Exhibit 4
BP DEFERRED COMPENSATION PLAN
(As amended and restated effective for
deferral elections made after July 31, 2001)
1. PURPOSE
The purpose of the BP Deferred Compensation Plan, as amended and restated,
(the "Plan") is to provide eligible employees of BP Corporation North
America Inc. (the "Company") and certain of its Affiliates an opportunity
to defer receipt of Compensation. The Company is a wholly owned, indirect
subsidiary of BP p.l.c. ("BP").
2. DEFINITIONS
(a) "Administrator" means the Senior Vice President of Human Resources of
the Company or, upon the resignation or removal of such Senior Vice
President, any successor officer who performs substantially similar
duties with respect to the administration of employee benefits
(whether assigned a different title by the Company or not). The
Administrator is a "Designated Officer" as such term is defined in the
Savings Plan and may delegate his duties hereunder.
(b) "ADS" means an American Depositary Share of BP, which currently
represents six ordinary shares of BP.
(c) "Affiliate" means any entity that directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under
common Control with the Company (or with another corporation in the BP
Group as applicable). Solely for purposes of this Plan, CH-20 will be
deemed to be an Affiliate.
(d) "Base Salary" means the base salary of an eligible employee (as
defined in Section 3), as adjusted from time to time.
(e) "Benchmark Interest Rate" means the rate of interest equivalents
credited on the balance in a Cash Account. The Benchmark Interest Rate
is determined, and may be changed, by the Administrator. The prime
rate on the first day of the month as charged by Bank One, N.A. is the
current Benchmark Interest Rate.
(f) "Beneficiary" means the beneficiary or beneficiaries designated from
time to time by the Participant to receive his Participant Account in
the event of his death prior to distribution. A Participant may
designate, or change the designation of, a Beneficiary under the Plan
by making the designation in the form and manner and at the time
determined by the Administrator. No such designation will be effective
until and unless it is timely received by the Administrator. Unless
otherwise designated on the Participant's beneficiary designation
form, if the Participant designated more than one Beneficiary and if a
Beneficiary predeceases the Participant, then all amounts which would
have been paid to such deceased Beneficiary on the Participant's death
will be paid in equal amounts to any remaining Beneficiaries in that
class of Beneficiaries. If the Participant dies without having filed a
valid Beneficiary designation, his Beneficiary will be his surviving
spouse, or if none, his estate.
(g) "Board of Directors" means the Board of Directors of BP Corporation
North America Inc.
(h) "BP" means BP p.l.c.
(i) "BP Group" means BP and its Affiliates.
(j) "Cash Account" means the account for the Investment Option which is
credited with interest equivalents at the Benchmark Interest Rate.
(k) "Class Year" means the calendar year during which Incentive
Compensation is awarded or Base Salary is deferred.
(l) "Company" means BP Corporation North America Inc. The Company is the
plan sponsor.
(m) "Compensation" means: (1) until December 31, 2001, Incentive
Compensation; and (2) effective January 1, 2002 (or as soon thereafter
as administratively possible) Base Salary and Incentive Compensation.
(n) "Control" means an entity's direct or indirect ownership of more than
50% of the equity of a corporation, or more than 50% of the ownership
interests in a non-corporate entity, or the ability through share
ownership or otherwise to elect a majority of the board of directors
of a corporation.
(o) "Dividend Equivalent" means the amount which is the equivalent to the
net dividend paid on an ADS which amount is credited to a
Participant's Phantom ADS Account on the dividend payment date for
ADSs.
(p) "Fair Market Value" means, as of any specified date, the average of
the highest and lowest quoted selling prices of ADSs as reported on
the composite tape for issues listed on the New York Stock Exchange on
the specified date, or, if no sales were so reported on the specified
date, the average of the highest- and lowest-quoted selling prices of
ADSs on the most recent date prior to the specified date on which
sales of ADSs were so reported.
(q) "Incentive Compensation" of an eligible employee (as defined in
Section 3) means:
(1) an award granted under an eligible incentive compensation plan;
(2) a sign-on bonus; (3) a retention bonus; or; (4) a comparable
arrangement, as determined by the Administrator.
(r) "Investment Option" means:
(1) Until December 31, 2001:
(A) for a Participant's 1999 Account "Investment Option" means
the choice between: (i) a Phantom ADS Account with Dividend
Equivalents, or (ii) a Cash Account with interest
equivalents at the Benchmark Interest Rate (with all or a
portion of the Cash Account or Phantom ADS Account converted
and invested in the other Investment Option no more than
once every three calendar months); and
(B) for a Participant's 2000 Account "Investment Option" means a
Cash Account with interest equivalents at the Benchmark
Interest Rate.
(2) Effective January 1, 2002, "Investment Option" means the
hypothetical equivalent of each investment option under the
Savings Plan. To the extent appropriate for the hypothetical
Investment Options available under this Plan (determined in the
sole discretion of the Administrator), the Administrator will
apply the same values, rules, and procedures used by the plan
administrator of the Savings Plan in determining hypothetical
gains and losses for Investment Options under this Plan.
Transactions and hypothetical investments under this Plan will be
processed using the same time frames as apply in the Savings
Plan. The Administrator will apply any transitional rules
approved in the Savings Plan to this Plan where investment
options are frozen, added or dropped, or where daily values are
not available. Notwithstanding the foregoing, to the extent
maintained as a Cash Account as of December 31, 2001, a
Participant's 1999 or 2000 Account may remain in a Cash Account;
provided, however, that no hypothetical exchanges may be made
into a Cash Account after December 31, 2001.
(s) "1999 Account", or "2000 Account" means an account maintained with
respect to a Participant's 1999 or 2000 Incentive Compensation
deferred under this Plan and awarded in 2000 and/or 2001,
respectively.
(t) "Participant" means an eligible employee (as provided in Section 3)
who has elected, under the terms and conditions of the Plan, to defer
receipt of all or a portion of his Compensation. An individual will
cease being a Participant as of the date his entire Participant
Account has been distributed.
(u) "Participant Account" means an unfunded account maintained on behalf
of a Participant by the Administrator to reflect all Compensation
deferred by the Participant under this Plan and any hypothetical gains
or losses relating to such deferrals.
(v) "Participating Employer" means the Company and any of its Affiliates
which have been determined in writing by the Administrator to be a
Participating Employer. Effective January 1, 2002, in order to be a
Participating Employer, an Affiliate must use the same payroll system
as the Company, except to the extent otherwise provided by the
Administrator.
(w) "Phantom ADS Account" means the account for the Investment Option
which is Phantom ADS Units established under a Participant's 1999
Account. In the event that ADSs (or any successor equity) cease
trading on the New York Stock Exchange ("NYSE"), the Fair Market Value
of each Participant's Phantom ADS Account will automatically be
converted to the Participant's Cash Account. Effective as of the close
of business on the NYSE on December 31, 2001, each Participant's
Phantom ADS Account will automatically be converted to the
hypothetical BP Stock Fund Investment Option by valuing the Phantom
ADSs in the Participant's Account at the closing price of the NYSE
used for the valuation of ADSs in the Savings Plan's BP Stock Fund and
by dividing the resulting Phantom ADS Account value by the December
31, 2001 unit price to yield the number of units of the hypothetical
BP Stock Fund in the Participant's Account at conversion.
(x) "Phantom ADS Unit" means, on or before December 31, 2001, the
equivalent of an ADS in corresponding value which is credited to a
Participant's Phantom ADS Account.
(y) "Savings Plan" means the BP Employee Savings Plan, as amended, and any
successor plan.
(z) "Service Period" means:
(1) for purposes of deferring an award under an eligible incentive
plan, the eligible employee must remain employed by the BP Group
through the last business day of the calendar year in which the
award was earned;
(2) for purposes of deferring a retention bonus, the eligible
employee must remain employed by the BP Group through the last
day of the retention period; or
(3) other periods, as determined by the Administrator.
(aa) "Termination" means an employee's termination of employment from the
BP Group for any reason other than death.
(bb) "Timely Election" means:
(1) for purposes of deferring an award under an eligible incentive
plan, an election made during the annual election period as
determined by the Administrator; provided, however, that the
deferral will not be considered as timely if the award is payable
in the calendar year in which the deferral election is made;
(2) for purposes of deferring Base Salary on initial eligibility, an
election made during the initial 45 day period following the date
of initial eligibility;
(3) for purposes of deferring Base Salary after initial eligibility,
an election made by the last business day of the calendar year
for salary deferral commencing during the following calendar
year;
(4) for purposes of deferring sign-on bonuses, an election made by
the first day worked for the Company or an Affiliate;
(5) for purposes of deferring a retention bonus, an election made
within 30 days of the start of the retention period, provided
however, that the election must be on file no later than 60 days
prior to the end of the retention bonus Service Period; or
(6) other elections, as determined by the Administrator.
3. ELIGIBILITY
The following classes of employees are eligible to participate in the Plan:
(a) An employee of a Participating Employer on a U.S. payroll who
participates in a U.S. qualified pension plan sponsored by the Company
who is in grade F or higher (or an equivalent grade if the grade
system is changed or different terminology is used); or
(b) Any other employee of the BP Group as determined in writing by the
Administrator.
Notwithstanding the foregoing, eligibility will be determined at the time
the election is solicited, at the sole discretion of the Administrator.
4. TERMS OF DEFERRAL ELECTIONS
(a) An eligible employee must make a Timely Election if he wishes to defer
receipt of Compensation.
(b) An eligible employee may elect to defer:
(1) all or a portion of Incentive Compensation (in 1 percent
increments; and
(2) up to 50 percent of Base Salary in increments of 1 percent as
determined for each payroll period during the period of deferral.
The Administrator reserves the right to unilaterally reduce a
Participant's deferral election in order to satisfy other required
payroll deductions, or otherwise.
(c) A Timely Election to defer Compensation will be considered to be
received if it is made in accordance with procedures established by
the Administrator. Except as otherwise stated herein, elections to
defer become irrevocable at the end of the applicable election period
for Timely Elections.
(d) Notwithstanding the foregoing, no election to defer Incentive
Compensation will be effective unless the eligible employee remains
employed by the BP Group through the last business day of the Service
Period during which the Incentive Compensation was earned.
(e) Deferrals of Base Salary are effective through December 31 annually. A
Deferral of Base Salary election will end earlier on the Participant's
death, Termination or transfer to an Affiliate that is not a
Participating Employer. Further, during the deferral period, a
Participant can elect to rescind prospectively (but not increase or
decrease) his Base Salary deferral election; provided, however, that
he will not be considered an eligible employee under this Plan for the
remainder of the calendar year and for the following calendar year and
such rescission will invalidate any other pending election to defer
Incentive Compensation under the Plan.
(f) Deferred Compensation will be adjusted for hypothetical earnings,
gains or losses based on hypothetical investment in accordance with
Participant's Investment Option elections on file with the
Administrator. In the event that either no Investment Option has been
elected as an investment election, or that an elected Investment
Option is no longer available, the default Investment Option will be
the Investment Option equivalent to the default investment option in
the Savings Plan at that time.
(g) At the time of the deferral election, the eligible employee must elect
to have deferral distributions commence either: (1) in a specific year
-- even if the Participant is then employed by the BP Group
("In-Service Deferral"), or (2) after Termination ("Post-Service
Deferral").
(h) For each separate element of Compensation deferred during a Class
Year, the eligible employee must elect either an In-Service Deferral
or a Post-Service Deferral. Compensation deferred with respect to a
separate element of Compensation deferred during a particular Class
Year may not be allocated among In-Service Deferrals and Post-Service
Deferrals.
(i) In-Service Deferrals, including the distribution schedule elected, are
irrevocable when made, notwithstanding Termination before commencement
of scheduled distributions; provided, however, that as soon as
administratively practicable (as determined by the Administrator),
In-Service Deferrals will automatically convert to Post-Service
Deferrals on the earlier of a Participant's Termination or death, and
further provided, that this provision will only apply if the eligible
employee has notice of this condition at the time of deferral.
(j) Notwithstanding Section 4(i), a Participant, may exercise a one-time
election to convert an In-Service Deferral with respect to a
particular Class Year to a Post-Service Deferral if the election to
convert is made (in accordance with the Administrator's requirements)
at least one year prior to the earliest date that the In-Service
Deferral for the Class Year would have been payable.
(k) An election to make a Post-Service Deferral becomes irrevocable at the
end of the election period for Timely Elections; however, the
distribution schedule may be modified consistent with the Plan's terms
if a timely request to change is effectuated in accordance with
Section 4(n).
(l) Payout of deferred Compensation may be as follows:
(1) In an In-Service Deferral: (A) in a lump sum or (B) in up to 5
annual installments, provided that all payments must be completed
by April 1 of the 15th calendar year beginning after the deferral
date; or
(2) In a Post-Service Deferral: (A) in a lump sum or (B) in up to 15
annual, 60 quarterly, or 180 monthly installments, provided that
all payments must be completed by April 1 of the 15th calendar
year beginning after Termination. If a Post-Service Deferral is
elected without the election of a permissible distribution
schedule, payment will be made in a lump sum as soon as
administratively practicable after the first day of the calendar
quarter 18 months following the Participant's Termination or
death.
(m) Notwithstanding Subsection (l) above:
(1) In the event of a Participant's death, the Participant's
Beneficiary will be deemed to be the Participant for purposes of
determining when the Participant's Account will be distributed
and, with regard to a Participant who dies during employment with
the BP Group, the Participant's death will be deemed to be his
Termination for purposes of triggering any Post-Service Deferral
election on file; provided, however, that any distribution
payable to the Participant's estate will be made in a lump sum as
soon as practicable following the Participant's death. To the
extent that a Beneficiary has a right to maintain the
Participant's Account, the Beneficiary will be deemed to be the
Participant for purposes of making exchanges among Investment
Options.
(2) At the sole discretion of the Administrator, if the balance in a
Participant's Participant Account does not exceed $25,000 after
the earlier of his Termination date or his death, the balance may
be mandatorily paid out in a lump sum as soon as reasonably
practicable, notwithstanding any distribution schedule elected by
the Participant.
(3) A Participant or Beneficiary may request acceleration of payout
of all or a portion of the Participant's Account to a date or
dates sooner than elected in the case of unanticipated severe
financial hardship beyond the control of the Participant or
Beneficiary. Such payment will be made at the sole discretion of
the Administrator. Any such accelerated payout will be limited to
the amount deemed necessary by the Administrator to alleviate or
remedy the Participant's or Beneficiary's financial hardship.
(4) Notwithstanding (m)(3) above, a Participant or Beneficiary may
request acceleration of payment of all or a portion of the
Participant Account to a date or dates sooner than elected,
without regard to any hardship need, upon the imposition of a
forfeiture of 20 percent of the amount to be distributed early.
Such request must be made in accordance with procedures
established by the Administrator. The Administrator has sole
discretionary authority to grant or deny any such requests.
(n) A Participant who has elected a Post-Service Deferral pursuant to
Section 4(l)(2) may (in accordance with any procedures that may be
established by the Administrator) request that the Administrator alter
the distribution schedule previously established for the Participant's
Participant Account, provided that: (1) any such request must be made
no later than 12 months prior to the date when any distribution could
have commenced under the prior distribution election (or default
distribution date in Section 4(l) in the event no valid Post-Service
Deferral election was timely received), and (2) if such request is
granted, the first distribution to be made under a Participant's
distribution schedule may be made no sooner than 12 months after such
changed Post-Service Deferral distribution schedule is filed with the
Administrator. Further, an otherwise valid Post-Service Deferral
election will become invalid if the participant subsequently incurs a
Termination and the requested distribution election is scheduled to
commence within 12 months of when the Post-Service Deferral election
form was filed.
(o) Payouts of Participant Accounts will be made only in cash by check (or
by other method approved by the Administrator) and will not be made by
payment in ADSs or other securities.
(p) The most recent distribution schedule election accepted by the
Administrator from a Participant with respect to a Post-Service
Deferral will apply to all Post-Service Deferrals elected by the
Participant under this Plan without regard to the elements of
Compensation so deferred.
5. PARTICIPANT ACCOUNTS
(a) In General
The Administrator will maintain records which reflect each
Participant's deferrals, hypothetical gains and losses applying to
such deferrals based on the applicable Investment Options and
distributions made from the Account. The Administrator will maintain
separate subaccounts under a Participant Account as he determines
appropriate for proper administration, including, but not limited to
In-Service Deferrals, Post-Service Deferrals, Investment Options,
elements of Compensation deferred with respect to a particular Class
Year, 1999 Accounts and 2000 Accounts.
(b) Special Rules for 1999 Accounts and 2000 Accounts
(1) Interest Equivalents on Cash Accounts
A Participant's Cash Account will be credited with interest
equivalents and compounded monthly at the Benchmark Interest
Rate.
(2) Phantom ADS Account/Dividend Equivalent
The value of Phantom ADS Units for purposes of crediting a
Participant Account with periodic Dividend Equivalents and
reinvesting such amounts in additional Phantom ADS Units is the
Fair Market Value of ADSs on the applicable dividend payment
date. Any Phantom ADS Units will be maintained in the Participant
Account. The number of Phantom ADS Units in a Phantom ADS Account
will be adjusted to give effect to any increase or decrease in
the number of issued and outstanding ADSs through the declaration
of a stock dividend or through recapitalization resulting in an
ADS or ordinary share split, combination or exchange of ordinary
shares or the like. Phantom ADS Units do not entitle any person
to the rights of a holder of ADSs or ordinary shares of BP.
(3) Conversion of 1999 Participant Account Prior to January 1, 2002
Prior to January 1, 2002, a Participant with a 1999 Account, may
request conversion of all or a portion of his Cash Account (to
his Phantom ADS Account) or all or a portion of his Phantom ADS
Account (to his Cash Account). Subject to approval by the
Administrator, a conversion requested will be effective on the
date the request is allocated by the Administrator.
(4) Conversion of Cash Account After December 31, 2001
After December 31, 2001, a Participant with a Cash Account may
direct the Administrator to convert all or a portion of his Cash
Account to one or more Investment Options in accordance with the
applicable conversion procedures established by the Administrator
from time to time. No conversions may be directed into a Cash
Account after December 31, 2001.
6. PAYMENT OF DEFERRED COMPENSATION
(a) Except as provided in Section 4(m)(4) and in Section 12, each
Participant is entitled to receive the value of his Participant
Account at the date of distribution (less taxes, if any, required to
be withheld by the federal or any state or local government and paid
over to such government for the Participant) in accordance with such
Participant's election(s).
(b) If installments are elected, the amount of the first payment will be a
fraction of the balance in the Participant Account as of the day
preceding each payment, the numerator of which is one and the
denominator of which is the total number of installments elected minus
the number of installments previously paid.
7. UNFUNDED OBLIGATION OF BP
Obligations to make payments to Participants under this Plan are unsecured,
general obligations of BP. Notwithstanding the foregoing, payments under
this Plan may be made from the general funds of Participating Employers,
BP, or any affiliate of BP. No special or separate fund will be established
and no other segregation of assets will be made to assure the payment of
any deferrals or earnings thereon. Nothing contained in this Plan and no
action taken pursuant to its provisions, creates or should be construed to
create a trust or escrow of any kind or a fiduciary relationship between BP
or any of its Affiliates and any other person. To the extent a Participant
or any other person has a right to receive payments under this Plan such
right ranks parri passu with other unsecured and unsubordinated
indebtedness of BP.
8. NON-ASSIGNABILITY
The right of a Participant to receive any unpaid portion of the Participant
Account may not be voluntarily or involuntarily assigned, transferred,
pledged or encumbered or be subject in any manner to alienation or
anticipation, except as provided in Section 12.
9. ADMINISTRATION
The Administrator has the sole discretionary authority to adopt rules,
regulations and procedures for carrying out this Plan, to interpret and
implement its provisions and to grant or deny any and all claims hereunder.
The Administrator may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent he
deems expedient to carry it into effect. The Administrator's determinations
are final and binding on all persons. The Administrator may delegate to
other persons the responsibility of performing operational and ministerial
acts in furtherance of the Plan's purposes, but only the Administrator may
act on any aspect of the Plan affecting (a) any officer or director of the
Company who is an employee of the Company or (b) any employee to whom the
Administrator delegates authority with respect to the Plan. However, any
action that would otherwise result in self-approval on the part of the
Administrator with regard to participation in the Plan requires approval by
the Board of Directors. Subject to Section 10, the determinations of the
Administrator with regard to all Plan matters are final and conclusive.
10. AMENDMENT AND TERMINATION
This Plan may at any time be amended by the Administrator or any officer of
the Company or BP Group designated by the Board of Directors as having such
authority, subject to such restrictions and conditions on such rights as
the Board of Directors may impose. The Plan may at any time be amended or
terminated by the Board of Directors or BP. No amendment or termination
will, without the consent of a Participant, adversely affect such
Participant's rights with respect to amounts credited to his Participant
Account on the effective date of such amendment or termination.
11. NO EMPLOYMENT RIGHTS CONFERRED
Nothing contained in the Plan (a) confers upon any employee any right with
respect to continuation of employment with any Participating Employer or
the BP Group, (b) interferes in any way with the right of any Participating
Employer to terminate any employee's employment at any time, or (c) confers
upon any employee or other person any claim or right to any distribution
under the Plan except in accordance with its terms.
12. WITHHOLDING/RIGHT OF OFFSET
All accounts, payments or distributions under the Plan are subject to all
such income and employment taxes as are required, in the judgment of the
Participating Employer, to be withheld, deducted, or collected by such
Participating Employer under applicable federal, state, local or other laws
then in effect. Such taxes may also include hypothetical taxes and related
amounts under the BP Group's tax policies (as amended from time to time)
for expatriates and secondees. The Participating Employer may collect any
debt, obligation, tax or liability owed by the Participant to the
Participating Employer, as determined in the sole discretion of such
Participating Employer, by any of the following means:
(a) withholding from payroll;
(b) collecting payment by check;
(c) deducting from the person's Participant Account; or
(d) deducting from the net proceeds payable to a Participant, his
Beneficiary, or his Personal Representative.
13. OTHER DEFERRED COMPENSATION PLANS
Other deferred compensation plans of the Company will continue in effect
until such time as they may be terminated by the Board of Directors;
provided, that (a) no further amount may be deferred pursuant to any such
plan after so determined in writing by the Board of Directors, (b) the
Board of Directors may provide that any amounts deferred under any such
plan may be credited to Participant Accounts under the Plan subject to the
provisions of such other plan, and (c) the Board of Directors may determine
such other conditions as it may deem appropriate to effect the transition
from such plans to the Plan.
14. CONSTRUCTION
Unless the contrary is plainly required by the context, wherever any words
are used herein in the masculine gender, they are to be construed as though
they were also used in the feminine gender, and vice versa; wherever any
words are used herein in the singular form, they are to be construed as
though they were in the plural form, and vice versa.
Executed this ________ day of _______________, 2001.
BP Corporation North America Inc.
By: ___________________________________
Senior Vice President - Human Resources
BP p.l.c.
By: ___________________________________
Name:_________________________________
Title:___________________________________