these two amounts is the winning benefit. From this total winning benefit, the plan subtracts either the cash balance or the grandfathered heritage benefit payable under the qualified pension plan, whichever is greater. The difference is your Excess Compensation (Retirement) Plan benefit. For grandfathered ARCO, Vastar and Castrol benefits, the Excess Compensation (Retirement) Plan benefit will be reduced by amounts determined under the ARCO, Vastar and Castrol non-qualified plans, respectively. 31

34 POST 04 Your deferred compensation under the DCP and DCP II Plans is included in the year awarded for the total benefit accrual. For example, let s assume you elected to defer your bonus of $10,000 during the 2009 DCP II enrollment period. The $10,000 is awarded (and deferred) the following March. At this time, if you re in the second tier for pay credits under the cash balance formula, you would receive a notional March pay credit to the Excess Compensation (Retirement) Plan of $900. Likewise, if you re eligible for a grandfathered heritage benefit, the deferred compensation is included in the year awarded for final average earnings purposes. TNK-BP service and compensation, as defined under the TNK-BP retirement plan, are counted for vesting purposes and benefit calculations under this plan. Non-Qualified Pension Plans Note: If your Post-2004 Benefit distribution elections are not consistent, the manner in which your BP Excess Compensation (Retirement) Plan Post-2004 Benefit is distributed (by election or under the default provision) will govern your other non-qualified pension plans. BP Excess Benefit (Retirement) Plan Eligibility and participation If your annual benefit under the RAP exceeds the qualified plan limits, you automatically participate in the BP Excess Benefit (Retirement) Plan. How the plan works Your benefit, if any, under this plan is determined at your separation from service date. Here s how your benefit under this plan will be calculated: Your total benefit under the RAP is calculated without regard to the IRS restriction on maximum benefits payable under a qualified pension plan. Then, your actual RAP benefit is calculated applying the IRS limitation to the benefit amount. The difference between the two calculations above is your benefit payable under the Excess Benefit (Retirement) Plan. Qualified Pension Plan Non-Qualified Excess Benefit (Retirement) Plan A Retirement Accumulation Plan (RAP) prior to IRS benefit limit B Retirement Accumulation Plan (RAP) IRS limit $215,000 IRS BENEFIT limit C Non-qualified Excess Benefit (Retirement) Plan A B = C (amount credited to your non-qualified Excess Benefit (Retirement) Plan) 32

35 PRE 05 POST 04 The Excess Benefit (Retirement) Plan benefit, if any, is determined the first of the month following your termination of employment or separation from service. Interest will be added from the point you commence your qualified pension benefit until this non-qualified benefit is distributed. Interest is credited monthly at the 30-year Treasury Bond rate for the fourth month prior to the current month. If you were eligible to participate in this plan or any component of the BP Retirement Accumulation Plan prior to January 1, 2016 the minimum annual interest crediting rate is 5%; otherwise, the minimum annual interest crediting rate is 2%. (If you elect installment payments, the interest rate is the 30-year Treasury Bond rate in effect for the fourth month prior to the non-qualified benefit commencement date.) You can find the latest rates on LifeBenefits at com/lifebenefits/assets/documents/pq/interest-table-comm-update-current-rates.aspx. This entire benefit, if any, is a Post-2004 Benefit. It s not split between Pre-2005 Benefits and Post-2004 Benefits. Note: In most cases the IRS compensation limit will be triggered prior to the excess benefit limit. BP America Inc. Supplemental Retirement Accumulation Plan (SRAP) FROZEN Eligibility and participation Non-Qualified Pension Plans If you were a grandfathered heritage BP participant in the RAP at level F (C-1 prior to January 1, 2000) or higher and received or deferred certain incentive compensation that was excluded from the definition of eligible pay under that plan, you accrued non-qualified benefits under the BP America Inc. Supplemental Retirement Accumulation Plan (SRAP). Generally, this plan was frozen on July 1, 2000, and no further service credits will accrue after that date. However, if you were a BP grandfathered heritage employee who was promoted to level F between January 1, 2000 and January 1, 2005, you were granted eligibility under the SRAP and provided with an opening account. How the plan works Regular and supplemental interest credits, as applicable, will continue to be applied to your account until you leave the company. Only regular interest credits will continue on your unpaid account after your termination of employment. Pre-2005 Benefit plan rules apply to all accounts under this plan. 33

36 PRE 05 POST 04 BP Supplemental Executive Retirement Benefit (SERB) Plan Eligibility and participation You re automatically eligible for the SERB Plan if you re a band D or higher employee on the U.S. payroll between January 1, 2002 and April 30, Effective May 1, 2011, the BP Supplemental Executive Retirement Benefit Plan is closed to new entrants including rehires, unless a special exception applies. How the plan works Non-Qualified Pension Plans The BP Supplemental Executive Retirement Benefit (SERB) Plan is effective from January 1, 2002 through December 31, The plan sets a pension minimum for those at band D and above. However, given the nature of this wrap around plan, eligible employees will receive benefits under other BP U.S. pension plans that may completely offset the SERB benefit. In that case, no SERB benefit would be payable. Your SERB benefit, if any, will be determined the first of the month following your termination of employment or separation from service. Here s the formula used to calculate your SERB Target Benefit pension minimum: (1.3%) x (annual final average earnings) x (years of service)* = target annual annuity payable at age 60 Your SERB Target Benefit is reduced by 5% per year if your separation from BP occurs before age 60 and is then converted to a lump sum, which is offset by: Your total benefit under the RAP (without taking into consideration any QDRO offset); and Your total benefits under all other non-qualified U.S. pension plans in which you participate.** The remainder, if any, is your benefit payable from the SERB Plan. * Maximum of 37 years. ** Your non-qualified heritage ARCO pension transferred to Ayco (as grown with interest at 5.0%, if applicable), is considered part of the offset. Note: Your SERB Target Benefit will be reduced 5% per year if your separation from BP occurs before age 60. This reduction will be prorated to reflect partial years. The SERB benefit, if any, will be determined the first of the month following your termination of employment or separation from service. Interest will be added from the point you commence your qualified pension benefit until this non-qualified benefit is distributed. The Pre-2005 Benefit, if any, is credited with interest at a fixed rate of 4.90% per annum. The Post-2004 Benefit is credited monthly at the greater of the 30-year Treasury Bond rate for the fourth month prior to the current month, or 5%. (If you elect installment payments, the interest rate is the 30-year Treasury Bond rate in effect for the fourth month prior to the non-qualified benefit commencement date.) You can find the latest rates on LifeBenefits at Please see pages 37 and 39 for examples of the benefit calculations. 34 TNK-BP service and compensation, as defined under the TNK-BP retirement plan, are counted for vesting purposes and benefit calculations under this plan.

37 TNK-BP Supplemental Retirement Plan Eligibility and participation As described on page 5, you re automatically eligible if you re: A TNK-BP employee who terminated from BP prior to January 1, 2009 with the company s consent to accept immediate employment with TNK-BP (or an affiliate supporting the TNK-BP venture); A BPES employee providing services for TNK-BP who took a leave of absence from your prior position to accept immediate employment with BPES; or A TNK-BP employee who terminated from BP on or after January 1, 2012 with the company s consent. How the plan works If you re a TNK-BP employee, your benefit, if any, under this plan is determined at the time you terminate from TNK-BP or from the BP Group, provided you immediately returned to BP after leaving TNK-BP. If you re a BPES employee, your benefit, if any, under this plan is determined at the time you terminate from the BP Group. Your benefit will be determined the first of the month following your termination of employment or separation from service. Here s how these benefit accruals are determined once you have terminated your employment: A. Your total benefit is calculated under the BP Retirement Accumulation Plan (RAP) benefit formula without regard to the IRS compensation limit recognizing your service and compensation with TNK-BP or BPES as defined in the BP Excess Compensation (Retirement) Plan. B. Your benefit is calculated under the RAP benefit formula recognizing your service and compensation with TNK-BP or BPES as defined under the TNK-BP Plan (compensation limited to qualified plan limits). C. The lump-sum value of any benefit payable from the RAP and any defined benefit pension plan maintained by TNK-BP, or eligible affiliate is determined. If pension benefits commence under the RAP or a TNK-BP defined benefit pension plan before the calculation of benefits under the TNK-BP Supplemental Retirement Plan, the offset amount will be the lump-sum value of the benefit paid increased by 5% annual interest credits from the date benefit payments begin under those plans. Non-Qualified Excess Compensation (Retirement) Plan Benefit = A minus B Non-Qualified TNK-BP Supplemental Retirement Plan = B minus C Qualified BP Retirement Accumulation Plan Benefit and/or TNK-BP or affiliate pension plan = C Non-Qualified Pension Plans Qualified Pension Plan Non-Qualified TNK-BP Supplemental Retirement Plan Non-Qualified Excess Compensation (Retirement) Plan A RAP (Retirement Accumulation Plan) recognizing service and plan compensation while at TNK-BP or BPES Without limits B RAP (Retirement Accumulation Plan) recognizing service and plan compensation while at TNK-BP or BPES Up to IRS limits IRS limit C Retirement Accumulation Plan (RAP) and/or TNK-BP or affiliate pension plan 35

38 PRE 05 POST 04 Interest will be added from the point you commence your qualified pension benefit until this non-qualified benefit is distributed. The Pre-2005 Benefit, if any, is credited with interest at 4.90% per annum. The Post-2004 Benefit is credited monthly with interest at the 30-year Treasury Bond rate for the fourth month prior to the current month. If you were eligible to participate in this plan or any component of the BP Retirement Accumulation Plan prior to January 1, 2016 the minimum annual interest crediting rate is 5%; otherwise, the minimum annual interest crediting rate is 2%. You can find the latest rates on LifeBenefits at Interest-Table-Comm-update-current-rates.aspx. TNK-BP service and compensation, as defined under the plan, are counted for vesting purposes and benefit calculations under the BP Excess Compensation (Retirement) Plan and the BP Supplemental Executive Retirement Benefit Plan. Non-Qualified Pension Plans 36

39 Non-qualified pension calculation examples Example 1: Immediate qualified plan distribution Assumptions: Termination of employment or separation from service: December 13, 2016 Qualified Retirement Accumulation Plan (RAP) benefit commencement date: January 1, 2017 Non-qualified election: No election Non-qualified plan benefit determination date: January 1, 2017 (first of the month following date of termination/separation from service). The non-qualified benefit is determined as a lump sum as of the first of the month following your date of termination/separation from service. This amount is calculated based on applicable age, service, interest rate and mortality table. Pre-2005 Benefit commencement date: Since there s no distribution election, the default rules apply, which is a lump-sum distribution in January following termination of employment (in this case, January 2017). The Pre-2005 Benefit is calculated as of December 31, 2004, based on age, years of service, the interest rate and mortality table as of that date. This benefit grows at 4.90% per annum until the non-qualified pension plan determination date, January 1, Post-2004 Benefit commencement date: There s no distribution election, so the default rule applies, which is a lump sum 14 months following the date of separation (in this case, March 2018). The Post-2004 Benefit is determined by calculating the gross non-qualified pension plan benefit as of the non-qualified determination date and offsetting it by any Pre-2005 Benefit calculated on that date. Non-Qualified Pension Plans 37

40 PRE 05 POST 04 Grandfathered heritage benefit as of 12/31/2004 Pre-2005 Benefit (as of 12/31/2004) Pre-2005 Benefit with interest at 4.90% per annum until non-qualified pension plan determination date Excess Compensation (Retirement) Plan $100,000 $177,544 ($100,000 * ^ 12 ) SERB Benefit $300,000 $532,632 ($300,000 * ^ 12 ) Interest will be credited on your Pre-2005 Benefit at 4.90%. Non-Qualified Pension Plans At non-qualified benefit determination date (first of the month following date of termination/separation from service) RAP Benefit $600,000 Total benefit as defined under RAP without regard to IRS limits or deferred earnings $800,000 Excess Compensation (Retirement) Plan b $200,000 ($800,000 $600,000) Lump Sum value of SERB Target Benefit pension minimum reflecting early retirement reductions, if applicable (see page 34 for formula) $1,400,000 At non-qualified benefit determination date First of the month following date of termination Pre-2005 Benefit (with interest) separation from service Post-2004 Benefit Excess Compensation (Retirement) Plan $177,544 a $22,456 ($200,000 $177,544) SERB Benefit $532,632 $67,368 ($1,400,000 $600,000 $200,000 $532,632) Note: The Pre-2005 Excess Compensation (Retirement) Plan Benefit (with interest) noted as a cannot be greater than the total Excess Compensation (Retirement) Plan Benefit noted as b. 38

41 PRE 05 POST 04 Benefit at non-qualified pension plan benefit commencement date Pre-2005 Benefit (with interest)* Post-2004 Benefit** Excess Compensation (Retirement) Plan $177,544* $23,771 ($22,456* 1.05 ^ (14 months/12 months)) SERB Benefit* $532,632* $71,314 ($67,368* 1.05 ^ (14 months/12 months)) * There is no interest growth after termination in this example since the non-qualified benefit commencement date is the same date as the non-qualified benefit determination date. ** Interest will be credited monthly on the Post-2004 Benefit from the qualified plan benefit commencement date to the applicable distribution date for the Post-2004 Benefit based on regular interest credits (as defined in RAP). Note: If you convert this lump-sum benefit to installment payments, interest will be included in your installment payments. The applicable interest rate will be the 30-year Treasury Bond rate in effect for the fourth month prior to the non-qualified benefit commencement date. Example 2: Deferred qualified plan distribution Assumptions: Termination of employment or separation from service: December 13, 2016 Qualified plan (Retirement Accumulation Plan (RAP)) benefit commencement date: January 1, 2019 Non-qualified election: No election Non-qualified retirement plan determination date: January 1, 2017 (first of the month following date of termination/separation from service). The non-qualified pension plan benefit is determined as a lump sum as of the first of the month following the date of termination of employment or separation from service. This amount is calculated based on the applicable age, service, interest rate and mortality table. Non-Qualified Pension Plans Pre-2005 Benefit commencement date: Since there s no distribution election, the default rule applies, which is a lump-sum distribution in January following your employment termination (in this case, January 2017). The Pre-2005 Benefit is calculated as of December 31, 2004, based on age, years of service, the interest rate and mortality table as of that date. This benefit grows at 4.90% per annum until the non-qualified pension plan determination date, January 1, Post-2004 Benefit commencement date: There are no distribution elections, so the default rule applies, which is a lump sum 14 months following your separation from service (in this case, March 2018). The Post-2004 Benefit is determined by calculating the gross non-qualified pension plan benefit as of the non-qualified pension plan determination date and offsetting it by any Pre-2005 Benefit calculated as of that date. 39

42 PRE 05 Grandfathered heritage benefit as of 12/31/2004 Pre-2005 Benefit (as of 12/31/2004) Pre-2005 Benefit with interest at 4.90% per annum until non-qualified pension plan determination date Excess Compensation (Retirement) Plan $85,000 $150,912 ($85,000 * ^ 12 ) SERB Benefit $250,000 $443,860 ($250,000 * ^ 12 ) Interest will be credited on your Pre-2005 Benefit at a fixed rate of 4.90%. Non-Qualified Pension Plans At non-qualified pension plan benefit determination date (first of the month following date of termination/separation from service) RAP Benefit* $450,000 Total benefit as defined in RAP without regard to IRS limits or deferred earnings $670,000 Excess Compensation (Retirement) Plan b $220,000 ($670,000 $450,000) Lump Sum value of SERB Target Benefit pension minimum reflecting early retirement reductions, if applicable (see page 34 for formula) $950,000 * RAP benefit amount used to offset Excess Compensation Plan Benefit at non-qualified determination date may be different from amount payable at RAP benefit commencement date. 40

43 PRE 05 POST 04 At non-qualified benefit determination date First of the month following date of termination Pre-2005 Benefit (with interest) separation from service Post-2004 Benefit Excess Compensation (Retirement) Plan $150,912 a $69,088 ($220,000 b $150,912) SERB Benefit $280,000** Min of ($950,000 $450,000 $220,000 b ) and $443,860 $0 ($950,000 $450,000 $220,000 b $443,860)* * The Post-2004 SERB benefit is limited; it is determined first and cannot be less than $0. ** The Pre-2005 SERB benefit cannot exceed the value of the gross SERB benefit. (The gross SERB benefit is the SERB Target Benefit reduced by the RAP benefit and the total of all other non-qualified pension plan benefits.) Excess Compensation (Retirement) Plan Benefit at non-qualified plan benefit commencement date Pre-2005 Benefit (with interest)*** Post-2004 Benefit (with interest)*** $150,912 a $69,088 ($220,000 b $150,912) Non-Qualified Pension Plans SERB Benefit $280,000 $0 *** Note no additional interest is provided on the non-qualified benefits from bifurcation date to the non-qualified commencement since the commencement date is before the RAP benefit commencement date. Note: The Pre-2005 Excess Compensation (Retirement) Plan Benefit (with interest) noted as a cannot be greater than the total Excess Compensation (Retirement) Plan Benefit noted as b. 41

44 Deferred Compensation Plans FROZEN TO NEW DEFERRALS This plan has been frozen and no further deferrals may be made, but the following provisions still apply. Distribution elections and options Non-Qualified Deferred Compensation Plans Note: If you participated in DCP or DCP II prior to January 1, 2010, you may have already made distribution elections. You may choose to change your elections as described below. DCP distribution elections You have up to 60 days before termination to change your scheduled distribution. A form for changing your distribution election can be found on page 47. DCP II distribution elections Under DCP II you made a separate class year deferral for each year in which you participated, governed by separate deferral elections you made. You can still make push out elections per IRS guidelines, as described on page 17. Push out elections are made via Fidelity NetBenefits. Distributions may not start sooner than six months and must end no later than 180 months after your termination of employment or separation from service. DCP and DCP II distribution options See When you leave BP (page 11) and Involuntary Distributions under the DCP and DCP II (below). Involuntary distributions under the DCP and DCP II If at any time following your separation from service or death, you or your beneficiary s entire account balance is below the involuntary cash-out threshold, and installment payments have not commenced, the entire account will be distributed as soon as practicable in a lump sum. The involuntary cash-out threshold is specified by law and/or the plan document and may change from year to year. The cash-out thresholds are $25,000 for DCP and $10,000 for DCP II. 42

45 DCP II hardship withdrawals If you incur an unanticipated severe financial hardship as determined by the Administrator in accordance with Section 409A, you may apply to receive an accelerated distribution from your DCP II account to cover the hardship. This could include a severe financial hardship resulting from an illness or accident experienced by you, your spouse or your dependents. It also could include uninsured casualty losses to your property or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond your control. Such distributions are limited to the amount reasonably necessary to satisfy the emergency need. A hardship withdrawal application should be requested from BP Retirement Services at Fidelity. If your hardship withdrawal request is not granted and you disagree, you can file a claim. To file a claim, you must submit a written claim to the claims administrator pursuant to the claims and appeals process. Please contact Fidelity for more information. DCP 20% penalty withdrawal You may be able to accelerate previously elected DCP distributions (only) without regard to any hardship need by taking a 20% reduction of the distribution. A 20% penalty withdrawal application should be requested from BP Retirement Services at Fidelity. Non-Qualified Deferred Compensation Plans 43

46 General information Administrator The Administrator of the plans is the Head of Pensions and Benefits, Americas, of BP Corporation North America Inc., and may be changed from time to time. The Administrator has sole discretionary authority to (among other things): Establish and interpret rules and regulations regarding the plan. Determine eligibility of participants. Handle enrollments and calculations. Decide, in his/her discretion, whether benefits should be paid. Enter into administrative service agreements. Select and contract with a claims administrator. Interpret the plan. Resolve and clarify inconsistencies, ambiguities and omissions in or between the plan document and other related documents. Operate and administer the plan. Claims and appeals If you believe that you re due a benefit under any of these plans, you may file a claim. See the savings and retirement sections of the Benefits Handbook titled How to file a claim under ERISA and available at for information regarding the claims and appeals process. The same procedures that apply for making a claim or appeal under the qualified plans will apply for purposes of making a claim or appeal under the non-qualified plans. Note: The non-qualified plans are not subject to the fiduciary standards of the Employee Retirement Income Security Act of 1974 (ERISA). If following exhaustion of the plan s appeal procedure you still believe that you are entitled to a benefit under the plan, you may file a civil action. You may not file a civil action unless you have exhausted the plan s claims and appeals procedure. Any civil action for benefits that is not timely filed may be dismissed by the court for that reason. In any lawsuit you file, you must comply with both the statute of limitation applicable pursuant to ERISA (or applicable state law) and with the specific provisions of the plan that govern when lawsuits must be filed. The plan has a provision which governs when lawsuits must be brought. Any civil action for benefits must be brought no later than two years following the earliest of: (i) in the case of any lump sum payment, the date on which the payment was made, (ii) in the case of a periodic payment, the date of the first in the series of payments, or (iii) for all other claims, the date on which the action complained of occurred. Any civil action for benefits under the plan must be brought in the United States District Court for the Southern District of Texas, Houston Division, as required by the provisions of the plan. Amendment and termination 44 BP may amend or terminate any of its plans at any time and without prior notice. Except with respect to amendments required to comply with applicable law, no amendment or termination may adversely affect a benefit to which you re entitled prior to the date of the amendment or termination without your consent.

47 Additional information The Administrator has contracted with Fidelity Investments Institutional Operations Company (FIIOC, also known as BP Retirement Services at Fidelity) to provide recordkeeping services with respect to the plans, including: Maintaining plan records and participant accounts; Producing participant statements and confirmations; Processing plan withdrawals and distributions according to plan rules; and Providing telephone and online services for the plans. You can obtain up-to-date information on your non-qualified benefits by contacting BP Retirement Services at Fidelity. You have two ways to obtain information online or by phone. Online offers many advantages, including decision support tools, and it s available virtually at any time of the day or night. Whichever tool you decide to use, here s what you ll need to do: Online Log on to NetBenefits at By phone Call Participant Services Representatives are available Monday Friday, 7:30 a.m. 11:00 p.m., Central time. Outside the U.S., dial the AT&T access number of the country you are in. When prompted, dial , or call collect at (508) Hearing-Impaired, dial You ll need a Personal Information Number (PIN) to access your personal information through either of these resources. The first time you access these services, you ll be asked for personal information that will be needed to establish your PIN. Additional information about Deferred Compensation Plans If you previously deferred compensation under DCP II, your prior deferral is subject to the rules previously communicated at the time of the deferral to the extent not superseded by a subsequent communication. To receive a copy of prior communications submit a request to USPensionsandSavings@BP.com. If you have an account under DCP (relating to base pay deferrals for years prior to 2005 or bonus awarded with respect to services performed prior to 2004), your account will remain in that plan and subject to that plan s rules. Those rules are described in this document and in other materials available from BP Retirement Services at Fidelity. Information on grandfathered heritage deferred compensation plans is not included in this Overview. Information regarding grandfathered heritage plans may be obtained by contacting the recordkeeper for the plan. 45

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