The BP Scrip Dividend Program

Transcription

1 The BP Scrip Dividend Program Summary of terms for ADS holders bp.com/scrip What s inside? 3 The BP Scrip Dividend Program 4 Participation and eligibility 5 Managing your ADS holding 11 Taxation 12 How to contact us This document is important and requires your attention If you have any doubts about what actions you need to take, you should consult your stock broker, accountant or other appropriate legal or professional advisor. If you have sold or transferred all of your ADSs, you should consult the stockbrokers or other agent through whom the sale or transfer was effected for advice on the action you should take. 1

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3 The BP Scrip Dividend Program As part of our services to BP ADS holders, we are pleased to present the BP Scrip Dividend Program (the Program ) a simple way of using your dividends to build up your shareholding in BP. This document sets out the Summary of the Terms and Conditions of the Program. Participation in the Program is subject to the Deposit Agreement between BP and JPMorgan Chase Bank, N.A. as ADS Depositary (the Depositary ) and in accordance with the Full Terms and Conditions of the Program to the extent applicable to ADS holders. The Full Terms and Conditions, the Summary of Terms for ordinary shareholders and this Summary of Terms for ADS holders may be found at bp.com/scrip. The information provided in this summary document should not be regarded as a recommendation to participate in the Program. Participation in the Program is entirely voluntary. If you wish to receive dividends in cash, you do not need to take any further action. If you do decide to participate in the Program, you may cancel your participation at any time upon giving the requisite notice in writing. If you are in any doubt about the suitability of participating in the Program, you should contact an authorized financial advisor. What is the BP Scrip Dividend Program? The Program enables BP s ordinary shareholders and ADS holders to elect to receive payment of BP dividends in new, fully-paid ordinary shares or ADSs as the case may be, instead of cash. This entitles you to build up your holding in BP without going to the market to buy new ordinary shares or ADSs. The operation of the Program is always subject to the BP board of directors decision to make the scrip offer available in respect of any particular dividend. Should the board of directors decide not to offer the scrip in respect of any particular dividend, cash will automatically be paid instead. At any time the directors of the company, at their discretion and without notice to shareholders individually, may modify, suspend, terminate or cancel the Program. The directors of the company may make amendments to the Full Terms and Conditions or these Summary Terms and Conditions from time to time in accordance with the company's Articles of Association. 3

4 Participation and eligibility Who can join? ADS holders The Program is open to ADS holders through JPMorgan Chase Bank, N.A., as Depositary. The right to elect to join the Program is not transferable. This summary sets out how ADS holders can participate in the Program. Any queries regarding the Program should be directed to the Depositary, JPMorgan Chase Bank, N.A. via the following details: BP Shareholder Services JPMorgan Chase Bank, N.A. P.O. Box St. Paul, MN Toll free in US and Canada From outside the US and Canada Hearing impaired Ordinary shareholders The Program is open to all ordinary shareholders, subject to certain restrictions for overseas shareholders, on terms and conditions of participation, which differ from those described in this summary. Details of how the Program will work for ordinary shareholders are provided in the separate Summary of Terms for ordinary shareholders which can be found on our website at bp.com/scrip. Any enquiries about the participation of ordinary shareholders in the Program should be directed to Link Asset Services (formerly Capita Asset Services), the BP Registrar, at +44 (0)

5 Participation and eligibility How do I join? Details of all election choices available to shareholders will be provided online at bp.com/scrip. To join the Program, please complete the relevant box on the enclosed Form of Scrip Election or Revocation and return it to the Depositary in the enclosed envelope. What is the deadline for joining (or leaving) the Program for a particular dividend? In order to participate in the Program, your Form of Scrip Election or Revocation must be received by the Depositary before 5.00p.m. Eastern Time on the relevant election date to be announced by BP, which will not be more than 20 business days before the relevant dividend payment date. An election to participate in the Program that is received by the Depositary after the relevant election date for a particular dividend will be applied to subsequent dividend payments. The ex-dividend date, reference share price and election date in respect of any scrip dividends will be announced and made available on the BP website at bp.com/ dividends. All further information in respect of scrip dividends will be announced at bp.com/scrip. Once I join the Program, will I have to elect again for the next dividend? Not under the terms of the Program. If you hold your ADSs directly through the Depositary, unless and until it is revoked by notice from you to the Depositary in writing your election will apply for all future dividends in which a scrip dividend is offered. However, if you hold ADSs through a bank, broker or other intermediary you should confirm the procedure for participation in the Program through that intermediary. 5

6 Managing your ADS holding If I elect to receive ADSs instead of a cash dividend, will the cash value of my ADSs be the same as the cash dividend that I would have received? The number of ADSs that you receive will reflect a deduction for the fee of US$0.05 per ADS payable to the Depositary under the terms of the Deposit Agreement on the issuance of new ADSs. The value of the ADSs that you receive instead of cash may increase or decrease depending on the change in market value of the ADSs between the date the reference share price is announced, which is when the number of ADSs you will receive is determined, and the date you receive your ADSs. In addition, cash dividends attract a dividend fee (currently US$0.02 per annum, per ADS) which is not applicable to the ADSs received under the Scrip Dividend Program. How many new ADSs will I receive? Your entitlement to new ADSs will be based on the amount of cash dividend to which you are entitled less the deduction for the Depositary fee described below. The example set out on page 7 shows how the number of new ADSs will be calculated, including how the Depositary fee will be deducted. What will you do with any fractions? Fractional ADSs will be issued in respect of your scrip dividend election and will be reflected as part of the total book-entry ADS entitlement that will be credited to you in the Direct Registration System maintained by the Depositary. That fractional interest will be combined with any other fractional interests that you acquire in connection with future scrip dividend elections, and you will remain entitled to such fractional interests if you cancel your scrip dividend election for future dividends or where BP modifies, suspends or terminates the Program. Fractional interests will be taken into account for purposes of calculating your future dividend and voting entitlements. However, if you hold your ADSs through a bank, broker, common depositary (e.g. DTC) or other intermediary, there may be different procedures relating to fractional interests. What happens if I sell or acquire ADSs after I join the Program? If you have sold some of your ADSs before an ADS record date for a dividend, the Program will apply to the shares underlying the remainder of your ADSs. If you have bought or otherwise acquired any additional ADSs and they are registered with the Depositary prior to the ADS record date for any dividend to which you are entitled, the shares underlying your additional ADSs will be covered by your existing election choice. If you have bought or otherwise acquired any additional ADSs and they are registered with 6

7 Managing your ADS holding Example of ADS entitlement under scrip alternative The number of ADSs payable to ADS holders will depend on the amount of the dividend payable and on the reference share price, as described below. Number of ADSs owned: 200 Dollar dividend to be paid per ADS: $0.60 Step 1: Cash entitlement The amount of cash dividend owed is calculated by multiplying the number of ADSs owned by the dividend per ADS. (Please note: a dividend fee will be payable by holders receiving a cash dividend, therefore the cash entitlement in this example does not reflect the final cash dividend available for those not participating in the scrip alternative.) (200 x $0.60) = $ total cash entitlement Step 2: Reference ordinary share price To determine how many ordinary shares should be issued to reflect the cash entitlement we need to determine the reference share price for BP shares. This is an indicative price that represents the current market value of BP s shares. We use the average of the closing mid price (converted into US$) for BP s ordinary shares on the London Stock Exchange Daily Official List for the five trading days commencing on the ex-dividend date for ordinary shareholders. Assuming average closing prices over five days converted into US$ on the day: ($ $ $ $ $7.532) 5 = $7.532 per ordinary share Step 3: Reference ADS price We then convert the ordinary share price into an ADS price by multiplying by six (there are six ordinary shares underlying each ADS) and adjusting for the Depositary fee ($0.05 per ADS). ($7.532 x 6) = $ Step 4: ADS entitlement The number of ADSs to be issued is calculated by dividing the cash entitlement (from step 1) by the reference ADS price (from step 3). $ $ = ADSs 7

8 Managing your ADS holding the Depositary after the ADS record date for any dividend to which you are entitled, the shares underlying your additional ADSs will not be eligible for the next dividend but will be eligible for future dividends. The shares underlying your additional ADSs will be covered by your existing Scrip Dividend Election. If you are unclear as to whether you are entitled to the dividend on those ADSs, you are advised to contact the Depositary or the broker or agent through whom the purchase was made. Are my new ADSs included in the next scrip dividend? Yes. All new ADSs issued in connection with scrip dividends will automatically increase your ADS holding on which the next entitlement to a scrip dividend will be calculated. When will I receive confirmation of my new ADSs? The Depositary will distribute new ADSs in book-entry form to those electing to receive a scrip dividend. Statements reflecting the new ADSs will be delivered to registered ADS holders within one week of receipt of the underlying shares by the Depositary. Trading in new ADSs is expected to begin on the dividend payment date. Can I elect to receive ordinary shares instead of ADSs? If you hold ADSs, then you may only elect to receive ADSs, not ordinary shares. Does the Program apply to ADSs held in joint names? Yes, but all joint ADS holders will need to sign the Form of Scrip Election or Revocation. What happens if I have more than one account? If your ADSs are registered in more than one account, you will need to complete a separate Form of Scrip Election or Revocation for each account. Can I participate in the Program in respect of part of my account? No, your Form of Scrip Election or Revocation to the Depositary will only be accepted in relation to the whole of your ADS account. How can I cancel my election? You may cancel your election to participate in the Program at any time. However, written notice of cancellation must be given to the Depositary by the election date to be announced by BP, that will not be more than 20 business days before the relevant dividend payment date, for it to be effective for that dividend. Notice must be received by the Depositary before 5.00p.m. Eastern Time on that election date for paper and online instructions. If more than one form of instruction is received on the same day, then the instruction received last, in accordance with the stated times, will be the one that is accepted. 8

9 Managing your ADS holding Any notice of cancellation must be sent to the Depositary using one of the following options: By mail: JPMorgan Chase Bank, N.A. Voluntary Corporate Actions Department P.O. Box St. Paul, MN By overnight courier or hand delivery: JPMorgan Chase Bank, N.A Centre Pointe Curve Suite 101, Mendota Heights, MN Your election will be deemed to be cancelled if you sell or otherwise transfer your ADSs to another person but only with effect from the registration of the relevant transfer. Can BP change or cancel the Program? Yes, the operation of the Program is always subject to the BP board of directors decision to make an offer of new shares in respect of any particular dividend. The board of directors may also, after such an offer is made, revoke the offer generally at any time prior to the issue of new ADSs under the Program. The Program may be modified, suspended or terminated at any time at the discretion of the board of directors without notice to shareholders individually. In the case of any modification, existing elections (unless otherwise specified by the board of directors) will be deemed to remain valid under the modified arrangements unless and until the Depositary receives a cancellation from you in writing. In the case of termination of the Program, existing elections will be deemed to have been cancelled as at the date of such termination. If the BP board of directors revokes an offer (or otherwise suspends or terminates the Program), ADS holders will receive their dividends in cash on or as soon as possible after the dividend payment date. Any announcement of any cancellation or modification of the terms of the Program will be made on BP s website at bp.com/scrip. What do I do if I have any questions about the Program or need help? Please contact the Depositary, JPMorgan Chase Bank, N.A. toll-free in the US and Canada at , or at from outside the US and Canada. 9

10 Taxation What are the tax consequences of receiving ADSs instead of a cash dividend? The tax consequences of electing to receive new ADSs instead of a cash dividend will depend on your individual circumstances. If you are not sure how you will be affected from a tax perspective, you should consult your accountant or other professional tax adviser before taking any action. The following summary is not exhaustive and is BP s understanding of certain tax consequences as of 23 January A US person who beneficially owns ADSs (as determined for US federal income tax purposes) and who elects to receive additional ADSs instead of cash will be treated as receiving a distribution and therefore subject to US federal income tax consequences similar to those of a US person who receives a cash dividend, but the amounts of the distributions will be different for US federal income tax purposes. Such a US ADS holder will be treated as receiving a distribution in an amount equal to the fair market value of the shares underlying the ADSs received, determined as of the date of their distribution (without any deduction for the issuance fee that will be withheld by the Depositary). For US federal income tax purposes, such a US ADS holder will have a basis in its additional ADSs equal to the fair market value described above and a holding period for such ADSs that begins on the day following the date of the distribution. An election to receive new ADSs instead of a cash dividend will be accepted only for accounts of ADS holders who have certified their taxpayer status in the manner described below. Any election forms received from ADS holders who have not certified their taxpayer status will be disregarded and a cash dividend payment will be made. HM Revenue & Customs no longer impose 1.5% UK stamp duty reserve tax on the creation of new ADSs and therefore no such tax is imposed on new ADSs issued under the Program. US residents You must provide a Social Security or Tax Identification Number on a substitute Form W-9 to certify that you are not subject to backup withholding in order for an election to receive new ADSs instead of a cash dividend to be valid. Failure to do so will result in your receiving the default cash payment and subject you to the applicable federal income tax withholding from any cash payment made to you. A substitute Form W-9 can be obtained by calling JPMorgan Chase Bank, N.A. as Depositary at or by accessing your account online at 10

11 Taxation Non-US residents Non-resident aliens (shareholders whose citizenship is in a country other than the United States) must have certified their foreign status by completing a W-8BEN form in order for an election to receive new ADSs instead of a cash dividend to be valid. Failure to do so will result in your receiving the default cash payment and may subject you to the applicable federal income tax withholding from any cash payment made to you. A substitute W-8BEN form can be obtained by calling JPMorgan Chase Bank, N.A. as Depositary at or by accessing your account on-line at How to contact us BP Shareholder Services JPMorgan Chase Bank, N.A. P.O. Box St. Paul, MN Toll free in US and Canada From outside the US and Canada Hearing impaired

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